Allbirds expands to Australia, eyes further global markets for 2018
By Tina Morrison
Dec. 22 (BusinessDesk) - Allbirds, the merino wool shoe company co-founded by former New Zealand soccer star Tim Brown, has expanded into its third global market, launching in Australia last month, and it’s eyeing up more markets for next year.
San Francisco-based Allbirds started selling its minimalist woollen sneakers direct to consumers in March 2016 and has online operations in the US and New Zealand, shops in San Francisco and New York, and a steady stream of pop-up outlets. It began selling online in Australia on Nov. 21 in response to customer demand from the world’s biggest merino producing country.
The company expanded in Australia "on the back of really strong demand from customers hoping to get hold of the shoes and it’s gone really well so far,” Brown said. “There is a huge empathy for wool in Australia and an inherent understanding of what the product is all about so we have always felt it was going to be a good market for us.”
Brown said other countries being eyed for potential growth include Europe, the UK and Canada but the company is cautious about expanding too fast and wants to ensure it remains “laser focused” on providing great customer service in its existing markets.
“Such has been the demand in America and New Zealand we have struggled at times even to maintain full supply of our products just in the markets we are already in so I think you have got to stay focused and not get too carried away which we have tried to do.
“Australia has been the first international market that we have added and we will look to potentially add more. Expanding to new markets and new countries is definitely a part of our plan,” he said. The company expects to add a fourth market in 2018.
It’s also planning to open more US stores next year after launching its first store below its offices in San Francisco in April and its second in Soho in New York, in September, he said.
“When people buy shoes, they want to touch them, they want to wear them, they want to try them on and we have got a long way to go to really nail exactly what our point of view is on retail and how we do it really well, but so far the signs have been really positive so yes it’s a big part of our plans,” he said.
Allbirds began with a research grant from New Zealand’s wool industry, and an initial Kickstarter campaign in 2014. In September this year it raised US$17.5 million through US investment firm Tiger Global Management, adding to the US$10 million raised in previous funding rounds since 2015, and giving it money for further research and development into novel, sustainable materials, as well as to expand internationally and grow its retail footprint in New Zealand and the US.
It is the largest direct-to-consumer footwear brand in the world at the moment, and Brown said it is profitable, although he declined to provide details.
Brown, a former captain of the All Whites, is described by those close to him as “gritty” and “tough”, as well as “smart” and "focused”. To develop his shoe company he has drawn on his Kiwi background as well as his knowledge of design, sport and management.
He had been studying architecture at Victoria University in Wellington when he left for a soccer scholarship at the University of Cincinnati, which has one of the most prestigious design schools in the US.
Born in London to a family where both his father and grandfather had worked on Fleet Street, Brown pursued a long-term dream by later undertaking a masters degree in management at the London School of Economics and also studied at Northwestern University’s Kellogg School of Management.
Global newswire Bloomberg reported that Allbirds is the latest in a fast-growing cadre of brands spinning wool into footwear, alongside Swiss startup Baabuk and British startup Mahabis, while established companies like Nike and Converse have also launched wool versions of their sneakers.
That’s sparked some tensions, with business publication NBR noting this week that Allbirds has filed an intellectual property lawsuit against rival footwear brand Steve Madden, claiming it had copied its Wool Runner shoes with a women’s sneaker, the Traveler.
The fashion trend for natural fibres bodes well for New Zealand’s wool industry, with Allbirds sourcing its 17.5-micron merino fabric from Italian manufacturer Reda. The 150-year old fabric maker is a major client of The New Zealand Merino Company and supplies luxury brands such as Giorgio Armani, Gucci, Tom Ford and Hugo Boss.
“Our larger deep aspiration is to build a business that truly has an impact on the materials that the footwear industry is using and the products that they make and we are in the very very first chapter of doing that but I think already we have shown that there is ways to use sustainable materials and natural materials in new ways and not just rely on synthetics,” Brown said.
Asked if the company could become publicly listed in the future, he said they were “truly focused” on their mission “and it will take us where it takes us”.
“We are having a great deal of fun at the moment, we are two years into this, and I think we are only just beginning to work out what this could be - I think we have the foundation of a big opportunity as a business,” he said.