Allbirds bows out of NZ, Aussie distribution as sales decline
Environmentally friendly shoe maker Allbirds has signed away the distribution rights to its New Zealand and Australian businesses.
The San Francisco-based business, which uses New Zealand merino wool in its footwear, has been grappling with declining sales, and has found itself in the position where it has to close up to 15 of its United States-based retail stores.
Late last year Allbirds made the decision to duck out of managing New Zealand and Australian distribution of its products amid ongoing poor financial results, signing Auckland-based Compendium Group as the exclusive distributor to sell its shoes and apparel in New Zealand and Australia.
Compendium will manage the running and establishment of future Allbirds retail stores, employ staff directly for the brand, establish a wholesale offering, and have full control of all business activity across Australasia, from July.
It has been tasked with growing the Allbirds business across the two markets, starting with setting up a wholesale business in both countries, and establishing a physical flagship store in Australia.
Currently, New Zealand is the bigger market on the sales front. Compendium said it had plans to establish at least two more physical Allbirds stores in New Zealand, in the tourist-centric regions.
Compendium has a digital-first approach to wholesale and distribution, and distributes a handful of environmentally-conscious brands, including footwear brand Oofos, blanket firm Rumpl, and Hydro Flask.
The company is in the process of moving Allbirds’ 17 staff to new contracts.
The deal with Compendium comes following Allbirds’ global strategy to hyper-localise its international business to turn around declining sales.
Allbirds has signed similar distribution deals with local companies in Canada, Japan and South Korea.
Compendium Group co-chief executive Johnathan Lopes Da Silva said the business would focus its efforts digitally to start with, and then look at opportunities to grow Allbirds’ physical store footprint over the next three to four years.
“The world has slightly changed as to the retail perspective, and being able to touch, see and feel [product is important], so the next step is that we’ll look into different channels in the outdoor boutique lifestyle ,and look to partner with retailers.”
Lopes Da Silva said the business planned to pair Allbirds with wholesale partners and launch within other retail stores, starting from October.
“They have built an incredible business with the online store and the Britomart store. Our job now for the next phase is to take that and build on that and plug in the wholesale piece – which is a big step for the company globally, not just in New Zealand,” said Kelly Cundell, co-owner of Compendium Group.
“We’re very aware of what we’ve bit off, and we’re scaling our team as part of that.
“We feel confident we’ve got the right mix to make this work.”
Cundell said decentralising a business to local distribution was part of growing a global business, and she had experienced similar with evolving and helping to scale the business of global footwear brand UGG.
“Allbirds went straight direct to consumer when it started, which at the time was really innovative, and in doing that have built some incredible foundations. Now, the next step is looking at that omnichannel environment and the landscape changing post-pandemic.”
Allbirds’ profitability and share price has taken a hammering since it listed on the Nasdaq in November 2021.
Investors paid US$15 for shares in the IPO, and would have felt pretty chuffed on their first day of trading on the Nasdaq market, when they closed at almost US$29. By May the following year, its share price had slumped to around US$4, and since to around US73 cents.
Last week Allbirds announced that chief executive and co-founder Joey Zwillinger would step down and be replaced by Joe Vernachio. It also forecast more financial losses in the year ahead.
Allbirds reported a 14.5% decline in revenue to US$72 million and a net loss of US$56.8m in the fourth quarter of its financial year, alongside a wider full year loss of US$152.5m, compared to a US$101m loss the previous year.
Who is Compendium Group?
Northcote-based Compendium is located in Auckland’s North Shore and run by brother and sister duo Johnathan Lopes Da Silva and Kelly Cundell. They come from a family of footwear distributors, with their father owning AGI, one of New Zealand’s largest footwear distributors.
Both cut their teeth in AGI and have been in the footwear industry most of their lives.
Compendium Ltd started in 2013 and recently formed into the Compendium Group, an amalgamation of three companies. It has teams based in the UK, Auckland and the Gold Coast.
Gold Coast-based Lopes Da Silva founded Compendium Ltd. Cundell, prior to the pandemic, was based in the UK, where she spent eight years working for The Deckers Group, and went on to co-create Sport Factory Pacific in 2014.
Cundell worked on the UGG brand for eight years, as marketing director for EMEA, helping to bring on distributors, decentralise that business, and growing its store network by opening 23 stores over that time. She got stuck in New Zealand during the pandemic, and decided to band together with Lopes Da Silva to pitch for brands together. The pair pulled the businesses together under the Compendium Group this year.
The company has plans to triple its Auckland staff numbers from 13, and currently employs about 30 people.