Footwear retailer Allbirds announced Wednesday it will close all remaining full-price stores in the United States by the end of February, marking a decisive shift from its brick-and-mortar roots to a focus on e-commerce and wholesale partnerships.

The move is part of a broader turnaround strategy aimed at achieving profitability. CEO Joe Vernachio stated the company has been "opportunistically reducing" its physical portfolio over the past two years and that exiting these "unprofitable doors" is essential to support the long-term health of the business.

Founded as a direct-to-consumer (DTC) brand, Allbirds expanded into physical retail during the DTC boom, going public in 2021. However, rising costs and changing consumer habits have prompted a strategic reversal. The company will maintain a minimal physical presence, operating only two U.S. outlet stores and two full-price locations in London.

The retailer's financial performance has been under pressure. In its most recent quarterly report, Allbirds cited international distributor changes and store closures as key factors behind a 23.3% year-over-year decline in net revenue. U.S. store revenue alone fell roughly 20%.

The pivot underscores the ongoing challenges for digitally-native brands that expanded into physical retail. Allbirds' stock has fallen more than 80% over the past two years, leaving it with a market capitalization of approximately $32 million, as it now seeks a path to sustainable growth through a leaner, digital-focused model.