Visa The Embedded Lending Opportunity April 2024 Banner

Birkenstock IPO Raises $1.4 Billion at Over $9 Billion Valuation

Birkenstock Public Offering Raises $1.4 Billion

German shoe retailer Birkenstock has raised $1.4 billion in its initial public offering (IPO).

The company set the price of its shares in the middle of the range it had initially sought, valuing Birkenstock at over $9 billion, The New York Times reported Wednesday (Oct. 11). Shares were priced at $46 each. The company had previously said it anticipated a price of $44 to $49 per share.

Birkenstock originally targeted a $10 billion valuation.

Analysts have warned that Birkenstock has entered the market at a tough moment, with high prices forcing consumers to cut back on fashion and other non-essentials, per the NYT report.

Global shoe sales are expected to increase by just 2.9% this year due to recent price increases, Reuters reported Thursday (Oct. 5).

Meanwhile, PYMNTS Intelligence found that as many as 6 in 10 consumers have cut back on their spending on clothing and accessories, while 40% said they have traded down to less expensive brands.

“The question is, how do you create desirability for people to buy another pair of Birkenstocks?” Mamta Valechha, consumer discretionary analyst at asset manager Quilter Cheviot in London, told Reuters.

Valechha added the sandals Birkenstock sells are a seasonal good, which makes the company’s sales volatile throughout the year.

The NYT report pointed out that other shoe companies that have gone public in recent years — AllBirds and Dr. Martens among them — have seen their value drop since joining the market.

In addition, other high-profile IPOs — such as Instacart and Arm — saw their prices drop after going public. That has led to reports of venture capitalists cautioning startups to put plans to go public on hold.

“In our portfolio, we would advise: Unless you really need to, hold back,” Mike Volpi, a general partner at Index Ventures, told the Financial Times Oct. 1. “The market has been rough in the past few weeks. … Unless you need to go out, I’d wait until the second half of next year.”

For all PYMNTS retail coverage, subscribe to the daily Retail Newsletter.