Birkenstock UK profits stumble as brand preps for £8bn IPO
Birkenstock’s UK arm reported a drop in profits for the year but its sales continued to soar.
The German business, whose stripped-back shoes are sometimes called ‘Jesus Sandals’, said total turnover reached £34m in the year ended September 2022 up from £23m in the same period the prior year.
Full year retail revenues also more than doubled, soaring 139 per cent year on year to £4.5m.
However, its operating profit slumped to £734,000 down from £962,000, with the group blaming administrative expenses for the dip.
A Birkenstock spokesperson said: “In the UK alone, revenues alone have increased from 2021 to 2022 by 48.8 per cent, which is a huge success under difficult market circumstances. Birkenstock UK Ltd. reports its numbers in line with local statutory requirements on a stand-alone basis.
“The published figures however include impacts of local tax regulations following OECD guidelines to comply with both German and UK regulations.”
“Accordingly the informative value of the reported figures for the operating profitability of the UK business is limited and is to be seen in the context of consolidated group numbers.”
“While this is a disappointing snapshot for the retailer, it’s position reflects the quandary facing many retailers at the moment,” said Sarah Riding, retail & supply chain partner at the law firm Gowling WLG.
“However, given Birkenstock’s ability to attune itself to existing customer needs, especially where high street footfall is concerned, demonstrates a key survival tactic that should help rebuild revenue and profit, once these variables eventually flat line.”
The brand is unlikely to be badly scratched by the dip in its UK arm, as sales performance remained resilient and the shoe also recently made a cameo in the blockbuster hit Barbie, sparking a renewed interest in the sandal.
The footwear maker is also gearing up for an IPO float that would value the business at $8bn (£6.2bn).
The European brand will list in New York and is expected to go public as early as September.