Allbirds will close 10 to 15 underperforming U.S. stores in 2024 as it seeks to streamline its operations. The footwear retailer, which currently operates 41 stores in the U.S and two in Canada, saw its net revenue decrease 14.7%, to $254.1 million, in 2023 compared to 2022. The revenue dip contributed to a net loss of $152.5 million this year, up from a $101.4 million loss the previous year.
“While the groundwork for profitable growth is now laid, there will be short-term revenue impact in 2024 as a result of these transformative activities,” said Allbirds Co-founder and CEO Joseph Zwillinger during a conference call discussing Allbirds’ 2023 financial results, who will be stepping down. Current COO Joseph Vernachio will move into the CEO position on March 15, but Zwillinger will remain on the company’s board and serve as a special advisor.
Allbirds reduced its workforce in May 2023 in a move that the retailer expected to deliver approximately $7 million in savings. The retailer began revamping its overall strategy to address disappointing financial results in March 2023.
As part of its turnaround strategy, Allbirds will focus on refreshing its product line, with delivery of new products slated for Q2 2024. “Our first test of this strategy was with the release of the Wool Runner 2 this past November, which was our most successful launch in over a year,” said Zwillinger. “And while just an initial test with relatively minor aesthetic adjustments, the success of this product has given us clear indication of how we can differentiate from others in our category and deliver products that our consumer will come back for time and time again.”
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Additionally, the brand plans to continue evaluating a transition in its international go-to-market strategy — moving to a distributor model in certain markets to grow them in a “cost- and capital-efficient manner,” according to a company statement. Allbirds transitioned the Canada and South Korea regions in Q3 2023 and has finalized agreements to do the same in Australasia and Japan.
