There’s a stereotype of the person who wears Birkenstocks,” says David Kahan, chief executive officer of the shoe company’s American division. It’s that eccentric aunt, the colleague who spends his weekends hiking, the camp counselor. Or, as Kahan puts it, “a little anti-establishment, maybe not the most attractive person.” He’s holding court at a Manhattan trade show on June 5, surrounded by rows and rows of new sandals. All week department-store buyers have haunted his booth. At a recent event, “Bloomingdale’s (M) came in with their fashion office—six twentysomething girls flitting around, picking up Birkenstocks and going, ‘So cute! So cute!’ ” he says. “Six months ago, they would have said, ‘That’s the ugliest thing I could ever wear.’ ”
Birkenstocks have been sold in the U.S. since 1966, when a woman named Margot Fraser started importing them after discovering the shoes on a German vacation. The business has had few ups and downs, with the exception of a faddish bump in the 1990s. Since then sales have been stable, buoyed by hippies, preppies, and Vermonters who stuck with Howard Dean after the scream. But in the past two years, something strange has been happening to Birkenstocks: They’ve gotten kind of cool.
“We’ve photographed them a ton—with boyfriend jeans, Chanel tweeds, and black work dresses—for the past six months,” says Eva Chen, editor-in-chief of the shopping magazine Lucky, who double-checks each issue to make sure Birks don’t appear more than once. “The last seven years in fashion have been all about the statement shoe, a beautiful, spindly heel that’s not comfortable.” The antidote, it turns out, is buckled and cushioned and jolie laide, as fans in France describe it. Pretty ugly.
“We’re not having a moment,” Kahan says. “We’re having…a launching pad to where this brand should be. A year ago, in a lot of stores, Birkenstock was in the back corner collecting dust, like a nice annuity that everybody knew. Now we’re in the windows.” That visiblity translates into dollars. Sales of Birkenstocks in the U.S. have risen 30 percent in the past year, and Kahan says they could double from 2014 to 2015. It was the third-most-ordered brand at online shoe retailer Zappos.com (AMZN) in May, Kahan says, bested only by Nike (NKE)—which does $27.8 billion in annual revenue—and Asics (7936:JP), which does about $3 billion. Kahan won’t provide sales figures but says his company earns a small fraction of that amount.
Birkenstock’s rediscovery can be traced to late 2012, when Italian designer Giambattista Valli created a metallic replica adorned with studs that sold the next spring for an absurd $850. The same season, the Parisian luxury label Céline (MC:FP) introduced a similar $895 sandal with a furry footbed—a Furkenstock, as fashion bloggers called it. This summer you’ll find men’s floral-leather pairs by Givenchy ($600), leopard-print decoys by Steve Madden ($90), and Rachel Zoe’s metallic version ($295), which she calls the Berk. (These are all legal, because it’s nearly impossible to copyright a shoe’s shape.)
Fashionable shoppers who see luxury copycats in magazines and department stores aren’t all falling for the exorbitant prices, especially when an authentic Birkenstock Arizona sandal costs about $100. Often, shoppers can find either option in the same store—top boutiques such as Barneys New York have started carrying the real ones along with the designer dupes. “All the sandals that are Birkenstock-like have done tremendously well,” says Tomoko Ogura, Barneys’ senior fashion director. “They complement each other. Céline helps accelerate the trend on the runways, while pricewise, there’s value in the actual product.” At $245, the striped Birkenstocks at her store are among the most expensive sandals the shoemaker offers.
Birkenstock has made sandals since 1964, but the name goes back to 1774, when Johann Adam Birkenstock first hawked his insoles in Germany. This heritage appeals particularly to younger shoppers, who gravitate toward products with some sort of back story. “Most people are just selling shoes, but how many brands have an emotional connection?” Kahan asks. “Think of Nike: sports, fitness. Think of Sperry Top-Sider: boating, nautical. Think of Vans (VFC): skate, alternative. Think of Converse: kind of avant-garde.” So where does his product fit in? “Birkenstock…it’s a bit vague what it means. But it’s vaguely specific. Everybody gets it. But everybody might get something a little different.”
Kahan, 52, has sold footwear for most of his career, running companies such as Reebok (ADS:GR) North America and Rockport. He wears baggy navy suits and speaks with a Boston-by-way-of-Brooklyn accent. He also comes across as a bit of a snob, especially when discussing the company’s changing audience. “It raises Birkenstock to a much higher level,” he says. “Plus, it puts the look on the feet of genuinely more attractive people.”
When Kahan started in May 2013, he wasn’t even certain he wanted the job. “The word I would use is messy,” he says of the American division, based on a massive campus in Novato, Calif., where slightly more than 50 employees work. Until recently the company known as Birkenstock USA was merely a distributor—not officially part of the family-owned Birkenstock Orthopädie. It had switched hands several times after Fraser exited and split ownership among the remaining employees. For the five years before Kahan came aboard, there was no CEO in the U.S. And it wasn’t until last year—when the family stepped aside from daily operations in Germany and new leadership was named—that Birkenstock purchased and incorporated affiliates in the U.S. and other countries and became a truly global operation.
Now that Kahan has a seat at the German table, he’s using it to directly court the tastemaker crowd. “Birkenstock could never do a lifestyle image or be styled with ready-to-wear clothing. It was sacrosanct to the German company,” he says. Recently, an American ad featured a multicultural couple from the knees down, with a Birkenstock-clad woman on tiptoes reaching to kiss her identically Birkenstocked boyfriend. Tifani Vernon-Yanyali, the U.S. director for creative services, spends a large part of her marketing budget installing these images in mom-and-pop shoe stores across the country. Still, there are no faces in any of the photos, and Kahan’s careful not to offend his base. “It’s not like we’re saying ‘Ashley and What’s-her-name Olsen, you two Olsens, come here,’ ” he says. “So our true customers aren’t alienated. They’re thinking, ‘Well, all you fashionable people, you’re just waking up to what we’ve known all along.’ ”
“It raises Birkenstock to a much higher level. Plus, it puts the look on the feet of genuinely more attractive people”
For the first time, the German overlords are also allowing co-branded collaborations. At the outré boutique Opening Ceremony, $185 pairs with motifs from the surrealist painter René Magritte cater to the customer Kahan describes as “art meets fashion meets global hipster.” J.Crew also scored its own $130 blue leather styles, which it carried in stores worldwide. “It was so crazy. When we opened our store in Hong Kong this May, people were grabbing them like hot cakes,” says Tom Mora, J.Crew’s vice president for womenswear. The Tannery, an emporium for sneakerheads in Boston, is also working on a special collection that will be released in 2015. Aside from these three projects, Birkenstock focuses on a few core designs each season, rather than offering one-offs to each of its American accounts as it sometimes did in the past. “When you buy an Apple product, it’s the same product in every store,” Kahan explains.
One of this year’s biggest hits is what Vernon-Yanyali calls the Unicorn. They’re entirely white, with two white leather straps and a white rubber sole that retailers resisted selling at first because they feared it would get dirty. Like their namesake, the shoes are impossible to find, even by their most well-connected admirers. Many devotees opt instead for a version that’s completely black, like some evil orthopedic twin.
During last year’s spring fashion shows in Europe, Lucky’s Chen was in Milan’s Prada (1913:HK) store trying on a pair of $900 heels when she glimpsed the “black-blacks,” as the company calls them, on another shopper. “I dropped the Pradas and ran after her and screamed, ‘Where did you get those?’ ” says Chen, who also owns the white-whites. “Then, when I got to France, I went straight from the airport to this small shop. By the end of Paris Fashion Week, that store must have been looted.”
The company limits certain in-demand styles, so the Internet buzzes with people trying to track them down. “We’ll say to retailers, ‘We have production constraints,’ ” Kahan says, making air quotes with his hands, “ ‘that only allow us to make as much as we can. We’re maxed out on production.’ Wink, wink.”
The goal is to prevent one style from saturating the market and burning out like a pair of Ugg (DECK) boots. In the coming months, the company will diversify by pushing the Madrid, a one-strap sandal that’s been popular for decades as a house shoe throughout Europe. The U.S. designers have also worked with the German manufacturer to create pairs that have sneakerlike soles, others that resemble women’s wedges, and a few closed-toe, lace-up options that Kahan himself wears. In three years, he expects sales of these—which look like a Birkenstock only in that they have an oblong shape—to make up 20 percent of the business.
For that to happen, the brand might have to focus on less fashionable stores. “We really respond to the open toe,” Ogura from Barneys says. “It balances out the heavier sole.” During June’s resort fashion shows, full of clothes that will be for sale around December, Ogura noticed many slip-on, “slide sandals,” which she predicts will help carry the Birkenstock un-moment into next year. It’s worth noting that many of these new shoes look like a different German import: Adidas shower sandals.