Allbirds is no longer flying solo after deals with Dick’s and Nordstrom
Allbirds, the environmentally-friendly footwear upstart, has opened third-party distribution for the first time. The first wholesale partners in the U.S. will be Nordstrom and Public Lands, Dick’s Sporting Goods’ new outdoors-themed banner, and in Europe, Zalando.
The woolen shoe company is known for its commitment to sustainably sourced materials and ingredients, but also its “vertically-led omnichannel strategy,” said Joey Zwillinger, co-founder and co-CEO, on Allbirds’ first-quarter analyst call.
The brand first began selling online in 2016 and has 39 stores.
“I’m not aware of any substantial brand that we compete with that has even 50 percent of its distribution by a vertical model. And we sit here today at greater than 99 percent being conducted in this manner,” said Mr. Zwillinger in announcing the entry into wholesale distribution. “These additional consumer touch points can be another powerful and profitable element to catalyze additional growth in our vertical retail strategy by increasing brand awareness across our target consumer segment.”
He noted that Allbirds’ U.S. aided brand awareness is currently in the low-double digits.
“We are going to be selective and really methodical about how we grow this, and we don’t expect a particularly material impact to 2022,” said Mr. Zwillinger. “But we do think that that will start to really provide a catalyst in and of itself and then also haloing into the direct business starting in ’23.”
In its initial public offering prospectus last year, Allbirds promoted how vertical distribution provides “more value to customers and to make our products more accessible, removing the cost, friction, and barriers of wholesale distribution.”
The move into wholesale distribution comes as athletic competitors, including Nike and Adidas, have been consolidating wholesale accounts in order to benefit from direct connections with consumers and higher margins.
Speaking to CNBC, BMO Capital Markets analyst Simeon Siegel expressed how brands such as Ralph Lauren and Calvin Klein owner PVH have proven wholesale distribution can be beneficial as long as over-distribution and excess promotions are avoided.
“Companies build very healthy and very large businesses by embracing wholesale,” he said.
- ALLBIRDS REPORTS FIRST QUARTER 2022 FINANCIAL RESULTS – Allbirds
- Allbirds, Inc. (BIRD) Q1 2022 Earnings Call Transcript – The Motley Fool
- Get Active and Stay Sustainable: Bringing Allbirds to Nordstrom Stores – Nordstrom
- Allbirds to start selling its shoes in select Nordstrom department stores – CNBC
DISCUSSION QUESTIONS: Do you see more benefits than risks in Allbirds’ move to open up wholesale distribution? What other wholesale partners would make sense for Allbirds?