Across fashion news this week, Birkenstock has seized the spotlight with news of its IPO on the New York Stock Exchange.

An IPO (an abbreviation for initial public offering) is the first time a company offers its shares for sale to the public on a stock market. There are many reasons why a private company might convert to public (also known as a floatation) one of which is that public companies can offer their shares for sale to the general public. This can give companies the ability to fundraise large amounts and potentially have greater access to borrowing facilities. There is also a “status” symbol of public companies considered by some to be desirable.

The transition from a private to a public company can be an intricate process that requires a number of professional advisers both to advise on the offering itself and to assist with the resulting corporate responsibilities and reporting requirements imposed by regulators. The IPO can be structured in different ways such as through share sales, share subscriptions or placings to a select group of investors and there can be different tranches of the IPO either limited by jurisdiction or shareholder type.

There has been plenty of speculation about how Birkenstock will fare on the open market and initial reports have not been overly favourable. Comparisons will undoubtedly be made to other fashion brands which have gone public in recent years, such as a recent IPO made by the company behind the Il Makiage brand, Oddity Tech Ltd, in July 2023 which is reported to be a sister portfolio company of Birkenstock. Analysts will be watching to see if more fashion brands join the trend and transition to publicly traded companies in the coming years.