Vera Bradley details additional cost reduction plans
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In an effort to return to profitability, Fort Wayne-based Vera Bradley Inc. (Nasdaq: VRA) is looking to cut another $12 million in costs, the company announced Tuesday. As part of the effort, Vera Bradley plans to eliminate 25 corporate positions.
CEO Jackie Ardrey, who was named to the position last November, said the company launched Project Restoration earlier this year in an effort to bring its Vera Bradley and Pura Vida brands back to profitable growth and strong cash flow.
Last month, Vera Bradley reported a fiscal full-year net loss of $59.7 million, compared to net income of $17.8 million the previous year. Ardrey said at the time that the current fiscal year will be a “rebuilding year” for the company.
Vera Bradley said several organizational changes in the marketing, e-commerce, product design, and product development areas will result in the 25 corporate positions being eliminated.
The company also plans to reduce other non-payroll costs, including non-working marketing expenses, third-party contracts and professional services, logistics, operational costs, and travel.
“This flattened and streamlined organizational structure will help us improve execution; make faster decisions; and provide support for the Consumer, Brand, Product, and Channel pillars of Project Restoration,” Ardrey said in a news release. “These most recent organizational changes and non-payroll expense reductions are expected to produce annualized savings of approximately $12 million.”
Ardrey said the savings will be on top of the $27 million in cost reductions the company realized in the previous fiscal year, which included eliminating three C-suite executive positions.
Additionally, Vera Bradley announced Michael Schwindle as its new chief financial officer, beginning May 8. Schwindle most recently served as CFO for accessory and jewelry retailer Claire’s and has held similar positions with retailers such as Fleet Farm, Payless ShoeSource, and Harry & David.
As part of the organization, current CFO John Enwright will be stepping down.
“We are committed to delivering improved value to our shareholders,” Ardrey said. “These efforts will allow us to reset our expense base and simplify the organization, so we can focus fully on Project Restoration and on delivering both healthy top- and bottom-line growth in the future.”
Ardrey said Vera Bradley expects to realize its $12 million in cost savings throughout the rest of the fiscal year, which ends Feb. 3, 2024.