Vince Improves Top and Bottom Lines
The brand is maintaining momentum and gaining market share.
Vince Holding Corp., evolving into a “global contemporary fashion group,” reported Thursday that its net income rose to $8 million, or 67 cents per diluted share, in the third quarter ended Nov. 2, compared with $6.8 million or 57 cents, in the same period last year.
Excluding costs associated with the acquisition of Rebecca Taylor and Parker, adjusted net income was $8.7 million or 73 cents per diluted share in the third quarter.
Net sales increased 3.4 percent to $86.4 million from $83.5 million, marking the sixth consecutive quarter of sales growth. Direct-to-consumer comparable sales grew 9.5 percent, and the gross margin rate increased 150 basis points to 50.4 percent.
Income from operations was $9.1 million compared to $9 million in the same period last year. Excluding costs associated with the acquisition of Rebecca Taylor and Parker, adjusted income from operations was $9.8 million.
“Our strong performance in the third quarter further demonstrates the continued momentum in the Vince brand,” said Brendan Hoffman, chief executive officer. “The growth in our direct-to-consumer business was led by our e-commerce channel and we remain pleased with the performance of our retail stores.
“In our wholesale channel, we continue to see evidence of market share gains and are excited to have expanded floor space in key doors.” Nordstrom and Neiman Marcus are among Vince’s wholesale clients.
“As we look ahead, we remain focused on advancing our strategic initiatives, which include growing our direct-to-consumer business through the expansion of our store base globally, driving market share gains within the wholesale channel, testing new product categories and refining our marketing efforts to drive traffic and conversion.”
Last month, the company announced the acquisitions of Rebecca Taylor and Parker from Sun Capital for $19.7 million. The deal created a portfolio of three contemporary yet distinct fashion brands under Vince Holding and adds $84 million in sales to the corporation.
With the acquisitions, the first for Vince, as well as through various initiatives across channels, Hoffman sees an opportunity to double revenue for the company over time.
“While the three brands sit near each other on the contemporary floors, their price points are different. Their aesthetics are very different. They speak to different customers, which is not to say there isn’t some overlap. To the consumer, they will continue to be separate,” Hoffman said when the acquisition was announced. “We will look to see what operational synergies there are.”
Among the growth plans, Vince is planning to launch stores in China in fall 2020, launch handbags to wholesale and invest more in large sizes. Hoffman said for the China launch, the company has selected “a highly experienced partner and is progressing toward an agreement.”
Vince, established in 2002, is known its California-inspired, understated, effortless style. Its range includes women’s and men’s ready-to-wear and accessories. The company operates 49 full-price retail stores, 15 outlets, vince.com and the Unfold subscription service.
The Rebecca Taylor collection is sold at Rebecca Taylor boutiques, on rebeccataylor.com, in high-end department and specialty stores, and through its own subscription service. Parker is sold on parkerny.com as well as high-end department and specialty stores.