Vince is still struggling.
Net sales for the first quarter dropped 14.2 percent to $58 million, compared to $67.6 million during the same period last year, and the brand’s net loss grew to $9.3 million, or 19 cents a share, from a $1.9 million loss at the start of 2016.
Chief executive officer Brendan Hoffman said the results were “largely in line with expectations,” during a call with shareholders.
“As anticipated, our wholesale sales during the quarter were impacted primarily by the elimination of our summer delivery,” Hoffman said. “While we are still facing challenges in this segment, we are making progress and continuing to evaluate ways to optimize our presence in this channel, including potentially rationalizing our points of distribution.”
Wholesale sales fell to $35.4 million during the first quarter, a 20.9 percent drop.
While Vince in May reached a deal with its principal shareholder Sun Capital for a $30 million cash infusion for a rights offering of common stock, Hoffman said the company is still looking to cut costs and “better align our resources with the growth areas for our business.”
Hoffman added that Vince “recently engaged a consultant to help with this process” and said the company is “highly focused on remediating our systems and working to increase liquidity in our business.”
Chief financial officer David Stefko also said Vince is “working to meet the conditions” of Sun Capital’s offer, and that talks are ongoing with term loan lenders for possible loan amendments “that will provide relief on covenants.
Vince has warned twice, as required under revised accounting standards, of its ability to continue as a going concern over the next year.
The brand earlier this year delayed its fourth-quarter financial results — showing a 21.9 percent drop in sales and a net loss of $162.1 million — citing a change in company systems after separating from its former parent, the Sun Capital-controlled Kellwood, which took the company public in 2013.
Hoffman admitted at the time that the fourth-quarter results were “below expectations” but spoke of changing assortments and deliveries and opening new stores this year as having the potential to turn the brand around.
Vince’s direct-to-consumer base of 54 stores — three more than it had during the first quarter last year, including a recently opened store in Honolulu — saw trends “dramatically improve” during the first quarter and so far into the second, according to Hoffman.
The ceo attributed the positive trend to “better management” of product offering, promotions and marketing.
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