Can Allbirds fly back to profitability?

Allbirds will close all of its remaining full-price US stores by the end of February, a milestone that marks the end of a yearslong retreat from brick and mortar for the sustainable footwear brand.

Founded in 2015, the company once leaned heavily into physical retail to fuel growth, opening dozens of stores at its peak. But those locations have struggled to gain traction. Allbirds’s full-year net revenue fell 25.3% to $189.8 million in 2024, and its brick-and-mortar traffic has continued to dampen.

Some analysts say the brand simply expanded faster than demand could sustain. The latest round of closures completes a multiyear effort to scale back its US footprint and refocus on online sales and wholesale partnerships.

Michael Brown, partner and Americas retail leader at consulting firm Kearney, said Allbirds ultimately is a “small player” in the market competing with bigger brands such as Adidas and Sketchers.

“They did open up their stores to try to gain that scale, but the other voices in this industry are very hard, very loud, and very quick to innovate,” he told Retail Brew. “On top of all other things, [Allbirds] really took advantage of where Nike was going through their changes, and there was some room in the market. But with Nike now surging back over the last four years…they just got blocked out in many markets and in many consumers’ minds.”

Maureen Bossi, director of consumer products and retail practice at management consultancy Baringa, agreed, adding that while opening stores is only part of a “natural strategic decision” for a DTC retailer like Allbirds, rents going up and shifting consumer behavior have made things more challenging and “probably playing a part in their strategic shift to say ‘We’re going to go back to our roots a little bit and focus on DTC again.’”

However, a criticism often leveled at Allbirds is that it failed to invest aggressively enough in e-commerce. Brown pushed back on that slightly. “You can only grow so much being online-only, unless you’re Amazon,” he said, noting that stores were essential for brand storytelling and for helping shoppers understand what the product stands for.

“Everybody’s products are about two inches by two inches, and it doesn’t resonate with the customer as well when they can have the in-store experience,” he said. “It will not be the easiest path for them to regain the money that they’ve lost in the last couple of years.”

The path to recapturing growth may be paved with obstacles, but it’s certainly not impossible and while Allbirds may have lost its full-priced US stores, there are other ways to keep some physical touchpoints, such as pop-ups or collaborations.

But Brown noted that the company may still be missing a robust multichannel structure—spanning retail, wholesale, resale, and online—that bigger players rely on. Marketing, however, may be one lever to pull as ambassadors, sponsorships, and influencers could help rebuild awareness and relevance.

Meanwhile, Bossi said, doubling down on transparency, value, and a well-run online experience will also be critical in regaining growth and loyalty among shoppers.

“Even just looking at their website, most of their shoes, at least, are at a price point where, if I were to buy them, I would be able to get free shipping, and they have easy returns,” Bossi said. “That’s something that’s extremely appealing to me as a shopper. I understand it costs them money, but if they’re thinking about those costs in aggregate and really understanding how they can drive down their cost to serve from an e-commerce perspective, they can get back to the profitability they’re seeking.”