Vera Bradley didn’t have a great start to the year, posting a first-quarter loss on lower revenue, and is set to close more than a dozen stores.
The handbag company reported a net loss of $4 million using generally accepted accounting principles, compared to $2.4 million in net income during the same quarter last year, and saw revenue fall to $96.1 million from $105.2 million a year ago.
Comparable-store sales during the period fell 12.5 percent, which included a 7.8 percent drop in physical retail and a 22 percent drop in e-commerce sales, and direct segment revenue fell by 5.6 percent.
The company cited general declines in store and online traffic, as well as Vera Bradley’s move to a new online platform for the lowered sales.
Revenue from indirect sales also fell by 15.3 percent, “reflecting a reduction in the number of specialty accounts, coupled with a reduction in ordered from both specialty accounts and certain key accounts,” the company added.
Nevertheless, chief executive officer Robert Wallstrom characterized revenues in line with expectations, but said “challenges in the retail environment continued into the first quarter.”
Looking ahead to the rest of the year, the company expects sales to continue a downward trend with revenue of $460 million to $480 million projected, compared to $486 million in 2016.
Wallstrom said the “primary objective” for Vera Bradley over the year “is to increase of customer count.”
To do this, Wallstrom said Vera Bradley will drive brand desirability through a robust marketing program, focusing on a core assortment, strategically leveraging licensing opportunities to expand brand reach and addition focus on digital sales.
The company will also be closing up to 15 Vera Bradley stores.
By executing these initiatives, Wallstrom said the brand can be positioned “for the future and improved profitability.”
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