Warby Parker IPO Would Tap Dual Specialty Retail And D2C Trends

Confidential filings, we note, mean that firms don’t have to disclose their financials publicly, which also means that investors (and competitors) don’t get a sense of the financials, or whether black ink or red ink marks the bottom line.  But the filing itself indicates that management is looking to ride the tailwinds of the great digital shift to eCommerce — and, perhaps, of the consumers’ continuing propensity to spend.

The confidential filing should come as no surprise.

As noted in this space earlier in the year, the company had gone through six separate rounds of fundraising through the past 10 years, with the last round early in 2020 reaching a $3 billion valuation. As reported by Fortune, the company became EBITDA profitable (a rough measure of cash flow) as of last year, for the first time since the firm was founded in 2010.

Beyond the roughly 130 brick-and-mortar locations in place across North America, the firm has focused its efforts on D2C. In evidence of that strategy, Warby Parker has a “Try 5 for Free” program in place that allows customers to try on five pairs of glasses that are shipped directly to them, and then they can decide to keep only the ones they want. There are also virtual “try on” features that help consumers see how they’d look in a given choice of frames.

But there are competitive shots across the bow in the specialty eyeglass space. Eyewear retailer EyeBuyDirect, which has grown its digital presence and product availability, said last month that it would roll out a new store on Amazon.  Drilling down a bit, the company said it will provide 15 non-prescription blue-light-blocking glasses that have “EBDBlue Plus lenses,” in addition to 16 sunglass styles. Prime members can make their selection and receive the glasses in two days. Other types of glasses, such as frames and lenses for reading glasses, will be available by the end of this year.

The pandemic has certainly spurred an embrace of the D2C, browse-ship-keep what you want model. As noted earlier this year, TryNow landed $12 million in a Series A round. The company’s technology lets shoppers check out for free and test a variety of products in their own residences. They can send back the items they don’t want and just pay for what they don’t return.

“Removing uncertainty before purchasing allows brands to unlock the power of in-store retail for consumers — all from the comfort of their own homes,” TryNow Founder and CEO Benjamin Davis said upon the news of the March funding.

The in-home retail experience, as it might be termed, may prove to be sticky. The latest findings of the PYMNTS New Retail Landscape study show that more than 72 percent of “digital shifters” plan to maintain at least some of their digital/online shopping activities. This leaves room for the D2C model to thrive, and also opens the possibility that they will shop on-site, which benefits the hybrid model on display with Warby Parker. As recently as April, it was estimated that globally, consumers have $5.4 trillion stockpiled, buoyed by stimulus payments, and would conceivably be ready to put that money to work in the economy in online and offline channels.