How Warby Parker evolved from an eyewear start-up to a sustainable company

If Dave Gilboa tracked his glasses better, Warby Parker might not exist.

In 2008, Gilboa lost a pair of $700 Prada glasses on a backpacking trip before starting his MBA program at the Wharton School of the University of Pennsylvania. There, he met classmates—Neil Blumenthal, Andy Hunt, and Jeff Ryder—who understood his frustration.

Within months, classmates were working on a solution that would eventually disrupt classes Nearly $150 billion Global eyewear industry. They co-founded Warby Parker, a leading direct-to-consumer brand that has sold millions of pairs of eyeglasses, both online and in 269 brick-and-mortar stores across the United States and Canada.

Warby Parker had revenue of about $670 million last year. It currently has a market capitalization of $1.79 billion, with Gilboa, 43, and Blumenthal, 44, serving as co-CEOs.

For most direct-to-consumer brands, the final and elusive piece of the puzzle is profitability, often due to razor-thin profit margins. Warby Parker is on the edge: It makes more money from brick-and-mortar stores than online, where in-store eye exams provide additional revenue, so it plans to steadily open more locations.

Industry analysts say the simple strategy should propel the company to a place of profitability and stability that has eluded many of its citizens — perhaps as soon as next year.

“The need for glasses and contact lenses continues to grow and grow,” Blumenthal tells CNBC Make It. “And we’re putting Warby Parker in a position to capitalize on that growth, to serve that very significant growing need.”

They hired a fashion publicist to raise awareness. Vogue magazine and GQ Writing about its launch, GQ magazine referred to it as “the Netflix of glasses.” Articles were published as soon as Warby Parker’s website went online, and the business was quickly filled with orders. The fledgling company achieved its first-year sales goals within three weeks.

Customers have been asking to visit Warby Parker offices to try on the glasses in person. So, after graduating and setting up headquarters in New York, the founders converted some of their office space into a showroom. “All of a sudden, we were on our way to getting $3 million [annual] “Sales is out of our office,” says Blumenthal, describing it as a “light bulb moment.”

Warby Parker opened its first store in Manhattan’s SoHo neighborhood in 2013. Last year, retail stores accounted for more than two-thirds of Warby Parker’s revenue, more than $440 million. The co-CEOs hope to eventually operate more than 900 locations.

“This year, we will open 40 stores, and we can plan to continue this rhythm for years to come,” says Blumenthal.

Warby Parker’s revenues have consistently grown each year, yet the 14-year-old company remains unprofitable. Blumenthal and Gilboa point to an adjusted EBITDA figure of – In the case of Warby Parker“Adjusted EBITDA” means excluding a series of non-recurring costs, charitable donations and tax-related expenses from the company’s bottom line — which amounted to $52.4 million last year as evidence of financial viability.

That’s actually a fair assessment, says Anthony Chukumba, managing director and analyst at Loop Capital, an investment bank and advisory firm. “The company has no debt at all, and generates free cash flow so it can fund continued growth,” he says, adding: “Warby Parker will be solidly profitable, from a net income perspective, by next year.”

Blumenthal and Gilboa plan to make Warby Parker a “one-stop vision care company” by turning the stores into a “one-stop shop” for customers’ eye care needs, Blumenthal says. Recently Earnings callBlumenthal noted that adding eye exams to retail stores helped increase Warby Parker’s average revenue per customer by more than 9% last year.

Active customers also rose: the company did just that More than 2.3 million of which in 2023, an increase of 30% since then 2019According to a Make It analysis of Securities and Exchange Commission filings.

But compared to industry giants, Warby Parker remains small. EssilorLuxottica, the Italian-French eyewear company behind Ray-Bans and Oakley, brought in more than 28 billion dollars In sales last year. Blumenthal insists there is plenty of room for growth within the huge global eyewear market, which is why he doesn’t hesitate to set the company’s next ambitious target.

“We want Warby Parker to be one of the most beloved brands in the world,” he says.

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