By Swetha Gopinath, Eyk Henning and Ruth David
Private equity firm L Catterton is set to launch an initial public offering of Birkenstock as soon as September that may value the iconic footwear maker at more than $8 billion ($11.9 billion), people with knowledge of the matter said.
The firm, backed by luxury French fashion house LVMH, is working with Goldman Sachs and JPMorgan Chase & Co. on a potential listing of Birkenstock in the US.
A listing could value the German sandal maker at as much as $US10 billion, according to one of the people. The company’s sales have been boosted of late by the blockbuster Barbie movie, which stars Margot Robbie in the title role donning a pair of Birkenstocks in one scene, which retail for $US130 a pair.
Deliberations are ongoing and no final decisions on the size or timing of an IPO have been taken, the people said, asking not to be identified discussing confidential information. Representatives for Birkenstock and L Catterton declined to comment.
The world seems awash in Barbie pink at the moment. For Mattel, the company behind the iconic doll, there is much riding on the movie — primarily reviving sales of Barbie dolls and accessories. Demand for all toys boomed during the pandemic, but the industry cooled as lockdown rules were lifted and inflation and economic malaise set in.
The movie has helped lift Mattel’s shares by more than a third from their recent March low as the company looks to capitalise on Barbie’s success. The toymaker is already exploring a sequel and planning to turn more of its brands, like Hot Wheels and Barney, into major Hollywood franchises.
The movie will generate more demand for Mattel’s dolls as well as movie-related merchandise, with some product lines already selling out. Mattel also delayed some Barbie-related promotions until after the release of the film, which will benefit the brand in the third quarter.
The movie has been a big international hit, grossing more than $US500 million globally in its first week, including the year’s biggest opening weekend. More than half of the box office take so far has been outside of the US.
How well the movie does also matters more broadly to the consumer sector. Along with Birkenstock, Mattel has struck around 100 brand partnerships with the likes of Gap.
A German giant
Founded nearly 250 years ago, Birkenstock has become a high-fashion brand, launching collaborations with luxury names such as Dior, Manolo Blahnik and Valentino, and spawning variants from labels including Celine and Givenchy. Its sandals have been sold in the US since 1966.
Birkenstock saw revenue rise 29 per cent to roughly €1.2 billion ($2 billion) last year, leading to adjusted earnings of €394 million, according to a lender presentation seen by Bloomberg News. It’s been investing heavily in building out its production sites in Germany, including a new €120 million factory in Pasewalk, a town north of Berlin.
An IPO of Birkenstock would come more than two years after the L Catterton and the family investment company of billionaire Bernard Arnault acquired a majority stake in the business, valuing it at about €4 billion ($6.6 billion).
Arnault, who is one of the world’s richest people, is the French tycoon behind luxury-goods powerhouse LVMH, which operates brands such as Louis Vuitton, Moet Hennessy, Tag Heuer and Dior.
The US market for IPOs looks like it’s finally coming back to life after 18 months in the doldrums, boosted by the recent success of restaurant chain Cava Group’s debut. Back in June, Cava almost doubled on its trading debut, surging 99 per cent from the IPO price to give the company a market value of $US4.9 billion.
The Business Briefing newsletter delivers major stories, exclusive coverage and expert opinion. Sign up to get it every weekday morning.
Source: Thanks smh.com