The Genius Who Sold America on Ugly Sandals

9 min read

Not sure how many of you may have seen the movie Barbie, staring Margot Robbie. If you did, towards the end of the movie, you might have taken note of Margot wearing a pair of Birkenstock sandals…of course they were pink. 

Oddly enough, another Margot was why Margot Robbie was wearing those sandals.  The Margot I’m referencing, played a pivotal role in making Birkenstock sandals a popular item in the U.S. What's even more incredible about this story, is that this Margot knew absolutely nothing about shoes. How did she do this?

Welcome to That's Life, I Swear.  This podcast is about life's happenings in this world that conjure up such words as intriguing, frightening, life-changing, inspiring, and more. I'm Rick Barron your host. 

That said, here's the rest of this story

If you follow the business financial news, you know that on October, 11, 2023, the German sandal maker Birkenstock went public. The company priced its IPO at $46 per share, in the middle of its $44 to $49 price range. That raised about $1.48 billion and gave Birkenstock a valuation of around $8.64 billion.

How did all this come about?

Allow me to walk through a little history about Birkenstock. Don't worry we'll get to Margot in a bit. 

Birkenstock is the family name of the brand's founder, Johann Adam Birkenstock.

The Birkenstock company traces its roots to 1774. Church records in Langen-Bergheim, a town outside Frankfurt, indicate that one Johann Adam Birkenstock was registered there as a shoemaker. He came up with the novel idea of making "fitness sandals" to promote a natural gait.

Johann Adam Birkenstock. Courtesy of WSJ

In the late nineteenth century, a descendant named Konrad Birkenstock opened two shops in Frankfurt. He made shoes, not sandals. At the time, the insoles of shoes were typically flat; Konrad's innovation was to make shoes with insoles that were contouredto fit and support the foot. He was one of the world's first shoemakers to experiment with insoles actually molded to the shape of the foot rather than the traditional flat footbed back in 1896, a more flexible footbed if you will.

In the early twentieth century, as shoe production became increasingly industrialized, Konrad developed flexible rubber insoles that could be inserted into commercially made shoes to create a comfortable Fussbett, or "foot bed." He became an orthopedic authority, as did his son, Carl Birkenstock, who joined the family business in his teens. 

Carl eventually wrote several books and pamphlets about foot health; they were filled with cross-sectional drawings of feet misshapen by inappropriate shoes. Carl Birkenstock's son Karl  joined the business, and in the sixties the company began producing sandals. According to company lore, Karl experimented in his family kitchen, baking a blend of cork and latex to produce a material that was light, resilient, and supportive.

History lesson over. Allow me to introduce Margot Fraser, who drove Birkenstock success in the United States for forty plus years.  Bear in mind, all this came about only because she had tired feet one day.

Margot Fraser. Courtesy of Footwear Plus Magazine

The journey of Birkenstock's evolution from a niche German wellness product into a global fashion icon wouldn't have unfolded as it did without the involvement of this remarkable woman. Born in 1929 and raised in Berlin, Margot made her mark as a successful dressmaker in Bremen, Germany.

When she attended elementary school in the 1930s, she remembers her principal saying that "girls were capable of anything and should follow their dreams." Margot took that quote to heart, but not her mother, who thought that type of thinking was nothing but silly nonsense. Even Margot's father was of the same mindset. When she told him she wanted to travel the world for business and show people that "not all Germans were bad," he responded: "My dear, you could never do that as a woman."

For Margot, the word 'impossible' was not part of her demeanor, but rather the word, 'possible'.

After attending a dressmaking school, she relocated to the countryside, crafting garments for local farmers who compensated her with eggs and butter. This was Margot's first experience as an entrepreneur. Faced with a bleak post-World War II Germany and an unyielding passion for her childhood dream, she resolved to leave her homeland, and head over to the United States.

Margot later found her roots and settled in Santa Cruz, California. 

By the early sixties, she had become an American citizen, and married an American.

Struggling with chronic foot pain, Margot’s life took an unexpected turn in 1966 during a visit to Germany when she stumbled upon a pair of Madrid sandals. 'Madrid', keep that name in mind as there's a story to those sandals.

She explained the transformation these sandals triggered in her: She said, and I quote, "All the exercises the doctors told me to do, like standing on a phone book and grabbing it with my toes (which made me feel like a hero if I did it for three minutes), I did automatically with these sandals."  End quote

Margot found the sandals well-made and that function over form won her over. Little did she know that putting on those pair of sandals was about to change her life, not to mention the role she would have coming up with a new marketing name for the sandals she had tried on, down the road.

The porch light went on in Margot's head. Impressed with the comfort and health benefits of the sandals, she recognized the potential market for Birkenstock in the United States.

Upon her return to the United States, she took a leap of faith and reached out to Karl Birkenstock, proposing the import of his innovative sandals. At the time, she observed, "all women's shoes were narrow and had pointed toes. Even the so-called healthy shoes still had heels." With countless American women enduring foot pain, Margot envisioned an easy transition into these fantastic footwear creations.

Much to Margot’s surprise, she was stunned when Berkinstock said yes to the energetic dressmaker.

Her initial encounters with skepticism, where shoe-store managers insisted that her sandals would never sell, were met with resilience. A friend's ingenious suggestion led her to set up a booth at a health-food convention in San Francisco. Her very first customers were health-food store owners, familiar with the discomfort of standing all day, who began stocking Birkenstocks beside granola and vitamins on their shelves.

Ironically, the shoe-store managers who had initially dismissed her found themselves desperately requesting Birkenstocks. Margot shared a story how the shoe-store managers came to her saying, 'Look, there is a health-food store on my street, and people are walking out with shoeboxes—they should be walking out of my store with shoeboxes.'"

Much like the Earth shoe that emerged from Scandinavia in the early seventies, known for its health-enhancing design with a lower heel cup compared to the toe, Birkenstocks became synonymous with the counterculture of the era.

How did someone who knew nothing about shoes, let alone sandals, accomplish her standing with Birkenstock? I guess you could call basic marketing 101. Where Margot excelled was paying keen attention to what women wanted. She listened.

They were her first customers. They were also her best customers. Birkenstock's financial documents credit "the breakthrough of modern feminism" as a key driver of its business, and the company's private-equity backers cite the products' appeal to women as one of the reasons they invested. In fact, Birkenstock says 72% of its customers are female.

Looking at the breakdown of the company's base is remarkable when you consider they pitch its products to be unisex. Steve Jobs wore them. Sneaker geeks have an obsession with these shoes.

Before you knew it, Margot began introducing the brand to American consumers and founded Birkenstock Footprint Sandals, Inc. in California in 1967, and became the first distributor of Birkenstock sandals in the United States.

At first, it seemed the decision to sell in the United Sates was not wise. The owners of local shoe stores wouldn't talk to her, and doctors treated her like a threat to the podiatry business. Many shoe stores rejected the sandals due to their appearance.

Face with these challenges in the early years, Margot doubled down on her efforts. Birkenstock sandals were relatively unknown in the U.S. market and the traditional design differed from the fashionable shoe trends of the time. However, she was determined to educate consumers about the health benefits of Birkenstock sandals and the quality of the product. 

Her patience and persistence soon paid off.

Margot Fraser checking out a warehouse. Courtesy of The Daily Mail

They say that timing is everything, not to mention 'location, location, location.' Margot began to make inroads with the consumer in the 1970s as sales for sandals were picking up steam. In the United States, Birkenstocks were first popular among young men and later on with flower children, a group traditionally associated with American liberalism. The shoe became popular with hippies and others who had a "back to nature" philosophy and appreciated the natural foot shape and foot-friendly comfort of Birkenstocks.

Birkenstock sandals would have crossed the ocean eventually, but the sandals became a symbol of rebellion because they landed in the heart of the counterculture, California in particular, when and where people were allergic to the mainstream and willing to wear their antiestablishment values on their feet.

Margot's marketing efforts and grassroots approach to promoting Birkenstock sandals soon took off over the years. She emphasized the comfort and orthopedic advantages of the sandals, thus the value-add for the consumer's feet. Her efforts gradually gained traction. Birkenstock sandals began to attract a dedicated following, especially among people seeking comfortable and supportive footwear. 

Margot formed a close working relationship with the Birkenstock family, sharing their unwavering passion for all things Birkenstock. They crafted shoes and made pivotal company decisions based on her invaluable feedback.

An example of her marketing sense was when she tried on Bikenstock sandals for the very first time back in Bavaria, Germany.

The moment Margot laid eyes on that quirky sandal; she knew it was something special. Its official name was the "Original Birkenstock-Footbed sandal," but her instincts told her that a name like that wouldn't easily woo American women. She passionately pitched her marketing insight to her German partners, who embraced her suggestion. And so, the single-strapped sensation was reborn as the "Madrid." Fast forward, and it's not just any bestseller; it's one of the company's absolute stars!

The bold tastes of the American consumer influenced the production in Germany. Margot told a story how sometimes her ideas met with resistance: "When I started to ask for color, the man who had to distribute the sandals in Switzerland said, 'This woman is going to ruin us. We are orthopedic—we don't need color.' But we brought color into the United States, and it helped sales everywhere."

Generation preference. Courtesy of WSJ

Margot sensed the intrigue in baby boomers who were determined not to mimic their parents' style. As fate would have it, their children, the millennials, didn't mind embracing the same look. Fast forward to today, and it's an electrifying twist of generational style. Boomers and millennials now form nearly identical portions of Birkenstock's loyal following, with the company's Arizona sandals and Boston clogs making waves in high schools and the most stylish retirement homes around!

The transformation of this business since Margot Fraser's game-changing sale of Birkenstock USA to her employees and her retirement in 2002 is nothing short of astonishing! It's like the company stepped into a time machine, propelled into a thrilling new era. Fast forward to today, and you'd hardly recognize the company.

Once a humble entity, it's now part of the mighty German parent company, runed by the trailblazing Oliver Reichert, the very first non-Birkenstock family member to steer the ship. 

Birkenstock isn't just about comfy sandals anymore; it's a whirlwind of innovation. Sneakers, boots, woolen wonders, shearling stunners, and waterproof masterpieces now grace its product line. Gone are the days when these sandals were just an anti-fashion statement. They've undergone a Cinderella-style makeover, becoming the go-to choice for the posh and the famous, including celebrities, and models.

As if that weren't enough to make your heart race, consider this: those who once turned up their noses at Birkenstock's distinctive style are now clamoring to put their feet in them. The company's dominion? The mighty United States!

Again, none of this epic journey would have been possible without the unbeatable Margot Fraser at the helm. She's the true hero of this exhilarating Birkenstock adventure!

Birkenstock sandals relaxing. Courtesy of Wikipedia

We lost Margot Fraser in 2017 at the age of 88, but her legacy will live on with Birkenstock. 

However, the company would not be in this place with the energy of a woman who knew nothing about shoes. The CEO of Birkenstock Americas division could not have stated it better when Margot died. He said, and I quote:

"It is not an overstatement to say that Margot's pioneering efforts paved the way for European comfort brands here in the U.S. It is because of Margot and the foundation she built that the brand is enjoying the success that it is today. And, it is because of Margot that shoes that are good for you have a place in so many stores and closets across the country." End quote

What can we learn from this story? What's the takeaway?

Margot Fraser's success at Birkenstock was a result of impeccable timing, market understanding, adaptability, passion, effective marketing, cross-generational appeal, and her unwavering dedication. Her journey of 40 plus years serves as a compelling case study for entrepreneurs and business leaders to take the word 'impossible' and covert it to 'possible.' 

Well, there you go, my friends; that's life, I swear

For further information regarding the material covered in this episode, I invite you to visit my website, which you can find on either Apple Podcasts/iTunes or Google Podcasts, for show notes calling out key pieces of content mentioned and the episode transcript.

As always, I thank you for listening and your interest. 

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