Warehouse function shifted to Kentucky as offices relocate in city
NOVATO — Birkenstock is staying in Marin County, but it is vacating its landmark 170,000-square-foot distribution center and offices at the north end of Novato as the company continues to streamline operations to be more nimble in the footwear marketplace.
Birkenstock Distribution USA, an employee-owned company that distributes footwear for Germany-based Birkenstock, no longer needs the facility it has occupied for the past 15 years at 8171 Redwood Blvd. because the company relocated fulfillment functions to Kentucky as of Jan. 2, according to Gene Kunde, CEO of Birkenstock Distribution USA.
Also, the current headquarters staff of 65 occupies only about half the more than 30,000 square feet of office space in two buildings behind the distinctive warehouse visible from Highway 101. In September, Birkenstock Distribution hired Meade Botwell of CB Richard Ellis to look for a new headquarters location between Larkspur and Petaluma.
The company settled on a 15,000-square-foot office in one of the renovated hangars at Barker Pacific Group’s Hamilton Landing business park at the southeast end of Novato. It signed a five-year lease and plans to move the office in mid-February.
Birkenstock Distribution USA has been around since Margot Fraser brought the first sandals to the U.S. market in 1966, but it’s quite different than it was even just a few years ago, according to Mr. Kunde.
“In recent years, we have tried to bring Birkenstock back into the contemporary footwear industry and connect with sellers, and part of that is outsourcing our fulfillment function and moving to a new office,” he said.
Birkenstock store owners and resellers have been requesting a distribution hub east of the Mississippi River, where 60 percent of them are located. The retailers said too much time was being taken to get shoes from the factory in Germany to Marin County then back to points of sale.
That was the way it was from 1966, when Ms. Fraser started Birkenstock Distribution USA. In 1971 she moved the company to San Rafael and then to the current location in 1992 when the company had 130 employees and sales of $50 million a year. A decade ago, as sales projections reached $100 million, the company secured supplementary warehousing in Petaluma.
In 2001, as some retailers were struggling through the economic recession, Ms. Fraser, 73 at the time, started transitioning the company toward employee ownership and brought Mr. Kunde to the helm to streamline the organization.
Part of working toward outsourced fulfillment was a deal in 2003 with UPS to handle delivery of special orders to retailers. Last year, Birkenstock Distribution concluded that fuel costs for transportation from factory to Novato to retailer were too high, and the time had come to open an East Coast hub. The company expanded its relationship with UPS, which now staffs and operates a fulfillment facility dedicated to Birkenstock in Hebron, Ky.
The entity that owns the 90-acre property is affiliated with Germany-based Birkenstock and hasn’t indicated what it plans to do with the land, according to Mr. Kunde.
However, local real estate experts expect the property, located along the hills on the west side of Highway 101, to be sold and the four-decade-old buildings redeveloped.
“It is a big warehouse out there, and they will have a hard time for users in that market to buy or lease that,” said Meridian Commercial’s Steven Leonard.
The city designates the site for light industrial and office uses, and redevelopment likely would be limited to the area where the existing buildings are located, according to Novato Redevelopment and Economic Development Director Ron Gerber.
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