- Eyewear start-up Warby Parker is set to launch a direct listing on Wednesday morning.
- The stock will trade on the New York Stock Exchange under the ticker symbol WRBY.
- The NYSE set a reference price of $40 on Tuesday night based on past trades in private markets.
Eyewear start-up Warby Parker is set to begin business on Wednesday morning via a direct listing, testing investors’ appetite for a domestic direct-to-consumer retail name.
The stock will trade on the New York Stock Exchange under the ticker symbol WRBY.
Warby Parker joins names like Spotify, Roblox and Coinbase that have also gone public through a direct listing rather than an initial public offering. In direct listing, a company does not raise fresh capital from banks. Instead, it lists its shares on an exchange, and the shares begin trading at a price determined through negotiations between the company and public investors. Insiders are then able to sell shares whenever they want.
The NYSE set a reference price of $40 on Tuesday night based on past trades on private markets, but ultimately the publicly listed price was based on investor demand. This would give the company a market value of about $4.5 billion based on its outstanding shares. According to company filings, the company’s shares traded privately in April at $24.53.
When Warby Parker was founded in 2010, the company was initially sending glasses for customers to try on at home and keep what they wanted to buy. The company has expanded by opening stores, which has helped it balance the huge expenses that come with running a massive e-commerce operation. In 2019, it launched a line of daily contact lenses.
Dave Gilboa, co-founder and co-CEO at Squawk, said, “We have less than 1% market share in this huge category, and see huge tailwinds to grow our top line and our bottom line in the years to come. Huh.” Box” Wednesday.
“There are a lot of opportunities to grow our physical retail footprint, but our e-commerce offering can also be scaled up,” he said.
In recent years, Warby Parker sales have soared, but so have its disadvantages. Its net revenue increased from $370.5 million in 2019 to $393.7 million in the fiscal year ended December 31, 2020, according to documents filed with the Securities and Exchange Commission. Warby Parker was also broke two years ago, but in 2020 its net loss totaled $55.9 million.
In recent months, Warby Parker has consistently lost money. It lost $7.3 million in the six months ended June 30.
One of the glasses maker’s biggest investments in the coming years will be in brick-and-mortar development, which Warby Parker hopes will drive earnings. While it anticipates that revenue will continue to grow, the company has yet to disclose when it could turn profitable.
The company is planning to open 30 to 35 new stores by the end of FY 2021, taking its total number of stores to around 155 to 160.
Although its stores were temporarily closed during the pandemic, Warby Parker has benefited from such a strong digital presence. Many consumers are still shopping more online. According to the company’s filing, nearly 50% of Warby Parker’s sales came from digital in the first six months of this year, compared to 60% last year.
“Ultimately we don’t care where the customer transacts,” Gilboa said. “We just want to make sure they have the best experience possible.”
Warby Parker is also looking to grow into categories beyond specs. Last year, about 95% of its sales were glasses, while 2% came from contact lenses, 1% from eye tests and 2% from eyewear accessories.
Neil Blumenthal, co-founder and co-CEO, sees massive opportunities in those other categories.
“Contact lenses are 2% of our business, but it’s a $5 billion plus market,” he said. “Even with an eye-opening … 1% of our business, but it’s more than $5 billion-dollar [market]. Huge opportunities for us in the future.”
For its fiscal third quarter ending Thursday, Warby Parker sees net revenue between $131 million and $133 million, which would represent growth of 26% to 28% from 2020 levels.
For the year, it expects total sales of $532 million to $537 million. In fiscal 2022, Warby Parker estimates that net revenue will grow at least 25% from 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 developing. Please check back for updates.
warby parker a four times CNBC Disruptive 50 company.
Sign up Head to our weekly, original newsletter, which goes beyond the annual list, offering a closer look at the disruptive 50 companies and founders who continue to innovate in every sector of the economy.