Why Americans Are Obsessed With These Ugly Sandals
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Why Americans Are Obsessed With These Ugly Sandals

Margot Fraser’s feet hurt. Then she found Birkenstocks and brought them to the U.S. Now the company is worth billions of dollars.

By BEN COHEN
Sun, Oct 15, 2023 7:00amGrey Clock 6 min

One of the iconic shots of the year’s biggest movie was Margot Robbie’s Barbie character in Birkenstocks.

She was only wearing them because of Margot Fraser.

This woman responsible for bringing the supremely comfy, seductively ugly German footwear to the U.S. was one of the most improbable business figures of her time.

She was an accidental entrepreneur who started distributing Birkenstocks from her California home in the 1960s, when nobody knew what they were or how orthopaedic sandals cured foot pain. The only places that would carry them were health-food stores, where each pair might as well have come with a jar of granola. She was a dressmaker with no clue about shoes, much less crunchy ones, but she grew the company from zero to hundreds of millions of dollars in sales. She would even come to be known as Mrs. Birkenstock.

The sandals that she introduced to Americans have become more popular and the business much bigger than Fraser could have predicted. This week, when Birkenstock went public, the company was valued at $8.6 billion.

It’s fitting that Birkenstock’s initial public offering comes on the heels of a summer ruled by the spending power of women because this is a company whose U.S. business has always been built around their needs.

That’s in large part because of Margot Fraser, the most important woman in the company’s history. She paid attention to women—and it paid off. 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.

It’s a remarkably high number for a company that explicitly markets its products as unisex. Steve Jobs wore them. Sneaker geeks want them. They were designed by Karl Birkenstock, a son of Carl and grandson of Konrad, descendants of the man who started the family’s tradition of shoemaking 249 years ago. More recently, the private-equity firm and family office of Bernard Arnault, the billionaire chief executive of LVMH’s luxury empire, bought a controlling stake and took the company public.

Anyone can now own stock in BIRK because of its connection to one of the world’s richest men, but Birkenstock never would have been in this position without a pioneering woman.

“It is because of Margot and the foundation she built that the brand is enjoying the success that it is today,” the president of the company’s American division said when she died in 2017.

She was the first to admit that she was an unlikely footwear executive and had to learn how to run the business one step at a time.

“I didn’t know a thing about shoes,” she once said. “What I did know was that my feet were always hurting.”

But that was all she needed to know. She figured that millions of women across the country must have feet that were always hurting, too.

Fraser had a keen sense of the American consumer for someone who grew up in war-torn Germany. The principal of her elementary school in the 1930s taught her that “girls were capable of anything and should follow their dreams,” but not everyone in her life agreed. “My mother thought that was all ridiculous feminist stuff,” Fraser wrote in a book offering business advice. Her father wasn’t exactly Betty Friedan, either. 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.”

She went to dressmaking school and moved to the countryside to make clothing for farmers, who paid her in eggs and butter. It was the teenager’s first taste of entrepreneurship. When she couldn’t see a future in Germany after World War II, she decided to leave home in pursuit of her childhood dream, and she boarded a trans-Atlantic ship with $25 in her pocket.

But it was only when Fraser returned as a tourist nearly 15 years later that she discovered the shoes that would rescue her feet and transform her life.

She was living in the U.S. when she took a spa trip back to Germany in 1966 and came across “sandals that weren’t pretty to look at.” But after years of trying anything to fix her aching feet—even standing on a phone book and gripping it with her toes—she tried on her first Birkenstocks.

She was pain-free within months.

Fraser realised that her feet were always hurting because of her painful footwear. No amount of standing on phone books would have made a difference for women in constrictive heels with pointed toes. What did make the difference for Fraser were these sandals made with leather, cork and a footbed the Birkenstock men invented. They were following in the footsteps of Johannes Birkenstock, which date back to 1774, when the cobbler was mentioned in the church records of a village near Frankfurt. The company’s first sandals were released in 1963, not long before Fraser slipped them on.

They were so comfortable that she didn’t care if they were ugly. Birkenstocks provided value because they solved a problem. They were basically Hokas for hippies.

Fraser took the sandals back to the U.S. and wrote to the Birkenstock family asking if she could sell them to Americans. They said yes to the dressmaker. At first, it seemed unwise. The owners of local shoe stores wouldn’t talk to her, and doctors treated her like a threat to the podiatry business.

She was desperate when a friend mentioned that a group called the Health Food Association was hosting a national convention nearby, which is how she found herself in a San Francisco hotel pitching sandals to people who sold lentils.

She needed to find people who didn’t mind how their shoes looked. As it turns out, they were the kind of people who owned health-food stores. Because they spent all day on their feet, they chose function over fashion. Fraser knew there would be a market for Birkenstocks when she spotted a woman at the convention shuffling around in nylons while carrying shoes that she couldn’t wear.

“The woman tried on a pair,” she wrote, “and bought them despite her husband’s protests.”

Once she had a foothold, Fraser began working out of her Bay Area home in 1967, calling her distribution company Birkenstock Footprint Sandals. She later renamed it Birkenstock USA.

She couldn’t have picked a better time or place for Birkenstocks to come plodding into the U.S. They would have crossed the ocean eventually, but the sandals became a symbol of rebellion because they landed in the heart of the counterculture, when and where people were allergic to the mainstream and willing to wear their antiestablishment values on their feet. “It was this perfect moment,” said Andrea Schneider-Braunberger, the curator of Birkenstock’s historical archives. “The culture was ready for such modern, convention-breaking shoes.”

Fraser worked closely with the Birkenstock family and shared their complete obsession with Birkenstocks. They made the shoes and decisions for the entire company based on her feedback.

The name of the funny-looking sandal that caught her eye was the “Original Birkenstock-Footbed sandal,” but Fraser told her German partners that American women were never going to buy something called “Original Birkenstock-Footbed sandal.” They took her marketing advice and branded the single-strapped sandal the “Madrid.” It remains one of the company’s top sellers.

It took six years for Fraser to venture beyond health-food stores and move into actual footwear stores. But that timing also turned out to be advantageous. By then, people were ready to buy Birkenstocks, and she was better at selling them.

She knew they intrigued baby boomers who didn’t want to look like their mothers and fathers. As it happens, their children don’t mind looking like them. Now, boomers and millennials make up almost the exact same percentage of Birkenstock’s consumers, and the company’s Arizona sandals and Boston clogs can be found in high schools and retirement homes.

The business is also barely recognisable from when she sold Birkenstock USA to her employees and retired in 2002. It was later folded into the German parent company, which is run by Oliver Reichert, the first person outside the Birkenstock family to be the CEO. Arnault’s L Catterton invested in 2021 with eyes on this week’s IPO.

Birkenstock has expanded into sneakers, boots and sandals in wool, shearling and waterproof material. Its proudly frumpy sandals meant to free women from the norms of fashion have become posh enough for celebrities, models and collaborations with Manolo Blahnik. The people who once turned up their noses at them now put their feet in them. And the company’s dominant market is the U.S.

None of that would have been possible without Margot Fraser.

Neither would the final scene in “Barbie.”

To sell more sandals to more Americans, she was always begging her partners for more colours, so Fraser would have been delighted to see what’s on the feet of another woman named Margot.

She’s wearing a pair of pink Birkenstocks.



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Celebrity-backed fund nears US$50m as investor demand builds 

With US$40 million already committed, the Global Talent Fund is attracting investor attention with a strategy focused on building globally scalable consumer brands alongside high-profile talent. 

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A new investment fund targeting celebrity-founded consumer brands has secured US$40 million in commitments and is rapidly approaching its US$50 million fundraising target, signalling growing investor appetite for alternative opportunities beyond traditional asset classes. 

The Global Talent Fund, which has a maximum raise of US$100 million, focuses on building and investing in consumer businesses alongside celebrities, athletes, and influential personalities who play an active role as co-founders rather than simply endorsing products. 

The strategy is based on the belief that changes in consumer behaviour, particularly the rise of social media and digital engagement, have fundamentally altered how brands are built and scaled. 

GTF founding partner Jeremy Hunt, who is helping lead the fund’s strategy, said consumers increasingly feel connected to personalities they follow online and are more willing to support products developed by those individuals. 

“Consumers are searching for content to engage with, and when a celebrity they like or follow takes them on the journey of creating a product or brand, they genuinely feel part of that process,” he said. 

The fund is targeting high-growth consumer sectors including wellness, hydration, beauty and recovery, areas Hunt believes continue to benefit from strong global demand and ongoing innovation. 

Rather than backing celebrity endorsement deals, the fund is seeking businesses where talent is deeply involved in product development, brand creation and long-term growth. 

According to Hunt, authenticity remains one of the biggest differentiators between successful celebrity-backed brands and those that fail. 

“The consumer can see clearly if someone is simply being paid to promote a product,” he said. “The winners are typically the brands where the celebrity has genuinely helped build the business from the ground up.” 

The model has attracted support from several prominent Australian investors and business families, reflecting broader interest in alternative investments with global growth potential. 

Hunt said consumer brands offered a level of tangibility that many investors found appealing. 

“Consumer brands are what we touch, feel, smell and taste every day,” he said. “Our investors understand the growth potential in the model, but they also want to be part of the journey.” 

The fund’s rapid progress towards its fundraising target comes amid growing recognition that celebrity influence, when combined with strong commercial execution and scalable business models, can create significant enterprise value. 

With several high-profile celebrity-founded businesses generating billion-dollar exits in recent years, supporters of the strategy believe the opportunity remains in its early stages. 

For more information, contact marc@kanerbridge.com.au

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