David Herrmann

Allbirds' Rapid Overexpansion Doomed Its Core Brand

I think Allbirds failed because they tried to do too much and grow too fast too soon and that left them scrambling to make up revenue as a publicly traded company. I think being public was a crash grab for some, but ultimately doomed the company. Moving from DTC to retail/wholesale presents incredible growth but if not done right can lead to massive strains on all levels of the business. Especially in an industry like footwear where sizing is such an issue. This likely was the start of their problems. Allbirds moved away from their core style and added too many diverse SKUs leading to multiple issues in trying to market everything to everyone. People liked the casual tennis-shoes. But COVID + active footwear market led by ON probably took a major piece of the pie from them in the last few years. Allbirds in an effort to increase revenue and likely AOV tried to introduce apparel. That largely was a failure. In the footwear industry there is very little margin for error at the level of revenue Allbirds was in. As costs increased from growing their retail footprint they likely experienced SKU failures and their team was likely forced to focus on their core styles. Their leadership team probably was telling the marketing team to push the new SKUs, but rising CACs on Meta and less than stellar looking shoes left them scrambling to keep testing, keep iterating. Anyway, this just feels like a classic wanting to be too big too fast and get the cash grab in during an era of easy money. They had zero moat in the footwear industry and remained niche. They tried to be the "cool shoe" by putting retail locations in expense outdoor malls like the Westfield in Century City, but that likely led to severe cash strain as the stores probably couldn't sell enough to justify them.