Allbirds, the sustainable footwear and apparel brand, has announced new distribution deals in Japan and Australasia, as part of its strategic transformation plan. The company has partnered with Goldwin in Japan and Compendium Group in Australasia, to transition from direct selling to a distributor model in these regions. The new deals, which will take effect from June and July 2024, respectively, will help Allbirds to build brand awareness and affinity, and to reach new customers and markets.
The Rationale and Benefits of the New Distribution Deals
The new distribution deals are part of Allbirds’ strategic transformation plan, which was announced in March 2023, and aims to improve the company’s profitability and growth. The plan includes several initiatives, such as optimizing US stores, slowing the pace of openings, reigniting product and brand, and improving cost savings. One of the key pillars of the plan is to expand the company’s omnichannel presence, which includes physical stores, marketplaces, and wholesale channels.
The new distribution deals will enable Allbirds to leverage the expertise and network of its partners, who are industry leaders in their respective regions. Goldwin, which will be the exclusive Allbirds distributor in Japan from June 1, 2024, is a renowned sportswear and lifestyle company, with a strong reputation and presence in the Japanese market. Compendium Group, which will be Allbirds’ first appointed Australasian distributor from July 1, 2024, is a leading fashion and lifestyle distributor, with a focus on Australia, New Zealand, and the Pacific Islands.
The new distribution deals will also allow Allbirds to focus on its core competencies, such as product innovation, brand building, and customer engagement, while outsourcing the operational aspects, such as inventory management, logistics, and marketing, to its partners. The new distribution deals will also reduce the company’s capital expenditure and operating expenses, and improve its cash flow and margins.
The Performance and Outlook of Allbirds
Allbirds, which was founded in 2014, is known for its eco-friendly and comfortable shoes and clothing, made from natural materials, such as wool, eucalyptus, and sugarcane. The company has a loyal and growing customer base, especially among millennials and Gen Z, who value sustainability and social responsibility. The company has also expanded its product portfolio, launching new categories, such as underwear, socks, and loungewear, in 2023.
However, Allbirds has also faced challenges and headwinds, such as the impact of the Covid-19 pandemic, the increased competition and saturation in the footwear and apparel market, and the high costs and risks of operating in multiple geographies. The company reported a net loss of $98.9 million, or $9.24 per share, on net sales of $546.3 million, for the fiscal year 2023, which ended on December 31, 2023. The company’s net sales decreased by 10.7 percent, while its net loss narrowed by 44 percent, compared to the previous year.
The company expects its net sales to be between $540 million and $555 million, and its adjusted EBITDA to be between $16 million and $18 million, for the fiscal year 2024. The company also plans to explore new distribution opportunities in other international regions, such as Europe and Latin America, as well as to launch new products and collaborations, such as a partnership with Adidas, to create a low-carbon shoe.
The Comments and Reactions of the Interim CEO and CFO
Annie Mitchell, the interim CEO and CFO of Allbirds, commented on the new distribution deals and the outlook for the fiscal year 2024, saying:
“We are excited to announce our new distribution partnerships in Japan and Australasia, which are important regions for our brand and our business. We are confident that Goldwin and Compendium will help us to grow and scale our brand, and to reach new customers and markets, while maintaining our high standards of quality and sustainability. These partnerships are also aligned with our strategic transformation plan, which aims to improve our profitability and growth, by expanding our omnichannel presence, launching new categories, and streamlining our operations. We look forward to working with our new partners, and to delivering long-term value for our customers, shareholders, and partners.”
