Birkenstock shares fall 12.6% after landing on the US stock market

Birkenstock, the iconic German shoemaker, experienced a 12.6% decline in shares on its debut on the US stock market, resulting in a valuation of $7.5bn. Despite the once-surging demand for its popular cork-soled sandals, investors are skeptical about its future prospects.

On the eve of trading, shares were priced at $46, positioning the company at an $8.6bn (£7bn) valuation, squarely within the projected $44 to $49 range. However, share values dipped to close at $40.20 in New York, where the company is listed under the ticker “BIRK”.

Birkenstock’s management, including CEO Oliver Reichert, showcased their signature footwear as they launched on Wall Street.

Historically, the brand gained immense popularity during the pandemic due to the shift to remote work, which saw a spike in demand for comfortable, heritage-rich footwear. The continuing trend of relaxed office dress codes means many haven’t reverted to conventional work shoes.

In 2021 alone, the company sold 30 million pairs, reporting a nearly 30% rise in sales to £1.1bn and profits of £162m. Predominantly favored by women (72% of its customer base), the brand aligns with changing fashion perceptions that no longer equate femininity solely with high heels.

From the IPO, the company aims to raise around $1.5bn. A portion of this, about a third, will address debts, with the remainder going to the private equity firm L Catterton, which became a majority stakeholder in 2021.

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Oliver Reichert, Birkenstock’s CEO since 2013, plans to diversify their product line beyond sandals to include clogs, trainers, shoes, and boots.

However, market analysts caution that Birkenstock’s public debut comes amid challenging market conditions, citing concerns over a sluggish economy, waning consumer confidence, and the underperformance of IPOs by other footwear giants like Dr Martens.

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Mai Linh Pham

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