Allbirds is closing its last brick-and-mortar store in San Francisco, drawing a line under an era when the wool sneaker maker was a staple of the city’s startup uniform. The move comes as the company pares back nearly its entire physical retail footprint, keeping just a couple of U.S. outlet locations and two full-price stores in London while pushing harder on e-commerce and a more disciplined cost structure.
Executives have framed the retreat as part of a broader turnaround, emphasizing the need to shutter unprofitable doors, simplify operations, and steer toward profitability after a rocky two years for the once high-flying direct-to-consumer brand.
Why Allbirds Is Leaving Its San Francisco Hometown
Allbirds built its name on sustainability, comfort-first design, and a viral DTC playbook. But the economics of owned retail have become tougher. Company filings show revenue has slid since 2022, margins compressed under promotions and logistics costs, and the stock has lost the vast majority of its value since the 2021 IPO, leaving the company with a market capitalization that has, at times, dipped below $50 million.
Leadership’s strategy has been to cut fixed costs, streamline the assortment, and concentrate demand in channels with better unit economics. The brand has been pruning leases for the past two years, and this latest action suggests an acceleration of that plan. In short: fewer expensive storefronts, more focused online and wholesale distribution, and a tighter path to cash-flow breakeven.
A San Francisco Storefront Meets New Retail Math
San Francisco’s retail environment has shifted dramatically. Major chains have closed or downsized downtown, including the announced exits of anchor department stores at the city’s flagship mall and several large-format retailers. Real estate firms such as CBRE and Cushman & Wakefield have tracked elevated retail vacancies and softening rents, while office vacancy has hovered near record highs around 35%—a headwind for weekday foot traffic.
Footfall data providers like Placer.ai have reported that Union Square visits have trailed 2019 levels by roughly one-third, with a gradual recovery that has yet to fully normalize. For a brand built on discovery and try-on, thinner traffic and higher operating costs make the store P&L harder to justify—especially when every dollar counts in a turnaround.
What Remains of the Allbirds Retail Store Fleet
The company is trimming to a skeletal network: a pair of U.S. outlet stores designed to move product efficiently and two full-price London locations that serve as brand touchpoints in a key international market. The message is clear—physical retail remains part of the mix, but only where the numbers work and the stores play a defined role in the funnel.
Everything else shifts to channels that can scale without the overhead. Allbirds’ own site will remain the primary hub, and the brand has also explored select wholesale partnerships to reach customers who prefer shopping in multi-brand environments. For shoppers, expect end-of-season markdowns as stores wind down, continued online availability of core styles, and customer service handling returns and exchanges through digital channels.
Lessons for DTC and Sustainable Brands From Allbirds
Allbirds is hardly alone. A number of digitally native labels have revisited aggressive store rollouts and marketing spend in favor of profitability. Some, like Outdoor Voices, shuttered stores altogether; others, such as Warby Parker, have leaned into services and higher-attach categories to improve store productivity. The common thread is a shift from growth-at-all-costs to sustainable unit economics.
For Allbirds, the brand equity remains strong: a recognizable aesthetic, transparent materials story, and loyal customer base. The challenge is translating that into a leaner model with healthier gross margins, lower SG&A, and product development grounded in repeatable hits rather than costly experimentation. If the turnaround sticks, fewer stores may ultimately mean a sturdier business.
What This Means for San Francisco’s Retail Landscape
The closure is another data point in San Francisco’s retail reset. Policymakers and landlords are already experimenting with shorter leases, pop-up activations, and incentives to lure tenants back. Recovery will likely track the city’s broader return-to-office arc and tourism rebound—both critical to revitalizing ground-floor commerce.
For now, the last Allbirds sign coming down underscores a pragmatic reality: in a market where costs remain high and traffic uneven, even beloved brands will choose flexibility over footprint. The sneakers aren’t going anywhere. The storefronts, at least in San Francisco, are.
