What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2022-03-29 compared with 2021-03-30 · 173 added, 141 removed, 351 unchanged (47% of the section changed)

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In July 2019, Vera Bradley, Inc.

acquired a 75% interest in Creative Genius, Inc., which also operates under the name Pura Vida Bracelets (“Pura Vida”).

acquired a 75% interest in Creative Genius, Inc., which operates under the name Pura Vida Bracelets (“Pura Vida”).

Pura Vida results are consolidated within the Company’s financial statements beginning on July 17, 2019, the first full day following the acquisition.

Prior period results have not been recast and are therefore not comparable with the fiscal 2020 period.

Beginning in the second quarter of fiscal 2020, the Company has included an additional segment for Pura Vida due to its acquisition.

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The VB Direct business consists of sales of Vera Bradley products through Vera Bradley full-line and factory outlet stores in the United States;

verabradley.com;

e-commerce sites verabradley.com and verabradley.ca;

the Vera Bradley online outlet site;

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As of January 29, 2022, the Company operated 70 full-line stores and 75 factory outlet stores.

The annual outlet sale was cancelled in 2020 as a result of the COVID-19 pandemic.

The annual outlet sale was cancelled in 2020, 2021, and 2022 as a result of the COVID-19 pandemic.

VB Indirect .

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The Pura Vida brand has a differentiated and expanding offering of bracelets, jewelry, and other lifestyle accessories.

The Pura Vida segment represents revenues generated through the Pura Vida websites, www.puravidabracelets.com, www.puravidabracelets.eu, and www.puravidabracelets.ca and through the distribution of Pura Vida-branded products to wholesale retailers, substantially all of which are located in the United States.

R efer to Note 15 o f the Notes to Consolidated Financial Statements set forth in Part II, “Item 8.

The Pura Vida segment represents revenues generated through the Pura Vida websites, www.puravidabracelets.com, www.puravidabracelets.eu, and www.puravidabracelets.ca and through the distribution of Pura Vida-branded products to wholesale retailers and department stores, substantially all of which are located in the United States, as well as through its first retail store which opened in August 2021.

Refer to Note 14 of the Notes to Consolidated Financial Statements set forth in Part II, “Item 8.

Financial Statements and Supplementary Data,” of this report for additional information regarding the Pura Vida acquisition.

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The passion for design and customer service established by our founders has driven our Compan y for nearly 40 years and remains the cornerstone of Vera Bradley, Inc.

Baekgaard retired from Vera Bradley operations in 2017 but continues

to serve on the Board of Directors and as a brand ambassador.

Baekgaard retired from Vera Bradley operations in 2017 but continues to serve on the Board of Directors and as a brand ambassador.

Miller retired in October 2012 as our National Spokesperson and in August 2019 from the Board of Directors.

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acquired a majority interest in Pura Vida.

Similar to the Vera Bradley brand, Pura Vida was founded by two Southern California friends, Griffin Thall and Paul Goodman.

Thall and Goodman, while traveling through Costa Rica in 2010, crossed paths with two bracelet artisans.

Similar to the Vera Bradley brand, Pura Vida was founded by two friends, Griffin Thall and Paul Goodman.

Thall and Goodman, from Southern California, where traveling through Costa Rica in 2010 and crossed paths with two bracelet artisans.

Thall and Goodman asked the artisans to make 400 bracelets to take home with them.

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a unique lifestyle company.

Vision 20/20 Initiatives and Growth Strategies

In fiscal 2018, we embarked on Vision 20/20 - our aggressive three-year plan to restore the Vera Bradley brand and business to a healthy foundation, and in fiscal 2021 we completed the first full year of consolidated operations of Pura Vida.

Despite challenges related to the pandemic, we strengthened our infrastructure and better positioned both the Pura Vida and Vera Bradley brands for the future.

Some achievements in the product, marketing, and distribution areas for fiscal 2021 follow.

We have identified three key franchise businesses – Youth/Campus, Travel, and Everyday where we can offer our customers thoughtful solutions that we believe will propel our future growth.

Enterprise Vision and Growth Strategies

We are committed to being a purpose-driven, multi-brand, stable-growth company, generating strong cash flow.

We are positioned to continue to invest in our two lifestyle brands;

seek out accretive acquisitions of other cash-generating, purpose-driven brands over time;

and return capital to shareholders.

During fiscal 2022, we focused on four key strategies to further enhance our brands and strengthen our operations.

Our accomplishments related to these strategies are as follows:

• We continued to drive our digital-first strategy.

We made strategic organizational shifts and investments to pivot us to a digital-first company, evolving into a customer-centric, data-driven, technology-enabled, and digitally-focused enterprise which we believe allows us to effectively engage with our customers and offer a seamless shopping experience.

Over one-third of our consolidated revenues are now generated from e-commerce sales, and excluding our factory stores, over half of our total company sales are driven by e-commerce.

• We further enhanced our product innovation pipeline, collaborations, and category extensions .

We continue to build our Vera Bradley and Pura Vida lifestyle brands to attract new customers and increase share of wallet with existing customers.

• We continued to build our community through marketing.

Both brands are working to engage, diversify, and grow their customer bases through analytics;

targeted marketing;

and environmental, social, and governance (“ESG”) efforts.

• We further evolved our distribution channels.

We are continually looking for new ways to reach our customers and to reinvent the shopping experience in the ever-changing retail environment;

the future for both brands will be a combination of digital and brick and mortar.

Product , Marketing, and Distribution Strategies

We have identified three key franchise businesses – Everyday, Travel, and Youth/Campus where we can offer our customers thoughtful solutions that we believe will propel our future growth.

We will continue to look for opportunities to expand into relevant new categories that reflect our brands and signature attributes of comfortable, casual, affordable, and fun.

We will also continue to use licenses and strategic partnerships as appropriate to expand our product categories.

In fiscal 2021:

• We accelerated our robust fabric innovation pipeline to develop new fabric offerings and build on our platform of sustainable fabrics;

we expanded our full-line Performance Twill and recycled ReActive collections, introduced our Ultralight fabrication in our factory stores, and developed our recycled cotton collection that will launch in spring 2021;

• We quickly reacted to the consumer demand for personal protective equipment, producing and selling millions of cotton face masks, generating revenue and gross margin dollars for the fiscal year;

• We continued another year of collaborations with several iconic brands, including Crocs, Disney, and Gillette Venus to create and sell limited-edition product collections;

introduced our signature masks and 1982 backpacks in Target stores and on target.com;

and launched our collaboration with Warner Bros.

Consumer Products for the creation of our Harry Potter™ + Vera Bradley collection.

These collaborations will continue into fiscal 2022.

In fiscal 2022 we saw year-over-year growth in our traditional cotton, Recycled Cotton, Performance Twill, and ReActive fabrications, and continued traction on our Factory Ultralight collection.

We also continued product collaborations with several iconic brands, including Harry Potter™, Disney, and Crocs.

In fiscal 2022, we launched our collaboration with Classic Accessories for our first-ever outdoor collection.

We are planning another year of brand collaborations in fiscal 2023 that we believe engage existing and new customers, increase brand awareness, generate media attention, and provide Vera Bradley the opportunity to strategically test and enter into new product categories.

Distribution Channels.

Vera Bradley products are available through our Direct channel including full-line and factory outlet stores, online through verabradley.com and our online outlet site, and typically our Vera Bradley annual outlet sale, as well as through the Indirect channel including department and specialty retail stores, national accounts, third-party e-commerce sites, and third-party inventory liquidators.

Vera Bradley products are available through our Direct channel including full-line and factory outlet stores, online through verabradley.com, verabradley.ca and our online outlet site, and typically our Vera Bradley annual outlet sale, as well as through the Indirect channel including department and specialty retail stores, national accounts, third-party e-commerce sites, and third-party inventory liquidators.

We continue to focus on tightly integrating our multi-channel business by strengthening and right-sizing both our Direct and Indirect distribution channels.

We opened six new factory outlet stores in fiscal 2021.

We plan to open five new factory outlet stores in fiscal 2022.

We are continuing to improve the profitability of our full-line store portfolio by re-balancing our existing fleet through select closures along with identifying future market opportunities.

We will continue to focus on our highest-potential stores, enhancing the customer experience and further localizing our assortments.

We will continue to develop and test new formats;

We will continue to focus on our highest-potential stores by enhancing the customer experience and will continue to develop and test new formats;

however, we have currently suspended full-line store growth.

In fact, we have closed 39 underperforming full-line stores since the beginning of fiscal 2018 and forecast that we will close additional full-line stores.

Building our digital flagship, verabradley.com, remains a key part of our distribution strategy.

In fact, we have closed 44 underperforming full-line stores since the beginning of fiscal 2018 and forecast that we will close additional full-line stores, although this remains a fluid process.

We opened six new factory outlet stores in fiscal 2022 and plan to open five new factory outlet stores in fiscal 2023.

We continue to focus on enhancing and reinventing the customer experience in our full-line stores, and certain digital shopping additions that gained popularity during the pandemic have remained popular, such as appointment selling, buy-online/pick-up in-store, and curbside pickup.

Over the long-term, we have prioritized digital as the primary revenue growth driver for Vera Bradley, making major strategic shifts and investments to pivot us to a digital-first company;

however, we are enabling her to shop in a seamless manner and want her to shop where and how she wants to shop.

Stores continue to be an integral part of this omni-channel strategy.

During fiscal 2021, we converted our e-commerce platform to Shopify Plus.

This conversion was part of our overall IT project called Project Novus, which also replaced our ERP, POS, Business Intelligence, and Order Management systems.

These changes decreased the complexity of our

systems and provided us with a technology platform to help us make quick, data-based, informed decisions, which we believe will further enhance the customer experience and help us achieve our growth objectives.

These changes decreased the complexity of our systems and provided us with a technology platform to help us make quick, data-based, informed decisions, which we believe will further enhance the customer experience and help us achieve our growth objectives.

Our Vera Bradley online outlet flash sales allowed us to continue to sell clearance merchandise in a more discreet manner, reducing clearance activity on verabradley.com and in our full-line stores.

In fiscal 2021, we had approximately 66 million visits to our website and our online outlet site.

In fiscal 2022, we had over 52 million visits to our website and our online outlet site.

In our Indirect channel, we will continue to expand our digital marketplaces such as Amazon, as we focus on meeting customers where they are in their shopping.

Our department store relationships allow us to expose our brand to new customers and showcase new product assortments.

We are currently in approximately 276 department store locations.

We are currently in approximately 300 dep artment store locations.

In the department stores, we continue to work on enhancing our brand presentation and profitability.

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Marketing and brand positioning are both critical elements as we continue to engage new consumers and strengthen our bond with existing customers.

In fiscal 2021:

• As mentioned, we launched our new verabradley.com Shopify Plus site which we believe allowed us to improve our customer's buying experience.

• Our investments in customer data science, and business analytics allowed us to collect and analyze data, respond to customer changes, and adjust marketing spending in an agile way, which helped us to navigate the COVID-19 pandemic.

Data science and analytics will continue to drive our marketing decisions going forward.

• We believe our digital first strategy, focused on targeted digital efforts, increased brand awareness.

Total impressions for the fiscal year more than doubled to almost 10.0 billion compared to the prior-year period.

Our investments in customer data science and business analytics have continued to position us well, allowing us to collect and analyze data and respond to customer changes and adjust marketing spend on a real-time basis and in an agile way.

Our goal is to drive our performance through marketing and community engagement.

We are continually focused on looking for new ways to creatively engage our customers, grow brand awareness, and introduce new customers to our brands in a cost-effective manner, but that is becoming more challenging and expensive for both of our brands.

Since the Company’s 2019 acquisition of Pura Vida, Pura Vida has shared its digital expertise with Vera Bradley and helped Vera Bradley enhance its digital effectiveness.

Vera Bradley’s marketing platform will continue to be a blend of digital and more traditional channels, such as direct mail, email, quality media placements, PR, and targeted TV ads.

Our marketing efforts are increasingly reflective of our ongoing commitment to diversity and inclusion.

We will continue to drive social media engagement by employing more user-generated content, growing our influencer and ambassador programs, further enhancing social storytelling and social selling, expanding Facebook Live and Reels, and growing TikTok engagement.

Under the umbrella of VB Cares, we reinforced our position as a total stakeholder-focused and socially-conscious organization and continued to strengthen our community support and charitable initiatives that are meaningful to our customers and that make a significant impact on those in need, particularly women and children.

Efforts included supporting the Vera Bradley Foundation for Breast Cancer, the Coronavirus Response Fund for Nurses, New Hope Girls, and our national “Blessings in a Backpack” program.

In fiscal 2022, efforts included supporting the

Vera Bradley Foundation for Breast Cancer, New Hope Girls, and our national “Blessings in a Backpack” program.

We will continue our VB Cares focus.

Pura Vida offers prod ucts in the accessories category, primarily bracelets, with the balance of products in other jewelry categories such as rings and necklaces.

Pura Vida offers prod ucts mostly in the accessories category, primarily bracelets, with the balance of products in other jewelry categories such as rings and necklaces.

These products are created with the “pura vida” lifestyle and aesthetic in mind, slowing down and living life to the fullest.

During fiscal 2021 Pura Vida further expanded into new product categories.

Nearly 50% of our e-commerce business is comprised of jewelry categories other than traditional string bracelets, such as metal, semi-precious stone charms, charms, and the engravable collection.

During fiscal 2022, Pura Vida expanded into new product categories, such as apparel.

Nearly 50% of the Pura Vida business is comprised of jewelry categories other than bracelets, such as rings, anklets, and necklaces.

We believe these product categories highlight the brand's lifestyle appeal which we believe will continue to be a key driver of growth.

C harity bracelets remained popular, reaching over $3.0 million in lifetime charitable contributions to more than 200 charities.

Charity bracelets remained popular, reaching over $4.0 million in lifetime charitable contributions to more than 200 charities.

During fiscal 2022, we entered into high-profile product collaborations, including Hello Kitty, Disney, and Harry Potter, bringing new customers to our brand.

Distribution Channels.

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We also distribute Pura Vida products through select wholesale accounts throughout the U.S.

We will continue to target some larger accounts for growth which should help build the Pura Vida brand.

We expanded our presence with our wholesale partners by introducing larger in-store presentations in fiscal 2021.

During fiscal 2021, we added Pura Vida shop-in-shops to six Vera Bradley full-line stores.

We also plan to open Pura Vida's first retail store in fiscal 2022.

We have established what we believe to be a robust digital marketing platform with highly effective consumer engagement across social media and other online platforms.

The Pura Vida digital marketing strategy is anchored in innovative and effective ways to connect with our consumers, including partnerships with select individuals who we believe encapsulate the brand’s identity and serve as natural extensions of the Pura Vida marketing strategy.

We will continue to target some larger accounts for growth which we expect to help build the Pura Vida brand.

During fiscal 2022, we added Pura Vida shop-in-shops to 23 Vera Bradley full-line stores and completed the roll-out of the Pura Vida charity bracelet program to all Vera Bradley full-line and factory stores.

We opened our first Pura Vida retail location in San Diego in August 2021 and have plans to open additional retail locations in fiscal 2023.

Additional Pura Vida stores will likely be in tourist, coastal, and/or college towns with established customer bases.

The San Diego store is allowing us to showcase the Pura Vida lifestyle with a full array of existing products and new product innovations, especially as we expand into new product categories such as apparel.

Stores will play an important role going forward in new customer acquisition as we continue to diversify our marketing platforms.

The Pura Vida digital marketing strategy is anchored in innovative and effective ways to connect with our customers, including partnerships with select individuals who we believe encapsulate the brand’s identity and serve as natural extensions of the Pura Vida marketing strategy.

These partnerships translate into authentic, user-generated content that we can repurpose as ads, e-mail campaigns, and our own social media content.

Since spring of fiscal 2022, there has been a significant shift in social and digital media effectiveness due to the Apple IDFA (identifier for advertisers) update impacting direct-to-consumer companies, including Pura Vida.

We are in the process of strengthening our internal marketing and data analytics talent at Pura Vida.

Our team has continued to work diligently to dive deeper into customer analytics and build a more diverse and balanced marketing program through growing our SMS subscriber base, onboarding a new email marketing agency, and spreading a portion of our marketing resources to new platforms such as TikTok, podcasts, and YouTube.

As digital marketing becomes more expensive, Vera Bradley will be able to assist Pura Vida with more traditional marketing channels, such as direct mail and e-mail.

Pura Vida remains one of the most highly-engaged brands in the accessories space, surp assing the 2.0 million m ark of followers on Instagram and is consistently listed as one of the most engaged jewelry brands on Instagram.

Instagram followers and Facebook likes rose during fiscal 2021.

Pura Vida continued to rank among the top of the industry for our Net Promoter and Customer Satisfaction Scores.

Over 150,000 m icro-influencers have been on-boarded, and reliance on micro-influencers is a key part of Pura Vida’s strategy.

To date, over 150,000 micro-influencers have been on-boarded, and reliance on micro-influencers is a key part of Pura Vida’s strategy.

Micro-i nfluencers are brand ambassadors who showcase Pura Vida products on their social media channels in exchange for commission.

In fiscal 2021, we entered into an agreement with TikTok sensation Charli D'Amelio for our collaborative Pura Vida bracelet style pack which launched on March 5, 2021, during our fiscal 2022.

We plan to continue to build upon the influencer program, particularly focusing on individuals with the greatest number of followers.

During fiscal 2021, we doubled our SMS messaging list from fiscal 2020 to over one million active subscribers.

Enterprise Vision and Fiscal 2022 Growth Drivers

For our enterprise's vision to become a purpose-driven, multi-brand, growth-oriented company, we will focus on enhancing our purpose-driven efforts while seeking out appropriate acquisitions of other comfortable, affordable, purpose-driven, digitally-native brands, similar to our Pura Vida acquisition.

We will also expand our reach by adding adjacent product categories and geographies.

For fiscal 2022, we believe the four key growth drivers for the Company will be:

• Driving our digital-first strategy , by evolving the digital distribution of our products and further refining and utilizing digital experiences to serve our customers.

We will support this initiative by continuously refining our technology, developing business process and technology platforms to improve agility, data-based decision making, customer centricity, and speed-to-market.

• Enhancing our product innovation pipeline, collaborations, and category extensions to attract new customers and increase the share of wallet with existing customers.

• Building our community , through marketing and by creating an impactful, engaging brand movement that deepens brand loyalty.

• Evolving our distribution channels , by focusing on future growth opportunities and addressing the drastically changing retail environment and the consumer marketplace.

Our Product Release Strategy

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We typically introduce new collections monthly.

Each launch typically consists of one to three signature cotton-quilted prints, as well as other fabrications including Performance Twill, Re-Active, microfiber, or leather some of which are also available in solid colors.

Each launch typically consists of one to three signature cotton-quilted prints, as well as other fabrications including Performance Twill, Re-Active, and microfiber, some of which are also available in solid colors.

These collections of prints and solids are incorporated into the designs of a wide range of products, including bags, accessories, and travel items.

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To keep our assortment current and fresh, and to focus our inventory investments on our best performers, we discontinue prints and fabrications as necessary.

We sell our remaining inventory of retired products primarily through our website (including our online outlet site), factory outlet stores, typically our annual outlet sale, and third-party liquidators.

We sell our remaining inventory of retired products primarily through our websites (including our online outlet site), factory outlet stores, typically our annual outlet sale, and third-party liquidators.

We introduce new Pura Vida products seasonally, approximately three times a year (spring, summer, and fall).

We release curated product assortments multiple times per season that each embody a trend that we believe resonates with our customer base.

Each product launch collection typically consists of 50 to 100 SKUs.

We offer a mix of seasonally inspired designs and certain core designs.

In April 2021, we plan to launch our Pura Vida apparel collection of shirts and hoodies, initially as a limited collection.

We offer a mix of seasonally inspired designs and next generation designs of core bestsellers.

In April 2021, we launched our Pura Vida apparel collection of shirts and hoodies and plan to further expand apparel in fiscal 2023 with new silhouettes and materials.

The following chart presents net revenues generated by each of the Company’s product categories and other revenues as a percentage of our total net revenues for fiscals 2022, 2021, and 2020.

Fiscal Year Ended

2021 February 1,

2022 January 30,

2021 February 1,

Bags 28.2 % 35.9 % 41.1 %

Accessories 34.5 % 35.1 % 31.3 %

35.1 % 31.3 % 22.3 %

Bags 32.0 % 28.2 % 35.9 %

Travel 17.5 % 15.3 % 21.9 %

Apparel/Footwear 11.1 % 1.2 % 1.2 %

Home 8.6 % 7.3 % 7.2 %

Apparel/Footwear 4.7 % 11.1 % 1.2 %

2.7 % 3.0 % 2.5 %

Total 100.0 % 100.0 % 100.0 %

(1) Fiscal 2020 increase in accessories due to the inclusion of Pura Vida beginning July 17, 2019.

(1) Includes primarily stationery, licensing, freight, merchandising, and gift card breakage revenue.

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We believe our accessories are attractively priced and allow the consumer to include some color in her wardrobe.

Our product development team consistently updates the accessories assortment based on consumer demand and fashion trends.

Our product development teams consistently update the accessories assortment based on consumer demand and fashion trends.

Our travel product category includes rolling luggage, cosmetics, travel and packing accessories, and travel bags which includes our iconic duffel and weekend bags.

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Apparel/Footwear .

Our apparel and footwear category includes sleepwear, footwear, cotton face masks, outerwear, socks, and scarves.

Our apparel and footwear category includes sleepwear, footwear, cotton face masks, outerwear, socks, scarves, and Pura Vida tees and hoodies.

Cotton face mask sales began during fiscal 2021 at both Vera Bradley and Pura Vida.

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All print development is managed by our internal print design team.

Once developed, we generally copyright our patterns as appropriate.

Once developed, we generally copyright

our patterns as appropriate.

We believe that great design is not only central to our products, but also is a fundamental part of our brand development and growth strategies.

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Our product development team works closely with our marketing and merchandising teams to gather consumer insights through a variety of methodologies, including seasonal market research, in-store testing, scheduled interviews, and online and in-person surveys conducted by our internal team.

Our work is also informed in part by market data analysis provided through our membership to industry services and organizations.

Our work is also informed in part by market data analysis provided through our membership in industry services and organizations.

The design and product development teams work to ensure that we offer products that are constructed to meet our design, function, construction, and quality standards in a cost-effective manner.

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In addition to products developed in-house, we also pursue brand extensions through strategic partnerships, licensing agreements, and brand collaborations.

We currently have licenses in place for eyewear, collegiate (NCAA), bedding, technology accessories, stationery/drinkware, sleepwear and loungewear, bath collections, certain footwear, and female shaving products.

We also have licensing agreements with Disney Theme Park Merchandise, Warner Brothers, and certain U.S.

We currently have licenses in place for eyewear;

collegiate (NCAA);

technology accessories;

stationery/drinkware;

sleepwear and loungewear;

certain footwear;

female shaving products;

outdoor furniture, accessories, and décor;

wallpaper and luxury vinyl tile;

and pickle ball racquets and accessories.

We also have licensing agreements with Disney Consumer Products, Warner Brothers Consumer Products, Peanuts Worldwide, and certain U.S.

Military forces.

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Our cross-functional team attends trade shows and performs market research to develop what we believe will be on-trend products that communicate and emulate the “pura vida” lifestyle.

We also pursue brand extensions through licensing agreements and we have partnered with Shark Week, Warner Brothers Consumer Products, Disney Consumer Products, Sanrio, and other companies that are consistent with our brand.

We believe that the growth of our brands and our business is influenced by our ability to introduce and sell our merchandise in a way that clearly conveys the Vera Bradley and Pura Vida brand personalities.

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Retention Advertising.

We communicate with our established customers consistently throughout the year with regular e-mails, social media, and notifications, as well as seasonal direct mail catalogs and brochures related to the Vera Bradley brand.

We communicate with our established customers consistently throughout the year with regular e-mails, social media, and notifications, as well as seasonal direct mail related to the Vera Bradley brand.

Our retention advertising is geared to keeping Vera Bradley top of mind with our customers, rewarding our customers, and providing them with news of our seasonal launches, new product introductions, and VB Cares initiatives.

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Public Relations and Product Placement.

Vera Bradley has received considerable editorial exposure in the press, with mentions in O the Oprah Magazine , WWD , Forbes , The Wall Street Journal , and Better Homes and Gardens .

Vera Bradley has received considerable editorial exposure in the press, with mentions in Oprah Daily , In Style , People , Elle , WWD , Cosmopolitan , Good Housekeeping , and Forbes .

In addition, we have expanded our public relations efforts to reach popular online influencers and bloggers.

Product placement of Vera Bradley products in feature-length films and on prime-time television shows remains strong with television placements in Call Me Kat , The Neighbors , Blackish , Superstore , American Housewife , The Conners , Bless This Mess , The Neighborhood , Last Man Standing , and A.P.

Product placement of Vera Bradley products in feature-length films and on prime-time television shows remains strong with television placements in The Neighbors , Blackish , American Housewife , The Neighborhood , Mom, Ozark, The Blacklist, and Chicago Fire .

Movie placements include:

Pitch Perfect 3 , La La Land , Girl's Trip , Baywatch , A Bad Moms Christmas, Den of Thieves, and Bad Boys III .

Don’t Look Up, Black Friday, Arthur the King, Jurassic World, Moxie, and The Prom .

Partnerships.

During fiscal 2021, under the umbrella of VB Cares, we reinforced our position as a total stakeholder-focused and socially-conscious organization and continued to strengthen our community support and charitable initiatives that are meaningful to our customers and that make a significant impact on those in need, particularly women and child ren.

Efforts included supporting the Vera Bradley Foundation for Breast Cancer, the Coronavirus Response Fund for Nurses, our national “Blessings in a Backpack” program, and New Hope Girls, among others.

During fiscal 2022, under the umbrella of VB Cares, we reinforced our position as a total stakeholder-focused and socially-conscious organization and continued to strengthen our community support and charitable initiatives that are meaningful to our customers and that make a significant impact on those in need, particularly women and children.

Efforts included supporting the Vera Bradley Foundation for Breast Cancer, our national “Blessings in a Backpack” program, New Hope Girls, and Free Mom Hugs, among others.

Social Media and Online Marketing.

We use online marketing and social networking sites as tools to increase brand awareness and drive traffic to verabradley.com and to our Vera Bradley stores.

Vera Bradley can be found on Facebook, Instagram, TikTok, Twitter, Pinterest, and YouTube.

For Vera Bradley, we have captured approximately 6.5 million active customer e-mail addresses in our online customer file, with many of these customers providing age, occupation, and location data.

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Our Instagram has grown to approximately 560,000 followers and is our most highly engaged social medium.

In addition, we often partner with brand-right bloggers to promote product.

Vera Bradley catalogs are a vehicle for promoting the Vera Bradley brand and product portfolio.

Each catalog is sent to a targeted customer mailing list.

In addition to distributing the catalog, we produce and distribute a number of other marketing pieces, including postcards and mini-mailers.

In addition, we often partner with brand-right bloggers to promote our products.

Vera Bradley mailers are a vehicle for promoting the Vera Bradley brand and product portfolio.

Each mailer is sent to a targeted customer mailing list.

We believe our direct mail medium generates excitement and awareness about the Vera Bradley brand and allows us to reach both new and loyal customers in their homes.

Our marketing effectiveness for the e-commerce channel was negatively impacted by the Apple IDFA update in fiscal 2022.

This update negatively impacted our social media advertising and tracking, particularly Facebook and Instagram, which have been our primary marketing vehicles for growing the brand.

We are putting additional resources in place to address this situation in fiscal 2023 with new data warehousing initiatives to maximize our first-party data and customer retention.

In addition, as previously mentioned, we are continuing to diversify our marketing program by adding new marketing channels and leveraging SMS and email marketing more than in the past.

Retention Advertising.

We connect with our established customers with regular emails, affiliate marketing, SMS marketing, and social media marketing.

Our retention advertising focuses on informing Pura Vida customers of new product launches, exclusive offers, inventory restocks of best sellers, upselling subscription products, and the latest Pura Vida news.

New Customer Acquisition Advertising.

Pura Vida focuses on digital advertising through Facebook, Instagram, Google, Snapchat, and Pinterest to acquire new customers.

We are consistently testing new audiences, channels, creative, and promotions to maximize our return on paid media spend.

Pura Vida focuses on digital advertising through Facebook, Instagram, TikTok, Google, Snapchat, and Pinterest to acquire new customers.

We are consistently testing new audiences, channels, creative ads, and promotions to maximize our return on paid media spend.

Ambassador Program .

We have a grassroot program of over 150,000 brand ambassadors who drive customers to our website and generate buzz in local communities, digitally through their social media channels, in person through events, and through word of mouth.

This program helps us reach our customers in a personal fashion.

We acquire these brand ambassadors through advertising on Instagram and Snapchat, as well as regular promotion through our organic channels.

We have a grassroots program of brand ambassadors who drive customers to our website and generate buzz in local communities, digitally through their social media channels, in person through events, and through word of mouth.

This program helps us reach our customers in a peer-to-peer fashion, similar to word of mouth marketing.

We acquire these brand ambassadors through advertising on Instagram and Snapchat, as well as regular promotion through our organic and retention channels.

Influencer Marketing .

We have tiers of small to large sized influencers across various key markets and demographic profiles.

We work with influencers on product collaborations and campaigns, and foster organic relationships with them through photoshoots, trips, and events which we believe drives organic growth for the brand.

We work with macro influencers on product collaborations and campaigns, and foster organic relationships with them through photoshoots, trips, and events which we believe drives organic growth for the brand.

We have also built a network of micro influencers through our gifted program who post for our brand in exchange for product and exposure on our social channels.

Charity Collaborations .

We actively partner with charities to donate to causes that are important to our customers.

To date, we have donated over $3.0 million to various charities around the world.

W e actively partner with charities to donate to causes that are important to our customers.

To date, we have donated over $4.0 million to var ious charities around the world.

Events Marketing .

We utilize our vintage 1972 airstream that we have converted into a traveling retail store to bring the Pura Vida brand to life for our customers.

We would typically travel nationwide to different music festivals, surf competitions, yoga festivals, as well as local events in San Diego.

However, events marketing has been temporarily suspended since March 2020 as a result of COVID-19.

To reach our existing customers in person, to acquire new customers, and to expose customers to the experiential aspect of our brand, we have hosted several successful events at our flagship retail store in San Diego that opened in fiscal 2022.

We have additional opportunities to expand our event marketing to include new retail stores as they open.

Because Vera Bradley and Pura Vida products are frequently given as gifts, we have historically realized, and expect to continue to realize, higher sales and operating income in the fourth quarter of our fiscal year, which includes the holiday months of November and December.

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Channels of Distribution

We distribute our Vera Bradley products through our VB Direct and VB Indirect segments and Pura Vida products through e-commerce and wholesale retailers.

We distribute our Vera Bradley products through our VB Direct and VB Indirect segments and Pura Vida products primarily through e-commerce and wholesale retailers.

This multi-channel distribution model is designed to enable operational flexibility and maximizes the methods by which we can access potential customers.

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Our factory outlet stores are a vehicle for selling factory exclusive styles, as well as retired merchandise at discounted prices, while maintaining brand integrity.

At the end of fiscal 2021, over 95% of the merchandise found in our factory outlet stores consisted of factory exclusive styles.

Typically, approximately 95% of the merchandise found in our factory outlet stores consists of factory exclusive styles, although supply chain challenges in fiscal 2022 caused inventory levels of factory exclusive styles to fall below this level.

Factory outlet stores are an integral part of our distribution strategy, as this format provides an additional channel of distribution for our products and enables us to better target value-oriented customers.

Our factory outlet stores average approximately 3,400 square feet per store.

Our factory outlet stores average approximately 3,400 square feet per store and we expect to invest approximately $0.5 million per new store, consisting of inventory, pre-opening costs, and build-out costs, less tenant-improvement allowances.

As of January 29, 2022, we operated 75 factory outlet stores, all located in the United States.

Store Location Selection Strategy.

Our store location decisions for both full-line and factory outlet stores are made based upon our comprehensive retail strategy that includes actual and planned penetration in both Indirect and Direct segments, as well as

existing e-commerce demand.

At this time, we do not believe all geographical markets have been fully penetrated by our distribution channels, although we have temporarily suspended full-line store growth and forecast that we will close additional full-line stores.

We believe that long-term expansion of our store base will increase brand awareness and reinforce our brand image.

We believe that long-term expansion of our store base will increase brand awareness and reinforce our brand image by contributing to our omni-channel retail strategy.

In addition to analyzing store economics, we pay particular attention to the location within the shopping center, the size and shape of the space, and co-tenancies.

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Consequently, an essential requirement for the success of our stores is our ability to attract, train, and retain talented, highly motivated district managers, store managers, and sales associates.

St ore Economics.

We expect our full-line stores to average approximately 1,800 square feet per store, and we expect to invest approximately $0.4 million per new store, consisting of inventory, pre-opening costs, and build-out costs, less tenant-improvement allowances.

We expect our factory outlet stores to average approximately 3,400 square feet per store, and we expect to invest approximately $0.5 million per new store, consisting of inventory, pre-opening costs, and build-out costs, less tenant-improvement allowances.

In 2006, we began selling our products through the verabradley.com website.

The objective of verabradley.com is to provide both a mechanism for marketing directly to consumers and a storefront where consumers can find the entire full-line Vera Bradley collection.

During fiscal 2021, we re-platformed our website to Shopify Plus to become more streamlined, nimble, and efficient in our technology platform and business processes.

During fiscal 2021, we re-platformed our website to become more streamlined, nimble, and efficient in our technology platform and business processes.

Since 2018, we have also operated an online outlet site to reduce clearance sales from verabradley.com.

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Annual Outlet Sale.

We have not held our annual outlet sale for the past two years as a result of the COVID-19 pandemic.

We have also cancelled our calendar year 2022 sale.

Our annual outlet sale is typically held in the Allen County War Memorial Coliseum Exposition Center in Fort Wayne, Indiana each spring.

The annual outlet sale is an important tradition for Vera Bradley, has many loyal followers, and is an opportunity for us to sell our retired merchandise at discounted prices in a brand-right fashion.

In light of the COVID-19 pandemic, we cancelled our calendar year 2021 and 2020 annual outlet sale.

Our calendar year 2022 sale is currently planned for April 2022.

We will be assessing the feasibility of future annual outlet sales in calendar 2023 and beyond.

Vera Bradley Indirect Segment

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We are currently in approxima tely 300 d epartment store locations.

The top 25% of our specialty retailers account for approximately 70% of total specialty retail er revenue.

No single Indirect retailer represented more than 10% of consolidated net revenues in fiscal 2021, with the top ten Indirect retailers, representing in the aggregate approxim ately 50% of tot al Indirect segment net revenues.

The to p 25% of our specialty retailers account for approximately 80% of total specialty retail er revenue.

No single Indirect retailer represented more than 10% of consolidated net revenues in fiscal 2022, with the top ten Indirect retailers, representing in the aggregate approxim atel y 55% of total Indirect segment net revenues.

The majority of our Indirect retailers have been customers for over five years.

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The subscription club is a mechanism to continue to build brand loyalty and stimulate higher retention.

The Pura Vida wholesale channel is comprised primarily of specialty stores including Tilly’s, The Buckle, The Paper Store, Ron Jon Surf Shops, Hallmark stores, and Nordstrom, among others.

The Pura Vida wholesale channel is comprised primarily of specialty stores including Tilly’s, The Buckle, The Paper Store, Ron Jon Surf Shops, Hallmark stores, Nordstrom, and Dillards, among others.

Pura Vida also has a presence on Amazon through a third-party wholesaler.

We have a combination of in-house and external sales personnel who work with our wholesale retailers regarding order fulfillment and compilation.

Pura Vida has one retail store location in San Diego, California, which opened in fiscal 2022.

The Company expects to open approximately three additional retail store locations in fiscal 2023.

Manufacturing and Supply Chain Model

During fiscal 2022 for the Vera Bradley brand, we faced significant supply chain disruptions that caused delivery delays, as well as inbound and outbound freight cost increases.

Surges in demand for shipping containers has caused the cost per container to rise significantly.

In addition, the surge in imports has caused delays in getting ships into ports and congestion once the containers arrive at the ports.

Oftentimes, this has added several weeks of delays to our deliveries.

We are continuing to work diligently to mitigate the situation, including shortening the product development timeline and adding inventory coverage, but we expect shipping delays and freight expense increases to continue for the near future.

We have also been impacted by higher tariffs from previously duty-free countries, where we source products, as a result of the Generalized System of Preferences (“GSP”) duty-free status expiring at the end of calendar year 2020.

We cannot guarantee if or when the GSP duty-free status will be reinstated or, if reinstated, retro-actively applied by Congress.

Our multi-country manufacturing and supply chain model is designed to achieve efficient, timely, and accurate order fulfillment while maintaining appropriate levels of inventory.

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The overall objective for our sourcing team is to build and sustain collaborative partnerships throughout our supply chain, with a focus on identifying appropriate countries and partners to manufacture our products while maintaining and focusing on flexibility.

Our sourcing team leverages its expertise in negotiation, relationship management, flexibility, and change management to maintain a strong global supply chain.

Our sourcing team leverages its expertise in negotiation, relationship management, flexibility, and change management to maintain a strong, diverse global supply chain.

Our sourcing team also focuses on achieving the right balance of production sites and countries of origin to mitigate the risk of concentrated production, including potential incremental tariffs.

To continue to assist in this risk mitigation, our sourcing team reduced our Vera Bradley production in China from approximately 25% in fiscal 2020 to less than 15% in fiscal 2021 (which excludes mask production).

With exception to China-centric production categories, we have an ongoing strategy that continues to reduce our China exposure in both finished goods and raw materials.

To continue to assist in this risk mitigation, our sourcing team reduced our Vera Bradley production in China from over 50% in fiscal 2019 to approximately 15% in fiscal 2022.

We strive to maintain the appropriate balance of inventory to enable us to provide a high level of service to our customers, including prompt and accurate delivery of our products at a reasonable cost.

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We have also integrated our Vera Bradley planning, forecasting, and segmentation processes under one function called Merchandise Planning and Allocation.

We have started to experience delays as a result of port congestion for imported products, which may result in longer lead times or increased inbound freight costs.

While we are working to mitigate the impact of these delays through various actions, there is a risk that these delays could adversely impact our sales during fiscal 2022.

Approximately half of Vera Bradley product sales are cotton-based.

Our other fabrics include primarily nylon, polyester, microfiber, and leather.

Our other fabrics include primarily fleece, polyester, and microfiber.

We source our raw materials from various suppliers in Asia, with the majority coming from China and South Korea.

Our global sourcing team works with select suppliers enabling us to optimize the mix of cost, lead time, quality, and reliability within our global supply network.

Our global sourcing team works with select suppliers enabling us to optimize the mix of cost, lead time, quality, and reliability

within our global supply network.

We actively mitigate raw materials price increases through purchasing at advantageous times and periods.

All of our suppliers must comply with our quality standards, and we use only a limited number of pre-approved suppliers who have demonstrated a commitment to delivering the highest quality products.

In April 2016, we opened an office in Hong Kong to lead the global supply chain in Asia, including the oversight of sourcing and procurement.

The majority of our Vera Bradley finished goods, not sourced through licenses or strategic partners, are manufactured by a variety of global manufacturers located primarily in Vietnam, Myanmar, Cambodia, Indonesia, and China.

We are continually updating our factory audit process and building a bett er compliance program to ensure our vendor code of conduct is met.

In fact, in fiscal 2022 we moved from internal factory audits to partnering with BetterWork to conduct the audits.

BetterWork brings diverse groups together (governments, global brands, factory owners, unions, and workers) to improve working conditions in the garment industry and make the sector more competitive.

These audits encompass both the Vera Bradley and Pura Vida brands.

In April 2016, we opened an office in Hong Kong to lead the global supply chain in As ia, including the oversight of sourcing and procurement.

We discontinued manufacturing in Myanmar in mid-2021.

With the oversight of our office in Hong Kong and our independent contractors, we believe these financial benefits have been realized without sacrificing the level of quality inherent in our products or service to our customers.

Pura Vida products are sourced primarily from El Salvador, as well as China, Guatemala, and India.

We have begun an active supply chain diversification process to ensure a focus on maintaining flexibility and to help mitigate the risk of concentrated production, similar to the Vera Bradley supply chain.

Pura Vida products are sourced primarily from El Salvador, as well as China, Guatemala, Cambodia, Indonesia, and India.

We have continued an active supply chain diversification process to ensure a focus on maintaining flexibility and to help mitigate the risk of concentrated production, similar to the Vera Bradley supply chain.

When determining the size of orders placed with our manufacturers, we take into account forward-looking demand, lead times for specific products, current inventory levels, and minimum order quantity requirements.

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We maintain computer hardware, applications, and networks to enhance and accelerate the design process, to support the sale and distribution of our products to our customers, and to improve the integration and efficiency of our operations.

Our information systems are designed to provide, among other things, comprehensive order processing, production, accounting, and mana gement information and analytics for the product development, retail, sales, marketing, distribution, finance, and human resources functions of our business.

In fiscal 2021 at Vera Bradley, we migrated our ERP, POS, Business Intelligence, and Order Management systems to cloud-based Microsoft D365 streamlining and simplifying our work and providing for additional capabilities such as mobile POS.

Our ERP integration is planned for the fall of fiscal 2022 for Pura Vida.

When complete, our entire enterprise will be on a unified technology platform.

Our information systems are designed to provide, among other things, enterprise class business management, comprehensive order processing for all commerce channels, production, accounting, and management information and analytics for the product development, retail, sales, marketing, distribution, finance, and human resources functions of our business.

In fiscal 2021 at Vera Bradley, we migrated our ERP, POS, Business Intelligence, and Order Management systems to cloud-based platforms streamlining and simplifying our work and providing for additional capabilities such as mobile POS and multi-company operations on the same platform.

We completed our ERP migration during fiscal 2022 for Pura Vida, so that our entire enterprise is on a unified technology platform.

We continue to assess our on-premise and cloud-based technology solutions in an effort to ensure we have the optimal solutions for our business.

In fiscal 2023, we are implementing a new suite of inventory planning tools to optimize full line assortments, localized assortments, pricing and promotion planning, and inventory positions.

For both Vera Bradley and Pura Vida, we face strong competition in each of the product lines and markets in which we compete.

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Every year, we conduct an associate engagement survey in order to better understand our associates’ insights into our Company’s strengths and opportunities.

In 2020, we once again had outstanding participa tion, with 85% of ou r associates sharing their candid feedback.

Our 2020 overall engagement score was once again in the upper quartile compared to peer companies, which was exceptional and best in class, particularly in light of the pandemic and difficult work circumstances for many.

In 2021, we once again had outstanding participation, with approximately 80% of our associates sharing their candid feedback.

Our 2021 overall engagement score was once again above average in all categories compared to peer companies with some categories in the upper quartile compared to peer companies.

The feedback gave us insight into improvement opportunities and was instrumental in decisions we made to shape, strengthen, and improve our Company.

As a result of the survey feedback, over the last several years we have made meaningful improvements to benefits, career development, compensation, wellness programs, and our facilities.

As a result of the survey feedback, over the last several years we have made meaningful improvements to benefits, career development, compensation, mental health and wellness programs, and our facilities.

We believe listening to our associates’ feedback provided through the annual Engagement Surveys continually strengthens our corporate culture.

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Failure to comply with such laws and regulations could result in costs for corrective action, penalties, or the imposition of other liabilities.

Compliance with environmental laws and regulations has not had a material effect upon our earnings or financial position.

Compliance with environmental laws and regulations has not had a material effect upon our capital expenditures, earnings, or competitive position.

If we violate any laws or regulations, however, it could have a material adverse effect on our business or financial performance.

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Beatrice Mac Cabe 43 Chief Creative Officer, Vera Bradley

Stephanie Scheele 44 Chief Marketing Officer, Vera Bradley

Stephanie Scheele 45 Chief Purpose & Communication Officer, Vera Bradley, Inc.

Mary Beth Trypus 56 Chief Revenue Officer, Vera Bradley

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Dely began his legal career at New York law firm Fried Frank, LLP.

Daren Hull was promoted to Vera Bradley Brand President in February 2021 where he will focus on building customer engagement and expanding revenue while cultivating the ethos of the Vera Bradley brand.

Daren Hull was promoted to Vera Bradley Brand President in February 2021 with a focus on building customer engagement and expanding revenue while cultivating the ethos of the Vera Bradley brand.

Prior to this, Mr.

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Korney served as Vice President, Global Merchandising for Converse, a shoe, apparel and accessories manufacturer and distributor, where he introduced the Global Merchandising function in June 2015.

Between November 2012 and June 2015, he served as

Senior Divisional Merchandise Manager for Fossil.

Between November 2012 and June 2015, he served as Senior Divisional Merchandise Manager for Fossil.

From July 2011 to November 2012, he served as the General Merchandise Manager for Dallas Cowboys Merchandising and from September 2006 to March 2009, he served as Global Vice President within various Merchandising and Creative functions at The Walt Disney Company.

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Mac Cabe gained prior design and brand development experience at other fashion brands including Diane von Furstenberg, John Galliano in Paris, and Marni in Milan.

Stephanie Scheele was named Chief Marketing Officer in April 2018 and before that served as our Vice President – Marketing Strategy and Operations since 2015, leading the insights and customer database programs and overseeing the marketing strategy team.

Stephanie Scheele was named Chief Purpose and Communications officer in 2021.

Before that, Ms.

Scheele was Vera Bradley’s Chief Marketing Officer from April 2018 until 2021.

Prior to April 2018, Ms.

Scheele served as our Vice President – Marketing Strategy and Operations since 2015, leading the insights and customer database programs and overseeing the marketing strategy team.

Scheele has spent over 15 years with Vera Bradley in various roles of increasing responsibility.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business