Vera Bradley loves women with lots of baggage. The company designs, makes and sells quilted handbags and travel bags, as well as accessories, such as cosmetic bags, curling iron covers, and wallets. Its goods are available at 3,300 gift and specialty stores and about 35 Vera Bradley full-price stores in 25 US states. It also operates several outlet shops and an online store. In addition to its core products, the firm licenses its name for use on Vera Bradley-branded rugs, eyewear, stationery, and home decor items. The business was founded as Vera Bradley Designs in 1982 by Patricia Miller and Barbara Bradley Baekgaard when they recognized a need for good-looking women's luggage. In 2010 the company went public.
In its first year as a public company Vera Bradley enjoyed strong sales growth, with net revenue up more than 26% in fiscal 2011 (ends January) vs. the previous year. Sales got a boost from the opening of nine full-price and three outlet stores. Net income rose by nearly 7%. Since its launch in 2006, the company's e-commerce site (verabradley.com) has experienced strong sales growth (adding nearly $23 million in sales in fiscal 2011) and the company hopes to increase e-commerce sales even more through the use of social networking sites such as Facebook and Twitter.
Vera Bradley operates through two channels: Direct and Indirect. Its Direct Channel (about 40% of sales) consists of sales generated by the Vera Bradley full-price stores and sales from its website. It also operates four outlet stores. The larger Indirect portion of the business consists of sales of Vera Bradley products at 3,300 independent retailers, select national retailers, and through third-party e-commerce sites.
The accessory retailer (which changed its name to Vera Bradley, Inc., when it became a publicly traded company) is using the proceeds from the IPO, which was priced at $16 per share in October 2010, to expand its network of full-price and outlet stores. (The company believes the US market can eventually support at least 300 Vera Bradley full-price stores, about ten times the number it operated upon going public.) Growth with respect to the location of its stores is another company concern -- it intends to position new stores in underpenetrated markets, mainly in the Midwest, Southwest, and West. The company is also looking abroad for additional sales, launching an international marketing campaign in early 2011 to increase its brand awareness in Japan.
The Vera Bradley name has a strong brand identity and courts an upscale market with its range of product offerings; the stylish, inviting décor of its stores; and its knowledgeable staff and personalized services. Its visual displays try to create the feeling of hominess and warmth, all of which appeals to the shopper with discretionary money.
Co-founders Baekgaard and Miller own nearly 22% and 18% of the company's shares, respectively. The investment firm FMR LLC owns more than 14% of the shares.