It all flew south, you could say.
Allbirds, founded in 2015, was the proud peacock of DTC brands during its meteoric rise from hip New Zealand startup with an eco-friendly wool uppers hook to de rigueur casual sneaker brand of tech bros and soccer moms. It seemed as if the high-flyer could do no wrong, raising $348 million for its November 2021 IPO that valued the company at $4 billion on the first day of trading. Indeed, Allbirds was a Wall Street and media darling. The New York Times in particular wrote about the brand often in business profiles and fashion reviews and wove the Allbirds name into general news articles on a random and at times bewilderingly regular basis.
Five short years later, Allbirds’ wings have been clipped. It’s no longer the “it” sneaker brand. It failed to diversify its footwear selection from the original jogger silhouette. Its foray into leggings and jackets failed to take flight, and its performance running shoe collection never gained meaningful traction. Its expansion into wholesale accounts never took off, largely because retailers didn’t welcome the brand with open arms after having been circumvented by its initial DTC model. Last but not all, Allbirds’ foray into brick-and-mortar flagships was a financial bust. Huge spaces in high-rent districts can weigh down the strongest of birds.
As one industry veteran notes: “They spent millions on extravagant store build-outs when they should’ve been minimalistic in their approach, since they didn’t have a profitable business. Ignorance is bliss, I guess.” Arrogance might also have played a role in Allbirds’ descent. “The founders (Tim Brown and Joey Zwillinger) came from the digital and tech sectors and had no clue about how the footwear industry operates. Worse, they didn’t want to hear from anyone in our industry. They always acted aloof. They should’ve brought in experts to manage the business and focused their expertise on the digital and marketing hype.”
Another longtime retailer describes Allbirds as a one trick pony with an Achilles’ heel: a wool material that limited it to fall and winter selling seasons. “No matter what people said about the material being cool and year-round, it’s still wool,” he says. Nevertheless, he remembers the incredible hype surrounding Allbirds. “We wanted the jogger in five colors in both genders and big pair orders, but they wouldn’t open anybody except Nordstrom,” he says. “By the time they opened their distribution further, a lot of us had realized it was a one hit wonder and didn’t have legs.”
Adds the industry exec cited earlier, “They didn’t build each season with new products and styles. It’s hard to build a business with the same exact widget. They didn’t understand that you’re only as good as your last season.”
Another longtime retailer says Allbirds failed to understand the natural growth path for new brands. Basically, it’s the opposite of moving from DTC to national chains, then on to specialty independents. “They went straight to consumers and then only to Nordstrom, and when people like me reached out, they turned us down,” he recalls. “When they finally started going after other retailers, many said ‘piss off’ or had gone in a different direction. I was already carrying Woolloomooloo, which is pretty similar. I don’t need both. It’s amazing that some brands still haven’t learned that it’s the independent tier that gets you placed.”
The deal with American Exchange Group (AXNY) is expected to close in the second quarter of this year. The company portfolio includes acquisitions Aerosoles (2022) and White Mountain (2023) as well as license deals with Ed Hardy, Jones New York, Alexis Bendel, Born, Rampage, Jonathan Adler, and Island Surf Company, among others. In a statement about the deal, Joe Vernachio, CEO of Allbirds, said the company is “incredibly thankful to our teams for the work they have been doing to fuel our product engine, build awareness of Allbirds, and deliver an engaging customer experience…This next chapter with AXNY builds on the foundational work already completed and sets up the brand to thrive in the years ahead.”
Allbirds peaked at nearly $300 million in revenue in 2022 and topped out at more than 60 stores worldwide a year later. However, amid mounting losses and several restructuring plans, the company has been closing all its remaining stores, with the exception of two U.S. outlets and two full-price stores in London. A renewed focus on ecommerce is an attempt to restore profitability.
Allbirds’ stock closed at $2.66 as of press time, giving the company a market capitalization of around $24 million. The company’s third-quarter revenues declined 23.3 percent to $33 million, while its net losses in the period amounted to $20.3 million, or $2.49 per share. At the time of that reporting, the company had lowered its full-year sales guidance to $161–$166 million, down from $189.8 million in 2024, $254.1 million in 2023, and $297.8 million in 2022.
Could Allbirds take flight again? Anything is possible, says one longtime retailer. “The name is good, well known, and just a flop for now,” he says. “I’d have sold it to Birkenstock and let them create a line, ‘Allbirds by Birkenstock.’ Use the Birkenstock footbed and feature all kinds of wool uppers, including a way to make the wool so tight that it looks like the nubuck on an Arizona sandal. Or here’s another idea: Maybe partner with the Audubon Society.”
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