The Gen-Z intimates brand’s sale to a little-known strategic is the latest in an ongoing series of less than desirable exits for unprofitable digitally-native start-ups.
Brands like Warby Parker, Allbirds and Olaplex have successfully slashed digital advertising costs. Now they need to figure out new ways to find customers.
Cautious investors are finding safer bets in tech-focused platforms that create products for digitally-native brands over traditional DTC start-ups.
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Allbirds sales and profits have slipped amid its ongoing plan to streamline its business.
Warby Parker’s revenue jumped 14 percent to $170 million in the third quarter of the year, an increase propelled by 11 new store openings, product launches and higher sales of its contact lenses. But the company’s stock price still fell over 20 percent after the earnings release, as gross margins dropped to 55 percent from 57 percent a year earlier.
The buzzy, Gen-Z-founded intimates start-up, announced on Tuesday that it is set to be acquired by Ariela & Associates International, which owns the licence to Fruit of the Looms’ bra line. Terms of the deal were not disclosed.