Birkenstock has hired new experienced top managers while streamlining its product line as it is working more like a group. The number of styles on offer has been reduced from around 1,000 to 600, focusing on the Birkenstock brand name.
It will keep the brands Birki's and Papillio. However, the Alpro brand is being renamed Birkentock Professional, while Tatami has been changed to Birkenstock Premium. Footprints, which stands for closed-toe footwear, is now called Birkenstock Shoes, and the company plans to invest a lot in this segment, using an Italian design studio.
All the children's shoes produced by the group, except for licensed products, will be renamed Birkenstock Kids. Birko, the group's brand of orthopedic insoles, has changed its name to Birkenstock Accessories.
As of Oct. 1, Birkenstock is a group employing 1,800 people worldwide. While it previously included 38 different companies, it is now a holding company with a unified structure for sales, services and production.
At the GDS fair last month, Birkenstock held a press conference to present in more detail its strategy and its new management structure, which we partly reported on in the last issues of Shoe Intelligence. Some of the new executives confirmed the group's plans to double its production in Germany to 20 million pairs by 2020, without transferring any of it to other countries.
Birkenstock has created new positions in sales and communication. Curiously, there was no single person previously at Birkenstock to handle communication, but last July Jochen Gutzy assumed the new position of head of communications for the group, which intends to become more transparent and to capitalize fully on the strong notoriety of the Birkenstock brand name. He manages the group's internal and external communication, public affairs and the positioning of all Birkenstock brands. Gutzy reports directly to Oliver Reichert and Markus Bensberg, joint chief executives of the Birkenstock Group and representatives of its two sole new owners, Christian and Alex Birkenstock. Gutzy worked for ten years as managing partner at a German communication consultancy, MärzheuserGutzy.
Birkenstock has also hired Frank Maasfelder for the newly created position of head of global sales for all of the group's brands. Since Sept. 1, he is responsible for conceptual development when entering new markets and the optimization of sales functions in general. He acts as a liason among the marketing, finance and production units. Maasfelder has been working for Adidas Inhouse Consulting in the areas of sales and consulting, starting in 2007. Most recently, he was responsible for the restructuring of Reebok in India. Previously, he worked as sales and key accounts manager at RWE and in the area of strategic marketing at Bosch Rexroth.
Also on Sept. 1, Michael Dörner started working at Birkenstock in the newly created position of area manager for Europe, the Middle East and Africa for all of the group's brands. Since 2006, Dörner worked as general manager for Central Europe and sales director for Germany and Austria at Wolverine Europe. Previously, he worked in the areas of key accounts management, product management and sales at Adidas-Salomon and Reebok. Both Maasfelder and Dörner report directly to Dieter Klingenberg, the former Adidas executive who was recently appointed managing director in charge of sales for the whole group.
As already reported in Shoe Intelligence, Randolf Friedel has been hired to act as country manager for the markets of Germany, Austria and Switzerland. Since March 1, he has been responsible for all of the group's brands in these countries, reporting to Klingenberg. He has been asked to strengthen relations with local retailers.
Additionally, Birkenstock is cooperating more closely with the big German buying groups. It recently signed centralized settlement contracts with Sabu and ANWR in Germany. It rented an exhibition space of 80 sqm in ANWR's new 01 order center near Frankfurt, which is meant to serve as an example for Birkenstock's new store concept, which will be introduced in all the markets.
The establishment of new top sales positions is partly meant to boost international sales. Germany is still responsible for about 60 percent of the group's total sales, which are now estimated to have reached around €250 million last year. We had previously provided a much higher figure for Birkenstock in our annual “brown shoe chart,” but it apparently referred to retail sales.
The second-largest market is the U.S., with a share of about 15 percent, and the U.S. subsidiary is run since recently by David Kahan, formerly with Nike, Adidas and Rockport.
Birkenstock, which is said to be very profitable, raised its sales by 4 percent in the first eight months of this year, as compared to the same period of 2012, with growth of 22 percent in Germany. The company expects them to increase by about 5 percent through the end of 2013, with growth of 10 percent in the U.S.
The potential of the brand is huge, particularly in emerging markets such as Russia, Poland, India and South America, as Birkenstock is deemed to be recognized as one of the top five footwear brands around the world. Its footbed is used or imitated widely. The brand enjoys a premium position in Japan, although it doesn't have any monobrand stores in the country.
There are about 250 Birkenstock stores around the world, and pratically all of them or shop-in-shops or are run by franchisees. The company is working on a new store concept, but it wants to get the product right first.
Company officials plan to upgrade the Birkenstock collection, notably by using higher-quality materials, without raising prices. Rudy Haslbeck, who has been the head of design and product development for all the Birkenstock brands since March 1 and previously brand manager of Snipe, presented special new models at the GDS for the spring/summer 2014 collections. They included new products such as sheepskin boots, which will be available for delivery as from Oct. 15, and two sporty styles as add-on to its trekking collection for spring/ summer 2014, which were developed in cooperation with Vibram.
Additionally, Birkenstock offered a ten-piece limited edition for Christmas 2013, designed by Patrik Muff and available at only a few retail stores such as Selfridges in London. The women's model carries a retail price of €4.000 and the men's model is priced at €1.500.