Did Allbirds fly too close to the sun?
13/03/2024
The company also announced a change in leadership as chief operating officer Joe Vernachio takes the position of CEO, taking over from co-founder Joey Zwillinger, who will remain on the board as an adviser.
The company had a stellar ascent in its first few years, favouring an online selling model and a strong focus on ‘sustainable’ and natural materials. Five years after its launch in 2016, it was valued at more than $2 billion.
It went public in 2021, but admitted in its IPO prospectus that it had "incurred significant net losses since inception, and anticipate that we will continue to incur losses for the foreseeable future".
At the time, it added: “We operate in a highly competitive market; the size and resources of some of our competitors may allow them to compete more effectively, which could result in a loss of our market share and a decrease in our net revenue and profitability… and our focus on using sustainable materials and environmentally friendly manufacturing processes and supply chain practices may increase our cost of revenue and hinder our growth.”
Nevertheless, there was high demand, and Allbirds’ shares sold for $15 each on its debut in November 2021, valuing it at $3.3 billion.
With outside investors to answer to, it announced a restructuring and ‘strategic transformation plan’ in 2023. It will close 10-15 US stores.
It attributes some of the declines in revenue in 2023 to lower selling points and discounted stock.
Joey Zwillinger said: “The company made meaningful progress in 2023 both operationally and financially, ending the year in a much stronger position. With the transformative actions we completed over the past year, coupled with world-class leadership, I am confident in the team, and in particular, Joe Vernachio’s stewardship of the brand for this next chapter for Allbirds.
“Looking ahead, Joe’s focus on growth and rebuilding consumer momentum through compelling products and storytelling is what the company needs now, and sets Allbirds up to achieve durable, profitable growth and create value for our shareholders.”
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