AMDP Investment Proposal: Warby Parker

 Date: 14 October, 2024

To: Anima Mundi Development Partners: Investment Team

From: Leo Lu, R&D, AMDP

Subject: AMDP Investment Proposal in Warby Parker

The company that I am proposing an investment in is Warby Parker, a sustainable eyewear company that emphasizes their commitment to social responsibility. It was founded in 2010, and the headquarters are based in New York City, New York. 

Warby Parker sells prescription glasses and sunglasses within its retail locations and online through its website. Warby Parker disrupted the market by making fashion and affordability coincide while making certain that accessibility would extend to people in need. Their major commitment to being socially conscious and a sustainable company is the "Buy a Pair, Give a Pair" program. For every pair of glasses sold by the company, it gives a free pair to needy people through its nonprofit partners. To date, it has donated over 15 million pairs of glasses to needy people in underserved communities from around the world.

This model not only caters to the needy - an estimated 2.7 billion people around the world need glasses but do not have access to them - but it also places Warby Parker among the forerunners of companies involved in social entrepreneurship. By investing in Warby Parker, we contribute to and support a company that is very much involved in closing up the gap of accessibility, enhancing its reputation and customer loyalty hence ensuring sustained long-term financial growth.

Warby Parker has pledged commitment to reducing environmental impact through various green initiatives. These include using sustainable materials, such as cellulose acetate, in composing its products, which are biodegradable and, therefore, less harmful to the environment than traditional plastics. Warby Parker also acts upon carbon offsetting to lower and mitigate its carbon footprint. By showing that they are into sustainability, Warby Parker looks at an increasing crowd of environmentally aware consumers, and this makes it a strong candidate for us as a socially responsible investment.

Apart from their very strong donation model, the company partners with nonprofit organizations to provide education and visual care. Warby Parker's mission statement says it partners with the nonprofit social enterprise called VisionSpring, describing that the organization "creates access to affordable eyewear for those living on less than $4 per day, raises awareness about common optical issues, conducts vision screenings, and sells highly subsidized eyeglasses in low-income communities." Emphasizing assistance for those in need really lets customers see that the company truly has ethical motives and concerns, something that would entice certain consumers into making certain purchasing decisions.

Their direct-to-consumer model is disrupting the conventions of traditional eyewear. This, in turn, allows for extremely high-quality, affordable eyewear for a fraction of what this industry can provide. Ease of convenience through online platforms and an amazing retail experience develop an enhanced customer experience with personalized overall service. With the trend really leaning increasingly toward online shopping, Warby Parker finds itself at the head of buying glasses online. Already it has been huge online, and with this innovation in business and a strong online presence comes a well-positioned investment, and on the direct side, great financial returns.
In its second full year as a publicly traded company, Warby Parker netted $71.7 million in 2023, 12% higher than their net revenue was in 2022. Another 40 retail locations were opened in the US in 2023. While the social and environmental considerations should be factored and considered strongly, financial performance is at the forefront of any investment decision. Warby Parker does both, and it also has shown phenomenal growth on the financial side of the company. This year-to-year growth should continue to happen as the company expands its retail presence and the growth of its online platform. In addition, the increasing demand for fashionable yet reasonably priced eyewear makes Warby Parker continue to be in demand by the end consumer. If one were to think about the eyewear industry, Warby Parker has an outstanding brand image.

Other industrial sources echo similar sentiments. As Business Insider summarizes, "however you go about it, you'll always have the support of Warby Parker stores for adjustments, exchanges, and returns. Warby Parker has the most flexible and consumer-friendly business model in the eyewear industry." Another well-respected source in the industry, USA Today, also notices that "These are some of the best frames that we've tested. One of the biggest things I've noticed about online glasses retailers, especially those that offer trendy frames, is that some quality can be sacrificed at the level of little details, but Warby Parker really nailed all the little stuff." Speaking to the overall view across the eyewear industry, Warby Parker nails all the important details. We fundamentally believe that an investment in Warby Parker is fully aligned with our commitments to socially responsible investments.

This is a strong social investment, with focuses on accessibility, sustainability, and social impact from this company; an innovative business model meets our financial expectations with strong financials. Besides, the growth opportunities with an investment in Warby Parker are quite great too. This investment can be made possible because we are an expanding company with increasing net revenue year to year, in which we can invest in a profitable brand that is in alignment with our team's values and commitments. Due to their pledge to being a sustainable and socially responsible company, I propose the significant investment to Warby Parker. I truly believe this will make for an excellent addition to our investment portfolio.

Definitions

Triple Bottom Line

The Triple Bottom Line is a sustainability framework that can measure a business's success in three emphasized areas: profit, people, and the planet. This framework shows social, environmental, and financial performance. This framework is based on the idea that companies should think about the impact of their decisions on people, the planet, and profits in an equal manner. This can also be used to inform ESG (environmental, social, governance) initiatives, which investors often use to consider investment decisions.

Corporate Social Responsibility

Corporate Social Responsibility is a broader business model that keeps companies accountable when thinking about their impact on society as a whole. It measures both negative and positive contributions to the economy, the environment, and community. When thinking of CSR initiatives, topics like supply chain transparency, sustainability, and philanthropy are popular within companies. Keeping CSR as a priority can lead to improved customer loyalty, brand perception, and an overall better financial performance.

Social Enterprise

A social enterprise is a business that sets out to address social or environmental issues, utilizing its profits to achieve that mission. These social objectives are their primary purpose. Their endeavors, however, must be financially stable, otherwise they are reliant of subsidiaries and tax dollars, which is difficult to rely on.

Carbon Footprint 

Carbon Footprint is the total amount of greenhouse gases that an organization emits into the atmosphere. When thinking of the carbon footprint for company objectives, companies want to limit their carbon footprint to improve the environment, as it is a key indicator of a company's environmental impact. This can be calculated by adding up all greenhouse gas emissions. It's important to reduce this as it helps the company lower greenhouse gas emissions.


Works Cited

https://online.hbs.edu/blog/post/what-is-the-triple-bottom-line

https://online.hbs.edu/blog/post/types-of-corporate-social-responsibility

https://hbr.org/2015/05/two-keys-to-sustainable-social-enterprise

https://www3.epa.gov/carbon-footprint-calculator/

https://www.warbyparker.com/buy-a-pair-give-a-pair

https://www.businessinsider.com/guides/style/warby-parker-review

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