Birkenstock to Target $8.6 Billion IPO Valuation

German sandals maker Birkenstock will launch on the New York stock exchange on Wednesday in an initial public offering (IPO).

Shares in the company will be priced at $46. This would be in the middle of the company's $44-49 target, giving it a market value of just over $8.6 billion. 

Birkenstock has shed its unflattering association with sock-and-sandal-wearing Germans to become a fashion accessory.

The stock flotation marks a new milestone, just two years after the Birkenstock heirs sold a majority stake to private equity group L Catterton.

For emerging stocks, an IPO in New York shows global ambitions. Although the simplicity of the brand’s shoes is parodied in some quarters, analysts say its stubborn insistence on the original format has become the brand's selling point. 

Investors often watch IPOs closely as they offer a chance to buy stock early in the hopes it appreciates over time. Birkenstock recorded revenues of 1.11 billion euros ($1.17 billion) for the nine months ending June 30, up 21% from the same period a year earlier. Net profit for the nine months was 129.1 million euros, up 20% from 103.3 million euros a year ago.

While other companies have shifted production to places where labor is generally cheaper, such as Asia, Birkenstock says 95% of its products are assembled in Germany, where it is headquartered. The company has 6,200 employees worldwide.