Birkenstock has confirmed its planned Initial Public Offering (IPO) on the New York Stock Exchange using the ticker ‘BIRK’. Its shares will start trading on Wednesday 11 October.
It’s looking to raise nearly $11bn, pricing its shares between $44-49.
Regardless of whether they wear socks or not, many will be excited to see this shoemaker float on the stock market for the first time.
Dating back as far as 1774, Birkenstock has a long history in manufacturing shoes and sandals. Its orthopaedic footbed is intended to allow people to walk as nature intended, as if barefoot.
The ‘ugly’ shoe took off in popularity during the pandemic, though sales have risen over the years.
It says its products are designed for everyone. While the majority of Birkenstock’s customers are female, there’s a broad spread across different age ranges and incomes. Showing it’s not just cool for one group or another.
They also had a small cameo in the recent Barbie movie.
Birkenstock sells its sandals to wholesalers, but it’s also selling direct to consumers via its own bricks and mortar retail stores, and website. And is looking to increase this element of its sales.
The company may be German, but just over half its revenue comes from the US.
Birkenstock in numbers:
- Revenues of 1.2bn EUR in 2022
- Nearly 30m pairs of shoes sold last year
- 12% increase in units sold from 2020 to 2022
- Gross profit margin increased from 55% to 60% from 2020 to 2022
- Direct-to-consumer revenue increased from 30% of all revenues in 2020 to 38% in 2022
Though there are signs that demand might be slowing. The nine-month sales through to June grew 5%, which is less than the rate of growth during the pandemic.
As with everything, investors must look past the hype, fanfare and the history. Birkenstock's past performance doesn’t guarantee success and shouldn’t be used as a guide on future returns. Investments rise and fall in value, so investors could make a loss.
It’s important to understand a company before you invest. Know the company-specific risks, make sure you’re happy with the long-term prospects and it’s right for you, and never put all your eggs in one basket.
Investing in an individual company is higher-risk and isn’t right for everyone. Your returns are dependent on the fate of that company. If it fails, you risk losing your whole investment. Investors should only buy and hold individual shares as part of a well-balanced, diversified portfolio.
How to buy Birkenstock shares
UK investor's can't take part in the Birkenstock IPO. We hope to be able to broker trades in Birkenstock shares but we require them to be enabled by CREST, the UK’s depositary for electronic shares. This may not be possible for a few days and is outside of our control.
If you believe that the long-term prospects for Birkenstock are right for your needs, and want to buy the shares, here’s what you’ll need to do:
1. Choose an account to hold your shares in
Once listed on the stock market, we expect you to be able to hold Birkenstock shares in our Fund and Share Account, Stocks and Shares ISA, Lifetime ISA or Self-Invested Personal Pension (SIPP).
Before you buy a US share with us though, you’ll need to have completed a W-8BEN form.
CHOOSE AN ACCOUNT THAT'S RIGHT FOR YOU
2. View the latest share price
On the first day of trading, it can take several hours to get a live market price. During this time, you can’t buy the shares.
Investors will be able to trade the shares through us once there’s a live market price, and trading and settlement has been confirmed by the UK clearing and settlement service. This could be after the shares have already started trading on the stock exchange.
3. Buying Birkenstock shares
We’ll show you the live Birkenstock price in both US dollars and sterling. You can then choose to accept the price or not.
That’s it. Your shares will be held in your account. You can see how they’re doing online or on our app and deal whenever the US market is open.
What are the costs to buy Birkenstock shares?
There are three charges when buying US shares with us.
1. Dealing charge
It costs up to £11.95 per deal to buy and sell US shares online. You can also deal over the phone or by post from £20 – £50 per deal.
2. Foreign Exchange (FX) charge
US shares are bought and sold in US dollars. You don’t need to hold a foreign currency account. We’ll convert the money in your account into US dollars to pay for the shares. When you sell, we’ll convert the proceeds back into pounds for you.
The cost will depend on the value of your deal, up to 1% per deal. Changes in the exchange rate will affect the sterling value of overseas holdings.
3. Annual account charge
There’s no annual account charge to hold US shares in the Fund and Share Account. It costs up to 0.45% per year to hold shares in a Stocks and Shares ISA or SIPP (capped at £45 per year in the ISA and £200 per year in the SIPP). The charge for holding shares in a Lifetime ISA is 0.25% capped at £45.
VIEW A FULL LIST OF OUR CHARGES
Our share dealing service is for investors happy making their own investment decisions. You should speak to a financial adviser if you’re not sure if an investment is right for you.
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Image by John MacDougall / Contributor via Getty
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