Dive Brief:
- Vince Holding Corp. is launching a transformation program to boost its profitability and create $30 million in savings over the next three years, according to a company release Tuesday.
- The program includes streamlining manufacturing and production operations, reducing promotional activity, “optimizing breadth and depth of markdowns,” and enhancing efficiencies in store operations, corporate overhead and third-party spending.
- The program comes after a deal with Authentic Brands Group to buy the intellectual property of the Vince brand was announced in April. Vince CEO Jack Schwefel said in the release that the deal increased the company’s “financial flexibility.”
Dive Insight:
The news release doesn’t provide specifics on these cost-cutting measures. Spokespeople for Vince and Authentic didn’t immediately respond to Fashion Dive’s request for additional information.
“Following a thorough review of our business and cost structure, we have identified opportunities to further streamline our organization and drive efficiencies across our operations,” Schwefel said in the release. “We believe the transformative actions we are implementing along with our enhanced focus on our strategic growth initiatives position us well to deliver sustainable, profitable growth and drive value for all of our stakeholders.”
Along with the announcement, the company also provided preliminary financial results for its third quarter, which ended Oct. 28. It expects net sales to total between $81 million and $83 million, and the release notes this is a “sequential improvement compared to the second quarter of 2023.”
In the second quarter, it saw net sales decrease to $69.4 million, reflecting a 14.3% drop in Vince brand sales compared to the same period last year.
Authentic controls the Vince brand’s IP through a subsidiary, ABG Vince. Vince Holding Corp. received $76.5 million and a 25% ownership stake in the subsidiary under the deal. After the 10-year term of the agreement ends, Vince Holding Corp. will have eight 10-year renewal options.
In September 2022, Vince announced it was winding down its Rebecca Taylor business so it could focus on the Vince brand. Later, it sold the Rebecca Taylor IP and other assets to the Ramani Group for $4.3 million.
Authentic, a company known to buy struggling businesses, owns more than 50 lifestyle and entertainment brands, including Eddie Bauer, Frye, Reebok and Nautica.
It recently closed the acquisition of Boardriders, parent company of brands Quiksilver, Roxy and Billabong. Following the deal, Boardriders laid off 84 employees, including a CEO, global CFO, chief information officer and chief tax officer.
Editor’s note: This story has been updated to clarify Vince brand sales figures.
