Birkenstock Could Break Fashion’s IPO Logjam

It’s a big week for the Arnaults.

Birkenstock, which the Arnault and LVMH-backed L Catterton acquired in 2021, is expected to stage its initial public offering in the coming days. And on Oct. 10, LVMH reports its third-quarter results.

First, Birkenstock: the shoemaker bills itself as the “oldest start-up on earth,” a reference to its 250-year history. But L Catterton is cashing in on the brand’s recent success, which has seen sales spike by 71 percent between its 2020 and 2022 fiscal years. Collaborations with Dior, Manolo Blahnik and other high-end names has turned the sturdy leather-and-cork sandals into status footwear, while a cameo in the Barbie movie was the latest demonstration of pop culture dominance.

The IPO is likely to be a success for L Catterton, which acquired Birkenstock for €4 billion (about $4.3 billion at the time) and is projecting a post-IPO valuation potentially surpassing $9 billion. If we’re ranking strange looking, but wildly popular shoes, Birkenstock’s market capitalisation would be significantly higher than Crocs or On, though smaller than Deckers, seller of Hokas and Uggs.

But the real takeaway will be for other potential fashion IPOs waiting in the wings. Between Birkenstock and Oddity Tech, another L Catterton investment that went public this summer, the logjam appears to have broken. Arc’teryx and Salomon owner Amer Sports has filed for an IPO, while Golden Goose, Skims, Shein and others are rumoured to be planning public listings. Oddity’s performance offered mixed signals: demand for shares was strong, rewarding early stakeholders, but the stock’s price has dropped more than 40 percent since its debut, potentially a signal for investors to steer clear of future IPOs. Birkenstock, a bigger, better-known name, will offer clearer guidance.

Onto LVMH results: The world’s biggest luxury company is experiencing what counts for a downswing, amid signs demand for high-end clothes, shoes and bags is peaking in the US and coming in short of expectations in China. It’s hard to be too concerned about LVMH’s fashion arm when it’s reporting growth merely in the high teens rather than the 30 percent or more seen in recent years. But the relative gloom seen in analyst notes and the performance of LVMH’s stock speaks to the high expectations the company has set. It’s that much more difficult to spur meaningful growth at Louis Vuitton, on top of its current €20 billion-plus in annual sales, or to turn Tiffany into a global jewellery juggernaut, when luxury’s two biggest markets are in a funk.

What Else to Watch for This Week

Sunday Oct. 8

Shanghai Fashion Week begins

Tuesday

LVMH reports third-quarter results

New York Bridal Week begins

Wednesday Oct. 11

Frieze London begins

Gucci Cosmos, the brand’s traveling exhibition, comes to London

Lakme Fashion Week X FDCI begins, showcasing the work of designers from across India

Thursday

Fast Retailing reports results

Victoria’s Secret holds an investor day

US reports September inflation data

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