Allbirds received a warning from the Nasdaq Stock Market last week notifying the brand that it is no longer in compliance with the market’s listing rules. Specifically, Allbirds’ share price fell below $1 for 30 consecutive days, according to a Monday press release.
The retailer has until Sept. 30 to regain compliance, which would require 10 consecutive days of the footwear company’s stock trading at $1 or more. However, the release also noted that after the initial 180 day period, Allbirds might be eligible for an additional 180 days within which to regain compliance. It’s unclear what Allbirds current plan is to do so, but the retailer said it is weighing its options.
“Allbirds intends to actively monitor the bid price of its Class A common stock and will consider actions that it may take in response to this notification in order to regain compliance with the continued listing requirements, but no decisions about a response have been made at this time,” the company said.
The delisting warning comes less than a month after Allbirds replaced co-founder Joey Zwillinger as CEO, elevating then-Chief Operating Officer Joe Vernachio to the position. At the same time, the DTC brand said it would close 10 to 15 underperforming stores in the U.S. this year and that it expects revenue to be down as much as 25% in 2024.
Allbirds’ sales declines and net losses have been mounting in recent years as it struggles to make its sustainable footwear proposition profitable. When venture capital funds were more accessible, Allbirds expanded beyond its footwear roots, launching lifestyle apparel and activewear, but now it’s closing the stores it built with a bigger footprint to showcase those offerings.
The company in 2022 said it would sunset its leggings category as part of a strategy to simplify its product offerings, and Vernachio is continuing to edit the brand’s assortment: In March, he said a refreshed product line would launch in late Q2 this year. The retailer last year launched a new lifestyle sneaker style, The Courier, and released an updated version of its hero product, the Wool Runner.
Amid its struggles, Allbirds has expanded beyond its DTC roots, launching on Amazon in the fall and signing deals with REI, Nordstrom and Dick’s Sporting Goods’ Public Lands in 2022. Internationally, the retailer is also shifting away from a DTC model and introducing a distributor model, which Zwillinger says is a “more profitable” go-to-market strategy.
All the while, the brand’s workforce has seen dramatic shifts. Allbirds laid off 8% of its global corporate workforce in 2022, then another 21 employees in May last year at the same time that co-founder Tim Brown announced he would move from a co-CEO position to chief innovation officer. The company’s chief financial officer exited a year ago, and Allbirds in January announced a new chief design officer and chief marketing officer.
