Tim Brown and Joey Zwillinger, Allbirds co-CEOs: 'We are proud of what we’ve achieved'
One year after its IPO, the Allbirds brand is doing well. With 57 stores opened worldwide by the end of 2022, including 38 in the United States and an ever-expanding line of children's and lifestyle footwear, the sustainable footwear brand is expanding. An opportunity to get an update from Joey Zwillinger and Tim Brown, the two founders and co-CEOs of Allbirds.
FashionNetwork: How is Allbirds going post-IPO?
Tim Brown: November marks our one year anniversary of our IPO, which was a critical step in building Allbirds into a 100-year brand, while setting a new industry standard for sustainable business for others to follow. We’ve learned so much and are proud of what we’ve achieved. Despite the external headwinds and uncertainty, it's been a year full of wins, including cutting-edge materials innovations, a deep pipeline of new style introductions, the addition of our new third-party channel, and the launch of our ReRun program to enable a circular economy for our products. And through it all, we remain on track to deliver on all commitments from our sustainability principles and objectives framework that we outlined in our S-1 (SEC filing).
FNW: Sales in the U.S. market are improving, what is your assessment of retail sales?
Joey Zwillinger: Our team has been focused on optimising and strengthening our business, and we’re incredibly proud of our journey in just six years. We continue to invest behind our three growth initiatives: expanding and energising our product portfolio, growing our store fleet, and scaling our international business. In the third quarter, U.S. physical retail channel sales grew 53% compared to 2021. We have opened six new stores in the U.S. and 15 since the end of 2021. By the end of 2022, we expect to have 57 global stores, 42 in the U.S. and 15 internationally. Our stores are the best expression of our brand and serve as powerful community hubs. They remain an incredible acquisition tool, allowing us to gain leverage on marketing spend to lower customer acquisition costs and increase the penetration of valuable omnichannel repeat customers. In the U.S., where net revenue increased, retail store sales were the primary driver, which is incredible to see.
FNW: 2022 also marked your desire to strengthen your wholesale development?
JZ: We began working with a select number of third party partners such as Nordstrom, Selfridges, REI, Zalando and more. We’re in over 100 doors today with a long runway for growth ahead. Similar to our direct retail strategy, a key tenet of our third party strategy is to meet consumers who may not have heard about Allbirds before. We believe that our third party footprint is already increasing new customer acquisition and brand awareness. In fact, we have found very little overlap between our direct-channel customers and those of our third party partners - providing a fantastic avenue and opportunity for brand discovery.
FNW: How many countries are you present in today, and what figures can you share with us?
JZ: Allbirds can be purchased in 36 countries, and in the second quarter, we hit a major milestone of $1 billion in lifetime revenue. It’s been incredible to see the global expansion of Allbirds from our base in San Francisco. I’m also happy to report that our adjusted net revenue grew 15% [to $72.2 million] beating our guidance and consensus.
FNW: What are your ambitions for the European market?
JZ: Scaling our international business is one of our growth initiatives, and the European market plays a significant role. We have five stores in Europe, three in London, one in Berlin and one in Amsterdam. We are experiencing strong momentum in the U.K, despite the significant macro challenges being faced in Europe this year, and have seen record breaking brand awareness and customer acquisition figures. During the third quarter, we saw over 20% growth in local currency, driven by solid comps in our established Allbirds stores in London. We also opened a Selfridges concession, which is increasing brand awareness and driving sales. Europe is also a hub for tourists, so our presence is reaching multiple consumer categories. As we move forward, we'll be primarily focused on the U.K. and Germany and we’re excited about building Allbirds in Europe. Overall, we’re confident in the long-term demand in our international markets.
FNW: What progress have you made in terms of sustainability?
TB: We recently released our 'Flight Status' sustainability report for 2021, which shows that we were able to reduce our average product carbon footprint by 12% while growing our net revenues by 27% in 2021. We've done this by focusing on three key areas: Regenerative Agriculture, Renewable Materials, and Responsible Energy. In regenerative agriculture, we partnered with New Zealand Merino and other brands to pave the way for regenerative wool through the ZQRX framework. To date, nearly 500 growers have signed up, representing 15% of New Zealand's farmland, committing to work with nature to continuously improve human, animal, and environmental outcomes. We remain on track to deliver on our goal to cut our already low per product carbon footprint in half by 2025 and achieve near zero by 2030.
FNW: What are the first results of the launch of the resale platform, ReRun?
JZ: We’re really proud of our ReRun platform which we launched in the U.S. in 2021. It enables a circular economy for our slightly imperfect and gently used products and gives our customers access to classic Allbirds styles with a lower price tag, and a lower impact on the planet. ReRun brought in over 26,000 unique customers, of which 12,000 were new to Allbirds. It’s been a huge success and we met the financial goals for ReRun for the year within the first five months of launching.
FNW: Who are Allbirds' customers today?
TB: We have a breadth of customers globally, who share common values. They are looking for products that don’t compromise on style, sustainability or performance. With our extended product range, we’re also attracting consumers in both the lifestyle and performance category. Our customers are incredibly important to us, and our direct relationship with them has also meant they play a significant role in optimising our business through a consistent feedback loop. Those customer insights enable us to predict trends and be agile as a business.
FNW: You mention the development of more and more lifestyle shoes, is this the direction of your products for the future?
TB: The launch of the Pacer franchise, including our hero Plant Pacer, crafted with a 100% plastic-free leather alternative, was an important step to further unlock our lifestyle portfolio. We’re always looking for ways to provide better, more sustainable, more style-led products for our consumers. This continued style innovation will be paramount to our next phase of growth and so we are continuing to do the hard work, investing in natural materials innovation and product creation. We also remain focused on leading the conversation on sustainability in the footwear space with our relentless focus on Super Natural material innovation. Watch this space for exciting updates!
FNW: You recently partnered with Lindsay Lohan, why did you choose this sometimes controversial personality?
TB: We partnered with Lindsay Lohan in our Unexpected Athlete campaign to launch our latest performance running shoe the Tree Flyers, the pink one, of course! The Tree Flyers are our most innovative running shoes yet, but we wanted to highlight that anyone can lace up and log some miles. On top of that, sustainability can be a complex and often heavy topic so partnering with Lindsay Lohan helped us to spread our sustainability message in a humorous way, and to a mass audience. In order to make real progress in sustainability, we’re strong believers of injecting it into popular culture and this partnership was just one great example of how we’re approaching this.
Copyright © 2023 FashionNetwork.com All rights reserved.