1. F i n a l P r e s e n t a t i o n
B u s i n e s s Po l i c y F a l l 2 0 1 6
T h e C o l l a b o r a t i v e E f f o r t s o f :
Bashayer Baljon, Aly Homan, Paige Norris, Dominique Rampogu, and Taylor Wenger

2. 2
Agenda
• Company Overview
• Industry & Market Share
• Competition
• SWOT Analysis
• Strategic Initiatives
• I: Increasing Market Share
• II: Close Bottom 10% of Stores
• III: Halting & Renovating Stores
• End Results

3. 3
Headquarters:
FortWayne,
Indiana
Net Sales:
$502.6M
Locations:
150Total
Full-Line (110)
Factory Outlet (40)
Employees:
2,950
Source: Fact Set
Company Overview

4. Source: Fact Set
4
Sector:Consumer Non-Durables
Industry: Apparel and Footwear
Market Share of Industry Relative to Competitors
Kate Spade & Co Vera Bradley, Inc.
Michael Kors Coach
Vince Steven Madden
Industry & Market Share
31.41%42.06%
12.72% 10.05%
2.72%1.03%

5. 5
SWOT Analysis
STRENGTHS
• Diverse Channel Mix
• Liquidity
• Low COGS
OPPORTUNITIES
• Revisit Channel Strategy to
Strengthen E-Commerce
• New Product Line
WEAKNESSES
• Weak Brand Relevance
• Data Breach
THREATS
• Consumer’s Brand Association
withTraditional Prints
• Closing of Department Stores

6. 6
Objectives
Drive a 2% increase in sales in first year, a 3% increase in second year,
which claims a 5% increase in market share
StreamlineVera Bradley’s product development in order to achieve and
maintain brand relevance
Recapture lost same-store sales after sales per square foot decreased from
$760 to $703 in 2016, on top of 14.3% decrease from 2014 to 2015
1
2
3

7. 7
Strategy I: Increasing Market Share
V x VB
VERA BRADLEY SIGNATURE COLLECTION
Drive a 2% increase in sales in first year, a 3% increase in second year, which
claims a 5% increase in market share
Break out into two sub-brands underVera Bradley, Inc.
Extensive marketing campaign will support implementation
Recreate & strengthen brand perception and relevance among millennial women

8. 8
Strategy I: Increasing Market Share
V xVB
sold
for
higher
price

9. 9
Income Statement: Strategy I (Increase Market Share)
*In millions USD 2019 % 2018 % 2017 % 2016 %
Sales $ 528.03 100 $ 528.03 100 $ 512.65 100 $ 502.60 100
Cost of Goods Sold $ 197.10 37.33 $ 203.83 38.60 $ 210.78 41.12 $ 217.97 43.37
Gross Income $ 330.93 62.67 $ 324.20 61.40 $ 301.87 58.88 $ 284.62 56.63
SG&A Expenses $ 212.20 40.19 $ 212.20 40.19 $ 212.20 41.39 $ 231.54 46.07
EBIT (Operating Income) $ 118.73 22.48 $ 112.00 21.21 $ 89.66 17.49 $ 53.09 10.56
Interest Expense $ 0.26 0.05 $ 0.26 0.05 $ 0.26 0.05 $ 0.26 0.05
Pretax Income $ 118.46 22.43 $ 111.74 21.16 $ 89.40 17.44 $ 46.46 9.24
IncomeTaxes $ 41.55 7.87 $ 39.20 7.42 $ 31.38 6.12 $ 18.90 3.76
NET INCOME
$ 76.91 14.57 $ 72.54 13.74 $ 58.02 11.32 $ 27.56 5.48
9

10. 10
Strategy II: Close Bottom 10% of Stores
Close bottom 10% of underperforming stores
Result in funds used toward licensing costs for new sub-brand
Decrease
COGS

11. 11
Income Statement: Strategy II (Close Bottom 10%)
11
*In millions USD 2019 % 2018 % 2017 % 2016 %
Sales $ 502.60 100 $ 502.60 100 $ 452.34 100 $ 502.60 100
Cost of Goods Sold $ 193.73 38.53 $ 200.24 39.84 $ 207.08 45.78 $ 217.97 43.37
Gross Income $ 308.96 61.47 $ 302.36 60.16 $ 245.26 54.22 $ 284.62 56.63
SG&A Expenses $ 212.20 42.22 $ 212.20 42.22 $ 208.38 46.07 $ 231.54 46.07
EBIT (Operating Income) $ 96.76 19.25 $ 90.15 17.94 $ 36.88 8.15 $ 53.09 10.56
Interest Expense $ 0.26 0.05 $ 0.26 0.05 $ 0.26 0.06 $ 0.26 0.05
Pretax Income $ 96.50 19.20 $ 89.89 17.88 $ 36.62 8.10 $ 46.46 9.24
IncomeTaxes $ 33.87 6.74 $ 31.55 6.28 $ 12.91 2.85 $ 18.90 3.76
NET INCOME
$ 62.63 12.46 $ 58.34 11.61 $ 23.71 5.24 $ 27.56 5.48

12. 12
Strategy III: Halting & Renovation of Stores
Recapture lost same-store sales after sales per square foot decreased from $760 to $703 in
2016, on top of 14.3% decrease from 2014 to 2015
Halt opening of new stores in fiscal 2017
Shift focus toward completing renovations of current full-line stores
COST SAVINGS:
$400,000 $62,500
New Store Costs (1200 sq. ft) Renovation Costs

15. Income Statement: Strategy III (Store Renovations)
15
*In millions USD 2019 % 2018 % 2017 % 2016 %
Sales $ 512.70 100 $ 512.70 100% $ 507.62 100% $ 502.60 100%
Cost of Goods Sold $ 210.25 41.01 $ 217.43 42.41% $ 224.85 44.29% $ 217.97 43.37%
Gross Income $ 302.45 58.99 $ 295.27 57.59% $ 282.77 55.71% $ 284.62 56.63%
SG&A Expenses $ 212.20 41.39 $ 212.20 41.39% $ 212.20 41.80% $ 231.54 46.07%
EBIT (Operating Income) $ 90.24 17.60 $ 83.07 16.20% $ 70.57 13.90% $ 53.09 10.56%
Interest Expense $ 0.26 0.05 $ 0.26 0.05% $ 0.26 0.05% $ 0.26 0.05%
Pretax Income $ 89.98 17.55 $ 82.80 16.15% $ 70.31 13.85% $ 46.46 9.24%
IncomeTaxes $ 31.58 6.16 $ 29.07 5.67% $ 29.07 4.87% $ 18.90 3.76%
NET INCOME
$ 58.39
11.39
$ 53.73
10.48%
$ 53.73
8.98%
$ 27.56
5.48%

16. Comparing Net Incomes with Each Strategy
Incremental
Value 2019
Net Income
2018
Net Income
2017
Net Income
2016
Net Income
Close Bottom
10%
22.97 16.29 -20.72 27.56
Increase Market
Share
37.25 30.49 13.59 27.56
Store
Renovations
18.73 11.68 1.18 27.56
Combined
Strategies
78.95 58.46 -5.95 16

17. THANK YOU
Q u e s t i o n s ?

18. Appendix
Incomes Statements
• NO STRATEGY
• COMBINED STRATEGIES
Competitive Analysis
• COGS COMPARISON
• GENERAL INFO
Channel Distribution
• DIRECTVS. INDIRECT
• CHANNEL COMPARISONYOY
Sales Analysis
• TOTAL SALES BY
PRODUCT CATEGORY
• SAME STORE SALES
Survey Results
• AGE OF RESPONDENTS
• DOYOU OWNVB PRODUCT?
• PRODUCT AWARENESS
• PRODUCT LIKEABILITY
• BRAND PERCEPTION
3 4 5 6 7 8 9 10 11 12 13 14 15 16
Profitability Ratios
• GROSS MARGIN
• OPERATING MARGIN
• NET PROFIT
• ROA
• ROE
• DuPont Analysis
OPERATION EFFICIENCY
• INVENTORYTURNOVER
• TOTAL ASSETTURNOVER
• ACCOUNTS RECEIVABLE
LIQUIDITY
• CURRENT RATIO
• QUICK RATIO

19. 19
APPENDIX 1
35%
10%35%
15%
5%
% of Mix to IMC Budget
Digital Out-Of-Home Print Sales Promotion Direct Response
$33,392,000
$38,000,000
A n n u a l A d S p e n d :
To t a l M a r ke t i n g S p e n d :

20. INCOME STATEMENTS
20

21. 21
Income Statement: No Strategy
*In millions USD 2019 2018 2017 2016 2015 2014
Sales $ 470.73 $ 481.12 $ 491.74 $ 502.60 $ 508.99 $ 536.02
Cost of Goods Sold $ 197.10 $ 203.83 $ 210.78 $ 217.97 $ 236.98 $ 240.59
Gross Income $ 273.63 $ 277.30 $ 280.96 $ 284.62 $ 272.01 $ 295.43
SG&A Expenses $ 212.20 $ 212.20 $ 212.20 $ 231.54 $ 208.28 $ 204.80
EBIT (Operating Income) $ 61.43 $ 65.09 $ 68.76 $ 53.09 $ 63.73 $ 90.64
Interest Expense $ 0.26 $ 0.26 $ 0.26 $ 0.26 $ 0.41 $ 0.38
Pretax Income $ 61.16 $ 64.83 $ 68.49 $ 46.46 $ 63.66 $ 93.87
IncomeTaxes $ 21.50 $ 22.78 $ 24.06 $ 18.90 $ 22.83 $ 35.06
NET INCOME $ 39.66 $ 42.05 $ 44.43 $ 27.56 $ 40.84 $ 58.81
21

22. 22
Income Statement: Combined Strategies
*In millions USD 2019 2018 2017 2016 2015 2014
Sales $ 476.26 $ 476.26 $ 462.39 $ 502.60 $ 508.99 $ 536.02
Cost of Goods Sold $ 189.87 $ 196.35 $ 203.05 $ 217.97 $ 236.98 $ 240.59
Gross Income $ 286.39 $ 279.91 $ 259.34 $ 284.62 $ 272.01 $ 295.43
SG&A Expenses $ 212.20 $ 212.20 $ 212.20 $ 231.54 $ 208.28 $ 204.80
EBIT (Operating Income) $ 74.19 $ 65.09 $ 47.13 $ 53.09 $ 63.73 $ 90.64
Interest Expense $ 0.26 $ 0.26 $ 0.26 $ 0.26 $ 0.41 $ 0.38
Pretax Income $ 73.92 $ 64.83 $ 46.87 $ 46.46 $ 63.66 $ 93.87
IncomeTaxes $ 25.97 $ 22.78 $ 16.50 $ 18.90 $ 22.83 $ 35.06
NET INCOME $ 47.96 $ 42.05 $ 30.37 $ 27.56 $ 40.84 $ 58.81
APPENDIX 1
22

23. COMPETITIVE COMPARISON
23

24. 24
Cost of Goods Sold Comparison
2016 2015 2014 2013 2012
$217.97 $236.98 $240.59 $232.87 $203.22
$1441 $1286 $1433 $1376 $1292
-
$490.5 $459.5 $540.7 $662.1
*in millions USD
APPENDIX 1

25. 25
Competitive Comparison (General & Margins)
APPENDIX 1

26. CHANNEL DISTRIBUTION
26

27. 27
Direct Channel: E-Commerce, Full-Line Retail Stores, & Factory
Outlet Stores
Indirect Channel: Department Stores & Specialty Retail Stores
69.9%
30.1%
Source: Fact Set
Channel Distribution
APPENDIX 1

28. 28
Source: Fact Set
Channel Distribution (YOY)
APPENDIX 1

29. SALES ANALYSIS
29

30. 30
Source: Fact Set
Total Sales by Product Category
APPENDIX 1

31. 31
Same Store Sales
APPENDIX 1

32. PROFITABILITY (%)
RATIO ANALYSIS:
32

33. 2014 2015 2016
55.12 53.44 56.63
59.64 60.53 -
70.17 69.32 67.93
INDUSTRY
46.92 46.64 -
Source: Fact Set
33
Gross Margin
APPENDIX 1

34. 34
Source: Fact Set
Operating Margins
2014 2015 2016
16.91 12.52 10.56
10.83 6.66 -
25.91 18.03 16.94
INDUSTRY
12.62 12.35 -
APPENDIX 1

35. 35
Source: Fact Set
Net Profit
2014 2015 2016
10.97 8.02 5.48
6.74 1.75 -
16.26 9.6 10.25
INDUSTRY
8.57 8.89 -
APPENDIX 1

36. 36
Source: Fact Set
Return on Assets
2014 2015 2016
19.27 11.36 7.05
8.06 2.28 -
21.72 9.66 9.63
INDUSTRY
10.21 10.74 -
APPENDIX 1

37. 37
Source: Fact Set
Return on Equity
2014 2015 2016
26.17 15.13 9.67
91.82 9.76 -
32.35 16.39 17.8
INDUSTRY
19.67 20.63 -
APPENDIX 1

38. 38
DuPont Analysis
Profit Margin Total Asset
Turnover
Equity
Multiplier
2014 10.97 1.76 26.7
2015 8.02 1.42 15.13
2016 5.48 1.29 9.67
APPENDIX 1

39. OPERATION EFFICIENCY
RATIO ANALYSIS:
39

40. 40
Inventory Turnover
2014 2015 2016
1.79 2.01 2.06
2.68 2.8 -
2.73 2.54 3.05
APPENDIX 1

41. 41
Total Asset Turnover
2014 2015 2016
1.76 1.42 1.29
1.2 1.3 -
1.34 1.01 0.94
APPENDIX 1

42. 42
Accounts Receivable Turnover
2014 2015 2016
17.14 16.34 15.08
12.68 13.3 -
25.7 20.05 19.33
APPENDIX 1

43. LIQUIDITY
RATIO ANALYSIS:
43

44. 44
Current Ratio
2014 2015 2016
4.09 4.25 3.81
1.88 2.33 -
2.28 3 2.63
APPENDIX 1

45. 45
Quick Ratio
2014 2015 2016
1.82 2.69 2.1
1.25 1.61 -
1.63 2.42 2.07
APPENDIX 1

46. 46
Survey: Age of Respondents
APPENDIX 1

47. SURVEY RESULTS
47

48. 48
Survey: Do you own Vera Bradley products? (16-20)
APPENDIX 1

49. 49
Survey: Do you own Vera Bradley products? (21-34)
APPENDIX 1

50. 50
Survey: Do you own Vera Bradley products? (35-50)
APPENDIX 1

51. 51
Survey: Do you own Vera Bradley products? (51-80)
APPENDIX 1

52. 52
Survey: Product Awareness (21-34)
APPENDIX 1

53. 53
Survey: Product Likeability (21-34)
APPENDIX 1

54. 54
Survey: Brand Perception (21-34)
APPENDIX 1

55. 55
Survey: Brand Perception (21-34)
APPENDIX 1