How an orthopedic company with a reputation for ugly shoes created a brand that’s worth billions

Most people can make a quick decision when asked to choose between a pink Stiletto and a brown Birkenstock. Weird Barbie challenges Stereotypical Barbie in this year’s Barbie film to make the same choice. Barbie believes that the high heel is synonymous with a life filled with beach parties and dancing, while the sandal represents “knowing what the truth of the universe.”

The fact that Greta Gerwig, the director of the film, used the Birkenstock Arizona sandal as a symbol for the truth about life speaks volumes about this “ugly” orthopedic footwear.

Since the 1960s, Birkenstocks have been the shoes of choice among the “brown rice” or hippie crowd. But this image has changed dramatically. Birkenstock’s flexible arch support has been able, as comfort, climate-change concerns, and demand for non-animal products have become more important to shoppers.

Financial analysts had predicted that the German shoe company would be worth more than US$8 Billion (PS6.5 Billion) before its shares were made available to the public at the New York Stock Exchange. Birkenstock will have the third-largest US listing in 2023. It’s not bad for footwear designed to promote foot health.

Family footwear business

Industrial manufacturing processes were changing in Europe when Johann Adam Birkenstock founded the Birkenstock brand in 1774 in Germany. The Birkenstocks used this new technology to develop shoes with flexible insoles that support the arch for better foot health.

Exports to Europe began in the 1920s, but it was not until then that wealthy Europeans realized the advantages of this type of footwear. In the 1960s, the company started producing sandals. In 1973, the brand introduced the third style after the Madrid (1963) and the Zurich (1964).

Birkenstock began to transition from orthopedic shoes into fashion at this time with the help of entrepreneur Robert Lusk. He recognized that the counterculture generation was looking for a comfortable alternative.

Lusk opened the Natural Shoe Store at London’s Covent Garden to serve this customer base in 1976. Lusk began to broaden the appeal of the Birkenstock brand in the late 1990s. He convinced Birkenstock that its most popular styles, the Arizona & Madrid, should be available in new colors. The new colors were designed to appeal to more fashionable customers.

Birkenstock’s ‘bubble up’

The brand continued to grow, but at that time, Birkenstocks could only be purchased through Lusk’s or a mail-order service. There was also a Birkenstock standalone store. The sandals became a popular summer shoe choice for A-listers like Jude Law, then British Vogue editor Alexandra Shulman, and other celebrities.

Production was increased in Germany due to the scarcity effect. A brand’s distribution can be affected by a sudden increase. Unusually, the increased availability of Birkenstocks did not seem to affect demand and its “brand value” on a long-term basis. The value that a company gets from the perception its consumers have of it. Birkenstock has also seen its brand equity increase through its collaborations with high-end designers such as Dior and Manolo Blahnik.

Birkenstock slow burn is a good example of the “bubble theory. This is opposite to the traditional “trickle-down” phenomenon, where mass-market brands and designers are influenced and shaped by luxury fashion and high-end designer labels. Brands and designers are instead taking inspiration from other aspects of society. This includes alternative subcultures. They reinterpret the original use.

Doctor Martens, Crocs, and other mainstream fashion brands have successfully borrowed from subcultures. Both brands have utilitarian roots, and they both had impressive valuations when they went public: Doctor Martens was valued at PS3.7 Billion in 2021, while Crocs was valued at US$1.15 Billion.


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