Birkenstock Preps for September IPO With Potentially Big Price Tag
See you in September?
Sources said the sandal maker Birkenstock is preparing to launch its IPO as soon as next month, which could value the firm at more than $8 billion.
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But plans are still in flux, dependent on market conditions and Birkenstock’s primary backer, L Catterton.
A spokeswoman for the consumer-focused private equity company declined to comment Tuesday. The timing and valuation of a potential initial public offering were first reported by Bloomberg News. Goldman Sachs and J.P. Morgan are said to be managing the process.
WWD broke the news last month that Birkenstock was marching toward Wall Street, leading the group of public market contenders looking to jump into the market after successful offerings from Savers Value Village, Cava Group Inc. and Oddity Tech.
Whereas the rush of 2021 IPOs — including Allbirds, Rent the Runway Inc. and Olaplex — have mostly seen their stocks slump as the market fell out of love with internet-dependent companies, the consumer firms going public this summer are still on the upswing.
Beauty and wellness company Oddity Tech, which is also backed by L Catterton, was seen as a particular success, generating big returns for its backer with an offering that was heavily oversubscribed as investors tried to get a piece of the action.
Oddity priced at $35 a share and is trading at more than $50, with a market capitalization of about $3 billion.
This is familiar territory for L Catterton, which bills itself as the world’s largest consumer-focused private equity fund and has taken Restoration Hardware, Leslie’s, Vroom, Peloton, Noodles & Co. and others public.
If Birkenstock does nab a valuation over $8 billion it would be another hit for L Catterton, which bought control of the German footwear brand in 2021 for what was said to be about 4 billion euros, or $4.8 billion at that time. Joining in on the deal was Financière Agache, the family investment vehicle of Bernard Arnault, whose luxury giant LVMH Moët Hennessy Louis Vuitton also backs L Catterton.
Judging the footwear company’s price will be easier when it files its initial paperwork with the Securities and Exchange Commission, officially detailing its financial results and business plan.
Birkenstock is said to have seen its revenues increase 29 percent last year to 1.2 billion euros with adjusted earnings of 394 million euros — numbers that, if they bear out, show a company that is both very profitable and growing quickly at scale.
Even so, pricing an IPO is a delicate matter.
Once companies file their registration statement with the SEC, management goes on a road show to meet with investors. After some back and forth, a range is set for the per share offering price, which can inch higher if more investors sign up to buy shares immediately before they hit the open market.
Typically only a portion of the company is initially offered to the market. The idea is to price the introduction so the backers make money with their first sale and also leave room for the stock to continue to rise, increasing the value of the shares that aren’t sold right away.
There’s always some guesswork — on the part of buyers and sellers — but the dynamic is even a little harder to gauge now given the unusual market and economy.
Coming into the year, economists were predicting that high inflation and the high interest rates needed to bring prices back down were going to cause a recession and clamp down on consumers.
Reading those tea leaves, markets shut down. S&P Global Market Intelligence said that there were only 22 U.S. IPOs in the second quarter with $7.5 billion in stock offered — down from the peak in the first quarter of 2021, when there were 357 IPOs with $132.2 billion offered.
That has Birkenstock striding toward the market just as investors are perking up and looking to buy into something big.
It also has the sandal maker, which traces its beginnings to 1774, transferring into public hands at a time when the economy is looking better, but is still a big question mark.
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