Birkenstock Footprint Sandals, Inc. Business Information, Profile, and History

Company Perspectives:

Our purpose is to share our heartfelt belief that comfortable, healthy footwear contributes to happiness and well-being. Through our distribution of high quality footwear, we strive to create positive, harmonious relationships with employees, customers, vendors and the environment, emphasizing honesty and integrity in all we do. Within our company, our goals are to provide an atmosphere that stimulates growth and creativity among employees and to reward and encourage contributions.

History of Birkenstock Footprint Sandals, Inc.

Birkenstock Footprint Sandals, Inc. is the primary U.S. distributor for Birkenstock Original Contoured Footbed products made by Germany's Birkenstock Orthopädie GmbH. The Birkenstock family of Germany has a long history in the shoemaking trade. Throughout the first half of the 20th century, the company marketed orthopedic shoe inserts. In the 1960s, Birkenstock used the principles behind these products to create a homey-looking sandal, designed with comfort foremost in mind. After these shoes were introduced to the United States in the late 1960s, they gained popularity with hippies and academics and were sold mainly in health food stores before reaching a mass market in the late 1980s. In 2001 Birkenstock was selling sandals, clogs, shoes, and boots in over 400 styles, colors, or materials to men, women, and children. Top fashion designers in the United States and Europe use Birkenstocks in their shows emphasizing the latest trends. Specialized Birkenstocks are sold to podiatrists, other health professionals, sports enthusiasts, computer workers, and others in niche markets. Birkenstock Footprint Sandals, also known as Birkenstock USA, sells its products in company-owned stores in San Francisco and Berkeley, California; company-owned mall outlet stores in Gilroy, California, Wrentham, Massachusetts, and Orlando, Florida; over 160 licensed stores; and over 3,500 retail shoe stores and department stores, including Nordstrom, REI, Parisian, and Macy's.

German Roots of Birkenstock Products

Birkenstock traces its roots to the late 18th century, when a German cobbler named Johann Adam Birkenstock, who was born in 1754, was first registered as a "subject and shoemaker" in the church archives of Langenbergheim, a town in the duchy of Hesse, Germany. By the end of the 19th century, Konrad Birkenstock, a descendant, owned two shoe stores in Frankfort, the capital of Hesse. These stores would become the foundation of the modern Birkenstock businesses.

Konrad Birkenstock had the inspiration that would form the basis for his family's business for the next hundred years. At the time, shoes were made with flat soles, despite the fact that the bottom of the human foot is curved. Birkenstock realized that a sole curved to complement the shape of the foot would be more comfortable than a flat surface. In 1897, he designed the first Birkenstock contoured shoe last, a tool used in shoe-making, to help his cobblers make customized footwear for patrons.

On the strength of this innovation, Konrad Birkenstock began to spread the word of his new kind of shoe. He gave frequent talks to other leading members of the shoemaker's guild, explaining his fully contoured footbed. Birkenstock traveled throughout Germany promoting his new idea, and licensed other cobblers to produce shoes made with his technique. By the start of the 20th century, he had moved beyond the borders of his native country, traveling to Austria and Switzerland as well.

By 1902, however, the popularity of custom-made shoes had begun to wane, as factory-manufactured footwear began to be more widely distributed. Adapting the essence of his idea for this new and growing market, Konrad Birkenstock developed flexible, contoured arch supports, which could be inserted into mass-produced shoes to make them more comfortable. Birkenstock's arch supports, which bent to accommodate the foot, differed from the other supports on the market, which were made of unyielding metal. With the rise of mass-produced shoes, the Birkenstock family business moved away from the crafting of custom-designed shoes to concentrate on the production of shoe inserts.

In 1908, Birkenstock pushed forward with the foot support when he developed his own substance and built molding presses to manufacture the flexible orthopedic insert. Four years later, the firm continued its technological innovation when it created a new method for using rubber, a material just beginning to be developed, in shoe inserts. In 1913, Konrad Birkenstock's son Carl joined the family firm, insuring that continuity in the company's activities would be possible. In the wake of Carl's arrival, Konrad Birkenstock committed the bulk of his family's considerable assets to the research and development of rubber as a material for foot supports.

In the same year that Birkenstock undertook these efforts, Germany entered World War I. The company's contribution to the war was the design and manufacture of orthopedic shoes to be worn by wounded soldiers in a large military hospital in Frankfort. As a result of these activities, Birkenstock's products came to the attention of the doctor in charge of the hospital, who praised his efforts and encouraged him to market his orthopedic inserts more widely. In 1915, Carl Birkenstock began to travel throughout Germany, introducing the family's products to new buyers.

Two years after the end of World War I, a second Birkenstock brother, Heinrich, entered the family business. Though Germany's economy suffered following the war, the Birkenstock business thrived. The family opened a branch in Vienna, the capital of Austria, in 1923, and soon expanded its distribution to countries across Europe, selling orthopedic inserts in Austria, Switzerland, France, Italy, Belgium, Czechoslovakia, Holland, Luxembourg, Denmark, Sweden, and Norway. To accommodate this expanded customer base, Birkenstock opened a larger factory in the town of Friedberg, in Hesse. When demand for the Birkenstock product necessitated even greater manufacturing capacity, the company added night shifts at the factory.

The late 1920s and early 1930s saw the company make many changes and additions to its product line. In 1926 and again in 1935, Birkenstock expanded its line of footbeds, adding different widths to better fit the foot and to accommodate fashionable shoes. In 1937, Birkenstock further altered the footbed, adding a "ring," which it patented, that allowed the insert to be easily adjusted to fit each foot. By 1928, Birkenstock's success had attracted the notice of its competitors, and other companies began to market non-metallic arch supports. For the first time, the company had competition for its products.

With the start of the 1930s, Birkenstock expanded its education and promotion efforts beyond people who made shoes to the public itself. The company published 70,000 copies of "The Foot and its Treatment," a heavily illustrated pamphlet of 50 pages, in an effort to inform customers about the company's theories of orthopedics. Two years later, in 1932, Birkenstock stepped up its education efforts when it began to offer training seminars and lectures to orthotic appliance sellers in most European countries. These sessions lasted a week, and included more than 5,000 people in the mid-1930s.

Germany's defeat in World War II changed but did not seriously disrupt Birkenstock's development. With the coming of peace in 1945, the company transferred its operations from the Frankfort area in Hesse, to the town of Bad Honnef on the Rhine. Innovation and education continued apace; in 1946 the company introduced a toe-free insert and in 1947 it began to distribute a pamphlet for shoe sellers titled "Footorthotics System Birkenstock," with 112 pages and 55 illustrations. In 1950, Konrad Birkenstock, the creator of the flexible footbed and the company's driving force for half a century, died at the age of 77.

The decade following Konrad Birkenstock's death saw a number of changes in the venerable company. In 1956, Birkenstock introduced an insole made of shaped foam that was created through thermoplastic compression. Two years earlier, in 1954, a new generation of Birkenstocks had joined the family firm, when Karl Birkenstock, Carl Birkenstock's son, came aboard. Although his father envisioned the company's future exclusively in terms of orthopedic shoe inserts, the younger Birkenstock had more ambitious plans. He hoped to create a shoe that provided all of the benefits of walking barefoot. To do this, he experimented, combining his grandfather Konrad's techniques of flexible, contoured arch support, with his own understanding of how the foot works and moves.

Within a decade of Karl Birkenstock's arrival at the family firm, the company had re-entered the shoe business. In 1964, it began to manufacture a shoe whose design was based on the shape and function of the human foot. The new Birkenstock shoe was built from the inside out, starting with an orthopedically-based footbed, which gave firm support to the bottom of the foot. The company's goal was to make the wearer feel that he or she was walking on a surface that would yield, such as wet sand. In order to accomplish this, Birkenstock designed a footbed made of cork, latex, and jute, which absorbed shocks to the foot. The company also added a raised toe bar, to facilitate the instinctive gripping motion of the toes, and a heel cup, to cradle the heel and better distribute the body's weight. In 1965, Karl Birkenstock attached this sole to two simple leather straps to create a clunky, but comfortable, orthopedic sandal.

Margot Fraser and the Origins of Birkenstock Footprint Sandals

One year after Birkenstock began to market its new sandals, the shoes came to the attention of Margot Fraser, a German-born dress designer who had immigrated to the United States. While she was vacationing at a spa in Bavaria, workers suggested that she try Birkenstock sandals to ease her chronic foot problems. Several months later, her foot pain greatly improved. Fraser was hooked, and she believed that other American women would also want an alternative to the uncomfortable high-fashion shoes typically marketed to women. She spread the word about Birkenstock sandals to her friends, bringing them shoes from Germany. Finally, along with her husband, a cookware importer, Fraser arranged with Karl Birkenstock to market his sandals in the United States.

When Fraser approached the owners of shoe stores about selling Birkenstock sandals in their stores, she was universally rebuffed. Repeatedly, shoe sellers assured her that no American woman would ever wear shoes that ugly, regardless of how comfortable they might be. Seeking alternate marketing channels, Fraser turned to the health food industry. "We had to sell to people with a different vision," Fraser later recounted to People magazine. "It was very tough at first," she told the New York Times. "But it was when I went to a health fair, and people there wanted them that I got a start. They were interested in fitness." At a trade show, Fraser sold her first pair of sandals to a woman who was limping among the booths, holding her high-heeled shoes in her hands. After trying the Birkenstock sandals, this woman began wearing them constantly and also bought several pairs to sell in her health food store.

Fraser set up business in her home in Santa Cruz, California, using her garage as a warehouse. Sales of the sandals through health food stores increased, and the shoes gained a reputation for their comfort. In addition, Fraser sold the shoes through the mail. She bought shoes directly from the factory, often in lots of 20 pairs, and had them shipped parcel post to her house.

In 1971, Fraser moved her business out of her house, leasing a small office on top of a San Rafael, California, health food store for $25 a month. In 1972 she incorporated her company under the name Birkenstock Footprint Sandals, Inc., and formally became the sole U.S. distributor of Birkenstock products. Fraser hired a part-time bookkeeper and packer. "We made enough money to survive," she later told the Sacramento Bee. "We were pinching our pennies, but we managed." By the end of that year, the company had sold 10,000 pairs of shoes to the U.S. market, promoting the product through homemade fliers, small ads in health food publications, and booths at trade fairs and shoe shows. Often, the shoes were first bought by the owners of health food stores, who had to stand behind a cash register all day. With their recommendation, the popularity of the shoes spread through word of mouth.

While Fraser was working to sell Birkenstock products in the United States, the German parent firm was furthering its efforts to develop its line. In 1966, the company introduced a special paper, on which a customer's footprint could be marked, for a better fitting shoe. In the following year, Birkenstock developed and began to use "Birko-Cork," a natural thermo-pliable product for use in footbeds. Two years later, the company also began to sell insoles that massaged the feet in its "noppy-fit" sandals.

During the 1970s the popularity of Birkenstock footwear exploded, as the shoes became associated with the Bohemian lifestyle popular with young people. In the United States, sales of Birkenstock sandals grew dramatically, and the company introduced a number of new styles. In 1970, a sandal called "Roma," with a strap that encircled the heel, was sent to stores. In the following year, "Arizona," designed with two classic wide straps, was introduced. Overall, there were 12 different varieties of the basic Birkenstock shoe, all sold in natural earth tones.

In Germany, the Birkenstock company expanded its production facilities in order to meet the new demand. The company leased a factory in the town of St. Katharinen that housed punching presses to cut out the leather pieces for its shoes in 1974. Two years later, Birkenstock introduced "Birko Foam," yet another new material for use in its shoes, and in 1978, the company began to use superelastic light material to make new specially contoured soles.

At the start of the 1980s, Birkenstock modernized its production processes further, installing computerized last-making machinery to make the molds for shoes. Two years later, Birkenstock introduced its first significant variation on the basic sandal, the thong-sandal, which it began to sell in five different styles. In the next two years, the company received nearly 40 different design protection rights from the German Patent Office for its products, including two developed for the thong sandal. In 1984 Birkenstock opened a larger warehouse for its products.

Despite the innovation of the thong sandal, sales of Birkenstock shoes began to wane in the early 1980s, as fashions shifted away from the functional and down-to-earth. We were struggling with the image ... that we were a hippie shoe," Fraser later told Forbes. "We wanted to change that." In 1989, her company ditched its old, chunky logo, replacing it with something sleeker. In addition, the company joined with Birkenstock's German designers to increase the number of styles and colors offered to customers. Gradually, the number of Birkenstock sandal styles available grew to 125, with colors such as mango, moss, fuchsia, and cognac. In addition, Birkenstock sandals for children were introduced under the name Birkikids.

Developments in the 1990s and Beyond

In 1990, Birkenstock began to sell its shoes through a glossy mail-order catalogue, which it updated every six months. Soon other catalog merchants, such as L.L. Bean and the Sharper Image, were marketing the company's wares. By the early 1990s, popularity of Birkenstock sandals was once again soaring, as baby boomers aged and comfort became chic. In 1992, Birkenstock purchased a large warehouse to distribute its products, which were shipped from Germany to Houston in containers, and then moved by rail to Novato, California. This facility used a mile of conveyor belts and a computerized bar-code inventory system to control stock after a $1 million renovation. From this warehouse, shoes were sent to more than 90 Birkenstock specialty stores, large department stores, and other vendors.

Meanwhile, Birkenstock Footprint Sandal's financial performance kept improving. Sales increased 30 percent annually from 1988 to 1990, then jumped another 44 percent from 1990 to 1991, aided by an increased selection of footwear and celebrities including Madonna and Harrison Ford buying Birkenstocks.

In 1992 Mary Scott and Howard Rothman wrote a chapter about Birkenstock in their book Companies with a Conscience. They emphasized that founder Margot Fraser's open communication style and caring about her employees, vendors, and customers had been the key from the beginning. For example, Melanie Grimes, Birkenstock Footprint's first licensed retailer, said, "I started selling Birkenstocks from the closet of my college dorm in 1972. When I eventually opened a store of my own ... the shipment arrived with a letter from Margot saying 'If the shoes are not for you and your customers, please send them back for a full refund.'" Keeping the letter as a reminder of how Fraser had built their business relationship, Grimes in 1992 had three Birkenstock licensed stores in or near Seattle.

Birkenstock worked with M.J. Feet, the name of Melanie Grimes' retail stores, when the store decided in 1996 to use the Internet to sell Birkenstocks. The retailer made sure corporate headquarters approved the items sold online and how they would be marketed.

In the late 1990s, Birkenstock Footprint Sandals received several awards or honors. Footwear News in 1997 inducted founder Margot Fraser into the Footwear Hall of Fame. Working Woman Magazine in May 1998 rated the company by revenue as number 140 in its list of the Top 500 Women-Owned Businesses. Margaret and Phyllis A. Katz in their 1997 book The Feminist Dollar: The Wise Woman's Buying Guide included Birkenstock as the sixth most female friendly company out of 386 total companies. The Business Journal published for Sonoma, Marin, and Napa counties concluded that Birkenstock was the largest minority or women-owned business in that area.

Unlike their earlier history of rejection, Birkenstock products, especially the Boston clog, were quite popular with many international clothes designers. For example, Stephen DiGeronimo used Birkenstock products in his November 4, 1997 fashion show. After Narciso Rodriguez used cashmere flannel-covered Bostons in his fashion show in Milan, Italy, several other clothing designers followed his lead. For example, Charles Chang-Lima, Perry Ellis, John Scher, Paco Rabanne, Gene Meyer, and Ron Chereskin also featured Birkenstocks in their fashion shows.

Trish Donnally, fashion editor for the San Francisco Chronicle said on August 20, 1998 that "the crunchy granola of shoe styles is in" and that they indeed were "trendy." Although some said the company's clogs were ugly, they enjoyed the footwear comfort. "Everything in a Birkenstock is reparable," pointed out Laurie Davenport, the Birkenstock San Francisco store manager. "You can replace foot beds, hammer out the cork edge to cradle bunions, and you can remove the toe bar [in sandals] if people find them uncomfortable."

Birkenstock in the 1990s set a good example of combining the profit motive with environmental protection. In 1991 a group of employees organized themselves as the Green Team to promote environmentally sound practices by both employees and the corporation. It attempted to reduce paper consumption and trim office waste, and it offered several commuting options. In 2001 Birkenstock continued to decrease its energy consumption through facility improvements and new technology.

With strict vegetarians or vegans unwilling to eat or use any animal products, Birkenstock found alternatives to its leather products. Its catalog listed footwear made from wool, polyurethane, and acrylic. It said these nonleather products used "breathable, durable materials which hold their 'new' look longer than most real leathers." People for the Ethical Treatment of Animals (PETA) included Birkenstocks in its free Shopping Guide to Nonleather Products.

In 2001 Birkenstock Footprint Sandals remained under the leadership of its founder and President Margot Fraser, while Mary Jones, the firm's first employee, was its vice-president and manager of human resources. However, employees owned about 40 percent of the company. Based in Novato, California, in Marin County, Birkenstock Footprint's headquarters included 157,000 square feet for its offices and warehouses. It annually sold about two million pairs of its footwear to men, women, and children and looked forward to serving others in the future.

Principal Competitors: NIKE, Inc.; Ecco; The Timberland Company; SAS; Mephisto; Naot.

Chronology

• Key Dates:
• 1774: Johann Adam Birkenstock is listed as a shoemaker in church archives in Germany.
• 1897: Konrad Birkenstock designs the first Birkenstock contoured shoe last to enable the manufacture of customized footwear.
• 1966: Margot Fraser first brings Birkenstock products to the United States.
• 1972: Birkenstock Footprint Sandals, Inc. is incorporated.
• 1995: Company opens outlet store in Gilroy, California.
• 1996: Birkenstock opens its company store in Berkeley, California; Orlando outlet store is opened.
• 1997: Birkenstock opens its San Francisco retail store.
• 2000: Company opens outlet store in Wrentham, Massachusetts.