Why Birkenstock is Back on the Radar: CEO David Kahan Says ‘Never Compromise Brand Equity’

The centuries-old brand is making a come back by holding true to its self-proclaimed 'geeky' roots and creating market scarcity.

This story originally appeared on Transworld Business and has been republished with permission. Words by Kailee Bradstreet. For more stories, visit Transworld Business.

Depending on when you were born, you may remember Birkenstock sandals in different ways. The brand, after all, has been around for more than 240 years.

It's hard to believe that a shoe company that got its start in a small village in Germany in the late 1700's could survive several turns of century, major cultural shifts and a myriad of sociological evolution. But Birkenstock is the shining example of how a brand can decide to stick with a simple idea (in this case, sandals) and carve out a niche – no matter how small and obscure.

birkenstock coo david kahan

Kahan showcases some of the latest media attention the brand has received. Photo: Ryan Harrah

Although, CEO David Kahan acknowledged at Thursday's SIMA Boot Camp session, the brand's popularity has come in waves – the '60s and ’70s, a blip in the '90s (when Apple Founder Steve Jobs unapologetically adopted them) and now, over the past few years, Birkenstock has risen in the fashion scene with celebrities, models and youth influencers once again.

Part of that has come from a reinvigorated strategy that Kahan has put in place over the past five years since he's been at the helm. Love them or hate them, the brand has made a resurgence with millennials and younger generations, who don't necessarily associate the brand with Woodstock and iconic '60s culture but are seeing the brand emerge within a different time period fraught with changes of its own.

"The product hasn't changed but we have found new ways to make it exciting," Kahan said. "We took a successful niche brand into a brand new territory, and it was scary."

Kahan, who doesn't take the brand and its mission too seriously, jokingly likened people with an affinity to Birkenstocks in the past as those who sat at the "geeky" table in the high school cafeteria. But, he said, instead of dropping their brand DNA and going to sit with the "cool crowd," Birkenstock has been bringing the cool crowd to them.

The number one guiding principle in this strategy? "Never compromise your brand equity. Ever."

"We decided to wake up this brand that people loved," says Kahan. "We doubled down on who we are. We never wanted to alienate the "geeks," and we didn't want it to show up [in retail] in ways that didn't do it justice."

birkenstock ceo david kahan

A look at Birkenstock’s collaboration with Barneys New York. Photo courtesy of Birkenstock

Instead, Kahan and team narrowed down Birkenstock's retail distribution, creating market scarcity and even severing ties with a few of its top accounts, because the brand message and placement wasn't being executed in line with its mission statement. Although they've aligned with new retail partners, including a recent collaboration with high-end stockist Barneys, Kahan says they've been careful not to portray the brand as "being something we aren't."

You’ll also rarely find Birkenstock product off-price or marked down. Why? Besides compromising brand equity, Kahan says it does't align with the brand's overall message – which emphasizes a sustainable, hand-made process at its company-owned factory. It is, essentially, the opposite of fast-fashion, or what Kahan refers to as "disposable wearables," and maintaining products at MSRP reflects that value, he says.

The CEO was recently thrown into the spotlight when he sent a personal note to Birkenstock retailers about Amazon. Birkenstock has a small amount of authorized dealers on Amazon – these are retailers that the brand feels it can trust to preserve its integrity – but outside of that, Birkenstock does not allow third-party vendors on Amazon, although that hasn't stopped rogue dealers from popping up almost weekly, Kahan adds.

"Amazon, to me, is the most dangerous thing out there. As a brand, the easiest choice is: 'everyone is on Amazon, I need to be there.' But you have to make a decision: are you purely transactional or are you emotional?" he asks.

According to Kahan, all the great brands in history are those that generate an emotional connection – a brand that you love so much you'd be willing to tattoo its logo on your body, he offers.

Kahan views Amazon's transaction-driven, low pricing, and the risks associated with selling on Amazon (including counterfeit product knock-offs through third-party vendors) as the opposite of an emotional brand experience. He also balks at paying a celebrity to wear a product, arguing that youth today see through that type of marketing. (The company has turned down "gifting" its product to celebrities, including big names like Beyoncé, Kahan points out).

Since taking the helm five years ago, Kahan has a mission to enact change while preserving the brand’s original ethos. Photo: Ryan Harrah

"Everything has been about fast fashion and now there's a glut in the market," Kahan says. "But the millennials who will drive the future of spending have a stronger belief in sustainable practices, and I think there is a backlash that's starting to happen with brands that are trying to offer too much, too fast. Doing less is better, and it's true to who we are."

Basically, Birkenstock continues to march to the beat of its own drum, not following casual trends or industry standards. But despite staying firmly rooted in its original mission, Kahan says his main focus since taking the reins has been reinforcing an internal culture that embraces change. It’s a concept that's hard for just about everyone, let alone a company that has been around for centuries, is still family-owned and operated and answering to a German board of shareholders (who also share the Birkenstock name). It's understandable why they might be resistant to changing things up, Kahan points out.

"They really needed a wake-up call," he says about the company when he came on board. "They weren't even a part of the footwear industry, there were just their own little world. It was a big culture shift."

He compared this to youth who are just embarking on the college experience. They might be on track for a particular career, but they don’t have blinders on, either, he said. The rate of change only continues to accelerate, and only those who are thinking “two steps ahead” and initiating this change will survive.

“Kids today will invent the jobs they are going to be doing in 10 to fifteen years,” says Kahan. “This is how we need to start thinking right now about our industry – no matter what industry you are in – and the product you are putting out.”

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