Yahoo Finance Vera Bradley Aims to Restore Profitability With ‘Complete Transformation’
Vera Bradley learned the hard way that not everybody wants one of its signature cotton quilted print bags.
“Obviously, we’ve had some struggles here,” Jacqueline Ardrey, president and chief executive officer of Vera Bradley, said to WWD.
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But in the 19 months since she’s been running the publicly traded, Fort Wayne, Ind.-based Vera Bradley, there’s been some serious soul searching and plotting for a better future.
“We conducted this really comprehensive analysis of the business, looking at sales data, customer demographics, competitors, macroeconomic challenges and industry trends, and that all resulted in a conscious pivot to reposition and refresh this brand, to ensure long-term growth for years to come,” said Ardrey, during an interview earlier this week. “If you look at the market for cotton, printed, quilted bags, we probably had most of it. But we learned we were defining ourselves too narrowly.
“[On Thursday,] we pull the switch.”
That’s when Vera Bradley unveils its “New Day” program of sweeping change ranging from introducing “elevated,” more modern handbag styles and fabrics and refreshed web and store experiences, to reintroducing catalogues, bolstering the marketing and even updating the logo.
To further raise the profile, actress Zooey Deschanel has been tapped as brand ambassador. “She’ll be front and center in all our campaign marketing for the rest of the year,” Ardrey said.
“We’ve carefully coordinated the launch of new and elevated products, updated the branding, stores have been repainted and refixtured and we’ve added new graphics,” Ardrey said. “There is less clutter, less stacking of merchandise.…If you were in one of our stores on Wednesday night and you came again on Thursday, it’s completely different. Everything came off the floor and replaced with a whole new assortment.” Asked what’s currently selling best, Ardrey replied, “We continue to see strong sales in travel items, for example the Weekender travel and duffel bags, along with our traditional bestsellers like backpacks. We’re also seeing a demand for fashion items like our beaded bag collection that sold out in less than one week.”
Seasonal catalogues are being reintroduced and distributed to homes, reversing years of gradually phasing them out. “We’re expanding and prioritizing upper funnel media such as OHH [out-of-home] including billboards in Times Square, Lincoln Tunnel, the Chicago Metra [train system] and in major airports, in print, in digital and on CTV [the television network in Canada],” the CEO said. “And, we will certainly be leveraging brand ambassadors on social media to reach new audiences,” starting with Deschanel. Next month, the strategy extends to the Vera Bradley outlets, with new styles and renovations, Ardrey added.
“It’s a complete transformation.”
Vera Bradley was founded by 42 years ago by friends Barbara Bradley Baekgaard and Patricia R. Miller who sensed a void for fashionable travel bags and luggage. What they saw in airports they felt was boring. The company specializes in handbags, travel bags, backpacks, blankets and gifts, and is upping the percent of handbags in the assortment, though Ardrey declined to specify how much each category represents as a percent of the total assortment.
Vera Bradley operates 40 full-line stores, 80 outlets, verabradley.com, as well as the Pura Vida jewelry and accessories brand which is not linked to the New Day program.
Last quarter, Vera Bradley reported a net loss of $8.1 million, compared to a net loss of $4.7 million in the year-ago period. On a non-GAAP basis, the loss was $6.5 million, compared to $2.6 million in the year-ago period. Revenues totaled $80.6 million compared to $94.4 million in the prior year.
“We expect to see profitability in the back half of the year,” Ardrey said.
Last year, net income totaled $7.8 million, compared to a 2023 loss of $59.7 million in 2022, though earnings over the last five years or so has been declining. The stock has been trading around $5.90 and has a 52-week high of $8.35.
Challenges notwithstanding, Ardrey, who previously served as president of home furnishings and seasonal decor at catalogue company Grandin Road, said, “For the size of this company, there is high brand awareness, and really positive sentiment. The foundations of the company are strong,” she said, adding that it operates with discipline, has a “highly engaged” team, strong balance sheet with no debt and a “robust” technology platform.
“A lot of times when you come into a turnaround, some of those foundations are not so strong. We did have those strong foundations to build upon so we can really concentrate on the front end.”
The company has strengthened its focus on 35- to 54-year-old women who are shopping for herself, her daughter and her mother in a lot of cases, Ardrey said. “Focusing in that range is where we want to be. We used to say we were eight to 80. We were just too wide.”
With the New Day changes, the assortment is “still very recognizable Vera Bradley,” Ardrey said. “But there’s a lot of new, intriguing, upgraded, improved fabrics, leathers and color, and certainly the prints and our quilted cotton printed bag that we’re known for but there are lots of other more popular and modern silhouettes and fabrics.” There are also less choices, for easier shopping. A less is more approach.
The logo, the CEO explained, is inspired by the stems of the flowers Vera Bradley researches to develop its floral designs and colors. The new logo is green, rounded and softer in shape than the old black and white logo.
“For a product transformation,” Ardrey said, “you always start with fabric, your core raw materials. The team came to me and said, ‘We want to upgrade our cotton and make it softer. We want this new cotton gabardine. I looked at it, felt it and said, ‘I don’t think we can afford this,’ and they said, ‘Just leave it to us.’ And with our sourcing team, our manufacturers and the fabric mills, we actually got that fabric to a place where we could afford it and keep our price points the same. And in some cases, we’ve actually reduced a few price points on important items.”
Vera Bradley is also introducing a new nylon, which “has a bit of shine, takes color incredibly well” and versatile for casual or less casual situations, the CEO said. She also singled out the introduction of a softer, supple pebbled leather.
In addition, “We eliminated the hardware in a lot of places to keep the look very soft. We developed a “friendship knot” for adjusting straps, Ardrey said.
Vera Bradley is displaying several new crossbodies, created a section for its latest tote styles and is offering scarves and charms to personalize looks. The scarves are designed to wear separate or tied around the bags, to give a hint of print in contrast to solid-colored bags.
“We recognize that not everybody wants to carry a print bag,” Ardrey said. “Sometimes it’s just about having great solid colors in a run of different fabrics but we also want to offer that little pop of print and color for people as well.”
On the selling floors, “Our customers told us there’s been too much there. So we are merchandising the stores in a much more creative way,” Ardrey said. “There’s a spirit of discovery in the store that was not there before.”
Launch Gallery: Zooey Deschanel Stars in Vera Bradley New Campaign
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