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Report: Allbirds Enters Activewear Category as it Preps for Upcoming IPO

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Allbirds has launched an activewear collection ahead of its IPO, according to CNBC. The Natural Run Collection features six products, including tanks, T-shirts and shorts for both men and women, and ties into the retailer’s environmental message with initial carbon footprint ranges from 4.7 kg to 14.5 kg of CO2 before being 100% offset to zero.

The collection is the culmination of two years’ work and more than 70 iterations. Like many other recent activewear brands the items are designed for use beyond workout activities, particularly as a day-to-day fashion option.

The clothes are made with eucalyptus tree fiber and merino wool, materials also found in the brand’s sneakers that help Allbirds reach its commitment to cutting its per-product carbon footprint in half by 2025.

“For us at Allbirds, the disconnect between what we wear to improve our personal health and its negative impact on the health of our planet seemed like an important space for us to tackle,” said Tim Brown, Co-Founder of Allbirds in an interview with CNBC. “Running apparel is typically made of synthetic materials, derived from barrels of oil.”

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Activewear has become a hot category after lockdowns caused shoppers to rethink their day-to-day wardrobes. The most recent activity in this market was Wolverine Worldwide’s acquisition of Sweaty Betty for approximately $410 million in cash, and plenty of other retailers have been making moves in 2021:

  • Kohl’s will begin offering apparel from Eddie Bauer online and in approximately 500 stores nationwide in the fall to expand its outdoor and activewear presence;
  • American Eagle Outfitters plans to open 50 new Aerie locations this year even as it shutters up to 250 stores under its flagship banner;
  • Online fashion retailer ASOS acquired a number of British fashion brands, including activewear retailer HIIT, from Arcadia Group for approximately $411 million; and
  • Fabletics partnered with lifestyle brand Tough Mudder to expand its activewear offerings to the more than 6 million members of the Tough Mudder community through a series of retail pop-up shops, custom apparel and experiential offerings.

The strength of the activewear is reflected in retailer financial results: lululemon topped Q1 expectations with 88% revenue growth compared to Q1 2020 and net revenue of $1.2 billion. This was up from $782 million in Q1 2019, showing that the retailer was not just recovering from the pandemic but continuing on an upward trajectory.

Nike has been building on its own success with the Nike Live store concept, part of the activewear giant’s ongoing effort to focus on growth via its own channels. The company has been pulling products off third-party sites, including Amazon in 2019, while investing in its own stores and digital experiences.

Allbirds is already set to make a splash with its IPO, which has been projected at $1.7 billion and could take place as early as September 2021. The retailer’s entry into a hot category might be enough to send its initial valuation even higher.

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