Allbirds could raise $269 million if its planned IPO prices at the top of its target range. The company is also hoping to convince a judge to toss a lawsuit inspired by PETA’s agitation.
On Monday, the Ben Affleck-approved B Corp. said it’s eyeing a range of $12 to $14 when it formally prices shares for its upcoming initial public offering, potentially valuing the sustainable fashion startup at a cool $2 billion once it wraps up an IPO roadshow.
The lofty valuation would cap off the brand’s journey from a maker of sustainable wool shoes to a full-blown eco-minded lifestyle empire. Though it made its name in sugarcane-soled New Zealand merino wool sneakers, the Bay Area company that co-CEOs Joey Zwillinger and Tim Brown founded in 2015 has steadily expanded into eco-friendly socks, underwear and apparel. It’s also making a bigger play for brick-and-mortar, opening a slew of new stores in recent weeks, including its latest outpost in Denver.
Carbon neutral since 2019, Allbirds now links corporate bonuses to additional carbon goals. Packaging incorporates 90 percent post-consumer recycled cardboard for an all-in-one shoebox, shopping bag and mailer. Curbing emissions is central to the Allbirds ethos, prompting a “low-carbon” collab with Adidas earlier this year.
However noble they may be, Allbirds’ eco-enlightened claims are not without their detractors. Also Monday, the fashion imprimatur filed a motion to dismiss a class-action lawsuit Patricia Dwyer brought this summer after reading an April PETA blog post claiming that “Allbirds Is All Wrong.” The animal-welfare organization accused Allbirds of a litany of offenses, namely engaging in “humane washing and greenwashing.” Touting its planned switch to “regenerative” wool does little for the “sheep who are tormented and eventually killed in the wool industry,” PETA claimed.
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Dwyer, who purchased one or more pairs of shoes this year, alleged that she wouldn’t have shelled out for the “premium” product’s full sticker price if Allbirds hadn’t “misrepresented” attributes such as their low carbon footprint, which the lawsuit claimed is based on incomplete life-cycle assessments (LCA) and unreliable industry-sourced data.
In its motion to dismiss, the footwear company states that Dwyer does not “dispute the accuracy of Allbirds’ disclosures to customers,” “claim that Allbirds represents its ‘footprint’ disclosures as broader or more comprehensive than they actually are,” or “point to any legal requirement that consumers be provided with information sufficient to allow them to comparison shop based on information she regards as important an environmental impact assessment.”
What’s more, the “misleading” terms Dwyer took issue with—including “humane,” “animal-friendly” and “responsible”—were claims made by supplier ZQ Merino, and not by Allbirds, the brand pointed out. “Nowhere does Dwyer allege that any grower in Allbirds’ supply chain has been accused of, let alone been shown to have engaged in, animal cruelty,” it wrote. “Instead, Dwyer makes sweeping allegations about the treatment of sheep in the world at large.”
“Dwyer equates alleged mistreatment by some wool farmers in New Zealand and around the world to mistreatment by Allbirds or its ZQ Merino-certified suppliers,” it added. “This is not even guilt by association; it is an unsupported inferential leap that fails to satisfy the most basic pleading standards.”
Allbirds urged the court to dismiss with complaint “with prejudice.”
Whether the company successfully convinces Judge Cathy Seibel to throw out the $5 million suit, Allbirds has its future as a public company to look forward to. Documents list its net revenue for the 2021’s first six months as $219.3 million, or 13.2 percent ahead of 2019, thanks to higher average order values and rising digital purchases. Gross margins in the six-month period improved to 51.4 percent. Allbirds also reported an accumulated net loss of $21.1 million in the same frame, versus a $25.9 million net loss for all of 2020.
Allbirds plans to offer 19.2 million shares of Class A common stock, comprised of 15.4 milion shares offer by Allbirds and 3.8 million from some of its current stockholders. It expects to list on the Nasdaq Global Select Market, trading under the ticker symbol “BIRD.”