Vince New York Retail

Vince Holding Corp. is holding off on filing its financial results for the year and the fourth quarter as it looks to borrow more money.

The high-end casualwear brand sent a notice of late filing to the Securities and Exchange Commission, which gives it until April 28 to hand over its 2016 financials.

Vince said “unanticipated delays in compiling financial reports and other data” made an extension necessary and pointed to its exit from former parent company Kellwood Apparel, which took the company public in late 2013, as cause for the delays.

The brand also noted that once the reporting is complete, it expects the transition and implementation of new systems to result “in one or more material weaknesses in internal controls.”

We have experienced difficulties in the integration and identified certain issues associated with these new systems,” Vince chief executive officer Brendan Hoffman said.

The company also expects the financial results to be “further impacted” by unspecified asset impairment charges related to its goodwill and trade name, along with a $1.7 million equity contribution made to its operating subsidiary.

Vince plans to make additional equity contributions in the future from current cash holdings of $20 million.

More serious however, may be Vince management’s continued evaluation of any conditions that are threatening the company’s ability to operate as a going concern within one year of releasing the financial results, as required under new federal accounting standards.

The company also entered on Friday an amendment letter with Bank of America, which allows Vince to borrow against its $20 million in cash holdings.

Hoffman said the increased borrowing capacity will allow Vince to operate “more efficiently.”

“However, in light of the difficult retail environment, we believe that it is prudent to consider a scenario in which we do not meet our financial covenants,” Hoffman went on. “That said, we have done a lot of work to reset the brand and believe that we are taking the right strategic steps to optimize our wholesale business, expand our direct-to-consumer business and grow our international presence.”

The brand has been in resetting mode for some time and Vince founders Rea Laccone and Christopher LaPolice left the company in February, for the second time, only 15 months into a two-year consulting agreement.

At the time, Hoffman, who joined Vince in late 2015, said the company had “largely accomplished our objective of resetting the brand aesthetic and merchandise offering,” while admitting financial results “do not yet reflect the progress we have made.”

For the nine months ended Oct. 29, Vince had a net loss of $511,000 versus a $3.3 million gain in the year before. Net sales came to $204.3 million, compared to $220.7 million the year before.

As of January, Vince operates 40 retail stores and 14 outlets, in addition to a full e-commerce site, and is sold through 2,300 other retail locations in 40 countries.

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