BC Business
Kits Eyecare customers have some 2,000 different offerings to pick from
The co-founder and chief operating officer of a company with a market cap of over $200 million is pounding away on a keypad by a warehouse door outside of Vancouver’s Broadway Tech Centre in the middle of an absolute downpour. The code that Joseph Thompson is trying to jam into the system isn’t working. After a dozen apologies and a quick phone call, we’re inside. “You changed the code on me!” Thompson says playfully to operations manager Craig Culpan.
“You can never be too careful,” says Culpan, a former member of the Canadian national rugby team, through a thick New Zealand accent.
Thompson would probably agree with that general assessment. In 2018, Roger Hardy, founder of Coastal Contacts and its well-known Clearly brand (which he sold to French optical firm Essilor for $445 million), recruited Thompson and president Sabrina Liak to help him launch a new company, Kits Eyecare.
Hardy, Thompson (who has a background in e-commerce with companies like Procter & Gamble and Amazon) and Liak (former managing director at Goldman Sachs) took their time, starting with contact lenses and using that core of vision-corrected customers to move to glasses.
“One of the tricks of the industry is that you have to start with the manufacturing,” Thompson tells me at the company’s downtown offices before we make the journey east to the warehouse. “It’s counterintuitive, because you’d like to learn how to sell 100 or 1,000 pairs of glasses before investing millions in a lab. The problem is that if you do it that way, you’ve built a marketing or retail organization, and the profit is in the lens. Before we sold our first pair of glasses, we put a couple million into the first version of our lab.”
When you do that, you get to dictate the price point. And Kits has been able to produce a quality product at a dollar value (most pairs of glasses are $28) that’s below most, if not all, of the online competition. That still raises the question of how an eyewear company can turn a profit when many people have only one or two pairs of glasses. But Kits has a larger goal: to change customers’ behaviour.
“We have this incredible offer of putting quality glasses in front of you for a low price,” says head of product design Edita Hadravska, a former design director with Arc’teryx and Aritzia. “So you start treating them as your scarf. Glasses go in the middle of your face—why wouldn’t you play with them, have different colours and looks? We’re not in this to create planned obsolescence.”
From a marketing standpoint, the company has gifted pairs to influential Canadians like Jillian Harris and Love It or List It’s Todd Talbot, and also done referral partnerships with community figures that champion the brand, like Jason Prevost, manager of restaurant Nook (which has a location in Vancouver’s Kitsilano neighbourhood, where Kits’s brick-and-mortar store is, of course, located). “It’s about finding the right people who are glasses wearers and are authentic and genuine,” says senior partnerships manager Katie Dempsey. “But the product really does speak for itself.”
Kits closed its $55-million IPO in early 2021 and initially traded at $8.50 per share on the TSX. That price dropped to a low of just over $2 a year and a half later, but it’s rebounded since. In late March, the company was trading at around $6.50 a share. “We’re coming up on a million active customers and have been profitable the last four quarters in a row,” says Thompson.
The market opportunity, according to Thompson, is large: to the tune of around $80 billion in the U.S. and $10 billion in Canada. “There aren’t that many industries left that need to be simplified,” he said. “Our mandate is to make eyecare easy.”
To that end, there’s the lab. There’s little wonder to why Culpan changed the code—the 33,000-square-foot warehouse is packed to the brim with equipment, tools and merchandise, all stored with a neatness and precision that would make even the most ardent Marie Kondo disciple blush.
Culpan worked with Thompson at Vancouver-based home improvement e-commerce firm BuildDirect for just over two and a half years. “Joe called me, he was crying, telling me he missed me,” Culpan jokes.
Culpan moves his massive figure around the place quickly and with purpose as he showcases the different sections (frame and lens picking; assembly and QA; machine surfacing, cutting and edging; and shipping). Customers have some 2,000 different offerings to pick from, and Culpan and his team of around 80 lab employees keep track of all the orders diligently, with the goal of getting product to doors within 24 hours of purchase.
There’s also a corner of the lab created by Hadravska in which the design team can work on new models of frames and see them come to life in real time.
“There’s always a case [for offshore manufacturing]—some of those facilities in China and other places are fantastic,” Thompson says. “But there’s something about having a manufacturing facility close by… it feels different when you have designers working on glasses next to where folks are QAing and assembling them versus doing it over FaceTime with a 12-hour time difference.”
Later, in his car, as the windshield wipers work furiously to keep the view clear, Thompson is reflective when asked whether there’s pressure in running a publicly traded company with around 150 employees. “For sure there is, and you feel it,” he says. “That’s part of it. It is scary. You have the well-being of a lot of people in your hands. But we think we can do right by them.”