Latest Tariffs To Hit Indiana-Based Luxury Handbag Maker Vera Bradley

Sep 20, 2018

The Trump administration’s third round of tariffs to be imposed on China includes handbags, a product made by northeast Indiana-based Vera Bradley.

Vera Bradley has seen sales decline in recent years, though shares have risen 17 percent this year, with profits beating expectations last quarter. Company leaders say they’re concerned about what this will do to future sales.

In a letter the retailer sent to the USTR Robert Lighthizer, Vice President of Global Sourcing Steve Bohman says Vera Bradley sources 21 percent of the company’s products to China and says they can’t, in his words "viably be sourced elsewhere.” He writes the tariffs will have what he calls a "detrimental effect" on the company, costing employees jobs and raising prices.

John Talbott studies the retail industry at Indiana University. He says Vera Bradley can’t quickly change its supply chain, so tariffs hurt.

“They’re forcing Vera Bradley to consider a different type of supply structure and they’re asking them to do that in the face of financial headwinds,” Talbott says.

Purdue University economics professor Anson Soderbery says that argument isn’t likely to convince the administration to offer amnesty from the tariff list.

“I imagine the administration won’t respond to that request because I would picture their response as something like, ‘What do you mean you cannot move production? You can produce anywhere. You can produce your handbags in the U.S. Why don’t you move your production in China back to the U.S.?’” says Soderbery.

Talbott says the U.S. produces a substantial amount of fabric, but most sewing factories are located outside of the U.S.

“It’s not gonna bring this type of manufacturing back on shore,” says Talbott. “What it may mean, if these tariffs are directed at China, that people will move their manufacturing facilities over time to countries not designated and specially targeted.”

Another accessories brand, Goody Products – an Atlanta company that makes elastic hair ties – has also submitted a letter asking that their product not be included in the recent round of tariffs.

Vera Bradley representatives declined an interview for this story.