Eyewear startup Warby Parker is due to start trading Wednesday morning with a direct listing, testing investor appetite for retail for home consumers.
The shares will be listed on the New York Stock Exchange under the ticker WRBY.
Warby Parker joins names like Spotify, Roblox, and Coinbase, which also went public through direct listing rather than initial public offering. With a direct listing, the company does not raise new capital from banks. Instead, he lists his shares on an exchange and the shares begin to trade at a price negotiated between the company and government investors. Insiders can then sell the stock whenever they want.
The New York Stock Exchange set a reference price of $ 40 Tuesday night based on previous trading in private markets, but the publicly quoted price was ultimately based on investor demand. This would give the company a market value of about $ 4.5 billion based on the shares it placed. The company’s shares traded privately at $ 24.53 in April, according to company reports.
When Warby Parker was founded in 2010, the company first sent glasses to customers to try them on at home and keep what they wanted to buy. The company expanded with store openings, which helped offset the huge costs associated with launching a major e-commerce business. In 2019, she launched a line of daily contact lenses.
“We have less than 1% market share in this huge category and are seeing huge tailwinds that will allow us to increase our revenue and profits in the coming years,” said Dave Gilboa, co-founder and co-CEO, at Squawk. Box “Wednesday.
“There are so many opportunities to grow our physical retail presence, but also to scale our e-commerce offering,” he said.
Warby Parker’s sales have grown in recent years, but losses have also increased. Its net revenue for the fiscal year ended December 31, 2020 rose to $ 393.7 million from $ 370.5 million in 2019, according to filings with the Securities and Exchange Commission. Warby Parker paid off two years ago, but in 2020 it had a net loss of $ 55.9 million.
Warby Parker has continued to lose money in recent months. In the six months ended June 30, he lost $ 7.3 million.
One of the eyewear maker’s largest investments in the coming years will focus on growing eyewear production, which Warby Parker hopes will help boost profits. While he predicts revenue will continue to grow, the company has yet to reveal when it will become profitable.
By the end of fiscal 2021, the company plans to open 30 to 35 new stores, bringing the total number of stores to 155–160.
Although its stores were temporarily closed during the pandemic, Warby Parker benefited from such a strong digital presence. Many consumers are still making more purchases online. According to company reports, roughly 50% of Warby Parker’s sales were digital in the first six months of this year, up from 60% last year.
“In the end, we don’t care where the customer makes the transaction,” Gilboa said. “We just want to make sure they have the best experience.”
Warby Parker also strives to develop not only in glasses, but in other categories as well. Last year, about 95% of sales were eyeglasses, 2% were contact lenses, 1% were eye exams and 2% were eyeglass accessories.
Neil Blumenthal, co-founder and co-CEO, sees scope for scaling in these other categories.
“Contact lenses make up 2% of our business, but this is a market with a turnover of more than $ 5 billion,” he said. “It’s the same with ophthalmology exams … 1% of our business, but that’s also a $ 5 billion plus.” [market]… Great opportunities for us in the future. “
In the third fiscal quarter, which ends Thursday, Warby Parker expects net revenues of $ 131 million to $ 133 million, up 26-28% from 2020 levels.
Annual sales are expected to range from $ 532 million to $ 537 million. Warby Parker estimates that net revenue will grow at least 25% in fiscal 2022 over the prior year.
In Warby Parker’s direct listing, registered shareholders will be able to sell 77.7 million Class A shares, but the company will not receive any proceeds from those sales.
This story is evolving. Please stay tuned.
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