New York (AFP) - Shares of German sandals maker Birkenstock fell almost 13 percent from their introductory price on Wednesday, on its first day trading on the New York Stock Exchange.
The company, trading under the ticker "BIRK," closed at $40.06, down 12.9 percent from its initial public offering price of $46 which valued the company at about $8.6 billion.
The sharp decline in its stock price values the sandals maker at closer to $7.5 billion.
"The truth is we didn't have 'the Barbie moment.' Barbie had the ' Birkenstock moment,'" quipped Chief Executive Oliver Reichert on CNBC, as he described the company as a "purpose" brand shortly before the debut.
Birkenstock started life as an orthopedic shoemaker, but has since shed its unflattering association with sock-and-sandal-wearing Germans to become a fashion accessory, as illustrated in the latest Hollywood blockbuster "Barbie."
The stock flotation marks a new milestone, just two years after the Birkenstock heirs sold a majority stake to private equity group L Catterton and the family holding fund of French luxury magnate Bernard Arnault.
"An IPO in New York signals global ambitions," said Fernando Fastoso, a professor specializing in luxury brand management at Pforzheim University.
"Since 2021, the company has been partially owned by a private equity firm backed by LVMH. Hence, it seems that Birkenstock wants to further develop its iconic status to target the growing market for luxury across the world," he added.
'Authenticity'
Birkenstock traces its roots back to 1774 and Johann Adam Birkenstock, who worked as a cobbler in Langen-Bergheim, a small community in western Germany.
In 1896, Konrad Birkenstock began focusing on orthopedic footwear, developing comfortable, contoured insoles designed to cushion the feet.
Brought to the United States in the 1960s, the sandals with their broad straps and cork and latex sole were quickly adopted by hippies who took to their no-frills comfort and claimed their utilitarian look as an anti-fashion badge.
But when supermodel Kate Moss donned them for a fashion shoot in the 1990s, the sandals were propelled into standard footwear for A-listers.
Brands from Paco Rabanne and Valentino to Celine have customized their versions of Birkenstocks, even putting them on runways.
Actress Frances McDormand padded on stage at the Oscars in February 2019 in a yellow pair under a pink gown -- vindicating the idea that footwear does not need to be painful to be glamorous.
While they are now available in more colors, the sandals have largely stayed the same.
For Fastoso, it is the "inflexible and stubborn" insistence on the original format that has become the brand's selling point.
"In that stubbornness lies the authenticity that is so crucial in branding today," he said, noting that a brand that acts "following its principles rather than adjusting to trends is deemed authentic."
With hippies and stars alike making up its customers, Birkenstock recorded revenues of 1.11 billion euros ($1.17 billion) for the nine months ending June 30, up 21 percent from the same period a year earlier.
Net profit for the nine months was 129.1 million euros, down 20 percent from 103.3 million euros a year ago.
While other companies have shifted production to places where labor is generally cheaper, such as to Asia, Birkenstock says 95 percent of its products are assembled in Germany.
Headquartered in the picturesque city of Linz am Rhein in western Germany, the company has several manufacturing sites in the country and around 6,200 employees worldwide.
