Vince returns to sales growth as strategic shift continues

Vince Holding Corp. announced on Monday revenues increased 6.8% to $74.2 million for the second quarter, thanks to surging wholesale revenues at its Vince brand.

The New York-based luxury fashion firm said Vince brand sales rose 7%, on the back of a 29.6% increase in the wholesale channel, driven by earlier than expected shipments of fall product as well as the normalization of the off-price business within the channel. Wholesale growth more than offset the 18.1% decline in the direct-to-consumer channel, which continued to be impacted by the reduction in promotional activity as well as store closures.

The company ended the quarter with 61 company-operated Vince stores, a decrease of 5 stores since the second quarter of fiscal 2023.

For the three months ending August 3, net income was $0.6 million or $0.05 per diluted share, compared to net income of $29.5 million or $2.36 per share in the same period last year

“We are pleased with our second quarter results driven by strong performance in our wholesale channel, ongoing focus on full price selling and disciplined expense management of our core operating cost structure which helped to partially offset the expected headwinds from ongoing royalty expenses as well as the re-establishment of our incentive compensation program,” ​said ​David Stefko, interim chief executive officer of Vince Holding.

“The strength in our wholesale channel was driven in part by our ability to fulfill demand earlier than expected and helped to offset softer performance in our direct-to-consumer channel which was impacted by store closures and our strategic decision to continue to pull back on promotional activity. As we look ahead to the remainder of the year, while we are taking a more prudent approach to our outlook for direct-to-consumer sales as we continue to execute our strategy amidst an increasingly uncertain macroeconomic backdrop, our outlook for our wholesale channel remains unchanged and our increased expectations for profitability underscore our commitment to operating a stronger full price business model.”

The earnings update comes one year after the wind down of Vince’s struggling Rebecca Taylor business.
In October, Vince announced its ‘Transformation Program’ focused on driving profitability through an improved gross margin profile and an optimized expense structure. The program is expected to result in over $30 million in savings over the next three years, including approximately $10 million of savings in fiscal 2024. As of the end of the second quarter of fiscal 2024, the company said it is ahead of its mid-year fiscal 2024 target.