1 00:00:00,120 --> 00:00:03,040 Speaker 1: Now more bad news for former market darling. All Birds, 2 00:00:03,360 --> 00:00:06,160 Speaker 1: the eco friendly shoemaker, which was co founded, obviously by 3 00:00:06,200 --> 00:00:08,480 Speaker 1: former all White Tim Brown, has posted a net loss 4 00:00:08,520 --> 00:00:11,399 Speaker 1: of nineteen million US dollars for the second quarter this year. 5 00:00:11,840 --> 00:00:14,720 Speaker 1: All Birds shares were trading at almost thirty US bucks 6 00:00:14,760 --> 00:00:17,759 Speaker 1: each when the company listed on the NASDAQ three years ago. 7 00:00:17,760 --> 00:00:20,400 Speaker 1: They're now worth less than a dollar. Greg Smith is 8 00:00:20,440 --> 00:00:22,440 Speaker 1: the head of retail at Devin Funds Management and with 9 00:00:22,520 --> 00:00:24,479 Speaker 1: us Hey, Greg, Hi, Heather. Are they going to be 10 00:00:24,480 --> 00:00:25,280 Speaker 1: forced to dlist? 11 00:00:25,960 --> 00:00:28,440 Speaker 2: Well, that's the sort of the latest sort of risk. 12 00:00:28,600 --> 00:00:31,160 Speaker 2: I suppose the NAR's ex issued them. I noticed since 13 00:00:31,600 --> 00:00:35,040 Speaker 2: notice that they've traded below the dollar mark for thirty days, 14 00:00:35,040 --> 00:00:37,560 Speaker 2: So they basically got to the end of to September 15 00:00:37,720 --> 00:00:41,240 Speaker 2: to get it above a dollar for ten consecutive business datis, 16 00:00:41,280 --> 00:00:44,040 Speaker 2: so the clock is ticking. But you know, they could 17 00:00:44,040 --> 00:00:46,600 Speaker 2: actually request an extension of up to six months, and 18 00:00:46,600 --> 00:00:48,959 Speaker 2: there's actually a way they can engineer it by doing 19 00:00:49,000 --> 00:00:51,919 Speaker 2: a reverse stock splits. So but I think they've got 20 00:00:51,920 --> 00:00:54,240 Speaker 2: bigger problems than the delisting. 21 00:00:54,360 --> 00:00:55,600 Speaker 1: Yeah, what are the bigger problems? 22 00:00:55,680 --> 00:00:57,319 Speaker 2: Well, look, when you look at I think it's really 23 00:00:57,320 --> 00:00:59,560 Speaker 2: been a victim of its own hype. As you pointed out, 24 00:01:00,400 --> 00:01:03,920 Speaker 2: it listed at the peak of the pandemic late twenty 25 00:01:03,920 --> 00:01:06,600 Speaker 2: twenty one. Consumer brands are in fashion. You know, had 26 00:01:06,600 --> 00:01:10,080 Speaker 2: the eco friendly company footwear story to tell people love 27 00:01:10,200 --> 00:01:12,520 Speaker 2: the love the story. You know Obama he was wearing 28 00:01:12,520 --> 00:01:15,720 Speaker 2: will Runners Liono Leonardo DiCaprio. He was an early investor. 29 00:01:16,040 --> 00:01:18,200 Speaker 2: Time dubbed at the most comfortable shoe in the world. 30 00:01:18,480 --> 00:01:20,000 Speaker 2: It was crazy when you think about it. You know, 31 00:01:20,040 --> 00:01:23,200 Speaker 2: the valuation in the company was over four billion US dollars. 32 00:01:23,480 --> 00:01:26,000 Speaker 2: The year before, they'd made just two hundred million in sales. 33 00:01:26,280 --> 00:01:28,760 Speaker 2: You fast forward four years, they're still around about two 34 00:01:28,800 --> 00:01:31,680 Speaker 2: hundred million in sales. So the call fact that dissipated 35 00:01:32,000 --> 00:01:35,080 Speaker 2: are they expanded overseas that was expensive Brooks and Watar 36 00:01:35,120 --> 00:01:37,839 Speaker 2: stores competitors, and then we've had a cost of living 37 00:01:37,880 --> 00:01:41,600 Speaker 2: crisis and the company doesn't discount. So yeah, it's a lot. 38 00:01:41,600 --> 00:01:43,319 Speaker 2: Read ink. One hundred and fifty million dollars is what 39 00:01:43,360 --> 00:01:46,800 Speaker 2: the company lost twenty twenty three. And as you point out, 40 00:01:46,800 --> 00:01:49,240 Speaker 2: the valuation has fallen and I can invested the peak, 41 00:01:49,240 --> 00:01:51,360 Speaker 2: you'd be down around him at ninety eight percent. But 42 00:01:51,920 --> 00:01:53,560 Speaker 2: they have a new CEO and he has a plan. 43 00:01:54,080 --> 00:01:56,840 Speaker 1: Yeah, now on that new CEO, right, he's one of 44 00:01:56,880 --> 00:02:00,560 Speaker 1: the so called traditional executives that they've brought in. They've 45 00:02:00,640 --> 00:02:02,560 Speaker 1: also fired a whole bunch of people. They shut a 46 00:02:02,560 --> 00:02:05,080 Speaker 1: bunch of shops. Is this showing any signs of working? 47 00:02:05,800 --> 00:02:08,480 Speaker 2: It's actually showing some margin imprevment, But it's a long 48 00:02:08,560 --> 00:02:11,080 Speaker 2: way back, and you know that that top line is 49 00:02:11,200 --> 00:02:13,639 Speaker 2: never going to eventuate how it was imagined, so all 50 00:02:13,639 --> 00:02:15,040 Speaker 2: you can do is work with what he's got. So 51 00:02:15,080 --> 00:02:18,480 Speaker 2: what they're doing really is closing underperforming stores in the US, 52 00:02:18,919 --> 00:02:22,519 Speaker 2: they're closing up to fourteen this year. Offshore markets are 53 00:02:22,520 --> 00:02:26,800 Speaker 2: moving to a distributed model, which is less costly than 54 00:02:27,000 --> 00:02:30,000 Speaker 2: obviously having their own stores, and they're just having direct 55 00:02:30,000 --> 00:02:33,520 Speaker 2: markets in the US, UK and EU shifted their factories 56 00:02:33,560 --> 00:02:36,280 Speaker 2: that's a bit cheaper, the factories in Vietnam there as well. 57 00:02:36,680 --> 00:02:39,000 Speaker 2: They're still not discounting, So yeah, they could be a 58 00:02:39,000 --> 00:02:40,680 Speaker 2: bit of a here when we have got a cost 59 00:02:40,760 --> 00:02:43,280 Speaker 2: of living crisis, and yeah, consumers are feeling the pinch, 60 00:02:43,720 --> 00:02:46,160 Speaker 2: and you look at the top line revenues down twenty 61 00:02:46,320 --> 00:02:49,040 Speaker 2: seven percent at the last quarter on a year ago. 62 00:02:49,200 --> 00:02:52,600 Speaker 2: Listen to the earning call and management still talking about 63 00:02:53,040 --> 00:02:55,960 Speaker 2: telling a story to consumers, which I thought was somewhat ironic. 64 00:02:56,080 --> 00:02:59,359 Speaker 2: They've got some new brands coming. They actually have stopped 65 00:02:59,400 --> 00:03:01,400 Speaker 2: the pace of the new brands that are coming, but 66 00:03:01,639 --> 00:03:04,079 Speaker 2: they have got the tree Glider. They're doing things of 67 00:03:04,200 --> 00:03:06,799 Speaker 2: a few new colors as well. But yet it is 68 00:03:06,919 --> 00:03:08,959 Speaker 2: a long road back, and you know, we are not 69 00:03:09,000 --> 00:03:12,079 Speaker 2: going to get back to that four billion valuation, probably 70 00:03:12,120 --> 00:03:14,720 Speaker 2: not in the next sort of fifty years anyway, Oh. 71 00:03:14,520 --> 00:03:15,760 Speaker 1: Great, fifty years. 72 00:03:15,880 --> 00:03:16,120 Speaker 2: Okay. 73 00:03:16,120 --> 00:03:18,919 Speaker 1: I mean, listen, if what made them so wealthy, so 74 00:03:19,280 --> 00:03:22,160 Speaker 1: valuable was the fact that they were an it shoe, 75 00:03:22,560 --> 00:03:24,440 Speaker 1: and when they're not in an itshoe, it's not working 76 00:03:24,480 --> 00:03:26,040 Speaker 1: for them, does that mean that that is the key 77 00:03:26,160 --> 00:03:27,360 Speaker 1: they need to be cool again. 78 00:03:28,000 --> 00:03:29,840 Speaker 2: Yeah. And then we were seeing as coll You're quite right, 79 00:03:29,880 --> 00:03:32,320 Speaker 2: you know, he had all the A listers wearing them. 80 00:03:32,520 --> 00:03:34,960 Speaker 2: You know, they were seeing this comfy. Actually the other 81 00:03:35,000 --> 00:03:36,840 Speaker 2: point as well was, you know, I suppose part of 82 00:03:36,880 --> 00:03:39,800 Speaker 2: the issue has been the actual feedback from consumers is actually, 83 00:03:39,840 --> 00:03:43,240 Speaker 2: don't last that long now, they're not the lacking and durability, 84 00:03:43,240 --> 00:03:44,880 Speaker 2: which is a bit of a here when particularly when 85 00:03:45,200 --> 00:03:46,960 Speaker 2: people are feeling the pinch and they want stuff that's 86 00:03:47,000 --> 00:03:49,880 Speaker 2: going to last. So that cool factor, I think, you know, 87 00:03:50,520 --> 00:03:53,040 Speaker 2: was engineered a lot of the hype that you saw, 88 00:03:53,160 --> 00:03:55,560 Speaker 2: you know, and then the lead up to the stock listing, 89 00:03:55,600 --> 00:03:58,680 Speaker 2: and also there were stock market conditions which also drove 90 00:03:58,720 --> 00:04:01,800 Speaker 2: that hype as well. Yes, so becoming cool the game 91 00:04:01,880 --> 00:04:03,880 Speaker 2: would help. I'm not sure if we're going to see 92 00:04:03,880 --> 00:04:09,440 Speaker 2: Donald Trump wearing wearing them all or Kamela Harris, but yeah, 93 00:04:09,800 --> 00:04:12,080 Speaker 2: it is a long way back. And you know, brands 94 00:04:12,120 --> 00:04:14,320 Speaker 2: do sort of have their day in the sun, but 95 00:04:14,320 --> 00:04:16,400 Speaker 2: they also do make a comeback. And who would have 96 00:04:16,400 --> 00:04:18,600 Speaker 2: thought CROs would make a revival, so you ne evern know. 97 00:04:18,800 --> 00:04:20,920 Speaker 1: Well, that's a very good point, Greg, actually an excellent point. 98 00:04:20,920 --> 00:04:22,720 Speaker 1: Thank you so much. Made appreciate it. Greg Smith, head 99 00:04:22,720 --> 00:04:24,120 Speaker 1: of retail at Devin Funds Management. 100 00:04:25,080 --> 00:04:28,279 Speaker 2: For more from Heather Duplessy Allen Drive, listen live to 101 00:04:28,360 --> 00:04:31,400 Speaker 2: news talks he'd be from four pm weekdays, or follow 102 00:04:31,440 --> 00:04:33,200 Speaker 2: the podcast on iHeartRadio.