Winston & Strawn LLP
35 West Wacker Drive
Chicago, Illinois 60601
October 18, 2010
BY EDGAR
Mr. Jay Williamson
Division of Corporation Finance
U.S. Securities and Exchange Commission
100 F Street, NE
Mail Stop 3561
Washington, DC 20549
| Re: | Vera Bradley, Inc. |
| Registration Statement on Form S-1 |
| File No. 333-167934 |
Dear Mr. Williamson:
On behalf of Vera Bradley, Inc. (the “Company”), enclosed for your review is Amendment No. 7 to the Company’s Registration Statement on Form S-1 (File No. 333-167934) (the “Registration Statement”), originally filed with the Securities and Exchange Commission (the “Commission”) on July 1, 2010, amended by Amendment No. 1 filed on August 13, 2010, Amendment No. 2 filed on September 7, 2010, Amendment No. 3 filed on September 24, 2010, Amendment No. 4 filed on October 1, 2010, Amendment No. 5 filed on October 6, 2010, and Amendment No. 6 filed on October 13, 2010. An electronic version of Amendment No. 7 concurrently has been filed with the Commission through its EDGAR system. The enclosed copy of Amendment No. 7 has been marked to reflect changes made to Amendment No. 6.
Set forth below are the responses to the comments in the Staff’s letter to the Company, dated October 15, 2010, relating to the Registration Statement. For convenience of reference, the text of the comments in the Staff’s letter has been reproduced in italicized type below.
Mr. Jay Williamson
October 18, 2010
Page 2
Form S-1, filed October 13, 2010
Dilution, page 22
Comment No. 1
We reviewed your response to our prior comment 5, noting you have excluded deferred tax assets and liabilities of $8.46 million and debt issuance costs of $1.37 million in computing the pro forma net tangible book value as of July 31, 2010 and pro forma as adjusted net tangible book value as of July 31, 2010. Please revise your disclosure here to describe in sufficient detail the reason(s) for the exclusion of these items from your net tangible book value, and the impact of the exclusion on net tangible book value per share, adjusted net tangible book value per share and dilution per share to new investors.
Response:
The Company added disclosure on page 22 to include its definition of total tangible assets and thereby explain that the Company excluded deferred tax assets and debt issuance costs in computing the pro forma net tangible book value and pro forma as adjusted net tangible book value as of July 31, 2010.
Comment No. 2
We note your disclosure of pro forma net tangible book value per share of $(.72) as of July 31, 2010. It appears to us that the pro forma net tangible book value per share before offering would be $(.78) (i.e. $28,600,000 / 36,506,670 shares). Please revise or provide us with your supporting calculations.
Response:
Consistent with the Staff’s stated view set forth in Section 3420 of the Division of Corporation Finance’s Financial Reporting Manual relating to Distributions to Promoters/Owners At or Prior to Closing of an IPO, the Company included 3,332,000 additional shares in the denominator when calculating pro forma net tangible book value per share. Those additional shares represent (quoting the language from Section 3420) “the number of shares whose proceeds would be necessary to pay the dividend (but only the amount that exceeds current year’s earnings).” Thus, to calculate the additional shares, the Company took the $106 million distribution to certain of its existing shareholders less the Company’s net income for the twelve months ended July 31, 2010 (of $56.02 million) and divided the resulting figure by $15 (the expected stock price):
(106 million – 56.02 million) / 15 = 3.332 million.
Mr. Jay Williamson
October 18, 2010
Page 3
When pro forma net tangible book value per share is adjusted for the additional 3.332 million shares, the number of shares in the denominator is 39,838,670 (i.e., 36,506,670 plus 3,332,000). Accordingly, the pro forma net tangible book value per share at July 31 was $(0.72), or net tangible book value of $(28,600,000) divided by 39,838,670 shares.
The Company added disclosure on page 22 to clarify that the Company included 3,332,000 additional shares in the denominator when calculating pro forma net tangible book value per share as of July 31, 2010.
Management’s Discussion and Analysis of Financial Condition and Results of Operation, page 26
Liquidity and Capital Resources, page 39
Comment No. 3
We note your revised disclosures in response to prior comment 7. However, considering the significant increase in your debt, please revise to include detailed discussion of how you will be able to satisfy your working capital requirements, anticipated capital expenditures and debt payments for the foreseeable future.
Response:
The Company has added additional disclosure on page 40 in response to the Staff’s comment.
Report of Independent Registered Public Accounting Firm, page F-10
Comment No. 4
We note you provided a draft of an audit opinion to be issued once the stock split has been consummated. We assume this opinion will be formally issued prior to the effectiveness of the registration statement, and that the related accountants’ consent will be filed as well. If our assumption is not correct, please advise.
The Company advises the Staff that the stock split has been consummated effective as of October 18, 2010. Accordingly, the Report of Independent Registered Public Accounting Firm appearing on F-10 has been formally issued and the related Consent of PricewaterhouseCoopers LLP has been filed as Exhibit 23.1.
**********
Additionally, attached as Exhibit A to this correspondence are marked pages to the Registration Statement that we faxed to the Staff today for consideration.
Mr. Jay Williamson
October 18, 2010
Page 4
If you have any questions regarding Amendment No. 7 or any of the responses in this letter, please call me at (312) 558-6061 or, in my absence, Steven J. Gavin at (312) 558-5979.
| Respectfully submitted, |
| /s/ Arlene K. Lim |
| Arlene K. Lim |
Enclosures
| cc: | Pam Howell |
| Raj Rajan |
| Brian Bhandari |
| Patrick Daugherty (Foley & Lardner LLP) |
Exhibit A
