Ready for the (Birken)stock Market?

Less than a month after Arm, Instacart and Klaviyo kickstarted the U.S. IPO market, Birkenstock is set to become the next high-profile stock market debutant this week. The German company famous for its premium sandals is expected to announce the final pricing of its IPO on Tuesday before making its trading debut the day after. According to Reuters, Birkenstock will likely price its IPO at the top of its $44-to-$49-per-share range, which would give the company a valuation of roughly $10 billion.

In recent years, Birkenstock sandals have achieved remarkable popularity, transcending their humble origins as orthopedic footwear. Originally designed in the 1960s, Birkenstocks gained a following for their ergonomic footbed, which provided unparalleled support paired with quality materials and timeless design. Over the years, the sandals’ utilitarian appeal found favor with the counterculture movements of the 1970s, making them a symbol of laid-back, bohemian lifestyles. Decades later, Birkenstocks can frequently be seen on the feet of fashion models, influencers and other celebrities, establishing the brand as a household name for comfortable premium footwear.

According to the company’s IPO filing, its latest growth story began in 2009 when Oliver Reichert took the reigns as general manager first and then as CEO in 2013, transforming the family-owned business with a century-long history in shoemaking into a global enterprise. Since 2014, the company’s revenue has grown at a CAGR of 20 percent, with the past two years' performance standing out in particular. From 2020 to 2022, revenue has grown by more than 70 percent, as the post-pandemic Zeitgeist boosted demand for what is perceived as a comfortable, more sustainable alternative to sneakers and other mass-produced footwear.

It will be interesting to see how the company fares after its debut, as the environment remains challenging for stock market newcomers, as the post-IPO performance of Arm and Instacart illustrates, both of which have come down notably in recent weeks following an initial IPO “pop”.