The Birkenstock family started making shoes some 250 years ago, a span that includes some industry-leading innovations, the creation of a ubiquitous sandal for hippies and tech bros, and even a cameo in the Barbie movie.
But that didn’t impress investors much when the German company finally went public. BIRK was initially listed at $46 but slid 13% on Wednesday—and the company is still struggling to find traction as of Friday.
It’s another mixed signal about the market for IPOs.
On the one hand…or foot, if you will…the company has its own unique set of challenges.
Several other shoe companies, including Allbirds and Dr. Martens, have seen their valuations drop since going public in recent years. And just as Birkenstock was going public, Louis Vuitton Moët Hennessy was reporting weakness in Chinese spending on luxury goods. (LVMH partially owns Birkenstock.)
“The timing of the IPO was in a way unfortunate as it followed LVMH Q3 results, in which management stressed how European consumers had deteriorated in a significant way in Q3,” Javier Gonzalez Lastra, an investment partner at Tema ETFs, told Reuters.
But analysts are also watching for signs of broader weakness as companies in other industries test the IPO market, too.
Following the pandemic and some major stumbles in 2020 and 2021, IPOs have been notably down in the last couple of years. These latest tripping hazards come just as some observers were hoping the IPO market would get back on its feet.
“In recent weeks, IPO advisers have emphasized that they believe the market is open for large companies with proven results, but a high-profile flop like this could discourage others considering late-2023 offerings,” the Wall Street Journal reported.
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