Birkenstock on the stock market: will it repeat the success of Crocs?

• The 10 largest global footwear brands saw a total increase in stock prices by 387% over the last decade, compared to a 155% increase in the S&P 500 index.
• Footwear brands Deckers (685%) and previously disliked Crocs (546%) led the pack.
• Some of the recent footwear stock market debuts have failed, including Dr Martens and Allbirds.

For all individual investors considering Birkenstock before next week’s high-profile IPO, an analysis by eToro may reveal that investing in the world’s largest footwear brands can be a lucrative pastime.

The eToro trading and investment platform looked at the results of stock prices for the ten largest footwear-related firms [see Table 1] in the world and found that their stock prices increased by a total of 387% in the last decade (based on an evenly weighted index). That’s more than twice the 10-year returns from the S&P 500 index (155%).

However, recent IPOs for popular footwear companies have fallen – Allbirds has recorded a fall of 96% since its stock market debut in 2021, and Dr Martens – also listed in 2021 – fell by 64%. Swiss footwear brand On Holding, which went public in 2021, did better, falling by only 27% since its debut, but by 60% this year.

Birkenstock is set to go public next week, targeting a valuation of $10 billion, which would make it the fifth largest footwear brand in the world in terms of market capitalization.

Ben Laidler, Global Markets Strategist at eToro, said: “The Birkenstock brand has become almost synonymous with Germany and there’s a lot of emotion associated with this IPO. Our research suggests that the buzz may be justified, since the world’s biggest footwear brands have rewarded investors in the past. However, it also highlights the need for long-term focus on diversification, as some brands only generate large profits several years after going public, and some of the recent footwear offerings have struggled.”

The world’s most valuable footwear manufacturer Nike saw a 160% increase in its stock price over the last 10 years, with a more modest increase of 12% over the last five years. German giants Adidas and Puma also saw substantial increases in their stock prices over the last decade, by 105% and 171% respectively.

Perhaps more noteworthy for investors considering the IPO of the German cult brand Birkenstock are the results of Crocs’ stock prices. Seen for years as unfashionable and unloved by some, Crocs’ popularity has exploded in recent years, and the company’s stock price has risen by 318% in just five years and 546% over the decade, with only Deckers achieving better results (685%).

Of the top ten footwear-related brands, only VF Corporation, whose brands include Timberland and Vans, saw a 10-year decline in stock prices, falling by 65%.

Ben Laidler adds: “The Birkenstock and Crocs stories bring natural comparisons to mind, as both brands have moved from the fringes to mainstream fashion in recent years, and Birkenstock will surely hope for a similar trajectory in share prices to that of Crocs after going public. However, the picture in the industry isn’t always rosy, and consumers can often be fickle. As our research shows, some popular brands such as Dr Martens and Allbirds haven’t met expectations after going public.”

Table 1: Shows the 10-year stock price performance of the ten largest global footwear brands.

Source: Refinitiv as of October 2, 2023.

*Past performance is not indicative of future results.