Allbirds plots big store expansion, but warns of enduring losses in IPO filing

The company on Tuesday filed its initial public offering prospectus and it reveals a growing company with big ambitions, with sizeable losses to match. Allbirds, which created a sensation in 2016 with comfy stylish wool shoes that became de rigueur for the Silicon Valley and environmentally conscious set such as actor Leonardo DiCaprio, has also tapped into general consumers’ growing interest in sustainably produced footwear and apparel.

Media outlets have estimated Allbirds could be valued at $1.7 billion in its widely anticipated IPO, or as Allbirds calls the stock listing with a neologism in the prospectus, its Sustainable Public Equity Offering.

Allbirds disclosed in its filing with the U.S. Securities and Exchange Commission that revenue in the first half of 2021 rose 26.7% to $117.5 million. But its net loss more than doubled to $21.1 million and the company warned investors to get used to it. “We have incurred significant net losses since inception, and anticipate that we will continue to incur losses for the foreseeable future,” Allbirds wrote.

At the same time, the company has made clear it wants to to remain a growth story in terms of revenue. For one thing, it has plans to add significantly to its current fleet of some 27 stores and ramp up “hundreds of potential locations.” And it will keep diversifying beyond the footwear that has attracted a very faithful, niche following. (Allbirds said in its filing that repeat customers accounted for 53% of its 2020 sales, up from 46% in 2019. The most active 25% of its U.S. customers won between 2016 and 2019 have spent $446 on Allbirds over the years.)

Earlier this month, Allbirds said it was launching into activewear, an intensely competitive area dominated by the likes of Nike, Lululemon Athletica, Adidas and Under Armour, building on its initial foray in 2019 into apparel, starting with socks, and more items added the next year. Allbirds is betting that consumers will prefer its running clothes, made with tree fibers and merino wool, also key materials in its shoes, to sports clothing with polyester in it. Earlier this summer, Allbirds announced a plan to cut its per product carbon footprint by half as it looks to bolster its sustainability bona fides.

One of its directors is Nancy Green, CEO of Gap Inc’s $8 billion Old Navy business, something that will surely be helpful to Allbirds as it builds up its apparel offering. Allbirds plans to list its Class A common stock on the Nasdaq exchange under the ticker symbol “BIRD.” (Its investors include heavyweights like T. Rowe Price, Fidelity, and Tiger Global.)