Allbirds announced plans to close its remaining full-price U.S. stores by the end of February, shifting focus to e-commerce and partnerships.
“This is an important step for Allbirds, as we drive toward profitable growth under our turnaround strategy,” CEO Joe Vernachio explained in a statement. “We have been opportunistically reducing our brick-and-mortar portfolio over the past two years. By exiting these remaining unprofitable doors, we are taking actions to reduce costs and support the long-term health of the business.”
The sustainable shoe company began in Silicon Valley and thrived during the direct-to-consumer boom, going public in 2021, per CNBC. Like many DTC brands, it aimed to grow its customer base through physical retail, relying on store openings to strengthen its finances.
However, rising rents and a renewed emphasis on digital presence are causing Allbirds and other DTC companies to shift their focus. The sneaker company had previously announced gradual store closures across the country.
In its third-quarter earnings report in November, the company said its net revenue fell 23.3% from the same period a year ago. This was mainly due to changes with international distributors and physical store closures. Compared to last year, net revenue from U.S. stores decreased by about 20%.
Allbirds has a market cap of $32 million. However, its stock has plunged more than 80% over the past two years.