When a Story Isn't Enough
Allbirds had a great narrative. They just didn't have a sneaker brand underneath it.
There was a moment, maybe 2018 or 2019, where you couldn’t walk through a coffee shop in the Bay Area without stepping over a pair of Allbirds.
Not sneakerheads. Not hypebeasts. Tech guys. Product managers, startup founders, venture capitalists who wanted to signal they were thoughtful and low-key and didn’t care about status... while wearing a shoe that was very much about status. The Allbirds Wool Runner became the unofficial uniform of Silicon Valley the same way the Patagonia vest did. It meant something, culturally. You knew exactly what it said about a person when you saw them wearing it.
That’s actually a hard thing to build. Most brands spend decades chasing that kind of cultural moment.
Allbirds just couldn’t hold onto it.
Last week, Allbirds agreed to sell its assets to American Exchange Group for $39 million. Less than 1% of the $4.1 billion valuation they carried when they went public in November 2021. The brand that made sustainability fashionable is being acquired by the same company that owns Aerosoles.
To me, that signals something the entire footwear industry needs to sit with for a minute.
The story was never the product
Allbirds built their entire identity around what the shoe was made of, not what it did or how it made you feel. Merino wool. Sugarcane soles. Carbon footprint numbers stamped right on the box. That’s a marketing story. A compelling one. But it was never really a shoe story.
In sneaker culture, the product has to hold weight on its own. People will tell you they bought Jordans because of Michael, because of what the shoe meant... but the silhouette also has to be right. The colorway has to land. The way it sits on your foot has to feel like something. The story amplifies a great product. It can’t replace one.
Allbirds had one good shoe. Maybe two. And they rode that wave as far as it would take them.
By 2023, a Statista consumer survey found that only 22% of Americans even recognized the Allbirds name. To put that in context... that’s below KangaROOS. Below Mizuno. Barely ahead of VEJA and Autry, two brands most casual shoppers have never heard of. Meanwhile adidas and Nike were sitting at 94% each. The cultural moment Allbirds had in Silicon Valley never translated to mainstream brand awareness. It stayed exactly where it started... inside a very specific zip code, among a very specific type of person.
The expansion that killed them
After the IPO, the company did what too many brands do when they suddenly have investor money and momentum: they tried to be everything.
They opened dozens of stores in high-profile retail locations that couldn’t do the volume to justify the rent. They launched performance running shoes. Workout apparel made from merino wool. And in what was supposed to be their biggest moment, they partnered with adidas across two drops, the FUTURECRAFT.FOOTPRINT in late 2021, and the ADIZERO X ALLBIRDS 2.94 KG CO2e in April 2022, a $120 running shoe that carried the most press-friendly sustainability story in the industry at the time. Two major brands. Two years of development. A carbon footprint literally printed in the name.
I picked up a pair of that collab on clearance a couple years later for about $15.
I try to buy shoes from every brand I can. I think it’s important to experience sneakers if I expect you to read my thoughts and opinions about them. It’s how I stay honest about what’s actually happening at the product level. And when a $120 adidas collaboration built around the biggest sustainability narrative in footwear ends up in a clearance bin at that price, you don’t need an earnings report to know something is wrong. The market told you everything.
Revenue peaked around $298 million in 2022 and has been falling every single quarter since. By 2024, cumulative losses had reportedly swelled past $419 million. This January, they closed all remaining full-price U.S. stores.
I’ve seen this pattern before. Not at this scale... but it’s familiar. A brand gets hot, gets funded, starts chasing the next thing instead of doubling down on what made them special. The core customer starts to feel like an afterthought. New customers never arrive. The middle collapses.
What the sneaker industry actually taught us here
If you’ve worked in this business for any length of time, you’ve watched brands come and go. The ones that actually build something durable have both a great product and a great story... and they know when to say no.
Allbirds said yes to everything. Apparel. Running. Collab culture. Wholesale after building their identity around DTC. That shift didn’t offset the declining direct-to-consumer numbers. It just added complexity and diluted what made people care in the first place.
There’s also something worth naming: sustainability, as powerful as it was, turned out to be a harder sell than anyone expected once the novelty wore off. Consumers said they cared about environmental impact. But when it came time to choose between a $95 wool sneaker and something that looked better and cost less... they chose the other thing. To me that signals that sustainability, on its own, is a feature. Not a brand.
And if you want to understand just how hard this industry actually is... consider the other end of the spectrum. I recently wrote about Mark Strong, the founder of Saint65, a small independent sneaker brand out of Nashville who spent four years making his first shoe. Sixty pairs. One colorway. Hairy suede uppers, Vibram soles, leather laces from a Tennessee tannery. Four years to bring 60 pairs to market.
Allbirds had $4.1 billion in valuation, an adidas collaboration, national distribution, and a mainstream media moment... and still couldn’t make it work. They still disappeared with only 22% brand awareness among American consumers. Mark Strong is grinding to get his first 60 pairs out the door. Allbirds had every conceivable advantage and still lost. To me that speaks volumes about how brutally difficult it is to build a lasting footwear brand, at any scale. The market doesn’t care about your story. It cares about your product.
On is wearing the crown now... and they earned it
Walk through that same Bay Area coffee shop today and you know what you see instead of Allbirds. On Running. The Swiss brand with the cloud sole pods, the Roger Federer connection, the performance story wrapped in a lifestyle aesthetic. A different kind of it shoe for the same crowd.
But what separates On from where Allbirds ended up is worth looking at closely, because it isn’t luck.
On built performance credibility first. The CloudTec sole technology wasn’t a marketing concept dreamed up in a boardroom... it came from Olivier Bernhard, a professional triathlete who was literally cutting garden hoses and gluing them to shoe soles trying to solve a real problem with how running shoes cushioned impact. The product worked before the story did. Runners adopted it. Then the lifestyle crowd followed, the way they always follow when something real is happening at the performance level.
Allbirds inverted that entirely. The sustainability narrative was airtight, the branding was clean, the product was... fine. Comfortable enough. But it was never solving a problem the way a running shoe solves a problem. It was solving a feeling. And feelings are much harder to hold onto.
On also made a critical move that Allbirds couldn’t pull off: they brought Roger Federer in not just as an endorser but as an equity partner and creative collaborator. That gave the brand access to one of the most respected athletes on earth, and more importantly, it gave Federer a genuine reason to show up for the brand in meaningful ways. The Loewe collaboration, the premium positioning, the expansion into tennis... all of it built on a foundation of real athletic credibility that Allbirds was never able to manufacture.
On has also been disciplined about where they grow. They moved into apparel, yes, but from a performance base, not a panic move to juice revenue. They opened retail intentionally and selectively. To me that signals a company that understands the difference between expanding a brand and diluting one.
None of this means On is immune to the pressures that took down Allbirds. The it shoe cycle is real, and the Bay Area tech crowd that made Allbirds will eventually move on from On too. The question is whether On has built enough brand depth with sneaker enthusiasts and athletic legitimacy to survive that cultural moment passing... and right now, the evidence suggests they have.
What happens next
American Exchange Group picks up the Allbirds IP and assets for $39 million, pending shareholder approval expected sometime in Q2 2026. The Allbirds name will likely survive in some form under new ownership. Whether it means anything is a different question.
For everyone reading this who works in footwear... brand side, retail, buying, or building something of your own... the Allbirds story is worth studying. Not to feel good about their failure. But because the mistakes they made aren’t unique to them.
Growing too fast. Losing the thread of what made you special. Confusing investor enthusiasm for consumer loyalty. These happen at every level of this industry, from small boutiques to publicly traded companies.
The $15 outlet grab told me the story was already over. The product has to be the foundation. Everything else is just the story you tell about it.
I’m Nick Engvall, and I’ve been writing about sneakers and culture for two decades, from building Eastbay’s first blog to being employee #9 at StockX. I run Sneaker History (website and podcast) and write The Sneaker Newsletter... the people, the stories, and the business of sneakers. If you want the deeper stuff... the industry analysis, the “From the Vault” stories from inside the business... become a paid subscriber.
You nailed it, Nick.
The shoe… what its design-engineering purpose is… must be at the center of a sneakers story. Being sustainable isn’t enough when nearly each of the full-on performance brands has eco-friendly products that perform at an elite level.
✌🏽💙👟