Allbirds files for "sustainable" IPO
Sustainable footwear specialist Allbirds has filed for its long-expected initial public offering (IPO) in the US as it rides the wave of increasing consumer demand for eco products. It will list on the NASDAQ index that’s popular with many tech firms and start-ups and will trade under the ticker symbol BIRD.
The San Francisco-based company said it was launching a “sustainable” initial public offering — or SPO — and certain environmental, social and governance (ESG) standards will be to the fore as it becomes a publicly-listed business.
The company said its hopes “to help pioneer a framework for companies to conduct what we are calling a sustainable public equity offering . Our vision is that Allbirds’ [IPO] will lay the groundwork that can be used by other companies for future SPOs,” the filing said.
With that ambition, this filing is being closely watched, even more than it usually would be.
The ESG focus aside, the IPO is designed to raise money for the six-year-old company that had raised $100 million in its most recent funding round, reportedly valuing it at $1.7 billion. Current investors include T Rowe Price, the ASOS investor that itself made headlines this week after taking a 10% stake in Boohoo.
Allbirds has had a fairly fast rise to prominence with its wool-based athletic shoes gaining rave reviews at launch, both for comfort and performance and scoring highly on carbon impact. With 98% of its sales being at full price and 53% coming from repeat customers, it clearly has pricing strength and strong customer loyalty.
It now sells in 35 countries and revenue reached nearly $220 million in 2020. Sales in the first half of this year reached nearly $118 million. Pre-tax earnings also jumped to more than $15 million last year from $1.3 million, although it’s still loss-making on a net profit basis. Net losses rose from $14.5 million in 2019 to $25.9 million in 2020.
The company has big hopes for future sales, despite also expecting ongoing losses for a few more years yet and seeing a large number of copycat products on the market.
But it expects the fact that “the lines have blurred between home, gym and play” will continue to impact the market and that digital growth will carry on at a fast rate. In its filing it said online sales reached almost $195 million last year.
That said, the impact of the pandemic hurt its physical store sales as they dropped from being 17% of its total revenue in 2019 to only 11% in 2020. But physical store sales should climb further as it opens more locations and it had 27 stores at the end of H1. It also said it's in the “early phase of a ramp towards hundreds of potential locations.”
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