Vera Bradley (VRA) Plans Delay to Conversation; Says Could Impact Q4 Comps

October 12, 2016 9:43 AM EDT
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Vera Bradley (NASDAQ: VRA) disclosed the following on Wednesday:

Item 8.01 Other Events

On September 15, 2016, Vera Bradley was provided information by law enforcement regarding a potential data security issue related to its retail store network. The press release outlining details of the security issue is furnished as Exhibit 99.1 to this report.

Management believes that its insurance policies will cover most of the expenses related to this issue.

In addition, the Company has delayed the October 2016 planned conversion of its digital flagship,, to a new platform. The postponement is primarily related to delays in completing the integration of the new website platform with existing Company systems, and a contributing factor is the data security issue since resources previously allocated to the conversion were reallocated to resolving the security issue. Because of the upcoming holiday season, the digital flagship conversion will now be launched in the first quarter of fiscal 2018.

  • Once implemented, management believes the new platform will enable consumers to shop faster and easier both on-line and in-store. Enhanced functionality will include:
  • additional navigation and search enhancements,
  • strategic segmentation and personalization,
  • enhanced payment options and eGift cards,
  • order on line, pick up in store, and
  • site capabilities for future foreign expansion.

This conversion delay could impact the Company’s ability to generate positive comparable store sales in the fourth quarter of fiscal 2017. However, due to offsetting expense savings related to the delayed conversion, management does not expect the delay to have a material impact on diluted earnings per share for the fourth quarter or fiscal year ended January 28, 2017.

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