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Nov. 3, 2021, 12:22 p.m. EDT

Allbirds IPO: 5 things to know about the newly public eco-friendly shoe company

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Tonya Garcia

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Apparel and shoe sales in 2020 totaled $1.8 trillion with $366 billion spent on footwear, according to Statista data included in the prospectus.

“By serving consumers directly, we cut out the layers of costs associated with traditional wholesalers, creating a more efficient cost structure and higher gross margin, which we believe allows us to deliver better products and a better experience to customers at a price point competitors would have difficulty matching,” the company said.

A pair of women’s Wool Runners were recently priced at $98 on the company’s website.

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Joseph Zwillinger and Timothy Brown, both founders of the company and both 40 years old, are Allbirds’ co-chief executives. Prior to launching Allbrids, Zwillinger was vice president of industrial products at biotech company TerraVia Holdings from 2009 to 2015. He has been on the board of Big Sky Growth Partners, a SPAC, since April.

Brown was the lone CEO of Allbirds from May 2015 to October 2015. From March 2015 to August 2015, he was a manager in the innovation strategy and business development department at Redscout, a brand consulting firm. In 2010, he was vice captain of the New Zealand World Cup football team.

Michael Bufano has been the company’s chief financial officer since April, and joined the company in January. From July 2010 to February 2020, he served in several roles at Panera Bread, including CFO. From March 2020 to December 2020 he was a business adviser to a number of early stage companies.

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One of Warby Parker’s /zigman2/quotes/229389137/composite WRBY +1.22% co-CEOs, Neil   Blumenthal, sits on the board. Also on the board are Mandy Fields, chief financial officer for E.L.F. Beauty Inc. /zigman2/quotes/202760864/composite ELF +4.38% , and Emily Weiss, CEO of another cosmetics company, Glossier Inc.

Here are five more things to know about Allbirds before it goes public:

The company sees potential for hundreds more stores

Allbirds says it has identified hundreds of possible locations for new stores to build on the 27 it has. It is also looking to grow internationally. Less than a quarter (24%) of 2020 revenue came from outside the U.S.

Allbirds says it may continue to post losses

To develop new innovations, open new stores, attract and retain talent and take other steps to expand the company, Allbirds anticipates increased operating expenses — and that means more losses. Competitors with more resources could also put Allbirds’ market share at risk. And the company’s focus on sustainability throughout the supply chain could drive up costs.

“We expect to continue to incur significant losses in the future,” the company acknowledges in the prospectus. “We will need to generate and sustain increased revenue levels in future periods to achieve profitability, and even if we achieve profitability, we may not be able to maintain or increase our level of profitability. “

Climate change could hurt the business

Allbirds is built on addressing climate change, but that doesn’t mean it’s immune to the ravages of the climate crisis.

Climate change could still hurt the business through “an increase in prices of raw materials, commodities, and/or packaging, as well as reduced availability of key manufacturing components,” says the prospectus. “Increased frequency of extreme weather, such as storms, hurricanes, and floods, could cause increased disruption to the production and distribution of our products and have an adverse impact on consumer demand and spending.”

Watch: This food trend could reduce the 40% food waste in America

The company’s generous return policy might squeeze revenue

Allbirds “generally” allows customers to return items within 30 days for a full refund or exchange, which the company says is unusual for footwear.

“Our revenue is reported net of returns, discounts, and any taxes collected from customers and remitted to government authorities,” the prospectus says.

“The introduction of new products, changes in customer confidence or shopping habits or other competitive and general economic conditions could cause actual returns to exceed our estimates.”

The cost of raw materials could jump

Allbirds uses sugar cane, merino wool, castor bean oil and other raw materials that can be affected by weather, demand, commodities markets and other factors.

The company also faces risks tied to its suppliers, which are mostly outside of the U.S. Global issues including political unrest, terrorism, trademark protection and shipping delays could become problems for Allbirds.

Supply chain issues tied to COVID-19 have already created challenges for a number of consumer companies , including competitors.

$ 9.97
+0.12 +1.22%
Volume: 1.89M
March 24, 2023 4:00p
P/E Ratio
Dividend Yield
Market Cap
$1.15 billion
Rev. per Employee
$ 78.48
+3.29 +4.38%
Volume: 1.39M
March 24, 2023 4:00p
P/E Ratio
Dividend Yield
Market Cap
$4.18 billion
Rev. per Employee

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