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What changed in VINCE HOLDING CORP.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of VINCE HOLDING CORP.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+285 added−297 removedSource: 10-K (2025-05-02) vs 10-K (2024-05-02)

Top changes in VINCE HOLDING CORP.'s 2025 10-K

285 paragraphs added · 297 removed · 201 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeOur Vince Direct-to-consumer segment includes our Vince company-operated retail and outlet stores, our Vince e-commerce business and our subscription service, Vince Unfold. 5 Our Rebecca Taylor and Parker segment consisted of our operations to distribute Rebecca Taylor and Parker brand products to major department and specialty stores in the U.S. and select international markets and directly to the consumer through their own branded e-commerce platforms, our Rebecca Taylor retail and outlet stores and through our subscription service, Rebecca Taylor RNTD.
Biggest changeThe direct-to-consumer business also includes our e-commerce website, vince.com , and our subscription service, Vince Unfold, vinceunfold.com . 5 The following table details the number of Vince retail stores we operated for the past two fiscal years: Fiscal Year 2024 2023 Beginning of fiscal year 63 67 Net (closed) opened (6 ) (4 ) End of fiscal year 57 63 Rebecca Taylor and Parker Rebecca Taylor and Parker consisted of our operations to distribute Rebecca Taylor and Parker brand products to major department and specialty stores in the U.S. and select international markets and directly to the consumer through their own branded e-commerce platforms, our Rebecca Taylor retail and outlet stores and through our subscription service, Rebecca Taylor RNTD.
We believe we have sufficient capacity in our domestic and international distribution facilities to support our current and projected business. Information Systems During fiscal 2021, we completed the rollout of a new point of sale ("POS") system for the Vince brand to expand our omni-channel capabilities to promote direct-to-consumer growth and enhance the customer engagement and shopping experience.
We believe we have sufficient capacity in our domestic and international distribution facilities to support our current and projected business. 7 Information Systems During fiscal 2021, we completed the rollout of a new point of sale ("POS") system for the Vince brand to expand our omni-channel capabilities to promote direct-to-consumer growth and enhance the customer engagement and shopping experience.
For cost and control purposes, we contract with select third-party vendors in the U.S. to produce a small portion of our merchandise. 6 All of our garments are produced according to our specifications, and we require that all of our manufacturers adhere to strict regulatory compliance and standards of conduct.
For cost and control purposes, we contract with select third-party vendors in the U.S. to produce a small portion of our merchandise. All of our garments are produced according to our specifications, and we require that all of our manufacturers adhere to strict regulatory compliance and standards of conduct.
Trademarks and Licensing On April 21, 2023, Vince, LLC, the Company's wholly owned indirect subsidiary, entered into the Asset Purchase Agreement, by and among Vince, LLC, ABG Vince, a newly formed indirect subsidiary of Authentic Brands Group, LLC, the Company and ABG Intermediate Holdings 2 LLC, whereby Vince, LLC sold its intellectual property assets related to the business operated under the Vince brand to ABG Vince at closing.
Trademarks and Licensing On April 21, 2023, V Opco, the Company's wholly owned indirect subsidiary, entered into the Asset Purchase Agreement, by and among V Opco, 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.
ITEM 1. B USINESS. Overview We are a global retail company that operates the Vince brand women's and men's ready to wear business. 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 under "Recent Development".
ITEM 1. B USINESS. Overview We are a global retail company that operates the Vince brand women's and men's ready to wear business. 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 under "Recent Developments".
On May 25, 2023, in connection with the Closing, Vince, LLC and ABG Vince entered into a License Agreement (the “License Agreement”), which provides Vince, LLC 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," together with the Core Territory, the “Territory”), to the Approved Accounts (each as defined in the 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," together with the Core Territory, the 8 “Territory”), to the Approved Accounts (each as defined in the License Agreement).
We serve our customers through a variety of channels that reinforce the brand images. We have a select number of wholesale partners who account for a significant portion of our net sales. In fiscal 2023 and fiscal 2022, sales to one wholesale partner, Nordstrom Inc., accounted for more than ten percent of the Company's net sales.
We serve our customers through a variety of channels that reinforce the brand images. We have a select number of wholesale partners who account for a significant portion of our net sales. In fiscal 2024 and fiscal 2023, sales to one wholesale partner, Nordstrom Inc., accounted for more than ten percent of the Company's net sales.
Fiscal year 2023 consisted of a 53-week period and fiscal year 2022 consisted of a 52-week period. Our principal executive office is located at 500 5 th Avenue, 20th Floor, New York, New York 10110, and our telephone number is (323) 421-5980. Our corporate website address is www.vince.com .
Fiscal year 2024 consisted of a 52-week period and fiscal year 2023 consisted of a 53-week period. Our principal executive office is located at 500 5 th Avenue, 20th Floor, New York, New York 10110, and our telephone number is (323) 421-5980. Our corporate website address is www.vince.com .
Vince, LLC is required to pay ABG Vince a royalty on net sales of Licensed Products and committed to an annual guaranteed minimum royalty of $11,000 and annual minimum net sales as specified in the License Agreement, in each case, during the initial term of the License Agreement, except that the guaranteed minimum royalty and minimum net sales for the first contract year during the initial term will be prorated to the period beginning on the Closing Date and ending at the end of the Company's 2023 fiscal year.
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 $11,000 and annual minimum net sales as specified in the License Agreement, in each case, during the initial term of the License Agreement, except that the guaranteed minimum royalty and minimum net sales for the first contract year during the initial term will be prorated to the period beginning on the Closing Date and ending at the end of the Company's 2023 fiscal year.
Additionally, the License Agreement provides Vince, LLC with a license to use the Licensed Property in the Territory to design, manufacture, promote, market, distribute, and sell ready-to-wear Sportswear Products and Outerwear Products (the "Core Products") and Baby Layettes (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.
Additionally, the License Agreement provides V Opco with a license to use the Licensed Property in the Territory to design, manufacture, promote, market, distribute, and sell ready-to-wear Sportswear Products and Outerwear Products (the "Core Products") and Baby Layettes (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 Option Territory may be changed unilaterally by ABG Vince at any time after the effective date of the License Agreement. The License Agreement also provides Vince, LLC with a license to operate the Vince e-commerce site, www.vince.com, as well as to operate all retail stores in the Territory.
The Option Territory may be changed unilaterally by ABG Vince at any time after the effective date of the License Agreement. The License Agreement also provides V Opco with a license to operate the Vince e-commerce site, www.vince.com, as well as to operate all retail stores in the Territory.
The Company operates on a fiscal calendar widely used by the retail industry that results in a given fiscal year consisting of a 52 or 53-week period ending on the Saturday closest to January 31. • References to "fiscal year 2023" or "fiscal 2023" refer to the fiscal year ended February 3, 2024; and • References to "fiscal year 2022" or "fiscal 2022" refer to the fiscal year ended January 28, 2023.
The Company operates on a fiscal calendar widely used by the retail industry that results in a given fiscal year consisting of a 52 or 53-week period ending on the Saturday closest to January 31. • References to "fiscal year 2024" or "fiscal 2024" refer to the fiscal year ended February 1, 2025; and • References to "fiscal year 2023" or "fiscal 2023" refer to the fiscal year ended February 3, 2024.
Vince, LLC 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 Vince, LLC is in material breach of the License Agreement and such breach has not been cured within the specified cure period.
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 Agreement and such breach has not been cured within the specified cure period.
Our warehouse in Hong Kong is operated by a third-party logistics provider and supports our wholesale orders for international customers located primarily in Asia. Our warehouse in Belgium is operated by a third-party logistics provider and supports our Vince wholesale orders for international customers located primarily in Europe and our Vince UK store.
Our warehouse in Hong Kong is operated by a third-party logistics provider and supports our wholesale orders for international customers located primarily in Asia and the Middle East. Our warehouse in Belgium is operated by a third-party logistics provider and supports our Vince wholesale orders for international customers located primarily in Europe and our Vince UK store.
We continue to collaborate with our wholesale partners in various areas, including merchandising and logistics to build a more profitable and focused wholesale business. Our direct-to-consumer business includes our company-operated retail and outlet stores and our e-commerce business. During fiscal 2023, we closed four net retail stores.
We continue to collaborate with our wholesale partners in various areas, including merchandising and logistics to build a more profitable and focused wholesale business. Our direct-to-consumer business includes our company-operated retail and outlet stores and our e-commerce business. During fiscal 2024, we closed six net retail stores.
These sales represented 20% of fiscal 2023 and 16% of fiscal 2022 net sales, respectively. We design our products in the U.S. and source the vast majority of our products from contract manufacturers outside the U.S., primarily in Asia.
These sales represented 26% of fiscal 2024 and 20% of fiscal 2023 net sales, respectively. We design our products in the U.S. and source the vast majority of our products from contract manufacturers outside the U.S., primarily in Asia.
Vince, LLC is required to pay royalties comprised of a low single digit percentage of net sales arising from retail and e-commerce sales of Licensed Products and a mid single digit percentage of net sales arising from wholesale sales of such Licensed Products.
V Opco is required to pay royalties comprised of a low single digit percentage of net sales arising from retail and e-commerce sales of Licensed Products and a mid single digit percentage of net sales arising from wholesale sales of such Licensed Products.
The Vince women's collection includes seasonal collections of luxurious cashmere sweaters, silk blouses, a leather and suede collection that encompasses all classifications, and jackets, dresses, skirts, pants, t-shirts, footwear, outerwear, and accessories. The Vince men's collection includes cashmere sweaters, woven shirts, core and fashion pants, blazers, outerwear, footwear and accessories.
The Vince women's collection includes seasonal collections of luxurious cashmere sweaters, silk blouses, a leather and suede collection that encompasses all classifications, and jackets, dresses, skirts, pants, t-shirts, footwear, outerwear, and accessories.
Distribution Facilities As of February 3, 2024, we operated out of three distribution centers, one located in the U.S., one in Hong Kong and one in Belgium.
Distribution Facilities As of February 1, 2025, we operated out of three distribution centers, one located in the U.S., one in Hong Kong and one in Belgium.
However, we believe that we have established a sustainable and distinct position in the current marketplace, driven by a product assortment that combines classic and fashion-forward styling, and a pricing strategy that offers customers accessible luxury. 7 Human Capital As of February 3, 2024, we had 579 employees, of which 355 were employed in our company-operated retail stores.
However, we believe that we have established a sustainable and distinct position in the current marketplace, driven by a product assortment that combines classic and fashion-forward styling, and a pricing strategy that offers customers accessible luxury. Human Capital As of February 1, 2025, we had 578 employees, of which 344 were employed in our company-operated retail stores.
Vince, LLC is required to operate and maintain a minimum of 45 Retail Stores and Shop-in-Shops in the Territory.
V Opco is required to operate and maintain a minimum of 45 Retail Stores and Shop-in-Shops in the Territory.
Vince, LLC may elect not to renew the term for a renewal term.
V Opco may elect not to renew the term for a renewal term.
Until the Asset Sale closed, our Vince Wholesale segment also included our licensing business related to our licensing arrangements for our women's and men's footwear line, as well as soft accessories and cold weather goods.
Until the Asset Sale closed, our Vince Wholesale segment also included our licensing business related to our licensing arrangements for our women's and men's footwear line, as well as soft accessories and cold weather goods. Our Vince Direct-to-consumer segment includes our Vince company-operated retail and outlet stores, our Vince e-commerce business and our subscription service, Vince Unfold.
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.
A nominal sale of all outstanding shares of Rebecca Taylor, Inc. to Nova Acquisitions, LLC was completed on May 3, 2024. 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.
If these systems, processes, and functions do not operate successfully, our business, financial condition, results of operations and cash flows could be materially harmed " and Part II, Item 9A.
Risk Factors — " Risks Related to Our Information Technology and Security — We are continuing to adopt, optimize and improve our information technology systems, processes and functions. If these systems, processes, and functions do not operate successfully, our business, financial condition, results of operations and cash flows could be materially harmed " and Part II, Item 9A.
Fiscal Year (in thousands, except percentages) 2023 % of Total Net Sales 2022 % of Total Net Sales Vince Wholesale $ 149,603 51.1 % $ 169,375 47.4 % Vince Direct-to-consumer 143,096 48.9 % 149,770 41.9 % Rebecca Taylor and Parker 191 0.0 % 38,297 10.7 % Total net sales $ 292,890 100.0 % $ 357,442 100.0 % Our Vince Wholesale segment is comprised of sales to major department stores and specialty stores in the U.S. and in select international markets.
Fiscal Year (in thousands, except percentages) 2024 % of Total Net Sales 2023 % of Total Net Sales Vince Wholesale $ 165,349 56.3 % $ 149,603 51.1 % Vince Direct-to-consumer 128,103 43.7 % 143,096 48.9 % Total reportable segment net sales 293,452 100.0 % 292,699 99.9 % Rebecca Taylor and Parker — 0.0 % 191 0.1 % Total net sales $ 293,452 100.0 % $ 292,890 100.0 % Our Vince Wholesale segment is comprised of sales to major department stores and specialty stores in the U.S. and in select international markets.
The visits to vince.com also provide an opportunity to grow our customer base and communicate directly with our customers both on line and in stores. See Part I, Item 1A.
The visits to vince.com also provide an opportunity to grow our customer base and communicate directly with our customers both on line and in stores. See Part I, Item 1A. Risk Factors — " Risks Related to Our Business and Industry — We may not be able to realize the benefits of our strategic initiatives.
Our diversified channel strategy allows us to introduce our products to customers through multiple distribution points that are presented in three reportable segments: Vince Wholesale, Vince Direct-to-consumer, and Rebecca Taylor and Parker.
Business Segments We serve our customers through a variety of channels that reinforce the brand images. Our diversified channel strategy allows us to introduce our products to customers through multiple distribution points that are presented in two reportable segments: Vince Wholesale and Vince Direct-to-consumer.
During fiscal 2022, we completed the implementation of a customer data platform and the front-end re-platforming of our Vince e-commerce website. Our continued strategy includes investing in customer facing technologies to further expand our omni-channel capabilities and to further consolidate systems over time to create operational efficiencies and to achieve a common platform across the Company.
Our continued strategy includes investing in customer facing technologies to further expand our omni-channel capabilities and to further consolidate systems over time to create operational efficiencies and to achieve a common platform across the Company. See Part I, Item 1A.
As of February 3, 2024, we operate 48 full-price retail stores, 15 outlet stores, the e-commerce site, vince.com , and the subscription service Vince Unfold, vinceunfold.com . Vince is also available through premium wholesale channels globally. Our wholesale business is comprised of sales to major department stores and specialty stores in the U.S. and in select international markets.
Vince is also available through premium wholesale channels globally. Our wholesale business is comprised of sales to major department stores and specialty stores in the U.S. and in select international markets.
These teams work closely together to develop and execute campaigns that appeal to both our core and aspirational customers.
The message and marketing strategies of the Vince brand are cultivated by dedicated creative, design, marketing, visual merchandising, and public relations teams. These teams work closely together to develop and execute campaigns that appeal to both our core and aspirational customers.
The Brand Vince Vince Holding Corp. 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.
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 February 1, 2025, we operate 43 full-price retail stores, 14 outlet stores, the e-commerce site, vince.com , and the subscription service Vince Unfold, vinceunfold.com .
Our apparel has appeared in the pages of major fashion magazines such as Vogue, Harper's Bazaar , Elle, InStyle, GQ , Esquire and WSJ . Well-known trend setters in entertainment and fashion are also regularly seen wearing the brand. Sourcing and Manufacturing We do not own or operate any manufacturing facilities.
Well-known trend setters in entertainment and fashion are also regularly seen wearing the brand. Sourcing and Manufacturing We do not own or operate any manufacturing facilities. We contract for the purchase of finished goods with manufacturers who are responsible for the entire manufacturing process, including the purchase of piece goods and trim.
We contract for the purchase of finished goods with manufacturers who are responsible for the entire manufacturing process, including the purchase of piece goods and trim. Although we do not have long-term written contracts with manufacturers, we have long-standing relationships with a diverse base of vendors which we believe to be mutually satisfactory.
Although we do not have long-term written contracts with manufacturers, we have long-standing relationships with a diverse base of vendors which we believe to be mutually satisfactory. We work with more than 30 manufacturers across 12 countries, with 66% of our products produced in China in fiscal 2024.
Design and Merchandising Our creative team is focused on developing and implementing the design direction for the Vince brand. Our design efforts are supported by well-established product development and production teams. We believe continued collaboration between design and merchandising will ensure we respond to consumer preferences and market trends with new innovative product offerings while maintaining the brand's fashion foundation.
The Vince men's collection includes cashmere sweaters, woven shirts, core and fashion pants, blazers, outerwear, footwear and accessories. 6 Design and Merchandising Our creative team is focused on developing and implementing the design direction for the Vince brand. Our design efforts are supported by well-established product development and production teams.
Risk Factors — " Risks Related to Our Business and Industry — We may be unable to effectively execute our customer strategy ." Our public relations team conducts a wide variety of press activities to reinforce the brand image and create excitement around the Vince brand.
" Our public relations team conducts a wide variety of press activities to reinforce the brand image and create excitement around the Vince brand. Our apparel has appeared in the pages of major fashion magazines such as Vogue, Harper's Bazaar , Elle, InStyle, GQ , Esquire and WSJ .
Marketing, Advertising and Public Relations We use marketing, advertising and public relations as critical tools to deliver a consistent and compelling message to consumers. The message and marketing strategies of the Vince brand are cultivated by dedicated creative, design, marketing, visual merchandising, and public relations teams.
We believe continued collaboration between design and merchandising will ensure we respond to consumer preferences and market trends with new innovative product offerings while maintaining the brand's fashion foundation. Marketing, Advertising and Public Relations We use marketing, advertising and public relations as critical tools to deliver a consistent and compelling message to consumers.
The Company closed the Asset Sale on May 25, 2023. See Part I, Item 1A. Risk Factors — "Risks Related to Our Business and Industry for additional discussion regarding risks to our business associated with the Asset Sale.
Risk Factors — "Risks Related to Our Business and Industry" for additional discussion regarding risks to our business associated with the P180 Acquisition. The Brand Vince Vince Holding Corp. is a global retail company that operates the Vince brand women’s and men’s ready to wear business.
Removed
Recent Development On April 21, 2023, Vince, LLC, the Company's wholly owned indirect subsidiary, entered into an Intellectual Property Asset Purchase Agreement (the "Asset Purchase Agreement"), by and among Vince, LLC, 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 Vince, LLC sold its intellectual property assets related to the business operated under the Vince brand to ABG Vince at closing (the "Asset Sale").
Added
Recent Developments On May 3, 2024, V Opco completed a nominal sale (the "Transaction") for $1.00 (one dollar) of all outstanding shares of Rebecca Taylor, Inc., which held the Rebecca Taylor business prior to the wind-down (defined below), to Nova Acquisitions, LLC.
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The direct-to-consumer business also includes our e-commerce website, vince.com , and our subscription service, Vince Unfold, vinceunfold.com . 4 The following table details the number of Vince retail stores we operated for the past two fiscal years: Fiscal Year 2023 2022 Beginning of fiscal year 67 68 Net (closed) opened (4 ) (1 ) End of fiscal year 63 67 Rebecca Taylor Rebecca Taylor, founded in 1996 in New York City, is a contemporary womenswear line lauded for its signature prints, romantic detailing and vintage inspired aesthetic, reimagined for a modern era.
Added
The Transaction was completed pursuant to a Stock Purchase Agreement (the “SPA”), dated May 3, 2024, entered into between V Opco and Nova Acquisitions, LLC.
Removed
On September 12, 2022, the Company announced its decision to wind down the Rebecca Taylor business. On December 22, 2022, Rebecca Taylor, Inc., the Company's indirectly wholly owned subsidiary, completed the sale of its intellectual property and certain related ancillary assets to RT IPCO, LLC, an affiliate of Ramani Group.
Added
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”).
Removed
See Note 2 "Recent Transactions" to the Consolidated Financial Statements in this Annual Report for additional information. The Rebecca Taylor collection was previously available through retail stores and outlet stores, through its branded e-commerce site and through its subscription service Rebecca Taylor RNTD, as well as through major department and specialty stores in the U.S. and in select international markets.
Added
On the same day, V Opco completed a partial pay-down of $20,000 of the subordinated debt (the “Sun Debt Facility”) with SK Financial Services, LLC, an affiliate of Sun Capital (the “Sun Debt Paydown”). See Part I, Item 1A.
Removed
All Rebecca Taylor retail and outlet stores operated by the Company were closed as of January 28, 2023 and the e-commerce site operated by the Company ceased in December 2022.
Added
As a result of the completion of the wind down and sale, and the determination by the CODM that Parker would not be considered in the Company’s future operating plans, Rebecca Taylor and Parker is no longer an operating segment of the Company.
Removed
The following table details the number of Rebecca Taylor retail stores we operated for the past two fiscal years: Fiscal Year 2023 2022 Beginning of fiscal year — 18 Net (closed) opened — (18 ) End of fiscal year — — Parker Parker, founded in 2008 in New York City, is a contemporary women's fashion brand that is trend focused.
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During fiscal 2022, we completed the implementation of a customer data platform and the front-end re-platforming of our Vince e-commerce website. In fiscal 2023 and 2024, we improved our cybersecurity environment through the implementation of true end-point protection and improved network infrastructure.
Removed
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.
Removed
LLC, an affiliate of BCI Brands. The Parker collection was previously available through major department stores and specialty stores worldwide as well as through its e-commerce website. Business Segments We serve our customers through a variety of channels that reinforce the brand images.
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We work with more than 25 manufacturers across 10 countries, with 79% of our products produced in China in fiscal 2023.
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See Part I, Item 1A. Risk Factors — " Risks Related to Our Information Technology and Security — We are continuing to adopt, optimize and improve our information technology systems, processes and functions.
Removed
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.
Removed
LLC, an affiliate of BCI Brands. 8 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. See Note 2 "Recent Transactions" to the Consolidated Financial Statements in this Annual Report for additional information.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeAs a result of the magnitude of our foreign sourcing, our business is subject to the following risks: • political and economic instability in countries or regions, especially Asia and in connection with armed conflict (such as conflicts between Ukraine and Russia and in the Middle East), including heightened terrorism, diplomatic and other security concerns, which could subject imported or exported goods to additional or more frequent inspections, leading to delays in deliveries or impoundment of goods; • imposition of regulations, quotas and other trade restrictions relating to imports, including the additional tariffs and bans imposed on certain imports from China (such as those imposed by the Uyghur Forced Labor Prevention Act), as well as other quotas imposed by bilateral textile agreements between the U.S. and foreign countries from time to time; • currency exchange rates; • imposition of increased duties, taxes, tariffs and other charges on imports; • increases in the costs of fuel, travel and transportation, both related and unrelated to the armed conflict between Ukraine and Russia and in the Middle East, and demand for freight services at a time of reduced ocean freight capacity; • disease epidemics and health-related concerns, which could result in travel restrictions, closed factories, reduced workforces and higher labor costs, scarcity of and increased prices for raw materials and scrutiny or embargoing of goods produced in infected areas; • labor union strikes at ports through which our products enter the U.S.; • labor shortages in countries where contractors and suppliers are located; • restrictions on the transfer of funds to or from foreign countries; • the migration and development of manufacturing contractors, which could affect where our products are or are planned to be produced; • reduced manufacturing flexibility because of geographic distance between our foreign manufacturers and us, increasing the risk that we may have to mark down unsold inventory as a result of misjudging the market for a foreign-made product; and • violations by foreign contractors of labor and wage standards and resulting adverse publicity.
Biggest changeAs a result of the magnitude of our foreign sourcing, our business is subject to the following additional risks: • imposition of duties, taxes, tariffs and other charges on imports, and regulations, quotas, bans and other trade restrictions relating to imports (particularly in light of the financial impacts of recently implemented and new retaliatory and/or reciprocal tariffs, as well as changing trade policies between the U.S. and its trading partners), as further discussed below; • imposition of regulations, quotas and other trade restrictions relating to imports, including quotas imposed by bilateral textile agreements between the U.S. and foreign countries; • currency exchange rates, including decreases in the value of the U.S. dollar relative to foreign currencies, which could increase the cost of products we purchase from foreign suppliers; 16 • political and economic instability in countries or regions, especially Asia and in connection with armed conflict (such as conflicts between Ukraine and Russia and in the Middle East), including heightened terrorism, diplomatic and other security concerns, which could subject imported or exported goods to additional or more frequent inspections, leading to delays in deliveries or impoundment of goods; • increases in the costs of fuel, travel and transportation, both related and unrelated to the armed conflict between Ukraine and Russia and in the Middle East, and demand for freight services at a time of reduced ocean freight capacity; • disease epidemics and health-related concerns, which could result in travel restrictions, closed factories, reduced workforces and higher labor costs, scarcity of and increased prices for raw materials and scrutiny or embargoing of goods produced in infected areas; • labor union strikes at ports through which our products enter the U.S.; • labor shortages in countries where contractors and suppliers are located; • restrictions on the transfer of funds to or from foreign countries; • the migration and development of manufacturing contractors, which could affect where our products are or are planned to be produced; • reduced manufacturing flexibility because of geographic distance between our foreign manufacturers and us, increasing the risk that we may have to mark down unsold inventory as a result of misjudging the market for a foreign-made product; and • violations by foreign contractors of labor and wage standards and resulting adverse publicity.
In addition to the costs of compliance with and other burdens imposed by privacy and data security laws and regulations, any failure or perceived failure by us or any third parties with whom we do business to comply with these laws, rules and regulations, or with other obligations to which we may be or become subject, may result in actions against us by governmental entities, private claims and litigation, fines, penalties or other liabilities.
In addition to the costs of compliance with and other burdens imposed by privacy and data security laws and regulations, any failure or perceived failure by us or any third parties with whom we do business to comply with these laws, rules and regulations, or with other obligations to which we may be or become subject, may result in actions against us by governmental entities, private claims and litigation, fines, penalties or 19 other liabilities.
We are unable to control the business strategies of ABG Vince relating to the expansion of the Vince brand outside of the license granted to us under the License Agreement, including how those strategies impact our own business strategies, the quality of products produced by 9 other Vince brand licensees as well as how the overall Vince brand image may evolve.
We are unable to control the business strategies of ABG Vince relating to the expansion of the Vince brand outside of the license granted to us under the License Agreement, including how those strategies impact our own business strategies, the quality of products produced by other Vince brand licensees as well as how the overall Vince brand image may evolve.
We will cease to be a non-accelerated filer if either (i) the aggregate market value of our outstanding common stock held by non-affiliates as of the last business day of our most recently completed second fiscal quarter (our "public float") is $75,000 or more and our annual revenues for the most recently completed fiscal year are $100,000 or more or (ii) our public float is $700,000 or more, in which case we would become subject to the requirement for an annual attestation report by our independent registered public accounting firm on the effectiveness of our internal control over financial reporting.
We will cease to be a non-accelerated filer if either (i) the aggregate market value of our outstanding common stock held by non-affiliates as of the last business day of our most recently completed second fiscal quarter (our “public float”) is $75,000 or more and our annual revenues for the most recently completed fiscal year are $100,000 or more or (ii) our public float is $700,000 or more, in which case we would become subject to the requirement for an annual attestation report by our independent registered public accounting firm on the effectiveness of our internal control over financial reporting.
On July 7, 2023, Rebecca Taylor, Inc. and Rebecca Taylor Retail Stores, LLC, each as an assignor, made a General Assignment for the Benefit of the Creditors (the "Assignment") to a respective assignee, an unaffiliated California limited liability company, pursuant to California state law.
On July 7, 2023, Rebecca Taylor, Inc. and Rebecca Taylor Retail Stores, LLC, each as an assignor, made a General Assignment for the Benefit of the Creditors (the “Assignment”) to a respective assignee, an unaffiliated California limited liability company, pursuant to California state law.
Accordingly, we cannot predict how expectations of ethical business practices might develop in the future and cannot be certain that our guidelines would satisfy all parties who are active in monitoring and publicizing perceived shortcomings in labor and other business practices worldwide.
Accordingly, we cannot predict how 18 expectations of ethical business practices might develop in the future and cannot be certain that our guidelines would satisfy all parties who are active in monitoring and publicizing perceived shortcomings in labor and other business practices worldwide.
The failure to make timely deliveries 17 may cause customers to cancel orders, refuse to accept deliveries or demand reduced prices, any of which could have a material adverse effect on us.
The failure to make timely deliveries may cause customers to cancel orders, refuse to accept deliveries or demand reduced prices, any of which could have a material adverse effect on us.
In addition, we will need to continue to attract, assimilate, retain, and motivate highly talented employees with a range of other skills and experience.
In addition, we will need to continue to attract, assimilate, retain, and motivate highly talented 15 employees with a range of other skills and experience.
(including disruptions related to the armed conflict between Ukraine and Russia and in the Middle East) could also materially and negatively impact our business. We maintain business interruption insurance. These policies, however, may not adequately protect us from the adverse effects that could result from significant disruptions to our distribution system.
(including disruptions related to tariff risks and the armed conflict between Ukraine and Russia and in the Middle East) could also materially and negatively impact our business. We maintain business interruption insurance. These policies, however, may not adequately protect us from the adverse effects that could result from significant disruptions to our distribution system.
If these risks limit or prevent us from manufacturing products in any significant international market, prevent us from acquiring products from foreign suppliers, or significantly increase the cost of our products, our operations could be seriously disrupted until alternative suppliers are found or alternative markets are developed, which could negatively and significantly impact our business.
If these risks limit or prevent us from manufacturing products in any significant international market, prevent us from acquiring products from foreign suppliers, or continue to significantly increase the cost of our products, our operations could be seriously disrupted until alternative suppliers are found or alternative markets are developed, which could negatively and significantly impact our business.
In addition, pursuant to the License Agreement, our exclusive license to operate the Vince brand may be limited by the terms of the License Agreement. Some of the regions in which we currently operate are designated as Option Territories, including the Middle East and Latin America.
Furthermore, pursuant to the License Agreement, our exclusive license to operate the Vince brand may be limited by the terms of the License Agreement. Some of the regions in which we currently operate are designated as Option Territories, including the Middle East and Latin America.
The success of this strategy depends on a number of factors, including the identification of suitable markets and sites, negotiation of acceptable lease terms while securing those favorable locations, including desired term, rent and tenant improvement allowances, and if entering a new market, the timely achievement of brand awareness and proper evaluation of the market particularly for locations with shorter term, affinity and purchase intent in that market, as well as our business condition in funding the opening and operations of stores.
The success of this strategy depends on a number of factors, including the identification of suitable markets and sites, negotiation of acceptable lease terms while securing those favorable locations, including desired term, rent and tenant improvement allowances, and if entering a new market, the timely achievement of brand awareness and proper evaluation of the market, affinity and purchase intent in that market, as well as our business condition in funding the opening and operations of stores.
ITEM 1A. RI SK FACTORS. The following risk factors should be carefully considered when evaluating our business in addition to the forward-looking statements included elsewhere in this Annual Report. See "Disclosures Regarding Forward-Looking Statements." Any of the following factors could materially adversely affect our business, results of operations and financial condition.
ITEM 1A. RI SK FACTORS. The following risk factors should be carefully considered when evaluating our business in addition to the forward-looking statements included elsewhere in this Annual Report. See “Disclosures Regarding Forward-Looking Statements.” Any of the following factors could materially adversely affect our business, results of operations and financial condition.
We are a "smaller reporting company," as defined in the Exchange Act, and we intend to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not "smaller reporting companies," including reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements.
We are a “smaller reporting company,” as defined in the Exchange Act, and we intend to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “smaller reporting companies,” including reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements.
We are subject to risks associated with leasing retail and office space, are historically subject to long-term non-cancelable leases and are required to make substantial lease payments under our operating leases, and any failure to make these lease payments when due would likely harm our business, profitability and results of operations.
We are subject to risks associated with leasing retail and office space, which are historically subject to long-term non-cancellable leases and are required to make substantial lease payments under our operating leases, and any failure to make these lease payments when due would likely harm our business, profitability and results of operations.
Simultaneously with the Asset Sale, Vince, LLC entered into a license agreement (as amended from time to time, the "License Agreement") with ABG Vince which provides us with a license to use the Licensed Property in the Territory (as defined in the License Agreement) 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,” together with the Core Territory, the “Territory”), which Option Territory may be changed unilaterally by ABG Vince at any time after the effective date of the License Agreement.
Simultaneously with the Asset Sale, V Opco entered into a license agreement (as amended from time to time, the “License Agreement”) with ABG Vince which provides us with a license to use the Licensed Property in the Territory (as defined in the License Agreement) 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,” together with the Core Territory, the “Territory”), which Option Territory may be changed unilaterally by ABG Vince at any time after the effective date of the License Agreement.
Our top five manufacturers accounted for the production of approximately 54% of our finished products during fiscal 2023. Supply disruptions from these manufacturers (or any of our other manufacturers) could have a material adverse effect on our ability to meet customer demands if we are unable to source suitable replacement materials at acceptable prices or at all.
Our top five manufacturers accounted for the production of approximately 59% of our finished products during fiscal 2024. Supply disruptions from these manufacturers (or any of our other manufacturers) could have a material adverse effect on our ability to meet customer demands if we are unable to source suitable replacement materials at acceptable prices or at all.
On May 25, 2023, Vince, LLC, the Company's wholly owned indirect subsidiary, sold all its intellectual property assets related to the business operated under the Vince brand to ABG Vince, an indirect subsidiary of Authentic Brands Group, LLC ("Authentic”), pursuant to the Asset Purchase Agreement, entered into by and among Vince, LLC, ABG Vince, the Company and ABG Intermediate Holdings 2 LLC.
On May 25, 2023, V Opco, the Company's wholly owned indirect subsidiary, sold all its intellectual property assets related to the business operated under the Vince brand to ABG Vince, an indirect subsidiary of Authentic Brands Group, LLC (“Authentic”), pursuant to the Asset Purchase Agreement, entered into by and among V Opco, ABG Vince, the Company and ABG Intermediate Holdings 2 LLC.
For so long as we remain a "non-accelerated filer" under the rules of the Securities and Exchange Commission, our independent registered public accounting firm is not required to deliver an annual attestation report on the effectiveness of our internal control over financial reporting.
For so long as we remain a “non-accelerated filer” under the rules of the Securities and Exchange Commission, our independent registered public accounting firm is not required to deliver an annual attestation report on the effectiveness of our internal control over financial reporting.
Additionally, we may use in the Territory, the Licensed Property in the Territory to design, manufacture, promote, market, distribute, and sell ready-to-wear sportswear products and outerwear products (the "Core Products") and home décor and baby layettes (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.
Additionally, we may use in the Territory, the Licensed Property in the Territory to design, manufacture, promote, market, distribute, and sell ready-to-wear sportswear products and outerwear products (the “Core Products”) and home décor and baby layettes (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.
We are a "smaller reporting company" and intend to avail ourselves of reduced disclosure requirements applicable to smaller reporting companies, which could make our common stock less attractive to investors.
We are a “smaller reporting company” and intend to avail ourselves of reduced disclosure requirements applicable to smaller reporting companies, which could make our common stock less attractive to investors.
If we are unable to realize the benefits of the strategic initiatives, our financial conditions, results of operations and cash flows could be materially and adversely affected. We may be unable to improve our profitability.
If we are unable to realize the benefits of the strategic initiatives, our financial conditions, results of operations and cash flows could be materially and adversely affected.
These changes could also decrease our opportunities in the market and decrease our negotiating strength with our wholesale partners.
All of these changes could also decrease our opportunities in the market and decrease our negotiating strength with our wholesale partners.
Lastly, Vince, LLC's governance rights as a minority equity holder of ABG Vince are limited and therefore, ABG Vince could choose to take corporate actions that would materially and negatively impact the results of operations of ABG Vince, which could in turn adversely affect the amount of cash available for distribution to Vince, LLC.
Lastly, V Opco's governance rights as a minority equity holder of ABG Vince are limited and therefore, ABG Vince could choose to take corporate actions that would materially and negatively impact the results of operations of ABG Vince, which could in turn adversely affect the amount of cash available for distribution to V Opco.
If Authentic does not protect the intellectual property rights of the Vince brand, we may become unable to operate our business as intended, which could harm our business and cause our results of operations, liquidity, and financial condition to suffer. We may be unable to successfully complete the wind down of the Rebecca Taylor business.
If Authentic does not protect the intellectual property rights of the Vince brand, we may become unable to operate our business as intended, which could harm our business and cause our results of operations, liquidity, and financial condition to suffer. We may be unable to successfully conclude remaining matters following the wind down of the Rebecca Taylor business.
Our current operations are based largely in the U.S., with international wholesale sales representing approximately 8% of net sales for fiscal 2023. Therefore, we have a limited number of customers and experience in operating outside of the U.S.
Our current operations are based largely in the U.S., with international wholesale sales representing approximately 7% of net sales for fiscal 2024. Therefore, we have a limited number of customers and experience in operating outside of the U.S.
A variety of laws and regulations, in the U.S. and internationally, govern the collection, use, retention, sharing, transfer and security of personally identifiable information and data, including the European Union's General Data Protection Regulation ("GDPR"), which became effective during fiscal 2018, the California Consumer Privacy Act of 2018 ("CCPA"), which became effective on January 1, 2020 and the California Privacy Rights Act of 2020 ("CPRA"), which became effective January 1, 2023.
A variety of laws and regulations, in the U.S. and internationally, govern the collection, use, retention, sharing, transfer and security of personally identifiable information and data, including the European Union's General Data Protection Regulation (“GDPR”), which became effective during fiscal 2018, the California Consumer Privacy Act of 2018 (“CCPA”), which became effective on January 1, 2020 and the California Privacy Rights Act of 2020 (“CPRA”), which became effective January 1, 2023.
We intend to take advantage of these reporting exemptions until we are no longer a "smaller reporting company." We will remain a "smaller reporting company" until the aggregate market value of our outstanding common stock held by non-affiliates as of the last business day of our most recently completed second fiscal quarter is $250,000 or more and annual revenue as of our most recently completed fiscal year is $100,000 or more, or the aggregate market value of our outstanding common stock held by non-affiliates as of the last business day of our most recently completed second fiscal quarter is $700,000 or more, regardless of annual revenue. 19 ITEM 1B.
We intend to take advantage of these reporting exemptions until we are no longer a “smaller reporting company.” We will remain a “smaller reporting company” until the aggregate market value of our outstanding common stock held by non-affiliates as of the last business day of our most recently completed second fiscal quarter is $250,000 or more and annual revenue as of our most recently completed fiscal year is $100,000 or more, or the aggregate market value of our outstanding common stock held by non-affiliates as of the last business day of our most recently completed second fiscal quarter is $700,000 or more, regardless of annual revenue.
Our ability to continue to have the liquidity necessary to service our debt, meet contractual payment obligations, including royalty payments under the License Agreement, and fund our operations depends on many factors, including our ability to generate sufficient cash flow from operations, maintain adequate availability under our 2023 Revolving Credit Facility (as defined below) or obtain other financing.
Our ability to continue to have the liquidity necessary to service our debt, meet contractual payment obligations, including royalty payments under the License Agreement (as defined below), and fund our operations, particularly in light of the recently implemented tariffs, depends on many factors, including our ability to generate sufficient cash flow from operations, maintain adequate availability under our 2023 Revolving Credit Facility (as defined below) or obtain other financing.
If we are unable to correct material weaknesses or deficiencies in internal controls in a timely manner, our ability to record, process, summarize and report financial information accurately and within the time periods specified in the rules and forms of the SEC, will be adversely affected.
Moreover, other material weaknesses or deficiencies may develop or be identified in the future. If we are unable to correct material weaknesses or deficiencies in internal controls in a timely manner, our ability to record, process, summarize and report financial information accurately and within the time periods specified in the rules and forms of the SEC, will be adversely affected.
The ultimate effect of this change on our earnings cannot be quantified, as the effect of movements in raw materials prices on industry selling prices are uncertain, but any significant increase in these prices could have a material adverse effect on our business, financial condition and operating results. The extent of our foreign sourcing may adversely affect our business.
The ultimate effect of this change on our earnings cannot be quantified, as the effect of movements in raw materials prices on industry selling prices are uncertain, but any significant increase in these prices could have a material adverse effect on our business, financial condition and operating results.
We are subject to numerous domestic and international laws, regulations and advisories, including labor and employment, environmental, wage and hour, customs, truth- in-advertising, consumer protection, data and privacy protection, and zoning and occupancy laws and ordinances that regulate retailers generally or govern the importation, promotion and sale of merchandise and the operation of stores and warehouse facilities.
We are subject to numerous domestic and international laws, regulations and advisories, including labor and employment, environmental, wage and hour, customs and tariffs, truth- in-advertising, consumer protection, data and privacy protection, and zoning and occupancy laws and ordinances that regulate retailers generally or govern the importation, promotion and sale of merchandise and the operation of stores and warehouse facilities, all of which may change from time to time.
Identifying a suitable supplier is an involved process that requires us to become satisfied with 18 their quality control, responsiveness and service, financial stability and labor and other responsible and/or ethical business practices.
Identifying suitable suppliers is an involved process that requires us to become satisfied with their quality control, responsiveness and service, financial stability and 17 labor and other responsible and/or ethical business practices.
In fiscal 2024, 15 of our existing store leases will expire, many for which we have already extended or secured an alternative location.
In fiscal 2025, 11 of our existing store leases will expire, many for which we have already extended or secured an alternative location.
Our ability to accurately forecast demand for our products could be affected by many factors, including an increase or decrease in demand for our products or for products of our competitors, product introductions by competitors, unanticipated changes in general market conditions, and weakening of economic conditions or consumer confidence in future economic conditions.
Our ability to accurately forecast demand for our products could be affected by many factors, including an increase or decrease in demand for our products or for products of our competitors, product introductions by competitors, unanticipated changes in general market conditions (including the recently implemented tariffs as discussed below), and weakening of economic conditions or consumer confidence in future economic conditions.
Consumer spending is impacted by a number of factors, including actual and perceived economic conditions affecting disposable consumer income, customer traffic within shopping and selling environments, business conditions, interest rates and availability of credit and tax rates in the general economy and in the international, regional and local markets in which our products are sold, including those resulting from inflation and other macroeconomic pressures in the United States and the global economy (including rising interest rates, fears of recession and continued market volatility and instability in the banking sector), health epidemics or pandemics, climate change, and catastrophic events, such as war (including the armed conflicts between Ukraine and Russia and in the Middle East) and the related governmental and non-governmental global responses to such conflict), terrorist attacks, civil unrest, and other acts of violence.
Consumer spending is impacted by a number of factors, including actual and perceived economic conditions affecting disposable consumer income, customer traffic within shopping and selling environments, business conditions, interest rates and availability of credit and tax rates in the general economy and in the international, regional and local markets in which our products are sold, including those resulting from inflation and other macroeconomic pressures in the United States and the global economy, particularly in light of the financial impacts of recently implemented and new retaliatory and/or reciprocal tariffs, as well as changing trade policies between the U.S. and its trading partners (including rising interest rates, fears of recession and continued market volatility and instability in the banking sector), health epidemics or pandemics, climate change, catastrophic events, such as war (including the armed conflicts between Ukraine and Russia and in the Middle East and the related governmental and non-governmental global responses to such conflict), terrorist attacks, civil unrest, and other acts of violence.
In addition, under the License Agreement, we are required to maintain a minimum number of retail locations as well as obtain prior approval from ABG Vince with respect to new retail locations which may be provided at its sole good faith discretion. We may be unable to execute this strategy as intended if ABG Vince chooses to withhold such approval.
In addition, under the License Agreement, we are required to maintain a minimum number of retail locations as well as obtain prior approval from ABG Vince with respect to new retail locations which may be provided at its sole good faith discretion.
As a result of the Asset Sale, the intellectual property rights relating to the Vince brand will be protected and enforced by Authentic and we have no control over their actions to do so.
Our competitive position could suffer if the intellectual property rights relating to the Vince brand are not protected. As a result of the Asset Sale, the intellectual property rights relating to the Vince brand will be protected and enforced by Authentic and we have no control over their actions to do so.
In addition we are subject to laws and regulations related to us being a public company, including the rules and regulations of the SEC and the NYSE. Any violation of or not meeting compliance standards under such laws and regulations could impact our status as a public company, including our ability to continue being listed on the NYSE.
Any violation of or not meeting compliance standards under such laws and regulations could impact our status as a public company, including our ability to continue being listed on the NYSE.
Risks Related to Our Business and Industry The failure to maintain our license agreement relating to the Vince brand would cause us to lose all our revenues.
The failure to maintain our license agreement relating to the Vince brand would cause us to lose all our revenues.
The increased use of smartphones, tablets, and other wireless devices, as well as the hybrid and remote work environments may also heighten these and other operational risks.
The increased use of smartphones, tablets, and other wireless devices, as well as the hybrid and remote work environments, and advancements in and increasing business integration of artificial intelligence may also heighten these and other operational risks.
Inventory levels in excess of customer demand may result in inventory write-downs or write-offs and the sale of excess inventory at discounted prices, which would negatively impact our gross margin, as was the case in fiscal 2022.
If we fail to accurately forecast customer demand, we may experience excess inventory levels or a shortage of products. Inventory levels in excess of customer demand may result in inventory write-downs or write-offs and the sale of excess inventory at discounted prices, which would negatively impact our gross margin, as was the case in fiscal 2022.
For example, as of February 3, 2024, we were a party to 67 operating leases associated with our retail stores and our office and showroom spaces requiring future minimum lease payments of $22,006 in the aggregate through fiscal 2024 and $84,140 thereafter.
For example, as of February 1, 2025, we were a party to 61 operating leases associated with our retail stores and our office and showroom spaces requiring future minimum lease payments of $22,466 in the aggregate through fiscal 2025 and $109,209 thereafter.
Because substantially all of our products are distributed from one state, our operations could be interrupted by labor difficulties, or by floods, fires, earthquakes or other natural disasters and health crises and pandemics, at or near such facility.
Because substantially all of our products are distributed from one state, our operations could be interrupted by labor difficulties, by floods, fires, earthquakes or other natural disasters and health crises and pandemics, at or near such facility, or by the indirect effects of macroeconomic events, such as recently implemented, new and retaliatory and/or reciprocal tariffs.
There can be no assurance that there will not be a disruption in the supply of our products from independent manufacturers or that any new manufacturer will be successful in producing our products in a manner we expected.
There can be no assurance that there will not be a disruption in the supply of our products from independent manufacturers or that any new manufacturers will be successful in producing our products in a manner we expected, and as a result, our business and financial results could be negatively affected.
The effectiveness of our Interim Chief Executive Officer and our senior leadership team generally, following the transition, and the transition to the permanent Chief Executive Officer when identified, could have a significant impact on our ability to operate the business effectively.
The effectiveness of our new Chief Executive Officer and Chief Financial Officer and our senior leadership team generally, following the foregoing transitions, could have a significant impact on our ability to operate the business effectively.
We cannot guarantee that we will be able to match supply with demand in all cases in the future, to produce sufficient levels of desirable product or to forecast demand accurately. If we fail to accurately forecast customer demand, we may experience excess inventory levels or a shortage of products.
We cannot guarantee that we will be able to match supply with demand in all cases in the future, to produce sufficient levels of desirable product or to forecast demand accurately.
In addition, a lack of demonstrated compliance by our suppliers could lead us to seek alternative suppliers, which could increase our costs and result in delayed delivery of our products, product shortages or other disruptions of our operations.
In addition, a lack of demonstrated compliance by our suppliers, and especially by any new suppliers with whom we may have little or no experience, could lead or require us to seek alternative suppliers, which could increase our costs and result in delayed delivery of our products, product shortages or other disruptions of our operations.
Moreover, alternative manufacturers, if available, may not be able to provide us with products or services of a comparable quality, at an acceptable price or on a timely basis. We may also, from time to time, make a decision to enter into a relationship with a new manufacturer.
Moreover, alternative manufacturers, if available, may not be able to provide us with products or services of a comparable quality, at an acceptable price or on a timely basis.
Our ability to timely service our indebtedness, meet contractual payment obligations, including royalty payments under the License Agreement, and to fund our operations will depend on our ability to generate sufficient cash, either through cash flows from operations, borrowing availability under the 2023 Revolving Credit Facility or other financing.
Our ability to timely service our indebtedness, meet contractual payment obligations, including royalty payments under the License Agreement, and to fund our operations, particularly in light of the recently implemented tariffs, will depend on our ability to generate sufficient cash, either through cash flows from operations, borrowing availability under the 2023 Revolving Credit Facility or other financing, and our ability to access the capital markets if other sources of financing are unavailable on acceptable terms.
As part of our strategy to increase focus on our direct-to-consumer business, we continue to seek retail opportunities in targeted streets or malls with desirable size and adjacencies, typically near luxury retailers that we believe are consistent with our key customers' demographics and shopping preferences, and seek to negotiate more favorable leases including shorter terms.
We continue to seek retail opportunities in targeted streets or malls with desirable size and adjacencies, typically near luxury retailers that we believe are consistent with our key customers' demographics and shopping preferences, and seek to negotiate favorable leases.
Specifically, such covenants significantly restrict our ability and, if applicable, the ability of our subsidiaries to, among other things: incur additional debt; make certain investments and acquisitions; enter into certain types of transactions with affiliates; use assets as security in other transactions; pay dividends; sell certain assets or merge with or into other companies; guarantee the debt of others; enter into new lines of businesses; make capital expenditures; prepay, redeem, or exchange our debt; and form any joint ventures or subsidiary investments.
The 2023 Revolving Credit Facility includes covenants that may impair our financing and operational flexibility and make it difficult for us to react to market conditions and satisfy our ongoing capital needs and unanticipated cash requirements. 10 Specifically, such covenants significantly restrict our ability and, if applicable, the ability of our subsidiaries to, among other things: incur additional debt; make certain investments and acquisitions; enter into certain types of transactions with affiliates; use assets as security in other transactions; pay dividends; sell certain assets or merge with or into other companies; guarantee the debt of others; enter into new lines of businesses; make capital expenditures; prepay, redeem, or exchange our debt; and form any joint ventures or subsidiary investments.
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, the foregoing expectation is dependent on a number of factors, including, among others, our ability to generate sufficient cash flow from operations, our ongoing ability to manage our operating obligations, the results of any future inventory valuations and the potential borrowing restrictions imposed by our lenders based on their credit judgment, which could materially and negatively impact our borrowing capacity, the wind down of the Rebecca Taylor business, as well as macroeconomic factors.
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, the foregoing expectation is dependent on a number of factors, including, among others, our ability to generate sufficient cash flow from operations, 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 any future inventory valuations and the 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.
As our leases expire, we may fail to negotiate renewals, either on commercially acceptable terms or at all, or to find a suitable alternative location, which could cause us to close stores in desirable locations or in the case of office leases, incur costs in relocating our office space. 12 A substantial portion of our revenue is derived from a small number of large wholesale partners, and the loss of any of these wholesale partners could substantially reduce our total revenue.
As our leases expire, we may fail to negotiate renewals, either on commercially acceptable terms or at all, or to find a suitable alternative location, which could cause us to close stores in desirable locations or in the case of office leases, incur costs in relocating our office space.
If we are unable to obtain any necessary waivers and the debt is accelerated, a material adverse effect on our financial condition and future operating performance would likely result. 10 We may not be able to realize the benefits of our strategic initiatives. Our business growth depends on the successful execution of our strategic initiatives of our business.
If we are unable to obtain any necessary waivers and the debt is accelerated, a material adverse effect on our financial condition and future operating performance would likely result. We may be unable to improve our profitability.
There is no assurance, however, that we would not be subject to material security problems in the future, including cyber or malware attacks, including as an indirect result of the armed conflicts between Ukraine and Russia and in the Middle East, and we could incur significant expenses or disruptions of our operations in connection with resulting system failures or data and information breaches.
There is no assurance, however, that we would not be subject to material security problems in the future, including cyber or malware attacks, including as an indirect result of our ability to direct sufficient human and capital resources towards systems and data security, malicious actors using artificial intelligence to carry out more sophisticated attacks and increasing the potential for harm, changes to domestic and international regulations or other policies or the armed conflicts between Ukraine and Russia and in the Middle East, and we could incur significant expenses or disruptions of our operations in connection with resulting system failures or data and information breaches.
If our business does not generate sufficient cash flow from operating activities, and sufficient funds are not otherwise available to us from borrowings under our credit facilities or from other sources, we may not be able to service our operating lease expenses, grow our business, respond to competitive challenges or fund our other liquidity and capital needs, which would harm our business.
Particularly in light of the financial impacts of recently implemented and new retaliatory and/or reciprocal tariffs, as well as changing trade policies between the U.S. and its trading partners, if our business does not generate sufficient cash flow from operating activities, and sufficient funds are not otherwise available to us from borrowings under our credit facilities or from other sources, we may not be able to service our operating lease expenses, grow our business, respond to competitive challenges or fund our other liquidity and capital needs, which would harm our business.
Any increased competition, or our failure to adequately address any of these competitive factors which we have seen from time to time, could result in reduced sales, which could adversely affect our business, financial condition, and operating results. 14 Competition, along with such other factors as consolidation within the retail industry and changes in consumer spending patterns, could also result in significant pricing pressure and cause the sales environment to be more promotional, as it has been in recent years, impacting our financial results.
Competition, along with such other factors as consolidation within the retail industry and changes in consumer spending patterns, could also result in significant pricing pressure and cause the sales environment to be more promotional, as it has been in recent years, impacting our financial results.
The price and availability of the raw materials and, in turn, the fabrics used in our apparel may fluctuate significantly, depending on many factors, including crop yields, weather patterns, labor costs and changes in oil prices as well as other economic factors, such as those related to the armed conflict between Ukraine and Russia and in the Middle East.
The price and availability of the raw materials and, in turn, the fabrics used in our apparel may fluctuate significantly, depending on many factors, including crop yields, weather patterns, labor costs and changes in oil prices as well as other economic factors, particularly in light of the financial impacts of recently implemented and new retaliatory and/or reciprocal tariffs, as well as changing trade policies between the U.S. and its trading partners, and the armed conflict between Ukraine and Russia and in the Middle East.
If we fail in our efforts to continue adopting, optimizing and improving these systems, processes and functions as currently planned, we could incur further disruptions to our business and operations, including lost e-commerce sales, a negative mobile experience for our customers, deficiencies or weaknesses in our internal controls, as well as additional costs to replace those systems and functions. 16 Failure to comply with privacy‑related obligations, including privacy laws and regulations in the U.S. and internationally as well as other legal obligations, could materially adversely affect our business.
If we fail in our efforts to continue adopting, optimizing and improving these systems, processes and functions as currently planned or fail to effectively utilize technological advancements in areas such as artificial intelligence and data analytics, we could incur further disruptions to our business and operations, including lost e-commerce sales, a negative mobile experience for our customers, deficiencies or weaknesses in our internal controls, as well as additional costs to replace those systems and functions.
In the U.S., we rely on a distribution facility operated by a third-party logistics provider in California. Our ability to meet the needs of our wholesale partners and our own direct-to-consumer business depends on the proper operation of this distribution facility.
Our ability to meet the needs of our wholesale partners and our own direct-to-consumer business depends on the proper operation of this distribution facility.
In fiscal 2023 we worked with more than 25 manufacturers across 10 countries, with 79% of our products produced in China throughout fiscal 2023. A manufacturing contractor's failure to ship products to us in a timely manner or to meet the required quality standards could cause us to miss the delivery date requirements of our customers for those items.
A manufacturing contractor's failure to ship products to us in a timely or cost-effective manner or to meet the required quality standards could cause us to miss the delivery date requirements of our customers for those items.
Moreover, changes in product safety or other consumer protection laws could lead to increased costs to us for certain merchandise, or additional labor costs associated with readying merchandise for sale. It is often difficult for us to plan and prepare for potential changes to applicable laws and future actions or payments related to such changes could be material to us.
Moreover, changes in product safety or other consumer protection laws could lead to increased costs to us for certain merchandise, or additional labor costs associated with readying merchandise for sale.
We are dependent on the ability of these independent manufacturers to adequately finance the production of goods ordered and maintain sufficient manufacturing capacity. Because we do not control these independent manufacturers, they may not continue to provide products that are consistent with our standards.
We use independent manufacturers to assemble or produce all of our products, whether inside or outside the U.S. We are dependent on the ability of these independent manufacturers to adequately finance the production of goods ordered, maintain sufficient manufacturing capacity, and otherwise provide products that are consistent with our quality and ethical standards.
While we may be able to shift our sourcing options to avoid any negative macroenvironmental impact of a particular region such as China, executing such a shift would be time consuming and would be difficult or impracticable for many products and may result in an increase in our manufacturing costs and/or may negatively impact the quality of our products.
While we have implemented certain strategies to mitigate such impact, including further diversification of our sourcing base to mitigate some negative macroenvironmental impact of a particular region such as China, executing such diversification is and will be time consuming, may be difficult or impracticable for many products, may result in further increases in our per-unit costs and/or may negatively impact the quality of our products.
For example, in fiscal 2022, we completed the implementation of a customer data platform and the front-end re-platforming of our Vince e-commerce website and in fiscal 2021, we completed the roll-out of a new POS system for the Vince brand.
For example, in fiscal 2022, we completed the implementation of a customer data platform and the front-end re-platforming of our Vince e-commerce website and in fiscal 2023 and 2024, we improved our cybersecurity environment through the implementation of true end-point protection and improved network infrastructure.
General economic conditions in the U.S. and other parts of the world, including a weakening of the economy and restricted credit markets, can affect consumer confidence and consumer spending patterns. The success of our operations depends on consumer spending.
See “— Changes to and unpredictability in the trade policies and tariffs imposed by the U.S. government and the governments of other nations could materially affect our financial condition and results of operations.” General economic conditions in the U.S. and other parts of the world, including a weakening of the economy and restricted credit markets, can affect consumer confidence and consumer spending patterns.
The success of our strategic initiatives depends on a number of factors, including our ability to execute and realize the enhanced profitability expectations of our planned transformation program, position our retail and e-commerce businesses for further strategic growth, particularly through enhancement of our customer data platform to drive greater loyalty and conversion and capture broader customer base, expand our presence internationally including in Asia and Europe, grow men's business, our ability to properly identify appropriate future growth opportunities, and other macroeconomic impacts on our business.
However, the continued success of our strategic initiatives depends on a number of factors, which historically included positioning our retail and e-commerce businesses for further strategic growth, particularly through enhancement of our customer data platform to create improved segmentation and personalization for an enhanced customer experience, expanding our presence internationally including in Asia and Europe, growing men's business, properly identifying appropriate future growth opportunities, and other macroeconomic impacts on our business.
Furthermore, we may not be able to maintain the successful operation of our retail stores if the areas around our existing retail locations undergo changes that result in reductions in customer foot traffic or otherwise render the locations unsuitable, such as economic downturns in the area, changes in demographics and customer preferences, and the closing or decline in popularity of adjacent stores.
Furthermore, we may not be able to maintain the successful operation of our retail stores if the areas around our existing retail locations undergo changes that result in reductions in customer foot traffic or otherwise render the locations unsuitable, such as economic downturns in the area (particularly in light of the financial impacts of recently implemented and new retaliatory and/or reciprocal tariffs, as well as changing trade policies between the U.S. and its trading partners), changes in demographics and customer preferences, and the closing or decline in popularity of adjacent stores. 13 As of February 1, 2025, we operated 57 stores, including 42 company-operated Vince full-price stores and 14 company-operated Vince outlet stores throughout the United States and one company-operated Vince full price store in the United Kingdom.
We do not have formal written agreements with any of our wholesale partners and purchases generally occur on an order-by-order basis.
Our consolidated net sales to the full-price, off-price and e-commerce operations of our largest wholesale partner comprised 26% of our total revenue for fiscal 2024. We do not have formal written agreements with any of our wholesale partners and purchases generally occur on an order-by-order basis.
A worsening of the economy may negatively affect consumer and wholesale purchases of our products and could have a material adverse effect on our business, results of operations and financial conditions. We have identified a material weakness in our internal control over financial reporting that could, if not remediated, result in material misstatements in our financial statements.
A worsening of the economy may negatively affect consumer and wholesale purchases of our products and could have a material adverse effect on our business, results of operations and financial conditions. Our operations are restricted by our credit facilities. Our credit facility contains significant restrictive covenants.
It is possible that the interests of Sun Capital and its affiliates may in some circumstances conflict with our interests and the interests of our other stockholders, including you.
Hoffman with the interests of the Company and/or our other stockholders, it is possible that, in certain circumstances as P180 makes operational decisions for itself, including litigation activities and tax determinations, its interests may conflict with our interests and the interests of our other stockholders, including you.
The Assignment resulted in the residual rights and assets of each of Rebecca Taylor, Inc. and Rebecca Taylor Retail Stores, LLC being assigned and transferred to such assignees. As a result, Rebecca Taylor, Inc. and Rebecca Taylor Retail Stores, LLC no longer hold any assets.
The Assignment resulted in the residual rights and assets of each of Rebecca Taylor, Inc. and Rebecca Taylor Retail Stores, LLC being assigned and transferred to such assignees. The wind down of the Rebecca Taylor business was completed on May 3, 2024 with the nominal sale of all outstanding shares of Rebecca Taylor, Inc. to Nova Acquisitions, LLC.
For example, a majority of our ocean shipments go through the ports in California, which had previously been subject to significant processing delays due to COVID-19 as well as a prior blockage in the Suez Canal, resulting not only in shipment disruptions but also in significantly increased freight costs.
For example, a majority of our ocean shipments go through the ports in California, which are subject to significant processing delays, particularly in light of the financial impacts of recently implemented and new retaliatory and/or reciprocal tariffs, as well as changing trade policies between the U.S. and its trading partners, which in turn results not only in shipment disruptions but also in significantly increased freight costs.
We historically had and continue to have a small number of wholesale partners who account for a significant portion of our net sales. Our consolidated net sales to the full-price, off-price and e-commerce operations of our largest wholesale partner comprised 20% of our total revenue for fiscal 2023.
A substantial portion of our revenue is derived from a small number of large wholesale partners, and the loss of, or other changes with, any of these wholesale partners could substantially reduce our total revenue. We historically had and continue to have a small number of wholesale partners who account for a significant portion of our net sales.
We may not successfully manage the transition associated with the appointment of the Interim Chief Executive Officer, and a permanent Chief Executive Officer when identified, which could have an adverse impact on us. On March 26, 2024, Jonathan Schwefel resigned from his positions as Chief Executive Officer of the Company and member of the Board. In connection with Mr.
We may not successfully manage the transition associated with the appointment of a new Chief Executive Officer and Chief Financial Officer, which could have an adverse impact on us. On February 5, 2025, we announced that, in connection with the P180 Acquisition, we appointed Brendan Hoffman as our Chief Executive Officer, effective as of February 6, 2025.
Our ability to comply with the covenants and other terms of our debt obligations will depend on our future operating performance.
Our ability to comply with the covenants and other terms of our debt obligations, particularly in light of the financial impacts of recently implemented and new retaliatory and/or reciprocal tariffs, as well as changing trade policies between the U.S. and its trading partners, will depend on our future operating performance.
Any increase in the prices of our products and/or decline in the quality of our products could in turn negatively impact the demand for our products. Our reliance on independent manufacturers could cause delays or quality issues which could damage customer relationships. We use independent manufacturers to assemble or produce all of our products, whether inside or outside the U.S.
Any increase in the prices of our products and/or decline in the quality of our products could in turn negatively impact the demand for our products and negatively impact our business and results of operations.
Any such action would be expensive to defend, could damage our reputation and could adversely affect our business and operating results. Risks Related to Our Supply Chain Problems with our distribution process could materially harm our ability to meet customer expectations, manage inventory, complete sale transactions, and achieve targeted operating efficiencies.
Problems with our distribution process could materially harm our ability to meet customer expectations, manage inventory, complete sale transactions, and achieve targeted operating efficiencies. In the U.S., we rely on a distribution facility operated by a third-party logistics provider in California.
Risks Related to Our Structure and Ownership We are a "controlled company," controlled by investment funds advised by affiliates of Sun Capital, whose interests in our business may be different from yours. Affiliates of Sun Capital owned approximately 68% of our outstanding common stock as of March 31, 2024.
In addition, a suspension or delisting could impair the Company’s ability to raise additional capital through the public markets and the Company’s ability to attract and retain employees by means of equity compensation. We are a “controlled company,” controlled by investment funds advised by affiliates of P180, whose interests in our business may be different from yours.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeGiven the importance of information security to our customers, employees, suppliers and other partners, our Board and/or the Audit Committee receives reports as needed from our CIO on cybersecurity-related matters, including the status of projects to strengthen our security systems and to improve our cyber threat readiness, as well as on the existing and emerging cyber threat landscape and our program for managing these security risks. 20
Biggest changeGiven the importance of information security to our customers, employees, suppliers and other partners, our Board and/or the Audit Committee receives reports as needed from our CIO on cybersecurity-related matters, including the status of projects to strengthen our security systems and to improve our cyber threat readiness, as well as on the existing and emerging cyber threat landscape and our program for managing these security risks.
Our cybersecurity program uses processes, technologies, and controls to assist in our efforts to assess, identify, and manage material cybersecurity-related risks. The Company employs a number of tools and services, such as network monitoring and vulnerability assessments to inform our risk identification and assessment processes.
Our cybersecurity program uses processes, technologies, and controls to assist in our efforts to assess, identify, and manage material cybersecurity-related risks. 20 The Company employs a number of tools and services, such as network monitoring and vulnerability assessments to inform our risk identification and assessment processes.

Item 2. Properties

Properties — owned and leased real estate

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Biggest change(New York) NY September 20, 2019 Street 2,820 1,948 East Hampton (East Hampton) NY February 6, 2021 Street 1,830 1,290 Knox Street (Dallas) TX September 17, 2021 Street 1,802 1,280 Total Street (17) 44,399 30,561 Malibu County Mart (Malibu) CA August 9, 2009 Lifestyle Center 1,298 1,070 Town Center at Boca Raton (Boca Raton) FL October 13, 2009 Mall 1,206 1,013 The Westchester (White Plains) NY November 6, 2009 Mall 2,486 1,775 Phipps Plaza (Atlanta) GA April 16, 2010 Mall 1,643 1,356 Stanford Shopping Center (Palo Alto) CA September 17, 2010 Lifestyle Center 2,028 1,391 Fashion Island (Newport Beach) CA May 20, 2011 Lifestyle Center 2,317 1,642 Chestnut Hill (Chestnut Hill) MA July 25, 2014 Lifestyle Center 2,357 1,886 Merrick Park (Coral Gables) FL April 30, 2015 Lifestyle Center 2,022 1,482 DC City Center (Washington) DC April 30, 2015 Lifestyle Center 3,202 2,562 Scottsdale Quarter (Scottsdale) AZ May 15, 2015 Lifestyle Center 2,753 2,200 River Oaks (Houston) TX October 1, 2015 Lifestyle Center 2,998 2,398 Tyson's Galleria (McLean) VA April 29, 2016 Mall 2,668 1,705 The Grove (Los Angeles) CA May 23, 2016 Lifestyle Center 2,717 2,174 Somerset Collection (Troy) MI May 27, 2016 Mall 2,000 1,533 King of Prussia (King of Prussia) PA August 18, 2016 Mall 3,107 2,202 Fashion Valley (San Diego)* CA August 25, 2016 Lifestyle Center 1,606 1,300 Hawaii (Honolulu) HI May 25, 2017 Mall 1,828 1,371 Short Hills (Short Hills) NJ March 29, 2018 Mall 1,450 1,290 El Paseo Village (Palm Desert) CA April 26, 2018 Lifestyle Center 2,615 2,002 Waterside Shops (Naples) FL May 24, 2018 Mall 1,723 1,315 The Domain (Austin) TX June 28, 2018 Mall 1,719 1,375 Palisades Village (Pacific Palisades) CA October 4, 2018 Lifestyle Center 2,953 2,525 The Gardens Mall (Palm Beach Gardens) FL October 19, 2018 Mall 2,360 2,025 Aventura Mall (Aventura) FL April 5, 2019 Mall 1,873 1,280 Santana Row (San Jose) CA August 8, 2019 Lifestyle Center 2,295 1,517 The Shops at Riverside (Hackensack) NJ February 27, 2020 Mall 2,843 2,296 Southpark (Charlotte) NC May 21, 2021 Mall 1,630 1,040 Roosevelt Field (Garden City) NY August 6, 2021 Mall 1,678 1,214 Cherry Creek (Denver) CO August 20, 2021 Lifestyle Center 2,032 1,512 Pentagon City (Arlington) VA September 3, 2021 Mall 1,937 1,359 Boston Seaport (Boston) MA May 13, 2022 Lifestyle Center 1,820 1,386 Total Mall and Lifestyle Centers (31) 67,164 51,196 Total Full-Price (48) 111,563 81,757 Cabazon Premium (Cabazon) CA November 11, 2011 Outlet 3,250 2,000 Riverhead (Riverhead) NY November 30, 2012 Outlet 2,500 2,000 Fashion Outlets of Chicago (Rosemont) IL August 1, 2013 Outlet 3,485 2,599 Seattle Premium (Tulalip) WA August 30, 2013 Outlet 2,214 1,550 Las Vegas (Las Vegas) NV October 3, 2013 Outlet 2,028 1,420 San Marcos (San Marcos) TX October 10, 2014 Outlet 2,433 1,703 Carlsbad Premium (Carlsbad) CA October 24, 2014 Outlet 2,453 1,717 Wrentham Village Premium (Wrentham) MA September 29, 2014 Outlet 2,000 1,400 Camarillo Premium (Camarillo) CA February 1, 2015 Outlet 3,001 2,101 San Francisco Premium (Livermore) CA August 13, 2015 Outlet 2,485 1,753 Chicago Premium (Aurora) IL August 27, 2015 Outlet 2,300 1,840 Woodbury Commons (Central Valley) NY November 6, 2015 Outlet 2,289 1,831 Sawgrass Mills (Sunrise) FL December 4, 2015 Outlet 2,866 2,326 22 Orlando Vineland Premium (Orlando) FL November 24, 2020 Outlet 2,914 2,302 Leesburg (Leesburg) VA June 11, 2021 Outlet 2,626 2,042 Total Outlets (15) 38,844 28,584 Total Vince Stores (63) 150,407 110,341 *As of February 3, 2024, this location is in the process of relocating to another store within the same Lifestyle Center.
Biggest change(New York) NY September 20, 2019 Street 2,820 1,948 East Hampton (East Hampton) NY February 6, 2021 Street 1,830 1,290 Knox Street (Dallas) TX September 17, 2021 Street 1,802 1,280 Total Street (17) 45,898 30,833 Malibu County Mart (Malibu) CA August 9, 2009 Lifestyle Center 1,298 1,070 Town Center at Boca Raton (Boca Raton) FL October 13, 2009 Mall 1,206 1,013 Phipps Plaza (Atlanta) GA April 16, 2010 Mall 1,643 1,356 Stanford Shopping Center (Palo Alto) CA September 17, 2010 Lifestyle Center 2,028 1,391 Fashion Island (Newport Beach) CA May 20, 2011 Lifestyle Center 2,317 1,642 Chestnut Hill (Chestnut Hill) MA July 25, 2014 Lifestyle Center 2,357 1,886 Merrick Park (Coral Gables) FL April 30, 2015 Lifestyle Center 2,022 1,482 DC City Center (Washington) DC April 30, 2015 Lifestyle Center 3,202 2,562 Scottsdale Quarter (Scottsdale) AZ May 15, 2015 Lifestyle Center 2,753 2,200 River Oaks (Houston) TX October 1, 2015 Lifestyle Center 2,154 1,626 Tyson's Galleria (McLean) VA April 29, 2016 Mall 2,668 1,705 The Grove (Los Angeles) CA May 23, 2016 Lifestyle Center 2,717 2,174 Somerset Collection (Troy) MI May 27, 2016 Mall 2,000 1,533 King of Prussia (King of Prussia) PA August 18, 2016 Mall 3,107 2,202 Fashion Valley (San Diego) CA August 25, 2016 Lifestyle Center 1,644 1,300 Hawaii (Honolulu) HI May 25, 2017 Mall 1,828 1,371 El Paseo Village (Palm Desert) CA April 26, 2018 Lifestyle Center 2,615 2,002 Waterside Shops (Naples) FL May 24, 2018 Mall 1,723 1,315 The Gardens Mall (Palm Beach Gardens) FL October 19, 2018 Mall 2,360 2,025 Aventura Mall (Aventura) FL April 5, 2019 Mall 1,873 1,280 Santana Row (San Jose) CA August 8, 2019 Lifestyle Center 2,295 1,517 The Shops at Riverside (Hackensack) NJ February 27, 2020 Mall 2,843 2,296 Southpark (Charlotte) NC May 21, 2021 Mall 2,588 1,875 Roosevelt Field (Garden City) NY August 6, 2021 Mall 2,987 1,921 Cherry Creek (Denver) CO August 20, 2021 Lifestyle Center 2,032 1,512 Boston Seaport (Boston) MA May 13, 2022 Lifestyle Center 1,820 1,386 Total Mall and Lifestyle Centers (26) 58,080 43,642 Total Full-Price (43) 103,978 74,475 Cabazon Premium (Cabazon) CA November 11, 2011 Outlet 3,250 2,000 Riverhead (Riverhead) NY November 30, 2012 Outlet 2,500 2,000 Fashion Outlets of Chicago (Rosemont) IL August 1, 2013 Outlet 3,485 2,599 Seattle Premium (Tulalip) WA August 30, 2013 Outlet 2,214 1,550 Las Vegas (Las Vegas) NV October 3, 2013 Outlet 2,028 1,420 San Marcos (San Marcos) TX October 10, 2014 Outlet 2,433 1,703 Carlsbad Premium (Carlsbad) CA October 24, 2014 Outlet 2,453 1,717 Wrentham Village Premium (Wrentham) MA September 29, 2014 Outlet 2,000 1,400 Camarillo Premium (Camarillo) CA February 1, 2015 Outlet 3,001 2,101 San Francisco Premium (Livermore) CA August 13, 2015 Outlet 2,485 1,753 Chicago Premium (Aurora) IL August 27, 2015 Outlet 2,300 1,840 Woodbury Commons (Central Valley) NY November 6, 2015 Outlet 2,289 1,831 Sawgrass Mills (Sunrise) FL December 4, 2015 Outlet 2,866 2,326 22 Leesburg (Leesburg) VA June 11, 2021 Outlet 2,626 2,042 Total Outlets (14) 35,930 26,282 Total Vince Stores (57) 139,908 100,757
The following store list shows the location, opening date, type, and size of our company-operated retail locations as of February 3, 2024: 21 Vince Locations State Opening Date Type Gross Square Feet Selling Square Feet Washington St. (New York) NY February 3, 2009 Street 1,850 1,150 Prince St.
The following store list shows the location, opening date, type, and size of our company-operated retail locations as of February 1, 2025: 21 Vince Locations State Opening Date Type Gross Square Feet Selling Square Feet Washington St. (New York) NY February 3, 2009 Street 1,850 1,150 Prince St.
(New York) NY August 3, 2012 Street 3,503 1,928 Westport (Westport) CT March 28, 2013 Street 1,801 1,344 Greenwich (Greenwich) CT July 19, 2013 Street 2,463 1,724 Mercer St. (Soho - New York) NY August 22, 2013 Street 4,500 3,080 Columbus Ave. (Upper West Side - New York) NY December 18, 2013 Street 4,465 3,126 Newbury St.
(New York) NY August 3, 2012 Street 5,002 2,200 Westport (Westport) CT March 28, 2013 Street 1,801 1,344 Greenwich (Greenwich) CT July 19, 2013 Street 2,463 1,724 Mercer St. (Soho - New York) NY August 22, 2013 Street 4,500 3,080 Columbus Ave. (Upper West Side - New York) NY December 18, 2013 Street 4,465 3,126 Newbury St.
Although our more recent leases are subject to shorter terms as a result of the implementation of our strategy to pursue shorter lease terms, some of our leases have initial terms of 10 years, and in some instances, can be extended for an additional term.
Although certain recent leases are subject to shorter terms as a result of the implementation of our strategy to pursue shorter lease terms when evaluating certain markets, some of our leases have initial terms of 10 years, and in some instances, can be extended for an additional term.
ITEM 2. PR OPERTIES. The following table sets forth the location, use and size of our significant corporate facilities and showrooms as of February 3, 2024, all of which are leased under various agreements expiring at various times through fiscal 2034, subject to renewal options.
ITEM 2. PR OPERTIES. The following table sets forth the location, use and size of our significant corporate facilities and showrooms as of February 1, 2025, all of which are leased under various agreements expiring at various times through fiscal 2035, subject to renewal options.
Location Use Approximate Square Footage New York, NY Corporate Office 49,492 Los Angeles, CA Vince Design Studio 28,541 Paris, France Vince Showroom 4,209 As of February 3, 2024, we leased 150,407 gross square feet related to our 63 company-operated Vince retail stores.
Location Use Approximate Square Footage New York, NY Corporate Office 49,492 Los Angeles, CA Vince Design Studio 28,541 Paris, France Vince Showroom 4,209 As of February 1, 2025, we leased 139,908 gross square feet related to our 57 company-operated Vince retail stores.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

2 edited+0 added−0 removed3 unchanged
Biggest changePurchases of Equity Securities by the Issuer and Affiliated Purchasers We did not repurchase any shares of common stock during the three months ended February 3, 2024. Unregistered Sales of Equity Securities None. 23 ITEM 6. [RESE RVED]
Biggest changePurchases of Equity Securities by the Issuer and Affiliated Purchasers We did not repurchase any shares of common stock during the three months ended February 1, 2025. Unregistered Sales of Equity Securities None. ITEM 6. [RESE RVED]
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOC KHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. Market Information Our common stock trades on the New York Stock Exchange under the symbol "VNCE". Record Holders As of March 29, 2024, there were 3 holders of record of our common stock.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOC KHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. Market Information Our common stock trades on the New York Stock Exchange under the symbol "VNCE". Record Holders As of March 31, 2025, there were 6 holders of record of our common stock.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

71 edited+39 added−52 removed67 unchanged
Biggest changeFiscal 2023 Compared to Fiscal 2022 The following table presents, for the periods indicated, our operating results as a percentage of net sales as well as earnings (loss) per share data: Fiscal Year 2023 2022 Variances % of Net % of Net (in thousands, except per share data and percentages) Amount Sales Amount Sales Amount Percent Statements of Operations: Net sales $ 292,890 100.0 % $ 357,442 100.0 % $ (64,552 ) (18.1 )% Cost of products sold 159,598 54.5 % 219,472 61.4 % (59,874 ) (27.3 )% Gross profit 133,292 45.5 % 137,970 38.6 % (4,678 ) (3.4 )% Impairment of intangible assets — 0.0 % 1,700 0.5 % (1,700 ) * Impairment of long-lived assets — 0.0 % 1,880 0.5 % (1,880 ) * Gain on sale of intangible assets (32,808 ) (11.2 )% (1,620 ) (0.5 )% (31,188 ) * Selling, general and administrative expenses 134,476 45.9 % 161,432 45.2 % (26,956 ) (16.7 )% Income (loss) from operations 31,624 10.8 % (25,422 ) (7.1 )% 57,046 (224.4 )% Interest expense, net 11,118 3.8 % 9,887 2.8 % 1,231 12.5 % Income (loss) before income taxes and equity in net income of equity method investment 20,506 7.0 % (35,309 ) (9.9 )% 55,815 (158.1 )% (Benefit) provision for income taxes (3,478 ) (1.2 )% 3,037 0.8 % (6,515 ) (214.5 )% Income (loss) before equity in net income of equity method investment 23,984 8.2 % (38,346 ) (10.7 )% 62,330 (162.5 )% Equity in net income of equity method investment 1,462 0.5 % — 0.0 % 1,462 * Net income (loss) $ 25,446 8.7 % $ (38,346 ) (10.7 )% $ 63,792 (166.4 )% Earnings (loss) per share: Basic earnings (loss) per share $ 2.05 $ (3.14 ) Diluted earnings (loss) per share $ 2.04 $ (3.14 ) (*) Not meaningful Net sales for fiscal 2023 were $292,890, decreasing $64,552, or 18.1%, versus $357,442 for fiscal 2022.
Biggest changeFiscal 2024 Compared to Fiscal 2023 The following table presents, for the periods indicated, our operating results as a percentage of net sales as well as earnings (loss) per share data: Fiscal Year 2024 2023 Variances % of Net % of Net (in thousands, except per share data and percentages) Amount Sales Amount Sales Amount Percent Statements of Operations: Net Sales $ 293,452 100.0 % $ 292,890 100.0 % $ 562 0.2 % Cost of products sold 148,273 50.5 % 159,598 54.5 % (11,325 ) (7.1 )% Gross profit 145,179 49.5 % 133,292 45.5 % 11,887 8.9 % Impairment of goodwill 31,973 10.9 % — 0.0 % 31,973 * Gain on sale of intangible assets — 0.0 % (32,808 ) (11.2 )% 32,808 * Gain on sale of subsidiary (7,634 ) (2.6 )% — 0.0 % (7,634 ) * Selling, general and administrative expenses 138,016 47.0 % 134,476 45.9 % 3,540 2.6 % (Loss) income from operations (17,176 ) (5.9 )% 31,624 10.8 % (48,800 ) (154.3 )% Interest expense, net 6,569 2.2 % 11,118 3.8 % (4,549 ) (40.9 )% Other income, net (344 ) (0.1 )% — — (344 ) * (Loss) income before income taxes and equity in net income of equity method investment (23,401 ) (8.0 )% 20,506 7.0 % (43,907 ) (214.1 )% Benefit for income taxes (3,642 ) (1.3 )% (3,478 ) (1.2 )% (164 ) 4.7 % (Loss) income before equity in net income of equity method investment (19,759 ) (6.7 )% 23,984 8.2 % (43,743 ) (182.4 )% Equity in net income of equity method investment 712 0.2 % 1,462 0.5 % (750 ) (51.3 )% Net (loss) income $ (19,047 ) (6.5 )% $ 25,446 8.7 % $ (44,493 ) (174.9 )% (Loss) earnings per share: Basic (loss) earnings per share $ (1.51 ) $ 2.05 Diluted (loss) earnings per share $ (1.51 ) $ 2.04 (*) Not meaningful Net sales for fiscal 2024 were $293,452, increasing $562, or 0.2%, versus $292,890 for fiscal 2023.
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.
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.
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%.
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 33 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%.
This pressure often takes the form of customers requiring us to provide price concessions on prior shipments as a prerequisite for obtaining future orders. Pressure for these concessions is largely determined by overall retail sales performance and, more specifically, the performance of our products at retail.
This pressure often takes the form of 34 customers requiring us to provide price concessions on prior shipments as a prerequisite for obtaining future orders. Pressure for these concessions is largely determined by overall retail sales performance and, more specifically, the performance of our products at retail.
The assessment of inventory value, as a result, is highly subjective and requires an assessment of the seasonality of the inventory, its future desirability, and future price levels in the off-price sector. 34 In our wholesale businesses, some of our products are purchased for and sold to specific customers' orders.
The assessment of inventory value, as a result, is highly subjective and requires an assessment of the seasonality of the inventory, its future desirability, and future price levels in the off-price sector. In our wholesale businesses, some of our products are purchased for and sold to specific customers' orders.
Sales are recognized when the control of the goods are transferred to the customer for the Company's wholesale businesses, upon receipt by the customer for the Company's e-commerce businesses, and at the time of sale to the consumer for the Company's retail businesses.
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 businesses, and at the time of sale to the consumer for the Company's retail business.
On April 21, 2023, Vince, LLC 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.
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 32 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.
Third Lien Credit Facility On December 11, 2020, Vince, LLC 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 Vince, LLC, 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.
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.
Our primary cash needs are funding working capital requirements, including royalty payments under the License Agreement, meeting our debt service requirements, and capital expenditures for new stores and related leasehold improvements. The most significant components of our working capital are cash and cash equivalents, accounts receivable, inventories, accounts payable and other current liabilities.
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.
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, Vince, LLC and Vince Intermediate and any future subsidiary guarantors, other than among others, equity interests in ABG Vince, as well as the rights of Vince, LLC under the License Agreement.
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.
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 will contribute its intellectual property to a newly formed Authentic subsidiary ("ABG Vince") for cash consideration and a membership interest in ABG Vince.
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.
Term Loan Credit Facility On September 7, 2021, Vince, LLC entered into a $35,000 senior secured term loan credit facility (the "Term Loan Credit Facility") pursuant to a Credit Agreement (the "Term Loan Credit Agreement"), as amended from time to time, by and among Vince, LLC, as the borrower, the guarantors named therein, PLC Agent, LLC, as administrative agent and collateral agent, and the other lenders from time to time party thereto.
Term Loan Credit Facility On September 7, 2021, V Opco entered into a $35,000 senior secured term loan credit facility (the "Term Loan Credit Facility") pursuant to a Credit Agreement (the "Term Loan Credit Agreement"), as amended from time to time, by and among V Opco, as the borrower, the guarantors named therein, PLC Agent, LLC, as administrative agent and collateral agent, and the other lenders from time to time party thereto.
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, Vince, LLC and the Company's existing material domestic restricted subsidiaries as well as any future material domestic restricted subsidiaries.
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.
Prior to May 25, 2023, on an inception to date basis, the Company had made repayments of $7,335 on the Term Loan Credit Facility. 30 2023 Revolving Credit Facility On June 23, 2023, Vince, LLC, 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 Vince, LLC, the guarantors named therein, Bank of America, N.A.
Prior to May 25, 2023, on an inception to date basis, the Company had made repayments of $7,335 on the Term Loan Credit Facility. 30 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.
On May 25, 2023, in connection with the Authentic Transaction, Vince, LLC, entered into a License Agreement (the "License Agreement") with ABG Vince, which provides Vince, LLC 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).
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).
At February 3, 2024, a hypothetical 1% change in the reserves for allowances would have resulted in a change of $52 in accounts receivable and net sales. Inventory Valuation Inventory values are reduced to net realizable value when there are factors indicating that certain inventories will not be sold on terms sufficient to recover their cost.
At February 1, 2025, a hypothetical 1% change in the reserves for allowances would have resulted in a change of $69 in accounts receivable and net sales. Inventory Valuation Inventory values are reduced to net realizable value when there are factors indicating that certain inventories will not be sold on terms sufficient to recover their cost.
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.
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.
The 2023 Revolving Credit Agreement also permits Vince, LLC 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 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 Agreement also permits Vince, LLC 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 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.
An entity may elect to perform a qualitative impairment assessment for goodwill and indefinite-lived intangible assets. If adverse qualitative trends are identified during the qualitative assessment that indicate that it is more likely than not that the fair value of a reporting unit or indefinite-lived intangible asset is less than its carrying amount, a quantitative impairment test is required.
An entity may elect to perform a qualitative impairment assessment for goodwill. If adverse qualitative trends are identified during the qualitative assessment that indicate that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, a quantitative impairment test is required.
In addition, income from operations for fiscal 2023 includes a net benefit of $1,750 from the wind down of the Rebecca Taylor business, primarily related to the release of operating lease liabilities as a result of lease terminations and a $765 gain associated with the sale of the Parker tradename, offset by$150 of transaction related expenses associated with the sale of the Parker tradename.
Activity for fiscal 2023 includes a net benefit of $1,750 from the wind down of the Rebecca Taylor business, primarily related to the release of operating lease liabilities as a result of lease terminations, a $765 gain associated with the sale of the Parker tradename and $150 of transaction related expenses associated with the sale of the Parker tradename.
We expect such seasonality to continue. 33 Critical Accounting Estimates Management's discussion and analysis of financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP").
Critical Accounting Estimates Management's discussion and analysis of financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP").
Performance by Segment The Company has identified three reportable segments as further described below: 26 • Vince Wholesale segment—consists of the Company's operations to distribute Vince brand products to major department stores and specialty stores in the United States and select international markets; • Vince Direct-to-consumer segment—consists of the Company's operations to distribute Vince brand products directly to the consumer through its Vince branded full-price specialty retail stores, outlet stores, and e-commerce platform, and its subscription service Vince Unfold; and • Rebecca Taylor and Parker segment—consisted of the Company's operations to distribute Rebecca Taylor and Parker brand products to major department stores and specialty stores in the U.S. and select international markets, directly to the consumer through their own branded e-commerce platforms and Rebecca Taylor retail and outlet stores, and through its subscription service Rebecca Taylor RNTD.
Performance by Segment The Company has identified two reportable segments as further described below: • Vince Wholesale segment—consists of the Company's operations to distribute Vince brand products to major department stores and specialty stores in the United States and select international markets; and 26 • Vince Direct-to-consumer segment—consists of the Company's operations to distribute Vince brand products directly to the consumer through its Vince branded full-price specialty retail stores, outlet stores, and e-commerce platform, and its subscription service Vince Unfold.
As of January 28, 2023, the indefinite-lived intangible asset was the Vince tradename. On April 21, 2023, the Company entered into the Authentic Transaction with Authentic and as a result, the Vince tradename and Vince customer relationships were classified as held for sale and amortization of the Vince customer relationships ceased.
On April 21, 2023, the Company entered into the Authentic Transaction with Authentic and as a result, the Vince tradename and Vince customer relationships were classified as held for sale and amortization of the Vince customer relationships ceased.
The Company 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 are recorded as deferred debt issuance costs which will be amortized over the remaining term of the Third Lien Credit Facility.
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.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. Our fiscal year ends on the Saturday closest to January 31. Fiscal years 2023 and 2022 ended on February 3, 2024 ("fiscal 2023") and January 28, 2023 ("fiscal 2022"), respectively. Fiscal 2023 consisted of 53 weeks and fiscal 2022 consisted of 52 weeks.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. Our fiscal year ends on the Saturday closest to January 31. Fiscal years 2024 and 2023 ended on February 1, 2025 ("fiscal 2024") and February 3, 2024 ("fiscal 2023"), respectively.
See Note 11 "Income Taxes" to the Consolidated Financial Statements in this Annual Report for further information. Equity in net income of equity method investment of $1,462 consists of the Company's proportionate share of ABG Vince's net income for fiscal 2023. See Note 2 "Recent Transactions" for further information.
See Note 11 "Income Taxes" to the Consolidated Financial Statements in this Annual Report for further information. Equity in net income of equity method investment for the fiscal years 2024 and 2023 was $712 and $1,462, respectively, and consists of the Company's proportionate share of ABG Vince's net income.
The Company incurred a total of $1,150 of financing costs. In accordance with ASC Topic 470, "Debt", these financing costs were recorded as deferred debt issuance costs (which is presented within Other assets on the Consolidated Balance Sheets) and are amortized over the term of the 2023 Revolving Credit Facility.
In accordance with ASC Topic 470, "Debt", these financing costs were recorded as deferred debt issuance costs (which is presented within Other assets on the Consolidated Balance Sheets) and are amortized over the term of the 2023 Revolving Credit Facility. 31 As of February 1, 2025, the Company was in compliance with applicable covenants.
The Company recorded expense of $828 during fiscal 2023, related to the write-off of the remaining deferred financing costs. Certain letters of credit remain in place with Citizens which were secured with restricted cash, totaling $769 as of February 3, 2024. Restricted cash is included in Prepaid Expenses and other current assets in the Consolidated Balance Sheets.
The Company recorded expense of $828 during fiscal 2023, related to the write-off of the remaining deferred financing costs. As of February 1, 2025, no letters of credit remained in place with Citizens that were secured with restricted cash. Restricted cash is included in Prepaid Expenses and other current assets in the Consolidated Balance Sheets.
Liquidity and Capital Resources Our sources of liquidity are cash and cash equivalents, cash flows from operations, if any, borrowings available under the 2023 Revolving Credit Facility and our ability to access the capital markets, including our Sales Agreement entered into with Virtu Americas LLC in June 2023 (see Note 9 "Stockholders' Equity" to the Consolidated Financial Statements in this Annual Report for further information).
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 5 "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 9 "Stockholders' Equity" for further information).
The Company closed the Asset Sale on May 25, 2023, and therefore no longer carries finite-lived intangible assets as of February 3, 2024. See Note 2 "Recent Transactions" for further information.
The Company closed the Asset Sale on May 25, 2023, and therefore no longer carried finite-lived intangible assets as of February 3, 2024. See Note 2 "Recent Transactions" for further information. Income taxes and Valuation Allowances We account for income taxes using the asset and liability method.
Comparable sales decreased $5,444, or 3.8%, including e-commerce, primarily due to a decrease in e-commerce traffic. Non-comparable sales, which includes new stores that have not completed 13 full fiscal months of operations and Vince Unfold, declined by $2,296, offset by $1,066 of sales attributable to the 53rd week.
Comparable sales, including e-commerce, decreased $6,145, or 4.8%, primarily due to a decrease in promotional activity. Non-comparable sales, which includes new stores that have not completed 13 full fiscal months of operations and Vince Unfold, declined by $8,848, which includes $1,066 of sales attributable to the 53rd week of the prior year.
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"), whose affiliates own, as of February 3, 2024, approximately 68% of the Company's common stock.
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.
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.
Since the end of fiscal 2022, four net stores have closed, bringing our total retail store count to 63 (consisting of 48 full price stores and 15 outlet stores) as of February 3, 2024, compared to 67 (consisting of 50 full price stores and 17 outlet stores) as of January 28, 2023.
Since the end of fiscal 2023, six net stores have closed, bringing our total retail store count to 57 (consisting of 43 full price stores and 14 outlet stores) as of February 1, 2025, compared to 63 (consisting of 48 full price stores and 15 outlet stores) as of February 3, 2024.
During fiscal 2023, the Company maintained a full valuation allowance on all deferred tax assets that have a definite life as we do not believe it is more likely than not that such deferred tax assets will be recognized. Indefinite-lived net operating losses have been recognized to the extent we believe they can be utilized against indefinite-lived deferred tax liabilities.
During fiscal 2024 and fiscal 2023, the Company maintained a full valuation allowance on all deferred tax assets that have a definite life as we do not believe it is more likely than not that such deferred tax assets will be recognized.
See Note 2 "Recent Transactions" to the Consolidated Financial Statements in this Annual Report for further information. Substantially all Rebecca Taylor inventory was liquidated as of January 28, 2023. Additionally, all Rebecca Taylor retail and outlet stores operated by the Company were closed as of January 28, 2023 and the e-commerce site operated by the Company ceased in December 2022.
Substantially all Rebecca Taylor inventory was liquidated as of January 28, 2023. Additionally, all Rebecca Taylor retail and outlet stores operated by the Company were closed as of January 28, 2023 and the e-commerce site operated by the Company ceased in December 2022.
The total gross margin rate increase was primarily driven by the following factors: • The favorable impact from the wind down of the Rebecca Taylor business, which historically operated at a lower overall gross margin, contributed positively by approximately 310 basis points; 25 • The favorable impact from lower product costing, freight costs, and higher pricing which contributed positively by approximately 250 basis points; • The favorable impact of year-over-year adjustments to inventory reserves contributed positively by approximately 200 basis points; and • The favorable impact from lower promotional activity in the Direct-to-consumer segment which contributed approximately 140 basis points; partly offset by • The unfavorable impact from royalty expense associated with the License Agreement with ABG Vince contributed negatively by approximately 320 basis points.
The total gross margin rate increase was primarily driven by the following factors: • The favorable impact from lower promotional activity in the Direct-to-consumer segment and lower discounting, which contributed positively by approximately 330 basis points; 25 • The favorable impact from lower product costing and freight costs, and higher pricing, which contributed positively by approximately 320 basis points; partially offset by • The unfavorable impact from royalty expense associated with the License Agreement with ABG Vince, which contributed negatively by approximately 150 basis points; and • The unfavorable impact of channel and product mix, which contributed negatively by approximately 80 basis points.
For a discussion of the risks facing our business, see "Part I, Item 1A—Risk Factors" included in this Annual Report. 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.
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 "Part I, Item 1A—Risk Factors" included in this Annual Report. Executive Overview We are a global retail company that operates the Vince brand women's and men's ready to wear business.
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 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.
The estimates regarding recoverability and fair value can be affected by factors such as future store results, real estate demand, store closure plans, and economic conditions that can be difficult to predict. During the second quarter of fiscal 2022, the Company determined the need to assess recoverability for certain Rebecca Taylor retail locations.
The estimates regarding recoverability and fair value can be affected by factors such as future store results, real estate demand, store closure plans, and economic conditions that can be difficult to predict.
For fiscal 2022, there was a gain on sale of intangible assets of $1,620 related to the sale of the Rebecca Taylor intellectual property and certain related ancillary assets. See Note 2 "Recent Transactions" to the Consolidated Financial Statements in this Annual Report for additional information.
See Note 2 "Recent Transactions" to the Consolidated Financial Statements in this Annual Report for additional information. Gain on sale of subsidiary for fiscal 2024 was $7,634 related to the sale of Rebecca Taylor. See Note 2 "Recent Transactions" to the Consolidated Financial Statements in this Annual Report for additional information.
LLC, an affiliate of BCI Brands. See Note 2 "Recent Transactions" to the Consolidated Financial Statements in this Annual Report for further information. The Parker collection was previously available through major department stores and specialty stores worldwide as well as through its e-commerce website. The Company has identified three reportable segments: Vince Wholesale, Vince Direct-to-consumer and Rebecca Taylor and Parker.
LLC, an affiliate of BCI Brands. See Note 2 "Recent Transactions" to the Consolidated Financial Statements in this Annual Report for further information. The Company has identified two reportable segments: Vince Wholesale and Vince Direct-to-consumer.
This valuation 37 allowance is subject to periodic review, and if the allowance is reduced, the tax benefit will be recorded in the future operations as a reduction of our income tax expense.
Indefinite-lived net operating losses have been recognized to the extent we believe they can be utilized against indefinite-lived deferred tax liabilities. This valuation allowance is subject to periodic review, and if the allowance is reduced, the tax benefit will be recorded in the future operations as a reduction of our income tax expense.
Based on our current expectations, we believe that our sources of liquidity will generate sufficient cash flows to meet our obligations during the next twelve months from the date these financial statements are issued. 28 Operating Activities Twelve Months Ended (in thousands) February 3, 2024 January 28, 2023 Operating activities Net income (loss) $ 25,446 $ (38,346 ) Add (deduct) items not affecting operating cash flows: Impairment of intangible assets — 1,700 Impairment of long-lived assets — 1,880 Depreciation and amortization 4,939 8,334 Provision for bad debt 104 424 Gain on sale of intangible assets (32,808 ) (1,620 ) Loss on disposal of property and equipment 260 121 Amortization of deferred financing costs 758 1,267 Deferred income taxes (4,021 ) 2,866 Share-based compensation expense 1,541 2,095 Capitalized PIK Interest 4,026 2,869 Loss on debt extinguishment 3,136 — Equity in net income of equity method investment, net of distributions (121 ) — Changes in assets and liabilities: Receivables, net (42 ) 8,787 Inventories 31,236 (11,462 ) Prepaid expenses and other current assets (655 ) 1,198 Accounts payable and accrued expenses (23,994 ) 2,704 Other assets and liabilities (8,165 ) (2,078 ) Net cash provided by (used in) operating activities $ 1,640 $ (19,261 ) Net cash provided by operating activities during fiscal 2023 was $1,640, which consisted of net income of $25,446, impacted by non-cash items of ($22,186) and cash used by working capital of $1,620.
Risk Factors—Risks Related to Our Business”. 28 Operating Activities Twelve Months Ended (in thousands) February 1, 2025 February 3, 2024 Operating activities Net (loss) income $ (19,047 ) $ 25,446 Add (deduct) items not affecting operating cash flows: Impairment of goodwill 31,973 — Depreciation and amortization 4,006 4,939 Provision for bad debt 9 104 Gain on sale of intangible assets — (32,808 ) Gain on sale of subsidiary (7,634 ) — Loss on disposal of property and equipment 88 260 Amortization of deferred financing costs 312 758 Deferred income taxes (4,282 ) (4,021 ) Share-based compensation expense 1,588 1,541 Capitalized PIK Interest 4,515 4,026 Loss on debt extinguishment — 3,136 Equity in net income of equity method investment, net of distributions 2,683 (121 ) Changes in assets and liabilities: Receivables, net (11,652 ) (42 ) Inventories (376 ) 31,236 Prepaid expenses and other current assets 298 (655 ) Accounts payable and accrued expenses 19,820 (23,994 ) Other assets and liabilities (242 ) (8,165 ) Net cash provided by operating activities $ 22,059 $ 1,640 Net cash provided by operating activities during fiscal 2024 was $22,059, which consisted of a net loss of $19,047, impacted by non-cash items of $33,258 and cash provided by working capital of $7,848.
The following discussion and analysis should be read in conjunction with our consolidated financial statements and related notes included elsewhere in this Annual Report. All amounts disclosed are in thousands except store counts, share and per share data and percentages. This discussion contains forward-looking statements involving risks, uncertainties and assumptions that could cause our results to differ materially from expectations.
Fiscal 2024 consisted of 52 weeks and fiscal 2023 consisted of 53 weeks. 23 The following discussion and analysis should be read in conjunction with our consolidated financial statements and related notes included elsewhere in this Annual Report. All amounts disclosed are in thousands except store counts, share and per share data and percentages.
Selling, general and administrative ("SG&A") expenses for fiscal 2023 were $134,476, decreasing $26,956, or 16.7%, versus $161,432 for fiscal 2022. SG&A expenses as a percentage of sales were 45.9% and 45.2% for fiscal 2023 and fiscal 2022, respectively.
Selling, general and administrative ("SG&A") expenses for fiscal 2024 were $138,016, increasing $3,540, or 2.6%, versus $134,476 for fiscal 2023. SG&A expenses as a percentage of sales were 47.0% and 45.9% for fiscal 2024 and fiscal 2023, respectively.
We are unable to make reliable estimates of cash flows by period due to the inherent uncertainty surrounding the effective settlement of these positions. • The Company has available the 2023 Revolving Credit Facility, which 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 summary above does not include the following items: • The Company has available the 2023 Revolving Credit Facility, which 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.
Net cash provided by investing activities of $1,468 during fiscal 2022 represents the proceeds received from the sale of intangible assets (see Note 2 "Recent Transactions" to the Consolidated Financial Statements in this Annual Report for further information), partly offset by capital expenditures primarily related to the investment in our e-commerce platforms, as well as retail store buildouts, including leasehold improvements and store fixtures. 29 Financing Activities Twelve Months Ended (in thousands) February 3, 2024 January 28, 2023 Financing activities Proceeds from borrowings under the Revolving Credit Facilities $ 245,116 $ 402,652 Repayment of borrowings under the Revolving Credit Facilities (289,387 ) (378,778 ) Repayment of borrowings under the Term Loan Facilities (29,378 ) (5,622 ) Proceeds from common stock issuance, net of certain fees — 825 Tax withholdings related to restricted stock vesting (142 ) (213 ) Proceeds from stock option exercises, restricted stock vesting, and issuance of common stock under employee stock purchase plan 48 75 Financing fees (3,336 ) (1,128 ) Net cash (used in) provided by financing activities $ (77,079 ) $ 17,811 Net cash used in financing activities was $77,079 during fiscal 2023, primarily consisting of $44,271 of net repayments of borrowings under the Company's revolving credit facilities, the repayment of $29,378 of borrowings under the Term Loan Credit Facility, and financing fees of $3,336 (which includes a $553 prepayment penalty associated with the termination of the Term Loan Credit Facility during fiscal 2023).
Net cash provided by investing activities of $75,540 during fiscal 2023 primarily represents $76,500 of proceeds received from the sale of the Vince intangible assets and $1,025 of proceeds received from the sale of the Parker intangible assets (see Note 2 "Recent Transactions" to the Consolidated Financial Statements in this Annual Report for additional information). 29 Financing Activities Twelve Months Ended (in thousands) February 1, 2025 February 3, 2024 Financing activities Proceeds from borrowings under the Revolving Credit Facilities $ 211,213 $ 245,116 Repayment of borrowings under the Revolving Credit Facilities (214,027 ) (289,387 ) Repayment of borrowings under the Term Loan Facilities — (29,378 ) Repayment of borrowings under the Third Lien Credit Facility (15,000 ) — Tax withholdings related to restricted stock vesting (264 ) (142 ) Proceeds from issuance of common stock under employee stock purchase plan 29 48 Financing fees (332 ) (3,336 ) Net cash used in financing activities $ (18,381 ) $ (77,079 ) Net cash used in financing activities was $18,381 during fiscal 2024, primarily consisting of $15,000 of the repayment of borrowings in connection with the P180 Acquisition (see Note 2 "Recent Transactions" for additional information) and $2,814 of net repayments of borrowings under the Company's revolving credit facilities.
Investing Activities Twelve Months Ended (in thousands) February 3, 2024 January 28, 2023 Investing activities Payments for capital expenditures $ (1,460 ) $ (2,782 ) Transaction costs related to equity method investment (525 ) — Proceeds from sale of intangible assets 77,525 4,250 Net cash provided by investing activities $ 75,540 $ 1,468 Net cash provided by investing activities of $75,540 during fiscal 2023 primarily represents $76,500 of proceeds received from the sale of the Vince intangible assets and $1,025 of proceeds received from the sale of the Parker intangible assets (see Note 2 "Recent Transactions" to the Consolidated Financial Statements in this Annual Report for additional information).
Investing Activities Twelve Months Ended (in thousands) February 1, 2025 February 3, 2024 Investing activities Payments for capital expenditures $ (4,232 ) $ (1,460 ) Transaction costs related to equity method investment — (525 ) Proceeds from sale of intangible assets — 77,525 Net cash (used in) provided by investing activities $ (4,232 ) $ 75,540 Net cash used in investing activities of $4,232 during fiscal 2024 represents capital expenditures primarily related to retail store buildouts, including leasehold improvements and store fixtures.
Transformation Program The Company is implementing a transformation program focused on driving enhanced profitability through an improved gross margin profile and optimized expense structure, beginning fiscal 2024. The transformation program is focused on improving the Company’s gross margin profile and driving cost efficiencies.
Transformation Program On October 31, 2023, the Company announced its Transformation Program focused on driving enhanced profitability through an improved gross margin profile and an optimized expense structure. The Transformation Program achieved its goal set out for fiscal 2024.
See Note 2 "Recent Transactions" to the Consolidated Financial Statements in this Annual Report 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.
(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.
In fiscal 2022, the Company elected to perform a quantitative impairment test on goodwill allocated to the Company's Vince Wholesale reporting unit. The results of the quantitative test did not result in any impairment because the fair value of the Company's Vince Wholesale reporting unit exceeded its carrying value.
The results of the quantitative test did not result in any impairment because the fair value of the Company’s Vince Wholesale reporting unit exceeded its carrying value. Goodwill was $0 and $31,973 as of February 1, 2025 and February 3, 2024, respectively.
Our effective tax rate for fiscal 2023 and fiscal 2022 was (17.0)% and (8.6)%, respectively.
Benefit for income taxes for fiscal 2024 was $3,642 as compared to $3,478 for fiscal 2023. Our effective tax rate for fiscal 2024 and fiscal 2023 was 15.6% and (17.0)%, respectively.
This increase in interest expense was partly offset by an overall reduction of debt primarily through the termination of the term loan credit facility in the second quarter of fiscal 2023. Provision for income taxes for fiscal 2023 was a benefit of $3,478 as compared to an expense of $3,037 for fiscal 2022.
In addition, the decrease was attributable to an overall reduction of debt primarily through the termination of the Term Loan Credit Facility in the second quarter of fiscal 2023 and lower levels of debt under the revolving credit facilities, partially offset by an increase in interest expense related to the Third Lien Credit Facility.
Interest expense, net increased $1,231, or 12.5%, to $11,118 in fiscal 2023 from $9,887 in fiscal 2022 primarily due to $1,755 write-off of deferred financing costs and a $553 prepayment penalty both associated with the termination of the Term Loan Credit Facility (as defined below), as well as an $828 write-off of deferred financing costs associated with the termination of the 2018 Revolving Credit Facility (as defined below).
The change in SG&A expenses compared to the prior year period was primarily due to: • $4,718 of increased rent expense primarily due to lease modifications effective in fiscal 2023; • $4,308 of increased compensation and benefits; • $703 of increased marketing and advertising costs; partly offset by • $5,030 decrease related to transaction related expenses associated with the Asset Sale in fiscal 2023; • $1,306 of decreased consulting and information technology costs; and • $504 net decrease in total SG&A expenses resulting from the wind down of the Rebecca Taylor brand; Interest expense, net decreased $4,549, or 40.9%, to $6,569 in fiscal 2024 from $11,118 in fiscal 2023 primarily due to $1,755 write-off of deferred financing costs and a $553 prepayment penalty both associated with the termination of the Term Loan Credit Facility (as defined below), as well as an $828 write-off of deferred financing costs associated with the termination of the 2018 Revolving Credit Facility (as defined below).
Net cash used in operating activities during fiscal 2022 was $19,261 which consisted of a net loss of $38,346, impacted by non-cash items of $19,936 and cash used by working capital of $851.
Net cash provided by operating activities during fiscal 2023 was $1,640 which consisted of net income of $25,446, impacted by non-cash items of $(22,186) and cash used by working capital of $1,620.
Twelve Months Ended February 3, January 28, (in thousands) 2023 2022 Net Sales: Vince Wholesale $ 149,603 $ 169,375 Vince Direct-to-consumer 143,096 149,770 Rebecca Taylor and Parker 191 38,297 Total net sales $ 292,890 $ 357,442 Income (loss) from operations: Vince Wholesale $ 43,416 $ 43,592 Vince Direct-to-consumer 5,774 2,397 Rebecca Taylor and Parker 2,443 (21,255 ) Subtotal 51,633 24,734 Unallocated corporate (1) (20,009 ) (50,156 ) Total income (loss) from operations $ 31,624 $ (25,422 ) (1) Unallocated corporate for fiscal 2023 includes the $32,043 gain related to the sale of the Vince intellectual property and certain related ancillary assets.
Twelve Months Ended February 1, February 3, (in thousands) 2025 2024 Net Sales: Vince Wholesale $ 165,349 $ 149,603 Vince Direct-to-consumer 128,103 143,096 Total segment net sales 293,452 292,699 Rebecca Taylor and Parker — 191 Total net sales $ 293,452 $ 292,890 Income (loss) from operations: Vince Wholesale $ 57,905 $ 43,416 Vince Direct-to-consumer 2,970 5,774 Total segment income from operations 60,875 49,190 Rebecca Taylor and Parker (1) 7,633 2,443 Subtotal 68,508 51,633 Unallocated corporate (2) (85,684 ) (20,009 ) Total (loss) income from operations $ (17,176 ) $ 31,624 (1) Activity for the Rebecca Taylor and Parker reconciling item for fiscal 2024 primarily consists of the gain recognized on the sale of Rebecca Taylor.
At February 3, 2024, a hypothetical 1% change in the inventory obsolescence reserve would have resulted in a change of $47 in inventory, net of cost of products sold.
At February 1, 2025, a hypothetical 1% change in the inventory obsolescence reserve would have resulted in a change of $25 in inventory, net of cost of products sold. Fair Value Assessment of Goodwill Goodwill is tested for impairment at least annually and in an interim period if a triggering event occurs.
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.
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 February 1, 2025, we operate 43 full-price retail stores, 14 outlet stores, the e-commerce site, vince.com , and the subscription service Vince Unfold, vinceunfold.com .
On June 23, 2023, Vince, LLC 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. 32 Contractual Obligations The following table summarizes our contractual obligations as of February 3, 2024: Future payments due by fiscal year (in thousands) 2024 2025-2026 2027-2028 Thereafter Total Unrecorded contractual obligations Other contractual obligations (1) $ 43,257 $ 3,604 $ — $ — $ 46,861 Guaranteed Minimum Royalty payments 11,000 22,000 22,000 44,000 99,000 Recorded contractual obligations Operating lease obligations 22,006 33,622 21,233 29,285 106,146 Long-term debt obligations — — 29,982 — 29,982 Total $ 76,263 $ 59,226 $ 73,215 $ 73,285 $ 281,989 (1) Consists primarily of inventory purchase obligations and service contracts.
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.
The Company expects to achieve these goals primarily through streamlining manufacturing and production operations, reducing promotional activity and optimizing the breadth and depth of markdowns, and enhancing efficiencies within store operations, corporate overhead and third-party spend. 24 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 stores as a combined single direct-to-consumer channel of distribution.
Given the evolving tariff policies, we are in the process of re-evaluating our goals under the Transformation Program as we expect to leverage the program infrastructure to help mitigate the potential impact from tariffs. 24 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 stores as a combined single direct-to-consumer channel of distribution.
Our Vince Direct-to-consumer segment had income from operations of $5,774 in fiscal 2023 compared to income from operations of $2,397 in fiscal 2022. The change was primarily driven by an improved gross margin, which was unfavorably impacted by royalty expenses associated with the License Agreement with ABG Vince.
Our Vince Direct-to-consumer segment had income from operations of $2,970 in fiscal 2024 compared to income from operations of $5,774 in fiscal 2023.
This determination can be made on an asset by asset basis, and an entity may resume performing a qualitative assessment in subsequent periods. During the second quarter of fiscal 2022, the Company determined that a triggering event had occurred in the Rebecca Taylor and Parker segment as a result of changes to the Company's long-term projections.
An entity may pass on performing the qualitative assessment for a reporting unit and directly perform the quantitative assessment. This determination can be made on an asset by asset basis, and an entity may resume performing a qualitative assessment in subsequent periods. In both fiscal 2024 and fiscal 2023, the Company performed its annual impairment test during the fourth quarter.
In fiscal 2023, the Company elected to perform a quantitative impairment test on goodwill allocated to the Company’s Vince Wholesale reporting unit. The results of the quantitative test did not result in any impairment because the fair value of the Company’s Vince Wholesale reporting unit exceeded its carrying value by 7.9%.
The charge was recorded within Impairment of goodwill on the Consolidated Statements of Operations and Comprehensive Income (Loss) during the fourth quarter of fiscal 2024. 35 In fiscal 2023, the Company elected to perform a quantitative impairment test on goodwill allocated to the Company’s Vince Wholesale reporting unit.
As of February 3, 2024, the Company was in compliance with applicable covenants. As of February 3, 2024, $35,473 was available under the 2023 Revolving Credit Facility, net of the Loan Cap, and there were $14,227 of borrowings outstanding and $5,053 of letters of credit outstanding under the 2023 Revolving Credit Facility.
As of February 1, 2025, $39,820 was available under the 2023 Revolving Credit Facility, net of the Loan Cap, and there were $11,413 of borrowings outstanding and $6,215 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 February 1, 2025 was 7.0%.
Vince Wholesale Twelve Months Ended (in thousands) February 3, 2024 January 28, 2023 $ Change Net sales $ 149,603 $ 169,375 $ (19,772 ) Income from operations 43,416 43,592 (176 ) Net sales from our Vince Wholesale segment decreased $19,772, or 11.7%, to $149,603 in fiscal 2023 from $169,375 in fiscal 2022, due primarily to lower off-price and international shipments, in addition to the reduction of licensing revenue due to the sale and transfer of our intellectual property assets under the Asset Sale.
Vince Wholesale Twelve Months Ended (in thousands) February 1, 2025 February 3, 2024 $ Change Net sales $ 165,349 $ 149,603 $ 15,746 Income from operations 57,905 43,416 14,489 27 Net sales from our Vince Wholesale segment increased $15,746, or 10.5%, to $165,349 in fiscal 2024 from $149,603 in fiscal 2023, due primarily to higher full-price shipments.
See Note 2 "Recent Transactions" to the Consolidated Financial Statements in this Annual Report for further information. Tax Receivable Agreement In connection with the consummation of the IPO, we entered into a Tax Receivable Agreement with the Pre-IPO Stockholders.
See Note 2 "Recent Transactions" within the notes to the Consolidated Financial Statements in this Annual Report for further information. Parker, founded in 2008 in New York City, was a contemporary women's fashion brand that was trend focused.
The fair value of the Company's Vince Wholesale reporting unit was estimated using a combination of the income approach (the discounted cash flows method) and the market approach (guideline public company method).
The estimated fair value of the Company implied by the P180 Acquisition was allocated to the Company’s reporting units, Vince Wholesale and Vince Direct-to-consumer, using a market-based approach, considering the relative contributions of each reporting unit to the Company as well as appropriate valuation multiples for each reporting unit relative to the implied P180 Acquisition multiple.
Income from operations from our Vince Wholesale segment decreased $176, or 0.4%, to $43,416 in fiscal 2023 from $43,592 in fiscal 2022 primarily due to lower net sales that were partially offset by an improved gross margin, which was unfavorably impacted by royalty expenses associated with the License Agreement with ABG Vince. 27 Vince Direct-to-consumer Twelve Months Ended (in thousands) February 3, 2024 January 28, 2023 $ Change Net sales $ 143,096 $ 149,770 $ (6,674 ) Income from operations 5,774 2,397 3,377 Net sales from our Vince Direct-to-consumer segment decreased $6,674, or 4.5%, to $143,096 in fiscal 2023 from $149,770 in fiscal 2022.
Vince Direct-to-consumer Twelve Months Ended (in thousands) February 1, 2025 February 3, 2024 $ Change Net sales $ 128,103 $ 143,096 $ (14,993 ) Income from operations 2,970 5,774 (2,804 ) Net sales from our Vince Direct-to-consumer segment decreased $14,993, or 10.5%, to $128,103 in fiscal 2024 from $143,096 in fiscal 2023.
As a percentage of sales, gross margin was 45.5%, compared with 38.6% in the prior year.
The change was partly offset by the effect of the 53rd week in the prior comparative period. Gross profit increased $11,887, or 8.9%, to $145,179 in fiscal 2024 from $133,292 in fiscal 2023. As a percentage of sales, gross margin was 49.5%, compared with 45.5% in the prior year.
Removed
As of February 3, 2024, we operate 48 full-price retail stores, 15 outlet stores, the e-commerce site, vince.com , and the subscription service Vince Unfold, vinceunfold.com . Vince is also available through premium wholesale channels globally.
Added
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.
Removed
See Note 2 "Recent Transactions" to the Consolidated Financial Statements in this Annual Report for additional information. The Rebecca Taylor collection was previously available through retail stores and outlet stores, through its branded e-commerce site and through its subscription service Rebecca Taylor RNTD, as well as through major department and specialty stores in the U.S. and in select international markets.
Added
Vince is also available through premium wholesale channels globally.
Removed
All Rebecca Taylor retail and outlet stores operated by the Company were closed as of January 28, 2023 and the ecommerce site operated by the Company ceased in December 2022. Parker, founded in 2008 in New York City, was a contemporary women's fashion brand that was trend focused.
Added
See Note 2 "Recent Transactions" to the Consolidated Financial Statements in this Annual 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.
Removed
The reduction was primarily due to the wind down of Rebecca Taylor and higher off-price sales in the fourth quarter of fiscal 2022, partly offset by the effect of the 53rd week. Gross profit decreased $4,678, or 3.4%, to $133,292 in fiscal 2023 from $137,970 in fiscal 2022.
Added
As a result of the completion of the wind down and sale, and the determination by the CODM that Parker would not be considered in the Company’s future operating plans, Rebecca Taylor and Parker is no longer an operating segment of the Company.
Removed
Impairment of intangible assets for fiscal 2022 was $1,700 related to the impairment of the Rebecca Taylor tradename. See Note 3 "Goodwill and Intangible Assets" to the Consolidated Financial Statements in this Annual Report for further information.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeITEM 7A. QUANTITATIVE AND QUALITATIVE DISCL OSURES 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 8. FINANCIAL STATEMENT S AND SUPPLEMENTARY DATA.
Biggest changeITEM 7A. QUANTITATIVE AND QUALITATIVE DISCL OSURES 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. 36 ITEM 8. FINANCIAL STATEMENT S AND SUPPLEMENTARY DATA.

Other VNCE 10-K year-over-year comparisons