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Allbirds has booked another big loss and announced that CEO Joey Zwillinger will follow his co-founder Tim Brown in quitting the executive suite.
It also warned of lower revenue, and more losses, for the year ahead. Its already-battered shares were down 15.05 per cent in extended trading.
“10 to 15″ stores are to be closed over the course of 2024 from a total of 60 worldwide (down from 62 in June last year). Allbirds’ only store in NZ, on Auckland’s Viaduct, won’t be affected by the closures, which will all be in the US.
Allbirds founder Tim Brown gave up the CEO reins in May last year amid losses, revenue setbacks and a backlash against the brand. Photo / Dean Purcell.
As of Friday, the new chief executive will be San Francisco-based Joe Vernachio, a former head of global operations for The North Face who has recently been serving as Allbrids chief operating officer, driving its turnaround bid.
Ex-All Whites captain Brown, who started Allbirds from an apartment in Wellington’s Cuba St, stepped down as co-chief executive in May last year as the firm’s challenges mounted, leaving Zwillinger in sole charge at the top.
“Joey and I, together with the board, made the decision to transition my title from co-founder and co-CEO to co-founder and chief innovation officer,” Brown said. The Kiwi and his co-founder Zwillinger remain on the board.
The maker of eco-friendly shoes incorporating New Zealand merino wool today reported a fourth-quarter net loss of US$56.8 million, taking its full-year net loss to US$152.5m - compared to the prior year’s US$101.4m in red ink.
Fourth quarter revenue fell 14.5 per cent to US$72m, while full-year revenue was down 14.7 per cent to US$254m.
An Allbirds store on Fifth Avenue in Manhattan. The firm says it will close '5 to 10' retail outlets this year. Its Auckland Viaduct shop is safe. All of the closures will be in the US. Photo / Grant Bradley
Another revenue fall ahead
The firm warned that 2024 revenue would be lower, at between US$190m to US$210m but with a slightly narrow adjusted ebitda loss (that is, after restructuring costs, including store closures) of US$63m to US$78m from the full-year ebitda loss of US$78.1m reported this morning.
The firm ended its financial year (which coincides with the calendar year) with US$130m in cash from the year-ago US$167m. It also has an un-tapped US$50m revolving credit facility. Cost-cutting saw fourth-quarter cash burn reduce to US$4.7m from the year-ago US$4.7m.
New business model, new designer
As part of an ongoing restructure, Allbirds is moving away from direct sales with the appointment of four international distributors.
Last week, Allbirds said the Auckland and Gold Coast-based Compendium would be its distributor and “brand custodian” for Australasia “including our spiritual home of New Zealand”, Allbirds CFO Annie Mitchell said.
And after copping two home page features by the Wall Street Journal saying it was no longer the “it” shoe with Silicon Valley, and quoting consumer complaints about its footwear’s durability, the firm is also rebooting design and brand operations.
In January, Allbirds named chief marketing officer Kelly Olmstead (formerly brand activation VP for Adidas) and a new chief design officer, Adrian Nyman, formerly Nike’s creative director for global retail.
Allbirds listed on the Nasdaq in November 2021 at US$15.00 per share.
Its shares rose 91 per cent to US$28.64 by the close of its first day of trading - valuing the firm at just under US$4 billion and Brown’s minority stake at US$459m ($650m). This morning Allbirds’ shares closed at US93 cents before falling as low as 78c in after-hours trading.
Chris Keall is an Auckland-based member of the Herald’s business team. He joined the Herald in 2018 and is the technology editor and a senior business writer.
