A woman walks past an Allbirds store in the Georgetown neighborhood of Washington, D.C., Feb. 16, 2021.
Al Drago | Bloomberg | Getty Images
Shoe brand Allbirds on Wednesday became the latest retailer to shift its focus from physical stores to online retail to increase profitability.
The company announced that it will close its remaining full-price stores in the U.S. by the end of February to use its resources for e-commerce and partnerships.
“This is an important step for Allbirds, as we drive toward profitable growth under our turnaround strategy,” CEO Joe Vernachio said 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.”
Allbirds said it will continue to operate two outlet stores in the U.S. and two full-price stores in London.
The sustainable shoe company got its start in Silicon Valley and flourished during the direct-to-consumer boom, making its initial public offering in 2021. It joined a number of DTC companies that sought to build their customer bases through physical retail and banked on opening stores to boost balance sheets.
Now, as rents rise, physical retail loses its shine and being digitally native becomes more important, Allbirds and other DTC companies have begun to shift their focus. The sneaker company has previously announced gradual store closures across the country.
In its third-quarter earnings report, in November, the company said its net revenue took a 23.3% hit from the same period a year ago, primarily due to impacts from international distributor changes and physical store closures. Compared with last year, net revenue from stores in the U.S. decreased by roughly 20%.
Allbirds has a $32 million market cap but has seen its stock plunge more than 80% over the past two years.
