German sandal maker Birkenstock, known for its comfortable yet unattractive footwear, recently had its initial public offering (IPO) on Wall Street. The IPO priced the shares at $46 each, valuing the company at approximately $8.6 billion. However, shares started trading lower, raising doubts about the company’s future growth potential. Despite this, Birkenstock has come a long way since its humble beginnings as a cobbler in the 18th century. The brand slowly gained popularity among fashion-conscious individuals, with supermodel Kate Moss endorsing the brand in the 1990s. In recent years, Birkenstock has gained a mass following due to its emphasis on comfort, collaborations with fashion designers, and celebrity sightings.
Birkenstock’s appearance in the Barbie movie further solidified its cultural relevance and led to a surge in demand. Last year, the company sold 30 million pairs of shoes, despite some lingering skepticism about its aesthetics. As the company goes public, investors are questioning whether Birkenstock can maintain its momentum and whether the pressures of the public markets will help or hurt the brand. The IPO allowed L Catterton, the private equity firm backed by French luxury giant LVMH, to bring in nearly $1.5 billion. However, Birkenstock plans to retain an 80% stake in the company, indicating their belief in the brand’s future success.
Some customers express concerns that the IPO may lead to a decline in quality and dilute the brand. However, experts argue that Birkenstock has successfully built desire through fashion collaborations and the introduction of new colors and materials. While going public does not guarantee success, Birkenstock has already undergone significant changes, such as shedding its family leadership and gaining backing from L Catterton. The decision to list is seen as a natural step for the company.
Birkenstock is following in the footsteps of other footwear and fashion companies that have gone public. Some have seen their fortunes decline, while others have proven to have staying power. Crocs, for example, has experienced significant growth since its listing in 2006. Despite investor caution, many believe that Birkenstock’s appeal will endure as long as the shoes maintain their comfortable features. Ultimately, the success of the IPO and the brand’s future growth will depend on how Birkenstock navigates the challenges and pressures of the public markets.
Original news source: Birkenstock: Once-uncool sandal maker now worth billions (BBC)
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Group or Classroom Activities
Warm-up Activities:
– News Summary
Instructions: Divide the class into pairs or small groups. Give each group a few minutes to read the article. Then, ask them to write a brief summary of the article, highlighting the key points and main ideas. After they have finished, have each group share their summary with the class and compare their responses.
– Opinion Poll
Instructions: Divide the class into pairs or small groups. Ask each group to come up with three questions related to the article that they can ask their classmates. The questions should elicit their opinions or thoughts on the topic. Once the groups have prepared their questions, have them take turns asking their classmates and recording their responses. Afterward, facilitate a class discussion where students can share their opinions and discuss their viewpoints.
– Headline Creation
Instructions: Instruct the class to work individually or in pairs. Give them a few minutes to come up with a catchy headline for the article. Encourage them to be creative and use their knowledge of vocabulary and grammar to create an attention-grabbing headline. Afterward, have each student or pair share their headline with the class and explain why they chose it.
– Speed Summarizing
Instructions: Divide the class into two teams. Assign each team a specific section of the article to read and summarize. Give them a few minutes to read and prepare their summary. Once they are ready, have one member from each team come to the front of the class. Give them 30 seconds to summarize their assigned section as accurately and concisely as possible. After the time is up, have the rest of the class vote on which summary was the most accurate and clear.
– Future Predictions
Instructions: Instruct the class to work individually. Ask them to imagine they are financial analysts and predict what will happen to Birkenstock in the future based on the information provided in the article. They should consider factors such as market trends, competition, and consumer preferences. Give them some time to write down their predictions. Afterward, have a class discussion where students can share their predictions and explain their reasoning. Encourage them to engage in a debate and challenge each other’s predictions.
Comprehension Questions:
1. How much were the shares priced at during Birkenstock’s IPO?
2. What factors have contributed to Birkenstock’s recent popularity?
3. How many pairs of shoes did Birkenstock sell last year?
4. What are some concerns that customers have about the IPO?
5. What changes has Birkenstock already undergone in preparation for going public?
6. What other footwear and fashion companies have gone public?
7. How has Crocs fared since its listing in 2006?
8. What will determine the success of Birkenstock’s IPO and future growth?
Go to answers ⇩
Listen and Fill in the Gaps:
German sandal maker Birkenstock, known for its comfortable yet unattractive footwear, recently had its initial public offering (IPO) on Wall Street. The IPO priced the shares at $46 each, valuing the company at approximately $8.6 billion. However, shares started trading lower, (1)______ doubts about the company’s future growth (2)______. Despite this, Birkenstock has come a long way since its humble (3)______ as a cobbler in the 18th century. The brand slowly gained popularity among fashion-conscious (4)______, with supermodel Kate Moss endorsing the brand in the 1990s. In recent years, Birkenstock has gained a mass following due to its emphasis on comfort, collaborations with fashion designers, and celebrity sightings.
Birkenstock’s appearance in the Barbie movie further solidified its cultural relevance and led to a surge in (5)______. Last year, the company sold 30 million pairs of shoes, despite some lingering skepticism about its aesthetics. As the company goes public, investors are questioning whether Birkenstock can maintain its momentum and whether the pressures of the public markets will help or hurt the (6)______. The IPO (7)______ L Catterton, the private equity firm backed by French luxury (8)______ LVMH, to bring in nearly $1.5 billion. However, (9)______ plans to retain an 80% stake in the (10)______, indicating their belief in the brand’s future success.
Some (11)______ express concerns that the IPO may lead to a decline in quality and dilute the brand. However, experts argue that Birkenstock has successfully built desire through fashion collaborations and the introduction of new colors and (12)______. While going public does not guarantee success, Birkenstock has already undergone significant changes, such as shedding its family leadership and gaining backing from L Catterton. The decision to list is seen as a natural step for the company.
Birkenstock is following in the footsteps of other (13)______ and fashion companies that have gone public. Some have seen their fortunes decline, while others have proven to have staying power. Crocs, for (14)______, has experienced significant growth since its listing in 2006. Despite investor caution, many believe that Birkenstock’s appeal will endure as long as the shoes maintain their comfortable features. Ultimately, the success of the IPO and the brand’s future growth will (15)______ on how Birkenstock (16)______ the challenges and pressures of the public markets.
Go to answers ⇩
Discussion Questions:
Students can ask a partner these questions, or discuss them as a group.
1. What is your opinion of Birkenstock sandals? Do you find them comfortable or unattractive?
2. How would you feel if you owned shares in Birkenstock and they started trading lower after the IPO?
3. Do you think Birkenstock will be able to maintain its momentum and popularity in the future? Why or why not?
4. What do you think about fashion collaborations and celebrity endorsements for brands like Birkenstock? Do they influence your purchasing decisions?
5. How important is the cultural relevance of a brand like Birkenstock to its success? Why or why not?
6. Have you ever purchased a product based on its appearance, even if it may not be the most comfortable or practical option? Why or why not?
7. What are some potential advantages and disadvantages of going public for a company like Birkenstock?
8. How do you think the IPO will impact the quality and perception of the Birkenstock brand?
9. Do you think it’s important for a brand to evolve and adapt in order to stay relevant? Why or why not?
10. Have you ever owned a pair of Birkenstock sandals? If so, what was your experience with them?
11. How do you think the public markets will affect the decision-making process for Birkenstock as a company?
12. What are some potential risks and challenges that Birkenstock may face as a result of going public?
13. Do you think it’s possible for a brand to maintain its authenticity and uniqueness after going public? Why or why not?
14. How do you think the IPO will impact the relationship between Birkenstock and its customers?
15. What are some factors that you consider when deciding whether or not to invest in a company?
Individual Activities
Vocabulary Meanings:
Match each word to its meaning.
Words:
1. Birkenstock
2. IPO
3. shares
4. brand
5. public
6. company
7. success
8. market
Meanings:
(a) Achievement of desired goals or outcomes
(b) Organization or business entity
(c) Name or logo that represents a product or company
(d) Platform for buying and selling securities and assets
(e) Initial public offering
(f) German sandal maker known for comfortable footwear
(g) Units of ownership in a company
(h) Open to all investors and traded on a stock exchange
Go to answers ⇩
Multiple Choice Questions:
1. What was the initial public offering (IPO) price for Birkenstock shares?
(a) $8.6 billion
(b) $30 million
(c) $1.5 billion
(d) $46
2. Who endorsed Birkenstock in the 1990s?
(a) Crocs
(b) Kate Moss
(c) L Catterton
(d) Barbie
3. How many pairs of shoes did Birkenstock sell last year?
(a) 8.6 billion
(b) 1.5 billion
(c) 30 million
(d) 46
4. What percentage stake does Birkenstock plan to retain in the company after the IPO?
(a) 20%
(b) 50%
(c) 100%
(d) 80%
5. What concerns do some customers have about the IPO?
(a) Increase in popularity and demand
(b) Decline in quality and dilution of the brand
(c) Collaboration with fashion designers
(d) Introduction of new colors and materials
6. What private equity firm backed by LVMH brought in nearly $1.5 billion through the Birkenstock IPO?
(a) L Catterton
(b) Crocs
(c) Barbie
(d) Kate Moss
7. What company has experienced significant growth since its listing in 2006?
(a) Crocs
(b) Birkenstock
(c) L Catterton
(d) Barbie
8. What will determine the success of the IPO and the brand’s future growth?
(a) The endorsement of Kate Moss
(b) The introduction of new colors and materials
(c) How Birkenstock navigates the challenges and pressures of the public markets
(d) The retention of an 80% stake in the company
Go to answers ⇩
True or False Questions:
1. Birkenstock recently had its initial public offering (IPO) on Wall Street.
2. Birkenstock intends to sell a majority stake in the company after the IPO, indicating their lack of confidence in the brand’s future success.
3. Birkenstock struggled to sell 30 million pairs of shoes last year, despite skepticism about its aesthetics.
4. Birkenstock lost popularity among fashion-conscious individuals, with supermodel Kate Moss denouncing the brand in the 1990s.
5. Despite the IPO, shares of Birkenstock started trading lower, raising doubts about the company’s future growth potential.
6. The appearance of Birkenstock in the Barbie movie further solidified its cultural relevance and led to a surge in demand.
7. The IPO priced Birkenstock shares at $46 each, valuing the company at approximately $8.6 billion.
8. Birkenstock has failed to attract a large following in recent years due to its lack of focus on comfort, absence of collaborations with fashion designers, and lack of celebrity sightings.
Go to answers ⇩
Write a Summary:
Write a summary of this news article in two sentences.
Writing Questions:
Answer the following questions. Write as much as you can for each answer.
1. How did Birkenstock gain popularity among fashion-conscious individuals?
2. What led to a surge in demand for Birkenstock shoes?
3. What concerns do some customers have about the IPO and its impact on the brand?
4. What changes has Birkenstock already undergone in preparation for going public?
5. What factors will determine the success of Birkenstock’s IPO and future growth?
Answers
Comprehension Question Answers:
1. The shares were priced at $46 each during Birkenstock’s IPO.
2. Factors that have contributed to Birkenstock’s recent popularity include its emphasis on comfort, collaborations with fashion designers, and celebrity endorsements.
3. Birkenstock sold 30 million pairs of shoes last year.
4. Some concerns that customers have about the IPO include a potential decline in quality and a dilution of the brand.
5. Birkenstock has already undergone changes such as shedding its family leadership and gaining backing from L Catterton.
6. Other footwear and fashion companies that have gone public include Crocs.
7. Crocs has experienced significant growth since its listing in 2006.
8. The success of Birkenstock’s IPO and future growth will be determined by how the company navigates the challenges and pressures of the public markets.
Go back to questions ⇧
Listen and Fill in the Gaps Answers:
(1) raising
(2) potential
(3) beginnings
(4) individuals
(5) demand
(6) brand
(7) allowed
(8) giant
(9) Birkenstock
(10) company
(11) customers
(12) materials
(13) footwear
(14) example
(15) depend
(16) navigates
Go back to questions ⇧
Vocabulary Meanings Answers:
1. Birkenstock
Answer: (f) German sandal maker known for comfortable footwear
2. IPO
Answer: (e) Initial public offering
3. shares
Answer: (g) Units of ownership in a company
4. brand
Answer: (c) Name or logo that represents a product or company
5. public
Answer: (h) Open to all investors and traded on a stock exchange
6. company
Answer: (b) Organization or business entity
7. success
Answer: (a) Achievement of desired goals or outcomes
8. market
Answer: (d) Platform for buying and selling securities and assets
Go back to questions ⇧
Multiple Choice Answers:
1. What was the initial public offering (IPO) price for Birkenstock shares?
Answer: (d) $46
2. Who endorsed Birkenstock in the 1990s?
Answer: (b) Kate Moss
3. How many pairs of shoes did Birkenstock sell last year?
Answer: (c) 30 million
4. What percentage stake does Birkenstock plan to retain in the company after the IPO?
Answer: (d) 80%
5. What concerns do some customers have about the IPO?
Answer: (b) Decline in quality and dilution of the brand
6. What private equity firm backed by LVMH brought in nearly $1.5 billion through the Birkenstock IPO?
Answer: (a) L Catterton
7. What company has experienced significant growth since its listing in 2006?
Answer: (a) Crocs
8. What will determine the success of the IPO and the brand’s future growth?
Answer: (c) How Birkenstock navigates the challenges and pressures of the public markets
Go back to questions ⇧
True or False Answers:
1. Birkenstock recently had its initial public offering (IPO) on Wall Street. (Answer: True)
2. Birkenstock intends to sell a majority stake in the company after the IPO, indicating their lack of confidence in the brand’s future success. (Answer: False)
3. Birkenstock struggled to sell 30 million pairs of shoes last year, despite skepticism about its aesthetics. (Answer: False)
4. Birkenstock lost popularity among fashion-conscious individuals, with supermodel Kate Moss denouncing the brand in the 1990s. (Answer: False)
5. Despite the IPO, shares of Birkenstock started trading lower, raising doubts about the company’s future growth potential. (Answer: True)
6. The appearance of Birkenstock in the Barbie movie further solidified its cultural relevance and led to a surge in demand. (Answer: True)
7. The IPO priced Birkenstock shares at $46 each, valuing the company at approximately $8.6 billion. (Answer: True)
8. Birkenstock has failed to attract a large following in recent years due to its lack of focus on comfort, absence of collaborations with fashion designers, and lack of celebrity sightings. (Answer: False)
Go back to questions ⇧
