Vera Bradley is cutting costs as part of what it calls “Project Restoration” in response to dwindling sales. (Photo by BrianAJackson from Depositphotos.)
Additionally, Vera Bradley announced that company co-founder Barbara Baekgaard is stepping down from its board.
After another rough quarter, Vera Bradley is making some big changes, announcing plans to sell its Pura Vida business and cut costs at its retail stores as the company restructures as part of what it calls “Project Restoration,” according to reports from the bag and fashion accessories company.
“Our consumer, in particular, is just stressed right now, and that is reflected in our guidance this year,” said Jackie Ardrey, chief executive of the company, in a shareholder call. “Especially in our outlet channels, we have a greater proportion of customers who have a household income of less than $75,000, and they’re just not coming to the outlet stores.”
Pura Vida is one of two brands in the Vera Bradley portfolio. Plans to divest from the brand came after it posted a “significantly wider loss and lower-than-expected revenue in the fourth quarter,” according to a report from the Wall Street Journal.
“This sale of Pura Vida represents a significant step in our strategic evolution,” said Ardrey in a release about Vera Bradley’s fourth-quarter results. “Importantly, and in light of the uncertain macro and consumer environment, we will continue to manage the business prudently. Tied to our efficiency initiative previously announced, we remain on track to deliver a minimum of $20 million in cost savings in 2025, and we enter the new fiscal year debt-free, providing flexibility to operate our business transformation.”
The company said during its sale announcement that its divestment from Pura Vida would allow it to focus on its namesake brand, with plans for Vera Bradley to sign distribution deals with major retailers and expand its heritage bags and lower-priced product offerings.
In the sale announcement, Ardrey did not disclose the financial details of the Pura Vida sale but did note that the deal is expected to close at the end of the first quarter.
Vera Bradley first acquired a 75 percent stake in Pura Vida for $75 million in 2019 and bought the remaining 25 percent for $10 million in 2023. The La Jolla, Calif.-based jewelry line has struggled since joining the Vera Bradley family, despite efforts to expand its wholesale and retail presence, with its annual revenue dropping by nearly half since 2021. Pura Vida’s founders, Griffin Thall and Paul Goodman, exited the company when Vera Bradley completed its acquisition of the brand.
Looking forward, the Wall Street Journal said that for the 2026 fiscal year, the company expects an adjusted loss of 15 cents a share and revenue of $280 million, down from $372 million a year previous.
The company said it is also working on its strategy to improve its store performance as it braces for change, starting with cost cutting.
“As we look ahead to fiscal 2026, we see this as a year of stabilization requiring patience and continued optimization,” Ardrey said.
According to its fourth-quarter results report, Vera Bradley reported a loss of $47 million, or $1.69 a share, for the three months that ended Feb. 1, compared with a loss of $1.86 million, or 6 cents a share, for the same period a year earlier. Vera Bradley’s revenue dropped 25 percent to $100 million, while the Pura Vida brand saw its top-line performance plunge 44 percent from $24.2 million to $13.6 million.
During its results call, the company also announced that co-founder Barbara Baekgaard would not stand for re-election, transitioning instead to a director emeritus role. Her seat will not be replaced.
“While she will be stepping back from official board duties, Baekgaard will continue to remain involved in the company she co-founded and the Vera Bradley brand transformation,” said the company in a release about the change.
Baekgaard co-founded the company with Patricia Miller in 1982 and served as its co-president from 1982 until mid-2010. In May 2010, she was appointed creative chief, a role she served in through August 2017.
“I appreciate the collaborative support and business insights from Vera Bradley’s board members over these years and am excited about the new path that will be charted by this new generation of the Vera Bradley board,” added Baekgaard in a statement. “I look forward to continuing to offer my insights and historical knowledge for our business. My love for the Vera Bradley brand remains undiminished, and I am extremely optimistic about the company’s future under Jackie’s leadership.”
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