Tue. Oct 19th, 2021

IPO Updates

Sustainable shoemaker Allbirds said Tuesday that it has applied for a public listing in the U.S. because it is trying to take advantage of the demand for fashion brands with a green credential.

The San Francisco-based company wants to list its inventory as part of what it calls “Sustainable” initial public offering, led by bankers at Morgan Stanley, JPMorgan and Bank of America.

According to the agreement, the company must comply with certain environmental, social and management standards, such as maintaining a minimum ESG rating, implementing ‘best practices’ towards climate change and ‘commitments to make significant progress on key ESG issues’. , according to to a regulatory application.

‘We hope to provide a framework for businesses to make a sustainable public offering that we call. . . Our vision is that Allbirds’ initial public offering will lay the foundation that other companies can use for future SPOs, ”the report reads.

Founded in 2015, Allbirds last raised $ 100 million in a series of $ 1 billion E Series funding rounds last September.

The business, backed by T Rowe Price, Franklin Templeton and Baillie Gifford, has become popular among sustainability-conscious millennial consumers with its wool-based athletic trainers, named in 2016 by Time Magazine “the most comfortable running shoes in the world.”

The products of the shoes are manufactured with natural materials, and the company claims that the carbon footprint of the production of a standard pair of shoes is about 30 percent less than that of its competitors. It is said that the supply chain has been carbon neutral since 2019.

However, according to last year’s sustainability report, shipping was not included in the calculation of the carbon footprint. The company’s website says that wool for two of its collections is imported to Milan and processed into dust before being sent to Korea to be assembled into a shoe.

The shoes became popular among tech workers in Silicon Valley and young professionals in the city, which increased revenue from online sales to 74% from $ 126 million in 2018 to $ 219.3 million in 2020. The business grew rapidly expanded and operates in 35 countries.

Profit before tax grew from $ 1.3 million in 2019 to $ 15.4 million in 2020. However, the company said it was not making a profit yet. Net losses amounted to $ 40.4 million between 2019 and 2020.

The company, which its employees call its ‘herd’, also said it is expected to continue to make losses in the foreseeable future.

Allbirds said during the filing that as a result of the pandemic, ‘the lines between home, gym and play’ have blurred, and that it expects a more comfortable approach to workwear to reduce the sale of shoes, which are sold in retail. to keep. about $ 100 to $ 150 per pair.

The company has previously made major inroads into retail and mortar retail through its 27 stores, saying digital sales remain strong. In the application, the company said that revenue from online sales grew to $ 194.6 million in 2020, compared to $ 113 million in 2018.

New stores contributed to ‘increased brand awareness and web traffic,’ the brand said, but the pandemic hurt personal sales, which accounted for 11 percent of the company’s revenue and dropped 17 percent from 2019 to 2020.

According to a McKinsey study, enrolling in Allbirds is highly dependent on ESG qualifications and has noted that environmental impact and brand confidence are an increasingly important factor for Generation Z and millennial consumers.

Allbirds declined to comment other than the content of the IPO submission.

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