On Monday, the renowned German sandal company, Birkenstock, announced its intention to set the price range for its upcoming initial public offering (IPO) in New York between $44 and $49 per share. The footwear brand, supported by private-equity firm L Catterton, aims for a fully diluted valuation of approximately $10 billion. Additionally, the company revealed that a member of one of the world’s wealthiest families will join its board upon its debut.
Birkenstock is set to secure up to $1.58 billion, which places it among the top five largest IPOs of the past two years. In a filing made on Monday with the Securities and Exchange Commission, it was disclosed that Alexandre Arnault, the 31-year-old son of billionaire LVMH chairman Bernard Arnault, has been nominated to join the board of directors at Birkenstock.
Birkenstock also made public that Financière Agache, the Arnault family’s investment office that previously acquired a controlling interest in the footwear company in 2021, has shown interest in purchasing up to $325 million worth of Birkenstock shares during its initial public offering. Simultaneously, a consortium, including the Norwegian sovereign wealth fund, has signaled its potential interest in acquiring an additional $300 million worth of Birkenstock stock.
Birkenstock intends to begin trading on the NYSE next Wednesday. The sandal maker is set to become the fourth significant company to go public in the U.S. since mid-September. It joins a list that includes British chip designer Arm, grocery delivery service Instacart, and marketing automation firm Klaviyo. The performance of these three recent entrants in their initial weeks of trading has varied: Arm shares rose 5% from their IPO price, Klaviyo saw a 15% increase from its debut, while Instacart’s shares were down by 1%.
The Arnault family’s acquisition of Birkenstock valued the sandal company at $4.87 billion, resulting in a nearly 100% partially realized gain within 31 months. Following the sale, Alex and Christian Birkenstock, the heirs to the family business, each had a net worth of approximately $1.7 billion.
The Arnaults, considered Europe’s wealthiest family, have a patriarch in Bernard Arnault, whose estimated net worth is $187 billion, making him the second-richest person globally. Alexandre Arnault, Bernard’s third-oldest child and second-oldest son, has held the position of executive vice president of communications and product at Tiffany since 2021.
The company and its stockholder plan to sell at least 32 million shares, as per a filing with the U.S. Securities and Exchange Commission. Birkenstock is moving forward with its IPO plans amid a resurgence in IPO activity following a two-year lull. However, this resurgence has seen varied post-debut performances from high-profile listings such as Arm and Instacart.
Birkenstock, traditionally known for its comfort rather than fashion, has gained popularity among fashion enthusiasts. Its appeal reportedly increased when one of its brands was featured in the movie “Barbie,” where the lead actress, Margot Robbie, was seen wearing a pair of pink Birkenstock sandals.
In the last month, Birkenstock reported a 21% increase in revenue for the nine-month period ending on June 30. This growth demonstrates its resilience in the face of challenging market conditions for luxury goods, with consumers being cautious due to inflation concerns.
Birkenstock, a sixth-generation family-owned business with roots dating back to 1774, has established partnerships with prominent brands like Dior, Manolo Blahnik, and Rick Owens.
Following the IPO, L Catterton will hold approximately 83% ownership of the company. The funds generated from the IPO will be used to reduce the company’s debt. Goldman Sachs, J.P. Morgan, and Morgan Stanley are among the underwriters for the IPO.
(Source: Derek Saul | Forbes | Manya Saini | Niket Nishant | Reuters)
