How long do you think it’s going to take Allbirds to crash? It happened to A&F in its Michael Jeffries era. It happened to the Gap after Mickey Drexler’s era. It happened to Michael Kors and Tommy Hilfiger, both under the famous “pump and dump” team of Silas Chou and Lawrence Stroll. It happened to Juicy Couture under Liz Claiborne. Now it’s happening to VF Corp.’s Supreme, the once hottest brand that young consumers waited in line for hours to purchase. There are generations of many other brands that cycled through the same hot-to-cold trajectories, each an Icarus ascendant to a downward spiraling crash.

Allbirds represented an ethos of alternative resourcing supporting the commercial principle that consumers didn’t need to stop buying stuff, it just needed to buy good stuff.

Fall from Grace

The causes for crash and burn brands are many and varied. However, they share three dynamics, which like a nuke, blow these brands out of the water. 1. Ubiquity (or lack of scarcity as a strategy). 2. Hubris 3. Wall Street greed. Of course, one could say a lack of strategic leadership and naïve investors could also be thrown into the recipe. Then toss in the almighty consumer who, no surprise, is suffering from a national attention disorder. This short attention span is manipulated by fast-fashion brands Shein and Primark. They compel (train) their young customers to visit their stores and websites several times a week so they don’t miss out on the latest merchandise drops. It’s FOMO on steroids. That strategy may play to short attention spans but creates mountains of discarded apparel landfills.

Allbirds Rise

Allbirds’ founding team Joey Zwillinger and Tim Brown are both at the helm as co-CEOs. When they launched, they caught the imagination and passion of consumers who were concerned about the environment. Allbirds represented an ethos of alternative resourcing supporting the commercial principle that consumers didn’t need to stop buying stuff, it just needed to buy good stuff. Thus, the creation of their first shoe in 2016, the Wool Runner. And no pun intended, it took off. Having pre-marketed the launch, Allbirds sold $120,000 worth of shoes in five days, and racked up $100 million in sales in two years, for a valuation of $1.4 billion. With its Merino wool top layer (which is non-toxic), it made for a very comfortable and popular shoe. Soon it achieved status level, worn by Barack Obama, all the techies in Silicon Valley, and finally by almost everyone. Wool Runner was priced at $95, designed for both men and women, in five colors, and sold only online with a generous return policy. On trend with the conscious capitalism movement, Allbirds donated returned goods to the charity Sole4Soles. The brand ticked off all the right boxes as a perfect value proposition, which fueled its accelerating growth.

Allbirds Fall

Allbirds tapped into the zeitgeist moment and soon after its Wool Runner’s launch, they started to scratch the itch to go big and go fast, expanding the brand offerings in other categories that would be compatible with casual lifestyles and environmental concerns. There’s that hubris thing. The sky’s the limit. And in fact, they did grow from a $1.4 billion valuation to $4 billion by the time they went public in November 2021. However, also in 2021 Allbirds started to target the more fashion-forward Gen Z consumer. They launched what was to become a flop: wool leggings that were too thin and therefore transparent. However, this detail was unnoticed before thousands of pairs were manufactured, most of which were unsellable. Moving beyond the brand’s DNA, they also launched underwear, puffer jackets and golf shoes — but struggled to replicate the success of its first shoe. And for the full year of 2021 Allbirds reported a loss of $45 million on $277 million in sales, and continued downward, followed by shares falling 47 percent, collapsing the market value to $184 million early in 2023 (OMG, from $4 billion?). The stock has sunk more than 80 percent since its initial public offering.

Regrets Only

CO-CEO Joey Zwillinger had this to say about Allbirds situation in a Bloomberg article: “We over-emphasized products that extended beyond our core DNA. We just didn’t see the sell-through on those franchises that we would’ve hoped for, and that came at the expense of that core franchise. We took our eye off the ball a little bit.” A little bit??? How about your valuation plummeting from $4 billion to $184 million. That’s a steep mountain to reclimb if it’s even possible. In Allbirds’ case, hubris and poor leadership strategy hit two of the four reasons brands fail. But maybe Allbirds will become the modern-day mythological phoenix (unlike Icarus) rising out of the ashes to be reborn. With a refocus on its core customer and a new cardon-neutral shoe, maybe there’s hope. The common-sense teachable moment here is don’t get ahead of yourself – or your loyal customers. Those Greek myths aren’t just stories.