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August 2008
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Vera Bradley Announces New Plant and 490 New Jobs

Vera Bradley Designs Inc. announced Friday it is in final negotiations to lease a New Haven building to house an expanded in-house sewing staff.  The expansion – part of a long-term strategy – will add 490 new jobs to the company that designs and manufactures quilted cotton handbags, luggage and accessories.


Vera Bradley executives first revealed the plan to hire sewers in March, the same day three local companies supplying Vera Bradley announced they lost the Vera Bradley contract and were cutting more than 500 sewing jobs.  Combined with job cuts by sewing suppliers in Rochester and Van Wert, Ohio, Vera Bradley’s business strategy put more than 700 people in the region out of work this year.


Vera Bradley will continue to outsource some of its sewing to China. Company officials decline to specify what percentage of the work is done overseas, explaining that the amounts fluctuate from month to month and year to year.


Robert Hinty, the former Vera Bradley executive who owned the three Fort Wayne sewing suppliers, sued Vera Bradley in June for unspecified damages, alleging breach of contract. Vera Bradley spokeswoman Melissa Cordial cited the lawsuit when she declined to comment on the company’s “vertical integration strategy.”  (see our previous post “Exclusive Ex-Supplier Sues Vera Bradley”)


Manufacturers typically pull outsourced work back in-house as a way to save money, said Logan Jordan, associate dean of Purdue University’s Krannert School of Management in West Lafayette.  This move allows Vera Bradley to keep the profit that previously went to its suppliers and keep a close eye on quality, Jordan said. Other advantages include putting new designs into production faster and better controlling the ebb and flow of orders, he said.


Because sewing is menial labor, the work isn’t typically done in the United States, where workers are paid more, he said. Jordan was surprised when he first heard that Vera Bradley plans to bring a portion of its sewing in-house. He theorized that premium prices for Vera Bradley’s products help the company afford to pay local sewers. “You’ve got to give them points for wanting to keep (some) production close to headquarters and in the U.S.,” he said.


Among the incentives for choosing the site were a $100,000 grant from the city of New Haven for lighting and computer infrastructure needs and the potential for $299,000 in property tax savings if the New Haven City Council agrees to phase in the company’s tax levy over seven years. The company would still pay $417,000, even with a tax break.


A New Haven factory would become Vera Bradley’s fourth building in Allen County, Cordial said. The plan is to move 70 existing sewing jobs from the company’s other local operations to the New Haven building, which would house Vera Bradley’s cutting, quilting and sewing, she said.


The company is already accepting applications for industrial sewer positions at its Web site.  Read more about this story at the Fort Wayne Journal Gazette.

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