Dive Brief:
- After rumors of an IPO, DTC darling Allbirds has officially filed for one with the Securities and Exchange Commission. The retailer on Tuesday did not specify the number of shares it would offer or the potential share price.
- Allbirds plans to list its stock on the Nasdaq Stock Market under the ticker "BIRD." The retailer's growth plan involves deepening its footwear and apparel assortment to include more casual, performance and outdoor offerings, and expanding its store fleet, among other things.
- Like others in the DTC space, Allbirds also revealed net losses leading up to its IPO. The brand made $219 million in revenue in 2020, up from $194 million the year prior, but net loss grew during the same timeframe, from $14.5 million in 2019 to $25.9 million in 2020. In the first six months of 2021, the company reported a net loss of $21 million.
Dive Insight:
Allbirds is joining the IPO craze shortly after fellow DTC entrepreneur Warby Parker announced its direct listing.
In its filing with the SEC, Allbirds described its IPO as "the first sustainable public equity offering" and boasted that its footwear averages 30% less carbon footprint than a standard pair of sneakers. The company said its supply chain has been carbon neutral since 2019. Allbirds also highlighted its status as a public benefit corporation in the filing, noting that its "duty to balance a variety of interests may result in actions that do not maximize stockholder value."
"We began our journey in 2015 with three fundamental beliefs about the emerging generation of consumers: first, these consumers recognize that climate change is an existential threat to the human race; second, these consumers connect their purchase decisions with their impact on the planet, demanding more from businesses; and third, these consumers do not want to compromise between looking good, feeling good, and doing good," the company wrote in its filing.
The retailer has grown from opening its first store in 2017 to operating 27 as of the end of June (though a recent Atlanta store opening now marks the brand's 30th). Allbirds credited its speedy growth to the DTC model, noting it now reaches 2.5 billion customers in 35 countries through its DTC channels. Last year, digital made up 89% of Allbirds' sales, while its stores were 11%.
Allbirds highlighted its strong brand throughout the filing, noting that 98% of its sales for the entirety of its history have been sold at full price. Over half (53%) of net sales in 2020 came from repeat customers, and for the top 25% of U.S. customers acquired between 2016 and 2019, the average lifetime spend is $446.
Unfortunately, that still doesn't amount to profitability. Allbirds has recorded net losses for 2019 and 2020, as well as for the first six months of 2021. The DTC brand has an accumulated deficit of $113.1 million as of the end of June — and the company doesn't see the losses stopping now.
"We expect to continue to incur significant losses in the future," Allbirds said in the filing. "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."
Operating expenses are also expected to "increase substantially for the foreseeable future" as the brand continues to invest. The retailer is relying on the continued boom of the athleisure space to sustain the demand for its products into the future — as well as for the products it hasn't launched yet. As Allbirds looks for expansion, it's focused on apparel basics, performance and outdoors.
