Vince managed to cuts its losses for the second quarter despite a steep decline in sales due to the pandemic.

The net loss in the quarter ended Aug. 1 declined to $15.1 million, or $1.28 per share, compared to a net loss of $19.5 million, or $1.67 per share, in the same period last year.

Excluding non-cash asset impairment charges, net income in the second quarter of fiscal 2019 was $590,000 or $0.05 per diluted share.

Net sales decreased 59.9 percent to $37 million in the second quarter of 2020, as compared to $92.2 million in the same period last year.

Gross margin rate was 36 percent, compared to 47 percent in the same period last year.

The loss from operations was $14 million, compared to an operating loss of $18.4 million in the same period last year. Excluding non-cash asset impairment charges, income from operations in the second quarter of fiscal 2019 was $1.7 million.

Though the top and bottom lines remain disappointing though there’s some improvement, David Stefko, interim chief executive officer and chief financial officer, told WWD on Monday that the company continues to effectively manage liquidity, with $34.7 million in excess availability at the end of last quarter.
He also cited progress with distribution, with Vince products returning to Bloomingdale’s after a three-year absence. “We relaunched a few weeks ago on Bloomingdales.com and in select Bloomingdale’s stores, under ten. Neiman’s and Nordstrom have reduced their number of stores, so to expand our distribution we went back to Bloomingdale’s. We are open to further distribution,” possibly with other retailers, Stefko said.
Three years ago, Vince also cut its distribution with Saks. Asked if a return to Saks is contemplated, Stefko replied, “There are no discussions.”
He said Vince men’s and women’s  were top performers at the Nordstrom Anniversary sale last month, among contemporary brands.
While commerce continues to soar – up 60 percent on vince.com last quarter, Vince stores are challenged. Asked how they were performing, Stefko said, “When they began reopening in the second quarter, traffic was anemic. In the last four or five weeks, traffic is down 50 to 60 percent but improving. Conversion rates are higher.”
At the end of the quarter, there were 68 company-operated Vince and Rebecca Taylor stores, a net increase of two stores since the second quarter of fiscal 2019.
In late September, Vince will launch extended sizes for the first time, from 18 to 24, on Vince.com. Styles in extended sizes will be priced the same as those in regular sizes.
“Looking back on our second-quarter results, we began to rebuild momentum at Vince, following the initial impact of the pandemic, as consumer buying shifted to e-commerce and stores slowly reopened,” said Stefko.

The big gain in c-commerce sales for the Vince brand, the interim ceo said, was driven by “heightened promotions as we move through inventory as well as a positive response to our merchandise assortment as our casual luxury offerings across categories are well-suited for the stay-at-home lifestyle. We have re-prioritized our growth strategies to align with the near-term environment with a focus on e-commerce initiatives, maintaining our strong connection with our customers and expanding our reach through our direct-to-consumer and wholesale presence. For Rebecca Taylor, we are excited about the anticipation among our wholesale partners as we prepare to relaunch the brand and return to our elevated casual and feminine flirty roots.”

Stefko continued, “In terms of liquidity, we continued to execute cash savings strategies across expense, capital expenditure and working capital areas to align with the recovery of the business. Overall, we remain optimistic about our long-term potential as we leverage our iconic brands to drive global sales growth and enhanced profitability.”

Selling, general, and administrative expenses, excluding the non-cash impact of goodwill and intangible asset impairment charges, long-lived asset or other finite-lived intangible asset impairment charges, were $27.3 million, or 73.9 percent of sales, compared to $41.6 million, or 45.1 percent of sales, in the second quarter of fiscal 2019. The decrease in SG&A dollars was primarily the result of lower payroll and compensation expense, reduced marketing spend, decreased depreciation and amortization expense due to previous impairments as well as the streamlining of other operating costs.

The company ended the quarter with 68 company-operated Vince and Rebecca Taylor stores, a net increase of two stores since the second quarter of fiscal 2019.

By brand, Vince last quarter posted a loss from operations, excluding unallocated corporate expenses, of $1.1 million, compared to income from operations of $15.4 million in the same period last year. Net sales decreased 54.9 percent to $32.2 million compared to the second quarter of fiscal 2019. Wholesale sales decreased 60.5 percent to $17.2 million. Direct-to-consumer sales decreased 46.2 percent to $15.1 million.

At the Rebecca Taylor and Parker brands, the loss from operations was $3.1 million, compared to a loss of $20.4 million in the same period last year. The fiscal 2019 loss from operations includes non-cash asset impairment charges of $20.1 million. Net sales decreased 76.9 percent to $4.8 million.

As reported, Brendan Hoffman, the former ceo of Vince Holding Corp., last week joined Wolverine Worldwide as president and ceo-designee.

load comments
blog comments powered by Disqus