A Streamlining Vince Narrows Its Loss in Q1
The contemporary brand has been undergoing structural changes and maintains a cautious outlook.
macroeconomy and undergoing structural changes, managed to narrow its loss in the first quarter and post results that fell in line with expectations.
On Thursday, the contemporary brand reported a first-quarter net loss of $0.4 million, or $0.03 a share, compared to a net loss of $7.2 million or $0.60 a share in the same period last year. The loss from operations was $2.4 million, compared to a loss from operations of $5.3 million in the same period last year.
Adjusted loss from operations, which excludes $0.02 million in transaction expenses and a $0.08 million gain from the sale of Parker intellectual property, was $0.3 million.
Last September, Vince revealed it would wind down its Rebecca Taylor business to focus on the Vince brand. The wind-down is substantially completed.
And last April, Vince unveiled a "transformative strategic partnership" with Authentic Brands Group involving transferring its intellectual property to a newly formed Authentic subsidiary, ABG Vince, in return for $76.5 million in cash and a 25 percent membership interest in the subsidiary.
Excluding the transaction expenses, the Parker IP sale gain and a tax benefit, Vince's adjusted net loss for the first quarter of fiscal 2023 was $4.4 million, or $0.36 a share.
Net sales were $64.1 million, down 18.3 percent compared to $78.4 million in sales during the year-ago period. In the last quarter, there was a 6.3 percent decrease in Vince brand sales and a 99.2 percent decrease in Rebecca Taylor and Parker sales, combined, due to the wind-down of Rebecca Taylor.
“Our first-quarter results were largely in line with our expectations supported by our efforts to streamline our organization to focus on our core strengths while maintaining a disciplined approach to expense management as we continued to navigate a challenging macro environment," Jack Schwefel, chief executive officer, said in a statement.
"As we look to the remainder of fiscal 2023, while we are maintaining a cautious outlook with respect to the environment, particularly in our wholesale channel, we will continue to focus on driving improved margin performance," Schwefel added. "With our strengthened balance sheet in place driven by our recent transaction with Authentic Brands Group, we believe we are better positioned to execute our strategic initiatives and prioritize our commitment to improved financial performance over time.”
In other news at Vince, a new vice president of men's design, Kris Haigh, was recently hired. With more than 20 years' design experience, Haigh began his career at Marks & Spencer, then moved on to Alexander McQueen, Ralph Lauren, Abercrombie, Gap and LVMH, as well as launching his own brand, Kristopher.
This year, Vince opened a men's store in the Roosevelt Field Mall on Long Island in New York, and "continues to explore opportunities to expand our men's business," Schwefel said.
Commenting on selling trends, Schwefel said, "We are seeing a shift to buying closer to need and so dresses perform very well in the latter half of the quarter. This also picked up as the quarter progressed.
Across men's and women's, we also saw our customers respond well to our seasonal basics. In our stores in particular, we saw women gravitate to a vibrant color palette we offered in many of our styles this season.
"Turning to international, we have continued to show to open shop-in-shop locations," including at Harrods, Schwefel said. "We are reviewing our international go-to-market strategy and plan to leverage our previously announced new partnership with Authentic Brands Group and their expertise as a global brand development, marketing and entertainment platform."
Net inventory was $80 million at the end of the first quarter versus $83.3 million at the end of the first quarter last year. The decline in inventory was entirely driven by the wind-down of Rebecca Taylor. "While we had a moderate increase in our Vince inventory balance, primarily related to higher replenishment inventory and carryover fall inventory compared to last year, as we have discussed, we are pleased with the sequential improvement we have made with respect to our inventory balances," said Schwefel.
"We continue to believe we will return to more normalized inventory levels in the second half of fiscal 2023, reflecting the actions we have taken to move through units, as well as more conservative buys for current season inventory," added Schwefel.