Allbirds, the wool shoe brand that closed a $100m fundraising round this week, is backing bricks-and-mortar stores in spite of the pandemic.
The new funding — which gives Allbirds a $1.7bn valuation — will partly support physical expansion in markets outside the US as well as increasing headcount, according to the company’s co-founder Joey Zwillinger.
Allbirds currently employs 404 people but will add to that number in the coming months. This will end a hiring freeze imposed in early February when Allbirds first noticed a dip in its Chinese sales due to Covid-19 lockdowns.
The company, which made its name as a direct online seller, will open its 22nd store this month in its home city of San Francisco. More will follow next year, according to Mr Zwillinger, who co-founded the business in 2015.
“It sounds crazy in this environment but we are really committed to that channel. We think [shopping in stores] is going to come back,” Mr Zwillinger said.
One reason for setting up its own network of stores was to avoid the pressures from wholesalers and retailers that have encouraged other clothing brands to compromise on standards, according to Mr Zwillinger.
“We describe ourselves as slow fashion,” he says. “The internet has put a lot of pressure on bricks-and-mortar retailers so they put a lot of pressure on the brands for newness.
“That means the brands have to move very fast and then they tend to kind of give up on some things that are important to the world. The antidote to that is to control your own distribution.”
Although the US is still by far the largest market for Allbirds, growth is being driven by other nations, particularly in the Asia-Pacific region.
“Sales in China are going to double this year even though the pandemic happened there first,” Mr Zwillinger said.
The new cash injection will also support developments of environmentally sound shoe production to add to existing innovations, such as SweetFoam, the brand’s shoe sole material made from sugarcane.
Other projects include a collaboration with Adidas to create a shoe with the world’s lowest carbon footprint, which is due to launch next year.
An initial public offering was the logical conclusion for the company, according to Mr Zwillinger. He said that would not be in the next year.