Allbirds announced in a recent filing the company has cut around 21 corporate jobs as part of a cost-cutting exercise.
The US retailer said: “Our cost savings and capital efficiency initiatives build upon cost and cash optimisation work that we began in 2022, including a further reduction in global corporate workforce of approximately 9% in May 2023.”
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During Allbirds‘ first-quarter 2023 earnings call, Joey Zwillinger, co-founder and chief executive officer, said the workforce reduction will deliver approximately $7m in annualised SG&A savings, with full-year impact to be reflected beginning in 2024.
He continued: “We recently undertook a workforce reduction to reflect the reduced complexity created by our strategic initiatives. These moments are difficult, and we have taken steps to provide our departing colleagues with a smooth transition. And for those who remain, our strategy allows us to streamline operations, leaving a highly talented workforce well-positioned to ignite growth for the brand.”
Amidst the job cuts, Tim Brown, co-founder and co-CEO, will be transitioning from his role of co-CEO to chief innovation officer. He said: “While my role has changed, one thing hasn’t – and that’s my long-term focus and belief in the potential of this brand and business. I am looking forward to supporting Joey as he continues to lead the business as our CEO on a day-to-day basis.”
A brief overview of Allbirds Q1 2023
- Net revenue decreased 13.4% to $54.4m YoY. This excluded an estimated $1.2m negative impact from foreign exchange (FX).
- Gross Margin was down 40.1%, vs 51.9% in Q1 2022. It was impacted by several factors including a higher level of promotional activity, inventory write-downs, costs associated with manufacturing transition and a year-over-year shift in channel mix.
- Adjusted EBITDA was a loss of $21.7m, as opposed to a loss of $12.2m in the previous year.
- Net losses amounted to $35.2m compared to $21.9m in the first quarter of 2022.
Commenting on the first quarter performance, Zwillinger, explained: “We started the year with top- and bottom-line results above our expectations as our teams are executing the plan in what continues to be a difficult macro backdrop. The footwear industry saw a heavy promotional cadence in January, followed by a slowdown in spending in February, which was exacerbated during the bank run in March. Yet despite the industry headwinds and a leaner product launch calendar this quarter versus Q1 ’22, demand for Allbirds products exceeded our plans, particularly in March.”
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By GlobalDataStrategic transformation initiatives
The brand says it is continuously working on four initiatives to make progress against its plan to drive growth with expanded margins. These include:
- Reigniting products and brands;
- Optimising US distribution and four-wall profitability in stores;
- Evaluating a transition of international direct go-to-market strategy towards a distributor model to reduce opex and overall complexity;
- Improving overall gross margin and managing operating expenses.
Allbirds further added, it has finalised the extension and upsizing of its undrawn revolver with JP Morgan, which extended the maturity through 2026 and provides the retailer with $50m of committed liquidity and $50m of uncommitted incremental liquidity.
Earlier in March, the American footwear and apparel retailer announced its new net zero-carbon footwear M0.0NSHOT. The footwear product reportedly has a 0.0 kg CO₂e carbon footprint as opposed to an industry average of 14kg CO₂e.
