Allbirds Closes Stores to Prioritize Online Sales

• Net revenue fell 23.3% year-over-year in the latest quarter, with U.S. store revenue down roughly 20% due to store closures and distributor changes
• The company's stock has plunged over 80% in the past two years, leaving it with a $32 million market cap
• CEO Joe Vernachio described the closures as 'exiting unprofitable doors' to reduce costs and support the turnaround strategy after two years of gradual store reductions

SUMMARY: Allbirds Shifts to Digital-First Strategy with Store Closures

Sustainable footwear brand Allbirds announced Wednesday it will close all remaining full-price U.S. stores by the end of February, marking a strategic pivot to prioritize e-commerce and boost profitability. The company will maintain only two U.S. outlet locations and two full-price stores in London.

Key Financial Metrics:

• Allbirds' market cap stands at $32 million
• Stock has plunged over 80% in the past two years
• Net revenue declined 23.3% year-over-year in its most recent quarterly report (November)
• U.S. store revenue decreased approximately 20% compared to the prior year
• Revenue decline attributed to international distributor changes and physical store closures

Strategic Context:

CEO Joe Vernachio described the move as "an important step" in the company's turnaround strategy, focused on "profitable growth." Allbirds has been systematically reducing its brick-and-mortar footprint over the past two years, viewing remaining physical locations as "unprofitable doors."

Market Implications:

Allbirds joins a growing trend of direct-to-consumer (DTC) brands retreating from physical retail. The company initially thrived during the DTC boom and went public in 2021, joining peers who expanded aggressively into brick-and-mortar. However, rising rents and changing consumer behavior have made digital-native operations more attractive.

This shift reflects broader retail industry dynamics where companies are reassessing physical store economics versus e-commerce investments. The move signals continued pressure on specialty retail and validates the sustainability concerns around DTC brands that expanded too quickly into physical locations during the post-pandemic period.