With Golden Goose announcing its IPO in 2024, Birkenstock taking the plunge this week and Manolo Blahnik posting record sales, the question arises: is it worth investing in footwear-related stocks?
Bain had warned. The top luxury segment (targeting UHNWNI and HNWNI) would maintain strong momentum in 2023 despite the inflationary climate. But this was not the case for the aspirational clientele, whose portfolios are much smaller and subject to more drastic trade-offs.
However, a new impetus could come from a segment hitherto focused on sneakers: footwear.
The Gen Z lever
When it comes to footwear, Generation Z – born between 1996 and 2010 – is not content, like its millennial elders (born from the 1980s to mid-90s), “to praise the immaculate sneaker”. But they do the same with all their flat leather and heeled counterparts: sandals, ballerinas, lace-up boots, moccasins, cowboy boots…”.
It’s a detail that hasn’t escaped the notice of fashion commentators: for its latest Ancora show – a symbol of its rebirth – Gucci chose to focus on quiet luxury, bags and… shoes, highlighting the House’s iconic bit moccasin, brought up to date.
Other luxury brands have also chosen to consign the timeless but terribly commonplace sneaker to the closet. Flats, excluding sneakers, dominated the spring-summer 2024 shows.
For its part, LVMH, which is struggling to find customers for La Samaritaine, its department store on the Rive Droite, is banking on footwear to attract Generation Z.
All this could also benefit stock market values. While astronomical capital gains are far from systematic, the footwear segment could prove “very lucrative” on the stock market. At least, that’s what eToro has observed. The social investment platform delved into the IPO archives of the 10 biggest footwear brands to draw some valuable lessons.
It found that, collectively, their share prices had risen by 478% over the past decade (based on an equally weighted index). This represents more than double the ten-year returns of the S&P 500, the index preferred by managers (+162%), and above all 6.2 times more than the Parisian CAC40 index, with its 77% increase over 10 years.
Mind you, while once-unloved footwear brands Deckers (861%) and Crocs (626%) lead the pack alongside China’s Li-Ning, recent IPOs have fallen flat.
Since its IPO in 2021, Allbirds, the eco-responsible sneaker brand long the darling of Silicon Valley start-ups, has plummeted by 96%. Dr Martens and its military boots, inextricably linked with the punk movement of the 1970s, also due to go public in 2021, saw its share price plummet by 64%. The British manufacturer is selling less than expected and is facing operational difficulties in the US market.
But in 2021, not all stocks saw their share prices melt away like snow in the sun. Swiss running shoe brand On Holding has fared better, rising 27% since its IPO and 60% this year.
Birkenstock, future stock market star?
Among the flagship brands, Birkenstock, in a state of grace, is one in which L Catterton, a fund attached to the LVMH group, has invested and which is preparing to float on the New York Stock Exchange this Wednesday.
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Lire aussi > BIRKENSTOCK HAS APPLIED FOR A LISTING ON THE NEW YORK STOCK EXCHANGE
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