Allbirds returned fell but he says he has a plan

The rapid growth of the Allbirds until then has helped Wall Street to rule out concerns about deep losses, at first. Since then, Allbirds’ shares have lost more than 95% of their value. And after reaching a summit of $ 297.8 million in 2022, revenues fell from more than a third to 2024, despite a wider market for comfortable shoes. On Thursday, the company said that sales fell 23% during its second financial quarter, showing how intimidating a task was to make a return.

Now, the co-founder of Allbirds, Tim Brown and his CEO, Joe Vernachio, say that the company has a strategy to regain the favor of customers: to focus on what it did best in the first place. This means making versatile lifestyle shoes with a unique look, using innovative and durable materials to maintain the environmental credit so central to its identity. The company has closed stores and abandoned some of its unhappy attempts to develop in other categories to stimulate growth: leggings in merino wool, for example, or performance -oriented running shoes.

With the kind authorization of Allbirds

Rapid growth, and a few missteps

It was a classic story of a hot brand growing too quickly and making hasty errors in its ascent. In the case of Allbirds, they included the construction of an assortment of too wide products and the opening of too many stores. At the end of 2023, Allbirds had 45 American stores; Now he is back at 21 locations.

The brand was also too optimistic about its ability to sell directly to consumers. It took too long to align wholesale partnerships with national department channels like Nordstrom, wrongly betting that its own stores and website were sufficient to attract new customers and serve its informed fans to technology.

Meanwhile, imitators of Allbirds’ natural fiber shoes proliferated, and the history of the convincing brand that was at the beginning was in danger. “The time we had to evolve and develop this story was compressed in such an intense way,” says Brown Fortune in an exclusive interview before the ten years of Allbirds. “With the rapid success that came our way, we lost part of our DNA.”

Like many brands in growth mode, Allbirds has tried to launch a wider net for customers. The fact that the point was The Tree Flyer, a model launched in 2022 and intended for young customers, rather than at the ideal point of the brand between the 1930s and quarantine. The shoe did not make its captures and was interrupted. Other product flows: these woolen leggings and an expansion in articles far from its expertise, such as puffy jackets.

And Allbirds did not only open too many stores given its sales volume; These stores were also too important for your need, which does not allow an attractive display of its shoes.

Less maybe more when it comes to a store

All of these failures set out the company’s finances: during the five years that ended in December 2024, Allbirds lost $ 419 million on sales of $ 1.24 billion. He recently announced a credit facility spent to give himself more financial breathing room.

He closed several of his stores, and the 21 stores that the brand is still operating is smaller – about half the size of stores open in this blitz a few years ago. “We now have books, plants and sofas to relax and we simply spend a lot of time in the store, which gives us a better opportunity to get involved with them,” explains Vernachio.

With the kind authorization of Allbirds

The company also listens to the concerns expressed by certain analysts that the brand’s messaging has focused too much on environmental virtues, highlighting the fingerprint of carbon emissions from each element and the efforts of the company to reduce it. Some have urged Allbirds to focus more on the look and comfort of shoes. Vernachio rejects part of this criticism: focusing on lasting materials makes birds more innovative in its appearances and conceptions, he says.

But he notes that Allbirds now uses the word “nature” in his marketing much more than “sustainability”. “We believe that the word” sustainability “looks like a chore, like sorting your garbage,” he jokes.

Take off again?

Brown and Vernachio, who took the reins last year, replacing the co-founder of Brown, Joey Zwillinger, insists that the brand’s appeal is not just a fashion. They focus on drawing from what made Allbirds a feeling first: comfortable cool and innovative shoes.

Brown, a New Zealander, likes to quote a Maori proverb (“Before and following “) It talks about walking back in the future. “This moment is to return to the beginning and return to the fundamental principles that had been lost because we had so much growth and expansion,” he said.

Just as he did in 2015, Brown sees a white space on the shoes market that offer simplicity. Sneakers are often “too designed”, he said, and tend to count too much on plastic.

But the fact remains that many of the biggest successes of the last years of shoes are bulbous, flashy in design and heavy on synthetic materials. Brands like Hoka and in progress have been major tubes, and technical brands like New Balance and Brooks Running managed to inflict lifestyle shoes, taking part of the space formerly occupied by Allbirds.

Allbirds has revived its original bestseller, The Wool Runner NZ (a nod to the New Zealand roots of Brown), with some design adjustments and features as a double density insole which uses a cushioned memory foam.

There is also a leather shoe based on plants that comes out at the beginning of next year called Terraluxe, with a Vernachio look called “higher”. “What we look is that people want to have comfort in terms of sneakers on each occasion of use,” he said.

With the kind authorization of Allbirds

Another promising product is the Cruiser Tree. It is made with trees fibers – a nod to the first adapters who chose Allbirds for its green virtues. (A recycled polyester version and recycled Italian wool will be launched next month.) The cruise line was marketed as “inspired by the court”, which means that it was intended for people playing tennis and other judicial sports. But he found his niche like a versatile everyday shoe with clean lines and characteristics such as its low rubber seme which can be worn in several different situations. “We have long been expected to get a shoe like this in the closet of the customer,” explains Vernachio.

Ten years after its foundation, the Sneakers market and the world are very different. But to return to the original values and aesthetics of Allbirds is the way to follow, Brown said: “It is a brand that is worth fighting, with principles that have never felt more full of potential and important at this time.”