The day Allbirds went public in 2021, the company best known for its eco-friendly wool sneakers was worth $4 billion. Five years later, what’s left of it is being sold for just $39 million.
Allbirds said on Monday that American Exchange Group, a brand management company, will buy all of its assets. The deal must be approved by shareholders and is expected to close in the second quarter of 2026.
Joe Vernachio, the chief executive of Allbirds, said in a statement that the arrangement with American Exchange Group “sets up the brand to thrive in the years ahead.”
Allbirds was once the symbol of a venture capital boom in the 2010s, when firms poured billions of dollars into businesses that bypassed traditional retailers to sell their goods directly to consumers. Several companies achieved billion-dollar valuations, including Warby Parker glasses, Casper mattresses and Away luggage.
Much of that direct-to-consumer luster has been lost, and few have panned out the way investors had envisioned. The fall of Allbirds has been among the most significant of them all, with nearly all of its market value erased within a few years.
“Allbirds has gone from being a high flyer to a dead parrot,” said Neil Saunders, managing director of GlobalData, a data analytics and consulting company. Its early success “was driven by Silicon Valley hype, more than deep popularity with consumers in the American hinterland,” he said.
When co-founders Tim Brown and Joey Zwillinger debuted Allbirds in 2015, Silicon Valley was immediately enraptured by its sustainable sneakers. Made from Merino wool, the comfortable shoes became a staple in tech office attire, with executives and engineers filling their wardrobes with the minimalist designs.
Management saw the growth potential and tried to expand the business around the world by opening 15 stores by late 2019, mostly in the United States. They opened locations in China, the United Kingdom and New Zealand. By the end of 2023, Allbirds had 60 stores globally.
Executives spent millions to try to lure consumers with splashy television ads, pushing new versions of the wool shoes and showing off sneakers made with new materials like eucalyptus tree fiber pulp.
Yet the sneaker brand struggled to attract shoppers outside its Bay Area bubble. New shoe designs and an attempt to sell apparel didn’t catch on. All of the Allbirds shops in the United States have closed, except for two outlet stores. Sales fell nearly 20 percent last year and the company reported $77 million in net losses. Since going public, the business has never turned a profit.
As Allbirds flailed, it became evident that the original wool line of shoes had been a one-hit wonder, Stacey Widlitz, president of SW Retail Advisors, a research firm, said.
“When that house of cards never turned profitable, they had to close stores and try to come up with other products,” she said. “That did not work.”
Silicon Valley has moved on from Allbirds. The tech uniform now leans toward running shoes from On and Hoka or monochrome low tops from Common Projects.
The exuberance behind direct-to-consumer retailers has ended too, as investors have shifted their interest to social commerce and artificial intelligence start-ups.
As for Allbirds, the company will wind down as it closes the transaction. It canceled an earnings call that had been scheduled for Tuesday.
Alice Callahan contributed reporting.
Kim Bhasin is a business reporter covering the retail industry for The Times.
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