NEW YORK--(BUSINESS WIRE)--
Vince Holding Corp. (NYSE:VNCE), a leading global luxury apparel and
accessories brand (“Vince” or the “Company”), today announced that it
has reached an agreement to amend its Senior Secured Term Loan Facility
to waive the consolidated net total leverage ratio covenant requirement
through, and including, the first quarter of fiscal 2019. As previously
announced, the Company also reached an agreement to amend its Revolving
Credit Facility, immediately providing an additional $5 million in
borrowing capacity under such facility, which may be increased by an
additional $5 million as described below.
Brendan Hoffman, Chief Executive Officer, commented, “We are very
pleased to have obtained amended agreements with our lenders. These
steps, together with the completion of our proposed rights offering,
will provide Vince with additional liquidity and improve the capital
structure of the company. Importantly, we believe this should relieve
many of the pressures that had previously led management to conclude
that there was doubt about our ability to continue as a going concern.
We also expect that this will alleviate the pressures on our borrowing
capacity that we have seen from the accelerated terms and prepayment
requirements imposed by certain vendors. We anticipate that the waiver
of our covenant requirement through the first quarter of 2019, as well
as the additional liquidity that we are injecting into the business,
will enable us to continue to focus on driving momentum and improving
performance throughout the business.”
The amendment to the Company’s Senior Secured Term Loan Facility waives
the consolidated net total leverage ratio covenant requirement under its
agreement through, and including, the first quarter of fiscal 2019. The
amendment is subject to certain terms and conditions, including that $9
million of proceeds from the proposed Rights Offering will be used to
pay down the debt under the Term Loan. The Company also agreed to
additional amortization payments and modifications to certain negative
and affirmative covenants, as well as a 2% increase in the interest rate
and consent fees in the amount of 0.5% of the outstanding debt held by
the consenting lenders.
The Company also previously announced that it entered into an amendment
to its Revolving Credit Facility agreement, which provides an additional
$5 million of borrowing capacity to the Company in exchange for the
issuance of a letter of credit in the same amount for the benefit of the
Revolving Credit Facility lender by Bank of Montreal. The letter of
credit may be increased by an additional $5 million, in which case the
Company’s availability under the Revolving Credit Facility would also
increase by such amount. In addition, the amendment allows Vince to
include larger portions of certain trade receivables in the borrowing
capacity until July 31, 2017. The Company agreed to a 0.5% increase in
the interest rate and is required to pay $15 million of the outstanding
debt under the Revolving Credit Facility upon the completion of the
proposed rights offering without any concurrent commitment reduction,
which will create an equal amount of borrowing capacity under the
facility upon paydown.
ABOUT VINCE
Established in 2002, Vince is a global luxury brand best known for
utilizing luxe fabrications and innovative techniques to create a
product assortment that combines urban utility and modern effortless
style. From its edited core collection of ultra-soft cashmere knits and
cotton tees, Vince has evolved into a global lifestyle brand and
destination for both women’s and men’s apparel and accessories. As of
April 29, 2017, Vince products were sold in prestige distribution
worldwide, including approximately 2,300 distribution locations across
more than 40 countries. With corporate headquarters in New York and its
design studio in Los Angeles, the Company operated 40 full-price retail
stores, 14 outlet stores and its e-commerce site, vince.com. Please
visit www.vince.com
for more information.
This document, and any statements incorporated by reference herein,
contains forward-looking statements under the Private Securities
Litigation Reform Act of 1995. Forward-looking statements include the
statements regarding, among other things, our current expectations about
the Company's future results and financial condition, revenues, store
openings and closings, margins, expenses and earnings and are indicated
by words or phrases such as "may," "will," "should," "believe,"
"expect," "seek," "anticipate," "intend," "estimate," "plan," "target,"
"project," "forecast," "envision" and other similar phrases. Although we
believe the assumptions and expectations reflected in these
forward-looking statements are reasonable, these assumptions and
expectations may not prove to be correct and we may not achieve the
results or benefits anticipated. These forward-looking statements are
not guarantees of actual results, and our actual results may differ
materially from those suggested in the forward-looking statements. These
forward-looking statements involve a number of risks and uncertainties,
some of which are beyond our control, including, without limitation: our
ability to maintain adequate cash flow from operations or availability
under our revolving credit facility to meet our liquidity needs
(including our obligations under the Tax Receivable Agreement with the
Pre-IPO Stockholders); our ability to continue as a going concern; our
ability to successfully complete the proposed rights offering; our
ability to successfully operate the newly implemented systems,
processes, and functions recently transitioned from Kellwood Company;
our ability to remediate the identified material weaknesses in our
internal control over financial reporting; our ability to regain
compliance with the continued listing standards of the New York Stock
Exchange; our ability to ensure the proper operation of the distribution
facility by a third party logistics provider recently transitioned from
Kellwood; our ability to remain competitive in the areas of merchandise
quality, price, breadth of selection, and customer service; our ability
to anticipate and/or react to changes in customer demand and attract new
customers, including in connection with making inventory commitments;
our ability to control the level of sales in the off-price channels; our
ability to manage excess inventory in a way that will promote the
long-term health of the brand; changes in consumer confidence and
spending; our ability to maintain projected profit margins; unusual,
unpredictable and/or severe weather conditions; the execution and
management of our retail store growth plans, including the availability
and cost of acceptable real estate locations for new store openings; the
execution and management of our international expansion, including our
ability to promote our brand and merchandise outside the U.S. and find
suitable partners in certain geographies; our ability to expand our
product offerings into new product categories, including the ability to
find suitable licensing partners; our ability to successfully implement
our marketing initiatives; our ability to protect our trademarks in the
U.S. and internationally; our ability to maintain the security of
electronic and other confidential information; serious disruptions and
catastrophic events; changes in global economies and credit and
financial markets; competition; our ability to attract and retain key
personnel; commodity, raw material and other cost increases; compliance
with domestic and international laws, regulations and orders; changes in
laws and regulations; outcomes of litigation and proceedings and the
availability of insurance, indemnification and other third-party
coverage of any losses suffered in connection therewith; tax matters;
and other factors as set forth from time to time in our Securities and
Exchange Commission filings, including under the heading "Item 1A—Risk
Factors" in our Annual Report on Form 10-K and our Quarterly Reports on
Form 10Q. We intend these forward-looking statements to speak only as of
the time of this release and do not undertake to update or revise them
as more information becomes available, except as required by law.
This press release is also available on the Vince Holding Corp. website (http://investors.vince.com/).
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Source: Vince Holding Corp.