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Allbirds Sells To American Exchange Group for $39 Million
Get them while you can // Image by Kait Cunniff with DALL-E
Allbirds, the once-DTC sneaker darling of Silicon Valley, is being sold to American Exchange Group for $39 million — a fraction of its valuation just five years ago.
Why It Hurts: Ten years ago, DTC brands like Allbirds, Glossier, Bonobos, and Casper were the high-flying renegades of retail, blending social media marketing savvy with a sharp understanding of cultural trends. Despite the hype, very few found a sustainable business model that could last once the millennial-driven moment passed.
Behind The Sale: Allbirds has crashed.
American Exchange Group (the parent company of brands like Ed Hardy and Aerosoles) is paying $39 million for Allbirds’ IP, assets, and liabilities.
That’s a 95% discount from Allbirds’ $4 billion valuation when it went public in 2021 — and just one-eighth of the $301 million it raised in the IPO.
Allbirds said the deal has been approved by its board of directors but still requires shareholder approval, with all net proceeds going to that latter group.
The company “does not expect to continue its operations” after the sale, per an SEC filing.
Final Deal Points: Ultimately, Allbirds was a one-hit wonder. Its flagship wool shoe, marketed heavily on sustainability, struck a chord with Silicon Valley tech heads and suburban soccer moms alike. But the company failed to build on that initial success and never quite nailed down who its ideal customer was.
So, Allbirds rushed to do what many DTC startups were guilty of — trying too many things at once. That included a doomed wool legging (it turned out to be see-through), more technical running shoes (which runners didn’t embrace), and an apparel line that failed to connect. Eventually, the software engineers and soccer moms moved on to HOKAs and Ons.
Last year, Allbirds’ sales cratered by 20%, and the brand was forced to close its brick-and-mortar stores. In other words, it was time to box up the company.
The Future: Between the failures of sustainability-focused sneaker brands like Allbirds and TOMS, socially conscious fashion startups may have a harder time securing that sweet VC money.
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Today’s email was written by David Vendrell.
Edited by Nick Comney. Polled and Copy-edited by Kait Cunniff.
Published by Darline Salazar.