Warby Parker has successfully crossed over to the public side — now the company is its own hardest act to follow.
Shares of the eyewear brand shot up 36.2 percent to $54.49 in their direct listing on the New York Stock Exchange on Wednesday.
That gave the direct-to-consumer pioneer a market capitalization of $6.8 billion, above the reference valuation of $5 billion published late Tuesday and well ahead of its last private valuation of $3 billion, set last year.
The company went public via a direct listing, which allows existing shareholders to sell their stock on the open market instead of an IPO, which would create new shares that would be sold.
Regardless of the listing method, Warby Parker is now going to have to justify its big new valuation every day in the market as investors track its progress from buzzy newcomer to establishment player.
The company has about 1 percent of the U.S. eyewear market — a stat that can take on a glass half full, half empty dynamic.
Through the glass half full lens, the company can argue that it still has plenty of room to grow and that it has the brand and growth rate to justify big expectations.
On the glass half empty lens, critics argue that despite all the buzz and branding success and private funding, the company is still small and has yet to establish a steady stream of profits.
Over the long run, the market will decide which is the case.
For the six months ended June 30, Warby Parker’s sales jumped 53 percent to $270.5 million, but losses totaled $7.3 million. For the full year, the company has projected sales growth of up to 36 percent to $537 million, with the addition of 30 to 35 new stores for a total of up to 160 doors.
In its registration statement with the Securities and Exchange Commission, the company boasted of “Sustainable, Predictable Growth. Eye care purchases are predominantly a non-discretionary medical necessity; on average, for customers acquired between 2015 and 2019, we observed an approximately 50 percent sales retention rate within 24 months of their first purchase and nearly 100 percent sales retention rate over 48 months. We believe our retention is unique in the optical industry in that our customers come back to the Warby Parker brand repeatedly.
“By contrast, when customers in the optical industry typically replenish their glasses, we do not believe they are necessarily loyal to any particular brand,” the company said. “Given our brand’s strength and replenishment cycle, we believe we have significant opportunity ahead to grow our wallet share, and delight more and more customers.”
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