Will Bergenstock from Germany heading to New York overcome setbacks and succeed in its IPO?

Can Birkenstock, the famous German sandal brand preparing for a listing on the U.S. New York Stock Exchange, overcome the triple challenges of worsening business conditions, concerns over earnings, and poor stock performance in the same industry to achieve a successful debut?

Birkenstock, considered one of the major IPOs on the New York Stock Exchange this year, will begin trading under the ticker symbol 'BIRK' on the NYSE on the 11th (local time). According to the securities registration statement submitted to the U.S. Securities and Exchange Commission (SEC), Birkenstock plans to issue 32 million shares at a public offering price of $44 to $49 per share, raising up to $1.58 billion (approximately 2.13 trillion KRW). If the IPO succeeds, Birkenstock's corporate valuation is expected to reach $9.7 billion (about 13 trillion KRW). Birkenstock stated in its listing documents that "the funds raised from the listing will be used for operating capital and debt repayment."

Birkenstock has been regarded as one of the major IPOs on the New York Stock Exchange this year alongside ARM, a UK semiconductor design specialist that went public last month, and Instacart, the largest grocery delivery company in the U.S. According to financial information provider Dealogic, Birkenstock ranks third in market capitalization among companies pursuing IPOs on the New York Stock Exchange this year.

Foreign media have evaluated that dispelling concerns about earnings is crucial for Birkenstock’s successful IPO. Due to the seasonal nature of its core revenue source?sandals?Birkenstock experiences significant quarterly sales volatility. Mamta Valecha, an analyst at Quilter Cheviot, a London-based asset management firm, pointed out, "Developing strategies to resolve the instability in the earnings structure is a key challenge."

According to the listing documents submitted to the SEC, Birkenstock’s cumulative sales as of the end of June this year reached €1.11 billion, a 21% increase compared to the same period last year. However, net profit was €129.1 million, down 20% year-on-year.

Sales outlook is also not optimistic due to concerns over inflation and economic uncertainty. According to market research firm Euromonitor, global shoe sales are expected to increase by only 2.9% this year compared to the previous year. One foreign media outlet reported, "Considering the declining foot traffic in offline retail stores, there are calls for strategies to expand retail sales, such as attracting more in-store customers."

Furthermore, the stock prices of shoe companies that went public after 2021, such as Allbirds, Dr. Martens, and On Running, have shown a sluggish trend over the past two years, indicating poor stock performance among peer companies.

However, having a parent company with substantial capital strength is considered a factor that boosts investor sentiment. Birkenstock’s largest shareholder is El Caterton Partners, a private equity fund affiliated with the French luxury group Louis Vuitton Mo?t Hennessy (LVMH). El Caterton, jointly established by LVMH and a U.S. investment firm, along with Financi?re Agache, the family holding company of LVMH Chairman Bernard Arnault, acquired Birkenstock in May 2021. Although the acquisition price was not disclosed, the market estimates it to be around €4 billion (approximately 5.7 trillion KRW).

Founded in 1774 by Johann Adam Birkenstock, a German shoemaker, Birkenstock gained fame for its unique arch-shaped sole tailored to the shape of the foot and its cork manufacturing method. The brand began to attract overseas attention after entering the U.S. market in 1966 and became famous as the preferred footwear of the late Steve Jobs, the founder of Apple.

This content was produced with the assistance of AI translation services.