Allbirds is out to prove it's more than those fuzzy wool sneakers

• Allbirds reported disastrous sales and earnings last month.
• The company recently opened a Portland, Oregon, office staffed with Nike and Adidas veterans.

Allbirds made its name by removing the middleman and boosting the DTC movement by pushing shoe stores toward online and direct-to-consumer sales.

Now the company's removed a seemingly vital part of a sneaker — the Strobel board, a flexible fabric that holds the shoe together that's used in most sneaker construction.

On Tuesday, the San Francisco-based company released the SuperLight, a shoe that doesn't have a Strobel board. While a minor technical feat, removing that element of the shoe tells a bigger story.

Allbirds, once a DTC darling, is facing slowing sales and a collapsing stock price, is out to prove that it's still innovative.

About two years ago, Allbirds started hiring footwear veterans from Nike and Adidas in Portland, Oregon. Nike is based in a Portland suburb. Adidas has its North American headquarters in the city.

The work of the new hires is starting to hit store shelves, right on schedule for an industry that takes about two years to get products to market.

Last year, Allbirds opened a Portland office to house the new talent, adding to a staff that grew Allbirds from a Kickstarter campaign to a public company in less than six years — light-speed growth for a sneaker company. It took Nike nearly 18 years to get there.

"We've been able to plant a flag in a part of the world that's really important to global footwear," Allbirds' cofounder and co-CEO Tim Brown told Insider. "We've attracted some extraordinary talent from the big footwear brands."

In the past few months, products designed by Allbirds' new hires are coming out in fast succession, with the SuperLight capping a frenzy of releases that included the Riser, the Pacer, and a zero-carbon sneaker.

The product refresh comes as the company desperately needs some fresh buzz.

"They need a hit product pretty badly," Tom Nikic, a Wedbush Securities analyst, told Insider.

Founded in San Francisco in 2015, Allbirds is frozen in many consumers' minds as the maker of wool sneakers for technology workers — and even those workers are no longer wearing them.

Last month, Allbirds reported disastrous quarterly and annual earnings. Shares are trading for a little more than $1, after hitting $15 during the company's November 2021 IPO.

"The bird's falling," Nikic headlined his last note about Allbirds, one in a flurry of recent downgrades of the company's shares.

But Allbirds isn't pessimistic, and it's announced a sweeping turnaround plan.

At a January media event in Portland, Allbirds' chief brand officer, Kate Ridley, who previously worked as senior vice president of branding at Adidas, said the new Allbirds footwear office signals the company's arrival as a "serious contender in the footwear space."

Silicon Valley meets Sportswear USA

Allbirds' iconic wool sneaker, released in 2016, is one of the best "hero products" in recent history.

Time Magazine named it the "world's most comfortable shoe" that year, helping solidify the company's footwear as part of a Silicon Valley uniform. Former President Obama was among the company's early fans.

But the company has fallen out of favor with technology workers and trendsetters. In December, The Wall Street Journal blistered the company, saying the "tech bros" that helped popularize Allbrids had moved on to brands like On and Rothy's.

Allbirds knows it needs to evolve.

Ashley Comeaux and James Connolly are key to that innovation.

Comeaux is the vice president of product design, and Connolly is a senior product director. Both worked at Nike for more than a decade before joining Allbirds in 2021. They joined a staff that includes Allbirds veterans such as the vice president of innovation and sustainability, Jad Finck.

Allbirds has also added some former Nike brass to its ranks. Ann Freeman, who previously ran North America for Nike, is now on the Allbirds board. And in March, the comapny added Nike's former chief operating officer Eric Sprunk as a board adviser.

The new hires in the Portland office have worked on several recent launches, including the Pacer and the Riser, which have gotten strong reviews from Insider journalists who review products.

Perhaps most importantly, the shoes don't look anything like the Wool Runner.

The Pacer is an elegant lifestyle shoe. The Riser has "retro appeal" and "belongs in your rotation," according to Insider's Reviews desk.

"The goal and the hope is that customers, both existing and new ones, not only continue to appreciate the line that we have but can see the evolution of where the brand is going," Comeaux said at the January media event.

Last month, Allbirds released an audacious shoe that it described as the world's first net-zero-carbon shoe.

The SuperLight, the one without a Strobel board, is the next in the new wave of products.

The lack of a Strobel board makes the shoe lighter, which means it produces fewer carbon emissions in the manufacturing and shipping processes, Allbirds says. It also makes for a more comfortable shoe, the company says, since the top sits directly on the foam sole, which is derived from sugarcane. Like all Allbirds products, the shoe prominently displays its carbon footprint, another way Allbirds hopes to differentiate itself.

The shoe, released on Tuesday, retails for $115 and $120.

Ridley, who runs the Portland office, doesn't expect the innovation to slow. She said the 5,000-square-foot Allbirds outpost is akin to an early Mac office that hoisted a pirate flag as a nod to the willingness of employees to take risks and push boundaries.

"Except we don't fly a pirate flag here," she said with a smile.