Affected by factors such as persistently high inflation, sluggish economic growth, and global consumption downgrade, many leading brands are under huge operating pressure, and even fall into deep difficulties and fall off the altar.
Allbirds has a net loss of more than $1 billion!
Recently, Allbirds, a well-known brand in the United States, released its 2023 performance report, and the company's performance is under pressure, and the scale of losses continues to expand.
In 2023, the company's operating income will be $254 million, a sharp decrease of 14.68% compared to 2022. The company's net profit fell by 50.42%, with a net loss of 152 million US dollars (equivalent to more than 1 billion yuan).
On the day of the earnings release, Allbirds' stock price fell by nearly 20%.
On April 8 this year, Allbirds announced that the company had received a notice from Nasdaq, saying that its stock price had fallen below $1 per share for a consecutive month, requiring it to close above $1 per share for at least 10 consecutive days in the next six months, otherwise it would face the risk of being delisted.
As a representative enterprise of the DTC brand in the United States, Allbirds is facing today's situation, which is inevitably embarrassing.
It is understood that Allbirds is a sports brand founded in San Francisco, USA in 2016, co-founded by former New Zealand international Tim Brown and renewable materials expert Joey Zwilinger. The company's main business is running shoes and lazy shoes, which are quite well-known in the American market.
Allbirds' selling point to the outside world is that the carbon footprint of its products is 30% lower than that of regular sneakers. Made from wool as the main fabric, the eco-friendly sole is made from sugar cane extract, and the insole is infused with castor oil, focusing on comfort and natural environmental degradation, no sock donning and doffing, and can even be machine washed.
In addition, Allbirds has redesigned the packaging of its shoes using 90% recycled cardboard, integrating shoe boxes, shopping bags and postal bags.
Before the brand was officially launched, Allbirds founder Tim Brown launched a crowdfunding campaign on the crowdfunding site Kickstarter for $98 a pair of wool running shoes. Within five days, nearly 1,000 supporters helped to pre-sell 1,064 pairs of shoes and raise $120,000 in one fell swoop, far exceeding the project's original expectation of $30,000.
In the early days of the company's development, Allbirds attracted a large number of fans with its tall character as an "environmental fighter". As soon as the product was launched, it was sought after by Silicon Valley's technology and investment elites, and once became a "hot item" in Silicon Valley. It was even hailed by Time magazine as "the most comfortable shoe in the world".
In 2017, Allbirds, which adheres to the DTC (Direct to Consumer) model, has been making great strides and opened its first store in San Francisco. In the same year, Allbirds was named a "DTC Pioneer Brand" in their respective industries, along with eyewear brand Warby Parker and mattress brand Casper.
Since then, Allbirds has successively received the support of a series of heavyweight investment institutions, as well as celebrities such as Zuckerberg, Larry Page, Cook, Oscar winner Leonardo DiCaprio, and Starbucks head Howard Schultz.
Through crowdfunding and celebrity endorsements, Allbirds has garnered a lot of attention and funding.
According to the data, before the IPO, Allbirds completed a total of multiple rounds of financing, with a cumulative financing amount of more than 200 million US dollars.
In 2016, Allbirds closed a $7.25 million Series A funding round led by venture capital firm Maveron.
In 2017, Allbirds completed a Series B financing of $17.5 million, led by Tiger Global Fund.
In October 2018, Allbirds completed a $50 million Series C financing round from investors including T. Rowe Price and Fidelity Investment Group.
In early 2020, Allbirds closed a $75 million Series D funding round.
In September of the same year, Allbirds won $100 million in Series E financing, and its valuation once reached $1.7 billion.
In November 2021, Allbirds went public on the NASDAQ with an IPO price of $15 per share, raising a total of $300 million. On the first day of listing, the stock price was as high as $32.44 intraday, and finally closed up 92.6% at $28.89, with a market value of $4.135 billion, which also became the all-time high of Allbirds' stock price and market capitalization.
In the first 2 years of Allbirds' development, more than 1 million pairs of shoes have been sold, making it one of the fastest-growing dropshipping shoe brands of all time.
Allbirds is actively seeking change, but it is still in trouble!
In the early stage of development, Allbirds' product line was very simple, with only two kinds of running shoes (runner) and lazy shoes (lounger). On the basis of footwear, the follow-up company has successively expanded socks, sweaters, jackets, T-shirts, underwear, etc., but the main source of income is still footwear.
In May 2020, Allbirds launched its first functional running shoe, the Dasher collection, followed by the company's "Green Tech Apparel" collection, which includes TrinoXOTM T-shirts, 100% New Zealand merino wool Wool Jumper knitwear, Wool Cardi knitted cardigan, and TrinoTM Puffer rain and shine jacket. These products continue to be sustainable and have a carbon footprint label.
In 2022, Allbirds launched the Tree Flyer green technology lightweight running shoe.
Although Allbirds is actively seeking changes to adapt to market demand, the company's loss scale has been expanding in recent years.
For the full fiscal year 2021, Allbirds' operating income increased 27% year-over-year to $277.5 million, an increase of 43% compared to 2019. However, the net loss for the year reached 45.4 million US dollars, and the loss widened by 75.44%. By this time, Allbirds' stock price had plummeted by 70% to around $8, and its market value had shrunk to $1.2 billion.
In response, Allbirds co-founder Joey Zwillinger admitted in a public interview that problems caused by the company's decision-making mistakes caused the company's losses.
In 2022, Allbirds' revenue increased by only 7.3% to $297 million, below expectations of $305-$315 million. The company's net loss widened from $45.4 million in 2021 to $101.4 million in 2022.
Joey Zwillinger told the media that the most fundamental reason for the company's performance problems is the loss of focus on the product structure, which was too focused on products outside the core competitiveness.
Specifically, in fact, Allbirds' repeated losses are the result of a combination of factors, including market competition, internal management, cost control and external environment.
In 2023, Allbirds has made a series of strategic adjustments. In order to improve operating performance, the company launched a strategy that included product improvements, optimized U.S. distribution and store profitability, and re-evaluated its international strategy to further reduce costs and increase efficiency.
On November 14, 2023, Allbirds listed products on Amazon, including Tree Runners, Tree Breezers and other footwear styles, and all products were shipped by Amazon. The move comes at a time when Allbirds is aggressively expanding its distribution network.
In addition to the layout of Amazon, wholesale is another strategy of Allbirds. The CEO of Allbirds has said: "Wholesale will be a key channel in the future, providing us with the opportunity to increase brand awareness and achieve profitability. ”
Previously, Allbirds had adopted a direct entry strategy in the international market, but now it has also begun to transform into a distributor model.
In September 2023, Allbirds launched a distribution model in Canada and South Korea, followed by finalizing cooperation agreements with distributors in Australia and Japan in the fourth quarter, but it has not yet seen results.
During the strategic realignment period of Allbirds, there were also personnel changes within the company.
In May 2023, Allbirds' brand co-founder Tim Brown stepped down as co-CEO to take on a non-executive role as chief innovation officer.
In March 2024, the company announced that Joe Vernachio, Chief Operating Officer, was promoted to Chief Executive Officer and joined the Board of Directors, succeeding Co-Founder Joey Zwillinger. Joey Zwillinger will retain his capacity as a director and serve as a special advisor to the Company.
Now, according to the latest financial report released by Allbirds, the company's loss scale continues to expand. The company's stock price is also continuing to fall, facing the risk of delisting, and the road ahead can be described as difficult.