The rise and fall of Allbirds: How the buzzy sneaker company went from IPO darling to trading below $1
Allbirds announced weak earnings in August.Spencer Platt/Getty Images
Allbirds was founded in 2015 and soared to prominence with its iconic wool sneaker.
The company went public in November 2021. Shares rose 90% on the opening day of trading.
Sales have since slowed and the company reported a nearly 27% decline in quarterly revenue.
Allbirds is trying to turn the corner on a challenging chapter.The shoemaker, famous for its wool sneakers worn by tech bros and VCs, reported another quarter of falling sales in August, with quarterly revenues down nearly 27% to $51.6 million.With the closure of 14 underperforming stores, CEO Joe Vernachio told investors the past 18 months have been a period of reinvention for the company as it looks to reinvent itself in a leaner, more focused organization.Here's a history of Allbirds and how it went from a buzzy sustainable footwear brand to a company on the brink.Tim Brown and Joey Zwillinger cofounded Allbirds in 2015 as a sustainable-footwear companyTim Brown and Joey Zwillinger, the cofounders and co-CEOs of Allbirds.AllbirdsAccording to its initial filing with the SEC, Allbirds' mission was to "make better things in a better way, through nature." Zwillinger previously worked as a vice president of industrial products at a biotechnology companyAllbirds' Joey Zwillinger and Tim Brown.AllbirdsBrown's background included serving as the vice-captain of New Zealand's soccer team.Allbirds roared to life in 2016 with a Kickstarter campaign that hit its $30,000 goal in five days.KickstarterThe company ended up raising nearly $120,000 to make a wool running shoe designed to make a lighter environmental impact than traditional athletic shoes.In 2016, Allbirds received B Corp certification, a designation given to companies that work to advance environmental and social causes, and shareholder concerns.AllbirdsFor Allbirds, the designation codified, "how we take into account the impact our actions have on all of our stakeholders, including the environment, our flock of employees, communities, consumers, and investors."In only its second year in business, Allbirds gained the title of world's most comfortable shoe.AllbirdsTime magazine said Allbirds' hero product, the Wool Runner, was the "World's Most Comfortable Shoes."By 2017, Allbirds, Warby Parker, and Casper were considered among the "DTC pioneers" shaking up their respective industries — sneakers, eyeglasses, and mattresses.Warby Parker and Allbirds were among the DTC pioneers.Interim Archives/Getty ImagesBy 2018, direct-to-consumer business plans proliferated. In 2018, Inc. reported that more than 400 startups were trying to "become the next Warby Parker."Allbirds sneakers became synonymous with Silicon Valley dressingThe New York TimesIn August 2017, Allbirds got another shot of national publicity when The New York Times described Wool Runners as part of the Silicon Valley uniform.A month later, Allbirds opened its first store,The first Allbirds store was in NYC's Soho neighborhood.Business Insider/Jessica TylerThe 1,450-square-foot store is located in New York City's Soho neighborhood. In 2022, the company operated 58 stores.By 2020, Allbirds' popularity had spread well beyond Silicon Valley. President Barack Obama was spotted wearing Wool Runners repeatedly.Former President Barack Obama has worn Allbirds sneakers.Brynn Anderson/APBut the shoe started to fall out of favor with the trendsetters and the press, with GQ even lamenting the sight of Obama wearing them. "Can't someone send him a pair of Jordans?" the magazine wrote.Allbirds launched the Dasher in 2020.Allbirds' Wool Runners.AllbirdsWith the success of Wool Runners waning, Allbirds launched its first performance-running shoe, called the Dasher, in May 2020. Gear Patrol called it "shockingly good."Also in 2020, Allbirds partnered with Adidas to make a low-carbon shoe, another sign of the company's willingness to disrupt industry norms.The Adizero x Allbirds 2.94 kg CO2e.AllbirdsLarge footwear brands are typically reluctant to partner with one another. The shoe, called the Adizero x Allbirds 2.94 kg CO2e, had the lowest carbon footprint of any Adidas or Allbirds sneaker.In August 2021, ahead of a public offering, Allbirds disclosed growing annual sales, but also mounting losses.People shopping inside an Allbirds store in NYC in 2021.Spencer Platt/Getty ImagesSales increased from $193.7 million in 2019 to $219.3 million in 2020, but losses also increased, growing from $14.5 million in 2019 to $25.9 million in 2020. Allbirds went public in 2021.AllbirdsA little more than 2,100 days after it launched its Kickstarter campaign, Allbirds went public on November 3, 2021. Shares soared 90% on the opening day of trading, CNBC reported, a sign of Wall Street's bullish outlook for the company.Allbirds dropped claims about being the first "sustainable" IPO.The Allbirds store in Soho.Business Insider/Jessica TylerAfter the Securities and Exchange Commission objected, Allbirds dropped claims about being the first "sustainable" IPO, the Financial Times reported in November 2021.Allbirds launched wholesale in 2022.Jeff Greenberg/Contributor/Universal Images Group Editorial via GettyAlthough it was launched as a direct-to-consumer company, in May 2022, Allbirds announced its first wholesale partners, Zalando and Public Lands, then Nordstrom — a signal that DTC sales would not be enough to get the company to profitability.As Allbirds started to add wholesale partners, the backlash started to build against DTC companies.Allbirds has announced plans to slow store openings and increase wholesale partnerships.Allbirds"It's the de-DTC era," said Simeon Siegel, the managing director for equity research at BMO Capital Markets. Analysts, such as Siegel, said the benefits of direct sales were often overstated.As DTC companies started to fall out of favor, and investors started to pay more attention to profitability, Allbirds stock started to drop.Allbirds; InsiderAllbirds shares, which hit $28.64 on the company's first day of trading, had fallen to under $5 fewer than eight months later. Stock pickers said the company needed to expand beyond Wool Runners.In 2022, Allbirds officially lost its novelty in Silicon Valley wardrobes.Wall Street JournalRoughly five years after The New York Times christened Wool Runners part of the Silicon Valley uniform, The Wall Street Journal in December 2022 said that "tech bros" had moved on.In March 2023, Allbirds shares plummeted 47% after a disastrous earnings report that included a $101 million annual loss.Allbirds' Tree Flyers.AllbirdsOn a call with stock analysts, executives announced a sweeping four-part reorganization, including slowing the pace of store openings, adding more wholesale partners, and working to "reignite product and brand." Co-CEO Joey Zwillinger also said some of the company's marketing veered too far away from what Allbirds consumers want, including marketing for the Tree Flyers, above, which focused on its technical-performance attributes.Allbirds began to rethink its big bet on DTC.ReutersAs part of the reorganization plan, Zwillinger said the company was considering adding more wholesale partners. By then, the company's wholesale partners included Nordstrom, REI, Scheels, and Dick's.In 2022, while still based in San Francisco, Allbirds quietly opened an office in Portland, Oregon, to take advantage of the city's talented-footwear workforce. Nike is based in a Portland suburb, and Adidas has its North American headquarters in the city.In 2022, Allbirds opened an office in Portland, Oregon.Matthew Kish/Business InsiderAllbirds hired several Nike and Adidas veterans to run the office, including Ashley Comeaux, who spent more than 10 years at Nike before becoming Allbirds' vice president of product design.In early 2023, Allbirds released a string of products designed and developed by Comeaux and her team, including Risers, Pacers, and SuperLights, which lack a Strobel board, a manufacturing innovation designed to reduce carbon emissions and improve comfort.SuperLights, the latest shoe from Allbirds, doesn't have a Strobel board, which makes the shoe lighter and more comfortable.Courtesy AllbirdsRisers and Pacers have already gotten strong reviews from Business Insider. Although the new products were well-received, shares of the company traded below the $15 IPO price, trading for $1.23.In March 2023, Allbirds announced disappointing earnings and Zwillinger told analysts that the company had lost focus on its core.Allbirds claims its M0.0NSHOT is the world's first carbon-negative shoe.AllbirdsSince then, the company has focused on its best-sellers, the Wool Runner and Tree Dasher, while it discontinued underperforming products like much of its apparel, the Wall Street Journal reported. In June of last year, the company released what it said was the world's first carbon-negative shoe, which it calls the M0.0NSHOT.In May 2023, Allbirds announced a leadership shakeup, as co-founder Tim Brown said in an analyst call he would no longer be co-CEO of the company.Allbirds co-founder Tim BrownTommaso Boddi/Getty ImagesBrown said he would be stepping into the role of chief innovation officer of the company, leaving fellow co-founder Joey Zwillinger as the sole CEO of the company.The company also laid off 21 employees globally in May 2023, it said in a filing with the US Securities and Exchange Commission.An Allbirds store.Business Insider/Jessica TylerThe shoe company generally had a disappointing start to 2023. The company reported a 13% decline in year-over-year revenue in the first quarter.'As we've tried to expand and grow the brand, we created products that haven't quite met the mark,' Brown told The Wall Street Journal.The Allbirds Tree Flyer sneakers.Mara Leighton/InsiderIn a July 2023 article, Brown and Zwillinger told The Wall Street Journal that their attempts to appeal to customers younger than its 30- to 40-year-old base didn't go over well. The Tree Flyer was one of those attempts that missed the mark. The company reported second-quarter earnings were above expectations. Sales fell 10% compared to a projected 18%. "We laid out a road map for our strategic transformation back in March, and now two quarters into our work, we have gained traction and are solidly on track to drive toward profitability expectations," Zwillinger said in an August 2023 earnings call. In November, Allbirds released an updated version of its first Wool Runner.The new Wool Runner is available on the Allbirds website.Allbirds/ScreenshotThe Wool Runner 2 has been updated with a new version of its SweetFoam midsole and improved durability.Full-year earnings for 2023 were dismal indeed, with sales down 14.7% and a net loss of $152.5 million for the year.The Allbirds Pacer doesn't look anything like the company's iconic Wool Runner.Courtesy AllbirdsThe company also promoted Joe Vernachio from COO to CEO, with Zwillinger stepping down to serve as a special advisor and remaining on the board of directors.In April 2024, the company received notice that its stock faces possible delisting on the Nasdaq exchange. It has 180 days to improve the share price.Getty ImagesIn a statement, Allbirds said its stock must trade above $1 for at least 10 consecutive days in the next six months in order to stay in Nasdaq's good graces. Over the summer, the company announced a new lineup of shoes, aiming to "inject newness" into their offering.Allbirds' new Tree Glider shoes.AllbirdsThree other models, the Wool Runner 2, Tree Runner Go and Canvas Piper, have also been met with positive customer response, the company said, with more items selling at full price."We feel really positive about where we're headed," CEO Joe Vernachio said of the company's recent progress. "We think we're just at the very beginning of the process."AllbirdsLooking ahead, Allbirds has 10 product launches slated for late 2025 and early 2026, according to Footwear News.Matthew Kish, Ben Tobin, and Jennifer Ortakales-Dawkins contributed to earlier versions of this article.Read the original article on Business Insider
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