“What were we most concerned about during the pandemic? Provision of leather from Italy”. Such is the answer given by Oliver Reichert, Chief Executive Officer of Birkenstock. Meanwhile, the German historic brand keeps growing. In other words, by the end of 2019/2020 financial year its revenues will have increased, while estimated earnings are due to exceed one billion euros within two years (at most). The pandemic did not have any detrimental effect on the brand, then: apparently, they just “feared” they could not benefit from provision of hides and leather they usually make use of. That is, Italian leather.
Birkenstock sell about 12 million pairs, a year, of Arizona, their iconic unisex sandal. They manufacture them in Gorlitz, Germany, by using Italian hides. During the lockdown period, the sandal (and, more generally, the brand) has become the “official shoe for home office”. “This year the most demanding challenge has been about production – remarked Reichert while speaking to Footwear News –. Indeed, it is rather difficult to predict and estimate potential risks, for one’s own business, in such a complicated situation.
We purchase all of our products in Europe: leather comes from Italy, whereas cork comes from Portugal”. In fact, “what we were most concerned about at the beginning of the pandemic was our provision of hides and leather from Italy. That is why we started to buy all up. Although we had 11 million pairs of shoes stocked in our warehouse, we bought up each single piece of leather we could possibly find”.
They keep growing
The company proved long-sighted. In fact, sales have been enjoying an outstanding boost: no wonder, then, the annual financial statements, closing on 30 September 2020, will have higher revenues compared to the previous ones. “Due to the closure, which went on for two months, of selling stores, our results will be slightly less rewarding, compared to last year, as to EBIT”, claimed Reichert.
Nevertheless, according to estimates, Birkenstock earnings will supposedly exceed one billion euros “next year or in the next two years perhaps”. What is the secret of this success? “When lots of things are uncertain, people seek quality”. And leather as well, we would like to say.