German sandal maker Birkenstock is best known for its two-strap Arizona. Plans to take the company public with a listing on the New York Stock Exchange is expected to push the footwear firm far beyond its iconic sandal into growth spaces such as active and outdoor, among other categories.
Birkenstock last week filed its registration statement with the Securities & Exchange Commission, with the document offering a closer look at future plans for the growing business.
The company, like many footwear businesses that started off with sandals, continues to look for ways to generate year-round revenue via new product.
Part of the strategy to get there will focus on a boost in more closed-toe shoes, which Birkenstock listed in its filing as one of five underpenetrated areas it thinks the brand can further expand into. Other categories the company looks to grow include styles for professionals, orthopedic, active and outdoor, and kids.
Birkenstock pointed to new material innovations and shoe constructions as some of the strides it’s already made to solidify its presence in underpenetrated areas.
“These developments broaden our potential product range across usage occasions by creating highly functional, water ready, anti-slip outsoles and more rugged constructions,” Birkenstock said in its filing this week.
The company also outlined its desire to expand beyond footwear, with a prestige shoe and footcare line. Additionally, Birkenstock’s assortment of mattresses, frames, and other sleep options offers another potential growth avenue, according to the filing.
Birkenstock Financial Details
The sandal company, which was showing at the recent Surf Expo in Orlando, had revenue of 1.24 billion euros ($1.32 billion) and net profit of 187.1 million euros ($199.61 million) in its fiscal year 2022 ended Sept. 30, according to the registration statement. That compares with 962 million euros ($1.03 billion) in the prior year.
The brand was distributed across about 6,000 wholesale accounts in fiscal 2022 and varied across orthopedic locations, department stores, and fashion boutiques.
Birkenstock has seen success in recent years growing its direct-to-consumer business, which went from 30% of revenue in fiscal year 2020 to 38% in fiscal 2022.
E-commerce is expected to drive direct-to-consumer growth moving forward, particularly as the company opens more online stores in new markets.
“We have extensive whitespace to grow within and outside of our largest geographies, the U.S. and Europe,” the company said in its filing, pointing to markets such as the U.K., France, southern Europe, and Canada as examples.
Birkenstock has proposed to trade on the NYSE under the ticker BIRK.
IPO: Next “Logical Step”
Private equity firm L Catterton bought a majority stake in Birkenstock in 2021 for a reported 4 billion euros ($4.27 billion).
Birkenstock is led by CEO Oliver Reichert, who joined the business in 2009 initially as a consultant before being tapped for the top spot in 2013.
Today, Reichert leads a global business that counts more than 5,000 employees, which he said in the company’s filing is about triple the size of the workforce when he became CEO.
“We see ourselves as the oldest start-up on earth,” Reichert said in the filing. “We are a brand backed by a family tradition of a quarter of a millennium with the resilience, timeless relevance, and credibility of a multigenerational business. Yet, despite this heritage, Birkenstock remains empowered by a youthful energy level, with all the freshness and creative versatility of an inspired Silicon Valley start-up.”
Going public, Reichert went on to say, is the next “logical step” for the business since the founding family sold the majority stake to L Catterton.
Said Reichert of the IPO: “This is the beginning of a new chapter.”
Kari Hamanaka can be reached at firstname.lastname@example.org.