Allbirds on Tuesday filed regulatory documents for an initial public offering, for the first time revealing continued losses. While the buzzworthy sustainable brand that has disrupted the shoe industry in recent years increased…
net revenues from nearly $194 million in 2019 to more than $219 million in 2020, it also increased losses. Allbirds registered $14.5 million in losses in 2019, which widened to $25.8 million in 2020.
“We have incurred significant net losses since inception and anticipate that we will continue to incur losses for the foreseeable future,” the company told regulators. “If we are unable to maintain and enhance the value and reputation of our brand and/or counter any negative publicity, we may be unable to sell our products, which would harm our business and could materially adversely affect our financial condition and results of operations.”
The retailer added that other potential headwinds include the continued uncertainty amid the pandemic, the economy and consumers’ desire to purchase discretionary items, supply chain pressures, increased costs in advertising, rising real estate expenses, climate change and subsequent government regulations, competitors with more resources to compete globally and a general lack of experience in the retail industry.
Still, founders Tim Brown and Joey Zwillinger said the direct-to-consumer model, which eliminates costs associated with wholesale, has the potential for continued growth with the right funds in place.
“We started Allbirds as outsiders to the footwear and apparel industry,” the founders wrote in the regulatory document. “The prevailing doctrine of the synthetic-based footwear and apparel world was that comfort equals ugly and that natural materials were more expensive, less durable or less capable of sending you to a personal best, or put another way, worse. We decided to make consumer products differently, harnessing nature to create products that customers like better. We envisioned a future for this company where every step in a pair of Allbirds feels incredible underfoot across both casual and active occasions and we also wanted to complement our shoes with apparel that delivered luxurious second-skin comfort.
“We convinced a load of smart people to join us as colleagues, and together, we formed the Flock — many from outside the industry, along with some shoe dogs with decades of footwear industry experience who we dragged along to make sure we didn’t make dumb mistakes,” Brown and Zwillinger continued. “As a team, we set out to shift the paradigm on what it means to make truly great products. 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. Given the size of our market and the broad set of our target consumers, we believe our core strengths will propel us into the future.
“Likewise, we know a lot of investors want to make money while they create and reinforce positive impact by connecting capital to opportunity,” the founders said. “Our intention is to be a high-growth, profitable business that consistently delivers great outcomes for our stakeholders. We aspire to reward investors with eye-popping returns over the long term and we’ll work our tails off to do just that. And we intend to accomplish that by reaching more and more customers with better products that put less of a dent on the Earth.
“Our commitment to tread lighter and have a large positive impact on all of our stakeholders requires financial discipline and a focus on profitable growth,” Allbirds said. “Our expectation is that the combination of our strategy and growth initiatives will result in both top-line expansion and operational leverage, leading to a strong margin profile and a robust bottom line.”
The company is asking to be listed on the Nasdaq under the stock ticker “BIRD.” The firm listed the size of Allbirds’ offering…
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