Vera Bradley launching ‘cost efficiency initiative’
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Fort Wayne-based Vera Bradley Inc. on Tuesday announced plans for what it’s calling a strategic cost efficiency initiative aimed at reducing annual costs by about $20 million. However, specific details on the plan remain scarce.
CEO Jackie Ardrey said the effort will “drive a significant reduction of outside vendor contracts and spending.”
The announcement comes less than a month after Vera Bradley’s largest shareholder called on the company to consider strategic alternatives to bring the retail brand back to profitability.
Over the last few years, Vera Bradley has been focused on Project Restoration, which was designed to return the luggage, handbag, and fashion accessory designer back to profitability.
Earlier this year, Vera Bradley launched a brand refresh aimed at “reinvigorating the business and restoring brand relevance.”
“A critical supporting foundation of Project Restoration has been efforts to sharpen both focus and business discipline across all areas of the company,” Ardrey said. “As we prioritize resources in support of our transformation, we are streamlining business operations to restore profitability and ultimately increase shareholder value.”
Ardrey added the move will help the Vera Bradley team “focus on critical business priorities.” The company says the savings will affect selling, general and administrative expenses, as well as gross profit.
But precisely how the company plans to reduce its costs was not immediately made clear. Vera Bradley declined to provide additional details to Inside INdiana Business.
“This has been in the works for quite some time,” Chief Financial Officer Michael Schwindle said in a written statement to IIB. “More details will be shared at a future date.”
The company would not specify if job cuts would be included in the initiative. Vera Bradley employs more than 2,100 people, according to IBJ research, though it’s unclear how many are in Indiana.
Vera Bradley said it expects to realize the annual savings starting with its 2026 fiscal year. Additional details could come in March in conjunction with the company’s fourth quarter financial results.
In late December, Fund 1 Investments LLC, a long/short equity firm headquartered in Puerto Rico, said in a letter to Vera Bradley Board Chairman Robert Hall that the board should consider taking the company private or a potential sale among possible strategic alternatives due to the company’s recent financial performance.
The company reported a fiscal third-quarter net loss of $12.8 million last month, compared to net income of $5.1 million during the same period in 2023.
In a statement to IIB, Ardrey said the board “maintains open communications with shareholders, and regularly review the company’s strategic priorities and assess potential opportunities. We remain highly focused on executing our brand transformation plans, listening to customers, and nurturing the green shoots we’ve seen.”
Shares of Vera Bradley stock were up 1.6% to $3.78 per share at midday Wednesday. Vera Bradley is the 34th largest public company in Indiana, according to IBJ research.