Why has Birkenstock seemingly become the hottest shoe brand as of late? The 250-year-old German sandal maker is suddenly everywhere, collaborating with fashion’s biggest names, selling out at luxury price points, and generating the kind of cultural buzz typically reserved for sneaker drops and luxury launches.
The answer lies in a €4 billion acquisition. When L Catterton, LVMH’s private equity arm, acquired Birkenstock in 2021, they weren’t just buying a sandal company. They were acquiring a heritage brand with all the raw materials needed for luxury transformation: European craftsmanship, cultural credibility spanning counterculture to high fashion, and premium pricing tolerance.
The transformation has been swift and systematic. Before the LVMH acquisition, Birkenstock had occasional collaborations with celebrities like Heidi Klum in the 2000s. Since 2021, they’ve partnered with six major fashion houses including Proenza Schouler, Rick Owens, Valentino, Dior, and Manolo Blahnik, with four of these collaborations happening in just the past year.
Two years later, Birkenstock achieves nearly 60% gross margins rivaling Louis Vuitton, generates over €1 billion in revenue, and their hand-braided Kith partnership sells out instantly at luxury price points. This transformation reveals the LVMH luxury playbook in action and offers strategic repositioning lessons any heritage brand can apply.
The Story
Birkenstock’s story begins in 1774 when Johann Adam Birkenstock founded the company targeting wealthy German spa-goers. The brand’s original positioning was premium; they specialized comfort solutions for affluent customers seeking therapeutic benefits.
But by the 1970s, when the sandals hit American shores through health food stores, they became trapped in hippie counterculture positioning. While this built devoted following, it also limited the brand to a narrow market segment that seemed fundamentally incompatible with fashion.
LVMH recognized that Birkenstock possessed something most luxury brands spend decades building: authentic cultural credibility across multiple generations and subcultures.
The LVMH Transformation Playbook
LVMH’s systematic approach to luxury brand building became clear through Birkenstock’s evolution:
Install luxury-minded leadership. CEO Oliver Reichert came from German sports broadcasting, not footwear. This outsider perspective proved crucial; he could see positioning opportunities that industry insiders missed. Where traditional executives might have seen orthopedic limitations, Reichert saw untapped luxury potential.
LVMH created architectural separation. The 1774 line launched as Birkenstock’s “new venture into luxury,” named after their founding year. This separate tier allowed luxury experimentation without confusing core customers or diluting the main brand.
Establish luxury geography. LVMH opened Birkenstock’s Paris office on Rue Saint-Honoré in the heart of fashion, designed specifically to showcase collaborations with fashion’s elite. Geographic context signals luxury credibility to industry insiders.
Execute strategic collaborations. Since 2020, partnerships with Proenza Schouler, Rick Owens, Valentino, Dior, and Manolo Blahnik have systematically elevated brand perception. Each collaboration maintains Birkenstock’s core DNA while allowing partners to elevate aesthetic execution.
Control scarcity and pricing. Products never go on discount, collaborations sell out within days, and the most expensive 1774 pieces exceed €700.
The Cultural Timing Advantage
LVMH’s market intelligence identified the perfect moment for Birkenstock’s repositioning. The pandemic accelerated comfort-focused fashion trends just as luxury was embracing “ugly” aesthetics through brands like Golden Goose and Balenciaga.
As Reichert explained: “Everyone was staying home. People didn’t care about desks, chairs, or sweatpants, but they cared about what they wore on their feet. Birkenstock became part of a self-reinvention.”
The timing wasn’t accidental. LVMH recognized that fashion’s shift toward comfort-as-luxury created perfect conditions for repositioning a brand with established comfort credibility.
The Collaboration Strategy That Works
Unlike typical brand partnerships that simply swap logos, Birkenstock’s collaborations demonstrate sophisticated luxury strategy. Each partnership “starts with the signature moulded footbed” and is “reimagined through an artistic lens in custom palettes, fabrics and finishes which embody each designer’s DNA.”
The recent Kith collaboration exemplifies this approach. The hand-braided Boston clogs feature “custom handwoven uppers crafted from premium cow suede” celebrating the silhouette’s 50th anniversary. The comfort and functionality remain unchanged, but the execution now meets luxury standards.
This serves dual purposes: maintaining authentic positioning while gradually educating the market to value Birkenstock’s core competencies as luxury attributes.
The transformation’s success shows in luxury-level business metrics:
- 60% gross margins rivaling Dior and Louis Vuitton
- €1+ billion revenue with consistent double-digit growth across all channels
- 50% of sales from younger customers who see these as status symbols, not orthopedic aids
- Zero discounting while maintaining premium pricing across all product lines
These figures represent a fundamental business model transformation achieved in under five years.
The Strategic Lessons
Birkenstock’s evolution offers crucial insights for heritage brand repositioning:
Reclaim your luxury heritage. Birkenstock returned to their original premium positioning while maintaining cultural credibility earned over decades.
Leverage existing cultural authority. Rather than abandoning their comfort-focused history, LVMH positioned it as a luxury differentiator during fashion’s comfort revolution.
Create safe experimentation spaces. The 1774 line allowed luxury exploration without confusing core customers or risking main brand equity.
Time cultural shifts strategically. The comfort revolution and “ugly luxury” trend created perfect conditions for repositioning.
Install outside leadership. Reichert’s broadcasting background provided the fresh perspective needed to see opportunities industry insiders missed.
Execute systematic luxury elevation. LVMH’s playbook—from Paris geography to collaboration strategy to pricing discipline—systematically built luxury credibility.
In Summary
Birkenstock’s transformation validates that luxury positioning is about cultural authority and strategic execution. They proved that the best brand repositioning doesn’t abandon your strengths but to teach the market to value them differently.
The brand spent 250 years perfecting comfort and functionality. LVMH’s contribution was teaching the fashion world to value those qualities as luxury attributes through systematic positioning, strategic partnerships, and disciplined execution.
The question now becomes sustainability. Can Birkenstock maintain luxury credibility as pandemic-driven casualization potentially reverses? Their strategy suggests confidence: continue perfecting core competencies while allowing fashion collaborators to keep the aesthetic fresh.
It’s a model that could work indefinitely as long as they remember that their luxury positioning comes from being authentically excellent at what they do, not from trying to be something they’re not.
Thanks for reading this week! As always, I love helping small businesses win, whether that’s through my self-paced Social Media Masterclass here or through a 1:1, Direct discovery or working with my agency!
xx,
Camille