Birkenstock IPO gets predictable shoeing

Oddity Tech

11/10/2023 19:10

(The author is a Reuters Breakingviews columnist.  The opinions
expressed are their own.)
       NEW YORK, Oct 11 (Reuters Breakingviews) - Birkenstock’s
 BIRK.N  IPO is a flop. Investors in the United States have
given the no-frills clogs a kick in the rear despite the Barbie
movie craze and attempts by cornerstone investors to prop up the
deal. As of 6:30 p.m.(1730 GMT), the company’s stock was trading
at $41 a share, a discount of more than 10% to the $46 debut
price. 
    Birkenstock's owner L Catterton was banking on an easier
journey after Oddity Tech  ODD.O  listed in July with a 40% pop.
The sandal maker secured the backing of Norway's sovereign
wealth fund, among others, and cautiously priced the deal at the
middle of its range. Yet the timing wasn't ideal. The
Birkenstock enterprise was gunning for a multiple of 19 times
EBITDA, well above that of Europe's luxury conglomerates.
    Its price ambitions were always questionable, as was the
decision to ditch Europe for New York. It didn't help that LVMH
 LVMH.PA  shares slumped on Wednesday to their lowest level
since December on the back of slower third-quarter sales growth,
which also dragged down rivals Compagnie Financiere Richemont
 CFR.S  and Kering  PRTP.PA .
    The problems for Birkenstock boss Oliver Reichert don’t end
there. He has to contend with LVMH CEO Bernard Arnault, whose
family holding has pledged to buy up to $325 million of shares.
And if the first-day stock woes stick, a suitor might soon walk
all over Birkenstock. (Pamela Barbaglia)
 
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Graphic: Global IPO proceeds in free fall    https://tmsnrt.rs/3LY1SHj
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 (Editing by Jeffrey Goldfarb and Sharon Lam)
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