Eyewear maker’s direct listing shows investors still interested in popular, and unprofitable, direct-to-consumer brands
Unlike traditional initial public offerings, companies that go public through direct listings take their shares to the stock market without bankers, who set the opening price and line up buyers. Gaming company Roblox. After Warby Parker is one of several high-profile direct listings this year Corporation
Streaming Platform Spotify Technology To
and cryptocurrency exchange Coinbase Global Inc.
Warby Parker, which is unprofitable, is on track for $535 million in revenue this year. More than a year after Casper Sleep, its initial reception hasn’t completely piqued investor interest in growth-focused, unprofitable direct-to-consumer retailers. Inc. NS
In the direct listing, registered shareholders, including executives and employees, were able to sell 92.5 million Class A shares. The Company will not receive any income from those sales or direct listings.
Co-founders and co-CEOs Neil Blumenthal and David Gilboa said in an interview that their motivation for the listing was not to raise funds, but to raise Warby Parker’s public profile and to show that companies can have a positive impact. can be successful.
“Our motivation is to make a very direct positive impact, but also to inspire other businesses and entrepreneurs to think along the same lines,” Mr. Gilboa said. “Being public and being transparent about your business to the broader market is an opportunity to do that.”
The company is one of several planning to enter the public markets this year with a “mission-driven” approach to for-profit business, including shoe brand Allbirds Inc., and food maker Chobani LLC. Warby Parker has helped distribute over eight million glasses through its “buy a pair, give a pair” program.
Still, potential investors will focus more on the company’s performance. According to the company’s filings with the Securities and Exchange Commission, Warby Parker reported $270.5 million in revenue and a loss of $20.4 million for the six months ended June 30.
In 2020, the company generated revenue of $393.7 million with a loss of $55.9 million. The eyewear maker reported a loss of $370.5 million in revenue and $57.5 million for 2019.
Warby Parker was founded in 2010 and offers a selection of eyeglasses, sunglasses, contacts and eyewear accessories. The retailer later launched as an online-only brand before expanding into physical stores. As of June 30, it had 145 retail stores, according to the company’s filings.
According to the company’s filing, half of Warby Parker’s total sales came from digital channels in the first six months of this year, versus 60% in 2020.
The company is spending heavily on marketing with sales, general and administrative expenses accounting for about 70% of its revenue. It also faces competition from large eyewear vendors such as Ray-Ban, Lenscrafters and EssilorLuxottica SA, which owns other brands.
Even Warby Parker’s governance structure is tied to its mission, its leaders said. Messrs. According to an SEC filing, Blumenthal and Gilboa will both have supervoting Class B shares, which would give them 48% of the company’s voting power if the retailer goes public.
“This will ensure that we live our values every single day and continue on our path towards achieving our mission,” said Mr. Gilboa. “We do not expect to use that power to make any decisions that would be against the interests of any of our stakeholders or shareholders.”
Public companies whose founders have supervoting shares are protected from pressure from other investors. lift Inc.,
google parent alphabet Inc.
and snap Inc.
are among the public companies that have established supervision structures to give control to their founders.
Warby Parker raised $245 million from private investors last fall, leading to a $3 billion valuation. The company said in its SEC filing that it had previously sold shares for $24.53 each in a private transaction. According to FactSet, the brand has raised $572 million in venture capital since 2011.
Warby Parker listed its shares on the Big Board under the ticker symbol WRBY.
Charity L. Scott at [email protected]