A 249-year-old orthopedic sandal maker is now one of the year’s top IPOs amongst a crowd of buzzy tech companies. How did that happen?
Driving the news: Birkenstock is hitting the public market today, with the German shoemaker aiming to sell ~32 million shares for US$46 a pop, giving the company a ~$9.2 billion valuation.
- It’s the fourth blockbuster IPO within the past month, following Arm, Klaviyo, and Instacart, all of which started off red hot but have since delivered mixed results.
Why it’s happening: Birks were once thought to be strictly for organic food store owners and Lilith Fair attendees, but they’ve boomed in popularity since L Catterton — a PE firm backed by the European luxury conglomerate LVMH — bought the company in 2021.
- Last year, Birkenstock’s total annual revenue came in at €1.24 billion — a 29% increase from the year before and a roughly 70% increase from two years prior.
Zoom out: In recent years, Birks found a following in a different crowd: High-fashion hype beasts tired of sneakers and drawn to the comforts promised by cork sandals. The company has capitalized on this new clientele through collabs with brands like Stüssy and Valentino.
- And whether someone buys a pair because of Kendall Jenner or Barbie, people who go Birk never go back. A US poll found that, on average, Birk owners own 3.6 pairs.
Bottom line: Going public isn’t easy for shoemakers (just look at recent IPO flops Allbirds and Doc Martens), but Birkenstock has already done the near impossible: Changing its image to consumers without alienating the buyers who initially made it popular.—QH