Dive Brief:
- Vince Holdings reported net sales increased 4.7% year over year to nearly $84 million in Q4. The fashion retailer’s net loss for the quarter was $3.6 million, including a $6 million bad debt expense related to Saks Global’s bankruptcy, according to a company press release.
- For fiscal year 2025, net sales increased 2.2% year over year to $300 million, driven by a nearly 5% increase in the DTC segment. Income from operations was $9.2 million, compared to a $17.2 million loss the previous year. Net income for the year was $6.4 million, compared to a $19 million loss.
- “We remain supportive and confident in the new leadership team's ability to stabilize the business,” CEO and Director Brendan Hoffman said regarding Saks Global on a call with analysts.
Dive Insight:
Vince is satisfied with its quarterly performance “given the disruption we experienced with developments from Saks Global,” Hoffman said. “With the recent reorganization of Saks Global, we now have more clarity into the situation and are working with our partners there as they move forward in their plans.”
Saks Global represents around 7% of Vince’s total sales. Vince decided to temporarily pause shipments to the conglomerate, which resulted in a decline in its wholesale channel in Q4. Selling, general and administrative expenses in the quarter were $44 million, or 52.6% of net sales, compared to 47.2% of net sales in the year-ago quarter. The increase in SG&A was primarily due to the $6 million of bad debt related to Saks.
“We obviously went through the trials and tribulations last year and took a hit in Q4,” Hoffman said of the company’s dealings with Saks.
Saks Global saw an increasing number of vendors pull back on shipments due to a lack of invoice payment prior to its January bankruptcy. In the past few months, Saks Global has seen hundreds of vendors resume shipping inventory.
Vince is planning for future growth in part with its drop-shipping strategy, which the company is able to use to “take advantage of our licensed partners inventory,” Hoffman said. Vince started drop-shipping online with shoes, but will add handbags, suiting and accessories in Q2.
Additionally, the fashion company will continue to scale its men’s business. At the end of the year, the segment represented around 24% of total sales, but the company sees an opportunity to expand it to 30% penetration.
At the start of 2025, retail innovation firm P180 bought a majority stake of Vince Holding Corp. from affiliates of Sun Capital Partners. The fashion brand sold its intellectual property to Authentic Brands Group in 2023.
