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Birkenstock Files for IPO, Highlights Risks of Counterfeit Brands on Social Media

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Birkenstock Files for IPO, Warns of Counterfeit Brands on Social Media

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Birkenstock’s Plan to Go Public

Birkenstock, the iconic sandal maker founded in 1774, has filed its paperwork for an initial public offering (IPO) on the New York Stock Exchange. The company, originally from Germany and now based in London, aims to trade under the ticker symbol “BIRK.”

Challenges with Counterfeit Brands

Birkenstock has faced difficulties in protecting its intellectual property, as counterfeit brands take advantage of its popularity and premium prices. In its IPO prospectus, Birkenstock highlights the risks posed by counterfeiters who use social media platforms like Facebook to promote fake products. These knock-off products not only compete with Birkenstock’s private label offerings but also damage the brand’s reputation.

Birkenstock’s Struggles with Online Marketplaces

The filing mentions that in the past, third parties have created websites on platforms like Facebook to sell counterfeit Birkenstock products at discounted prices. Although the filing does not name Amazon directly, it indicates that Birkenstock has refrained from using certain third-party websites due to the selling of counterfeit products. Birkenstock previously quit Amazon in the U.S. due to unauthorized sales and counterfeit products.

Expanding Direct-to-Consumer Efforts

Since leaving Amazon, Birkenstock has significantly expanded its direct-to-consumer efforts in e-commerce in the U.S. The company aims to increase the proportion of its revenues from e-commerce. In 2022, the direct-to-consumer channel represented 38% of Birkenstock’s revenue.

Ownership and Future Plans

LVMH-backed private equity firm L Catterton currently owns a majority stake in Birkenstock. After the IPO, L Catterton will continue to hold a majority ownership. Birkenstock sees itself as a resilient and credible brand with a family tradition spanning over 250 years.

Counterfeit Brands on Facebook

Counterfeiters using Facebook to sell fake products is not a new issue. Facebook parent company Meta has faced lawsuits from luxury brands like Gucci for allowing the sale of counterfeit goods on its platform. In response, Facebook has taken measures to remove counterfeit content.

Financial Performance

In the first half of 2021, Birkenstock reported a 19% increase in revenue, reaching 644.2 million euros ($693.2 million). However, the company experienced a 45% drop in net income, primarily due to a foreign exchange loss.

Conclusion

Birkenstock’s IPO filing highlights the challenges posed by counterfeit brands using social media platforms to sell fake products. The company aims to protect its brand reputation and increase its e-commerce revenue. As it prepares to go public, Birkenstock remains resilient as a multigenerational business with a long-standing tradition.

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