Exclusive: Allbirds CEO Joey Zwillinger Steps Down, the Second Top Executive Shift in a Year
Amid a turnaround plan, Allbirds had made another big C-suite change.
Allbirds co-founder and chief executive officer Joey Zwillinger will step down as the company elevates chief operating officer Joe Vernachio to the CEO role and adds him to the board of directors. Zwillinger, who went from Allbirds’ co-CEO to sole CEO last May, will remain with the company as a member of the board of directors and special advisor. The changes are effective March 15.
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The CEO transition comes at a crucial time for Allbirds, which is one year into its business turnaround plan it outlined last March. This strategy focuses on revamping product, optimizing U.S. distribution and store profitability, re-evaluating its international strategy and improving cost savings. Since outlining this plan, Allbirds’ revenues have been challenged by decreases in average selling price, higher promotional activity and fewer sales per unit.
In its fourth quarter reported on Tuesday, Allbirds’ revenues were down 14.5 percent to $72 million. Net loss in the fourth quarter was $56.8 million or $0.37 per basic and diluted share.
For the full year of 2023, net revenues were down 14.7 percent to $254.1 million and net loss was $152.5 million, or $1.01 per basic and diluted share.
Vernachio told FN in an interview that he will continue leading the company within the framework of this plan — which he said is already showing signs of progress.
“Over the past year, we’ve significantly improved our business model — reducing our cost structure for instance,” Vernachio said. “It’s now time to regain momentum with our customers and position the brand to return to growth.”
Vernachio added that in the last year, Allbirds has improved its inventory position, realized cost savings, introduced new products and signed new agreements for international distribution. In May 2023, Allbirds announced a nine percent reduction to its global corporate workforce following an 8 percent reduction in August in order to cut costs.
“This next year is pivotal in our transformation and requires laser focus as we continue to lay this groundwork,” he said.
In its 2024 guidance issued Tuesday, Allbirds said it expects net revenues of between $190 million to $210 million, with U.S. net revenues of between $150 million to $165 million. Gross margin is expected to be between 42 percent to 45 percent. Q1 revenues are expected to be between $37 million and $42 million, with adjusted EBITD2 loss of between $27 million and $23 million.
Vernachio’s appointment marks the second CEO shift for Allbirds in less than a year after Zwillinger became the company’s sole CEO in May 2023. At the time, co-founder and co-CEO Tim Brown transitioned out of the co-CEO role and remained on as co-founder and chief innovation officer.
The news also comes on the heel of several recent high-profile appointments from Allbirds, including the promotion of Kelly Olmstead, formerly SVP of brand and marketing, to chief marketing officer and the appointment of Adrian Nyman to the newly created position of chief design officer.
“Not only have we upgraded the leadership team over the past year, but the team underneath is exceptional, and I have unwavering belief that the combination of the brand foundation and this team is a recipe for amazing success,” Vernachio said.
Vernachio joined Allbirds as COO in 2021, where he has been a key player in helping the company reduce inventory and rethink its U.S. and international distribution plans. In 2023, the company expanded Vernachio’s operations-focused role to include managing commercial and international functions and eventually gave him the reins over product development. Prior to Allbirds, Vernachio served as president of outdoor apparel brand Mountain Hardwear for four years, where he helped the company transform and achieve profitability. He also spent seven years at VF Corp.’s The North Face brand as vice president of global product and served in other roles at Patagonia, Nike, Roots, Calvin Klein and Spyder.
As CEO of Allbirds, Vernachio will double down on the the pillars for growth outlined by his predecessor. When it comes to product, Allbirds will continue to narrow its focus on popular core franchises, like the Wool Runner, and shift away from newer styles that have not resonated as strongly with consumers.
“We’ll be anchored in our iconic franchises, creating a relentless flow of product that meets the consumers’ style and use occasions,” Vernachio said. “In 2025, we plan to remaster our icons and incorporate deep seasonal storytelling to deliver more of what our customers love about Allbirds.”
As for distribution, Allbirds’ wholesale partners, including REI, Nordstrom, Public Lands, House of Sports and Scheels, will continue to become important avenues for growth.
Describing his elevation to CEO as a “high-point” in his career, Vernachio reiterated his confidence in the brand’s potential for growth.
“This transformation is ongoing — we have more work to do,” he said. “But the progress we’ve made to date has been meaningful. I’m very excited about the journey ahead.”
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