German shoe brand Birkenstock, known for their popular sandals, offered investors an IPO on the New York Stock Exchange that fell by over 12% after it was first presented.
The IPO debut was seen as lackluster to investors in the U.S. — and even as some tried to support the deal, the stock traded at $41 per share, which was a discount of over 10% from its initial price of $46.
Timing just wasn't on the company's side.
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Along with some in the investing world attempting to prop up its price, Birkenstock was able to receive the support of Norway's sovereign wealth fund, which joined other entities as the company's deal was priced near the middle of its range.
The shoe brand was founded almost 250 years ago by a German cobbler named Johann Adam Birkenstock. The company was able to stay under family control until 2021 when private equity powerhouse L Catterton garnered a majority stake in the business valued at $4.85 billion.
The drop in the share price during the company's market debut was seen as a negative signal from the IPO market. A first day trading slump is rare for large, well-established companies.
L Catterton said Birkenstock should be valued similarly to premium shoe brands like Nike, the Wall Street Journal reported.
While IPO experts have recently said the market is ready for large firms that have a proven track record, the Birkenstock deal was seen as a flop that could cause other companies to reconsider offerings so late into 2023.
Birkenstock's new owners have tried to raise the company's profile with some big collaborations between brands like Dior and with projects like the Barbie movie out this summer. It's an attempt to reinvigorate the brand after its past cultural associations, such as its role as a favorite shoe worn by Apple leader Steve Jobs, or the popularity during the 1970s of Birkenstock's "Arizona" sandal.
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