Updated at 4:20 p.m. EST
Allbirds failed to own its core customer.
The brand that disrupted the shoe market a decade ago — with a simple $95 sneaker — quickly lost its way — making a series of missteps that took it from Wall Street darling to bargain basement acquisition target. Allbirds revealed late Tuesday that it struck a deal with American Exchange Group to sell its assets for just $39 million, a dramatic reversal in fortunes.
While its November 2021 initial public offering captured the attention of investors who bought into its sustainability ethos, the sneaker brand’s losses grew and grew. Even when it went public, regulatory documents from its IPO offering said the company “incurred significant net losses since inception and [that the company anticipated] that we will continue to incur losses for the foreseeable future.”
Taking a five-year look back at the brand, the numbers tell the story of a business in decline. The brand was plagued by its desire to grow too fast, too soon; the loss of its core identity; increased competition in the lifestyle sneaker market; and a consumer that ultimately stopped believing in the story.
For the year ended Dec. 31, 2021, the net loss was $46.7 million, on net revenue of $277.5 million. In 2022, the net losses widened to $101.4 million, or revenues of $297.8 million. And by 2023, the net losses reached a high of $152.5 million, or revenues of $254.1 million. While 2024 saw the brand narrow its losses to $93.3 million, one big problem was that its revenues fell to $189.8 million. In a regulatory filing on Tuesday with the Securities and Exchange Commission, the company said the 2025 net loss only narrowed to $77.3 million, and the net revenues fell further to $152.5 million.
As of Dec. 31, 2025, the company employed 362, with 88 percent located in the U.S.
“Allbirds had a moment and then leaned too heavily on color updates rather than new products, which could not sustain the early success,” according to Matt Powell, an adviser at Spurwink River. “I can see Allbirds growing again, but I doubt if it will reach former heights.”
The San Francisco-based brand’s casual sneakers were initially a favorite among the Silicon Valley crowd, and were seen on the feet of former U.S. President Barack Obama and Hollywood celebrity Leonardo DiCaprio.
Company founders Tim Brown, a former New Zealand professional soccer player, and Joey Zwillinger, a biotech engineer, grabbed the market’s attention with its Wool Runner, a shoe crafted from merino wool and recycled plastic shoelaces and a proprietary sugarcane-based SweetFoam midsole that gave the shoe a lightweight and bouncy feel.
That followed with Sugar Sliders, that sold out. Then came their running sneaker, the Tree Dasher, in 2020, followed by the Tree Flyer two years later. But complaints surfaced over how the shoes weren’t durable enough for running, with the soles wearing out and shoes needing to be replaced after one year. Another sneaker followed, the vegan leather Pacer in 2022 that failed to garner sales.
The shoes weren’t the brand’s only problem. As Allbirds tried to expand, it created a line of workout apparel made from merino wool. The product didn’t meet with customer expectations, with many complaining they were left sweating profusely after a workout. A foray into wool leggings that showed one’s underwear also obviously missed the mark. Other apparel products were also introduced, such as wool dresses, but by this time, consumers largely ignored the brand and much of the apparel had to be discounted.
The digitally native brand also began opening stores in 2017, with overhead costs adding up. And with sales on the decline, margins followed. And eventually, the bigger brands in the industry such as Nike, Adidas and Puma found their groove with storytelling around sustainably focused product. Younger consumers also gravitated toward rising brands, such as On and Hoka, further impacting sales.
As the business lost focus, management turmoil also began to create negative headlines.
Zwillinger was succeeded as CEO in March 2024 by Joe Vernachio, the company’s chief operating officer. Brown stepped down as co-CEO a year earlier in May 2023 and shifted to the role of chief innovation officer.
The company in May 2025 unveiled a refreshed store concept in San Francisco as it rethought the in-store experience. But the shoe brand also had been struggling as it faced a difficult macro environment with uncertainty around consumer spending, on top of operational issues. And this past January, Allbirds said it would close all full-price U.S. stores by the end of February to improve profitability. Two U.S. outlet stores and two London full-price stores will remain open, at least for now.
On Monday, it was learned that the public company would be winding down sometime in the second quarter of 2026 following the disclosure that the brand was being acquired by American Exchange Group. (The deal is still subject to shareholder approval and is expected to close in the second quarter of 2026.)
Allbirds shares ended Monday trading at $2.98, and were up 1 percent Tuesday to close at $3.01. Other brands in the American Exchange portfolio include Aerosoles, White Mountain, Ed Hardy, Born Shoes and Jonathan Adler, among others.
