Vera Bradley, Inc.VRA
Vera Bradley, Inc. Goodwill & Intangibles Disclosure
Intangible Assets
The following tables detail the carrying value of the Company’s intangible assets related to the acquisition of a majority interest in Pura Vida.
| February 1, 2025 | |||||||||||||||||
| in thousands | Gross Basis | Accumulated Amortization(1) | Carrying Amount | ||||||||||||||
| Definite-lived intangible asset | |||||||||||||||||
| Customer Relationships | $ | 24,208 | $ | (24,208) | $ | — | |||||||||||
| Indefinite-lived intangible asset | |||||||||||||||||
Pura Vida Brand (2) | — | — | — | ||||||||||||||
| Total intangible assets | $ | 24,208 | $ | (24,208) | $ | — | |||||||||||
| (1) Amortization expense is recorded within the Pura Vida segment. | |||||||||||||||||
(2) An impairment charge of $6.2 million was recorded within the Pura Vida segment during fourth quarter of fiscal 2025. | |||||||||||||||||
| February 3, 2024 | |||||||||||||||||
| in thousands | Gross Basis | Accumulated Amortization(1) | Carrying Amount | ||||||||||||||
| Definite-lived intangible assets | |||||||||||||||||
| Customer Relationships | $ | 24,208 | $ | (22,872) | $ | 1,336 | |||||||||||
| Indefinite-lived intangible asset | |||||||||||||||||
Pura Vida Brand (2) | 6,237 | — | 6,237 | ||||||||||||||
| Total intangible assets | $ | 30,445 | $ | (22,872) | $ | 7,573 | |||||||||||
| (1) Amortization expense is recorded within the Pura Vida segment. | |||||||||||||||||
(2) Impairment charges of $5.4 million were recorded within the Pura Vida segment during the fourth quarter of fiscal 2024. | |||||||||||||||||
Fiscal 2025 Impairment
The Company performed its fiscal 2025 annual test over the indefinite-lived Pura Vida brand during the second quarter of fiscal 2025 and no impairment was recorded. In the fourth quarter of fiscal 2025, the Company identified triggering events and determined that the fair value of the Pura Vida brand was less than its carrying value, recording a full impairment charge of $6.2 million. In consideration of offers received for the sale of Pura Vida (see Note 18 herein for further information), the Company performed a quantitative analysis of the Pura Vida brand. Based on this quantitative assessment, the Company determined that the relative fair value of the Pura Vida brand indicated no fair value and that the Pura Vida brand was not recoverable.
Fiscal 2024 Impairment
The Company performed its fiscal 2024 annual impairment test over the indefinite-lived Pura Vida brand during the second quarter of fiscal 2024 and no impairment was recorded. In the fourth quarter of fiscal 2024, the Company identified triggering events and determined that the fair value of the Pura Vida brand was less than its carrying value, recording an impairment charge of $5.4 million. The Company continued to experience lower sales from its Pura Vida e-commerce channel due to a continued decline in social and digital media effectiveness, as well as continued lower sales from the wholesale channel. These lower sales volumes had a negative impact on the fair value determination of the aforementioned assets. The fair value of the Pura Vida brand was estimated using a relief-from-royalty method. The estimates and assumptions used in the determination of the fair value of the Pura Vida brand included the projected revenue growth, long-term growth rate, the royalty rate, and discount rate.
While we consider our assumptions in the determination of the fair value of these assets to be reasonable, they are complex and highly subjective. Our key assumptions (as described above in the valuation methodologies used in the determination of fair value) may be impacted by macroeconomic conditions, including inflationary pressures and the impact on consumer discretionary spending, supply chain challenges, as well as a sustained decline in stock price and potential changes in business strategy. Refer to Note 2 herein for additional information regarding fair value measurement.
Fiscal 2023 Impairments
The Company performed its fiscal 2023 annual impairment test over goodwill and the indefinite-lived Pura Vida brand during the second quarter of fiscal 2023.
The fair value of the Pura Vida reporting unit was determined using a combination of an income-based approach (discounted cash flows) and a market-based approach (guideline transaction method). The discounted cash flow method involved subjective estimates and assumptions such as projected revenue growth, operating profit, and the discount rate. The guideline transaction method involved transaction multiples derived from the acquisition of controlling interests in stocks of companies that are engaged in the same or similar lines of business as the reporting unit.
During the assessment for the fiscal 2023 annual test, it was determined that the fair values of the Pura Vida reporting unit and the Pura Vida brand were less than their carrying values. As a result, the Company recorded an impairment charge of $9.9 million and $19.4 million for the Pura Vida brand and goodwill, respectively, during the second quarter of fiscal 2023 within the Pura Vida segment.
We identified triggering events during the subsequent quarters of fiscal 2023, due to lower operating profit compared to previous forecasts, as well as changes in the long-range plan such as a pause on the opening of new Pura Vida retail stores. We performed further testing on the Pura Vida reporting unit and Pura Vida brand as a result. These analyses caused additional to be recorded in the fourth quarter of fiscal 2023 of $15.1 million and $24.9 million for the Pura Vida brand and goodwill, respectively, which reflects a full goodwill impairment. Collectively, impairment charges for the Pura Vida brand and goodwill during fiscal 2023 totaled $69.3 million.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 28, 2025 | Showing above |
| 2024 | Mar 29, 2024 | |
| 2023 | Mar 28, 2023 | |
| 2022 | Mar 29, 2022 | |
| 2021 | Mar 30, 2021 | |
| 2020 | Mar 31, 2020 | |
About Goodwill & Intangibles Disclosures
Goodwill and intangible asset disclosures reveal the premium paid in acquisitions and how management assesses whether that premium retains its value. Since goodwill is no longer amortized under US GAAP, the annual impairment test is the only mechanism that adjusts carrying values downward — making the assumptions behind that test critically important for investors.
Key signals: a history of goodwill impairments suggests management consistently overpays for acquisitions. Watch the gap between reporting unit fair value and carrying amount — when fair value exceeds carrying amount by less than 10-20%, a small decline in business performance could trigger a write-down. For finite-lived intangibles, examine useful life assumptions across customer relationships, technology, and trade names; aggressive estimates inflate near-term earnings. Compare total intangibles-to-total-assets ratios against peers to assess acquisition dependency. Rising goodwill as a percentage of equity can signal balance sheet fragility.