Each trading day, Nasdaq publishes a list of companies that are noncompliant with the continued listing standards. In most cases, a company is added to the list five business days after Nasdaq notifies the company about its noncompliance and is removed from the list one business day after Nasdaq determines that the company has regained compliance or no longer trades on Nasdaq. A summary of Nasdaq’s continued listing standards are included in our Continuing Listing Guide. The Listing Rules can be found here.
Noncompliant Companies (nasdaq.com)
February 16th of this year was the last day $BIRD shares were above $1 dollar. A quick glance at the Nasdaq noncompliance list reveals that Allbirds received their warning on 4-2-2024. The notice doesn’t arrive until a share price has been below a dollar for longer than 30 days. Allbirds has been below a dollar for 93 days as of 5-19-2024. April 2nd began the 180-day count before the company is delisted.
Sneaker Industry Prediction for 2024 | Number 2: Allbirds Figures it Out… a Little Bit
What happens when a company is delisted?
Last year I wrote an article on delisting. If the company doesn’t inspire confidence leading to an increase in the share price, they are taken off of the market. Without public funding, the company is no longer capable of providing the revenue needed to make considerable adjustments. The company has to pull from its cash coffers placing financial strain on the business.
I followed up the “What Happens” post with an analysis attempting to be more positive about the brand’s direction, but if you click through on the post “Figures it Out” you’ll find I had a difficult time generating a positive angle.
Interestingly, the inability to keep the discussion positive wasn’t because Allbirds lacked product capable of reaching new demographics and connecting with new audiences. The problem sits squarely in what I think is a slightly different broken brand triangle. The triangle in this instance is the base of the company and not all three points: Design and Marketing. Instead of rehashing the dialogue that already exists I’m placing Allbirds’ “broken wings” issue across the foundational elements of value and interest.
Marketing
While religion carries the notion of “Being all things to all people,” this is an adage that doesn’t work for sneakers and footwear. A brand attempting to be all things never challenges. Allbirds may be the most non-confrontational, non-emotional brand on the market. Last year I delivered a discussion about the imagery in their marketing. A year later and absolutely nothing has changed:
The company has safe, vanilla imagery. It’s not bad imagery. The pictures and videos of influencers/models fit the scope of what Allbirds aspires towards, but if this is what has been done, and it hasn’t pushed the brand forward why continue delivering the same thing? When I ran arch as a footwear brand I needed to sit in a place where a wide range of men could wear my casual footwear. I didn’t keep it safe, however. My sneaker, The Allen was made of denim and suede. Like Allbirds’ sneakers there wasn’t a prominent logo. The white logo on the tongue was clearly visible, but I knew selling a brand to people who had never heard of arch was going to be a difficult proposition.
When I delivered my lookbook it grabbed a diverse spectrum of buyers. I asked those buyers to allow pictures to be taken of them or to do their own pics. This was before the rise of Instagram. The result were some very cool shots of guys wearing my brand. Unlike Allbirds, arch didn’t fund at an absurd amount when I finally ran a Kickstarter and operating the brand was much more difficult than I thought because I couldn’t be where the people were.
Which moves this discussion to the next aspect of where Allbirds fell short, Pricing. I recently did a report on the Nike Ja 1. In that report I pulled data from 2017 to 2023. I did this to discuss the sweet spot for Nike Basketball pricing. What I learned was the sweet spot for all men’s sneakers sits in a similar range. On the Allbirds site under the category Everyday Sneakers, 16 sneakers are shown. 50% of those models are marked down. The brand’s best sneaker, in my opinion, is its most dynamic and functional, The Tree Flyer 2.
The Tree Flyer 2 has an SRP of 160.00. This price is far outside of the “sweet spot”, but an important aspect is this pricing issue is it competes directly with certified running shoes from every major brand with more doors and more distribution partners. The Tree Flyer isn’t connected to a sports athlete. There aren’t moments connected to any of their sneakers and this is the brand’s own doing. In remaining vanilla, it sits in the middle of the road. Why is this an issue? The sneaker industry is a busy highway. Have you ever seen anyone attempt to reach the middle of a highway? The middle of the road is the hardest and least visited place on the sneaker expressway. The only time someone goes there is when their car breaks down. Which begs this question…
Why Would You Visit Allbirds?
There are 51 total Allbirds store locations. 30+ stores are in the U.S. meaning they have enough locations to provide online shipping turnarounds of 1-2 days here in the States, but what drives engagement? What is the value proposition? The brand is sans logo and identifiers. Wearing them does not create identity like an Air Force 1 or adidas Samba would.
Allbirds isn’t a premium running company. They aren’t capable of carrying a high pricing strategy, especially when the kicks aren’t differentiated. The worst aspect of the pricing discussion is the recent push by larger brands into the “under 100” category. While Allbirds currently has half of their footwear under and around 100 dollars, none of the footwear creates an emotional impetus to purchase. Can the $BIRD learn to fly again? It all depends on how quickly the brand can exit the median of the highway and match the flow of traffic.