Birkenstock’s IPO could turn it into Wall Street’s new darling, going from a fashion faux pas to a potential $10 billion brand.

Birkenstock's IPO could turn it into Wall Street's new darling, going from a fashion faux pas to a potential $10 billion brand.

Birkenstock Eyed for IPO as L Catterton Explores Listing

German-based footwear company Birkenstock is reportedly considering an initial public offering (IPO), marking the second IPO this year from private equity owners L Catterton. Sources familiar with the matter indicate that the IPO could take place as early as September, with the company being valued between $8 and $10 billion, according to Bloomberg and the Financial Times.

L Catterton, whose parent company is backed by French fashion behemoth LVMH, is working with JPMorgan Chase & Co and Goldman Sachs on the listing. The private equity firm has a history of launching successful IPOs even in a less vibrant market. It recently backed online beauty products retailer Oddity Tech, facilitating a successful listing on the Nasdaq Stock Exchange in July, which raised more than $400 million.

While no final decision on the size or timing of the IPO has been made, the prospect of going public indicates positive prospects for Birkenstock. The company has not made any official comments regarding this development.

Birkenstock’s Rising Success and Widespread Interest

In recent years, Birkenstock has experienced a resurgence of interest from consumers and gained recognition from the wider fashion industry. Luxury e-tailer Yoox reported that Birkenstock’s Boston Clog was its best-selling shoe of 2022. Additionally, Google searches for the brand in the United States have more than quadrupled since January 2020.

Alongside its popular sandals, which have been available in the U.S. since 1966 and retail for approximately $90, Birkenstock has collaborated with luxury shoe designers. These collaborations have featured items such as velvet-covered clogs from Manolo Blahnik and double-buckled shoes from Dior.

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Birkenstock’s exposure reached new heights this year with the blockbuster movie Barbie, in which lead star and producer Robbie wore a pair of the brand’s shoes in one scene. The increased interest has translated into success for the company’s bottom line, a metric that Wall Street will likely pay close attention to this fall.

Strong Financial Performance and Expansion Efforts

As a private company, Birkenstock is not obligated to disclose its financial information publicly. However, the company stated in an interview with the Financial Times last year that it experienced an 11% increase in sales for the year ending September 2019. This strong performance resulted in sales worth €721.5 million ($861.7 million), driven by the sale of 23.8 million pairs of shoes. CEO Oliver Reichert even noted that the brand had been “sold out for ten years.”

Birkenstock’s success has allowed it to make significant investments in its production sites across Germany. In recent years, the company has focused on expanding and modernizing its manufacturing capabilities. It has also pledged €120 million ($143.3 million) to establish a new factory in Pasewalk, a town approximately 84 miles north of Berlin.

Outlook for Birkenstock’s IPO

The potential IPO for Birkenstock marks a significant milestone for the company. Going public would provide access to capital and further opportunities for expansion. It would also allow investors to participate in the success of a well-established brand that has experienced a resurgence in popularity and has proven financial performance.

While the timing and size of the IPO have yet to be finalized, the involvement of renowned financial institutions like JPMorgan Chase & Co and Goldman Sachs indicates strong interest in Birkenstock’s potential listing. Investors and consumers alike will be watching the developments closely as Birkenstock takes its next steps towards capital markets.