A footwear brand with more than 240 years of history cannot justifiably be called an underdog, but Birkenstock knows a thing or two about making a comeback. The German comfort footwear brand has weathered the ebb and flow of the global footwear market, surviving decades of copycats and the highs and lows associated with falling in and out (and back in) fashion. More impressively, the brand knows how to do it with quiet grace by sticking to its core values, putting customers first and never getting too swept up with trends — no matter how much instant sales gratification they may offer.
Upholding the brand’s values is David Kahan, former ENK International president and Rockport senior vice president. In 2013, Kahan came on board as Birkenstock USA CEO and has since had the unique task of leading the company through its latest comeback.
Just don’t call it a “Normcore” comeback. As Kahan explained, no one in the company uses the term to describe the comfort-focused fashion fad. In fact, Kahan says comfort is not a fleeting trend and that is why he says there will be a place for Birkenstock in stores and in closets long after Normcore fades away.
Vamp caught up with Kahan to find out what’s next for the heritage comfort brand and how it is transforming its core sandal business into a year-round venture with new and updated styles that stay true to its roots.
Vamp: What is life post-Normcore like for Birkenstock?
Kahan: The term “normcore” seems to have been invented by the fashion media. Within Birkenstock, we have never used the term, not even once. What does “normcore” mean? I guess if it means consumers want to be comfortable in what they wear, or want their wardrobe to be built around core items that may remain in their wardrobe more than one season, than sure, that speaks to what Birkenstock is all about.
I mean, post recession, it seems people in general just want to get real. Make smart purchases. Buy quality. Buy brands that are consistent with their personal values. Buy brands that they can trust. If that is the basis of normcore, I don’t see it ending anytime soon and I certainly don’t see the tremendous connection consumers now have with our brand slowing down anytime soon either.
Vamp: At what point did you realize that the buzz surrounding Birkenstock was more than noise and was real?
Kahan: Spring of 2014 was a true jumping off point for us. This was the season we saw a heightened demand across the market. Still, since our supply has been far below the market demand, momentum bubbled up and now for Spring 2015 is really escalated. Our retail results are far exceeding plan, even early in the season. For the first time ever, we will actually have a robust Fall/Winter business — consumers do not want to take off their Birkenstocks once they wear them.
Vamp: Which styles in Birkenstock’s artillery are driving the growth?
Kahan: Our most recognizable style is the two-strap Arizona. Obviously we do many versions of this style in different materials and detailing. Our Gizeh thong has been very successful as well. Having said this, we are not a one-style brand. We have at least five to 10 silhouettes that are all working at retail. In addition, our orthopedic footbeds are selling very well as well as our shoe care kits.
Vamp: Is growth primarily in the women’s market?
Kahan: Growth is significant across all segments. Obviously women’s is the largest percentage of the business.
Vamp: Does this mean you’re opening accounts with new retailers?
Kahan: We are very focused on our current retailers and are not, by and large, opening much new distribution either brick and mortar or online. The leading independent footwear stores are our bull’s-eye, meaning true sit and fit environments. We work very closely with leading department store partners like Nordstrom and Dillard’s to highlight the brand to their consumers, which benefits everyone. In addition, our online business is very successful. We are now the only true “comfort” brand that is resonating with a younger consumer, which helps bring traffic to the traditional comfort shoe retailer. The younger Journeys demographic is really beginning to embrace the brand.
Vamp: What type of buys are the more fashion-forward retailers making?
Kahan: Our fashion retailers span the higher end and top of the pyramid like Barneys, Concepts/Tannery, and Opening Ceremony who all seek limited edition models, to J. Crew, who while in “fashion” is still more Americana-mainstream, and thus has a focus on our core models. Our core styles in core colors are still the majority of our business, however the true “fashion-tipper” has been seeking new versions like patent, metallics, and our fully wrapped premium styles.
Vamp: What about comfort retailers?
Kahan: Many are scaling smaller sizes to capture younger consumers who are seeking our brand. They also are embracing our introduction of shoes, which will allow them a true 12-month Birkenstock presence in their stores.
Vamp: Are buyers taking a chance on new colors, or are we still in an age where classics are king?
Kahan: It is a mix. Obviously our classic colors are the largest majority of the business, but new iterations are having success as well. It seems the more we assort “new” alongside our classics, the more success our classics have. This is proving itself in every account. Classics alone are okay, but when assorted alongside new and fresh versions, the tried and true classics do even better.
Vamp: Do you think buyers feel confident about Birkenstock for this spring and beyond?
Kahan: The only “cautious” one is us. We are responsible for the next 200 years of the brand, not necessarily the next 200 days. But we manage our distribution very closely so that consumer demand remains high. Our strategy is not like the typical “comfort” vendor — we take our cues from luxury brands, from Nike Air Jordan and even from Apple.
When the new Air Jordan is released, it’s a quick strike in the market, in and out. Energize the consumer, and keep them hungry, then launch something new 30-60 days later that blows their mind. By Nike doing this with a disciplined approach for many years, it has helped them sell their more “accessible” styles across the broader market.
People wait in line three hours for the new iPhone and they are happy to do so. This is how brands remain relevant. It is the difference between being a footwear provider and a true footwear brand. With the heightened interest in what we are doing, this is how we must manage the market so all channels can succeed long term.
Vamp: Or brands throw hundreds of free shoes to bloggers and rely on Instagram to generate interest, yet Birkenstock hasn’t done that. Is that a conscious decision?
Kahan: Everything we do is very organic. We do not, by and large do any traditional advertising. We believe our consumer is smart. We believe they want to interact with real brands that speak to them and share their values.
Frankly, our resources go toward creating the highest quality products, maintaining made in Germany standards, providing the best back-end customer service, and front-end retail support with display materials. We have a great brand story to tell and wherever a consumer intersects with our product, both online and in-store, this story is communicated. And, what is most fulfilling is, it’s not some fake story. You can’t make up a brand with a 240-year history.
Vamp: How is business shaping up for Fall ’15?
Kahan: Fall ’15 is fully booked. It will be our first true winter season. Last year our shearling lines styles sold extremely well and this year all key retailers are on board. These models create the foundation of our Fall/Winter package which now includes boots and closed toe shoes. This is the Holy Grail, the feel of a Birkenstock in a shoe. The market has been asking for this for many years and our partners in Germany in design and development have taken 24 months to develop a product line that everyone is excited to carry.
Vamp: Which styles are performing well for fall?
Kahan: Our low bootie, high boot and moto boot have all placed extremely well. In addition, every key retailer has planned our shearling-lined styles.
Vamp: It is safe to say Birkenstock benefited by being knocked-off by high-end brands, but now the lower tier is trying to replicate your look. Does that have a different effect on the brand?
Kahan: We are flattered when designers like Givenchy use our silhouette as the basis for their design. Still obviously what they can’t replicate is our footbed and the true orthopedic benefit that only a real Birkenstock can provide. In luxury stores like Barneys we sit alongside designers and we sell extremely well. A Birkenstock at $140-$250 is a relative bargain versus a $900 Prada.
Low-end versions are a non-issue for us. We don’t pay any attention. Our retailers are finding that their consumers desire the real thing. Birkenstock’s core styles are an accessible purchase for most consumers so we don’t see any erosion. In addition, we just launched our EVA “essentials” collection, which are exceeding all expectations. These are being purchased as an add-on sale to consumers who are buying our traditional cork models.
Vamp: During a seminar at FN Platform in February, a well-known retailer said Birkenstocks are the only real trend in the market, aside from athletic footwear. Do you agree?
Kahan: I’m not sure. It’s a big, broad world out there and surely lots of footwear is being sold that isn’t sneakers or Birkenstock. What I will say is that trends used to come and go and that is changing. Trends now linger; they stay a lot longer. Converse and Vans are examples of that in sneakers. So, ask yourself, when did those trends start? It seems they have been trending a long time. They take hold and they escalate. The same can be said for Birkenstock.
I do believe that Birkenstock is different in one very significant way: Our product provides the ultimate in comfort and foot-health, thus even if a consumer purchases now as being “on trend,” they will be fans for life. Our end user becomes a passionate brand missionary — we get cards and letters every day to our office from consumers pledging their loyalty because we helped “cure” their foot pain. This is what makes the brand tick far more than a near-term trend and it is why when anyone says, “Hey Birkenstock is having its moment.”
I correct them and say, “No, we aren’t having our moment — what this is, is a moment in time whereby a far broader consumer base is now intersecting with our brand and the ‘fashionable’ crowd is now just learning what many of our loyal fans have known for many years — Birkenstock feels great to wear.” Now that’s a trend that will always exist.