FORT WAYNE, Ind. — On the heels of reporting net revenues of $123 million for the first quarter ended May 4 — an increase of 5% from $117.2 million in the first quarter of the year prior — Vera Bradley has announced that CEO Michael C. Ray plans to retire from the company.
Ray informed the company's board of directors that he will remain CEO through the transition period and intends to continue to serve as a director. The board has formed a search committee and retained Spencer Stuart to assist in the search for Ray's successor.
"On behalf of the board, I would like to thank Mike for his exceptional leadership and countless contributions to Vera Bradley throughout the past 15 years," said John Kyees, Vera Bradley's lead independent director. "Under his stewardship, the company has grown into an authentic lifestyle brand and powerful multichannel business; expanded its retail footprint; become a public company; and experienced remarkable growth, with annual revenues nearly doubling to $541 million during Mike's tenure as CEO. The board is grateful to Mike for his tireless work on behalf of the company and is confident Vera Bradley will continue to build on this strong track record of success."
"Mike has played an integral role in Vera Bradley's distinctive culture and in the company's evolution, growth and success,” added company co-founder and director Barbara Bradley Baekgaard. “We will miss Mike, but respect his decision to pursue other interests. Today we have a powerful brand, a diverse portfolio of highly sought-after products, and an exceptionally loyal, multi-generational customer base. I look forward to working with a new leader to further elevate our brand."
"My time here has been exciting and incredibly fulfilling, and I am grateful to our founders Barbara Baekgaard and Patricia Miller for allowing me to be part of the Vera Bradley story,” said Ray. “I will certainly miss working alongside my extraordinarily talented colleagues and I am extremely proud of what we have accomplished as a team. While it is difficult to think of leaving this very special organization, I believe it is the right time for the company to pursue a new leader who has the extensive retail and brand management experience that Vera Bradley needs to advance into its next phase of growth and success. I will remain fully engaged during the search and on-boarding processes to ensure a smooth transition."
Ray has served as the company’s CEO since October 2007, overseeing all day-to-day operations, and has served as a director on the board since June 2010. Prior to his promotion to CEO, Ray was EVP of sales and marketing from 2004 to 2007. He served as the company's national sales director from 1999 to 2004 after joining Vera Bradley in 1998 as director of finance.
During his tenure at Vera Bradley, Ray spearheaded the company's efforts to become a multichannel business with broad demographic appeal; develop sourcing, distribution and warehousing infrastructure to support the growth of the company; expand its retail footprint including entering the Japanese market; and achieve growth, with revenues increasing from approximately $18 million in 1998 to $541 million in fiscal 2013, and employees increasing from approximately 40 to 2,400.
After earning an accounting degree from Ball State University, Ray began his career at Coopers & Lybrand. Ray is also a board member of the Riley Children's Foundation in Indianapolis.
The company’s net revenue slightly exceeded its guidance, with comparable store sales increasing 0.9%. Its gross margin was slightly ahead as well.
In the direct segment, revenues increased 24% to $73.7 million, as a result of growth across all its channels. E-commerce revenue grew 23% primarily due to continued growth in website traffic. Indirect revenues decreased 15% to $49.3 million, primarily due to cautious ordering from its specialty retailers in the challenging retail environment.