In its much awaited U.S. initial public offering (IPO), Birkenstock, the German premium footwear company backed by private equity firm L Catterton, has set a fully diluted valuation goal of approximately $10 billion.

According to a filing with the U.S. Securities and Exchange Commission on Monday, the firm and its stockholder want to sell at least 32 million shares, likely at a price between $44 and $49 each, and raise up to $1.58 billion.

Despite a two-year lull in IPO activity, Birkenstock is moving through with its plans despite mixed post-debut results from some of the high-profile listings, such as Arm and Instacart.

“Investor sentiment is still highly sensitive, particularly given the realization that high interest rates are set to linger,” said Susannah Streeter, head of money and markets, Hargreaves Lansdown.

“So, despite the heady ambitions, Birkenstock may still end up listing at a mid or lower price in the range, regardless of all the publicity.”

The U.S. securities regulator should remain fully staffed to assess additional filings and support the IPO market in the meantime as a last-ditch effort to prevent a government shutdown is made.

The New York Stock Exchange will list Birkenstock under the ticker code “BIRK.” The company also announced the appointment of Alexandre Arnault, the billionaire son of LVMH Chairman Bernard Arnault, to its board of directors.

According to Birkenstock, Financière Agache, a company owned by the Arnault family, which also owns LVMH, has expressed interest in purchasing $325 million worth of the offering’s common shares.

Separately expressing interest in purchasing shares totaling $300 million, Durable Capital Partners LP and Norges Bank Investment Management each oversee one or more funds.

Comfort, not style, has typically been the defining characteristic of Birkenstock. But it has gained popularity among fashion connoisseurs, even more so since one of its brands was included in the film “Barbie,” in which Margot Robbie, who plays the lead role, was spotted wearing a pair of pink Birkenstocks.

“Fashionistas can be fickle and while Birkenstock may be basking in rays of popularity right now, it’s going to have to run fast to keep up in the stylish stakes. Counterfeit goods could also cause the company to lose its footing in the fast-moving fashion environment,” Streeter said.

In the nine months that concluded on June 30th, Birkenstock reported a 21% increase in revenue, demonstrating resilience in the face of challenging market conditions for luxury items as inflation-weary consumers rein in their spending.

Birkenstock is a sixth-generation family-owned company with origins dating back to 1774. It has collaborated with a number of well-known companies, such as Dior, Manolo Blahnik, and Rick Owens.

After the offering, L Catterton will hold about 83% of the company. According to the prospectus, Birkenstock plans to pay off debt with the IPO proceeds.

Among the underwriters for the IPO are Morgan Stanley, J.P. Morgan, and Goldman Sachs.

(Adapted from Reuters.com)

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