For Birkenstock, a company known for its casual sandals, fall 2023 doesn’t seem like a good time to go public. Two years of soaring inflation have eroded consumers’ willingness to splurge on clothes and shoes, while a post-pandemic return to the office after Labor Day means many white-collar workers must give up dressing like couch potatoes.
But maybe Birkenstock knows something we don’t. In fact, the shoe maker’s securities filing for its high-profile initial public offering this week listed one factor driving it forward: feminism. It lists “breakthroughs in modern feminism” as a “consumer megatrend” in its favor.
“Women’s evolving and expanding role in society continues to drive meaningful shifts in their footwear and apparel preferences,” the Germany-based company wrote in the report. A letter to potential investors.
“While fashion trends come and go, we believe women’s growing preference for functional clothing and footwear has and will prove to be long-term,” the company writes. Meaning – Like Barbie’s Once the women featured in this summer’s blockbusters throw away their painful, impractical heels, there’s no turning back.
“As a brand with a longstanding focus on functionality, we believe this continued tailwind will continue to drive relevance and growth,” the company wrote.
That might make sense: Not only has office attire become more casual for decades, but the pandemic has exacerbated the trend. Sneakers and jeans, which a decade ago were only common in tech and the most creative fields, have now become everyday wear in many offices. Meanwhile, the youngest workers are pushing the boundaries even further, wearing crop tops, cut-off trousers and even goth-inspired outfits.
“As everyone returns to work, especially women, they have stopped wearing uncomfortable shoes,” said Abigail Gilmartin, a retail analyst specializing in footwear at Bloomberg Intelligence.
“We’re seeing people wearing sneakers with fancy outfits, they’re wearing sandals more, they’re wearing clogs,” she added.
Potential value: $8.7 billion
Bloomberg Intelligence estimates that Birkenstock could be valued at between $7.7 billion and $8.7 billion in the IPO, three times the market value of fashion shoe maker Steve Madden and significantly higher than the $5.4 billion cap of rival Crocs. “The casual shoe market is growing, and I don’t think Birkenstock needs to take share from anyone, they just have to grow with it,” Gilmartin said.
Gilmartin points to this summer’s blockbusters Barbie The movie serves as a testament to the cultural relevance of Birkenstocks. In a key scene in the film, the protagonist must choose between living a fantasy life and learning the truth about the world, symbolized by the choice of pink heels or Birkenstocks. (Birkenstock sales surge after movie release, Footwear News report.)
The company achieved revenue of $687 million in the first half of this year, an increase of 19% over the same period last year. Birkenstock said that in fiscal 2022, the company sold 30 million pairs of shoes.
The most popular shoe styles so far in 2023 are sneakers or flats, according to the shopping platform lust. According to CNN, search volume for high heels is well below 2019 levels report Last month, a report asked: “Have we said goodbye to high heels?”
To be sure, there’s more than just a culture shift at Birkenstock: Gilmartin noted that the shoemaker is highly profitable, with a 35% profit margin after certain expenses, and that its vertically integrated manufacturing facilities allow it to tightly control quality. And its customers tend to be super fans: Birkenstock writes that its typical shopper owns 3.6 pairs of shoes.
Gilmartin herself falls into this camp: “I bought my first pair during the pandemic, and then I bought three more pairs,” she said.
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