In the late 2010’s no one online could avoid Allbirds: the hottest DTC sneaker startup. The brand became so coveted, that even Barack Obama was sporting a pair.
But in the years since the company’s explosive rise in popularity, it hasn’t just declined… it’s floundered.
How exactly did Allbirds go from being one of the coolest sneaker companies to almost bankrupt…
In just a matter of years?
The Birth Of Allbirds
Joey Zwillinger and Tim Brown, having met once (thanks to their wives)…
Joined forces in 2015 to become the cofounders of Allbirds.
Zwillinger created a cotton shoe prototype and called on Brown, a former player for the New Zealand soccer team, for insight into the shoe’s comfort and movement.
Eventually, what would become the Allbirds signature sneaker was put on Kickstarter…
And the prototype hit its goal of crowdfunding $30,000 in just five days…
The product went on to amass a whopping $120,000 through the campaign.
Zwillinger and Brown had one mission with Allbirds: to create a completely sustainable sneaker. In their eyes, consumers didn’t need to stop buying goods to have an eco-friendly impact on the planet…
It all came down to the sustainability of the product.
Now, the average Allbirds sneaker is entirely made out of recycled plastic, natural wool, and plant fibers.
The company got its start by selling sneakers completely online. At the time, this was a rare feat…
Considering how hard it is to break into the footwear industry launching a product online first was still unheard of.
But this model of selling directly to consumers, or DTC, paid off…
AND ALLBIRDS QUICKLY TOOK OVER THE INTERNET AND EVERYONE’S CLOSET.
Thanks to the rise of other DTC brands at this time, like Warby Parker or Glossier…
Allbirds was enjoying success unlike anything seen before for sneaker brands:
- Time Magazine named their shoe, the Wool Runner, the world’s most comfortable shoe
- The sneakers became a part of the Silicon Valley uniform
- Allbirds began opening brick-and-mortar stores in 2017
To top it off, Allbirds launched its IPO on November 3, 2021, with shares soaring 90% on its first day…
But that was just the beginning of the company’s decline…
The Company’s Decline
Once the company started reporting its earnings, we got a glimpse of what business was really like for Allbirds.
QUARTER AFTER QUARTER, INVESTORS STARTED LEARNING THAT THE HOT NEW SNEAKER COMPANY WAS ACTUALLY DROWNING IN LOSSES.
There are many reasons why Allbirds started underperforming. For starters, it wasn’t all on its own. Most companies that were part of the 2010s DTC boom have been failing and are at risk of bankruptcy.
But as it turns out, Allbird’s mission for end-all-be-all sustainability in footwear is not enough to sell customers on its product. What customers look for in footwear is comfort and affordability…
And while the company had a good track record for comfort, they were facing other issues…
For a few years, the company grew increasingly unfocused. The co-founders, Brown and Zwillinger, would butt heads over how to market their products. For a moment, the brand couldn’t decide whether it was marketing to “sneakerheads or soccer moms.”
As such, Allbirds started to stray from their target demographic. This cost them big time, as the company invested in designs that wouldn’t sell well.
Not only was the company losing out on potential customers, they were also facing heaps of complaints from former customers. Shoppers who bought the brand’s signature sneakers gave reports of holes forming in the shoes mere months after purchase.
Allbirds tried to expand into sportswear but after more fumbles and losses (and a shocking pair of unintentionally see-through leggings)…
THE COMPANY REALIZED THAT TO MOVE FORWARD THEY NEEDED TO GO BACK TO BASICS.
During this time, however, their stock kept dropping seemingly to no end.
THE COMPANY WENT FROM TRADING AT $28.64 ON ITS FIRST DAY TO LESS THAN $5 EIGHT MONTHS LATER.
The Sneaker’s Fate
When the NASDAQ threatened to delist Allbirds for having their shares trading at below $1…
ALLBIRDS LAUNCHED A HUGE RESTRUCTURING CAMPAIGN, WITH LAYOFFS AND BOTH CEO FOUNDERS STEPPING DOWN…
But is all hope really lost?
Both Brown and Zwillinger stepped down from their positions and welcomed Joe Vernachio as the new CEO.
Vernachio, who was formerly the COO of the company, has something the founders of the company don’t: the perspective of an industry expert.
Vernachio has a career working with brands like The North Face and Mountain Hardware…
And he’s feeling good about Allbirds’ future:
“WHEN THINGS AREN’T GOING SO WELL, PRETTY MUCH EVERYTHING’S FAIR GAME… NEVER LET A GOOD CRISIS GO TO WASTE.”
Beyond the new management, Allbirds recently managed to hit a 52-week high in trading price.
And the company is planning new product launches in 2025 and 2026.
It seems like all things considered, the company is feeling… optimistic?
While all companies ebb and flow during their time in business…
It seems like Allbirds might be one bad move away from total collapse.
Until then, we just have to wait and see if the company can take flight once again.
Be Great,
GCTV Staff
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