EXCLUSIVE: How Birkenstock overcame a dark family past

Birkenstock was always shorthand for ‘ugly.’ The achingly uncool preserve of hacky sack college kids, dads on vacation, and Haight-Ashbury hippies.

Even Kate Moss – at the peak of her runway prowess in 1990 – couldn’t drag the orthopedic eyesores out of the sartorial wilderness when she wore a pair of the sandals in a fashion campaign and was roundly mocked.

Then suddenly, in 2012, the 250-year-old family-run German brand earned an overnight luxury revamp, as – quelle horreur – Celine creative director Phoebe Philo sent a fur-lined version down the catwalk at Paris fashion week.

Vogue celebrated Philo’s outlandish footwear as ‘suitably unhinged’ – and, predictably, other high-end collaborations swiftly followed, including a ridiculous $76,000 iteration made from chopped up Hermes Birkin bags.

Now, a decade later, Birkenstock’s meteoric rise from geek to chic seems all but complete as the company made its stock market debut on Wednesday.

Birkenstock had been hungrily eying the New York Stock Exchange sale for weeks, with insiders ambitiously predicting a valuation of up to $11 billion.

In the end, the first day of trading was disappointing, with stocks tanking 12 percent and a closing market valuation of $7.5 billion.

Nonetheless, the sale is still a remarkable feat for a brand that, as DailyMail.com can now exclusively reveal, has overcome rather more significant challenges than the disapproval of the fashion snobs.

For, back in 1940s Germany, Carl Birkenstock – head of the company at the time and grandfather of the current Birkenstock family members who still own a minority stake in the company – became a member of Adolf Hitler’s Nazi Party.

In a statement the company told DailyMail.com: ‘[Carl joined] in 1940 under duress and the coercion of repeated verbal and physical attacks by local Nazis.’

Carl held no office or rank within the party, and there is no suggestion that he or any other members of the family was ever involved in Nazi activity – or, indeed, complicit in the Nazi’s persecution of Jews and other minorities.

The company explained: ‘[Carl] was repeatedly attacked because of his last name, which the Nazis considered as Jewish-sounding. As a result he felt compelled to present a proof of his non-Jewish descent. After he was beaten by a local Gestapo man, he saw no way to protect himself other than to join.’

Nonetheless, they admit that – like many millions of his fellow Germans at the time – Carl held a party membership card until the end of the regime, when Germany lost the war in 1945.

Subsequently, Carl was subjected to ‘denazification’ – the process by which Allied forces rid German society of Nazi ideology and power structures – and, in 1947, he received permission to start the Birkenstock brand afresh.

His son Karl soon took over the reigns and developed the brand that we recognize today – creating sandals with the now-iconic footbeds, made from contoured latex and waste corks from wine bottles.

The company can, however, be traced all the way back to 1774, Frankfurt, when a humble shoemaker named Johan Birkenstock started a family cobbling business. In the 1880s, they began selling flexible insoles – a revolutionary invention.

Standard insoles at the time were flat, unyielding pieces of metal, so these comfortable inserts, made from cork and rubber, were an instant hit. By 1925 they were being sold all across Europe.

The first iteration of sandals – created by Karl Birkenstock – came in 1963, and were a single-buckled ‘exercise sandal’.

Then, in 1966, Margot Fraser – a German immigrant who had moved to California and was raised by parents who opposed Hitler’s regime – took a holiday to her native country and discovered the sandals.

Loving what they did to improve her ‘tired’ arches – and spotting what she thought was an easy money-spinner – Fraser struck a deal with Karl Birkenstock and began importing the sandals Stateside.

However, aside from niche San Franciscan wellness stores – that sold the shoes alongside their over-priced vitamins and dried lentils – the vast majority of retailers found Birkenstocks so hideous that Fraser struggled to convince them to stock them.

And, as the Summer of Love unfolded, the sandals fast became associated with the LSD-loving beatniks and hippie high-school dropouts.

This granola-munching fanbase even gave way to a new pejorative: The ‘Birkenstock liberal’.

And – for decades – nothing much changed, with the sandals unable to shake their ugly connotation, dismissed by the fashion world.

With the dawn of the internet and the dot-com boom, they became the natural uniform of geeky techies. Indeed, the famous battered Arizonas owned by Apple’s Steve Jobs sold at auction last year for a staggering $218,750.

Their minimal but steady growth stalled in the wake of Karl’s retirement in the early 2000s, seeing ownership divided among his three sons: Stephan, Alex and Christian, who clashed over their differing visions for the brand’s future.

Adding to the strain was Christian’s messy divorce to his wife of 16-years, Susanne, in 2003.

During the court battle, Susanne claimed Christian spent most of his time away from their two young children.

Subsequently, she won the family’s palatial art nouveau villa overlooking the Rhine, while her estranged and elderly father-in-law, Karl, continued to live next door, forced to share her garden.

‘It really has been war,’ Susanne said to a journalist at the time.

But the problems didn’t stop there.

In 2004, she audaciously launched a rival footwear brand called Beautystep and used her married name to market the shoes.

The move led to another bitter court battle, where the family accused Susanne of ‘sponging’ off their name.

Eventually, a judge ruled in Susanne’s favor, that she could use the Birkenstock name, but on the condition that it was one-tenth the size of the Beautystep logo.

More infighting among the siblings continued to blight the brand’s success. And in 2008, Stephan sold his stake of the company to his brothers Christian and Alex, resigning all affiliation with the brand.

By 2012, it became clear that new leadership was needed to right the ship – and the reluctant decision was made to hand over the day-to-day operations to an outside CEO.

It was the right decision. Revenues of $21.1 million in 2012 rose swiftly to $1.34 billion last year, with the sandals now sold in some 100 countries.

In 2021, a private equity firmed backed by the luxury giant LVMH acquired a majority stake in the company for $4.8 billion – with Christian and Alex retaining a minority stake and each pocketing $1.7 billion.

Now, just two years later, that valuation has almost doubled in this week’s stock market debut.

And, for a company that took a quarter of a millennium to shake its image as the ugly reject, even overcoming a murky Nazi past, that is surely something to celebrate.