It’s an anecdote Oliver Reichert, the chief executive of the Birkenstock Group, likes to tell: Designer Marc Jacobs, long the creative director at fashion house Louis Vuitton, had inquired about collaborating with Birkenstock, saying that he wanted to redesign its sandals. But Mr. Jacobs’ highly “avant-garde” designs violated the company’s paramount rule: “No one tampers with the footbed.” So the company turned him down, says Mr. Reichert.
Not everyone has the confidence to refuse Marc Jacobs. But Mr. Reichert’s self-assurance isn’t merely posturing. The kind of hype shoemaker Birkenstock is experiencing today is unprecedented in the company’s 230-year history.
Until now, the flat, cork sandals with wide leather straps and a clunky footbed were only in with the muesli crowd. But the shoes are back in style, since French fashion house Céline had its models walking down the runway in similar sandals at its show last spring.
From New York to Madrid to London, the picture is much the same: Fashion-conscious women and men are wearing Birkenstocks. The prestigious New York Times style section devoted an entire story to “Birks.” Fashion chains such as Zara are selling knockoffs of the sandals, but this doesn’t bother Mr. Reichert. In fact, he says, “It just makes our shoe more popular.”
Thanks to the run on Birkenstocks, the family-owned company has seen substantial growth in revenues. Although he is unwilling to release concrete figures, Mr. Reichert has mentioned a “dramatic sales figure in the triple-digit millions” and a “dramatic profit figure in the double-digit millions.” Orders are currently 30 to 40 percent above last year’s level. The company has seen so much growth in the United States, China and Italy that it is having trouble keeping up with demand. Retailers in the United States sometimes have to wait weeks for shipments.
In St. Katharinen, one of the company’s four production sites in Germany, the machinery has been operating in two shifts for several weeks. Birkenstock has hired 200 staff since the beginning of the year. In the last year, Birkenstock has almost doubled the number of employees in final assembly.
To offset fluctuations in production, the company works primarily with temporary workers. About 30 percent of the 1,500 people working in production are not Birkenstock employees.
The boom is also giving new life to a plant in Steinau-Uerzell, near Frankfurt, which the company had decided to shut down a year ago and where it now plans to continue production. Birkenstock is adding a new building to its largest site in the eastern city of Görlitz, where subsidiary Alsa makes the footbed and where shoes will go into production in two years.
Birkenstock moved its headquarters to the rural town of Neustadt an der Wied near Bonn earlier this year. It’s about as far away from the hustle and bustle of the international fashion scene as a place can be.
And yet the company has been slowly getting a makeover since Mr. Reichert has been at the helm. Family heir and partner Christian Birkenstock recruited Mr. Reichert, who is in his mid-40s, four years ago. His mission was to revamp and professionalize the traditional company.
The challenge appealed to Mr. Reichert, then the managing director of DSF, a TV sports channel. He saw great potential in the family-owned company, which he characterized as a “sleeping giant.”
He consolidated the 38 individual companies into the current 10 companies and converted the family-owned business into a holding structure. The first consolidated financial statement will be released this October.
But not everyone likes the new orientation. Stephan Birkenstock, who had run the company with his brothers Alex and Christian since 2002, left two years ago, leaving each of the two remaining heirs with 50 percent of the group.
When asked what has changed since his arrival at Birkenstock, Mr. Reichert says: “Everything – except the product.” Collaborating with fashion designers would have been unthinkable in the past. But now New York-based retailer Barneys is designing Birkenstock models to display in its shop windows. The sandal-maker is also working with Japanese designer Yohji Yamamoto and Givenchy.
Despite all this attention, Mr. Reichert remains unfazed. He is careful not to pigeonhole the brand as a fashion accessory. “We are beyond fashion,” he says.
What he means is that customers buy the sandals for their quality and functionality, not for their trendiness. Sabine Meister, owner of Munich-based Meister & Associates, a consulting firm specializing in lifestyle issues, agrees: “One reason Birkenstock is successful is that the brand remains consistently true to its historic roots and its lasting principle of a healthy shoe.”
And that isn’t expected to change.
In fact, Mr. Reichert has an ambitious plan to capitalize on the brand’s clean image by licensing the Birkenstock name to seating, pillows and mattresses designed to promote healthy backs – products targeted at the health-conscious customer, just like the classic Birkenstock sandal. This desire to keep the company’s image green explains why Mr. Reichert saw fit to reject someone like Marc Jacobs.
Translated by Christopher Sultan