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A Warby Parker store in The Standard, Los Angeles, California.
Michael Buckner | Getty Images
Eyewear brand Warby Parker has lost money or broken even in each of the past three years – and has warned it could face headwinds as it tries to turn a profit in as a state-owned company, according to documents filed Tuesday with securities regulators.
The retailer, which is best known for selling low-cost, cutting-edge eyeglasses, is gearing up to make its debut on Wall Street. He said in January that he had confidentially filed for a listing in the United States.
With its IPO, Warby Parker is expected to join a growing list of consumer brands soon to be marketed on Wall Street. Jessica Alba’s Honest Co. and medical scrub maker Figs were recently made public. Salad chain Sweetgreen has confidentially filed for an IPO and footwear brand Allbirds is reportedly gearing up for an IPO as well.
Over the past three years, Warby Parker’s sales have increased, but so have its losses. Warby Parker’s net revenues for the fiscal years ended Dec.31, 2018, 2019 and 2020 were $ 272.9 million, $ 370.5 million and $ 393.7 million, respectively, according to documents filed with the United States Securities and Exchange Commission.
Its net loss was $ 22.9 million in 2018 and $ 55.9 million in 2020. It broke even in 2019, the company told regulators.
Warby Parker said he has continued to lose money in recent months. She lost $ 7.3 million in the semester ended June 20. As of that date, the company had an accumulated deficit of $ 356.3 million.
“Because we have a short history of large-scale operations, it is difficult for us to predict our future operating results,” the company said on the record. “We will need to generate and sustain increased revenue and manage our costs to achieve profitability. Even if we do, we may not be able to maintain or increase our profitability.”
The direct-to-consumer brand, founded in 2010, originally sent glasses to its customers to try on in the comfort of their own homes. However, it has expanded beyond an online-only transaction, opening stores and allowing customers to pick up their purchases in person. The strategy could help the company reduce e-commerce spending from shipping to returns.
It has grown to more than 145 stores, according to the file.
Almost all of Warby Parker’s revenue – 95% for the fiscal year ended December 31, 2020 – comes from the sale of eyewear. Only 2% comes from contact sales.
In the filing, the company said it has unique advantages over its competitors. Among them, he said he generated a following of fans. On average, he said that customers acquired between 2015 and 2019 had a sales retention rate of around 50% in the first two years after their first purchase and a sales retention rate of almost 100% in four. years.
The start-up has won the trust of the heavyweights of Silicon Valley. It raised $ 120 million in its last round of venture capital funding in 2020, which was worth $ 3 billion, according to data from PitchBook.
Its shareholders will include some of those investors, Tiger Global, T. Rowe Price, General Catalyst, D1 Capital Partners and Durable Capital, according to the filing.
– CNBC Lauren thomas contributed to this report.
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