Rent concessions help Vince to $5 million in earnings
New York-based fashion group Vince Holding Corp. reported third-quarter earnings of $5.0 million on Monday, or $0.42 per diluted share, down from $.6.0 million, or $0.50 per diluted share, in the prior-year period, as rent concessions and effective expense management helped to offset significant declines in sales.
As previously reported, in the third quarter ended October 31, 2020, Vince achieved net sales of $69.0 million, a 34.0% decrease compared to the $104.5 million reported by the company in the same period in the previous year.
At the group’s flagship Vince brand, quarterly net sales fell 28.7% to $61.6 million, reflecting a 24.2% decline in wholesale revenues, which totaled $38.7 million, and a 35.4% decrease in direct-to-consumer sales of $22.8 million.
Acquired in November of last year, the company’s Rebecca Taylor and Parker business saw its sales fall 58.9% to $7.5 million in Q3.
Thanks to negotiations with its landlords, Vince has been able to secure rent abatements, deferrals and reductions, resulting in a benefit of $4.2 million for the company in the quarter.
Overall, the company was able to reduce its selling, general, and administrative expenses to $25.4 million, or 36.8% of sales, compared to $43.4 million, or 41.6% of sales, in the same period in the previous year.
“We saw sequential improvement in our sales trends and delivered an operating profit, even excluding the benefit of rent concessions, through prudent cost management in the third quarter,” said Vince interim CEO and CFO David Stefko in a release.
“This sequential improvement in direct-to-consumer sales and gross margin continued into the fourth quarter as we entered the holiday season,” he added. “While the current environment remains difficult, Vince remains a top performing brand in the contemporary luxury segment within our existing wholesale partners with strong customer demand for comfort casual luxury.”
Year to date, Vince’s net sales totaled $145.1 million, down 46.4% from $270.8 million in the the first nine months of the previous year. Net loss for the period was $58.3 million, or a loss of $4.96 per diluted share, compared to a loss of $21.3 million, or $1.83 per diluted share.
As it continues its efforts to deal with the impact of the Covid-19 pandemic, the company recently announced that, subsequent to the end of the third quarter, it closed a third lien credit facility resulting in excess availability of $42.3 million.
Due to the ongoing uncertainty surrounding the coronavirus crisis, Vince has not provided financial guidance for the fourth quarter or full fiscal year.
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