Pura Vida Co-Presidents Griffin Thall and Paul Goodman will sell their remaining 25% stake in the business to Vera Bradley Inc. for $10 million and exit the bracelet company they started more than a decade ago.
The changes were announced Tuesday afternoon, and Thall and Goodman’s departure is effective Jan. 28. The deal to sell their share in the business to Indiana-based Vera Bradley, which bought 75% of the business in 2019 for $75 million, is effective Jan. 30. Pura Vida has become a meaningful accessories brand for industry retailers.
Pura Vida’s annual revenue totaled $119.6 million in its most recent fiscal year, a 6.3% increase, according to financial reports.
“We thank Griffin and Paul for building and growing such a wonderfully unique business and entrusting it to [Vera Bradley],” Vera Bradley Inc. President and CEO Jackie Ardrey said in a statement Tuesday. “We remain very optimistic about the opportunities ahead for Pura Vida.”
Thall is expected to stay on as a marketing and branding consultant. Meanwhile, Pura Vida’s Vice President of Finance Sujay Shah will oversee the business, while an executive search for a permanent president is conducted.
Thall and Goodman could not be immediately reached for comment by SES Tuesday afternoon. (SES members can listen to a podcast interview we did with the founders prior to the sale to Vera Bradley here.)
Business Challenges
Pura Vida was propelled to success by Thall and Goodman’s social media prowess. They launched the business initially as a direct-to-consumer brand. The company steadily grew with the help of brand ambassadors and a focus on influencers with highly engaged audiences.
Pura Vida Founders Paul Goodman and Griffin Thall at the Irvine Spectrum store – the San Diego State University business school graduates became multi-millionaires by selling colorful string bracelets and creating a coveted brand that is popular with teen and tween girls. Pura Vida’s store expansion has gone well, according to parent company Vera Bradley. Photo courtesy of @griffinthall.
More recently, however, the company’s sales took a hit with Apple software privacy changes that have made it harder for marketers to send targeted advertising through Facebook and Instagram. The two platforms are the dominant marketing channels used by Pura Vida.
The company has been exploring new marketing channels for itself, such as TikTok and SMS messaging, according to past statements by Vera Bradley.
Former Vera Bradley Inc. CEO Rob Wallstrom, who left the business last month, noted Pura Vida revenue for the third quarter ended Oct. 29 continued to fall on account of the “shift in social and digital media effectiveness,” increased digital media costs, and a contraction in wholesale sales.
As a result, Wallstrom told analysts last month the company was pulling back on year-over-year marketing spend for the brand until an effective strategy is in place and cited the “need to find a new way of acquiring customers that is not as dependent upon our old channels.”
Pura Vida reported revenue for the third quarter ended Oct. 29 was down 20.3% from the year-ago period to $21.7 million. The company recorded an operating loss of $1.4 million in the same quarter, compared to operating income of $1.8 million a year ago.
Vera Bradley Shakeup
The shuffling at Pura Vida came with announcements in the broader Vera Bradley organization on Tuesday, which the company said are being done in an effort to cut costs. Separate hiring moves are aimed at ramping up marketing and merchandising efforts, the company said.
Vera Bradley said Tuesday that its Brand President Daren Hull, Chief Creative Officer Beatrice Mac Cabe, and Chief Revenue Officer Mary Beth Trypus have left the company after their positions were eliminated.
Ardrey explained the decision as a move to “right-size our leadership team and cost structure for the size of our business, to address the continuing challenging macro environment, and to best position us to achieve our long-term strategic plans.”
The position eliminations also came with news the company is hiring a senior vice president of merchandising and design, while also hiring Chief Marketing Officer Alison Hiatt.
“We have a portfolio of two iconic, lifestyle brands; multi-generational customers with remarkable loyalty and devotion; amazing brand recognition; a solid balance sheet; and an extraordinary culture,” Ardrey said. “I believe the company will deliver meaningful growth and value to our shareholders over the long term. We have some heavy lifting to do in fiscal 2024, but I am confident that we will emerge a stronger company.”
Shares of Vera Bradley closed down 3% to $5.45 on Tuesday, with a recent market cap of $168.3 million.
Vera Bradley Inc. is expected to report its results for its fiscal fourth quarter March 8.
