MANUFACTURING
Vince Shows Softness in Second-Quarter Sales
Vince, the contemporary womenswear company born in Los Angeles and now headquartered in New York, reported some disappointing financial results for its second quarter.
Net sales for the quarter ending Aug. 1 declined 10.4 percent to $80 million from $89.3 million during the same period last year. Wholesale sales dropped 21.6 percent to $58.3 million while direct-to-consumer sales through the company’s 42 Vince stores and its online site jumped 44.7 percent to $21.7 million.
On a positive note, Vince’s same-store sales were up 13.4 percent, including e-commerce.
With such a sharp drop-off in sales, the high-end clothing company had a $5 million net loss for the second quarter compared with a net income of $10.5 million last year.
The company’s financial results were announced days after Jill Granoff, the chief executive officer when the company went public, left Vince. She was replaced by interim Chief Executive Officer Mark Brody.
Brody said the second-quarter financial results showed a major weakness in the company’s wholesale sales with lower-than-expected sell-through and customer reorders. That in turn led to a significant increase in inventory levels. “As a result, we elected to write down current year product to estimated net realizable value. In addition, our off-price customers reported high levels of inventory. In order for us to move forward with our strategy to reduce sales to off-price retailers and to enhance our brand positioning, we made the decision to dispose of the vast majority of prior-year product,” he said.
Brody said the company is working to enhance its product assortment and improve its operational performance with tighter inventories and procurement practices.
