If you need a new pair of glasses, you might think you have lots of choices. You could go to LensCrafters or Pearle Vision, maybe pick out a new pair of Ray Bans or Oliver Peoples, and then check the price tag. It can easily soar over $300 -- just for the frames. That’s largely because there’s a lot less competition than you might think. All those brands are owned by Luxottica, an Italian company that also owns Sunglass Hut, Oakley, and produces frames for companies like Chanel and Versace.
A company called Warby Parker is trying to change the prescription for the eyewear industry. It might seem niche at first. It sells a monocle. Yes, mostly ironically, but this is a company that appeals to hipster-types who may or may not have handlebar mustaches. Its frames tend to be thick-rimmed like something Buddy Holly wore. Its name comes from Jack Kerouac characters. But it was born out of frustration by the high cost of frames.
“It didn’t make sense that glasses should cost as much as an iPhone,” says Neil Blumenthal, who founded Warby Parker in 2010 with a few Wharton business school friends. Their answer to the price problem: high-quality glasses for $95 including lenses. Warby Parker designs the frames itself and sells online, undercutting established brands that markup prices up to 20-times more than the cost.
It’s a formula co-founder David Gilboa hopes will do to Luxottica what Amazon has done to bookstores.
“Luxottica has done a great job of creating the illusion of choice,” Gilboa says.
A Luxottica spokesperson declined to comment. While there are a number of eyewear companies, Luxottica is the biggest player with about 30 percent of the U.S. market, according to IBISworld.
Luke Williams of the Stern School of Business at NYU says Warby Parker’s model is daring, as it tries to upend an industry that many didn’t think was broken.
Warby Parker glasses aren’t available in many bricks and mortar shops. Instead, it has a home trial program, shipping up to five frames for free.
“They’re basically bringing the store to you,” Williams says.
To hone its image, the founders set the company’s headquarters in SoHo, New York’s capital of fashion. Its open office is research and design, marketing, and a call center all in one.
The company has grown to nearly 130 employees and has raised $55 million in venture capital from big names like Ashton Kutcher. It’s not yet profitable, but it’s sold at least a few hundred thousand frames and is growing fast, though it’s still a tiny player in a $9 billion retail market.
“Warby Parker by actually combining high fashion with reasonable price offers a much more potent threat to other companies like Luxottica,” says Christopher Marquis of Harvard Business School, who wrote a case study on the company.
K.C. Ifeanyi, a grad student, recently ditched his Ray Bans. For less than the cost of that Luxottica frame, he’s bought three Warby Parkers.
“Once I saw the style of the frames, and saw that they were $95, I thought, okay, this could really work,” Ifeanyi says.
One way to know if Warby Parker is changing the eyewear business is if a company like Luxottica copies the model. And, that’s a big risk for Warby.
“And, when that happens, Warby Parker are going to have to disrupt the model again,” Williams of NYU says.
And, Warby Parker plans to take on bricks and mortar stores soon, opening a showroom in SoHo this year right across from the Apple Store.