Once-high-flying Allbirds has come back to earth, planning to sell its assets for roughly $39 million and wind down its business.
The San Francisco-based company, whose Wool Runner footwear was once part of Silicon Valley's informal dress code, said it had signed a definitive sale agreement with American Exchange Group. That New York-based firm — whose brands include Aerosoles and White Mountain — is buying all of Allbirds' intellectual property rights as well as other unspecified assets. The purchase price marks a mighty fall for Allbirds, which once had a valuation of over $4 billion and has already shuttered its store fleet.
The sale is expected to close in the second quarter.
Allbirds, boasting that its wool sneaker-like shoes were sustainably manufactured, is one of a number of digital-native companies that began opening brick-and-mortar stores, with varying degrees of success. At least one retail analyst partially blamed Allbirds' demise on its stores. E-commerce pioneer and giant Amazon has also faltered when it comes to physical retail, pulling the plug on several chains it launched, including its Amazon Fresh supermarkets.
On the flip side, direct-to-consumer companies such as eyewear seller Warby Parker and furniture retailer Wayfair have seen success with their stores.
Nonetheless, the sale to American Exchange Group "is arguably an inauspicious end for Allbirds as a stand-alone business and is another signal that the [direct-to-consumer] bubble has now firmly deflated," Neil Saunders, a retail analyst and managing director at analytics firm GlobalData, said in a note on Tuesday.
'A dead parrot'
"The one-time valuation of Allbirds at $4.2 billion makes the $39 million American Exchange Group paid for the business seem like pocket change," Saunders said. "In actuality, the price represents a healthy premium on the current share value — which only underlines the magnitude of the decline in such a short space of time. Essentially, Allbirds has gone from being a highflyer to a dead parrot."
Allbirds and American Exchange Group didn't respond to separate emails from CoStar News on Tuesday seeking comment.
American Exchange Group has a portfolio of owned and licensed brands including Aerosoles, White Mountain, Ed Hardy, Born, Jonathan Adler and Rampage. It's involved in footwear, tech wearables, watches, jewelry, handbags, fashion accessories and beauty.
In January, long before the sale, Allbirds had announced it was closing nearly all its stores to focus on digital commerce. As of the end of last year, it had 23 company-operated stores in the United States and United Kingdom, with the majority in the states, according to a 10-K securities document filed Monday. It shut 10 stores last year — nine in the United States and one in the United Kingdom — and closed 15 U.S. stores in 2024. During the first quarter this year, it shuttered all its remaining full-price stores in the United States.
Currently, two U.S. Allbirds outlet stores and two full-price stores in London remain open, according to WWD.
Allbirds' focus on sustainability as a core differentiator didn't gain traction with shoe shoppers, according to Saunders, and its brick-and-mortar foray was too pricey.
Deep into the red ink
"While the company had some success in its early years, this was driven by Silicon-Valley hype more than deep popularity with consumers in the American hinterland," Saunders said. "Unfortunately, Allbirds bought into that hype and built its business plans around it. This included a very expensive expansion program, opening a lot of stores in high profile retail locations. Most of those locations did not do the volumes needed to make them profitable and ended up dragging the company deeply into the red."
Allbirds incurred a net loss of $77.3 million for the year ended Dec. 31, 2025, and $93.3 million for the year ended Dec. 31, 2024, according to its securities filing.
"There is substantial doubt about our ability to continue as a going concern," Allbirds said.
The sale, negotiated by a special committee of independent directors, received unanimous approval by Allbirds' board. It is subject to approval by the company's common stockholders.
Allbirds canceled issuing its fourth-quarter earnings or holding a call on the results. It had been scheduled to report its results on Tuesday.
"Over the past decade, Allbirds has evolved into a lifestyle footwear brand known for modern design, innovative materials and unparalleled comfort," Joe Vernachio, CEO of Allbirds, said in a statement. "This next chapter with AXNY builds on the foundational work already completed and sets up the brand to thrive in the years ahead."
For the record
TD Cowen is acting as financial adviser and Holland & Hart is acting as legal counsel to Allbirds.