Vera Bradley Inc. — which saw its stock drop 14.1 percent this week — is looking to Macy’s Inc. and a new partner in Japan to help move its business forward.
The Fort Wayne, Ind.-based firm posted lower sales and profits for the first quarter, but said it was broadening its reach and would start selling its handbags, totes and accessories at about 70 Macy’s doors. It also inked a five-year deal giving Look Inc. exclusive rights to market and distribute the brand’s products in Japan. Mitsubishi Corp. was granted the right to import the goods into Japan during the life of the agreement.
Vera Bradley was advised by Guggenheim Securities on the deal, which will have Look distributing the brand in the country beginning in October. Vera Bradley’s 13 doors in Japan will be shuttered.
“We entered Japan on our own over three years ago, and our experience has proven to us that there is an enormous opportunity for Vera Bradley there,” said Robert Wallstrom, chief executive officer of Vera Bradley.
The company had a tough go of it in the first quarter ended May 3. Net income fell 28.5 percent to $6.6 million, or 16 cents a share, on a 7.8 percent drop in sales, to $113.5 million.
The company had been looking for sales of $116 million to $120 million but said that the top line was hit by lower-than-planned orders from “indirect specialty retail partners,” a 9.4 percent drop in comparable-store sales and a shortfall during an annual outlet sale.
“We continue to face a difficult environment, one that is proving much more challenging than we anticipated just two short months ago,” Wallstrom said.
The firm is continuing to build up its executive team and has named Karen Peters executive vice president, retail and wholesale sales.
Last month Vera Bradley named Thomas Giacalone vice president of e-commerce at Vera Bradley Inc., and last November, Robert Wallstrom was named chief executive officer.
Peters, a 25-year retail veteran, most recently was senior vice president and director of stores for Saks Fifth Avenue Off 5th, where she worked with Wallstrom, the former president of Off-5th. Earlier, Peters held key management positions with Sears, Target and Kohl’s.
At Vera Bradley, Peters will oversee the full-line and factory outlet stores; the indirect channel including the gift channel; department store relationships, and other current and emerging indirect channels; store visual and store real estate. She will report directly to Wallstrom, who said, “During her tenure at Off 5th, Karen managed numerous new store openings, relocations, and renovations; substantially improved customer service metrics including conversion, checkout time, new customer acquisitions, and e-mail capture; and effectively collaborated with the merchandising and visual teams to elevate product assortments and in-store visual presentations. Karen will be a real asset to the company as we continue to add new retail stores, expand our department store presence, and stabilize our specialty gift channel.”