For hundreds of years, Burg Ockenfels was dwelling to medieval knights angling to manage site visitors alongside the Rhine River. At present the stone fortress flaunts two spherical towers, a row of Renaissance-style statues and a courtyard that appears out over hills and farms. To go to, you are taking a practice from Bonn to the sleepy village of Linz, then climb an extended, steep hill till you attain the compound’s elaborate gate. From there, the place appears one thing like Xanadu, the mountaintop palace in Citizen Kane.
Because the Nineteen Nineties, the property has belonged to Christian Birkenstock, the seventh-generation scion of the German footwear dynasty. Out entrance, the mailbox has a digicam and buzzers for 19 company entities with “Birkenstock” of their identify, together with nearly as many others belonging to Christian personally, in addition to the household workplace of his brother Alex. In early October, when Birkenstock capped off a decade of explosive progress with an preliminary public providing, Christian and Alex turned billionaires.
The person most chargeable for their windfall, nevertheless, usually works out of an workplace about 300 miles southeast, in Munich. Standing about 6-foot-6, with a thick, bushy beard, a baritone voice and a dry humorousness that may be intimidating, Oliver Reichert isn’t precisely what you’d anticipate from an orthopedic shoe firm government. Amongst those that’ve labored for or sat throughout the negotiating desk from Birkenstock’s chief government officer, a phrase generally used to explain him is “bully.”
When Christian Birkenstock employed Reichert in 2009, the household enterprise was in disarray, with stagnating gross sales and no coherent plan for the longer term. After their domineering father, Karl, stepped again years earlier, Christian and Alex—then of their late 30s and early 40s, respectively—started preventing with their older brother, Stephan, for artistic management. It had been greater than a decade for the reason that public had fawned over Birkenstocks, and abruptly upstarts akin to Crocs have been jolting a class lengthy relegated to stoners, geriatrics and German vacationers.
On the time of Reichert’s arrival, the one factor everybody on the firm agreed on was that Birkenstock’s patented “footbed”—the cumbersome sole of the distinctive sandals—was the supply of the magic. Past that, no one agreed on what precisely to do. Loads of firm veterans, whom Reichert finally known as “footbed fascists,” regarded to alter completely nothing. “It was nearly just like the Bible had been written, and we didn’t want a New Testomony,” Reichert, who turned the primary outsider to run the enterprise in its 250-year historical past, as soon as informed a German newspaper. “Then I got here in like a mixture of Martin Luther, Muhammad Ali and Napoleon.”
Reichert’s unsubtle confidence labored. Earlier than lengthy, Birkenstock sandals have been touchdown all over the place from Parisian runways and high-end shops to the ft of whole households from Brooklyn to Boise. Gone have been the times when you would pull off Germany’s autobahn and snap up a pair of Arizona sandals for beneath $50 at a relaxation cease. Below Reichert’s watch, Birkenstock turned an accessible luxurious, the corporate’s gross sales greater than tripling, to $830 million by 2020.
Then, the next 12 months, Reichert unexpectedly offered a majority stake to L Catterton Administration Ltd. in a deal that valued Birkenstock at about $4.9 billion. The non-public fairness agency, primarily based in Greenwich, Connecticut, occurred to be backed partly by Bernard Arnault, the French mastermind behind the posh empire LVMH, which owns manufacturers together with Louis Vuitton, Dom Pérignon and Tiffany. Within the three years since, Birkenstock has continued elevating costs, rolling out higher-end fashions and reducing out retail companions whereas build up its personal direct-to-consumer gross sales. It’s additionally expanded its German manufacturing vegetation, with plans to double manufacturing within the subsequent few years to allow an enormous push into China, India and different international locations for the primary time. And, after all, it went public.
When the corporate held its IPO in New York final fall, Reichert waxed philosophical. The world was not a primordial forest the place people walked barefoot all day on yielding, uneven floor, he mentioned. We now must cope with onerous surfaces akin to pavement and workplace flooring, which don’t help the arches of your ft. So, Birkenstock’s footwear has change into the next-best possibility. “The footbed promotes Naturgewolltes Gehen,” the native German defined in a registration assertion with the US Securities and Alternate Fee, utilizing a phrase that basically interprets as strolling the best way nature meant.
The IPO was a catastrophe. After elevating about $1.5 billion, shares promptly fell about 13 % on the primary day, which made it the worst debut for an enormous US itemizing in additional than two years. In January, after the corporate’s first quarterly earnings report awkwardly described Birkenstock as a “world zeitgeist and function model,” buyers have been nonetheless confused, and the corporate’s shares plunged once more.
A couple of days later, Reichert, clad in Boston clogs and a comfy sweater in his Munich workplace, bristled at buyers’ lack of information. Birkenstock isn’t actually a footwear model in any respect, he mused. It could possibly’t be lumped in with sneaker makers which might be keen to contract out the manufacturing course of to factories half a world away, neither is it a real creature of trend. If something, he concluded, it’s extra of a health-care firm targeted on ft. “We’ve got a complete addressable market of each human being,” says Reichert. “Which is bizarre—I’m totally conscious of that. But when you concentrate on it, you suppose: ‘OK, sure. In some way it’s proper.’”
Discovering Its Footing
In 1930, Carl Birkenstock—Christian and Alex’s grandfather—printed a guide known as The Foot and Its Remedy. Carl was the son of Konrad Birkenstock, a fourth-generation cobbler who’d developed two improvements across the flip of the century: extra reasonable fashions of ft upon which to construct footwear (again then, shoemakers hardly ever differentiated between left and proper) and a versatile insole designed to allow a extra pure stride. Konrad, nevertheless, by no means persuaded Germany’s footwear business to undertake his developments and practically bankrupted the household. Carl, then again, would evangelise his household’s patented footbed and solely promote his merchandise to individuals who accomplished his weeklong seminar on the “System Birkenstock.”
Within the Thirties, Carl additionally repeatedly tried, unsuccessfully, to speed up wider adoption by getting Nazi authorities on board. He pitched his insoles to the Hitler Youth and carried out exams on the ft of 170 members of the SS, in line with a forthcoming Birkenstock-commissioned guide. He did not safe any authorities orders. Nonetheless, even with no formal deal, Nazi troopers, after marching round Europe in ill-fitting boots, purchased his insoles, and manufacturing greater than doubled from 1938 to 1942. Carl joined the Nazi Get together himself in 1940—”comparatively late,” the corporate writes on its web site, clarifying that he by no means did enterprise with Hitler’s authorities, confiscated property from Jews or relied on compelled labor. (The brand new guide qualifies a few of these assertions, noting that Carl repeatedly sought to safe authorities contracts and in 1943 even tried to affix the Sturmabteilung, the Nazi paramilitary group of storm troopers that performed a key function in Hitler’s rise, although he wasn’t accepted.)
The inflow of cash from troopers helped maintain Carl’s actual ardour, the pursuit of an “preferrred shoe” that may incorporate the household’s concepts right into a mass-produced product. After a long time of tinkering, Carl retired in 1961, nonetheless flummoxed by the problem of effectively binding the household’s insoles into footwear.
From Carl’s failure, at this time’s Birkenstock was born. His son, Karl, cracked the code within the early Nineteen Sixties: an open-footbed sandal with a deep heel cup and raised toe grip, constituted of supplies together with cork and latex. Impressed by the no-frills Brutalist structure that was all the fashion in postwar Europe, Karl created a mannequin that featured a single fats leather-based strap affixed with a buckle, which might change into referred to as the Madrid.
In contrast to his forebears, Karl additionally found out easy methods to earn cash. After studying a guide known as How I Made a Fortune in Mail Order, he despatched catalogs to docs throughout Germany, a lot of whom purchased the sandals and really useful them to sufferers. Then, in 1966, Margot Fraser, a Berlin-raised seamstress who’d left Germany after World Conflict II and settled in Northern California, visited a Bavarian spa and chanced upon a pair of Birkenstocks, discovering that they relieved her foot and again ache. Again in San Francisco, she started importing the sandals and arrange an American outpost, Birkenstock Footprint Sandals Inc. (Years later, within the mid-Seventies, Karl Birkenstock lastly agreed to signal an settlement with Fraser, making her the only US importer of Birkenstocks.)
The sandals, which Fraser offered by means of well being meals grocers, turned a Bay Space cult favourite and shortly a totem of hippies trying to insurgent towards their mother and father. Shoe shops got here calling. It didn’t damage that Karl stored churning out silhouettes that may flip into classics, together with the double-strapped Arizona in 1973 and the low-slung Boston clog in 1976. Fraser skilled nearly nothing however progress together with her enterprise for nearly 20 years, till the increase ended within the Eighties with the rise of the power-dressing motion. Even so, loyalists needed Birkenstocks it doesn’t matter what. “The individuals who had gotten used to consolation didn’t need to hand over,” Fraser wrote in her guide Dealing With the Powerful Stuff: Sensible Knowledge for Operating a Values-Pushed Enterprise. “Perhaps they didn’t put on the footwear to the workplace anymore, however they stored a pair beneath their desk.”
To some extent, Birkenstock’s endurance epitomised the steadfast “Made in Germany” companies that helped gas West Germany’s speedy financial progress in the course of the Chilly Conflict. The businesses, typically known as Mittelstand corporations or “hidden champions,” are usually quiet, family-owned, thrifty affairs that concentrate on dominating market niches for the long run by producing high-quality merchandise, typically in Germany, which might be onerous to copy. That ethos was evident in two of Karl’s guiding guidelines. First, sock away cash in good years to bridge the hole in robust occasions. And second, hold every new shoe mannequin in catalogs for at the very least 5 years to keep away from falling prey to fickle trend traits. (Karl even prolonged this frugal mindset to his dwelling life—his three boys typically needed to share the identical bathwater, Christian as soon as informed a German newspaper.)
By the Nineteen Nineties the brothers, now of their 20s, had joined their father within the enterprise. On the time, firms akin to Nike Inc. and Adidas AG have been outsourcing shoe manufacturing to lower-cost international locations together with China and Taiwan. Birkenstock opted as an alternative to purchase factories in previously communist East Germany, although that got here with its personal problems. For a number of years the Birkenstock household battled with commerce unions and staff who needed to organise “works councils,” our bodies in Germany that enable staff extra say in administration selections, amongst different issues. At one level, Karl raised howls by referring to a few of his staff as “lepers”; he even dubbed a few of them “implementers of straightforward manufacturing,” which, in German, types an acronym that additionally means “morons.”
Along with his retirement approaching, Karl carved up the household enterprise right into a constellation of entities that he parceled out to his sons. That made it tougher for workers to organise, since technically they labored for smaller firms. However it additionally made it harder for the brothers to forge a shared imaginative and prescient for the longer term. As a substitute, they started cooking up a bunch of separate manufacturers that used the household footbed, which they anticipated distributors, together with Fraser’s firm within the US, to market. Stephan, the oldest brother, hewed closest to Karl’s conservative method and targeted on a line of cheaper plastic clogs known as Birkis. Alex, the center youngster, was extra taken with exploring fashion-forward kinds and created different manufacturers such because the lacquered, shiny sandals he known as Tatami and closed-toe footwear referred to as Footprints.
Christian, in the meantime, induced turmoil for the household. He and his spouse, Susanne, had purchased and refurbished Burg Ockenfels, the fortress overlooking the Rhine, and created their very own model of sandals. However after separating from Christian, Susanne launched her personal line known as Beautystep, which purported to assist ladies battle off cellulite. Earlier than lengthy, Susanne was showing in adverts saying she stood behind the sandals together with her identify, which remained Birkenstock even years after the divorce. Journalists dubbed the ongoing drama “Dallas on the Rhine,” and a German court docket finally put a restriction on Susanne’s use of the Birkenstock identify. (Her enterprise went broke.)
Again within the US, Fraser’s outdated workers had struggled since her retirement in 2002. She’d offered her distribution firm to staff, however the workers-turned-owners couldn’t resolve on a technique. In the meantime, the Birkenstock brothers’ escalating rivalry over the corporate’s path was coming to a head. Based on one former employee, Stephan often visited the Northern California workplace, whereas Alex and Christian usually dispatched German consultants. Sometimes, Stephan chanced upon his brothers’ proxies within the Marin County facility as they chatted with Birkenstock staff. Then he would blow up. “It was mainly like, ‘What the f— are you doing right here?’” recollects a former Birkenstock US government, who requested to not be named as a result of he nonetheless works within the business. “‘You’re right here to do Footprints. Go discuss to the Footprints individuals. Why are you mingling with a customer support supervisor of Birkenstock? You haven’t any cause to be doing that.’”
By the late 2000s, the brothers’ battle for artistic management had reached a breaking level. With Birkenstock’s American outpost adrift, the siblings lastly purchased it out. Christian, in the meantime, smoldering away one morning within the posh Austrian Alpine resort of Kitzbühel, had an opportunity encounter with a towering, brusque unemployed TV government who’d not too long ago been fired from his job at a German station. Whereas sipping a beer early within the day, Christian started rattling off his listing of issues—above all, together with his father and brother Stephan. Oliver Reichert listened and provided encouraging phrases, sharing the small print of his personal latest setback. Impressed, Christian invited Reichert to change into his advisor and assist type out the household’s issues.
An Outsider’s Perspective
Within the dynamics of German household companies, being a turnaround man was no easy job. Requested to characterize the character of such a profession transfer, Marko Sarstedt, head of the advertising and marketing division at Ludwig-Maximilians-Universität Munich, burst out laughing. “In German we might name this a Himmelfahrtmission,” he mentioned, which mainly interprets as “suicide mission.”
Reichert concluded that in attempting to reconcile the brothers, the sticking level was Stephan, a homebody who needed to play it secure with fundamentals, which clashed with Christian and Alex’s want to experiment. One in all Reichert’s first accomplishments: persuading Stephan to promote his stake to his youthful brothers in 2012 for greater than $100 million, in line with a German journal. (Birkenstock declined to say how a lot was really paid; Stephan couldn’t be reached for remark, whereas Karl, Christian and Alex all declined to speak to Bloomberg Businessweek.)
Reichert informed Christian and Alex that every of them proudly owning 50% of the corporate couldn’t work for lengthy; there was merely an excessive amount of baggage. Finally, they’d want both to promote the enterprise to a extra organized proprietor or to organize it for an IPO. With Christian and Alex agreeing to step again from operations, Reichert labored to simplify the handfuls of interlocking enterprise entities Karl Birkenstock had created, together with the varied product traces the brothers had concocted.
By 2013, Birkenstock’s group had been streamlined from a tangle of 38 particular person firms to a unified group construction that had divisions targeted on manufacturing, gross sales and different providers. To cap off this transformation, the corporate appointed Reichert as co-CEO alongside Markus Bensberg, a 22-year firm veteran. Bensberg, a buttoned-up, clean-shaven supervisor, rapidly pale into the background, whereas Reichert, overwhelming everybody together with his measurement and power, dominated the present. (Bensberg declined to speak to Businessweek.)
Managing Buzz
Round that point, designer Phoebe Philo, then of the LVMH-owned French model Celine, shocked the style world—and Birkenstock—by together with Arizona-like sandals lined with mink on the catwalk at Paris Vogue Week. Despite the fact that they weren’t technically Birkenstocks, it set off a frenzy for the model, one thing that had been taking place on and off for many years—as within the early ‘90s, when Kate Moss appeared in The Face journal carrying Rio and Palermo sandals and Marc Jacobs featured the footwear in his Grunge assortment. However the firm had by no means fairly found out what to do subsequent after these flurries of publicity.
In 2015, Birkenstock—nonetheless targeted on a couple of dozen huge distributors and wholesalers around the globe—didn’t have a complicated, centralized gross sales or advertising and marketing staff, a company-branded web site to promote the footwear or perhaps a Fb web page. (Reichert’s 4 children appeared in catalogs.) In the meantime, for many years, its factories, all native, had struggled to satisfy demand. Each time the model turned buzzy, order backlogs turned longer, by accident upping the footwear’ desirability, but in addition inflicting manufacturing complications.
Reichert and Bensberg started working, including manufacturing vegetation in japanese Germany, which allowed the corporate to double manufacturing capability. In 2016, as Birkenstock was nonetheless basking within the Philo-era buzz, it lastly entered the trendy age of e-commerce with a professional-looking on-line retailer of its personal. The subsequent 12 months Birkenstock acquired right into a high-profile battle with Amazon.com Inc., accusing it of attempting to purchase Birkenstocks from retail companions. Birkenstock refused to promote on Amazon, because it believed the retail big wasn’t doing sufficient to counter knockoffs. Reichert made an enormous deal about how he was sending undercover brokers to factories in Asia, attempting to goad them—on hidden cameras—into agreeing to fabricate faux Birkenstocks. He proudly recounted this method at a panel in Berlin in early 2018, the place the moderator requested him what he would say to Jeff Bezos in the event that they met head to head. Reichert, clad in a shawl and sandals, quipped: “Just be sure you deal with manufacturers correctly, and by no means battle a bear in its cave.”
Stepping Into Luxurious
Birkenstock’s gross sales stored climbing, from $500 million in 2016 to $810 million in 2019. That 12 months, it opened a showroom within the coronary heart of Paris’ trend district, in the identical constructing as a Celine boutique promoting purses and perfumes and across the nook from the onetime condo of Coco Chanel. Then it began partnering with manufacturers for brand new, luxury-priced Birkenstockian creations—an iridescent Arizona with Rick Owens, a corduroy suede Boston clog with Stüssy and a collection of velvet fashions, their buckles glistening with crystals, with Manolo Blahnik. (Till not too long ago, you would discover a $1,000 pair of co-branded Christian Dior Birkenstocks “tinted” with “the ever-present Dior Grey” on the LVMH model’s store throughout the road from Birkenstock’s showroom.)
For as soon as, the corporate was forging collaborations and driving its personal hype cycles. It had definitely missed sufficient of them—because it did when Crocs Inc., maker of the cartoonishly chunky, weightless plastic clogs, arrived on the scene in 2002. In its first decade, the Boulder, Colorado, upstart’s income rocketed to greater than $1 billion, the footwear wooing everybody from toddlers to boomers with seemingly infinite coloration choices and an obscenely comfy match—due to a novel ethyl vinyl acetate-based foam—for as little as $30.
Birkenstock had really been churning out its personal model of stiffer polyurethane sandals for the reason that Eighties, although it had solely focused niches akin to docs and gardening fans. The identical former Birkenstock US government recollects the frustration of calling up Germany within the mid-2000s and asking them to create a plastic shoe past the weird-fitting plastic Arizona, which was weighed down with the cork footbed and solely got here in primary colors. “They have been like, ‘We’ve got this, it’s excellent,’” he recollects. “And we have been like, ‘No, take a look at Crocs, they’re going loopy. Are you able to trim them up a bit bit, make some first rate colors? Not this crap.’ However they by no means, by no means acquired it.”
Years later, Reichert lastly did, rolling out Birkenstock’s cork-free, inexpensive EVA footwear in 2015, a enterprise line that’s pulling in new clients and persuading others so as to add to their collections. “In case you’ve purchased a pair of the Valentino [and Birkenstock] collab, shopping for a pair of white EVAs to go to the seaside—it’s pocket change,” says Sam Poser, an analyst at Williams Buying and selling LLC, who’s seen superfans load up in the summertime on a half-dozen otherwise colored EVA Arizonas—which value about $50 a pop—to match their nail polish.
Elevating the Firm’s Profile
Whereas the overwhelming majority of Birkenstock’s gross sales nonetheless got here from its conventional fashions, the limited-edition variations—typically that includes jaunty colors, premium supplies and greater buckles—didn’t simply command increased value tags; in addition they raised the entire firm’s status. Nowhere has this hypebeast awakening been extra evident than with Bostons. When Covid-19 hit, Birkenstock was already enjoying up the mannequin as a part of its plan to supply extra wintertime footwear. Then, as the entire world settled into sweatpants, Boston mania ensued. These well-timed Stüssy and Rick Owens Boston collaborations turned pandemic-era hits, with YouTubers and TikTokers flaunting them of their “shoe rotation” movies.
As Bostons offered out, on-line sneaker market StockX stepped in. The platform had already launched Birkenstock to its neighborhood of resellers and patrons in 2019, having noticed the rising phenomenon. Over the following three years, transactions of the model greater than tripled yearly on the location, dominated by Bostons. Final 12 months, Birkenstock turned StockX’s third-most-traded shoe model, one thing Rachel Makar, a senior director for merchandising there, attributes partly to growing old hipsters: “For the older sneaker heads, I believe it’s like, ‘What different consolation kinds can we add the place I don’t must placed on a sneaker on daily basis?’”
Basking within the model’s newfound trend cred, Christian and Alex eyed their subsequent transfer when the pandemic hit. They’d not too long ago watched one other pair of German siblings strike it huge: The Wirtgen brothers offered their late father’s namesake road-construction firm to Deere & Co. for $5.2 billion. If paving machines may mint billionaires, why couldn’t sandals?
In 2020, Reichert went on the lookout for a purchaser. Birkenstock employed Goldman Sachs, and for some time it appeared just like the successful suitor may be CVC Capital Companions, a personal fairness agency with high-profile European manufacturers. CVC managing companion Alexander Dibelius, typically considered Germany’s savviest dealmaker, believed he’d struck a gentleman’s settlement with Reichert to purchase Birkenstock for greater than $4 billion.
However earlier within the 12 months, Reichert had contacted one other scion: Alexandre Arnault, the son of Bernard Arnault who on the time was operating Rimowa, a German baggage maker LVMH had a controlling stake in. What if LVMH, the world’s largest luxurious holding firm, may make the same funding in Birkenstock? The elder Arnault, one of many richest individuals on the planet, was well-known for his affection for long-term investments, having hardly ever offered manufacturers over his nearly half-century of empire constructing. He was additionally a fan of expertise and high quality—not the kind to reap fast income by outsourcing manufacturing. However there was a transparent downside with the LVMH thought: The luxurious conglomerate was targeted on exclusivity and desirability, not mass-market stuff.
However there was one other potential means into the empire. In 2016 the consumer-focused non-public fairness agency Catterton had joined forces with LVMH and Bernard Arnault’s private holding firm to create L Catterton, with Arnault’s facet taking a 40 % stake within the mixed enterprise. In January 2021, with Covid raging and Dibelius’ cellphone calls to Reichert going unanswered, Birkenstock’s CEO travelled to Paris to satisfy with Arnault, the fruits of months of conferences with L Catterton’s staff.
In late February, L Catterton introduced it was shopping for a majority stake in Birkenstock, with Arnault’s household workplace taking an extra share. Christian and Alex Birkenstock would additionally retain minority positions. “Birkenstock was based practically 250 years in the past and has grown to change into one of many few iconic manufacturers within the footwear business,” Arnault mentioned in a press launch. “Collectively we’ll present help to the enterprise so it may possibly totally realise its vital progress potential.”
Going Public
By the point Birkenstock was able to make its debut on the New York Inventory Alternate final fall, the model was doubling down on Arnault’s playbook. It continued elevating costs and reducing off distribution with retailers, one thing that angered longtime companions and clients, particularly in Germany, the place locals had lengthy been accustomed to purchasing the sandals for reasonable. The latest opening of a $120 million plant on its dwelling turf and different manufacturing facility enlargement efforts meant that inside a few years Birkenstock may double its manufacturing capability, from about 30 million pairs a 12 months presently. Even the cultural timing appeared pitch-perfect, with the Arizona sandal getting an sudden cameo in the summertime’s blockbuster “Barbie” film.
Birkenstock’s staff descended on New York to host a collection of public-relations occasions, together with unveiling a leather-based swing and a shearling-lined seesaw close to Astor Place and internet hosting followers at a beer backyard in Brooklyn. However again in Germany some main buyers have been feeling jilted as a result of the corporate was itemizing in New York as an alternative of Frankfurt. Then got here extra Sturm und Drang—the weekend main as much as the IPO, the US authorities practically went into shutdown, adopted by the Israel-Hamas warfare breaking out, creating panic within the markets.
On Oct. 11, Reichert confirmed up on the NYSE in a black collared shirt with the highest three buttons unfastened, exposing loads of chest hair and rapidly turned one thing of an web sensation among the many day-trading social media set. He appeared on the balcony overlooking the buying and selling flooring alongside Alexandre Arnault, now a Birkenstock board member, who hoisted an Arizona sandal within the air. The temper rapidly soured, although. When the shares began buying and selling, they have been 11 % beneath the $46 IPO value—after which stored falling.
Since then, Reichert has struggled to persuade buyers that his previous decade of success is only a prelude to much more worthwhile progress. He insists that he’s going to maintain Birkenstock’s gross sales rising by practically 20 % a 12 months with income which might be extra akin to these of luxurious manufacturers like Hermès than sneaker makers like Nike. To get there, Birkenstock is planning to dive into markets in China, India and the Center East, the place plastic footwear are huge sellers within the sizzling, humid climate. The corporate additionally hopes to profit from the experience of Arnault, who lately has discovered loads of keen clients for his luxurious empire’s merchandise in Asia. It’s additionally attempting to broaden Birkenstock’s cold-weather choices past the oft-ridiculed “socks and ‘shares” look, ensuing within the Bend, a tennis-style sneaker, together with new boots together with the Bryson and the Birmingham. In the course of the vacation procuring season, its closed-toe fashions outsold its sandals for the primary time.
Reichert says that extra crucial than discovering new clients is ensuring Birkenstock will get the correct quantity of the best fashions—drawing from an archive of 700 silhouettes—to the best places on the proper occasions. Whereas most footwear firms have to lock in orders with contractor factories in Asia months prematurely, after which battle to adapt in the event that they’ve misjudged shopper sentiment, “we will reload the gun,” Reichert says. He’s referring partly to the corporate’s new manufacturing facility in Pasewalk and enlargement efforts in Görlitz and in Portugal (one of many solely locations outdoors Germany the place Birkenstock manufactures). Equally essential, the corporate can resolve when it desires to go for synthetic shortage with a selected line. “We may promote 3 times extra Bostons at this time, however we simply don’t do it,” he says.
For months now, Reichert has bewildered many buyers with pontifications about Birkenstock’s wealthy heritage and hip merchandise, fairly than revenue margins. However on Might 30 he lastly acquired his level throughout in a language Wall Road understands: elevating earnings targets for the 12 months. Birkenstock surged in its best-ever day of buying and selling, bringing the fill up greater than 20 % for the reason that IPO.
It appears the market is lastly appreciating what Reichert has identified all alongside. When he was a youngster rising up within the foothills of the Bavarian Alps, he says, his ft grew so massive that he couldn’t put on something offered in native shoe shops—that’s, apart from the footwear made by Karl Birkenstock, who believed everybody, irrespective of how huge their ft, ought to have entry to his footbed. “For them it was like, ‘After all, we additionally must help this mountain gorilla,’” he recollects.
However even with its a long time of endurance, Birkenstock has to have limits to its progress—whether or not you need to name it an orthopedic shoe firm, a luxurious trend home or perhaps a health-care firm.
Reichert scoffs on the suggestion. “I can promise you, as soon as we contact this ceiling, I will likely be not on this planet,” he says. “Even when I used to be, like, essentially the most anxious particular person on the planet, I might say, ‘OK, that is good for one more 50 years.’” He pauses. “However I let you know it’s good for one more 250 years.”
By Tim Loh
