Form 10-Q VINCE HOLDING CORP. For: May 02
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
Or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File Number:
(Exact name of registrant as specified in its charter)
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(I.R.S. Employer Identification No.) |
(Address of principal executive offices) (Zip code)
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(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Exchange Act:
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The |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer |
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Accelerated filer |
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Smaller reporting company |
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Emerging growth company |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
As of May 31, 2026, the registrant had
VINCE HOLDING CORP. AND SUBSIDIARIES
TABLE OF CONTENTS
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Item 1. |
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a) |
Unaudited Condensed Consolidated Balance Sheets at May 2, 2026 and January 31, 2026 |
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b) |
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c) |
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d) |
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e) |
Notes to Unaudited Condensed Consolidated Financial Statements |
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Item 2. |
Management's Discussion and Analysis of Financial Condition and Results of Operations |
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Item 3. |
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Item 4. |
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Item 1. |
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Item 1A. |
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Item 2. |
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Item 3. |
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Item 4. |
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Item 5. |
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Item 6. |
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INTRODUCTORY NOTE
On November 27, 2013, Vince Holding Corp. ("VHC" or the "Company"), previously known as Apparel Holding Corp., closed an initial public offering ("IPO") of its common stock and completed a series of restructuring transactions (the "Restructuring Transactions") through which Kellwood Holding, LLC acquired the non-Vince businesses, which included Kellwood Company, LLC, from the Company. The Company continues to own and operate the Vince business, which includes V Opco, LLC (formerly, Vince, LLC) ("V Opco"). Prior to the IPO and the Restructuring Transactions, VHC was a diversified apparel company operating a broad portfolio of fashion brands, which included the Vince business. As a result of the IPO and Restructuring Transactions, the non-Vince businesses were separated from the Vince business, and the stockholders immediately prior to the consummation of the Restructuring Transactions (the "Pre-IPO Stockholders") (through their ownership of Kellwood Holding, LLC) retained the full ownership and control of the non-Vince businesses.
On April 21, 2023, V Opco, the Company's wholly owned indirect subsidiary, entered into an Intellectual Property Asset Purchase Agreement (the "Asset Purchase Agreement"), by and among V Opco, ABG-Vince, LLC (f/k/a ABG-Viking, LLC) ("ABG Vince"), a newly formed indirect subsidiary of Authentic Brands Group, LLC, the Company and ABG Intermediate Holdings 2 LLC, whereby V Opco sold its intellectual property assets related to the business operated under the Vince brand to ABG Vince at closing (the "Asset Sale"). The Company closed the Asset Sale on May 25, 2023.
On January 22, 2025, P180 Vince Acquisition Co. ("P180"), a subsidiary of P180, Inc., a venture focused on accelerating growth and profitability in the luxury apparel sector, acquired a majority stake in the Company (the “P180 Acquisition”) from affiliates of Sun Capital Partners, Inc. (collectively, "Sun Capital").
For purposes of this Quarterly Report, the "Company," "we," and "our," refer to Vince Holding Corp. and our wholly owned subsidiaries, including Vince Intermediate Holding, LLC ("Vince Intermediate") and V Opco. References to "Vince," "Rebecca Taylor" or "Parker" refer only to the referenced brands.
DISCLOSURES REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q, and any statements incorporated by reference herein, contain forward-looking statements under the Private Securities Litigation Reform Act of 1995. Forward-looking statements 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: changes to and unpredictability in the trade policies and tariffs imposed by the U.S. and the governments of other nations; general economic conditions; our ability to maintain adequate cash flow from operations or availability under our revolving credit facility to meet our liquidity needs; restrictions on our operations under our credit facilities; our ability to improve our profitability; our ability to maintain our larger wholesale partners; our ability to accurately forecast customer demand for our products; our ability to maintain the license agreement relating to the Vince brand with ABG Vince; ABG Vince's expansion of the Vince brand into other categories and territories; ABG Vince's approval rights and other actions; our ability to realize the benefits of our strategic initiatives; our ability to make lease payments when due; our ability to open retail stores under favorable lease terms and operate and maintain new and existing retail stores successfully; our operating experience and brand recognition in international markets; our ability to remediate the identified material weakness in our internal control over financial reporting; our ability to comply with domestic and international laws, regulations and orders; increased scrutiny regarding our approach to sustainability matters and environmental, social and governance practices; competition in the apparel and fashion industry; our ability to attract and retain key personnel; seasonal and quarterly variations in our revenue and income; the protection and enforcement of intellectual property rights relating to the Vince brand; the extent of our foreign sourcing; our reliance on independent manufacturers; our ability to ensure the proper operation of the distribution facilities by third-party logistics providers; fluctuations in the price, availability and quality of raw materials; the ethical business and compliance practices of our independent manufacturers; our ability to mitigate system or data security issues, such as cyber or malware attacks, as well as other major system failures; our ability to adopt, optimize and improve our information technology systems, processes and functions; our ability to comply with privacy-related obligations; our status as a "controlled company"; our status as a "smaller reporting company"; and other factors as set forth from time to time in our Securities and Exchange Commission filings, including those described in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on April 16, 2026 (the "2025 Annual Report on Form 10-K") under the heading "Part I, Item 1A—Risk Factors" and any subsequently filed Quarterly Reports on Form 10-Q. We intend these forward-looking statements to speak only as of the date of this Quarterly Report on Form 10-Q and do not undertake to update or revise them as more information becomes available, except as required by law.
3
PART I. FINANCIAL INFORMATION
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
VINCE HOLDING CORP. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(in thousands, except share and per share data, unaudited)
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May 2, |
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January 31, |
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2026 |
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2026 |
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Assets |
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Current assets: |
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Cash and cash equivalents |
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$ |
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$ |
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Trade receivables, net of allowance for doubtful accounts $ |
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Inventories, net |
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Prepaid expenses and other current assets 1 |
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Total current assets |
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Property and equipment, net |
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Operating lease right-of-use assets, net |
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Equity method investment |
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Other assets |
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Total assets |
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$ |
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$ |
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Liabilities and Stockholders' Equity |
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Current liabilities: |
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Accounts payable |
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$ |
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$ |
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Accrued salaries and employee benefits |
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Other accrued expenses 2 |
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Short-term lease liabilities |
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Total current liabilities |
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Long-term debt |
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Long-term lease liabilities |
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Deferred income tax liability |
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Other liabilities |
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Stockholders' equity: |
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Common stock at $ |
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Additional paid-in capital |
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Accumulated deficit |
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( |
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( |
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Accumulated other comprehensive income |
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Total stockholders' equity |
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Total liabilities and stockholders' equity |
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$ |
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$ |
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1
2
See notes to unaudited condensed consolidated financial statements.
4
VINCE HOLDING CORP. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)
(in thousands, except share and per share data, unaudited)
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Three Months Ended |
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May 2, |
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May 3, |
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2026 |
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2025 |
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Net sales 3 |
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$ |
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$ |
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Cost of products sold 4 |
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Gross profit |
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Selling, general and administrative expenses 5 |
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Loss from operations |
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( |
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Interest expense, net 6 |
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Other (income) |
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( |
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— |
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Loss before income taxes and equity in net income of equity method investment |
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( |
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( |
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Benefit for income taxes |
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( |
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— |
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Loss before equity in net income of equity method investment |
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( |
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( |
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Equity in net income of equity method investment |
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Net loss |
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$ |
( |
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$ |
( |
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Other comprehensive income: |
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Foreign currency translation adjustments |
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Comprehensive loss |
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$ |
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$ |
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Loss per share: |
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Basic loss per share |
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$ |
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$ |
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Diluted loss per share |
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$ |
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$ |
( |
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Weighted average shares outstanding: |
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Basic |
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Diluted |
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3
4
5
6
See notes to unaudited condensed consolidated financial statements.
5
VINCE HOLDING CORP. AND SUBSIDIARIES
Condensed Consolidated Statements of Stockholders' Equity
(in thousands, except share amounts, unaudited)
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Common Stock |
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Number of Shares Outstanding |
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Par Value |
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Additional Paid-In Capital |
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Accumulated Deficit |
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Accumulated Other Comprehensive Income (Loss) |
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Total Stockholders' Equity |
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Balance as of January 31, 2026 |
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$ |
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$ |
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$ |
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$ |
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$ |
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Comprehensive loss: |
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Net loss |
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— |
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— |
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— |
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( |
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— |
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( |
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Foreign currency translation adjustment |
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— |
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— |
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— |
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— |
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Share-based compensation expense |
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— |
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— |
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— |
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— |
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Restricted stock unit vestings |
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— |
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— |
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— |
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— |
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— |
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Tax withholdings related to restricted stock vesting |
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( |
) |
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— |
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( |
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— |
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— |
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( |
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Balance as of May 2, 2026 |
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$ |
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$ |
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$ |
( |
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$ |
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$ |
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See notes to unaudited condensed consolidated financial statements.
6
VINCE HOLDING CORP. AND SUBSIDIARIES
Condensed Consolidated Statements of Stockholders' Equity
(in thousands, except share amounts, unaudited)
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Common Stock |
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Number of Shares Outstanding |
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Par Value |
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Additional Paid-In Capital |
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Accumulated Deficit |
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Accumulated Other Comprehensive Income (Loss) |
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Total Stockholders' Equity |
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Balance as of February 1, 2025 |
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$ |
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$ |
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$ |
( |
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$ |
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$ |
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Comprehensive loss: |
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Net loss |
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— |
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— |
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— |
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( |
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— |
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( |
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Foreign currency translation adjustment |
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— |
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— |
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— |
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— |
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Share-based compensation expense |
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— |
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— |
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— |
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— |
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Restricted stock unit vestings |
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— |
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— |
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— |
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— |
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— |
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Issuance of common stock |
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— |
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— |
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— |
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Other |
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— |
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— |
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( |
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— |
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— |
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( |
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Balance as of May 3, 2025 |
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$ |
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$ |
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$ |
( |
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$ |
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$ |
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See notes to unaudited condensed consolidated financial statements.
7
VINCE HOLDING CORP. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(in thousands, unaudited)
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Three Months Ended |
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May 2, 2026 |
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May 3, 2025 |
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Operating activities |
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Net loss |
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$ |
( |
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$ |
( |
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Add (deduct) items not affecting operating cash flows: |
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Depreciation and amortization |
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Allowance for doubtful accounts |
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Loss on disposal of property and equipment |
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Amortization of deferred financing costs |
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Share-based compensation expense |
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Capitalized PIK Interest due to loan with former related party |
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Equity in net income of equity method investment, net of distributions |
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Changes in assets and liabilities: |
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Receivables, net |
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Inventories |
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( |
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( |
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Prepaid expenses and other current assets |
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( |
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( |
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Accounts payable and accrued expenses |
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( |
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( |
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Other assets and liabilities |
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( |
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( |
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Net cash used in operating activities |
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( |
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( |
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Investing activities |
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Payments for capital expenditures |
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( |
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( |
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Net cash used in investing activities |
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( |
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( |
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Financing activities |
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Proceeds from borrowings under the Revolving Credit Facilities |
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Repayment of borrowings under the Revolving Credit Facilities |
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( |
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( |
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Tax withholdings related to restricted stock vesting |
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( |
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Proceeds from issuance of common stock, net of certain fees |
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Financing fees |
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( |
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Net cash provided by financing activities |
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Increase in cash, cash equivalents, and restricted cash |
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Effect of exchange rate changes on cash, cash equivalents, and restricted cash |
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( |
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Cash, cash equivalents, and restricted cash, beginning of period |
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Cash, cash equivalents, and restricted cash, end of period |
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Less: restricted cash at end of period |
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Cash and cash equivalents per balance sheet at end of period |
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$ |
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$ |
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Supplemental Disclosures of Cash Flow Information |
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Cash payments for interest |
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$ |
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$ |
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Cash payments for income taxes, net of refunds |
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Supplemental Disclosures of Non-Cash Investing and Financing Activities |
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Capital expenditures in accounts payable and accrued liabilities |
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See notes to unaudited condensed consolidated financial statements.
8
VINCE HOLDING CORP. AND SUBSIDIARIES
Notes to the Unaudited Condensed Consolidated Financial Statements
(in thousands, except share and per share data)
Note 1. Description of Business and Basis of Presentation
(A) Description of Business: The Company is a global retail company that operates the Vince brand women's and men's ready-to-wear business. Vince, established in 2002, is a leading global luxury apparel and accessories brand best known for creating elevated yet understated pieces for every day effortless style. Previously, the Company also owned and operated the Rebecca Taylor and Parker brands until the sale of the respective intellectual property was completed, as discussed below.
On April 21, 2023 the Company entered into a strategic partnership ("Authentic Transaction") with Authentic Brands Group, LLC ("Authentic"), a global brand development, marketing and entertainment platform, whereby the Company contributed its intellectual property to a newly formed Authentic subsidiary ("ABG Vince") for cash consideration and a membership interest in ABG Vince. The Company closed the Asset Sale (as defined below) on May 25, 2023. On May 25, 2023, in connection with the Authentic Transaction, V Opco, LLC (formerly, Vince, LLC) ("V Opco"), a wholly-owned subsidiary of the Company, entered into a License Agreement (the "License Agreement") with ABG-Vince LLC, which provides V Opco with an exclusive, long-term license to use the Licensed Property in the Territory to the Approved Accounts (each as defined in the License Agreement). See Note 2 "Significant Transactions" for additional information.
Rebecca Taylor, founded in 1996 in New York City, was a contemporary womenswear line lauded for its signature prints, romantic detailing and vintage inspired aesthetic, reimagined for a modern era. On September 12, 2022, the Company announced its decision to wind down the Rebecca Taylor business. On December 22, 2022, the Company's indirectly wholly owned subsidiary, Rebecca Taylor, Inc., completed the sale of its intellectual property and certain related ancillary assets to RT IPCO, LLC, an affiliate of Ramani Group. On May 3, 2024, V Opco completed the sale of all outstanding shares of Rebecca Taylor, Inc., which held the Rebecca Taylor business prior to the wind down, to Nova Acquisitions, LLC.
Parker, founded in 2008 in New York City, was a contemporary women's fashion brand that was trend focused. During the first half of fiscal 2020 the Company decided to pause the creation of new products for the Parker brand to focus resources on the operations of the Vince and Rebecca Taylor brands. On February 17, 2023, the Company's indirectly wholly owned subsidiary, Parker Lifestyle, LLC, completed the sale of its intellectual property and certain related ancillary assets to Parker IP Co. LLC, an affiliate of BCI Brands.
On January 22, 2025, P180, a venture focused on accelerating growth and profitability in the luxury apparel sector, acquired a majority stake in the Company (the “P180 Acquisition”) from affiliates of Sun Capital Partners, Inc. (collectively, “Sun Capital”). Simultaneously with the P180 Acquisition, V Opco amended its existing credit agreement with Bank of America, N.A. (“BofA”). The amendment consented to, among other things, the change in control in connection with the P180 Acquisition, as well as a partial pay down of the subordinated debt with SK Financial Services, LLC, an affiliate of Sun Capital, through increased borrowings under the credit agreement with BofA. See Note 2 "Significant Transactions" for additional information.
The Company reaches its customers through a variety of channels, specifically through major wholesale department stores and specialty stores in the United States ("U.S.") and select international markets, as well as through the Company's branded retail locations and the Company's website. The Company designs products in the U.S. and sources the vast majority of products from contract manufacturers outside the U.S., primarily in Asia. Products are manufactured to meet the Company's product specifications and labor standards.
(B) Basis of Presentation: The accompanying condensed consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles ("GAAP") and the rules and regulations of the U.S. Securities and Exchange Commission (the "SEC"). Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted. Therefore, these financial statements should be read in conjunction with VHC's audited financial statements for the fiscal year ended January 31, 2026, as set forth in the 2025 Annual Report on Form 10-K.
The condensed consolidated financial statements include the Company's accounts and the accounts of the Company's wholly-owned subsidiaries as of May 2, 2026. All intercompany accounts and transactions have been eliminated in consolidation. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting solely of normal recurring adjustments) and disclosures necessary for a fair statement of the results for the interim periods presented. The results of operations for these periods are not necessarily comparable to, or indicative of, results of any other interim period or the fiscal year as a whole.
(C) Use of Estimates: The preparation of financial statements in conformity with GAAP requires that management make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at
9
the date of the financial statements which affect revenues and expenses during the period reported. Estimates are adjusted when necessary to reflect actual experience. Significant estimates and assumptions may affect many items in the financial statements. Actual results could differ from estimates and assumptions in amounts that may be material to the condensed consolidated financial statements.
(D) Sources and Uses of Liquidity: The Company's sources of liquidity are cash and cash equivalents, cash flows from operations, if any, borrowings available under the 2023 Revolving Credit Facility (as defined in Note 4 "Long-Term Debt and Financing Arrangements") and the Company's ability to access the capital markets, including the Sales Agreement entered into with Virtu Americas LLC in June 2023 (see Note 7 "Stockholders' Equity" for further information). The Company's primary cash needs are funding working capital requirements, including royalty payments under the License Agreement, meeting debt service requirements and capital expenditures for new stores and related leasehold improvements. The most significant components of the Company's working capital are cash and cash equivalents, accounts receivable, inventories, accounts payable and other current liabilities.
The Company’s future financial results may be subject to substantial fluctuations, and may be impacted by business conditions and macroeconomic factors, particularly in light of the recently implemented tariffs. While we expect to meet our monthly Excess Availability (as defined in the 2023 Revolving Credit Facility Agreement) covenant and believe that our other sources of liquidity will generate sufficient cash flows to meet our obligations for the next twelve months from the date these financial statements are issued, the foregoing expectation is dependent on a number of factors, including, among others, our ability to generate sufficient cash flow from a combination of tariff mitigating initiatives, our ongoing ability to manage our operating obligations, the ability of our partners to satisfy their payment obligations to us when due, the results of the currently ongoing inventory valuation and potential borrowing restrictions imposed by our lenders based on their credit judgment, all of which could be significantly and negatively impacted by the recently implemented and new retaliatory and/or reciprocal tariffs, as well as changing trade policies between the U.S. and its trading partners, in addition to other macroeconomic factors. Any material negative impact from these factors or others could require us to implement alternative plans to satisfy our liquidity needs which may be unsuccessful. In the event that we are unable to timely service our debt, meet other contractual payment obligations or fund our other liquidity needs, we may need to refinance all or a portion of our indebtedness before maturity, seek waivers of or amendments to our contractual obligations for payment, reduce or delay scheduled expansions and capital expenditures, liquidate inventory through additional discounting, sell material assets or operations, or seek other financing opportunities. There can be no assurance that these options would be readily available to us and our inability to address our liquidity needs could materially and adversely affect our operations and jeopardize our business, financial condition and results of operations.
(E) Revenue Recognition: The Company recognizes revenue when performance obligations identified under the terms of contracts with its customers are satisfied, which generally occurs upon the transfer of control in accordance with the contractual terms and conditions of the sale. Sales are recognized when the control of the goods are transferred to the customer for the Company's wholesale business, upon receipt by the customer for the Company's e-commerce business, and at the time of sale to the consumer for the Company's retail business. See Note 12 "Segment Financial Information" for disaggregated revenue amounts by segment.
Revenue associated with gift cards is recognized upon redemption and unredeemed balances are considered a contract liability and recorded within other accrued expenses, which are subject to escheatment within the jurisdictions in which the Company operates. As of May 2, 2026 and January 31, 2026, the contract liability was $
(F) Recent Accounting Pronouncements: Except as noted below, the Company has considered all recent accounting pronouncements and has concluded that there are no recent accounting pronouncements that may have a material impact on its Consolidated Financial Statements, based on current information.
Recently Issued Accounting Pronouncements and Disclosure Rules
In November 2024, the FASB issued ASU No. 2024-03: Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. The ASU is intended to improve disclosures about a public business entity's expenses, primarily through additional disaggregation of income statement expenses. The FASB further clarified the effective date in January 2025 with the issuance of ASU 2025-01: Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date. The ASU is effective for fiscal years beginning after December 15, 2026, and interim periods beginning after December 15, 2027, with early adoption permitted. The requirements of the ASU will be applied prospectively with the option for retrospective application. We are currently evaluating the ASU to determine the impact on the Company's disclosures.
In September 2025, the FASB issued ASU No. 2025-06: Targeted Improvements to the Accounting for Internal-Use Software (Subtopic 350-40). This ASU modernizes and clarifies the threshold for when an entity is required to start capitalizing internal-use software costs, which occurs when (i) management has authorized and committed to funding a software project and (ii) it is probable that the project will be completed and the software will be used to perform the function intended. The guidance in this ASU, which
10
can be applied prospectively, retrospectively, or via a modified transition approach, becomes effective for fiscal years beginning after December 15, 2027, with early adoption permitted. We are currently evaluating the ASU to determine the impact on the Company's consolidated financial statements.
Note 2. Significant Transactions
Sale of Vince Intellectual Property
On April 21, 2023 the Company entered into the Asset Purchase Agreement (defined below), pursuant to which V Opco agreed to sell and transfer to ABG-Vince LLC (f/k/a ABG-Viking, LLC) ("ABG Vince"), an indirect subsidiary of Authentic, all intellectual property assets related to the business operated under the Vince brand in exchange for total consideration of $
Operating Agreement
On May 25, 2023, in connection with the closing (the "Closing") of the Asset Sale pursuant to the Intellectual Property Asset Purchase Agreement (the "Asset Purchase Agreement"), dated as of April 21, 2023, by and among V Opco, ABG Vince, the Company and ABG Intermediate Holdings 2 LLC, V Opco and ABG Vince entered into an Amended and Restated Limited Liability Company Agreement of ABG-Vince, LLC (the "Operating Agreement"), which, among other things, provides for the management of the business and the affairs of ABG Vince, the allocation of profits and losses, the distribution of cash of ABG Vince among its members and the rights, obligations and interests of the members to each other and to V Opco.
The Company accounts for its
The Company reviews its investment in ABG Vince for impairment when events or changes in circumstances indicate that an other-than-temporary decline in value may have occurred. If the carrying value of the investment exceeds its fair value and the loss in value is other than temporary, the investment is considered impaired and reduced to fair value, and the impairment is recognized in the period identified. Factors providing evidence of such a loss include changes in ABG Vince's operations or financial condition, significant continuing losses, and significant negative economic conditions, among others. During the three months ended May 2, 2026 and the fiscal year 2025, there was
License Agreement
On May 25, 2023, in connection with the Closing, V Opco and ABG Vince entered into a License Agreement (the "License Agreement"), which provides V Opco with a license to use the Licensed Property in the Territory, which is defined as the United States, Canada, Andorra, Austria, Germany, Switzerland, Belgium, Netherlands, Luxembourg, France, Monaco, Liechtenstein, Italy, San Marino, Vatican City, Iceland, Norway, Denmark, Sweden, Finland, Spain, Portugal, Greece, Republic of Cyprus (excluding Northern Cyprus), United Kingdom, Ireland, Australia, New Zealand, Mainland China, Hong Kong, Macau, Taiwan, Singapore, Japan and Korea (the "Core Territory"), together with all other territories (the "Option Territory"), to the Approved Accounts (each as defined in the License Agreement). V Opco is required to operate and maintain a minimum of
Additionally, the License Agreement provides V Opco with a license to use the Licensed Property to design, manufacture, promote, market, distribute, and sell ready-to-wear Sportswear Products and Outerwear Products (the "Core Products") and Home Décor (the "Option Products," together with the Core Products, the "Licensed Products"), which Option Products may be changed unilaterally by ABG Vince at any time after the effective date of the License Agreement.
The initial term of the License Agreement began on May 25, 2023, the date on which the Closing actually occurred, and ends at the end of the Company's 2032 fiscal year, unless sooner terminated pursuant to the terms of the License Agreement. V Opco has the option to renew the License Agreement on the terms set forth in the License Agreement for eight consecutive periods of ten years each, unless the License Agreement is sooner terminated pursuant to its terms or V Opco is in material breach of the License
11
Agreement and such breach has not been cured within the specified cure period. V Opco may elect not to renew the term for a renewal term.
V Opco is required to pay ABG Vince a royalty on net sales of Licensed Products and committed to an annual guaranteed minimum royalty of $
In the event that the annual guaranteed minimum royalty paid to ABG Vince in any given contract year is greater than the actual royalties earned by ABG Vince in the same contract year, the difference between the royalty actually earned and the annual guaranteed minimum royalty paid is credited for the next two contract years against any amount of royalty earned by ABG Vince in excess of the annual guaranteed minimum royalty paid during each such contract year, if any. Royalty expense is included within Cost of product sold on the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss).
P180 Acquisition
On January 22, 2025, P180 Vince Acquisition Co. (“P180”) purchased
Note 3. Fair Value Measurements
We define the fair value of a financial instrument as the amount that would be received from the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. We are responsible for the determination of the value of the investments carried at fair value and the supporting methodologies and assumptions. The Company's financial assets and liabilities are to be measured using inputs from three levels of the fair value hierarchy as follows:
Level 1— |
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quoted market prices in active markets for identical assets or liabilities |
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Level 2— |
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observable market-based inputs (quoted prices for similar assets and liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active) or inputs that are corroborated by observable market data |
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Level 3— |
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significant unobservable inputs that reflect the Company's assumptions and are not substantially supported by market data |
The Company did
The Company's non-financial assets, which primarily consist of operating lease right-of-use ("ROU") assets and property and equipment, are not required to be measured at fair value on a recurring basis and are reported at their carrying values. However, on a
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periodic basis whenever events or changes in circumstances indicate that their carrying value may not be fully recoverable, non-financial assets are assessed for impairment and, if applicable, written down to (and recorded at) fair value. There was
The inputs used in determining the fair value of the ROU assets are the current comparable market rents for similar properties and a store discount rate. The fair value of the property and equipment is based on its estimated liquidation value. The measurement of fair value of these assets are considered Level 3 valuations as certain of these inputs are unobservable and are estimated to be those that would be used by market participants in valuing these or similar assets.
Note 4. Long-Term Debt and Financing Arrangements
Debt obligations consisted of the following:
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May 2, |
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January 31, |
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2026 |
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2026 |
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Long-term debt: |
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Revolving Credit Facility |
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$ |
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$ |
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Third Lien Credit Facility |
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Total long-term debt |
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$ |
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$ |
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2023 Revolving Credit Facility
On June 23, 2023, V Opco, entered into a new $
The 2023 Revolving Credit Facility provides for a revolving line of credit of up to the lesser of (i) the Borrowing Base (as defined in the 2023 Revolving Credit Agreement) and (ii) $
Interest is payable on the loans under the 2023 Revolving Credit Facility, at Vince LLC's request, either at Term SOFR, the Base Rate, or SOFR Daily Floating Rate, in each case, with applicable margins subject to a pricing grid based on an average daily excess availability calculation. The "Base Rate" means, for any day, a fluctuating rate per annum equal to the highest of (i) the Federal Funds Rate for such day, plus
The applicable margins for SOFR Term and SOFR Daily Floating Rate Loans are: (i)
The 2023 Revolving Credit Facility contains a financial covenant requiring Excess Availability at all times to be no less than the greater of (i)
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The 2023 Revolving Credit Facility contains representations and warranties, covenants and events of default that are customary for this type of financing, including limitations on the incurrence of additional indebtedness, liens, burdensome agreements, investments, loans, asset sales, mergers, acquisitions, prepayment of certain other debt, the repurchase of capital stock, transactions with affiliates, and the ability to change the nature of its business or its fiscal year. The 2023 Revolving Credit Facility generally permits dividends in the absence of any default or event of default (including any event of default arising from a contemplated dividend), so long as (i) after giving pro forma effect to the contemplated dividend and on a pro forma basis for the 30-day period immediately preceding such dividend, Excess Availability will be at least the greater of
All obligations under the 2023 Revolving Credit Facility are guaranteed by the Company and Vince Intermediate and any future subsidiaries of the Company (other than Excluded Subsidiaries as defined in the 2023 Revolving Credit Agreement) and secured by a lien on substantially all of the assets of the Company, V Opco and Vince Intermediate and any future subsidiary guarantors, other than among others, equity interests in ABG Vince, as well as the rights of V Opco under the License Agreement.
As of May 2, 2026, the Company was in compliance with applicable covenants. As of May 2, 2026, $
On January 22, 2025, V Opco, LLC entered into that certain First Amendment (the “First Amendment”) to the 2023 Revolving Credit Agreement. The First Amendment amends the 2023 Revolving Credit Agreement to, among other things, (a) consent to the P180 Acquisition (see Note 2 "Significant Transactions" for additional information); (b) provide that, until the first Adjustment Date following January 22, 2026, the applicable margin will be
On March 18, 2026, V Opco entered into the Second Amendment (the "2023 Revolving Credit Facility Second Amendment") to the 2023 Revolving Credit Facility which, among other things, (a) modified the definition of Eligible Trade Receivables in the 2023 Revolving Credit Agreement to increase concentration limits and (b) expanded the eligibility criteria for Accounts owed by certain customers that may be included in the Borrowing Base.
Third Lien Credit Facility
On December 11, 2020, V Opco entered into a $
SK Financial is an affiliate of Sun Capital Partners, Inc. ("Sun Capital"). The Third Lien Credit Facility was reviewed and approved by the Special Committee of the Company's Board of Directors, consisting solely of directors not affiliated with Sun Capital, which committee was represented by independent legal advisors. Immediately prior to the P180 Acquisition, the affiliates of Sun Capital owned approximately
Interest on loans under the Third Lien Credit Facility is payable in kind at a rate revised in connection with the Third Lien Third Amendment (as defined and discussed below) to be equal to the Daily Simple SOFR, subject to a credit spread adjustment of
The Company had incurred $
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debt issuance costs. In connection with the debt extinguishment (see below), unamortized debt issuance costs of $
All obligations under the Third Lien Credit Facility are guaranteed by the Company, Vince Intermediate and the Company's existing material domestic restricted subsidiaries as well as any future material domestic restricted subsidiaries and are secured on a junior basis relative to the 2023 Revolving Credit Facility by a lien on substantially all of the assets of the Company, Vince Intermediate, V Opco and the Company's existing material domestic restricted subsidiaries as well as any future material domestic restricted subsidiaries.
On April 21, 2023, V Opco entered into that certain Consent and Third Amendment to Credit Agreement (the "Third Lien Third Amendment"), which, among other things, (a) permitted the sale of the intellectual property of the Vince Business contemplated in the Asset Sale, (b) replaced LIBOR as an interest rate benchmark in favor of Daily Simple SOFR, subject to a credit spread adjustment of
On June 23, 2023, V Opco entered into the
On January 22, 2025, V Opco entered into the Fifth Amendment (the “Third Lien Fifth Amendment”) to the Third Lien Credit Agreement which, among other things, consented to the P180 Acquisition.
Note 5. Inventory
Note 6. Share-Based Compensation
Employee Stock Plans
Vince 2013 Incentive Plan
In connection with the IPO, the Company adopted the Vince 2013 Incentive Plan, which provides for grants of stock options, stock appreciation rights, restricted stock and other stock-based awards. In May 2018, the Company filed a Registration Statement on Form S-8 to register an additional
Stock Options
A summary of stock option activity for the three months ended May 2, 2026 is as follows:
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Stock Options |
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Weighted Average Exercise Price |
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Weighted Average Remaining Contractual Term (years) |
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Aggregate Intrinsic Value |
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Outstanding at January 31, 2026 |
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$ |
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Granted |
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Exercised |
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Forfeited or expired |
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Outstanding at May 2, 2026 |
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Vested and exercisable at May 2, 2026 |
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$ |
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— |
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$ |
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Restricted Stock Units
A summary of restricted stock unit activity for the three months ended May 2, 2026 is as follows:
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Restricted Stock Units |
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Weighted Average Grant Date Fair Value |
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Non-vested restricted stock units at January 31, 2026 |
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Granted |
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$ |
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Vested |
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Forfeited |
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$ |
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Non-vested restricted stock units at May 2, 2026 |
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$ |
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Share-Based Compensation Expense
The Company recognized share-based compensation expense of $
Note 7. Stockholders' Equity
At-the-Market Offering
On June 30, 2023, the Company entered into a Sales Agreement (the “Virtu Sales Agreement”) with Virtu Americas LLC ("Virtu"), as sales agent and/or principal (the "Virtu At-the-Market Offering") under which the Company was able to sell from time to time through Virtu shares of the Company's common stock, par value $
Following the expiration of the 2021 S-3 Registration Statement, on September 23, 2024, the Company filed a replacement shelf registration statement on Form S-3, which was declared effective on October 3, 2024 (the "2024 S-3 Registration Statement"). Under the 2024 S-3 Registration Statement, the Company may offer and sell up to $
During the three months ended May 2, 2026 and May 3, 2025, the Company did
Note 8. (Loss) Earnings Per Share
Basic (loss) earnings per share is calculated by dividing net income by the weighted average number of shares of common stock outstanding during the period. Except when the effect would be anti-dilutive, diluted earnings per share is calculated based on the weighted average number of shares of common stock outstanding plus the dilutive effect of share-based awards calculated under the treasury stock method. In periods when the Company incurs a net loss, share-based awards are excluded from the calculation of earnings per share as their inclusion would have an anti-dilutive effect.
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The following is a reconciliation of weighted average basic shares to weighted average diluted shares outstanding:
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Three Months Ended |
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May 3, |
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2025 |
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Weighted-average shares—basic |
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Effect of dilutive equity securities |
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Weighted-average shares—diluted |
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Because the Company incurred a net loss for the three months ended May 2, 2026 and May 3, 2025, weighted-average basic shares and weighted-average diluted shares outstanding are equal for these periods.
Note 9. Commitments and Contingencies
Litigation
The Company is a party to legal proceedings, compliance matters, environmental, as well as wage and hour and other labor claims that arise in the ordinary course of business. Although the outcome of such items cannot be determined with certainty, management believes that the ultimate outcome of these items, individually and in the aggregate, will not have a material adverse impact on the Company's financial position, results of operations or cash flows.
IEEPA Tariff Refund
In February 2026, the U.S. Supreme Court ruled that tariffs imposed under the International Emergency Economic Powers Act (“IEEPA”) on goods imported into the United States were unauthorized. The Company serves as the importer of record for certain products previously subject to IEEPA tariffs and paid approximately $
To account for potential recoveries of previously paid IEEPA tariffs, the Company applies a gain contingency model in accordance with ASC 450-30, Gain Contingencies. Under this model, a gain contingency is not recognized until the gain is realized or realizable, which is at the earlier of when U.S. Customs and Border Protection (CBP) affirms the Company’s refund claim or the refund is received in cash. Any recovery, when recognized, would be reflected as a reduction of Inventory to the extent the related goods remain on hand, or as a reduction of Cost of goods sold for amounts related to goods already sold. As of May 2, 2026, the Company had not received any affirmation from CBP or refund payments, and the timing, amount, and ultimate receipt of any refunds remains uncertain. Accordingly, the Company has not recognized a receivable and corresponding offset to Cost of goods sold or Inventory in the condensed consolidated financial statements for the fiscal quarter ended May 2, 2026. Subsequent to the fiscal quarter ended May 2, 2026, the Company received cash refund payments of $
Contingencies
Beginning in 2020, the U.S. government enacted various relief packages in response to the COVID-19 pandemic, one of which was the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act"). The CARES Act included, among other items, provisions relating to refundable employee retention payroll tax credits. The Company applied for these employee retention tax credits relating to the first and second quarters of 2021. Due to uncertainties regarding approval by the Internal Revenue Service of the Company's eligibility for the credit and the complex nature of the Employee Retention Credit ("ERC") computations, the Company accounts for the ERC by analogy to ASC 450-30, Contingencies - Gain Contingencies. In accordance with ASC 450-30, the ERC is recognized after the related contingency is resolved and deemed realizable, which the Company has determined is upon receipt of payment and completion of any potential audit or examination or the expiration of the related statute of limitations.
In the second quarter of fiscal 2025, the Company received payments totaling $
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Note 10. Income Taxes
The Company provides for income taxes at the end of each interim period based on the estimated effective tax rate for the full fiscal year. Section 382 of the Internal Revenue Code of 1986 (“IRC”) subjects the future utilization of net operating losses to an annual limitation in the event of certain ownership changes, as defined ("382 limitation"). The Company determined that under Section 382, the P180 Acquisition resulted in an ownership change in January 2025. Thus, the Company’s ability to offset current year taxable income with net operating loss carryforwards is limited.
The benefit for income taxes for the three months ended May 2, 2026 is $
Each reporting period, the Company evaluates the realizability of its deferred tax assets and has maintained a full valuation allowance against its deferred tax assets. These valuation allowances will be maintained until there is sufficient positive evidence to conclude that it is more likely than not that these deferred tax assets will be realized.
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law by President Trump. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. The OBBBA did not have a material impact on the Company's income tax provision for the three months ended May 2, 2026, and will not have a material effect on our consolidated financial statements for the fiscal year ending January 30, 2027.
Note 11. Leases
The Company determines if a contract contains a lease at inception.
ROU assets and operating lease liabilities are recognized based upon the present value of the future lease payments over the lease term. As the Company's leases do not provide an implicit borrowing rate, the Company uses an estimated incremental borrowing rate based upon a combination of market-based factors, such as market quoted forward yield curves and company specific factors, such as the Company's credit rating, lease size and duration to calculate the present value.
Total lease cost is included in SG&A expense in the accompanying Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) and is recorded net of sublease income. Some leases have a non-cancelable lease term of less than one year and therefore, the Company has elected to exclude these short-term leases from its ROU asset and lease liabilities. Short term lease costs were immaterial for the three months ended May 2, 2026 and May 3, 2025.
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Three Months Ended |
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2025 |
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Operating lease cost |
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Variable operating lease cost |
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Sublease income |
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Total lease cost |
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$ |
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As of May 2, 2026, the future maturity of lease liabilities are as follows:
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May 2, |
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(in thousands) |
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2026 |
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Fiscal 2026 |
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$ |
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Fiscal 2027 |
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Fiscal 2028 |
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Fiscal 2029 |
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Fiscal 2030 |
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Thereafter |
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Total lease payments |
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Less: Imputed interest |
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|
|
( |
) |
Total operating lease liabilities |
|
|
|
$ |
|
|
As of May 2, 2026, future minimum tenant operating lease payments remaining under this sublease were approximately $
The operating lease payments do not include any renewal options as such leases are not reasonably certain of being renewed as of May 2, 2026, and do not include $
Note 12. Segment Financial Information
The Company has identified
The accounting policies of the Company's reportable segments are consistent with those described in Note 1 to the audited consolidated financial statements for the fiscal year ended January 31, 2026 included in the 2025 Annual Report on Form 10-K.
19
Summary information for the Company's reportable segments is presented below.
(in thousands) |
|
Vince Wholesale |
|
|
Vince Direct-to-consumer |
|
|
Total |
|
|||
Three Months Ended May 2, 2026 |
|
|
|
|
|
|
|
|
|
|||
Net Sales |
|
$ |
|
|
$ |
|
|
$ |
|
|||
|
|
|
|
|
|
|
|
|
|
|||
Cost of Products Sold* |
|
|
|
|
|
|
|
|
|
|||
Staff and Personnel |
|
|
|
|
|
|
|
|
|
|||
Occupancy |
|
|
|
|
|
|
|
|
|
|||
Marketing and advertising |
|
|
|
|
|
|
|
|
|
|||
Other segment items (1) |
|
|
|
|
|
|
|
|
|
|||
Total segment income before income taxes and equity in net income of equity method investment |
|
|
|
|
|
|
|
|
|
|||
Unallocated Corporate |
|
|
|
|
|
|
|
|
( |
) |
||
Total loss before income taxes and equity in net income of equity method investment |
|
|
|
|
|
|
|
$ |
( |
) |
||
|
|
Vince Wholesale |
|
|
Vince Direct-to-consumer |
|
|
Total |
|
|||
Three Months Ended May 3, 2025 |
|
|
|
|
|
|
|
|
|
|||
Net Sales |
|
$ |
|
|
$ |
|
|
$ |
|
|||
|
|
|
|
|
|
|
|
|
|
|||
Cost of Products Sold* |
|
|
|
|
|
|
|
|
|
|||
Staff and Personnel |
|
|
|
|
|
|
|
|
|
|||
Occupancy |
|
|
|
|
|
|
|
|
|
|||
Marketing and advertising |
|
|
|
|
|
|
|
|
|
|||
Other segment items (1) |
|
|
|
|
|
|
|
|
|
|||
Total segment income (loss) before income taxes and equity in net income of equity method investment |
|
|
|
|
|
( |
) |
|
|
|
||
Unallocated Corporate |
|
|
|
|
|
|
|
|
( |
) |
||
Total loss before income taxes and equity in net income of equity method investment |
|
|
|
|
|
|
|
$ |
( |
) |
||
20
|
|
Three Months Ended |
|
|||||
|
|
May 2, 2026 |
|
|
May 3, 2025 |
|
||
Depreciation and Amortization: |
|
|
|
|
|
|
||
Vince Wholesale |
|
$ |
|
|
$ |
|
||
Vince Direct-to-Consumer |
|
|
|
|
|
|
||
Total Segment Depreciation and Amortization |
|
|
|
|
|
|
||
Unallocated Corporate |
|
|
|
|
|
|
||
Total Depreciation and Amortization |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
Capital Expenditures: |
|
|
|
|
|
|
||
Vince Wholesale |
|
$ |
|
|
$ |
|
||
Vince Direct-to-Consumer |
|
|
|
|
|
|
||
Total Segment Capital Expenditures |
|
|
|
|
|
|
||
Unallocated Corporate |
|
$ |
|
|
|
|
||
Total Capital Expenditures |
|
$ |
|
|
$ |
|
||
|
|
As of |
|
|||||
|
|
May 2, 2026 |
|
|
January 31, 2026 |
|
||
Total Assets: |
|
|
|
|
|
|
||
Vince Wholesale |
|
$ |
|
|
$ |
|
||
Vince Direct-to-Consumer |
|
|
|
|
|
|
||
Total Segment Assets |
|
|
|
|
|
|
||
Unallocated Corporate |
|
|
|
|
|
|
||
Total Assets |
|
$ |
|
|
$ |
|
||
(1) Other segment items primarily include various third party expenses, banking fees, depreciation and amortization, supplies, and commissions.
* Cost of Products Sold for the three months ended May 2, 2026 includes royalty expenses of $
Note 13. Related Party Transactions
Operating Agreement
On May 25, 2023, V Opco, LLC and ABG Vince entered into the Operating Agreement, which, among other things, provides for the management of the business and the affairs of ABG Vince, the allocation of profits and losses, the distribution of cash of ABG Vince among its members and the rights, obligations and interests of the members to each other and to V Opco. See Note 2 "Significant Transactions" for further information. During the three months ended May 2, 2026 and May 3, 2025, the Company received distributions of cash of $
License Agreement
On May 25, 2023, V Opco and ABG Vince entered into the License Agreement, whereby V Opco is required to pay ABG Vince a royalty on net sales of Licensed Products and committed to an annual guaranteed minimum royalty of $
21
CaaStle Platform Services
On September 7, 2018, V Opco and CaaStle Inc. (“CaaStle”) entered into a platform services agreement, whereby CaaStle provided logistical services for the Company's Vince Unfold clothing rental service. The agreement was amended on November 1, 2024. Prior to the P180 Acquisition, CaaStle was an unrelated party to the Company. Due to CaaStle’s relationship with P180, as a result of the P180 Acquisition, CaaStle was considered a related party to the Company as of February 1, 2025. Subsequently, due to organizational changes at CaaStle and P180, CaaStle is no longer considered a related party to the Company.
During the three months ended May 2, 2026, the Company recognized no net sales, cost of products sold, or SG&A expenses from the arrangement. During the three months ended May 3, 2025, the Company recognized $
On April 24, 2025, the Company terminated the Vince Unfold program and the platform services agreement in its entirety.
Third Lien Credit Agreement
On December 11, 2020, V Opco entered into the $
See Note 2 "Significant Transactions" and Note 4 "Long-Term Debt and Financing Arrangements" for additional information.
Indemnification Agreements
The Company has entered into indemnification agreements with each of its executive officers and directors. The indemnification agreements provide the executive officers and directors with contractual rights to indemnification, expense advancement and reimbursement, to the fullest extent permitted under the Delaware General Corporation Law.
Second and Third Amended and Restated Bylaws
On January 22, 2025, the Board approved an amendment and restatement of the Company’s bylaws (the “Second Amended and Restated Bylaws”) to provide P180, following the P180 Acquisition, with the right to designate (i) a majority of the directors of the Board, (ii) the Chairman of the Board, and (iii) the chairman of each committee of the Board, in each case for so long as P180 continues to beneficially own at least thirty percent (30%) of the Company’s outstanding common stock. Subsequently, on April 4, 2025, the Board approved an amendment and restatement of the Second Amended and Restated Bylaws to remove such rights granted to P180 under the Second Amended and Restated Bylaws.
22
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This discussion summarizes our consolidated operating results, financial condition and liquidity. The following discussion and analysis should be read in conjunction with our Condensed Consolidated Financial Statements and related notes included elsewhere in this Quarterly Report on Form 10-Q (this "Quarterly Report"). All amounts disclosed are in thousands except store counts, share and per share data and percentages. See Note 1 "Description of Business and Basis of Presentation" within the notes to the Condensed Consolidated Financial Statements in this Quarterly Report for further information.
This discussion contains forward-looking statements involving risks, uncertainties and assumptions that could cause our results to differ materially from expectations. For a discussion of the risks facing our business see "Item 1A—Risk Factors" of this Quarterly Report as well as in our 2025 Annual Report on Form 10-K.
Executive Overview
We are a global retail company that operates the Vince brand women's and men's ready-to-wear business. We serve our customers through a variety of channels that reinforces the brand image. Previously, we also owned and operated the Rebecca Taylor and Parker brands until the sale of the respective intellectual property was completed, as discussed below.
Vince, established in 2002, is a leading global luxury apparel and accessories brand best known for creating elevated yet understated pieces for every day effortless style. As of May 2, 2026, we operate 42 full-price retail stores, 12 outlet stores, and the e-commerce site, vince.com. Vince is also available through premium wholesale channels globally.
On April 21, 2023 the Company entered into a strategic partnership ("Authentic Transaction") with Authentic Brands Group, LLC ("Authentic"), a global brand development, marketing and entertainment platform, whereby the Company contributed its intellectual property to a newly formed Authentic subsidiary ("ABG Vince") for cash consideration and a membership interest in ABG Vince. The Company closed the Asset Sale on May 25, 2023. On May 25, 2023, in connection with the Authentic Transaction, V Opco, entered into a License Agreement (the "License Agreement") with ABG Vince, which provides V Opco with an exclusive, long-term license to use the Licensed Property in the Territory to the Approved Accounts (each as defined in the License Agreement). See Note 2 "Significant Transactions" to the Condensed Consolidated Financial Statements in this Quarterly Report for additional information.
On January 22, 2025, P180 Vince Acquisition Co., a subsidiary of P180, Inc., a venture focused on accelerating growth and profitability in the luxury apparel sector, acquired a majority stake in the Company (the “P180 Acquisition”) from affiliates of Sun Capital Partners, Inc. (collectively, “Sun Capital”).
Rebecca Taylor, founded in 1996 in New York City, was a contemporary womenswear line lauded for its signature prints, romantic detailing and vintage inspired aesthetic, reimagined for a modern era. On September 12, 2022, the Company announced its decision to wind down the Rebecca Taylor business. On December 22, 2022, the Company's indirectly wholly owned subsidiary, Rebecca Taylor, Inc., completed the sale of its intellectual property and certain related ancillary assets to RT IPCO, LLC, an affiliate of Ramani Group. On May 3, 2024, V Opco completed the sale of all outstanding shares of Rebecca Taylor, Inc. to Nova Acquisitions, LLC.
Parker, founded in 2008 in New York City, was a contemporary women's fashion brand that was trend focused. During the first half of fiscal 2020 the Company decided to pause the creation of new products to focus resources on the operations of the Vince and Rebecca Taylor brands. On February 17, 2023, the Company's indirectly wholly owned subsidiary, Parker Lifestyle, LLC, completed the sale of its intellectual property and certain related ancillary assets to Parker IP Co. LLC, an affiliate of BCI Brands.
The Company has identified two reportable segments: Vince Wholesale and Vince Direct-to-consumer.
Results of Operations
Comparable Sales
Comparable sales include our e-commerce sales in order to align with how we manage our brick-and-mortar retail stores and e-commerce online store as a combined single direct-to-consumer channel of distribution. As a result of our omni-channel sales and inventory strategy, as well as cross-channel customer shopping patterns, there is less distinction between our brick-and-mortar retail stores and our e-commerce online store and we believe the inclusion of e-commerce sales in our comparable sales metric is a more meaningful representation of these results and provides a more comprehensive view of our year over year comparable sales metric.
A store is included in the comparable sales calculation after it has completed 13 full fiscal months of operations and includes stores, if any, that have been remodeled or relocated within the same geographic market the Company served prior to the relocation. Non-comparable sales include new stores which have not completed 13 full fiscal months of operations, sales from closed stores, and relocated stores serving a new geographic market. For 53-week fiscal years, we adjust comparable sales to exclude the additional week. There may be variations in the way in which some of our competitors and other retailers calculate comparable sales.
23
The following table presents, for the periods indicated, our operating results as a percentage of net sales, as well as earnings per share data:
|
|
Three Months Ended |
|
|||||||||||||
|
|
May 2, 2026 |
|
|
May 3, 2025 |
|
||||||||||
|
|
|
|
|
% of Net |
|
|
|
|
|
% of Net |
|
||||
|
|
Amount |
|
|
Sales |
|
|
Amount |
|
|
Sales |
|
||||
(in thousands, except per share data and percentages) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Statements of Operations: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net sales |
|
$ |
64,035 |
|
|
|
100.0 |
% |
|
$ |
57,933 |
|
|
|
100.0 |
% |
Cost of products sold |
|
|
31,643 |
|
|
|
49.4 |
% |
|
|
28,770 |
|
|
|
49.7 |
% |
Gross profit |
|
|
32,392 |
|
|
|
50.6 |
% |
|
|
29,163 |
|
|
|
50.3 |
% |
Selling, general and administrative expenses |
|
|
35,039 |
|
|
|
54.7 |
% |
|
|
33,601 |
|
|
|
58.0 |
% |
Loss from operations |
|
|
(2,647 |
) |
|
|
(4.1 |
)% |
|
|
(4,438 |
) |
|
|
(7.7 |
)% |
Interest expense, net |
|
|
644 |
|
|
|
1.0 |
% |
|
|
856 |
|
|
|
1.5 |
% |
Other (income) |
|
|
(103 |
) |
|
|
(0.2 |
)% |
|
|
— |
|
|
|
0.0 |
% |
Loss before income taxes and equity in net income of equity method investment |
|
|
(3,188 |
) |
|
|
(5.0 |
)% |
|
|
(5,294 |
) |
|
|
(9.1 |
)% |
Benefit for income taxes |
|
|
(408 |
) |
|
|
(0.6 |
)% |
|
|
— |
|
|
|
0.0 |
% |
Loss before equity in net income of equity method investment |
|
|
(2,780 |
) |
|
|
(4.4 |
)% |
|
|
(5,294 |
) |
|
|
(9.1 |
)% |
Equity in net income of equity method investment |
|
|
679 |
|
|
|
1.1 |
% |
|
|
491 |
|
|
|
0.8 |
% |
Net loss |
|
$ |
(2,101 |
) |
|
|
(3.3 |
)% |
|
$ |
(4,803 |
) |
|
|
(8.3 |
)% |
Loss per share: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic loss per share |
|
$ |
(0.16 |
) |
|
|
|
|
$ |
(0.37 |
) |
|
|
|
||
Diluted loss per share |
|
$ |
(0.16 |
) |
|
|
|
|
$ |
(0.37 |
) |
|
|
|
||
Three Months Ended May 2, 2026 Compared to Three Months Ended May 3, 2025
Net sales for the three months ended May 2, 2026 were $64,035, increasing $6,102, or 10.5%, versus $57,933 for the three months ended May 3, 2025.
Gross profit increased 11.1% to $32,392 for the three months ended May 2, 2026 from $29,163 in the prior year first quarter. As a percentage of sales, gross margin was 50.6%, compared with 50.3% in the prior year first quarter. The total gross margin rate increase was primarily driven by the following factors:
Selling, general and administrative ("SG&A") expenses for the three months ended May 2, 2026 were $35,039, increasing $1,438, or 4.3%, versus $33,601 for the three months ended May 3, 2025. SG&A expenses as a percentage of sales were 54.7% and 58.0% for the three months ended May 2, 2026 and May 3, 2025, respectively. The increase in SG&A expenses compared to the prior fiscal year period was due primarily to approximately $1,200 of increased benefit costs, and approximately $800 of increased marketing and advertising costs, partially offset by a decrease in legal costs.
Interest expense, net decreased $212, or 24.8%, to $644 in the three months ended May 2, 2026 from $856 in the three months ended May 3, 2025, primarily due to lower levels of debt under the Revolving credit facility.
Benefit for income taxes for the three months ended May 2, 2026 was $408, compared to $0 for the three months ended May 3, 2025. The benefit is due to the impact of applying the Company's estimated annual effective tax rate to the year-to-date ordinary pre-tax loss.
In the prior comparative period, the Company had year-to-date ordinary pre-tax losses for the interim period and anticipated annual ordinary pre-tax income for the fiscal year. The Company determined that it was more likely than not that the tax benefit of the year-to-date ordinary pre-tax loss would not be realized in the current or future years and therefore, the Company did not record any tax expense during the prior comparative period.
Equity in net income of equity method investment for the three months ended May 2, 2026 and May 3, 2025 was $679 and $491, respectively, and consists of the Company's proportionate share of ABG Vince's net income.
24
Performance by Segment
The Company has identified two reportable segments as further described below:
Unallocated corporate expenses are related to the Vince brand and are comprised of SG&A expenses attributable to corporate and administrative activities (such as marketing, design, finance, information technology, legal and human resource departments), and other charges that are not directly attributable to the Company's Vince Wholesale and Vince Direct-to-consumer reportable segments.
|
|
Three Months Ended |
|
|||||
|
|
May 2, |
|
|
May 3, |
|
||
(in thousands) |
|
2026 |
|
|
2025 |
|
||
Net Sales: |
|
|
|
|
|
|
||
Vince Wholesale |
|
$ |
32,066 |
|
|
$ |
30,290 |
|
Vince Direct-to-consumer |
|
|
31,969 |
|
|
|
27,643 |
|
Total net sales |
|
$ |
64,035 |
|
|
$ |
57,933 |
|
|
|
|
|
|
|
|
||
Income (loss) from operations: |
|
|
|
|
|
|
||
Vince Wholesale |
|
$ |
10,134 |
|
|
$ |
9,397 |
|
Vince Direct-to-consumer |
|
|
1,847 |
|
|
|
(800 |
) |
Total segment income from operations |
|
|
11,981 |
|
|
|
8,597 |
|
Unallocated corporate |
|
|
(14,628 |
) |
|
|
(13,035 |
) |
Total loss from operations |
|
$ |
(2,647 |
) |
|
$ |
(4,438 |
) |
Vince Wholesale
|
|
Three Months Ended |
|
|||||||||
(in thousands) |
|
May 2, 2026 |
|
|
May 3, 2025 |
|
|
$ Change |
|
|||
Net sales |
|
$ |
32,066 |
|
|
$ |
30,290 |
|
|
$ |
1,776 |
|
Income from operations |
|
|
10,134 |
|
|
|
9,397 |
|
|
|
737 |
|
Net sales from our Vince Wholesale segment increased $1,776, or 5.9%, to $32,066 in the three months ended May 2, 2026 from $30,290 in the three months ended May 3, 2025, due primarily to increased shipments.
Income from operations from our Vince Wholesale segment increased $737, or 7.8%, to $10,134 in the three months ended May 2, 2026 from $9,397 in the three months ended May 3, 2025, primarily driven by an increase in net sales, partially offset by a decrease in gross margin primarily due to the impact of tariffs.
Vince Direct-to-consumer
|
|
Three Months Ended |
|
|||||||||
(in thousands) |
|
May 2, 2026 |
|
|
May 3, 2025 |
|
|
$ Change |
|
|||
Net sales |
|
$ |
31,969 |
|
|
$ |
27,643 |
|
|
$ |
4,326 |
|
Income (loss) from operations |
|
|
1,847 |
|
|
|
(800 |
) |
|
|
2,647 |
|
Net sales from our Vince Direct-to-consumer segment increased $4,326, or 15.6%, to $31,969 in the three months ended May 2, 2026 from $27,643 in the three months ended May 3, 2025. Comparable sales, including e-commerce, increased $4,459 or 17.7%, due to an increase in both e-commerce and retail stores volume and higher prices. Non-comparable sales, including Vince Unfold, which was exited in the first quarter of fiscal 2025, decreased $133. Since May 3, 2025, 4 net stores have closed bringing our total retail store count to 54 (consisting of 42 full price stores and 12 outlet stores) as of May 2, 2026, compared to 58 (consisting of 44 full price stores and 14 outlet stores) as of May 3, 2025.
25
Our Vince Direct-to-consumer segment had income from operations of $1,847 in the three months ended May 2, 2026 compared to a loss of $800 in the three months ended May 3, 2025. The increase was primarily driven by an increase in net sales.
Liquidity and Capital Resources
The Company's sources of liquidity are cash and cash equivalents, cash flows from operations, if any, borrowings available under the 2023 Revolving Credit Facility (as defined in Note 4 "Long-Term Debt and Financing Arrangements") and the Company's ability to access the capital markets, including the Sales Agreement entered into with Virtu Americas LLC in June 2023 (see Note 7 "Stockholders' Equity" for further information). The Company's primary cash needs are funding working capital requirements, including royalty payments under the License Agreement, meeting debt service requirements and capital expenditures for new stores and related leasehold improvements. The most significant components of the Company's working capital are cash and cash equivalents, accounts receivable, inventories, accounts payable and other current liabilities.
The Company’s future financial results may be subject to substantial fluctuations, and may be impacted by business conditions and macroeconomic factors, particularly in light of the recently implemented tariffs. While we expect to meet our monthly Excess Availability (as defined in the 2023 Revolving Credit Facility Agreement) covenant and believe that our other sources of liquidity will generate sufficient cash flows to meet our obligations for the next twelve months from the date these financial statements are issued, the foregoing expectation is dependent on a number of factors, including, among others, our ability to generate sufficient cash flow from a combination of tariff mitigating initiatives, our ongoing ability to manage our operating obligations, the ability of our partners to satisfy their payment obligations to us when due, the results of the currently ongoing inventory valuation and potential borrowing restrictions imposed by our lenders based on their credit judgment, all of which could be significantly and negatively impacted by the recently implemented and new retaliatory and/or reciprocal tariffs, as well as changing trade policies between the U.S. and its trading partners, in addition to other macroeconomic factors. Any material negative impact from these factors or others could require us to implement alternative plans to satisfy our liquidity needs, which may be unsuccessful. In the event that we are unable to timely service our debt, meet other contractual payment obligations or fund our other liquidity needs, we may need to refinance all or a portion of our indebtedness before maturity, seek waivers of or amendments to our contractual obligations for payment, reduce or delay scheduled expansions and capital expenditures liquidate inventory through additional discounting, sell material assets or operations or seek other financing opportunities. There can be no assurance that these options would be readily available to us and our inability to address our liquidity needs could materially and adversely affect our operations and jeopardize our business, financial condition and results of operations.
Operating Activities
|
|
Three Months Ended |
|
|||||
(in thousands) |
|
May 2, 2026 |
|
|
May 3, 2025 |
|
||
Operating activities |
|
|
|
|
|
|
||
Net loss |
|
$ |
(2,101 |
) |
|
$ |
(4,803 |
) |
Add (deduct) items not affecting operating cash flows: |
|
|
|
|
|
|
||
Depreciation and amortization |
|
|
616 |
|
|
|
761 |
|
Provision for bad debt |
|
|
(32 |
) |
|
|
32 |
|
Loss on disposal of property and equipment |
|
|
— |
|
|
|
43 |
|
Amortization of deferred financing costs |
|
|
92 |
|
|
|
91 |
|
Share-based compensation expense |
|
|
91 |
|
|
|
146 |
|
Capitalized PIK Interest |
|
|
265 |
|
|
|
243 |
|
Equity in net income of equity method investment, net of distributions |
|
|
719 |
|
|
|
1,285 |
|
Changes in assets and liabilities: |
|
|
|
|
|
|
||
Receivables, net |
|
|
11,980 |
|
|
|
9,873 |
|
Inventories |
|
|
(4,475 |
) |
|
|
(3,078 |
) |
Prepaid expenses and other current assets |
|
|
(3,007 |
) |
|
|
(3,699 |
) |
Accounts payable and accrued expenses |
|
|
(10,726 |
) |
|
|
(11,560 |
) |
Other assets and liabilities |
|
|
(2,333 |
) |
|
|
(1,151 |
) |
Net cash used in operating activities |
|
$ |
(8,911 |
) |
|
$ |
(11,817 |
) |
Net cash used in operating activities during the three months ended May 2, 2026 was $8,911, which consisted of net loss of $2,101, impacted by non-cash items of $1,751 and cash used in working capital of $8,561. Net cash used in working capital primarily resulted from cash outflows due to a decrease in accounts payable and accrued expenses of $10,726, due primarily to timing of payments, and cash outflows of $4,475 due to an increase in inventories related to the timing of inventory receipts and increased costs due primarily to the impact of tariffs, partially offset by cash inflows from receivables of $11,980 mainly attributable to timing of collections.
26
Net cash used in operating activities during the three months ended May 3, 2025 was $11,817, which consisted of net loss of $4,803, impacted by non-cash items of $2,601 and cash used in working capital of $9,615. Net cash used in working capital resulted from cash outflows due to a decrease in accounts payable and accrued expenses of $11,560, due primarily to timing of payments, cash outflows in prepaid expenses and other current assets, due primarily to prepaid royalty payments, and an increase in inventories, partially offset by cash inflows from receivables of $9,873 mainly attributable to timing of collections.
Investing Activities
|
|
Three Months Ended |
|
|||||
(in thousands) |
|
May 2, 2026 |
|
|
May 3, 2025 |
|
||
Investing activities |
|
|
|
|
|
|
||
Payments for capital expenditures |
|
$ |
(216 |
) |
|
$ |
(1,424 |
) |
Net cash used in investing activities |
|
$ |
(216 |
) |
|
$ |
(1,424 |
) |
Net cash used in investing activities of $216 and $1,424 during the three months ended May 2, 2026 and May 3, 2025, respectively, represents capital expenditures primarily related to retail store buildouts, including leasehold improvements and store fixtures.
Financing Activities
|
|
Three Months Ended |
|
|||||
(in thousands) |
|
May 2, 2026 |
|
|
May 3, 2025 |
|
||
Financing activities |
|
|
|
|
|
|
||
Proceeds from borrowings under the Revolving Credit Facilities |
|
$ |
65,300 |
|
|
$ |
63,500 |
|
Repayment of borrowings under the Revolving Credit Facilities |
|
|
(55,900 |
) |
|
|
(48,150 |
) |
Tax withholdings related to restricted stock vesting |
|
|
(1 |
) |
|
|
— |
|
Proceeds from issuance of common stock, net of certain fees |
|
|
— |
|
|
|
4 |
|
Financing fees |
|
|
— |
|
|
|
(135 |
) |
Net cash provided by financing activities |
|
$ |
9,399 |
|
|
$ |
15,219 |
|
Net cash provided by financing activities was $9,399 during the three months ended May 2, 2026, primarily consisting of $9,400 of net borrowings under the Company's revolving credit facilities.
Net cash provided by financing activities was $15,219 during the three months ended May 3, 2025, primarily consisting of $15,350 of net borrowings under the Company's revolving credit facilities.
2023 Revolving Credit Facility
On June 23, 2023, V Opco, entered into a new $85,000 senior secured revolving credit facility (the "2023 Revolving Credit Facility") pursuant to a Credit Agreement (the "2023 Revolving Credit Agreement") by and among V Opco, the guarantors named therein, Bank of America, N.A. ("BofA"), as Agent, the other lenders from time to time party thereto, and BofA Securities, Inc., as sole lead arranger and sole bookrunner. All outstanding amounts under the 2018 Revolving Credit Facility (as defined below) were repaid in full and such facility was terminated pursuant to the terms thereof as a result of all parties completing their obligations under such facility.
The 2023 Revolving Credit Facility provides for a revolving line of credit of up to the lesser of (i) the Borrowing Base (as defined in the 2023 Revolving Credit Agreement) and (ii) $85,000, as well as a letter of credit sublimit of $10,000. The 2023 Revolving Credit Agreement also permits V Opco to request an increase in aggregate commitments under the 2023 Revolving Credit Facility of up to $15,000, subject to customary terms and conditions. The 2023 Revolving Credit Facility matures on the earlier of June 23, 2028, and 91 days prior to the earliest maturity date of any Material Indebtedness (as defined in the 2023 Revolving Credit Agreement), including the subordinated indebtedness pursuant to the Third Lien Credit Agreement.
Interest is payable on the loans under the 2023 Revolving Credit Facility, at Vince LLC's request, either at Term SOFR, the Base Rate, or SOFR Daily Floating Rate, in each case, with applicable margins subject to a pricing grid based on an average daily excess availability calculation. The "Base Rate" means, for any day, a fluctuating rate per annum equal to the highest of (i) the Federal Funds Rate for such day, plus 0.5%; (ii) the rate of interest in effect for such day as publicly announced from time to time by BofA as its prime rate; (iii) the SOFR Daily Floating Rate on such day, plus 1.0%; and (iv) 1.0%.
During the continuance of certain specified events of default, at the election of BofA in its capacity as Agent, interest will accrue at a rate of 2.0% in excess of the applicable non-default rate.
27
The applicable margins for SOFR Term and SOFR Daily Floating Rate Loans are: (i) 2.0% when the average daily Excess Availability (as defined in the 2023 Revolving Credit Agreement) is greater than 66.7% of the Loan Cap (as defined in the 2023 Revolving Credit Agreement); (ii) 2.25% when the average daily Excess Availability is greater than or equal to 33.3% but less than or equal to 66.7% of the Loan Cap; and (iii) 2.5% when the average daily Excess Availability is less than 33.3% of the Loan Cap. The applicable margins for Base Rate Loans are: (a) 1.0% when the average daily Excess Availability is greater than 66.7% of the Loan Cap; (b) 1.25% when the average daily Excess Availability is greater than or equal to 33.3% but less than or equal to 66.7% of the Loan Cap; and (c) 1.5% when the average daily Excess Availability is less than 33.3% of the Loan Cap. In accordance with the First Amendment, from the First Amendment Effective Date (January 21, 2025) until the first Adjustment Date occurring after the twelve (12) month anniversary of the First Amendment Effective Date, the applicable margin will be 2.50% with respect to SOFR Term Loans and SOFR Daily Floating Rate Loans and 1.50% with respect to Base Rate Loans.
The 2023 Revolving Credit Facility contains a financial covenant requiring Excess Availability at all times to be no less than the greater of (i) 10.0% of the Loan Cap in effect at such time and (ii) $7,500.
The 2023 Revolving Credit Facility contains representations and warranties, covenants and events of default that are customary for this type of financing, including limitations on the incurrence of additional indebtedness, liens, burdensome agreements, investments, loans, asset sales, mergers, acquisitions, prepayment of certain other debt, the repurchase of capital stock, transactions with affiliates, and the ability to change the nature of its business or its fiscal year. The 2023 Revolving Credit Facility generally permits dividends in the absence of any default or event of default (including any event of default arising from a contemplated dividend), so long as (i) after giving pro forma effect to the contemplated dividend and on a pro forma basis for the 30-day period immediately preceding such dividend, Excess Availability will be at least the greater of 20.0% of the Loan Cap and $15,000 and (ii) after giving pro forma effect to the contemplated dividend, the Consolidated Fixed Charge Coverage Ratio (as defined in the 2023 Revolving Credit Agreement) for the 12 months preceding such dividend will be greater than or equal to 1.0 to 1.0. In accordance with the First Amendment, V Opco shall not make certain Restricted Payments as defined in the Agreement until the earlier of (i) the date that is eighteen (18) month anniversary of the First Amendment Effective Date, which date is July 21, 2026 and (ii) the first date following the twelve (12) month anniversary of the First Amendment Effective Date on which the Consolidated Fixed Charge Coverage Ratio is greater than or equal to 1.0 to 1.0.
All obligations under the 2023 Revolving Credit Facility are guaranteed by the Company and Vince Intermediate and any future subsidiaries of the Company (other than Excluded Subsidiaries as defined in the 2023 Revolving Credit Agreement) and secured by a lien on substantially all of the assets of the Company, V Opco and Vince Intermediate and any future subsidiary guarantors, other than among others, equity interests in ABG Vince, as well as the rights of V Opco under the License Agreement.
No financing costs were incurred during the three months ended May 2, 2026 and May 3, 2025, respectively.
As of May 2, 2026, the Company was in compliance with applicable covenants. As of May 2, 2026, $31,236 was available under the 2023 Revolving Credit Facility, net of the Loan Cap, and there were $20,100 of borrowings outstanding and $6,160 of letters of credit outstanding under the 2023 Revolving Credit Facility. The weighted average interest rate for borrowings outstanding under the 2023 Revolving Credit Facility as of May 2, 2026 was 6.0%.
On January 22, 2025, V Opco, LLC entered into that certain First Amendment (the “First Amendment”) to the 2023 Revolving Credit Agreement. The First Amendment amends the 2023 Revolving Credit Agreement to, among other things, (a) consent to the P180 Acquisition (see Note 2 "Significant Transactions" for additional information); (b) provide that, until the first Adjustment Date following January 22, 2026, the applicable margin will be 2.50% with respect to SOFR Term Loans and SOFR Daily Floating Rate Loans and 1.50% with respect to Base Rate Loans; (c) eliminate the ability to make certain Restricted Payments until the earlier of (i) the date that is eighteen (18) month anniversary of the First Amendment Effective Date, which date is July 21, 2026 and (ii) the first date following the twelve (12) month anniversary of the First Amendment Effective Date on which the Consolidated Fixed Charge Coverage Ratio is greater than or equal to 1.0 to 1.0; and (d) until January 22, 2026, modify the thresholds applicable for the Agent’s rights to conduct field exams and inventory appraisals to Excess Availability being less than the greater of 25% of Loan Cap and $18,750 and, following January 24, 2026, such thresholds shall revert back to Excess Availability being less than the greater of 20% of Loan Cap and $15,000.
On March 18, 2026, V Opco entered into the Second Amendment (the "2023 Revolving Credit Facility Second Amendment") to the 2023 Revolving Credit Facility which, among other things, (a) modified the definition of Eligible Trade Receivables in the Credit Agreement to increase concentration limits and (b) expanded the eligibility criteria for Accounts owed by certain customers that may be included in the Borrowing Base.
28
Third Lien Credit Facility
On December 11, 2020, V Opco entered into a $20,000 subordinated term loan credit facility (the "Third Lien Credit Facility") pursuant to a credit agreement (the "Third Lien Credit Agreement"), as amended from time to time, dated December 11, 2020, by and among V Opco, as the borrower, VHC and Vince Intermediate, as guarantors, and SK Financial Services, LLC ("SK Financial"), as administrative agent and collateral agent, and other lenders from time to time party thereto. The proceeds were received on December 11, 2020 and were used to repay a portion of the borrowings outstanding under the 2018 Revolving Credit Facility.
SK Financial is an affiliate of Sun Capital Partners, Inc. ("Sun Capital"). The Third Lien Credit Facility was reviewed and approved by the Special Committee of the Company's Board of Directors, consisting solely of directors not affiliated with Sun Capital, which committee was represented by independent legal advisors. Immediately prior to the P180 Acquisition, the affiliates of Sun Capital owned approximately 67% of the Company's common stock.
Interest on loans under the Third Lien Credit Facility is payable in kind at a rate revised in connection with the Third Lien Third Amendment (as defined and discussed below) to be equal to the Daily Simple SOFR, subject to a credit spread adjustment of 0.10% per annum, plus 9.0%. During the continuance of certain specified events of default, interest may accrue on the loans under the Third Lien Credit Facility at a rate of 2.0% in excess of the rate otherwise applicable to such amount.
The Company had incurred $485 in deferred financing costs associated with the Third Lien Credit Facility, of which a $400 closing fee is payable in kind and was added to the principal balance. These deferred financing costs were recorded as deferred debt issuance costs. In connection with the debt extinguishment (see below), unamortized debt issuance costs of $179 were included in the calculation of the gain on extinguishment.
All obligations under the Third Lien Credit Facility are guaranteed by the Company, Vince Intermediate and the Company's existing material domestic restricted subsidiaries as well as any future material domestic restricted subsidiaries and are secured on a junior basis relative to the 2023 Revolving Credit Facility by a lien on substantially all of the assets of the Company, Vince Intermediate, V Opco and the Company's existing material domestic restricted subsidiaries as well as any future material domestic restricted subsidiaries.
On April 21, 2023, V Opco entered into that certain Consent and Third Amendment to Credit Agreement (the "Third Lien Third Amendment"), which, among other things, (a) permitted the sale of the intellectual property of the Vince Business contemplated in the Asset Sale, (b) replaced LIBOR as an interest rate benchmark in favor of Daily Simple SOFR, subject to a credit spread adjustment of 0.10% per annum, plus 9.0% (c) amended the Third Lien Credit Agreement's maturity date to the earlier of (i) March 30, 2025 and (ii) 180 days after the maturity date under the 2018 Revolving Credit Facility, (d) reduced the capacity to incur indebtedness and liens, make investments, restricted payments and dispositions and repay certain indebtedness and (e) modified certain representations and warranties, covenants and events of default in respect of documentation related to the Asset Sale. The Third Lien Third Amendment became effective upon the consummation of the Asset Sale, the prepayment of the Term Loan Credit Facility in full and other transactions contemplated by the Asset Purchase Agreement.
On June 23, 2023, V Opco entered into the Fourth Amendment (the "Third Lien Fourth Amendment") to the Third Lien Credit Agreement which, among other things, (a) extended the Third Lien Credit Agreement's maturity date to the earlier of (i) September 30, 2028 and (ii) 91 days prior to the earliest maturity date of any Material Indebtedness (as defined therein) other than the 2023 Revolving Credit Facility and (b) modified certain representations and warranties, covenants and events of default in respect of documentation conforming to the terms of the 2023 Revolving Credit Facility.
On January 22, 2025, V Opco entered into the Fifth Amendment (the “Third Lien Fifth Amendment”) to the Third Lien Credit Agreement which, among other things, consented to the P180 Acquisition.
Seasonality
The apparel and fashion industry in which we operate is cyclical and, consequently, our revenues are affected by general economic conditions and the seasonal trends characteristic to the apparel and fashion industry. Purchases of apparel are sensitive to a number of factors that influence the level of consumer spending, including economic conditions and the level of disposable consumer income, consumer debt, interest rates and consumer confidence as well as the impact of adverse weather conditions. In addition, fluctuations in the amount of sales in any fiscal quarter are affected by the timing of seasonal wholesale shipments and other events affecting direct-to-consumer sales; as such, the financial results for any particular quarter may not be indicative of results for the fiscal year. We expect such seasonality to continue.
Critical Accounting Estimates
Management's discussion and analysis of financial condition and results of operations relies on our condensed consolidated financial statements, as set forth in Part I, Item 1 of this Quarterly Report, which are prepared based on certain critical accounting policies that require management to make judgments and estimates that are subject to varying degrees of uncertainty. While we
29
believe that these accounting policies are based on reasonable measurement criteria, actual future events can and often do result in outcomes materially different from these estimates.
A summary of our critical accounting estimates is included in the Management's Discussion and Analysis of Financial Condition and Results of Operations section of our 2025 Annual Report on Form 10-K. As of May 2, 2026, there have been no material changes to the critical accounting estimates contained therein.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
As a "smaller reporting company," as defined by Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), we are not required to provide the information in this Item.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Attached as exhibits to this Quarterly Report on Form 10-Q are certifications of our Chief Executive Officer and Chief Financial Officer. Rule 13a-14 of the Exchange Act requires that we include these certifications with this report. This Controls and Procedures section includes information concerning the disclosure controls and procedures referred to in the certifications. You should read this section in conjunction with the certifications.
Under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, management has evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) as of May 2, 2026.
Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective due to the material weakness in our internal control over financial reporting as described below.
As a result of the material weakness identified, we performed additional analysis, substantive testing and other post-closing procedures intended to ensure that our condensed consolidated financial statements were prepared in accordance with U.S. GAAP. Accordingly, management believes that the condensed consolidated financial statements and related notes thereto included in this Quarterly Report on Form 10-Q fairly state, in all material respects, the Company's financial condition, results of operations and cash flows for the periods presented.
Material Weakness in Internal Control over Financial Reporting
As described in Management's Annual Report on Internal Control Over Financial Reporting in Part II, Item 9A of our Annual Report on Form 10-K for the year ended January 31, 2026, we did not maintain adequate user access controls to ensure appropriate segregation of duties and to adequately restrict access to financial applications and data.
This material weakness did not result in a material misstatement to the annual or interim consolidated financial statements. However, this material weakness could impact the effectiveness of IT-dependent controls (such as automated controls that address the risk of material misstatement to one or more assertions, along with the IT controls and underlying data that support the effectiveness of system-generated data and reports) that could result in a misstatement impacting account balances or disclosures that would result in a material misstatement to the annual or interim consolidated financial statements that would not be prevented or detected.
Remediation Efforts to Address the Material Weakness
To date, we have made continued progress on our comprehensive remediation plan related to this material weakness by implementing the following controls and procedures:
30
To fully address the remediation of deficiencies related to segregation of duties, we will need to fully remediate the deficiencies regarding systems access.
Management continues to follow a comprehensive remediation plan to fully address this material weakness. The remediation plan includes implementing and effectively operating controls related to the routine reviews of user system access and user re-certifications, inclusive of those related to users with privileged access, as well as to ensure user's access rights to systems are removed timely upon termination.
While we have reported a material weakness that is not yet remediated, we believe we have made continued progress in addressing financial, compliance, and operational risks and improving controls across the Company. Until the material weakness is remediated, we will continue to perform additional analysis, substantive testing, and other post-closing procedures to ensure that our consolidated financial statements are prepared in accordance with U.S. GAAP.
Limitations on the Effectiveness of Disclosure Controls and Procedures
A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Accordingly, our disclosure controls and procedures are designed to provide reasonable, not absolute, assurance that the objectives of our disclosure system are met. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the fiscal quarter ended May 2, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
We are a party to legal proceedings, compliance matters, environmental, as well as wage and hour and other labor claims that arise in the ordinary course of our business. Although the outcome of such items cannot be determined with certainty, we believe that the ultimate outcome of these items, individually and in the aggregate will not have a material adverse impact on our financial position, results of operations or cash flows.
ITEM 1A. RISK FACTORS
The risk factors disclosed in the Company's 2025 Annual Report on Form 10-K, in addition to the other information set forth in this Quarterly Report on Form 10-Q, could materially affect the Company's business, financial condition or results.
The Company’s risk factors have not changed materially from those disclosed in its 2025 Annual Report on Form 10-K.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
None of our directors or officers
31
ITEM 6. EXHIBITS
Exhibit Number |
|
Exhibit Description |
31.1 |
|
CEO Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
31.2 |
|
CFO Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
32.1 |
|
|
32.2 |
|
|
101.INS |
|
Inline XBRL Instance - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. |
101.SCH |
|
Inline XBRL Taxonomy Extension Schema |
101.CAL |
|
Inline XBRL Taxonomy Extension Calculation |
101.PRE |
|
Inline XBRL Taxonomy Extension Presentation |
101.LAB |
|
Inline XBRL Taxonomy Extension Labels |
101.DEF |
|
Inline XBRL Taxonomy Extension Definition |
104 |
|
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
32
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Date |
|
|
Vince Holding Corp. |
|
|
|
|
June 16, 2026 |
|
By: |
/s/ Yuji Okumura |
|
|
|
Yuji Okumura |
|
|
|
Chief Financial Officer |
|
|
|
(as duly authorized officer, and principal financial officer) |
33
ATTACHMENTS / EXHIBITS
XBRL TAXONOMY EXTENSION SCHEMA WITH EMBEDDED LINKBASES DOCUMENT