Vince Holding Corp., following a year of progress on both the top and bottom lines, is cooking up strategies in licensing, wholesaling and international growth to sustain the momentum and broaden the appeal.
There will also be significant price increases for fall 2022, due to rising costs.
Arranging licensing deals is a gateway to attracting more men’s customers, Jack Schwefel, chief executive officer of Vince Holding Corp., told WWD on Friday, just after the company reported that it cut its loss in the fourth quarter to $2.7 million, or 23 cents a share, compared to a net loss of $7.4 million, or 62 cents a share, in the same period last year.
Net sales in the period ended Jan. 29 increased 32.4 percent to $99 million as compared to $74.8 million in the same period last year, reflecting a 25 percent increase in Vince brand sales and a 121.3 percent increase in Rebecca Taylor and Parker.
Income from operations was $1.8 million compared to a loss of $3.9 million in the same period last year.
Discussing the growth agenda for 2022, Schwefel said its licensing is a gateway for particular growth in men’s products and “a long-term play” with opportunities for “deliberating and slowly” establishing pacts for small leather goods, men’s belts, accessories, fragrance and eyewear, as well as home, where the company has only dabbled. The company does have one licensing arrangement with Amicable for cold-weather accessories including gloves and scarves.
Schwefel also sees an opportunity to attract a greater number of younger customers. He said Vince resonates with a wide age range from 20 to 70, though the core customer averages around 40. “We’d love to talk more to those in their 20s and 30s.”
As a contemporary luxury brand that leans to classic styling, Vince isn’t about to get trendy in its pursuit of a greater number of younger customers, though there has been some fashion steps forward. For spring, for example, “the collection was more colorful and it’s been a resounding success. We won’t get trendy but there could be more of a nod to what’s happening” in fashion, Schwefel said. Rebecca Taylor and Parker are also contemporary brands.
On the wholesale front, the CEO singled out strong business at Bloomingdale’s where the depth of buys and the Vince footprint in stores is growing. Several years back, Vince discontinued its distribution with both Bloomingdale’s and Saks Fifth Avenue, largely because of the promotional atmosphere, and a desire to focus on its business with Neiman Marcus and Nordstrom. However, in late 2020, Vince returned to Bloomingdale’s as the climate changed, and later this year, Vince will return to Saks as well, with a presence on the luxury retailer’s e-commerce site, inside the Fifth Avenue flagship and at around 10 other Saks stores to be determined. “We’ll start shipping Saks with pre-fall,” Schwefel said.
Years ago, Vince went on a roll installing big boutiques within upscale department stores. That’s changed.
“Sometimes having those giant shops leads to being too promotional,” Schwefel said. “We would rather have a clean turn on a smaller shop than being promotional in a bigger shop,” where the inventory could get bloated. “This is now more of a bottom-line play than a topline play.”
In another growth maneuver, Vince is replatforming its e-commerce site so it’s a little more technically savvy, faster and optimized to mobile users, Schwefel said. The website is currently more set up for desktop computers, rather than tablets and cellphones.
Inflation is hitting Vince and other fashion brands. “It’s nominal for spring, but we will see it more for fall,” said Schwefel, noting that a men’s T-shirt, priced $65, would go up to $75. “We are all feeling the same cost-of-goods pressure. The cost of cashmere and linen is going up.”
Like other retail and fashion executives, Schwefel has seen sales of dressier items for occasions, a night on the town or for returning to the office pick up, though he also said there have been increases on the casual side of the business.
“Men’s pants are (selling) very well but a big component is the jogger, in sophisticated fabrics, but still it’s a casual look. The other night, I was in our Fifth Avenue store, I saw a woman selecting a silk blouse to wear to work and outfitting it with a pair of joggers. It was the perfect Zoom outfit,” Schwefel said. The store, which is on 49th Street right off Fifth Avenue was closed for two years due to the pandemic but reopened April 23 with a “refreshed” look and a more comprehensive collection, with pumped up space for footwear and extended sizes.
In releasing its fourth-quarter and year-end results, Schwefel said in the statement that despite “many headwinds beyond our control, we are very encouraged with the ongoing strength in our Vince brand. We have a solid foundation with strong brand equity and deep customer connections, which we will continue to leverage to further expand awareness and drive long-term growth.
He said that heading into 2022, “while we remain focused on executing our strategies including the expansion of our omnichannel capabilities, digital transformation and growing our men’s and international businesses, we will continue to employ measures to mitigate the impact of supply chain challenges and cost inflation by pulling forward inventory and instituting additional price increases. Longer term, we continue to see ample opportunity to grow our brands and look forward to driving market share gains as we capitalize on the increasing white space in the contemporary luxury category.”
By brand, Vince reported net sales increased 25.6 percent to $87.3 million as compared to the fourth quarter of fiscal 2020. Income from operations excluding unallocated corporate expenses was $15.9 million compared to income of $12 million in the same period last year.
The Rebecca Taylor and Parker brands’ combined reported net sales increased 121.3 percent to $11.7 million as compared to the fourth quarter of fiscal 2020. The loss from operations was $1.3 million compared to a loss from operations of $5 million in the same period last year.
For the fiscal year, the company’s net loss was $12.7 million, or $1.07 a share, compared to a net loss of $65.6 million, or $5.58 a share. The loss includes $1.5 million of expense related to the termination of the 2018 term loan. The adjusted net loss was $41.1 million.
Operating income was $0.5 million compared to an operating loss of $61.1 million in the prior year.
Total company net sales increased 46.8 percent to $322.7 million compared to $219.9 million in fiscal year 2020.
Vince plans to open a 1,875-square-foot unit in the Boston Seaport in about two months and its first store in China, in Shanghai, this fall, despite the city being on lockdown due to the COVID-19 health crisis there. The China store is a joint venture with a partner that hasn’t been announced yet.
The company ended the fourth quarter with 86 company-operated Vince and Rebecca Taylor stores, a net increase of 15 stores since the fourth quarter of fiscal 2020.