Birkenstock shares were set to open as much as 13% below their offer price in a tepid US market debut today, underscoring the challenges for new listings even after some highly anticipated IPOs last month raised hopes of a rebound.
Shares of the 250-year-old German sandal maker were set to open between $40 to $42 on the New York Stock Exchange, compared with the initial public offering price of $46 each.
Based on the low end of the range, Birkenstock could be valued at as low as $8.5 billion.
That is still nearly double the valuation at which L Catterton, the private equity group backed by French billionaire Bernard Arnault and his luxury goods empire Louis Vuitton Moet Hennessy, acquired a majority stake in the brand in 2021.
The lukewarm reception from investors comes weeks after strong market debuts for chip designer Arm Holdings, grocery delivery app Instacart and marketing automation platform Klaviyo.
Their shares have, however, given up gains since going public, muddying the outlook for the IPO market.
As of Tuesday's close, Instacart shares were 10% below their IPO price. Arm and Klaviyo were relatively stable, closing 9% and 16% above their IPO prices, respectively.
"It's clear there is some caution among investors about the path ahead for the brand," said Susannah Streeter, head of money and markets at Hargreaves Lansdown.
Birkenstock IPO, which raised $1.48 billion, was priced conservatively because of the market volatility despite enough demand to price it at the top of the indicated range of $44 to $49 per share, Reuters reported on Tuesday.
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Birkenstock - from German village to Barbie blockbuster
Birkenstock gained widespread attention after Australian actress Margot Robbie wore a pair of pink Birkenstocks in the final scene of the hit movie, "Barbie", which was released this summer.
But despite all its pop-culture allure, some industry experts say that the stock may not be on retail investors' radar at least in the near term.
"It lacks the market-related factors that lend well to becoming a meme stock like high short interest, a low free-float, or a major news event," said Tommy Tranfo, head of community at retail-investor-focused forum StockTwits.
"Since investors have been burned by many of the IPOs and SPACs from the last few years, there is a common theme of waiting until the dust settles," Tranfo added.
Founded in 1774 in the German village of Langen-Bergheim, the company was run by the Birkenstock family for six generations, until they sold a majority stake to L Catterton.
The PE firm will continue to own nearly 83% of the sandal maker. It had acquired a stake at a valuation of about $4.3 billion.
Birkenstock has partnership deals with luxury fashion brands, including Dior, Stüssy, Manolo Blahnik and Rick Owens.
The company had disclosed a 21% jump in revenue to 1.12 billion euros for the nine-month period ended June 30. Its net profit for the same period, however, fell 20% to 103.3 million euros.
