Vera Bradley Sharpens Focus on Licensing, Moves to Close Stores
Vera Bradley is sharpening its focus on licensing in reformulating its business. The company has landed seven new agreements to go with its long-time pact for eyewear with The McGee Group, with the bulk of new products arriving this fall.
Peking Handicrafts’ Vera Bradley bedding will be sold through 200 Bed Bath and Beyond stores starting this month, while distribution of Incipio Technologies’ cellphone cases expands to 2,000 AT&T stores from 900 in the spring. Mainstream’s swimsuits also have capsule collections at Macy’s and The Bon Ton stores. And CID Resources Inc. licensed the brand for medical uniforms due in the spring in targeting nurses and others in healthcare.
“We are strategically layering in licensing opportunities where they make sense,” said CEO Rob Wallstrom. Indeed, the company struck a deal with CID after finding that about 20% of its customers were employed in healthcare and were required to wear a uniform to work, Vera Bradley’s Stephanie Lawrence tells us.
For the most part, Vera Bradley will target home products for licensing. Fox Chapel Publishing is readying coloring books and activity kits, while Lifeguard Press has a license for stationery and office organization products. Renfro has a license for hosiery and boot liners.
Indeed, licensing is likely to be a key for generating new revenue as the company embarks on a three-year plan that includes closing up to 50 of its 111 full-line stores by 2021 as leases expire. At the same time it will gradually expand the number of factory outlets with plans to open six this year to increase the total 52 locations. The company also will trim its product offerings and slash the number of clearance sales, a move that is expected to reduce revenue by $40-$60 million in fiscal 2019 starting in January, Wallstrom said. It also has hired an outside consulting firm to review the company’s business.
Meanwhile, Vera Bradley’s net income in Q2 ended July 29 decreased to $2.1 million from $5.1 million a year earlier as it took $2.4 million in after-tax charge, including $1.5 million for the newly hired consulting firm. The company’s Q2 revenue slipped to $112.4 million from $119.2 million. Store sales increased to $89.3 million from $87.2 million, but same-store sales declined 4.3%. Indirect revenue, which includes licensing, fell to $27.3 million from $32 million.
Stephanie Lawrence, VP Licensing, 260-207-5976, firstname.lastname@example.org