(Bloomberg) — Allbirds Inc. is planning to cease operations only four years after the once-buzzy footwear company went public with a more than $4 billion valuation.
American Exchange Group, whose brand portfolio includes Aerosoles and Cliffs by White Mountain, agreed to buy all of Allbirds’ assets and intellectual property for about $39 million, according to a statement — less than 1% of what the company was once worth.
Allbirds initially grew popular among Silicon Valley workers with its basic eco-friendly wool sneakers. But early excitement around the brand gave way to product missteps and increased competition that eroded its value.
The San Francisco-based company made expansion attempts to win over young shoppers and runners. Allbirds rapidly expanded its store footprint and product offerings, drifting far from its core shoes with leggings and puffer jackets, but those efforts fell short. Sales declined by double-digit percentages each of the last three years.
“Essentially, Allbirds has gone from being a highflyer to a dead parrot,” said Neil Saunders managing director of GlobalData. “The reason for the lack of traction centered on the fact that the core differentiator of Allbirds – sustainability – has never been a key consideration for most footwear consumers.”
Allbirds’ stock closed at $2.98 on Monday prior to the announced sale, giving the company a market value of $24.5 million. The shares traded down around 1% as of 10:20 a.m. Tuesday in New York.
The deal with American Exchange Group, which is expected to close in the second quarter, still needs shareholder approval. A distribution of net proceeds to stockholders is expected in the third quarter.
Allbirds is expected to file a proxy statement describing the transaction and to seek stockholder approval of the sale and subsequent dissolution of the company no later than April 24.
TD Cowen is acting as financial adviser and Holland & Hart LLP is acting as legal counsel to Allbirds. As a result of the deal, Allbirds said it will not issue an earnings press release or hold a call originally scheduled for Tuesday.
–With assistance from Michael Hytha.
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