A woman walks past an Allbirds store in the Georgetown neighborhood of Washington, DC on February 16, 2021.
Al Drago | Bloomberg | Getty Images
Shoe brand All the birds On Wednesday, it became the latest retailer to shift its focus from physical stores to online retail in a bid to increase profitability.
The company announced it would close its remaining full-price stores in the United States by the end of February in order to use its resources for e-commerce and partnerships.
“This is an important milestone for Allbirds as we move toward profitable growth as part of our turnaround strategy,” CEO Joe Vernachio said in a statement. “We have opportunistically reduced our physical store portfolio over the past two years. By exiting these unprofitable doors, we are taking steps to reduce costs and support the long-term health of the business.”
Allbirds said it would continue to operate two outlet stores in the United States and two full-price stores in London.
The sustainable shoe company got its start in Silicon Valley and thrived during the direct-to-consumer boom, completing its IPO in 2021. It joined a number of DTC companies that were looking to grow their customer base through physical retail and were banking on opening stores to improve their balance sheets.
Now, as rents rise, brick-and-mortar retail loses its luster, and digital becomes more important, Allbirds and other DTC companies have begun to shift their focus. The sneaker company has already announced phased store closures across the country.
In its third-quarter earnings report in November, the company said its net sales declined 23.3% compared to the same period last year, primarily due to the impacts of international distributor changes and physical store closures. Compared to last year, net store sales in the United States decreased by approximately 20%.
Allbirds has a market capitalization of $32 million but has seen its stock plunge more than 80% over the past two years.