Vera Bradley Inc. is betting that a man whose product line once included items such as $1,995 Alexander McQueen studded leather totes can successfully transition to $99 quilted cotton totes.
Robert Wallstrom, a former Saks Fifth Avenue executive, on Tuesday was named Vera Bradley’s president and CEO. He succeeds Mike Ray, who is retiring.
Wallstrom, who spoke to The Journal Gazette from his New York office, said he’s excited to join a company with a compelling story.
“There’s just so much authenticity in the brand,” he said, adding that he’s impressed by the customer loyalty and engagement. “I think the company still has great growth in front of it.”
Investors blessed the announcement, sending Vera Bradley’s stock up 37 cents to close Tuesday at $23.12 on the Nasdaq stock market.
Wallstrom, 47, will join the Fort Wayne-based handbag maker on Monday. After a brief overlap, Ray will leave the company. Ray will vacate his board seat Monday, when Wallstrom joins the board of directors.
Vera Bradley designs and makes quilted cotton handbags, luggage, accessories and home décor items. Corporate and design operations are based locally. Most of the products are made in China.
Wallstrom, a Los Angeles native, holds a bachelor’s degree in business administration/accounting from San Diego State University.
He is president of Saks Fifth Avenue’s OFF Fifth division, the New York-based company’s value division.
About 90 percent of the merchandise it sells comes directly from suppliers. The other 10 percent is discounted merchandise from the full-price, luxury retail division.
Women’s handbags for sale Tuesday on OFF Fifth’s website included a Carlos Falchi lacey python tote marked down to $2,099.99 from $3,000, a Missoni flame stitch top handle bag discounted to $979.99 from $1,395 and a Kate Spade New York patent leather dot cross-body bag reduced to $139.99 from $298.
By contrast, Saks Fifth Avenue’s website includes numerous handbags priced at more than $3,000, including an Akris Ai medium ostrich bag listed Tuesday at $4,800.
Wallstrom spent 12 years with Saks, where he was group senior vice president and general manager of the flagship New York store from 2002 to 2007, and six years with Saks OFF Fifth.
During his tenure as president of OFF Fifth, the division increased sales by 50 percent and profitability by 100 percent, according to Vera Bradley’s announcement.
The retailer also expanded to 71 stores from 40.
Patricia Miller, who retired from the company on Oct. 31, 2012, and friend Barbara Baekgaard founded Vera Bradley 30 years ago after noticing during an airport layover that women’s luggage was anything but exciting.
The women, who named the business for Baekgaard’s mother, started their venture by spreading colorful fabric across a ping pong table, then cutting pieces that would be sewn into bags.
They launched an initial public offering of stock in October 2010.
Wallstrom, who signed a three-year, three-month contract on Monday, declined to talk about strategic direction. But he mentioned that Vera Bradley has an opportunity to create a stronger presence on the West Coast.
The married father of two isn’t troubled by the significant price and quality differences between Saks’ and Vera Bradley’s offerings. His retail experience includes selling items at various price points.
Vera Bradley’s strength, Wallstrom said, is delivering to its core customers “products that really fit people’s everyday needs.”
Spoiler alert: The new CEO has no plans to start selling jewel-encrusted, python skin Vera Bradley totes.
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