Shares of the embattled Vince Holding Corp. fell dramatically today in unusually high trading volume.
The stock started moving downward around noon and by 2:30 p.m. on Wall Street had fallen 62 percent to 36 cents, leaving the firm with a market capitalization of $16.6 million.
Nearly 19 million shares traded hands, compared with the 869,514 daily average.
There was no specific news from the company to spark the selloff, but Vince has been struggling to find its way forward in a very difficult environment that’s been tough for fashion companies of all stripes.
On Monday, B. Riley & Co. analyst Jeff Van Sinderen discontinued coverage of the stock to “focus our resources elsewhere.”
Van Sinderen said there was very little visibility at the firm, which posted a 21.9 percent decline in fourth-quarter earnings, to $63.9 million, while losses tallied $162.1 million.
He said the fate of Vince depended on what majority shareholder and private equity firm Sun Capital decides to do next, whether it be a capital boost, a sale or a bankruptcy.
“We continue to believe that the brand has potential (particularly in a restructured form),” Van Sinderen said. “However, in our view, the capital structure and current form of the business are unsustainable.”
Chief executive officer Brendan Hoffman tried to calm the waters on Friday during a call with Wall Street analysts, signaling upcoming store openings and expansions.
He said Vince’s spring collection, which shipped during the first quarter, sold “more in line with our expectations,” compared to pre-spring product, which saw order cancellations and returns, particularly in the off-price channel.
Like many retailers, e-commerce a source of strength and Hoffman said the company’s online business was growing by double digits.
Sun picked up Vince as part of its 2008 deal to buy Kellwood Co. and spun Vince out as an IPO in November 2013.
Representatives for the company as well as Sun were not immediately available for comment.
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