Plans NASDAQ Listing
In a statement submitted to the Securities and Exchange Commission, the company said it is planning to raise funds through an initial public offering. After receiving the green signal from regulators, the stock will trade on the Nasdaq Stock Market under the ticker symbol BIRD. The group of book-runners will be led by Morgan Stanley, JP Morgan, and Bank of America Securities. The number of shares and the offer price are yet to be disclosed.
Read management/analysts’ comments on quarterly reports
The company makes what it calls sustainable apparel, with special care on keeping the products eco-friendly. According to the management, the lead product is made from New Zealand superfine merino wool. Interestingly, Allbirds’ wool shoes have been quite popular among youngsters and professionals, especially in the tech sector. It seems the innovative approach, with regard to the materials used in the products, is working in the company’s favor.
Simple Design
The simple design, devoid of colorful patterns and stripes, helps Allbirds’ shoes stand out among peers. After the modest launch as a disruptor business around five years ago, the company strengthened its footprint pretty quickly, which underscores the success of the operating model. In the meantime, it grew into a mainstream brand and expanded to the international market, mainly Europe, China, and New Zealand.
In what could be a move aimed at growing the portfolio beyond wool shoes, the company recently launched activewear that includes biker shorts and leggings. Its long-term strategy is to make the most comfortable apparel with a low carbon footprint and offer customers a digitally-enabled and seamless cross-channel experience.
Elusive Profit
Meanwhile, the fact that Allbirds is a non-profitable entity is a cause for concern as far as investing is concerned, especially since the turnaround is unlikely to occur in the near future. While eco-friendly products differentiate it from most apparel brands, gaining market share consistently in the highly competitive industry would be a tough task.
Allbirds incurred a comprehensive loss of $23.6 million or $0.49 per share in fiscal 2020, wider than the $14.5-million loss recorded in the prior year. The bottom line was negatively impacted by a sharp increase in operating costs, which more than offset a 13% increase in revenues to $219.3 million.
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While digital sales accounted for as much as 89% of total sales last year, the ratio is likely to change as the initiatives to expand the store network picks up pace. Currently, Allbirds operates 22 brick-and-mortar stores.