German sandal maker Birkenstock has spent decades convincing shoppers that what might appear, at first glance, unattractive is actually desirable.
That power will now be tested on Wall Street.
The company's initial public offering priced the shares at $46 each, valuing the firm at roughly $8.6bn (拢7.08bn) - double its worth in 2021.
But shares started trading lower, reflecting doubts about how much more room there is to grow.
The company, which traces its roots to an 18th Century cobbler and released its first sandal in 1963,has already come a long way.
It found its first fans among hippie types drawn to the shoes' flexible, but sturdy support.
But the brand, long associated with a kind of geeky practicality, slowly converted the fashion world, scoring a seal of approval from supermodel Kate Moss in the 1990s.
Over the last decade, the company has won a mass following, as a pandemic-era emphasis on comfort, collaborations with fashion designers, and sightings on celebrities from Gwyneth Paltrow to Kaia Gerber stoked growth.
The capture of the cultural zeitgeist seemed confirmed this summer with the brand's appearance in the Barbie movie - in which the main character, after her journey of liberation, was seen sporting the classic two-strap sandal in pastel pink. The moment reportedly sent demand surging threefold.
Last year the company sold some 30 million pairs of shoes- despite lingering scepticism.
"We think it's ugly," said Einav Ben Hur, 47, who was nevertheless found at a Birkenstock store in New York recently buying a pair for her son. "He says it's fashionable, so here we are."
Image source, Getty ImagesAs shares start trading on the New York Stock Exchange, investors are facing the question of whether the company can maintain its momentum - and whether opening the firm up to the pressure of public markets for the first time in its long history will hurt or help.
"Some say: 'Birkenstock is having a moment'. I always reply then 'this moment has lasted for 250 years, and it will continue to last,'" chief executive Oliver Reichert said in the letter announcing the firm's plans to list.
The share sale allowed L Catterton, the private equity firm backed by French luxury giant LVMH that took a majority stake in the firm in 2021, to bring in nearly $1.5bn.
But the company plans to retain an 80% stake in Birkenstock, a sign that it does not believe the retailer's best days are behind it - despite a market flirting with exhaustion.
The firm's shares started trading at $41 each, down 11% compared with the IPO price.
Some customers said they feared the listing would put new financial pressures on the firm - forcing trade-offs that would hurt the brand in the long run.
"I'm afraid of the IPO because I think the quality will definitely disintegrate," said New Yorker Bella Sheth, 55, a project manager who has been buying Birkenstocks for more than three decades and now has six pairs. "Hopefully they won't get ruined."
Concerns about listing are warranted, given how often investors push for growth, despite the risk - especially acute in luxury fashion - that expansion will backfire and dilute the brand, said Thomai Serdari, professor of marketing at New York University's Stern School of Business.
But she said that for now, Birkenstock has done a good job building a sense of desire with its fashion collaborations and introductions of new colours and materials.
"Just because you get the IPO doesn't mean that you're going to be a Gap who exploded," she added, referring to the clothing brand that seemed to be everywhere in the 1990s but is now a shadow of its former self.
Morten Bennedsen is a professor at the University of Cophenhagen and INSEAD who studies family firms. He said the company had already transformed from a family-owned firm into a modern company, subject to investor pressures, when it shed its family leadership in 2013 and later won backing from L Catterton.
"That changed everything," he said. Compared to that decision, he added: "This is a completely natural step."
In choosing to list, Birkenstock is following a path well-trodden by footwear and fashion companies.
Some, such as sneaker brand Allbirds and boot company Dr Martens, which both went public in 2021 when markets were hot, have seen their fortunes tumble.
Others have proven to have staying power, like Crocs, which listed in 2006. The company, which sells more than 100 million pairs of shoes a year, is worth about $5.2bn, more than six times what it was at the start.
"It's clear there is some caution among investors about the path ahead for the brand," said Susannah Streeter, head of money and markets at Hargreaves Lansdown, noting that even the share price fetched in the IPO fell around the middle of what had been discussed.
Lacey Crocker, who bought her first pair of Birkenstocks in high school, said she thinks Birkenstock's appeal will endure even if the current fad fades - as long as the shoes keep the comfortable features that got them started.
"It's all about the arch support," the 39-year-old physician's assistant said. "Even if they do go out of style, I'd still wear them."
