A massive shoe retailer is now closing a quarter of stores following a drop of 15% in sales last year, sources confirm.
Alongside a nearly 15% revenue drop for 2023, popular shoe retailer Allbirds on Tuesday named a new CEO, replacing co-founder Joey Zwillinger.
Joe Vernachio, who has been Allbirds’ chief operating officer since 2021, will now take over the top post and join the board of directors on Friday.
Zwillinger will stay on as a board member and a special adviser to the company, according to a company press release.
Allbirds co-founder Tim Brown stepped down from the co-CEO role last year and now serves as the brand’s chief innovation officer.
At the same time, Allbirds reported earnings, with revenue for Q4 and the full year both down by about 15%.
Fourth-quarter revenue was $72 million, while full-year revenue was $254 million.
The company’s current plan to close 10 to 15 stores — about 17% to 25% of its 60-store fleet — will cost its U.S. business about $7 million to $9 million, reports Retail Dive.
“Stores remain a highly effective way to meet new customers and drive omnichannel purchasing and omnichannel purchasing is the most profitable consumer journey we can generate,” Zwillinger said.
“As we focus on renewing brand momentum and driving sustained growth in the U.S., we are leaning into our most efficient stores in key cities where we want to win.”
International revenue will also be hit with $25 million to $28 million in costs as Allbirds moves from a straight DTC model to a distributor model.
Zwillinger on a call with analysts said the distributor model is a “more profitable” go-to-market strategy and is allowing Allbirds to consider entering more international markets going forward.
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Other Economy News Today
This massive discount retailer is now closing 1,000 stores as inflation pressures the company to shutter several locations.
Dollar Tree Inc. plans to close a whopping 600 of its Family Dollar stores during the first half of the year, the company said Wednesday.
The retailer also intends to close an additional 370 Family Dollar stores and 30 Dollar Tree stores in the coming years as leases expire, CEO Rick Dreiling said during an earnings call.
Consolidated net sales for the fourth quarter rose 12% to $8.6 billion from $7.7 billion year over year.
Quarterly net sales at the company’s namesake banner rose 15% to nearly $5 billion, up from $4.3 billion a year earlier.
Family Dollar net sales rose 7% to $3.7 from $3.4 billion.
Overall, the company posted a net loss of $1.7 billion for Q4.
For the full year, consolidated net sales rose 8% to $30.6 billion from $28.3 billion a year earlier.
However, the company swung to a net loss of $998 million from a prior year profit of $1.62 billion.
Overall same-store sales increased 4.6%.
By banner, Dollar Tree’s comps rose nearly 6%, while Family Dollar’s comps grew 3.2%.
Dollar Tree said in November that it planned to review its Family Dollar portfolio and identify underperforming stores for closure, relocation, or re-bannering.
The Virginia-based company, which had 16,774 stores in the U.S. and Canada as of last month, publicly shared the outcome of its review for the first time Wednesday.
Dreiling said persistent inflation and reduced government benefits continue to pressure the lower-income consumers that comprise a sizeable portion of Family Dollar’s customer base.
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Also Read: A Massive Grocery Store Will Now Close All Locations
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