Lots of eyeballs were on Warby Parker’s direct listing this week. And the DTC darling delivered: Its stock price soared 36% in its Wednesday debut to close at $54.49, giving the company a $6+ billion valuation.

• There was a slight dip yesterday, with Warby ending the day at $53.05.

The strong showing could be a positive bellwether for the slew of online brands that have recently filed to go public, said Daniel McCarthy, assistant professor of marketing at Emory University’s Goizueta School of Business.

• A shortlist includes Allbirds, Fabletics, and Rent the Runway.

“The success that Warby Parker had with their IPO, it sends a signal to a lot of other companies that the market is receptive in general,” McCarthy told Retail Brew.

A numbers game: Still, the $6+ billion valuation surprised McCarthy, who said a figure around $2.5 billion was more in line with his expectations. Nevertheless, he does believe Warby Parker has an edge over most DTC brands.

How so? The company’s customer acquisition economics are favorable, in McCarthy’s view, as the first buy is profitable and Warby’s shoppers keep coming back.

• Earnest Research noted that Warby’s customers spend an average of $200, and repeat shoppers made up 42% of its base in 2020, up from 38% in 2019.

“They’re not really taking any risk when they acquire customers. All the repeat behavior, all the repeat purchases that they can get, it’s all just kind of icing on the cake. The second great thing about the unit economics is there’s a lot of icing on the cake,” McCarthy explained.

Warby’s IRL footprint is another positive differentiator, he noted. The company is adding up to 35 stores this year, bringing its fleet up to ~160; store sales accounted for roughly two-thirds of revenue pre-pandemic, whereas now the split is about 50-50.

• McCarthy did flag that despite Warby’s DTC start, its focus on stores might mean it could have had a “harder time growing [online]...with great economics.” (Dave Gilboa, Warby Parker’s co-CEO and cofounder, told us in June that e-comm sales were “north of 100% YoY for most of the pandemic.”)

Looking ahead: McCarthy is keeping an eye on Allbirds’ upcoming debut, a company whose economics he said aren’t as healthy as Warby’s.

“If [Allbirds is] received well, I think that could be an indication that the market is just very positive on companies like this, even when their underlying fundamentals aren’t so strong,” McCarthy said. “If Allbirds has more trouble, then I think it points to kind of this interesting bifurcation that [investors are] willing to kind of give a pass to high-quality companies, but maybe not so much in companies where the fundamentals aren’t quite as strong.”—KM

More than 820 stores and no website? In this economy? Yes, HomeGoods built its biz with decorative pillows and no e-comm operation. But this week, the retailer began selling its home decor on a website.

Parent company TJX has long preserved the HomeGoods brick-and-mortar treasure-hunt experience with well-stocked, seasonally shifting aisles. When TJX temporarily shuttered 4,500+ global stores in 2020, CEO Ernie Herrman made it clear that he didn’t want that to impact the company’s reliance on physical retail. “We will not look to e-commerce as our major leveraging point to get us through Covid,” he said last May.

Months later, in November, HomeGoods announced its forthcoming online storefront. TJX also owns discount chains like T.J. Maxx and Marshalls, both of which were slow to pivot online.

• T.J. Maxx started a website in 2013, and Marshalls embraced e-comm just a few years ago, in 2019.

On the hunt: Sales of furniture and home goods accounted for almost 12% of total e-commerce in the US, according to 2021 estimates. But Wayfair and Amazon have been behind most of those transactions, controlling 42% and 34% of all online furniture sales, respectively.

HomeGoods has to clean house and catch up to compete online.

“Balancing a frictionless shopping experience with the ‘right’ amount of friction [that] the consumer enjoys...scavenging for a deal or unique item...will be essential,” Kearney partner Timothy Derr told Retail Brew. “They need to start with a full assortment...The more they help the consumer piece together products to achieve their vision, the better.”—JG

We’re saying hello to October and leaving Q3 behind us (no doubt retailers wish it were that easy to deal with supply chains). You might have caught Morning Brew’s recap yesterday, and we thought it’d be fun to highlight a few of our most popular stories from the last three months:

• A look inside Jokr, the rapid grocery-delivery company
• ReviewMeta wants to helps online shoppers reality check shady Amazon reviews
• The rise and fall of the metal straw—and the reusables vying to take its place
• Etsy sellers eye a hot new accessory: vaccine card holders
• “A new company”: New Balance’s CEO on the company’s tech adoption blitz

Enjoy the weekend reading in between bids for Home Depot’s 12-foot-tall Halloween skeleton.—GT

Today’s top retail reads.

Facing the future: With Sephora linking up with Kohl’s (and Target welcoming Ulta), JCPenney has given its beauty strategy a makeover. (WWD)

Close ties: Global supply chains don’t seem like such a great idea anymore for fashion brands that are struggling with shipment delays and surging costs. So, companies like Benetton and Hugo Boss are moving things closer to home. (Reuters)

Shake it up: James Bond’s brand partnerships are moving from old-school favorites to newer names. (Glossy)

Tune in: What do major brands including Big Face, Bombas, Lounge Underwear, and Mented Cosmetics think about the future of commerce? Find out at Shopify’s Commerce+ livestream event on October 13. Register for free today.*

^{*This is sponsored advertising content}

Catch up on the Retail Brew stories you may have missed.

• Surveying if consumers are embracing cannabis as shoppers
• The supply-chain crisis could dampen the holiday season
• Say hello to TikTok Shopping

Three of the stories below are real...and one is most definitely not. Can you spot the fake?

1. Eminem opened up a restaurant in Detroit named “Mom’s Spaghetti.”
2. The songwriter royalties for Folgers’ iconic jingle (just try not to sing it) sold for more than $90,000.
3. Domino’s has teamed up with Chipotle to introduce burrito-style pizzas.
4. Meanwhile, Krispy Kreme and TGI Friday’s Japan have collabed on a “doughnut burger.”

Keep reading for the answer.