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CNN Business
New YorkCNN Business
—
Try selling a brightly colored paisley pattern quilted cotton handbag to anyone below the age of 40. Paisley doesn’t exactly scream “hot Millennial trend!”
But for Vera Bradley
(VRA), the paisley pattern is its identity. The company has attracted an almost cult-like following for its cotton handbags, backpacks and wallets which are often splashed with every kind of paisley pattern imaginable. There’s a “Fireworks Paisley,” a “Daisy Dot Paisley,” and even a whimsical “Mickey and Minnie Paisley.”
For nearly four decades, the company has unabashedly embraced the paisley print even as other retailers rushed to stock more Millennial-friendly items. It has championed bright, bold prints on its bags because it made sense for the customer it was courting.
“Traditionally the Vera Bradley shopper is the working mom, 40 to 60 years of age who likes patterns and comfortable casual bags,” said Eric Beder, a specialty retail analyst and CEO of small Cap Consumer Research.
Robert Wallstrom, CEO of Vera Bradley.
Vera Bradley
Then, two years ago, the company hit a rough patch.
“There were issues about the product becoming stale and heavy discounting to get product out the door,” Beder said.
Vera Bradley’s
(VRA) sales at stores open at least a year, an important gauge of a retailer’s health, fell 10.3% in 2018.
The company operates about 150 stores – split between mall locations and outlet centers – and sells products on its website. Online sales fell nearly 25% in 2018 over the prior year. Vera Bradley products, priced between $15 for a zip ID case to $278 for luggage, also sold at more than 2,000 other specialty stores and department stores nationwide.
The protracted slump in sales was a critical uh-oh moment for a company that usually generates more than $400 million in annual revenue.
Beder said there was a realization that not only did Vera Bradley have to innovate to retain its “heritage” customer, but it also had to find a way to build a new fan base among young shoppers.
“Vera Bradley is one of the largest sellers of backpacks and luggage. These items inherently appeal to school and college kids and young working adults,” said Beder. “The challenge for the brand has been to find a way to bridge that age gap between its core shopper and younger shoppers,” he said.
The turnaround
Vera Bradley CEO Robert Wallstrom, who joined the company in November 2013 after 16 years with luxury retailer Saks, said the company started to take “corrective action” in 2018.
The most significant step was investing in product and fabric innovation to create buzz. Last year, the brand rolled out a new collection of bags made with water-resistant cotton, bearing a more polished look with pattern-free solid colors in the mix.
“This is targeting the young woman who has graduated college and needs an affordable, durable first work bag,” said Beder.
This may also be the same consumer who grew up seeing her mom carry a Vera Bradley handbag on her shoulder or a Vera Bradley suitcase to the airport. So the brand connection is already there, according to the company. It has an opportunity to leverage that in a way that changes the perception of it being a “mom” brand to one that is relevant to her daughter or even her school age granddaughter.
Vera Bradley is launching bags in January that utilize fabric made from recycled plastic bottles.
Vera Bradley
In July of last year, the company bought majority stake in Creative Genius, owner of Pura Vida. The online brand, popular with Millennials and Gen Z, markets itself as a socially conscious brand with sustainable fabrics. It partners with charities worldwide and sells affordable handcrafted bracelets made by artisans from Costa Rica, El Salvador and other countries.
Shopping for gifts that had a social or environmental benefit was a big driver for younger shoppers this past holiday season, according to NPD Group. The data showed that about 25% of 25 to 34-year-olds, and almost 30% of 18 to 24-year-olds felt giving gifts that “give back” was more important to them than it was in the prior year.
Beder estimates Pura Vida’s sales to be around $125 million in 2020.
These changes helped turn around Vera Bradley in 2019. Beder said the brand grew sales in every quarter of the year.
Wallstrom is hoping to keep the momentum going in 2020. Vera Bradley is launching a bag collection in January designed with fabric made from recycled plastic bottles.
Analysts expect it will draw younger, higher-income, socially conscious shoppers who are willing to “pay up” for a product that fits their lifestyle and values.
“In many ways, the younger generation is influencing the generation above them,” said Wallstrom.
A new Vera Bradley collection of bags made from water-resistant cotton in solid colors is designed to appeal to young working woman.
Vera Bradley
Skewing even younger, the brand is launching a collaboration with Harry Potter in June. One collection will feature bags, tech products and accessories and another collection will focus on the holidays and include Harry Potter-themed robes, blankets and slippers.
Other legacy brands, including upscale home furnishing brand Pottery Barn, have also turned to Harry Potter to infuse excitement in the brand and capture the attention – and dollars – of younger consumers. Pottery Barn launched a Harry Pottery decor collection in 2018 and has since expanded it across its portfolio of furniture, kitchen items and cooking tools.
“We’ve always thought of the brand as multi-generational,” said Wallstrom. The effort now is to balance [classic] Vera Bradley with a fresher version of the brand.
“We’re finding that balance,” he said. “We have to respect what consumers want today.”