Fund 1 Sends Letter to Vera Bradley’s Board of Directors Highlighting the Opportunity for Value-Enhancing Strategic Alternatives
Believes Vera Bradley’s Iconic Brand is Highly Valuable and That Value Is Not Reflected in Today’s Share Price
Contends Vera Bradley Will Be Best Equipped to Focus on Brand Revival and Operational Improvements Under a Larger Organization or In the Private Markets
Pleased to Hear All Options Are on the Table to Maximize Shareholder Value
RINCON,
December 30, 2024
Vera Bradley, Inc.
12420 Stonebridge Road
Attention: Robert Hall
cc: Board of Directors
Bob,
Fund 1 Investments LLC (together with its affiliates, “Fund 1”, or “we”) beneficially owns approximately
As we described to you over the phone, Fund 1 is a global long/short equity firm that makes both public and private investments primarily focused on the consumer, telecom, media, and technology sectors. We possess significant retail expertise and have a long history of constructively engaging with management teams and boards to offer value-enhancing ideas, introductions to relevant executives, and capital for strategic initiatives to our portfolio companies. We encourage you to speak with executives from other companies that we have invested in to understand the valuable insight we endeavor to bring and how we strive to approach each situation with humility and level-headedness.
We thank you and appreciate the time you spent with us the other week as we have the utmost respect for you and the beloved brand your family has built over the past 40 years. As we have conducted substantial research on the Company over the past few years, we can’t help but admire Barb’s vision and tenacity – to build a business from scratch that, at its peak, generated
We, as your largest shareholder, simply want Vera Bradley to return to its winning ways. In its first year of being public, Vera Bradley generated
The Company is now experiencing a perfect storm – i) a history of value destruction and questionable capital allocation, ii) poor recent operational performance, iii) a failed brand turnaround, iv) extremely negative macro sentiment for fashion brands, and v) a less than
We believe Vera Bradley can be a much more valuable company and has a timely opportunity to return to its winning ways. If the Company were out of the public spotlight, there are many advantages for Vera Bradley: i) ability to focus on the brand revival without quarterly earnings, ii) cost savings opportunities unavailable in the public markets, and iii) more time for management to focus on the business as opposed to frequent meetings with shareholders.
We believe that a strategic or financial buyer would be able to complete a transaction at an attractive premium for shareholders. If a financial buyer provides the best opportunity, the Company should consider transaction structures that would enable existing stakeholders to participate in a transaction and maintain or increase their interests in the Company, which we would be willing to do.
As we discussed the other week, we wish to continue to have a constructive engagement with you and are available to discuss the contents of this letter at your convenience.
We look forward to supporting a successful outcome for the shareholders, employees and customers of Vera Bradley.
Best Regards,
Fund 1 Investments LLC
About Fund 1
Fund 1 Investments LLC is a global long/short equity firm that makes both public and private investments primarily focused on the consumer, telecom, media, and technology sectors.
1 Current Enterprise Value of
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Longacre Square Partners
Charlotte Kiaie / Bela Kirpalani, 646-386-0091
Fund1@longacresquare.com
Source: Fund 1 Investments LLC