Vince Holding Corp. on Thursday reported a first quarter net loss of $9.3 million, or 19 cents per share, compared to a net loss of $1.9 million, or 5 cents per share in the year-ago quarter. Revenue in the quarter fell 14.2% to $58 million from $67.6 million in the year-ago quarter, according to a company press release.
The upscale apparel company’s wholesale segment sales fell 20.9% to $35.4 million, primarily due to a reduction in full-price orders as a result of the elimination of its summer delivery. Direct-to-consumer segment sales fell 1% to $22.6 million while same-store sales including e-commerce sales fell 5.7%, due to a decrease in average order value.
The company’s operating loss was $8.2 million, worse than the $3.5 million in the first quarter last year. Vince ended the quarter with 54 company-operated stores, an increase of three stores since the first quarter of fiscal 2016, the company said.
In his statement on Thursday, Vince CEO Brendan Hoffman noted the company’s faltering quarter was nevertheless in line with its expectations, with its director-to-consumer sales, including e-commerce, seeing sequential improvement. He said he expects such positive momentum to continue this quarter.
“Looking ahead, we will remain focused on strengthening our direct-to-consumer business as well as take steps to optimize our wholesale business as we look to engage consumers across channels,” he also said. “In addition, we have recently strengthened our design and product development leadership and are excited about the product refinements and planned brand enhancements we have underway. Overall, we believe the Vince brand remains strong and we are making progress toward driving improved performance.”
Despite making adjustments to firm up Vince as a high-fashion brand, the company has failed to adequately meet shoppers’ expectations for quick turnarounds on new designs, and it's been further hampered by overall softness in apparel sales. The company spent last year addressing its design issues, and feedback from its wholesale partners, store associates and customers were used by the design team in upcoming collections, Hoffman told analysts earlier this year.
The company’s wholesale business is suffering along with the high-end department stores it furnishes with goods. In April, Moody’s Investors Service released a report forecasting a 1% decline in sales and a 7% to 8% decrease in operating profits for department store retailers this year, not even counting struggling Sears. Department stores have been hard hit by shifts in shopping habits, slowing mall traffic and competition from e-commerce and off-price retailers, according to that report.