German sandal brand Birkenstock is back in the news with reports of a potential initial public offering (IPO) in less than a month.
On July 31, media outlets cited insiders claiming that L Catterton, the private equity firm that owns Birkenstock, could list the company in the U.S. as soon as September. This move could potentially push Birkenstock's valuation above $8 billion, with some speculating it could reach up to $10 billion.
The insiders further stated that L Catterton is still considering its plans and hasn't firmly decided on the IPO's timeline or the amount of funding to raise.
While representatives of both Birkenstock and L Catterton declined to comment on these reports, recent signs suggest that the timing might be right for an IPO.
Media outlets noted that the brand received a major boost after the lead character in the popular movie "Barbie" was seen wearing pink Birkenstocks, a product placement that spiked the brand's sales.
Earlier in July, reports surfaced that L Catterton, backed by luxury goods giant LVMH, had been consulting with advisors including Goldman Sachs and JP Morgan Chase regarding a potential IPO for Birkenstock, which could take place this year or the next. The estimated valuation for the IPO was suggested to be over $6 billion.
Even at a $6 billion valuation, this would represent a more than 22% increase from the brand's value when L Catterton acquired Birkenstock just over two years ago.
At the end of February 2021, L Catterton reached an agreement to acquire a majority stake in Birkenstock, valuing the brand at about €4 billion, or approximately $4.9 billion at the time. With this week's rumors placing Birkenstock's top valuation at $10 billion, that would mean the brand's worth has doubled in just two years.
With a rich history spanning 250 years, Birkenstock began selling sandals in the U.S. in 1966. Thanks to collaborations with fashion brands like Dior, Valentino, and Italian luxury shoemaker Manolo Blahnik, Birkenstock has become a highly popular fashion brand today.
A bank presentation document obtained by the media shows Birkenstock's operating revenue increased by 29% last year to around €1.2 billion, or approximately $1.3 billion, with adjusted earnings of €395 million.
In May, Birkenstock's official website announced that the company had prepaid $50 million of its USD Term Loan B ahead of schedule. The company stated this move reflected its outstanding operational performance, strong liquidity, and commitment to deleveraging its balance sheet.
Birkenstock previously revealed plans for substantial investment in manufacturing plants in Germany, including a €120 million industrial park in the northern city of Pasewalk, near Berlin.
In March, Birkenstock announced that the industrial park in Pasewalk, about an hour's drive from Berlin, would be completed. The company planned to start installing production machines in April, with the manufacturing facility operational by the third quarter and the first batch of products ready by October at the latest.
