Birkenstock loses 10% in NYSE debut: going public was ‘the second-best option’

October 11, 2023 11:45 AM PDT | By Invezz

Birkenstock loses 10% in NYSE debut: going public was ‘the second-best option’ — Image source: Invezz

Birkenstock CEO discussed the IPO on CNBC

At the current stock price, the footwear giant commands a valuation of $8.32 billion versus $9.2 billion it had originally sought. On CNBC’s “Squawk on the Street”, Oliver Reichert – the Chief Executive of Birkenstock said today:

Best thing for the brand would be staying family owned. But within family, there were many problems. So, we go for second-best option, and that’s to be public and give the brand back to people.

Birkenstock saw its sales grow an exciting 70% between its fiscal 2020 and fiscal 2022. More importantly, CEO Reichert expressed confidence on Wednesday that the said growth is durable.

The German brand raised $495 million via the IPO that it plans on using to lower its debt.

Another setback for the IPO market: Birkenstock opens 11% below $46 IPO price in trading debut flop. The German sandal maker’s debut is the worst opening for a listing of $1bn or more in New York in over 2yrs, Bloomberg reports. Out of more than 300 US IPOs of that size in the… pic.twitter.com/UCL6sxxOU4

— Holger Zschaepitz (@Schuldensuehner) October 11, 2023

Birkenstock still has a lot of room to grow

Birkenstock has executed well on its direct-to-consumer strategy that has helped pushed margins up to about 60%. The shoe company attributed only 18% of its total sales to DTC in fiscal 2018 versus 38% in fiscal 2022.

Still, Alex Smith of Third Bridge is convinced it has more room to grow. For instance, Birkenstock could expand its footprint outside of its home continent Europe as well as the United States.

Plus, the German brand could diversify its customer base as well that is currently dominated by females, he told clients in a research note on Wednesday.

Lastly, it’s worth mentioning here that the current valuation of $8.32 billion is nearly double what Birkenstock was worth in 2021 when L Catterton took a majority stake in it.

Watch here: https://www.youtube.com/embed/wtT6b4OYAJg?feature=oembed

The post Birkenstock loses 10% in NYSE debut: going public was ‘the second-best option’ appeared first on Invezz

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