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Why Shoe Startups Are Making Sneakers From Wool

The economics of all-natural ingredients is helping new sneaker brands get a toehold in Nike's market.
Allbirds' footwear | Source: Allbirds
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  • Bloomberg

NEW YORK, United States — The perfect airport shoe is hard to come by. It should be stylish, cushioned but not overly sporty, and slip on easily. Tim Brown, a former professional soccer player from New Zealand, thinks he has the killer application for such a shoe: wool.

Today, Brown launched allbirds, an e-commerce sneaker brand selling one simple model: a foam and rubber outsole stitched to a single piece of merino wool. Dubbed The Wool Runner, the kicks come in four colors and are available only on the allbirds websitefor $95. It’s a shockingly spare shoe, but it passes the airport test. It’s sleek and cozy. It goes on and off with the ease of a slipper. And as feet swell, it gives without pinching, because the wool breathes and stretches a bit.

“It does all these amazing things for free that you can’t really get with synthetic fibers,” Brown said.

Allbirds is just the latest in a fast-growing cadre of brands spinning wool into sneakers. Baabuk, a Swiss startup, says a line of wool sneakers it launched in October is getting traction all over the world. In addition to a burgeoning online business, the brand said it is in talks about big orders from Backcountry.com and Recreational Equipment Inc.

Mahabis, a British startup, has drawn high praisefrom sneakerheads with a line of wool slippers that come with detachable polyurethane soles. Even Nike is getting into the game. Swoosh fans can now order eight Nike models in different wool fabrics supplied by Pendleton, an apparel brand based near Nike’s Beaverton, Ore., headquarters. Likewise, Converse launched a collaboration with Woolrich in November, stitching the company’s garish, fuzzy plaids in place of the standard canvas in its Chuck Taylor sneakers.

The wool sales pitch is pretty simple: It’s green, and it’s good. Wool is relatively lightweight, fairly tough, weather resistant, breathable and antimicrobial. Sheep, it turns out, aren’t that different from sprinters.

"It's a natural Gore-Tex," said Baabuk founder Dan Witting. "You know what the Bedouin, the nomads, wear in the desert? Wool."

It's also a novel and relatively inexpensive way for a new line of shoes to stand out in an increasingly crowded market. As sneakers jumped from the gym and the street to the office and the runway, the industry surged in step. "It’s not just an active item anymore; it's a huge, huge market," said Jaime Barr, senior footwear editor at WGSN, a fashion consultancy. "And material innovation is really going to be how you bring in the newness."

In the past year, the number of sneaker models for sale in the U.S. jumped 39 percent, according to WGSN. Joor, a digital marketplace connecting retailers with fashion brands, said one-third of the 1,500 labels on its platform now sell some form of athletic shoe. "Everyone is trying to do a sneaker, and it's taking share away from every other category," said Joor's founder and chief executive officer, Mona Bijoor.

Consumer demand is on pace. The U.S. sneaker business swelled 8 percent in 2015, according to the NPD Group. And the fastest-growing slice of the $17 billion market wasn't basketball hightops or running shoes; it was streetwear "classics," athletic shoes that aren't designed for any particular type of exercise. Call them brunch sneakers.

This is where the wool-shoe pitch gets interesting. Brown at allbirds believes there is a huge gap in the market between sporty sneakers from such companies as Nike and high-fashion sneakers that command more than $500. Here's the pitch for the latest wool shoes from Italy-based Superga: "Looking for fashion and comfort. ... Look no further."

Wool is just one of a rash of new materials that sneaker entrepreneurs are using to get attention in a bid for that large swath of consumers. “We’re seeing pony skin, snake skin, you name it,” said Matt Powell, an NPD sports industry analyst. “You want something no one else has — that's what drives the sneakerhead." Muroexe, a Spanish brand, is now making sneakers out of PVC and lycra.

Brown said big brands like Nike don’t use wool more widely because it is relatively expensive. Spinning up fibers and fabrics from petroleum offers a far better profit margin. It would be tough, however, for a sneaker startup to match Nike at its own game, using a massive research budget to cook up innovations such as Flyknit, a proprietary process that knits the upper of a shoe with a single fiber. Four years after introducing the process, Nike says it has more than 500 Flyknit- related patents.

There's no telling how much wool will weave its way into the shoe market, but early signs point to serious traction. Powell says the fuzzy fabric is particularly popular among millennials, who tend to favor sustainable products.

Allbirds, which  first started as a campaign on crowdfunding website Kickstarter, is the half-baked brainchild of a professional athlete trying to find something to do in retirement. In four days, the campaign had gathered $120,000, and Brown had a waiting list of 6,000 customers. Now, two years later, those folks will finally get a chance to buy the sneakers.

Brown has two warehouses full of his Wool Runners and funding to keep cranking out new models. Some $2.7 million of venture capital poured in when he pitched wool sneakers in New York and Silicon Valley. “We’re tapping into an innovation angle that’s very interesting,” Brown said. “We think it could be big.”

By Kyle Stock; editor: Alex Dickinson.

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