Birkenstock IPO might set worth at $8.7 billion—and Barbie motion picture function reveals why
The fall of 2023 may look like a bad time for Birkenstock, a business understood for its casual shoes, to go public. Two years of skyrocketing inflation have actually moistened customers’ desire to spend lavishly on clothing and shoes, while the post-Labor Day go back to the workplace after the pandemic ways lots of white-collar employees need to quit on dressing like lazy-bones.
But possibly Birkenstock understands something we don’t. Indeed, the shoemaker’s securities declare a prominent going public, revealed today, songs out one aspect that will drive it forward: Feminism. It notes the “Breakthrough of Modern Feminism” as a “consumer megatrend” in its favor.
“The ongoing evolution and expansion of the role of women in society continues to drive meaningful shifts in their preferences in footwear and apparel,” the Germany-based business composed in a letter to potential financiers.
“While trends in fashion come and go, we believe women’s increasing preference for functional apparel and footwear has and will prove secular in nature,” the business composed. Meaning—like Barbie’s title character in this summer season’s hit movie—when females throw away their unpleasant, unwise heels, there’s no going back.
“As a brand that has long stood for functionality, we believe this ongoing tailwind will continue to drive relevance and growth,” the business composed.
It might have a point: Not just has workplace wear has actually ended up being more casual over the years, the pandemic supercharged that pattern. Sneakers and denims—a years earlier just typical in tech and the most innovative fields—are now regular in lots of workplaces. The youngest employees, on the other hand, are pressing the borders even further with crop tops, cut-off trousers, and even goth-inspired clothing.
“Since everyone’s been returning to work, especially women, they’ve moved away from wearing uncomfortable shoes,” stated Abigail Gilmartin, a retail expert at Bloomberg Intelligence concentrating on shoes.
“We’re seeing people wearing sneakers with fancy outfits, they’re wearing sandals more, they’re wearing clogs,” she included.
Potential worth: $8.7 billion
Bloomberg Intelligence approximates that Birkenstock might bring an appraisal in its IPO of in between $7 and $8.7 billion—3 times the marketplace capitalization of style shoemaker Steve Madden and substantially greater than rival Crocs’ $5.4 billion cap. “The casual footwear market is growing, and I don’t think Birkenstock needs to take share from anyone, they can just grow with it,” Gilmartin stated.
Gilmartin indicated this summer season’s hit Barbie movie as evidence of Birkenstocks’ cultural importance. In a crucial scene in the motion picture, the title character needs to pick in between living a dream and understanding the reality about the world, signified by an option in between a pink high-heeled shoe or a Birkenstock. (Sales of Birkenstocks leapt after the movie’s release, Footwear News reported.)
The business generated $687 million in profits in the very first half of this year, a 19% dive from the six-month duration one year prior. In 2022, Birkenstock states, it offered 30 million sets of shoes.
So far in 2023, the most popular shoe designs have actually been tennis shoes or flats, according to shopping platform Lyst. Searches for high-heeled shoes are well listed below their levels in 2019, CNN reported last month in a story that asked, “Have we said goodbye to high heels?”
To make certain, Birkenstock has more than cultural shifts on its side: Gilmartin explained that the shoemaker is tremendously lucrative, with a 35% margin, omitting particular costs, and a vertically incorporated production center that permits it tight quality assurance. And its clients tend to be superfans: Birkenstock composed that its common buyer owns 3.6 sets of shoes.
Gilmartin herself falls under that camp: “My first pair I bought in the pandemic, and then I got three more,” she stated.
