Dive Brief:
- Allbirds recorded its highest sales quarter to date in Q4, notching a 23% net sales increase from last year. At the same time, net loss continued to grow, expanding by about a million dollars, to $10.4 million.
- For the year, net loss was close to doubling, from $25.9 million to $45.4 million, though co-CEO Joey Zwillinger sounded an optimistic note on profitability. “We are … laser-focused on generating meaningful and durable profitability,” Zwillinger said on a call with analysts, adding that the brand had seen “great progress” there.
- As it looks to a new chapter of growth, Allbirds is also expanding into wholesale starting in the second quarter.
Dive Insight:
As one of a host of direct-to-consumer brands that filed for an IPO last year, Allbirds now has a lot more eyes on its strategy. Executives on Wednesday outlined how several different pieces of its business are evolving as the company matures.
Most notable were the shifts Allbirds discussed in its channel strategy. Like many other DTC brands, Allbirds began as a digital brand and has since opened its own stores. Those physical locations are becoming a bigger part of its business, with the brand opening 13 new stores in 2021 and planning to open an additional 16 to 17 stores in 2022. The brand ended the fiscal year with 35 stores globally.
Allbirds’ sales from physical stores more than doubled in 2021, rising 112%, while digital sales increased 16%. Digital still makes up the vast majority of the company’s business at 80%, but Zwillinger noted that omnichannel customers spend 1.5 times more than single-channel customers.
Adding to its physical strategy is Allbirds’ imminent move into wholesale, expected in the second quarter. Zwillinger described the strategy as “proactive and deliberate” and said Allbirds will move into the channel “really slowly and methodically.” The main purpose of the shift is to raise brand awareness, with Zwillinger noting that Allbirds is “unknown” to the majority of U.S. consumers.
“We’ve talked about awareness as a really important indicator for our future growth and being at 11% in the U.S., which is our biggest market of course and highest brand awareness, that’s something we’ve got to work on every day,” Zwillinger said.
The company has made partnerships in the past with retailers like Nordstrom, and has seen a “positive halo” of sales to its direct channels from those deals. Executives also expect wholesale to be specifically useful for its performance footwear, where it’s important to be in the stores consumers are buying those shoes.
The brand is looking at only select wholesale partners, which Zwillinger described as “premium locations” that would be “very brand additive.” Asked about the possibility of wholesalers discounting Allbirds’ products in store, Zwillinger said that would be “really disappointing” and indicated the brand could easily move out of wholesalers if that happened.
“We don’t need these retailers to build our business,” Zwillinger said.
