The sale of Pura Vida to Vera Bradley closed Tuesday, so we followed up with Founders Paul Goodman and Griffin Thall to find out more about why they sold the company, lessons learned during Pura Vida’s rapid growth cycle and what they are excited about for the future.
Vera Bradley, a publicly traded company based in the Midwest that is best known for its quilted, colorful handbags, acquired 75% of Pura Vida for $75 million. Vera Bradley has the right to acquire the remaining 25% of the company in five years.
Griffin, 32, and Paul, 30, who owned 100% of the company, could earn up to $22.5 million more based on certain calendar 2019 targets.
Vera Bradley executives have said they were attracted to Pura Vida’s fast growth, strong financial profile, and digital expertise.
Pura Vida has essentially doubled revenue in each of the past two years and is profitable, with no debt.
The company’s revenue totaled $68.3 million in the year ended Dec. 31, 2018. Net income totaled $3.8 million and adjusted EBITDA $13.7 million, according to Vera Bradley filings. Pura Vida also had a 20% operating margin in 2018.
Vera Bradley, which is mostly brick-and-mortar focused, believes the digitally native Pura Vida can bring expertise to Vera Bradley. About 65% of Pura Vida’s sales come from e-commerce, 20% from wholesale and 14% from monthly subscriptions.
Executive Edition members can read our story that explores more about the deal and about Vera Bradley’s strategy.
Here is a Q&A with Paul and Griffin about the deal.
Why were you guys looking to sell now?
Pura Vida Owners Paul Goodman and Griffin Thall – Photo by SES
Paul Goodman and Griffin Thall: We weren’t really looking to sell quite honestly, we were looking for the best partner that could help take Pura Vida to the next level.
After interviewing over two dozen private equity firms, we were fortunate enough to connect with a strategic partner – Vera Bradley.
How do you think Vera Bradley will help Pura Vida?
Paul Goodman and Griffin Thall: We are confident that Vera Bradley will help optimize our back office functions as we continue to scale.
To start the new partnership, they plan to take over our accounting, finance, and legal needs, while letting our headquarters in La Jolla focus on branding, marketing, sales, social media, and operations.
What was one of the toughest moments in your entrepreneurial story and how did you overcome it?
Paul Goodman and Griffin Thall: I’d have to say that one of the toughest moments in our career has been learning how to scale a business with zero funding, along with building and managing a young staff.
Also, it has been extremely difficult to scale a business that relies on handmade goods that are sourced and manufactured all over the world.
Are there any key lessons you have learned on this journey?
Paul Goodman and Griffin Thall: One key lesson we have learned thus far is to put your head down and get to work, straight up.
There are so many people out there with ideas, products, and everything in between that they actually forget that for a business to take off, you NEED to put in the WORK.
Ever since day one, we have worked and did not stop working. We kept our eye on the prize and continued to build this business to where it is today.
Key takeaway: Push all the distractions to the side, don’t listen to anyone who tells you it’s a bad idea, and put your head down and get to work.
What are you most excited about now that the deal has closed?
Paul Goodman and Griffin Thall: We are most excited about working with the Vera Bradley team, which has 30-plus years of experience in operations, supply chain, wholesale, and building out retail stores.
