Vince Holding Corp. is closing the contemporary label Rebecca Taylor to focus on its core line.
“Given the increased headwinds from the range of macroeconomic and pandemic related issues in the industry that Rebecca Taylor in particular has faced over the past two years, we have made the difficult decision to exit our Rebecca Taylor business,” Vince CEO Jack Schwefel said. “The closure of Rebecca Taylor will allow the company to focus on Vince’s core businesses and our overall financial foundation for the long-term.”
The company’s second quarter earnings report showed that Vince’s net sales rose 20.5 percent while Rebecca Taylor and Parker’s dropped 27.9 percent. The company is talking to lenders to finalize the wind-down details for Rebecca Taylor, including selling the assets and exiting the business channels it operates in. Dana Telsey, chief investment officer of Telsey Advisory Group, said in a research note that she expects the wind-down process to take several months.
Vince is owned by Boca Raton, Fla.-based private equity firm Sun Capital Partners, which in February 2008 acquired the apparel and textiles firm Kellwood Co. in a deal valued at $762 million. Kellwood already had Vince under its umbrella, having acquired the brand in 2006. Kellwood bought Rebecca Taylor in January 2011 and purchased Parker in July 2014. Sun Capital in November 2013 spun off a portion of Vince via an initial public offering that raised $200 million.
Rebecca Taylor the designer left her namesake brand in August 2019. And in November 2019, Vince acquired Rebecca Taylor and Parker from Sun Capital for $19.7 million, at the time adding $84 million in sales. Vince, Rebecca Taylor and Parker at the time shared the same contemporary market, but at different price points. The goal was to create operational synergies across the three businesses and have the Vince team build the direct-to-consumer component of the acquired labels.
While Vince’s overall net sales rose 13.4 percent to $89.2 million from $78.7 million a year ago, it also significantly widened its net loss to $15 million, or $1.23 a share, for the three-month period, versus a net loss of $590,000, or 5 cents, a year ago. Drilling down further, the loss from operations was $5.2 million versus net income a year ago of $2.6 million. Vince said the loss from operations includes a $1.7 million impairment charge associated with the Rebecca Taylor trade name, and a $900,000 impairment charge connected with property and equipment of certain Rebecca Taylor stores. The company ended the quarter with 18 company-operated Rebecca Taylor doors.
“During the second quarter we saw momentum in Vince across both our women’s and men’s businesses as customers have returned to more normalized activities and events and are gravitating to the versatility of our sophisticated high-quality assortment,” Schwefel said. “While we are operating in a challenging macro environment with increased pressure on profitability, we remain focused on executing against our strategic initiatives for Vince, including the upcoming relaunch of the brand’s e-commerce platform.”