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In 1963, Karl Birkenstock transformed his grandfather Konrad’s contoured “footbed” insole into a health sandal, but it initially struggled to gain popularity. Now, after 60 years, the iconic German brand is estimated to be worth $8 billion in its upcoming initial public offering.
Birkenstock has experienced remarkable success, as highlighted by its appearance in the Barbie movie. In an interview with HTSI magazine last year, Oliver Reichert, the enthusiastic CEO, said, “Business is too good. Always. For 10 years we have been sold out.” In its recent IPO filing, he described Birkenstock as more than just a shoe – it is a way of thinking and living.
However, the brand’s journey to success was not immediate. Although the cork latex sandals had their devotees, including Steve Jobs, who auctioned his old pair for $219,000, it wasn’t until 2012 when designer Phoebe Philo lined a pair with mink for Céline that Birkenstocks gained recognition in the high fashion world.
Today, Birkenstock’s collaborations with luxury brands like Dior and Manolo Blahnik retail for up to €1,600, while their more affordable options start at just €45. The brand caters to a wide range of customers, staying true to Alfred Sloan’s slogan for General Motors cars in 1925.
While Birkenstock has cleverly aligned itself with consumer trends and continues to increase sales, there are risks involved, as seen with the fluctuating shares of Dr Martens and Crocs. Fashion can be unpredictable, with styles going in and out of vogue based on who wears them and when.
Georg Simmel, a German sociologist, once remarked that fashion often seeks to display its power by influencing public adoption of certain styles. Birkenstocks have faced ridicule in the past, and they may face it again. Simmel also noted how a style quickly loses favor with the elite once it becomes widely popular. So far, Birkenstock has managed to avoid this trap, with increasing average sales prices and a substantial portion of revenue coming from high-income earners.
However, as the company prepares for its IPO and public investors seek growth opportunities, there may be pressure to expand production into regions like China or Vietnam. But Birkenstock’s commitment to German manufacturing has been a key factor in its success, allowing them to maintain quality control and tradition. It is advised that they resist the temptation and continue doing what they do best, considering the brand’s loyal customer base and longstanding reputation.
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