Birkenstock IPO

Birkenstock IPO (BIRK)

Have you heard of the Birkenstock IPO? Birkenstock is a sixth-generation German family-owned business that began in 1774. After the family sold the business in 2010, the sandal and shoe retailer gained popularity. The sandal was recently featured in the Barbie movie with Margot Robbie wearing a pink pair.

It wasn’t the main reason people gossiped about the film, but many noticed the Birkenstock sandal. In September 2023, the company filed for an IPO. It began trading less than a month later, on Wednesday, October 11th, at $46 per share, valuing the company at $9.3B.

This is the fourth major IPO in 2023 after ARM Holdings, Instacart, and Klaviyo went public. Only one on the list is currently trading above its IPO price.

Will Birkenstock be successful on the stock market and join the ranks of other shoe-making peers? It’s backed by big names in the industry and other impressive investors. Let’s find out more about Birkenstock.

Chart by TradingView

Let’s get some more information on the Birkenstock IPO. Let’s fast-forward to 2021, when private equity firm L Catterton bought a majority stake in Birkenstock for \$4.3B. In two years, the company’s valuation more than doubled. The world’s second-richest individual backs L Catterton after Elon Musk and owner of Louis Vuitton Moet Hennessy (OTCMKTS: LVMUY), Bernard Arnault. 

Bernard Arnault and Louis Vuitton Moet Hennessey (LVMH)

The French businessman owns over 75 luxury, fashion, and cosmetics brands such as Tiffany & Co, Christian Dior, Givenchy, Marc Jacobs, Kenzo, Celine, Sephora and many more. It’s safe to say that he knows what’s hot in the fashion world.

Now that the German family is out of the picture, Bernard Arnault and his other investors have huge plans to make Birkenstock grow further. 

The Norwegian sovereign wealth fund (worth $1.47T), Financière Agache, and Durable Capital Partners all agreed to invest around $300M each. Will the Birkenstock IPO be as popular with investors on the stock market?

Fun fact: In the US, a Birkenstock customer owns, on average, 3.6 pairs.

Birken Stock Website

Is Birkenstock a Good Investment?

Since 2020, Birkenstock’s revenue has grown from $770M to $1.3B in 2022. Net profits have also increased, but some administrative expenses lowered expectations. Most importantly, the company is profitable, which isn’t always true with IPOs.

Birkenstock has a strong board of directors with Bernard Arnault and his business partners, his son, and other German executives. What will that mean for the Birkenstock IPO? It started rough, but the stock has been climbing. 

Birkenstock IPO First Day of Trading

How did Birkenstock’s stock market debut go? It couldn’t have gone worse. The stock lost 12%, and its valuation decreased to $7.5B. Investors lacked confidence in Birkenstock’s growth capabilities and believed consumer demand had peaked.

The DJIA and S&P gained, so the overall market can’t be blamed for Birkenstock’s decline. However, all three recent IPOs were in the red (ARM Holdings, Instacart and Klaviyo). Does the company have any upside, or is it destined to fail? Let’s take a quick look at this Birkenstock IPO.

COMPANY
Trade Ideas Logo TrendSpider Premium Partner Benzinga
DESCRIPTION Trade Ideas provides powerful tools like real-time market scanning, AI-driven trade signals, customizable alerts, advanced charting capabilities, and time-saving data visualization TrendSpider is the most robust all-in-one trading platform on the market today. Uncover strategies, pinpoint opportunities, analyze assets, and time trades like never before Benzinga allows traders to profit with actionable stock news, trading signals and alerts, A streaming platform with all the information you need to invest smarter today
HIGHLIGHTS

Case Against the Birkenstock IPO

Birkenstock has its critics, and they have valid points. First, the company’s valuation is a red flag. It is worth more than Skechers (NYSE: SKX), Crocs (NASDAQ: CROX), and Steve Madden (NASDAQ: SHOO). Each has a higher revenue than Birkenstock while having a lower market cap.

For Birkenstock to maintain a market cap of over $9B, its revenue in 2023 must triple from 2022. If we look at Skechers alone, its revenue for 2022 was $7.4B, and its current market cap is $7.53B. 

Next, the IPO market hasn’t been very hot in the last 24 months. In the last month, ARM Holdings, Instacart, and Klaviyo all went public. Klaviyo is the only one trading above its IPO price. Investors aren’t too optimistic about IPOs, and there’s a chance the Birkenstock IPO might suffer the consequences.

Mr Arnault hasn’t been spared in regards to IPOs. He is behind Oddity Tech’s (NASDAQ: ODD) stock market debut in July 2023, which is currently down almost 40% since. The company uses AI to identify consumers” beauty and wellness needs. 

Since the Birkenstock IPO, the stock tanked but has since been recovering. It’s currently trading over what the initial list price was set at. 

Case for the Birkenstock IPO

There is also some positivity about Birkenstock and its growth opportunities. Not only has the brand become somewhat of a fashion statement, it is very popular among celebrities and influencers.

DTC and e-commerce sales have increased in the last few years, and there is still much room for growth. That is very important for many people who will follow this trend. The famous two-strap Arizona sandal is successful, but the company wants to penetrate new markets.

The Birkenstock IPO filing focused on closed-toe shoes, professional footwear, orthopedics, outdoor, and kids models. Thanks to new materials and innovation progress, Birkenstock can address and develop these new markets. The company is also looking to adapt its materials to mattresses and sleeping options.

Its valuation might consider these new growth opportunities, which Crocs, Skechers, and Steve Madden don’t possess. It will be interesting to see how consumers will react to these new products and if they will be successful.

The first day of $BIRK was ugly. Traders didn’t value the starting price. However, Birkenstock is trading above the $46 debut price four months later.

Birkenstock Competitors

Let’s go back to Crocs and Skechers here. They may not be your first fashion choice, but they are very popular among consumers. Locals and tourists also widely use these brands outside of developed countries.

The Birkenstock IPO is facing a lot of competition in existing markets. If the company decides to expand, it must spend a lot of money and resources to convince customers that its products are superior.

1. Crocs (NASDAQ: CROX)

How does Crocs compete with the Birkenstock IPO? When I first saw Crocs in the early 2000s, I thought it was a joke and wouldn’t last. Oh, how I was wrong. Crocs are still popular and used more than ever in the US and abroad.

They have new designs, are more comfortable, and can even be considered a fashion statement. Between 2014 and 2018, Crocs lost popularity and threatened bankruptcy and store closures.

When its new CEO took over, he changed the branding and target audience. Crocs focused on awareness and fashion instead of only comfort. Celebrities endorsed the products, and the brand became popular once again.

Since 2018, revenues have tripled from $1B to $3.5B in 2022. After seeing a negative net income from 2014 to 2018, numbers have risen. Last year, the company recorded a net income of $540M, lower than in 2021 ($726M).

Crocs and Birkenstock look very different but compete in similar markets. Both rely on fashion and popularity to remain relevant.

2. Skechers (NYSE: SKX)

Could Sketchers affect the Birkenstock IPO? Skechers have never been so popular. Its stock is near an all-time high, revenue is growing, and the company is profitable. In the US alone, it is the third-largest footwear brand.

You can’t compare it to the popularity of Nike, Adidas, or Birkenstock, but the shoe is comfortable and a cheaper alternative. Not everyone can afford to spend a few hundred dollars on footwear, and that’s where Skechers is capitalizing. 

This year, Skechers is expected to record $8B in revenue, a new record for the company. I wouldn’t be surprised if the company exceeds expectations, carrying the stock even higher.

Final Thoughts: Birkenstock IPO

The Birkenstock IPO  had a disastrous first day on the stock market. Even though LVMH founder Bernard Arnault values the company twice as much as he bought it two years ago, the stock market doesn’t agree with him for now.

It could go either way as the company is exploring new markets, but nothing has been proven. Fashion comes and goes, and it’s hard to predict when a trend ends. For the moment, I would stay away from this stock until the company puts it in motion and delivers on its filing promises.

If you want to learn more about profiting from the stock market, head to our free library of educational courses. We have something for everyone, including trading options for those with small accounts.

Frequently Asked Questions

A Birkenstock IPO happened in October 2023—the $BIRK stock debuted at $46 a share.

In October 2023, $BIRK became a publicly traded stock. It struggled in the beginning but looks to be rallying.

The Birkenstock IPO wasn't very successful. Currently, analysts don't believe it has room for growth. But keep an eye on it as things can change with news and new products.

When Birkenstock went public, investors did not agree with its valuation. As a result, they dropped it 13% right off the bat. 

Related Articles

FREE ONLINE TRADING COURSES

If you’ve looked for trading education elsewhere then you’ll notice that it can be very costly.

We are opposed to charging ridiculous amounts to access experience and quality information. 

That being said, our website is a great resource for traders or investors of all levels to learn about day trading stocks, futures, and options. Swing trading too! 

On our site, you will find thousands of dollars worth of free online trading courses, tutorials, and reviews.

We put all of the tools available to traders to the test and give you first-hand experience in stock trading you won’t find elsewhere.

Our content is packed with the essential knowledge that’s needed to help you to become a successful trader.

It’s important to treat day trading stocks, options, futures, and swing trading like you would with getting a professional degree, a new trade, or starting any new career.

Invest the proper time into your Trading Education and don’t try to run before you learn to crawl. Trading stocks is not a get-rich-quick scheme. It’s not gambling either, though there are people who treat it this way. Don’t be that person! 

STOCK TRADING COURSES FOR BEGINNERS

The Bullish Bears team focuses on keeping things as simple as possible in our online trading courses and chat rooms. We provide our members with courses of all different trading levels and topics.

If you’re a beginner, intermediate level, or looking for expert trading knowledge…we’ve got you covered. 

We have a basic stock trading course, swing trading course, 2 day trading courses, 2 options courses, 2 candlesticks courses, and broker courses to help you get started. Free.

Just choose the course level that you’re most interested in and get started on the right path now. Become a leader, not a follower. When you’re ready you can join our chat rooms and access our Next Level training library. No rush. We’re here to help.

Click Here to take our free courses.