The struggling Vince label is getting creative with its strategy to overcome its financial issues.
The company has entered into an agreement with the Rebecca Taylor brand whereby in the event that Vince faces liquidity issues, Rebecca Taylor would purchase Vince product from approved suppliers. Vince would then purchase those goods from Rebecca Taylor at 103.5 percent of the price it paid.
Under this agreement, Rebecca Taylor would obtain a letter of credit, subject to availability under its credit facility. Once invoiced, Vince would have two business days to pay unless the terms are extended by Rebecca Taylor. If the invoices aren’t paid, Rebecca Taylor would be able to liquidate the goods however it deems appropriate.
The deal was made possible because the two companies are sister brands. Rebecca Taylor is owned by private equity firm Sun Capital Partners, which also holds about 58% of Vince Holding Corporation’s subsidiary, Vince LLC.
Vince has been struggling for months. The company raised questions about its future as a going concern in April, prompting Moody’s to downgrade it, citing possible liquidity issues over the next year and a half. The brand has been trying to transform but was hit by software issues, which resulted in late deliveries of spring goods. The company also cut its summer delivery.
[Read more about other retailers struggling to survive: Moody’s: Number of Distressed Retailers “Eclipses” Great Recession Rates]
The regain relevance, the label has been making changes to bring it closer to its original DNA. “We engaged our Founders as consultants to help us recapture our brand ecstatic,” said CEO Brendan Hoffman in the company’s Q4 earnings call, according to the Seeking Alpha transcript. “We rebalance the assortment to bring more fashion into the mix and reset our basic replenishment business and we once again began to work with [a] number of our former factories and fabric mills to enhance the quality of our pieces.”
Going forward, Vince is focusing on its seasonless offering and boosting its dress and bottoms business. The company also highlighted off-price and direct to consumer as its most promising channels.
Sales for the first quarter were down 14.2 percent to $58 million, compared to the same period last year. The company reported a net loss of $9.3 million.
LevaData is tapping the power of AI to make strategic sourcing and procurement more seamless for apparel industry members.Read more
Samples, it seems, may soon end up on the endangered list if 3D modeling technology continues to improve and provides the industry with a way to cut down production timelines.Read more
Abercrombie & Fitch continues to rely on Hollister gains, while positioning the Abercrombie brand for similar success. Gap sales up on Athleta, Old Navy performance.Read more
The domestic textile industry and apparel importers have often been on opposite sides of U.S. trade issues, but in today’s political climate they seem to have found some common ground.Read more
U.S. employers added 261,000 jobs in October, pushing unemployment down to the lowest rate since the halcyon days of late 2000.Read more
While everyone’s been focused on the "retail apocalypse," the real story to emerge from 2017 might be the strange bedfellows that have emerged as everyone tries to plot a course forward. The recent partnership between Walmart and Lord & Taylor is the latest to get people talking.Read more
J.W. Anderson’s chief executive, Simon Whitehouse, is exiting the company, plus Dick's Sporting Goods tapped Paul Gaffney as its new CTO.Read more