Dive Brief:
- Allbirds CEO Joey Zwillinger on a Tuesday earnings call named Zalando in Europe and Public Lands in the U.S. as its first wholesale partners, following its announced plans to enter the channel in February. Early indicators for the deals are “positive” and the company said it would announce additional partnerships soon.
- The company’s own physical stores are also performing well. Zwillinger noted that U.S. stores “grew well in excess of 150%” in the first quarter and were the company’s biggest driver of growth.
- Net revenue increased 26% year over year to $62.8 million, and grew 49% compared to 2020, according to a company press release. Net loss also increased by over $8 million to reach $21.9 million.
Dive Insight:
It’s almost a year since Allbirds filed for its IPO, and the company’s growth strategy is coming into focus. While Allbirds’ U.S. business is growing strongly, with 35% net sales growth in Q1, international was hit hard by the Russian invasion of Ukraine and COVID-19 impacts in China, causing sales to rise just 3%.
Despite the current headwinds, Allbirds still sees international as an “important element of our growth algorithm” and expects the impacts to that business to be transitory. Building out an omnichannel business is also top of mind for Allbirds, as the company continues to open new stores and build out its fleet. In March, the company opened a store in New York’s Flatiron District and plans about 17 stores for this year. Allbirds eventually has plans for “hundreds of potential locations.”
Zwillinger highlighted that omnichannel customers spend 1.6 times more than single-channel customers and that, so far, physical stores have been “highly productive” and have served as an efficient way to get new customers into the fold. So far, the brick-and-mortar footprint has skewed toward the U.S. and the company expects that to continue for the time being.
Wedbush analysts Tom Nikic and Ezra Weener highlighted the strong physical retail performance in emailed comments and emphasized it could be a growth driver going forward.
“With just 27 U.S. stores today, they have a long runway from store growth, and believe this can be a key driver of consumer engagement and higher brand awareness,” they said Tuesday.
Allbirds is no longer just pursuing sales through its own channels. The company’s new wholesale deals with Zalando and Dick’s Sporting Goods’ banner Public Lands are the first in a larger strategy to enter wholesale with selective partners. This, too, could help the brand scale.
“We believe a controlled entry to the wholesale channel can be a positive for both brand awareness and EBITDA margins,” Nikic and Weener said.
