Birkenstock is set to go public on Wednesday. But unlike its 2023 IPO peers, the company has a deep-rooted history.
The nearly 250-year-old company plans to offer 10.75 million shares at $46 a share on the New York Stock Exchange under the ticker symbol "BIRK."
That price, in the middle of its initial range of $44 to $49 per share, sets up the company to raise roughly $1.48 billion. When combined with ordinary shares outstanding after the completion of the offering, it puts Birkenstock's total valuation at $8.6 billion.
This is just another chapter for the Germany-based footwear brand. Founded in 1774, the brand's origin story began 249 years ago. Yet, the Birkenstock brand has managed to stay relevant all these years, now going on the ultimate stage.
The brand is "like rediscovering an old vinyl record and realizing it’s a timeless hit," Sunny Bonnell, CEO and founder of branding agency Motto, told Yahoo Finance in an email. "Birkenstock wears its history and values like a badge of honor."
Many of the companies that have gone public in 2023 are not only newcomers to the public market but also have more recent histories.
England-based tech company Arm (ARM) was founded as a company in 1990. The Mediterranean restaurant chain Cava (CAVA) opened its first location in 2010. And grocery delivery service company Instacart (CART) launched in the San Francisco Bay Area in 2012, the same year software company Klaviyo (KVYO) was founded.
Birkenstock's rich heritage is also deeper than other legacy companies at the time of their IPOs: Goldman Sachs went public 130 years after it was founded, American Express was 127 years old at the time of its public debut, Johnson & Johnson went public at 108 years, and Campbell Soup joined the public markets after 85 years of business.
A nearly 250-year-old company goes public
The Birkenstock brand is older than the United States.
According to the company's website, the footwear brand's origin can be traced back to 1774 to Johann Adam Birkenstock, who was listed as "subject and cobbler" in the church archives in Langen-Bergheim, Germany.
More than 100 years later, in 1896, Johann’s great-great-grandson, Konrad Birkenstock, became known as a "master cobbler" and began manufacturing and selling the "flexible footbed insoles."
In 1902, Konrad created the contoured arch support that Birkenstock is known for, and in 1925, Birkenstock opened a new factory in Friedberg, Germany, to make the "blue footbed," which it still sells today.
The business started picking up in the 1960s with the introduction of its first one-strap fitness sandal, called the Madrid Model.
In 1966, Birkenstocks came to the US market. Expanding into the US "provided numerous opportunities for the Birkenstock brand to grow, particularly in California where there was a new culture of young consumers who valued function, purpose and individuality," the company said in its S-1 filing.
Birkenstock continued to grow. In 2021, brothers Christian Birkenstock and Alex Birkenstock led the decision to sell a majority stake of the company to private equity firm L Catterton, and its affiliates including Bernard Arnault's luxury goods investment company, Financière Agache.
The company also named Oliver Reichert, who is now taking the company public, as the sole CEO.
"Despite this heritage, Birkenstock remains empowered by a youthful energy level, with all the freshness and creative versatility of an inspired Silicon Valley startup," Reichert wrote ahead of Birkenstock's IPO. "We have retained the original spirit of our forefathers who laid the foundation of a global business that is more relevant than ever before."
Birkenstock today: A multibillion-dollar company
In fiscal year 2022, the company brought in 1.24 billion euros, growing at an annual rate of 20% from fiscal 2014 to last year. It also sold sold 30 million units in 2022.
Word of mouth is the company's biggest marketing strategy. The company said in a filing that its universal nature allows it to appeal to "a broad range of consumers across age, gender, and socio-economic demographics."
That gives the brand a leg up compared to other brands as well as others in the 2023 IPO class.
"Imagine a band that doesn’t advertise yet sells out concerts," Bonnell said. "That’s Birkenstock. When a brand earns trust and love, it’s like igniting a bonfire."
Although the company is on its seventh generation of leadership, it can tap into any age, Bonnell added.
"It may seem like the boomer hippie in a room full of millennials and Gen Z, but that's its genius," she explained. "The brand speaks the language of the youth."
Now, this centuries-old company is being put to the ultimate test.
"Maybe this is the real test as to whether the IPO market is reopening for real or whether this was a false storm," Ben Laidler, eToro global markets strategist, told Yahoo Finance over the phone.
Torch Capital's founder and managing partner Jon Keidan is wary that an ongoing pullback in consumer spending could hurt the company.
"Birkenstocks falls into nice-to-have," he told Yahoo Finance Live. "And if people are tightening their belts, that may be the type of purchase that they may not make [in] the next year or two."
Furthermore, Barrett Daniels, US IPO services co-leader at Deloitte, is skeptical about investors' appetite for new players on the market.
"I would say it's not a perfect IPO window, but it's a window," he told Yahoo Finance Live. "The demand is there, the investment demand, but the question is who's ready to go? And I don't think the pipeline is quite where we thought it was."
—
Brooke DiPalma is a reporter for Yahoo Finance. Follow her on Twitter at @BrookeDiPalma or email her at [email protected].
Click here for the latest stock market news and in-depth analysis, including events that move stocks
Read the latest financial and business news from Yahoo Finance