Footwear firm’s IPO shows US market is yet to find its feet
investmentnews.comBirkenstock Holding Plc, the 249-year-old footwear brand, stumbled onto Wall Street last week in a debut that could quash the fledgling rebound of initial public offerings.
The maker of cork-soled sandals closed down 12.6% on Wednesday for the worst first-day showing in a US IPO of $1 billion or more in more than two years. Not since AppLovin Corp.’s April 2021 offering, with its 18.5% day-one loss, has there been a worse such debut.
Bad market timing appears to have counteracted the Neustadt, Germany-based company’s conservative pricing strategy and its reliance on anchor investors. It also overshadowed a recent sales boost from the Hollywood blockbuster Barbie whereMargot Robbie trades in her heels for a light pink pair.
The IPO was “definitely not the debut that Birkenstock was hoping for,” said Nicholas Smith, senior research analyst at Renaissance Capital. He added that the current market is more discerning and risk-averse, especially in the consumer sector.
Timing can sometimes be everything when it comes to an IPO. Birkenstock’s investor roadshow was bookended by a potential US government shutdown, public holidays in Germany and the US, delayed listings in Europe and an outbreak of war in Israel.
These factors, combined with disappointing earnings from Birkenstock’s indirect backer LVMH, just hours before the new stock was set to open trading in New York, hurt its performance. LVMH, and the family that controls it, is a partner of Birkenstock’s owner, L Catterton.
Bernard Arnault’s conglomerate, which owns labels such as Louis Vuitton and Christian Dior, reported a 9% rise in third quarter revenue, below the 11.9% analysts were expecting. It said consumers were spending less, especially in Europe, following the
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