Vera Bradley’s success fueled by affordability, multi-generational appeal

(Jeffrey MacMillan/ For The Washington Post ) - Alyssa Cole, 14, with her Vera Bradley collection and her dog, Lily, at her home in Fairfax.

(Jeffrey MacMillan/ For The Washington Post ) - Alyssa Cole, 14, with her Vera Bradley collection and her dog, Lily, at her home in Fairfax.

Alyssa Cole was in second grade when she received her first Vera Bradley bag: A small pink purse from her grandmother.

“And then in fifth grade, I went into a Vera Bradley store for the first time and I fell in love with it,” Cole said.

(Jeffrey MacMillan/For The Washington Post) - A line of customers stretches to the door at the Vera Bradley outlet store at Potomac Mills in Woodbridge last Tuesday.

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Today, the high school freshman has more than 30 bags and wallets by the designer, as well as rugs (one in her bedroom, another in her bathroom), bulletin boards, aprons, picture frames, a bedspread and pillow cases.

“If you name it, I probably have it,” said Cole, 14, who goes to Trinity Christian School in Fairfax. “Last year [for Christmas], I got a big tote bag, a big duffle bag, slippers and a new backpack. And I got, like, three wallets.”

Vera Bradley, known for its quilted bags patterned with a kaleidoscope of flowers and paisley, has used that distinctive look for over 30 years to cultivate a loyal following — a group of women, from young girls to grandmothers, who scour the company’s catalogues and stores for the newest designs with names such as “Tutti Frutti” and “Plum Crazy.”

Fueling the company’s success, analysts say, is a combination of affordable prices (tote bags range from about $30 to $100) and a wide range of patterns and colors (there are currently 23 prints in rotation).

“Vera Bradley has been very successful in creating collections,” said Peter Wahlstrom, a retail analyst at Morningstar. “When you have a tote, a handbag, a sunglasses case and an overnight bag in the same pattern, you create a certain following. It’s something other brands are trying to do, but Vera Bradley is one of the few that has carved out a niche with its patterns.”

Companies such as American Girl, which opened in Tysons Corner in 2011, and Pandora, the Danish charm bracelet chain that runs its U.S. operations out of Columbia, have amassed similar followings in recent years as Americans spring for small indulgences amid a slowly-recovering economy. And, analysts say, the rise of social media has made it easier for retailers such as Vera Bradley, Lululemon and Warby Parker to hone in on — and market to — very specific populations.

“There is a general trend of people going really deep into a brand,” said Bryan Gildenberg, chief knowledge officer at Kantar Retail, a research firm based in London. “People have always collected things — but historically, it was more generic items like coins and books. Now we’re seeing people who are very passionate about very specific brands.”

***

On Wednesday afternoon, more than three dozen shoppers waited in line to check out at Vera Bradley’s newest outlet store at Potomac Mills, which opened March 29.

“My neighbor told me that everything was 50 percent off, so I thought I’d come do my Christmas shopping,” said Dottie Wright of Montclair, who was holding 10 wallets and sunglasses cases in her hands.

Sherry Eagle, who was buying an apron for her mother-in-law, said it was her third visit to the store in less than a week.

“Four, if you count the time we came here before it opened,” her husband said.

“Oh yeah,” said Eagle, who lives in Woodbridge. “Well, I’m a big fan. So is my daughter — and my granddaughter.”

That multi-generational appeal, analysts say, is what sets the brand apart from others. Many women said they were introduced to Vera Bradley by their mothers or daughters; young girls often said they received their first bag from their grandmothers.

“Sometimes I’ll see a 5-year-old with a little Vera Bradley coin purse and I’ll see her grandmother — or her great-grandmother, even — also carrying a Vera Bradley handbag,” said Neely Tamminga, senior research analyst at Piper Jaffray. “I’ve often wondered if there is any other brand like that and the only thing I’ve come up with is Bayer Aspirin. That’s as close as it comes to cutting across that many generations.”

***

In 1982, Patricia Miller and Barbara Bradley Baekgaard were waiting to catch a flight in Atlanta when they realized there was a shortage of feminine-looking luggage. The friends, who lived in Fort Wayne, Ind., pooled together $500, set up shop in Baekgaard's basement and began creating brightly-colored fabric bags. The items were sold primarily in mom-and-pop shops and small gift stores.

It wasn’t until 2007, 25 years after its founding, that Vera Bradley opened its first retail store. Since then, the company has grown to include 79 locations, with about 20 more slated for the coming year. In all, the company has plans to have as many as 300 locations in the United States.

“The retail stores have been doing really well,” said Janine Stichter, an analyst for Telsey Advisory Group. “They’re continuing to grow quite quickly and that’s really why you’re seeing [the brand] becoming more popular.”

In its most recent fiscal year, the company racked up $541.1 million in revenue, a 17 percent increase from the year before. Profits rose 19 percent to $68.9 million in the same period.

“It’s a very affordable purchase,” Tamminga said. “It’s not hard to go into a store and find an indulgence under $30 or $20, and that’s remarkable in the grand scheme of retailing.”

Perhaps the biggest secret to Vera Bradley’s success, though, lies in the brand’s ability to reinvent itself with a constant flurry of new colors and novelty. In addition to bags, customers can now pick up pencil sharpeners and key chains in their favorite prints. Cosmetic cases come in multiple sizes, as do umbrellas and backpacks.

“They keep coming up with so many styles and patterns that I can never get my fix,” said Amanda Abraham, 35, who lives in McLean. “My husband has trained my kids to say, ‘Mommy, stop buying Vera Bradley stuff.’”

But executives say the very tactic that has helped bolster the company may lead to its downfall. In March, Vera Bradley announced that it will release only 15 new patterns this year for other sellers, down from 17 in 2012.

“After extensive analysis, we believe [the] number of new patterns we introduce annually diminishes the strength of the overall assortment,” Michael C. Ray, the company’s chief executive, said in a call with analysts.

***

April Hoffman said her friends have been talking up Vera Bradley purses for years.

“When we’d go to lunch together, it’d be like a Vera Bradley convention,” the Woodbridge resident said. “They kept saying, ‘Come on, you need a Vera Bradley bag.’ But I’d always say, ‘No, I don’t. I don’t need that.’”

Finally her friends bought her a purple Vera Bradley bag for her birthday. Hoffman says she was hooked.

On Wednesday, she was waiting in line at the Potomac Mills store, preparing to purchase an overnight bag and laptop case for herself, as well as a variety of presents for her sisters and in-laws.

“My collection is about to get a whole lot bigger,” she said.

A few yards away, Nicole McCory, 15, was shopping for a new book bag in her favorite pattern: Cupcakes Pink.

Alas, there were none left.

“They don’t have it anymore,” said McCory, who lives in Stafford. She picked up a backpack with a flowery blue print.

“But,” she added. “It’s OK. I’m falling in love with Summer Cottage right now.”

 
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