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 is
delaying the release of its financial results for the fourth quarter and
fiscal year ended January 28, 2017. As such, the Company has filed a
Form 12b-25 Notification of Late Filing for its Annual Report on Form
10-K with the Securities and Exchange Commission, extending the deadline
to file its Form 10-K on or before April 28, 2017. The extension is
necessary due to unanticipated delays in compiling financial reports and
other data that are necessary in preparing and completing the financial
statements. These delays are related to the transition from Kellwood,
the Company’s former parent company, and the integration of the
Company’s new ERP System with its internal business processes and
third-party systems, as well as additional procedures and processes that
the Company is undertaking to ensure that its financial statements are
fairly and accurately presented. In addition, although the Company has
not concluded its assessment of the effectiveness of its internal
controls over financial reporting as of January 28, 2017, it believes
that the transition and implementation described above will result in
one or more material weaknesses in internal controls.
Brendan Hoffman, Chief Executive Officer, commented, “We undertook an IT
migration project to make Vince independent from the Kellwood platform
and to create greater efficiencies in our business. While the
implementation was completed, we have experienced difficulties in the
integration and identified certain issues associated with these new
systems which we believe will result in one or more material weaknesses
in internal controls. We are in the process of correcting any systems
deficiencies that we have identified and expect this to be completed
during fiscal 2017. I would note that, until our systems are fully
remediated, we will continue to conduct additional due diligence around
our quarterly closing procedures to ensure the accuracy of our financial
results.”
The Company currently anticipates that its results for the fiscal year
ended January 28, 2017 will be further impacted by, among other matters,
material asset impairment charges, including impairment charges relating
to its goodwill and tradename, and the recording of a valuation
allowance against all of its deferred tax assets in the fourth quarter.
Moreover, the Company has made a specified equity contribution of $1.7
million and currently anticipates to make one or more additional
specified equity contributions to its operating subsidiary using a
portion of the cash it held for purposes of an equity cure in connection
with the Company’s compliance with the covenant relating to the
consolidated net total leverage ratio under its term loan facility as of
January 28, 2017. The Company continues to hold approximately $20
million of cash until needed by its operating subsidiary, including for
purposes of future equity cures under its credit facilities. In
addition, today the Company entered into a side letter with Bank of
America which amends and restates the initial side letter dated March 6,
2017. The side letter provides the Company with the ability, through
July 31, 2017, to borrow against a portion of its approximately $20
million of cash currently held.
Furthermore, as required by the new Financial Accounting Standards Board
Accounting Standards, management is assessing whether there are
conditions or events that raise substantial doubt about the Company’s
ability to continue as a going concern within one year after its
financial statements are issued. This includes, among other factors, the
impact of the current trends in the retail business environment on the
Company’s future projections and its effect on the Company’s ability to
comply with, or cure any potential future violation of, the Leverage
Ratio Covenant during such period. Such trends have contributed to
management lowering the Company’s projections in the past.
Hoffman continued, “In addition, we completed a side letter with Bank of
America that increases our borrowing flexibility, allowing us to operate
our business more efficiently. However, in light of the difficult retail
environment we believe that it is prudent to consider a scenario in
which we do not meet our financial covenants. That said, we have done a
lot of work to reset the brand and believe that we are taking the right
strategic steps to optimize our wholesale business, expand our
direct-to-consumer business and grow our international presence.”
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
January 28, 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); our
ability to successfully complete the migration of our systems and
processes from Kellwood Company and to successfully implement the new
systems, processes and functions following the migration; 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; the impact of recent turnover in the
senior management team; the fact that a number of members of the
management team have less than one year of tenure with the Company, and
the current senior management team has not had a long period of time
working together; 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.
This press release is also available on the Vince Holding Corp. website (http://investors.vince.com/).

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Source: Vince Holding Corp.