By Katherine Hamilton
Vera Bradley shares advanced 10% on Monday after the company's largest shareholder urged it to consider a strategic review, including a possible sale.
Shares of the women's accessories company rose to $3.98 in morning trading. The stock has fallen 26% since Dec. 10, just before it reported a swing to a fiscal third-quarter loss and cut its 2025 financial outlook.
Fund 1 Investments, which owns about 10% of Vera Bradley common stock, said in a letter to the company's board that it should begin considering strategic alternatives. The long/short equity firm said it believes Vera Bradley will have better success fixing itself if it goes private or is bought by a larger company.
Fund 1 said it believes that if Vera Bradley were out of the public spotlight, it would be able to better focus on brand revival without quarterly earnings, save costs by leaving the public markets and have more time to focus on the business rather than shareholder meetings.
"We believe that a strategic or financial buyer would be able to complete a transaction at an attractive premium for shareholders," Fund 1 said.
Fund 1 said it believes Vera Bradley is suffering from long-term value destruction, poor operational performance, a failed brand turnaround and negative sentiment for fashion brands across the board.
Write to Katherine Hamilton at katherine.hamilton@wsj.com
(END) Dow Jones Newswires
December 30, 2024 11:20 ET (16:20 GMT)
Copyright (c) 2024 Dow Jones & Company, Inc.
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