The transformation programme is focused on improving the Vince Holdings' gross margins and driving cost efficiencies through:
- streamlining manufacturing and production operations;
- reducing promotional activity and optimising breadth and depth of markdowns; and
- enhancing efficiencies within store operations, corporate overhead and third-party spend.
Vince explains the transformation efforts are expected to generate over $30m in savings over the next three years. The efforts will be led by the chief transformation and information officer, Heather Wilberger.
Jack Schwefel, chief executive officer of Vince, believes that following a thorough review of the business and cost structure, Vince has identified opportunities to further streamline the organisation and drive efficiencies across operations.
Schwefel said: "This year has been a year of significant change for our organisation as we continue to position Vince for long-term success. Our transaction with Authentic Brands Group provided increased financial flexibility as we fortified our balance sheet, and resulted in increased royalty expenses which we plan to offset with our transformation program. We believe the transformative actions we are implementing along with our enhanced focus on our strategic growth initiatives position us well to deliver sustainable, profitable growth and drive value for all of our stakeholders."
Vince preliminary Q3 2023 results
In addition to this, Vince shared its preliminary results for the third quarter (Q3) 2023 ended 28 October. The company preliminarily expects to deliver the following:
- Net sales of $81m to $83m reflecting sequential improvement compared to the second quarter 2023;
- Gross margin expansion compared to the third quarter 2022 driven by increased full price selling, lower promotional activity and lower freight expense offsetting royalty fees incurred; and
- Income from operations of $0m to $2m, inclusive of approximately $4m in royalty fees that were not incurred in the prior-year period.
Schwefel points out that for the third quarter, Vince preliminarily expects to deliver sequential topline improvement compared to the second quarter across both direct-to-consumer and wholesale channels as customers responded well to its compelling fall product assortment.
He adds: "Despite expected lower year-over-year total net sales, we preliminarily expect to deliver year-over-year gross profit increase and gross margin expansion for the quarter driven in part by ongoing inventory management leading to increased full price selling and lower promotional activity."
Vince will be publishing its Q3 2023 performance in early December.
