Birkenstock Shares Slump on First Day of Trading
Birkenstock shares dropped by over 10 percent on day one of trading on October 11, after the label completed the third-largest US listing of the year.
Business of Fashion first reported news of Birkenstock's IPO as rumors of a potential listing back in July.
However, at the end of the first day, Birkenstock's shares closed at $40.20 a share, nearly 13 percent below the $46 agreed the day before.
American investment firm L Catterton, a private equity firm backed by LVMH, has held a majority stake in Birkenstock since its acquisition of the German company back in 2021, with rumors at the time estimating the deal to be worth around $6 billion USD.
Last year, reports suggested that Savage X Fenty, Rihanna's lingerie brand and another L Catterton investment, and Kim Kardashian's SKIMS are also exploring the possibility of pursuing their own IPOs, although nothing has come to fruition yet.
Sure, the allure of going public may seem enticing at first — it gives brands funding appeal, offers authority, etc. — but it can be a double-edged sword, as publicly-traded brands are obviously subject to additional scrutiny.
Lanvin is a prime example. On day one of its IPO on the New York Stock Exchange (NYSE) in December 2022, the French luxury house saw its shares plummet by 25 percent from an initial price of $10.2 to $7.63 at the end of the trading day.
Allbirds similarly rocketed in value after its initial IPO but has since plummeted in appeal, leading to general disdain from investors.
Over the last few years, though, Birkenstock has experienced a massive boom in popularity. This is thanks in part to the explosive rise of its Boston clog and hyped collaborations with the likes of tastemaking labels like Dior and Stüssy that've solidified Birkenstock as a bonafide hitmaker.
This, for many investors, could have proven one reason of many as to why Birkenstock was perhaps too good an opportunity to ignore. But, alas, the early signs aren't great.
This article was first published on July 7 and then updated on October 13.
