On Dec. 8, Birkenstock will be honored as Brand of the Year at the first virtual FN Achievement Awards. Below is an article from the magazine’s Dec. 7 print issue about why consumers fell in love with its sandals and clogs once again.
In 2020, Birkenstock was undeniably hot. But how could a brand founded in 1774 — two years before the birth of the United States — still resonate with American consumers in the modern digital era?
Designer Rick Owens, a longtime collaborator with Birkenstock, believes its current dominance is partially a reaction to today’s culture. “A selfie generation might be oversaturated with conventional glamour and searching for more modest and holistic values. Birkenstock represents that,” he said.
And amid the many uncertainties this year due to the pandemic and its economic fallout, customers gravitated even more toward products that could give them some certainty, explained Tacey Powers, EVP and GMM for shoes at Nordstrom. “It is a brand consumers can trust in what otherwise has been a really hard year,” she said.
David Kahan, CEO of Birkenstock Americas, echoed that sentiment: “I think the world needs brands that stand for something beyond just a shoe, that give people emotional and maybe even spiritual comfort.”
Whatever its metaphysical properties, Birkenstock certainly saw huge material gains this year, as the health crisis changed buying habits among shoppers who were primarily conducting life and work from home.
Birkenstock Group co-CEO Oliver Reichert told FN earlier this year that its annual revenues for fiscal 2020 (which ended in September) had easily surpassed the prior year. “Because of the shutdown, we will be a bit under last year’s results in regard to EBIT. We shut down our production facilities for nearly two months,” he said. “But in the end, globally, we will have reached the same figures in 10 months as in 12 months last year, which shows we are still growing very fast, by two-digit percentages every year.”
Early in the year, demand sky-rocketed for Birkenstock’s two-strap Arizona sandal. In Q2, fashion search platform Lyst reported a 225% increase in online queries for the iconic style, and it was spotted on a slew of celebrities, including Kanye West, Reese Witherspoon and Jason Momoa (who will present Birkenstock with its FNAA).
But as the year progressed, other looks from the line garnered attention as well, according to Powers. “We have had great success with the brand this year, but the stand-out item is the Buckley shearling-lined clog. You can wear it with a wide-leg jean or throw it on as your favorite cozy work-from-home shoe,” she said.
Brand executives credit some of the success this year to its assertive production strategy early in the year, when supply chain challenges emerged. “We were buying like hell every piece of leather we can get,” Reichert recalled. “Everybody was worrying about cash flow, and I said, ‘OK, if the cash needs to flow, you need to release it.’”
Kahan also noted that Birkenstock avoided becoming highly promotional. “When COVID struck, rather than react like many did with deep discounts and compromised distribution, we did the opposite,” he said. “We decided no matter what, we would never compromise our brand equity.”
Outside of its products, the Birkenstock U.S. team also was lauded this year for its decision to close its offices on Election Day, to give employees the opportunity to cast their votes. The brand was one of the first to make the announcement, and helped inspire other companies to follow suit.
“The reaction to that was actually surprising,” said Kahan. “We didn’t do it as a political statement. We did it because this is a brand that just tries to do the right thing. Our only cause is bringing people happiness and satisfaction.”
For 34 years, the annual FN Achievement Awards — often called the “Shoe Oscars” — have celebrated the style stars, best brand stories, ardent philanthropists, emerging talents and industry veterans. The first virtual FNAAs will air online on Dec. 8 at 6 p.m. ET and are presented in partnership with The Style Room Powered by Zappos, and sponsors FDRA, Deckers Brands, Soles4Souls and Foot Locker.
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