Woolworths now sells Birkenstocks - and will add more brands as it fixes fashion 'mistakes'

Business Insider SA
(Birkenstock SA)
  • Woolworths' clothing business has had a torrid time of late, and the company's new CEO is determined to fix its offering
  • The retailer - which exclusively sells its own products - has started to introduce other brands, including Birkenstock sandals.
  • It is "actively" seeking new brands to incorporate in its stores, a spokesperson says.
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Woolworths is embarking on a new strategy to revive its weak fashion sales –  and it may include introducing international brands on its shelves.

It is starting with Birkenstock sandals – which according to the local retailer is “one of the hottest [shoe brands] in the world at the moment”.

Global demand for the German brand, founded by the shoemaker Johann Adam Birkenstock in 1774,  saw a recent resurgence as consumers – stuck at home during the pandemic - exchanged their formal work shoes for more comfortable footwear. Online searches for the sandals more than tripled this year, the US outlet NPR reported.

Birkenstocks have been sporadically fashionable since the 1960s, but the brand gained renewed traction in 2012, when they first appeared on the runway at Paris Fashion Week. Many celebrities – including Kendall Jenner, Reese Witherspoon and Miley Cyrus – are fans.

A Woolworths spokesperson says demand among its clients for the sandals – which are currently only available via its online store – has exceeded its expectations. The shoes are priced from R799 to R1,499, in line with other outlets.

“Both Woolies and Birkenstock are committed to sustainable sourcing and manufacturing, so there is a natural brand fit and alignment,” she added.

Woolworths exclusively sells its own brands at its stores, but says that the recent introduction of Veldskoen shoes – a South African brand which seems to be a favourite of Prince Harry – has also been “very successful”.

“We are very open to other brand collaborations, and will actively seek brands that complement and support our fashion offers and are the right brand fit for us,” the Woolworths spokesperson says.

Fixing FBH

Introducing new brands may be part of the strategy to fix the group’s languishing fashion sales, which is a top priority – along with sorting out its loss-making, debt-laden Australian business David Jones - for Woolworths’ new CEO Roy Bagattini, who was previously an executive at Levi’s in the US.

Woolworths’ fashion, beauty and home (FBH) division saw its before-tax profit fall by 46% to R948 million in the past year.

While stringent lockdown regulations – which banned sales of many FBH products at first – contributed, the company noted that even before the lockdown, the division suffered a “disappointing” performance. Profits margins shrank as it tried to get rid of stock with sales and other promotions.

Duncan Artus, the new chief investment officer at Allan Gray, recently told Business Insider that Woolworths’ clothing business’ operating profit was still 30% below levels seen in 2017.

Artus believes that attempts in recent years to sell more fashionable clothing misfired, and that it will return to more “core items”, which would appeal to the large target market of the group, thirty-something women.

READ | What you need to know about the new Woolworths CEO, who's from Joburg and runs Levi's in the US

But Bagattini said this week that Woolworths’ ignored new young, vibrant and aspiring customers for too long, Reuters reports. Woolworths now wants to fix poor fashion “mistakes” made over the past two years.

“You’re going to have product offerings that are very distinct, absolutely clear, not over-assorted. Not mountains of garments, but really brands that stand for something, that play well into the categories they need to be under, and are priced appropriately and you can see the distinctive difference of each of these offerings,” Bagattini told Business Day. The group also wants to speed up the time between design, production and the delivery of clothes at its stores.

Manie Maritz, previously managing director of Markham in The Foschini Group, has recently started as the new head of FBH. 

Compiled by Helena Wasserman

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