Birkenstock CEO accuses Amazon of 'modern-day piracy'

Birkenstock, which sells the signature two-strap sandals, stopped selling its shoes on Amazon earlier this year, citing a rise in counterfeit products and unauthorised sellers.
Birkenstock, which sells the signature two-strap sandals, stopped selling its shoes on Amazon earlier this year, citing a rise in counterfeit products and unauthorised sellers. PHOTO: BIRKENSTOCK

WASHINGTON • The chief executive of Birkenstock USA has emerged as an unlikely crusader in a growing battle between smaller retailers and ever-expanding giant Amazon.com.

His message to shop owners: Don't even think about selling our shoes to Amazon.

In a blistering five-page e-mail obtained by The Washington Post, Mr David Kahan last week derided the online behemoth for contacting shop owners and offering to buy their products at full price.

Birkenstock stopped selling its shoes on Amazon earlier this year, citing a rise in counterfeit products and unauthorised sellers.

Amazon, in an attempt to grow even bigger, has recently ramped up its efforts to stock its site with third-party goods. In past weeks, the company has contacted tens of thousands of United States retailers, asking them to join its Fulfillment by Amazon programme, which is already established in Europe. Among the merchants it contacted were shoe stores that sell only Birkenstocks.

(Mr Jeffrey Bezos, the founder and chief executive of Amazon, owns The Washington Post.)

Mr Kahan called the entreaty a "desperate act" and a "PERSONAL AFFRONT".

"Birkenstock does NOT sell (to) Amazon," he wrote in the e-mail to its retail partners. "And it is clear that they are seeking back-channel means by which to obtain our brand."

He emphasised that the German shoemaker prohibits shop owners from selling, distributing or shipping its products to resellers.

"I will state clearly, any authorised retailer who may do this for even a single pair will be closed FOREVER," he wrote. "I repeat, FOREVER."

He added that he is considering legal action against Amazon.com for "knowingly encouraging a breach of our policy". A spokesman for Amazon said the company buys products from third-party businesses to offer customers "a wider selection of great brands", and that those sellers can opt out at any time.

She declined to comment on Mr Kahan's complaint. "In our mission to be Earth's most customer-centric company, Amazon strives to provide our customers with the largest selection, at the lowest price and with the fastest delivery," she said in an e-mail.

But Mr Kahan says allowing unauthorised retailers - in this case, Amazon - to sell the company's iconic cork-and-leather sandals could tarnish its brand and reputation. Also at risk, he says, is the ability of companies to control how - and where - their products are sold.

"This is modern-day piracy on the high seas," he said in an interview. "This is a middle finger to all brands, not just Birkenstock."

For years, Amazon was one of the US' largest sellers of Birkenstocks. But about a year ago, Mr Kahan announced he would be ending the partnership, after deeming that Amazon wasn't doing enough to guard against fakes.

Whether to do business with the online behemoth has become a fraught question for retailers big and small. Last week, Sears announced it would begin selling its Kenmore appliances directly on Amazon, following in the footsteps of others like Nike, Samsung, Microsoft and Bose.

But Amazon's partnerships have not always been successful. In 2009, the company agreed to pay US$51 million to settle a five-year battle with Toys R Us after the toy company accused Amazon of breaking their contract by allowing other companies to sell toys, games and baby items on the site.

Amazon countersued Toys R Us, alleging "chronic failure" to keep products in stock.

More than half - 55 per cent - of Americans now begin their online shopping trips on Amazon, according to a survey commissioned by BloomReach, a marketing research firm.

Even if shoppers don't begin their search on the site, they often end up there, with roughly 90 per cent of consumers checking Amazon before they make a purchase, the survey found.

Birkenstock, which was founded in Germany in 1774, did not arrive in the US until nearly two centuries later.

The company's signature two-strap sandals quickly caught on during the counter-culture movement of the 1960s and 1970s, becoming synonymous with hippie fashion.

The brand has enjoyed a resurgence in recent years.

WASHINGTON POST

A version of this article appeared in the print edition of The Straits Times on July 27, 2017, with the headline 'Birkenstock CEO accuses Amazon of 'modern-day piracy''. Print Edition | Subscribe