Company of the Year

from Footwear Plus | March 2022

Shoe Salon

COMPANY OF THE YEAR: BIRKENSTOCK

A Big Year

BIG IS THE apt word to describe Birkenstock in 2021, the most successful year in the company’s history. The legendary German brand recorded big growth, expanded big into product categories and consumer markets, and announced big plans to open two new European factories soon to keep up with the growing demand. But the biggest news of all: its acquisition by LVMH for an estimated $3.5 billion. That’s huge—on many levels.

Birkenstock is no longer strictly the family-owned business it had been for nearly 250 years. The brand is now part of a conglomerate that features powerhouse fashion labels Louis Vuitton, Christian Dior, Celine and Givenchy. Concerns about funding brand expansion went poof. But the acquisition is much bigger than that. On a macro scale, it reflects how comfort is fashion. The granola, tree-hugging, anti-fashion, most renowned comfort brand is now a part of one of the world’s biggest fashion houses. Comfort is officially cool.

Here, CEO Oliver Reichert reflects on Birkenstock’s big year. A year that again broke records and, perhaps more importantly, laid the foundation for the brand to reach new levels of growth in the years ahead. —Greg Dutter

How was business overall in 2021? It was another record year with overall growth of over 30 percent. Our business performed extremely well across all categories, channels and markets. Our DTC business developed fantastically, with our own digital channel performing best and, most remarkably, with no repercussions for the wholesale channel, even compared to 2020, when online received a strong boost due to the pandemic. Things also went extremely well for us in the U.S. where we are one of the most popular footwear brands. I’m truly impressed by the passion with which our teams and partners made 2021 the most successful year in our company’s history. I say this with humility as 2021 was an incredible challenge for our industry.

What were some key product highlights? Where do I begin…2021 was such a busy year. We’re currently seeing a strategic push for the last fall/winter collection, so our share increased to 40 percent of our business in 2021. The push is driven by our cozy winter trends with shearling sandals, shoes, boots and home styles. Our main business continues to grow in spring/summer, driven by sandals, such as our new highlight, the Gizeh Big Buckle. We are also seeing positive trends for new product drops such as the Teddy platform sandal in our on-trend eggshell color and our new Arizona Split in exciting color blends. We’re also seeing fantastic progress in our closed-toe business—this part of the business is becoming more and more important.

On the collaboration side, our project with Jil Sander, launched in June, saw a huge response in the global fashion scene. It took two years for the product to be ready. We chose to work with Jil Sander, believing in the new perspective of Lucie and Luke Meier. They’ve given this important brand relevance and authenticity. Together we achieved what we always strive for: newness and product innovation. Why are the new German factories a big deal? Our multi-million investment program is quite unique in an industry that is used to handing over production to third-party suppliers. It will allow us to expand our production capacity from around 30 million pairs to 40 to 50 million pairs and create at least 1,000 new jobs in Germany. For outsiders, it may be unusual to invest so much money in an industry that has more or less turned its back on Europe and moved to Asia. But not for us. We are made in Germany. With these investments, we’ll strengthen our supply chain as well as show a clear commitment on the part of our shareholders to Germany. And maybe one more surprise: We’ll be investing in our orthopedic roots with Deep Blue Footbed, marking a new strategic chapter. Never forget, Birkenstock is the inventor of the footbed.

What was the biggest surprise of 2021? I was a bit surprised to see how much progress we, as a society, made in a more conscious and healthier lifestyle. It took a pandemic for people to take a closer look at their lifestyle. People care more about their health, eating habits, how/where they worked, etc. They started to reflect about their desk, their chair and how they dressed. Many people who tended to be uniform in the past reinvented themselves, and Birkenstock was a big part of this movement. We’ve seen this in our sales, which have literally gone through the roof overnight.

What was toughest challenge faced last year? To serve the dramatically growing demand while facing limitations in our production capacity. We’ve been sold out for 10 years in a row. Of course, it’s a good problem to have, but it’s still a challenge as we want to meet the expectations of our partners and consumers. Partnering with L Catterton allows us to pave the way to the next chapter in our growth story. With that backing, we’ll be able to grow our business into a new dimension while staying true to our roots and values.

How would you grade your team on navigating through such unprec-

edented challenges? This team is doing an extraordinary job—and not just in the pandemic, but for 10 years now. It doesn’t matter whether it’s the C-level or a factory worker, everyone is burning for their ideas and fighting for a greater cause, which is far bigger than each of us individually. You can see and feel that in our products—every detail is extremely well thought out and perfection is pushed to the highest level in every corner of our company.

Looking back on 2021, what are you most proud of? That we stayed relevant without having to compromise on our values and beliefs while many constants in life were turned upside down. And, while doing so, being a reliable partner for our employees, suppliers, distribution partners and, last but not least, fans.

Oliver Reichert, CEO, Birkenstock

THE IR SHOW VENDORS FEB. 1 - 3, 2022

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