Allbirds, San Francisco footwear and apparel brand known for its sustainable, eco-friendly products, is closing its remaining U.S. stores and shifting its growth strategy to wholesale distribution and ecommerce.
The company says the move is central to restoring profitability after two years of falling sales and mounting losses.
Allbirds said it will shut its last U.S. retail locations by the end of February, leaving only two outlet stores domestically and two full-price stores in London. Instead of operating its own stores, Allbirds plans to rely far more heavily on wholesale partners and international distributors to sell its products in physical retail markets.
The decision comes as the company’s financial results show both the strain of running stores and the growing role distributors already play in its sales mix.
In the third quarter ending Sept. 30, Allbirds reported revenue of $33.0 million, down 23.3% from $43.0 million a year earlier. For the first nine months of the year, revenue fell 21.7% to $104.8 million from $133.9 million.
Allbirds attributed much of that decline to “structural changes,” including planned store closures and transitions to distributor models in international markets.
Those changes are visible in the company’s margins. Gross margin slipped to 43.2% in the third quarter from 44.4% a year earlier, and to 42.7% for the first nine months from 47.5%. The company said the decline was due to a higher mix of digital and distributor sales and a lower share of sales from its own retail stores, along with higher duties and promotional activity.
At the same time, the cost of operating stores fell sharply. Selling, general and administrative expenses dropped to $21.7 million in the quarter from $31.0 million a year earlier, and to $71.0 million for the first nine months from $104.2 million. The reductions were driven by lower occupancy, personnel and depreciation costs tied to the shrinking store base.
For Allbirds, the math is straightforward: stores are expensive to run, while wholesale and distributor relationships allow the brand to reach more customers without carrying the cost of leases, staffing and in-store inventory.
The company’s guidance for 2025 underscores how central this shift has become. Allbirds said its outlook includes a $23 million to $25 million revenue impact directly tied to the transition from direct selling to distributor models in certain markets and the closure of U.S. stores.
By the end of the third quarter, inventory sales fell 25% a year earlier to $43.1 million, reflecting tighter inventory management as the company reduces store exposure and moves more products through partners.
CEO Joe Vernachio described the store closures as part of a broader turnaround to “reduce costs, enhance liquidity and pursue value-creating opportunities.”
For wholesale distributors and retail partners, Allbirds’ strategy represents an opportunity to carry a recognized consumer brand that is now dependent on third parties for physical market presence. Rather than using its own stores to present its products, Allbirds will increasingly rely on specialty retailers, department stores, and international distributors to represent the brand on the sales floor.
The move reflects a broader trend among consumer brands that once emphasized direct-to-consumer retail but are now returning to wholesale as store economics weaken and customer acquisition costs rise online.
For Allbirds, wholesale distribution is no longer a supplement to its business. It is becoming the primary way the brand reaches shoppers outside its website — and a key lever in its effort to stabilize sales and restore profitability.
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