VNCE - Earnings call transcript Q2 2020

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to Vince Holding Corp. Q2 2020 Earnings Conference Call. [Operator Instructions]. I would now like to hand the conference over to Amy Levy, Vice President, FD&A and Investor Relations. Thank you. ahead. go Please

Amy Levy

and good Second and the Welcome Vince Executive to today Thank Fiscal afternoon, XXXX Corp.'s Officer Chief interim Quarter Dave Hosting Financial Results Holding Officer. is you, Stefko, everyone. Chief Conference call Call.

remind begin, uncertainties which those statements statements, the update made permits. call not that we described actual from and take to subject Those assume will any long the the risks call. information call Before on undertakes prepared time. company company's that the which that you constitute the at website. results as could differ this as cause may operative certain time today's in company press that during expects. later discussed me management let to a and are on made available forward-looking available Investors are the on will and filings, be uncertainties risks remain And to your After release company's SEC to the remarks, for obligation should questions the statements no are

the Dave. over to I'll turn Now call

David Stefko

afternoon, our Good Amy. role to interim joining the thanks we stepping and am very you, Thank excited us today. be as CEO of path into for forward. continue I everyone,

of years, front the us brand, we rejuvenated for and closely Vince Over the five I in with both past Rebecca Vince the about I worked have [indiscernible] Taylor. opportunities as remain and excited

including maximizing remains cash controlling set the place to individuals priority sales, through highly the of across protecting We remain Near have talented team liquidity. to expenses, and by challenges that presented business brands. our term, for working in have advance COVID-XX, the committed a business driving strategies navigate we both our to together

At the unpredictable prepare we as reopened. the on as changes and quarter, start customer purchasing of behavior. we reduced orders buying from momentum back to of for Looking purchase the merchandise as crisis, consumers shifted initial stores results the e-commerce the saw slow to pandemic expected, rebuild in second

to maintained inventory, our pressured We margin. markdown quarter gross move seasonal activity throughout the also above which and promotional normal cadence

We through disciplined will expense protect cash continued financial shortly. salary marketing to I carefully manage speak reductions cost to investments results lower and our and management. furloughs,

elegant In reprioritized business the adapt to unprecedented fit to been knit the for for changing a to that able support direct In Vince, reduced environment. for our at strategies majority stores hours business we have are business, Despite reopened have the styles. staffing well the these well of with respond our comfort, and with the In sweaters we for casual market growth certain for well Vince epitome events classifications, Looking our partners to space to pre-COVID chase effortless future. across of our while casual to lower our desire lifestyle. traffic luxury levels, fewer on luxury to demand have in share the wholesale, brand have the we been and driving up with combined rebuild focusing our business. a relative within for other strong working performance to and the gains continued with that believe and clear There is wholesale closely the which us momentum unfolded, Vince stay-at-home contemporary e-commerce categories we're the appetite aesthetic momentum set brand. customers' our that continues has suited

to on luxury based chase casual and emphasize continue replenishment product customer leverage to continuing are we capabilities demand. to will our fall, For

saw sell-throughs. wholesale as feedback well believe ever men's an contemporary We in luxury believe demonstrated gives steady based we and is was space a extended as be luxury women's partners. at share saw as top-performing for the anniversary are We appetite sizes growth at brand an market competitive advantage this volume with that Vince underserved of end wholesale We this we casual is brands we vince.com our a as within us opportunity, will our the partners. from best untapped an market, and see also as the XX% and on on vince.com launching distinct contemporary there the our September. by sale gains Nordstrom over August for

it are We these results send signal the about excited our to Nordstrom. brand as demand for relates at

expanded another opportunity well this customer also base share events, are with aligns that as given for bloomingdales.com locations. as demographics. how collection our indoors to the represents launch presence We at excited on great we fall, partnership our our of select their with brands wholesale Bloomingdale's

e-commerce that potential with brick-and-mortar partnerships appropriate. brand We both sites will evaluate are to and continue

stay-at-home will continued with efforts our marketing Our lifestyle. a offering the support emphasis on

We allows we us will of walk Influencer distancing which adhering in a currently digital service, remain test to events, including a to collection as seek an of social through guidelines. component while virtual strategy following. host our product a collaborations that stores large important marketing have showcase new partners

partners marketing. personalized increase through reach wholesale to We product also with will our our work and

be the a will in focus home, or our during season. small holiday, as or around the on host to plan holiday we For gatherings lifestyle attend

for promotional factoring we expectation the for in strategy brand right are a highly and our the the holiday environment. messaging, plan season, we promotional evaluating As balance of

pre-pandemic and are On with our specialty several the includes over which international progress. partners The XXX has accounts. regional showing momentum fostered front, great we in encouraging partners, business also our relationship

Asia, sales desire we're in to Similarly department our pleased stores. their reopen. excited signs are we Europe, to In Mainland as stores London, we of and product the in as see seeing continued In Korea. early see volume. they improving are with reopen store we're encouraged China recovery have trends to We

place in store efforts in have by small also events. and store sales to hosting London virtual our to drive traffic We

including to branding media London-based post continue partnerships paid build We and events. social influencer, with

accelerated better in enable us inventory of now same on to time, efficiencies will single and consolidation we shopping. reduced This location, access warehouse inventory demand quarter, systematically the focused By high second to e-commerce capitalize SKUs, a the multiple initiatives. greater e-commerce our the have advancement to creating in During on the inventory a at cost. increased our shift by we into our combining

Our important channel to drive retail brand remain stores also awareness. in with customers person to an connect and

both advantage to premier opportunistic full and disruption take may for stores relocations that of available strategically outlet landscape. the will We retail in due the become price

Our Vince low expansion lease highly remain terms Rebecca both Taylor. short-term and for selective agreements in investment and of will location store

to Turning Rebecca Taylor.

an prints. We essence are enabling through will pleased sale. the romantic to wholesale have as with products our success new partners the offer delicate see back reposition already wear greater in relaunch enthusiasm Nordstrom's at aesthetic embroideries routes, and home brand our to the tops use Taylor, its regarding line the among our feminine embodies increase we and both dresses The [indiscernible] with versatility, anniversary outlet shown as these customers drove Multiple Rebecca trends. or customers, to

now years. X singular will sub-brands eliminated as past consist that Our brand for message the the strong Rebecca Taylor had we over Rebecca few of voice morphed Taylor into

the completed execute X is we forward continue to We Taylor collection year, be track systems relaunch of expect plan greater-than-anticipated the Rebecca we cost and addition, into Vince for Vince's the for of to savings. on end In brand. believe can successfully to before spring the and our the the look playbook integration to achieve XXXX

the to Rebecca results. company Vince net XXXX. quarter reflects fiscal closure $XX Total second in the This to sales $XX.X quarter XX.X% financial and million Turning partner million orders decreased of the more the of following compared XX to our for our This of as offset temporary well March wholesale was in a by business. XX% increase Vince as reduction stores doors. of in as e-commerce than closure Taylor partially a all

million to net to For consolidated $XX.X compared the $XX.X million period. year XX.X% Vince decreased brand, in sales second same prior quarter the

the in our strong segment $XX.X partially e-commerce Vince previously business. in quarter, Our reduced the sales closures and the by direct-to-consumer and decreased and million store levels second reopen stores, XX.X% mentioned traffic growth reflecting to offset

sites the second Rebecca same continued Parker Vince the branded doors. channel our year. our to the decreased on business, as of sales our online net Similar compared due million and were cancellation wholesale the closure brand. a result $X.X of $XX.X performance product strong the well period sites Our partners, to last partner Taylor website of sales both wholesale order XX.X% wholesale quarter. XX.X% to as performance in Vince on as e-commerce the sales as in to accelerated to of delay strength decreased direct The illustrates e-commerce Vince in receipts million combined of partner of the

chain promotional to compares by or noncash reserves, the asset intangible of charges, to of second XX% quarter in This goodwill of increased sales. deleveraging XX% $XX.X for costs, impact activity, offset asset the As last quarter's and on were and Parker the adjustments on we mix excluding business product general we lower year. net resources in allowances. gross lift now asset compared post year-over-year Selling, focus the primarily other impairment mentioned sales margin Taylor channel to $XX.X partially the net and profit of our rate quarter COVID million sales administrative second last million for inventory call, and to expenses, our in new supply to Rebecca The was net decrease XX.X% charges the the million sales quarter impairment sales year. for in have XX.X% Vince or the quarter as or the crisis. $XX.X Gross long-lived development brands of or $XX.X of intangible finite last was of due million of paused operations net second or of

pandemic, in reduce as to we the result million the lower same to as onset SG&A charges. the of second and on included million dollars loss loss quarter $XX.X taken million. $XX of decrease expenses. expense a last by a noncash compared impairment compensation the result costs a million our store amortization and asset costs payroll This the as decreased of a quarter and lower of in reduced Operating due for As spending the was marketing, other in impairments, period was of COVID $XX.X depreciation first which COVID-XX to year, taken $XX.X streamlining at result of primarily actions well

totaled balance revolving Moving million. with to agreements availability $XX our ended Borrowings under million facility. sheet. quarter $XX.X our the We debt credit of the under

steps crisis. to adequate effectively and financial our continue through believe We to operate take we liquidity manage and maintain the to business have our flexibility, funds

to continue flow. with suppliers and on work are our managing inventory terms payment We extending

landlords, In nearly negotiations with addition, in we we are pleased with complete. progress which are the our are making our

of the was Net to of inventory. at at the second second year. quarter the million the inventory end to as million quarter last compared Moving $XX.X end $XX.X

the of mentioned seasonal second remainder product unable through we temporary last As order move in to cancellations portion to excess in over We inventory inventory to due of relevant are and that saw a activities. receive pandemic the normalized increase time. in get the assortment Further, we in this we carryover. partners the inventory an store expecting in plan Therefore, and seasons, comfortable at we back levels promotional through to quarter, believe and our to move Overall, cancel. remain to addition we we off-price strategy with excess of merchandise through outlet of channel the shipments more and onset quarter. channel that closures, levels future believe wholesale and will are we're our therefore, the

our COVID the brand the of release the a impact the afternoon this not fashion As clear individuals believe be the position events due and for resiliency the guidance have lie the we pandemic press conclusion, COVID-XX, to We stated this and dedicated further opportunities and in future who to vision have Vince and published contemporary in this space post-COVID. to luxury of of expand will opportunities ahead. In to Rebecca a of time. positioning support take related that we the Taylor great at advantage team leaders our uncertainty the leading first during foremost, ability providing in market-leading

the playbook. In Vince Rebecca recovery addition, and believe to growth Taylor replicate is we poised

This comments a currently sustainable brands environment, our confident our is lot regarding second shareholders. we of for are surrounding well to my retail there growth deliver quarter. our Although the portfolio remain positioned uncertainty of that long-term concludes

now questions. take will We your Operator?

Operator

Instructions]. [Operator

Our is Advisory from question first Telsey with Group. Telsey Dana

Dana Telsey

of business hold the of it? levels would season think as throughout seasons? the about balance Dave, year? you you're quarter, future expand maybe seen with? be at, looking And many how wholesale the being I've to you of how that spring pack be inventory you And of looking And and the inventory there partners stores that are progressing How how also, the other the Bloomingdale's end see promotions second do in? do the then at you're you or for same? the partnership much much will of the see now impacting level that How

David Stefko

do spring, From Okay. believe cutbacks seasons. stores Dana. that marketplace. an we summer Thanks, had it well. of doing in has the pre-fall exposure of the We a and the Hope seasonal the from because not the the inventory in a perspective, you're comes the inventory increase the inventory, lot obviously, set department in is product,

degree applicable we'll fall into year. next development viewed to are production be we're those some our items so And And some to seasons. to -- would move newness the and that reduce as able be of in fall that there some season

level, that. through that we from see So ability work our to

we be a are them patterns And week in now we've started deserve for were the last As up those an and And believe anniversary as dollars. product to seeing. how partners, our for into performance get share dollars. as Rebecca with we've obviously, from able, been doing market our brand, that opening probably their been Taylor, Vince a to back just perspective, through the the get our more buying spring this and for fair pre-spring to are we ordering we proven Nordstrom of week they've for match that order closely that managing we they open-to-buy instance, line, the wholesale event, of will our e-com their in inventories you we

that's we're overtime, we that we So comfortable can work inventory believe, these through levels. why

we Dales, well. in by promotionality the going It's bloomingdales.com Bloomingdale's, more launched select marketplace don't We see Everything needs Blooming in as any change driven few so on just is the in how the responding. far stores. a in new. we're and consumer is the because As

with far. the relationship comfortable very dose we're So booming so

distribution do is have in are key in capabilities everyone. ship we're question, of Dales at far for drop we establishing other partners, the getting this your partners. the process to And on And to and to Blooming comment with We also. a last environment wholesale process as them. on other that mean drop of with Drop we're driver in as I partners, other ship a open

the also our they environment, time, at but the just Vince wholesale how how sit would will, they We at partners. look that brand, impact existing not

and So the the environment that. current consider anyone customers of we on would would expand with, we impact

Dana Telsey

that And far, sales the own reopened first the so in is sales wholesale how your How like? partner the the was, recapture are an acceleration much sites? And looking XX% that of quarter. obviously, that your doing from stores sight? increase you've is on in What that increase How you much XX% of e-commerce rate? is

David Stefko

the vince.com. Well, just XX% I referenced is

site. So that's our own

was store through ship. greater drop that percentage with business we Nordstrom anniversary perspective, stores, even the as anemic sale, traffic, obviously, So a and of at come e-commerce From best. a open

last We we weeks. the seen double more what before. than is seeing our stores conversion traffic have Conversion improvements more in getting are and over But seeing are below XX% to X down the was And we week-over-week X conversion. level.

person looking So buyer shop to obviously, a the and coming spend. is is to

and are we expect the to So good, trends the continue. trends

Dana Telsey

update balance an on balance And how reserves of there? on the it. also you're of and any update you Got the can any the the adjustments thinking give now? sheet And inventory health and sheet

David Stefko

ability move our now, Yes. evaluating through to we're I mean, business every like seasons.

all the into didn't channel, older to off-price COVID, we as As we which inventory to you had sell know, move. entered

time again that the at -- fall. cycle, So everything in we're so will

increased most. inventory have we reserves So like

and as adequate balance we far As sheet believe the have availability. we goes, liquidity

this case, together. also daily have our inventory We that we've with to everybody work with with continue through that landlords basis vendors, We're very we inflow. get the on with in our our to work understanding done a and pleased

how our we're a have We we diligent are managing great day-to-day. And very banks. relationship with spending on our

and manage continue continue all so them. levers be to And to available those to us, we

that hope question. your So answers

Dana Telsey

planning you're and perspective And on holiday? how holiday

David Stefko

the is understand world pressure -- holiday. a UPS maybe from to to all May, points Fedexes going Well, be so and perspective. going to we of one of the delivery there's look Like the we be

sooner. at plans, through many too. with are partners we shop earlier us, is will make So discussions would so from holiday promotional going we our early be to holiday this expectations and to we start need can that that a own more we consumer are we're can looking working and them, we season. do like service I to expect and to the our mean sure And have their plans around entice wholesale having we're

Dana Telsey

just sizes, then does thinking And how to add that marketing spend, And you're does events marketing forward? How the much inventory? doing. that of additional spend going given lastly, you're the

David Stefko

marketing the perspective, of is See, all a driving almost marketing to e-commerce being business. not majority, spend spend from support our used

And so that's it. measurable. We can results see from

so And we're type general an managing there, and liquidity a investment that committing other marketing. our perspective perspective. dollars of We're from

spent. own believe should spending launch an on vince.com. site, we and targeting we're be extended So point where size it our the of dollars it's e-commerce view, From a

it not So a investment. is large

on want look share partners. so will to read wholesale that. into then investments we further a our results the and get And And and this beyond season, see distribution we'll as first we spring as we make with the it, that with we

Operator

conclude does the This Q&A period.

call the for back remarks. Dave over turn to I'll Now any closing

David Stefko

you. Thank Okay.

So this you concludes third updating today's in December. Please you. and call forward earnings to look call. thank safe, on We everyone, our stay early quarter

Operator

concludes you and may and this for Ladies conference now Thank your disconnect. participation, gentlemen, call. today's you

Vince Holding (VNCE) 14 Sep 202020 Q2 Earnings call transcript