Allbirds is planning to overhaul its strategy after a weak Q4 2022 that resulted in the retailer’s first-ever quarterly revenue drop. The retailer still achieved 7% revenue growth for 2022 as a whole, but a poor holiday season resulted in a 13% revenue drop during Q4. The retailer also named Adidas veteran Annie Mitchell as its new Chief Financial Officer, replacing outgoing CFO Mike Bufano.
“While we made important progress, the year came to a challenging close, with results below our expectations due to both execution and macro challenges,” said Joey Zwillinger, Co-founder and Co-CEO of Allbirds in a statement. “We need to improve performance.”
Allbirds attributed the difficult season to a number of missteps, including the decision to introduce products such as technical performance running shoes that were aimed at an audience other than its core customer base. Zwillinger told CNBC that the company “unfortunately lost a bit of sight of what our core consumer fell in love with us for in the first place and what they continue to want from us.”
The shoe retailer also will eliminate the Chief Commercial Officer position and shift to a regional focus. This change will include having an omnichannel North America structure that reports directly to executive management. The new focus also will slow the rate of new store openings while “selectively” expanding the retailer’s presence in the wholesale channel, similar to its partnership with REI.
Allbirds also will evaluate potential distributor partners in international markets to help the brand grow internationally “in a cost- and capital-efficient manner.” These efficiencies will build upon and accelerate the cost and cash optimization initiatives the company implemented in 2022, though the impact may not be felt at first.
“Many of the changes I’ve outlined will take time, and 2023 will be a transition year, which should set us up to significantly improve profitability in 2024,” said Zwillinger on a call with investors. “Against the backdrop of our transformation work, most notably the timing and implications of potential changes to our international business, coupled with the uncertain macro environment, we are providing only quarterly guidance today.”