Despite raising USD1.5 Billion in IPO, Birkenstock shares went down by 12.6 percent on the New York Stock Exchange on its first day of trading and could potentially be a bad sign for other brands that are thinking about going public. Going public can allow companies to gain access to more capital but it may also attract scrutiny from investors, as is expected of the brand. Alexander Arnault, son to chairman and CEO of LVMH, Bernard Arnault, made an appearance at Birkenstock’s IPO. Earlier this month, the Securities and Exchange Commission revealed the nomination of the 31-year-old to Birkenstock’s board of directors.
While the German shoe brand has successfully captured the attention (and spending power) of a younger generation, Birkenstock also universally changed its perception as a polarising “orthoepic-looking shoe”, to a symbol of casual-chic footwear alongside other anti-fashion, fashion shoes the likes of Uggs and the Crocs — something Vogue Business attributes to Birkenstock’s attention to quality, innovation and creativity through their control of production. The brand’s Autumn/Winter 2022 campaign for instance, featured a bevy of fashion stylists and artists including the likes of Bernard Koomson, Masha Schubbach and Nehjat Ramoth, highlighting Birkenstock’s efforts to move to a younger demographic. However, Vogue Business also reports that since private equity firm L Catterton acquired Birkenstock in a USD4.35 billion deal in 2021, “revenues have boomed”.
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LVMH’s shares fell to their lowest levels of the year following disappointing financial results. In the response, the company said revenue growth was normalising following a COVID pandemic boom and flagged a “uncertain economic and geopolitical environment”. Fashion and technology are industries that have a history of high valuations. Oddity was valued at USD1.5billion when L Catterton’s tech platform Oddity became public.
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