Allbirds is continuing to make changes to its business as it seeks to return to profitability, according to two separate Securities and Exchange Commission (SEC) filings the footwear brand submitted this week.
Late Tuesday, the San Francisco-based footwear maker announced in an 8-K filing and on its quarterly earnings conference call that its co-founder and co-CEO Tim Brown will transition out of the role of co-CEO. Brown will now hold the role of co-founder and chief innovation officer.
As such, Allbirds co-founder Joey Zwillinger will now be the sole CEO. These moves were effective on May 4, according to the filing.
On Tuesday’s earnings call, Brown told analysts that he made this decision along with Zwillinger and Allbirds’ board in order to focus his efforts on the company’s strategic transformation plan.
“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,” Brown said. “I know both how far we have come and how much further we can go. With a focus on design, innovation and a clear vision for the role that brands will play in a new sustainable economy, we have significant potential through the strategic transformation underway.”
Plus, in a separate 10-K filing with the SEC on Wednesday, Allbirds announced it reduced its global corporate workforce further by 9 percent and terminated 21 individuals this month. While no specific details were given on what roles were affected, Allbirds said in the filing that it expects the estimated expenses related to severance and other employee termination-related costs to be substantially recognized during the second quarter of 2023.
This is the second round of layoffs for Allbirds. In August, the company said it had laid off 8 percent of its global corporate workforce a month prior in order to cut costs, as well as “dramatically” slowed the pace of corporate new hires.
At the time of the first round of layoffs, Allbirds said it would also implement other cost saving measures. These include reducing corporate office space to support a hybrid work model, transitioning to automated distribution centers, optimizing inventory, and scaling manufacturing to reduce costs and product carbon footprints.
In the same 10-K filing, Allbirds addressed a recent lawsuit against the company filed in U.S. District Court for the Northern District of California on April 13. According to the filing, the lawsuit alleges that Allbirds and its executives violated U.S. securities laws by making materially false and/or misleading statements about its business, operations and prospects. “We intend to vigorously defend against the lawsuit,” Allbirds said in Wednesday’s filing.
These filings come the same week Allbirds revealed its latest quarterly results. In the first quarter of 2023, the San Francisco-based footwear company said net revenue decreased 13.4 percent to $54.4 million compared to the first quarter of 2022 but increased 9.5 percent compared to the first quarter of 2021. Allbirds posted a net loss of $35.2 million, or $0.23 per basic and diluted share.
Allbirds said in a release on Tuesday that this decline is primarily attributable to a decrease in average selling price, driven by promotional activity and a higher mix of third-party sales, and an estimated $1.2 million negative impact from foreign exchange.
These results mark the first quarter to include the efforts Allbirds has taken under its new strategic transformation plan. Announced in March, the plan includes initiatives to reignite the product line, fully transition the company’s footwear production to a new manufacturing partner in Vietnam, move toward a distributorship model in international markets and put the brakes on the brand’s retail rollout.