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Business News/ Markets / Stock Markets/  Birkenstock IPO: Sandal company set to list on New York Stock Exchange next week in a tough market

Birkenstock IPO: Sandal company set to list on New York Stock Exchange next week in a tough market

Birkenstock IPO: Birkenstock plans to raise $1.58bn in IPO to reduce debt. L Catterton to own 83% of Birkenstock after IPO, funds express interest in purchasing shares.

 Birkenstock IPO lists on the New York Stock Exchange next week.Premium
Birkenstock IPO lists on the New York Stock Exchange next week.

Birkenstock IPO: Sandal company Birkenstock lists on the New York Stock Exchange next week. Investors and analysts according to Reuters report stated that Birkenstock needs to increase sales of its own website, shops, and clogs in order to attract new customers in the midst of the cost of living crisis, before it lists on the bourses.

Birkenstock, a manufacturer of sandals, is the most recent high-profile offering to draw attention from investors to the IPO market, which has been relatively quiet for the past two years with a spike in activity in September.

In order to raise at least $1.58 billion, Birkenstock announced plans to sell at least 32 million shares for between $44 and $49 each. It stated in its IPO filings that the proceeds will be used to reduce debt.

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According to a report by Reuters, Thomas Hayes, chairman of the hedge firm Great Hill Capital, anticipated that Birkenstock will utilise some of the funds it acquired through the IPO to expand even further and that its dominant market position in the US would enable it to pass on price hikes to customers.

The LVMH-backed private equity firm L Catterton, which currently owns 100% of the company, will continue to own approximately 83% of Birkenstock after the offering. Alexandre Arnault, the son of billionaire LVMH Chairman Bernard Arnault, will also serve on Birkenstock's board, as per Reuters news report.

Additionally, funds manage by Durable Capital Partners LP and Norges Bank Investment Management have expressed interest in purchasing shares with a $300 million market value.

In early September, Birkenstock has filed for an initial public offering, in another sign of the allure US equity markets hold for European firms seeking a valuation uplift.

Founded nearly 250 years ago, Birkenstock developed a contoured insole for greater comfort. The modern, cork-lined sandals took hold in the 1970s, as shoppers from the US Southwest to Europe became enamored with the comfy style. Birkenstock has since become a high-fashion brand, launching collaborations with luxury names such as Dior, Manolo Blahnik and Valentino, and spawning variants from labels including Celine and Givenchy.

More than half — 54% — of the company’s customers are in the Americas with Europe accounting for 36%, according to Tuesday’s filing. While women make up 72% of Birkenstock customers, the footwear has broad cross-generational appeal, led by millennials with 31% of sales, followed by baby boomers with 30%, Gen X with 27% and Gen Z with 12%.

Also Read: German footwear maker Birkenstock files for IPO in further boost to US market

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Published: 05 Oct 2023, 12:20 PM IST
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