German footwear brand Birkenstock has filed for an initial public offering (IPO) on the New York Stock Exchange (NYSE), aiming for a valuation of around $8 billion. The IPO filing, submitted to the U.S. Securities and Exchange Commission on September 12, follows a surge in the company's popularity and a significant increase in annual revenues.
In the six months leading up to March 2023, Birkenstock reported a revenue growth of 19% compared to the same period from the previous fiscal year. However, the company also witnessed a 45% drop in net profits due to rising inflation impacting both labor and material costs.
The decision to go public comes after L Catterton, a private equity firm backed by luxury brand group LVMH, bought a majority stake in Birkenstock over two years ago at a valuation of $4.85 billion. The firm's investment seems to have paid off as the shoemaker's annual revenues rose from about $781 million in 2020 to over $1.3 billion in 2022.
Despite the current trend of European companies seeking fundraising opportunities in the U.S., the IPO market has seen an 18-month slump due to global central banks' response to stifling inflation. This has led to escalated interest rates and decreased investor interest in riskier assets. However, experts suggest that this trend may be reversing.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, indicated that Birkenstock's move signals a revival of the IPO engine following this deceleration. She added that anticipation surrounding the end of the interest rate hiking cycle appears to be fueling renewed confidence in the market.
Birkenstock's history dates back to 1774 when it was founded by a German cobbler named Johannes Birkenstock. Over the years, the company has built a reputation for its comfortable footwear with a loyal customer base. Despite this, some experts caution that the company's future success is not guaranteed, given the volatile economic climate and competitive market landscape.
The company's IPO filing did not disclose the target share price or a proposed timeline for the IPO. However, it did reveal plans to list under the symbol "BIRK." With this move, Birkenstock joins other high-profile European companies like British chip manufacturer Arm, which is also planning a major IPO on the Nasdaq this week.
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