Birkenstock the latest shoe to drop in a tough IPO market

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A cost of living crisis could be a challenge for the premium footwear company

Sandal company Birkenstock needs to sell more clogs and boots and boost sales from its own website and boutiques to attract new shoppers amid a cost of living crisis, investors and analysts said before it lists on the New York Stock Exchange next week.

”The question is, how do you create desirability for people to buy another pair of Birkenstocks?” said Mamta Valechha, consumer discretionary analyst at asset manager Quilter Cheviot in London. Sandals are a seasonal product, which makes the company’s sales volatile over the year, Valechha added. Like its footwear counterpart Crocs, Birkenstock has been able to keep up with style trends and rebrand itself as a fashionable item worn by models and celebrities. Barbie, played by Margot Robbie, wore a pink pair of Birkenstocks in the final scene of the eponymous movie released this summer.

Birkenstock has disclosed plans to sell at least 32 million shares priced between $44 and $49 apiece, which would raise about $1.58 billion at the top end of estimates.But Thomas Hayes, chairman of hedge fund Great Hill Capital, said Birkenstock would likely use some of the capital raised through the IPO to further expand, and that its strong position in the U.S. allows it to pass on cost increases to shoppers.

New products on Birkenstock’s U.S. website include $34.95 slides, $250 “Cannes” leather sandals and $240 leather boots. Unique visits to its website this year through August 2023 are up by roughly 26.4% over the same period last year, according to data from Similarweb. The monthly jumps in traffic to its site ranged from 11.5% to 72.1%, the data shows.

 

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