- By Natalie Sherman
- Business Reporter, New York
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Image source, Warner Bros.
Birkenstock’s appearance in Barbie movie reportedly prompted increase in sales
German sandal maker Birkenstock has spent decades convincing shoppers that what may seem unattractive at first glance is actually desirable.
The limits of that power will now be tested on Wall Street, as its shares are set to begin trading on the New York Stock Exchange.
The initial public offering priced shares at $46 per share, valuing the company at approximately $8.6 billion (£7.08 billion).
This is more than double its value three years ago.
But is there further scope for progress?
The company, which traces its roots to an 18th-century cobbler, found its first fans in the 1960s among hippie types, who were won over by the company’s emphasis on flexible, but strong support.
“Birkenstock was not a fashionable shoe for decades,” New York Times fashion reporter Elizabeth Patton told the BBC. “It was something your dusky aunt or science teacher would wear with socks.”
But it eventually began to change the fashion world in the 1990s, gaining approval from supermodel Kate Moss.
Over the past decade, the company has gained massive popularity as a pandemic-era emphasis on comfort, collaborations with fashion designers and the attention of celebrities from Gwyneth Paltrow to Kaia Gerber fueled growth.
Last year the company sold about 30 million pairs of shoes.
Image source, Getty Images
Frances McDormand wore bright yellow Birkenstocks to the 2019 Academy Awards
The brand’s grasp of the cultural consciousness was confirmed by its appearance in this year’s Barbie movie, in which the lead character’s journey to liberation was summarized by her donning a pink pair of the company’s classic two-strap sandals. That moment reportedly tripled demand.
As shares begin trading on the New York Stock Exchange, investors are facing questions about whether the company can maintain that momentum — and whether the company will have to open itself up to the pressure of the public markets for the first time in its long history. Will harm or help.
“Some people say: ‘Birkenstock is having a moment’. I always respond ‘This moment has lasted for 250 years, and it will continue to do so,’” Chief Executive Oliver Reichert said in the letter detailing the firm’s listing plans. Said while announcing.
The share sale allowed private equity firm L Catterton, owned by French luxury giant LVMH, to take a majority stake in the firm in 2021, netting a cool $1.5 billion.
But the company plans to retain an 80% stake in Birkenstock, a sign it doesn’t believe the retailer’s best days are behind it — despite market fatigue.
Nevertheless, some customers said they also feared the listing would put new financial pressure on the company – forcing business closures that would damage the brand in the long run.
“I’m afraid of IPOs because I think the quality will definitely disintegrate,” said New Yorker Bella Sheth, 55, a project manager who has been buying Birkenstocks for more than three decades and now has six pairs. . “Hopefully they don’t get ruined.”
Bella Sheth says she wore her thong Birkenstocks during a six-hour hiking trip
Concerns about listing are reasonable, given how often investors push for growth — especially intense in luxury fashion — despite the risk that expansion will backfire and weaken the brand, says New York University’s Stern School of Business. said Thomai Cerdari, professor of marketing at the
But she said that for now, Birkenstock has done a good job of creating a sense of desire with its fashion collaborations and the introduction of new colors and materials.
“Just because you’ve got an IPO doesn’t mean you’re going to be a Gap that explodes,” he said, referring to the clothing brand that seemed to be everywhere in the 1990s but now has its own. Is a shadow of former self.
Morten Benedsen is a professor at the University of Copenhagen and INSEAD who studies family firms. He said the company had already transformed from a family-owned company to a modern one due to pressure from investors when it left its family’s leadership in 2013 and later secured backing from L Catterton.
“That changed everything,” he said. Compared to that decision, he said: “This is a completely natural step.”
In choosing the list, Birkenstock is following a path well-trodden by footwear and fashion companies.
Some, such as sneaker brand Allbirds and boot company Dr. Martens, which went public in 2021 when markets were hot, have seen their fortunes decline.
Others have proven they have staying power, such as Crocs, which listed in 2006. The company, which sells more than 100 million pairs of shoes a year, is worth about $5.2 billion, six times what it was initially worth.
Elizabeth Patton of said that, when it comes to high-profile footwear IPOs, people are often wary of valuations, of which Birkenstock has a “huge valuation”.
“But I also think this company has a lot of things going in its favor, namely the idea that looking good and feeling good are the same thing.”
Lacey Crocker, who bought her first pair of Birkenstocks in high school, said she thinks the appeal of Birkenstocks will endure even if the current trend fades — as long as the shoes retain the comfort features that made them popular. They were started.
“It’s all about fanatical support,” said the 39-year-old physician’s assistant. “Even if they go out of style, I’ll still wear them.”