Luxury apparel group Vince Holding saw its net sales decline but swung to a net income in the second quarter of FY23, largely attributed to the gain from the sale of its intellectual property brand to Authentic Brands Group.
Vince Holding’s net sales fell 22.1 per cent to $69.4 million. This reflects a 14.3 per cent decline in Vince brand sales and a 98.7 per cent decrease in Rebecca Taylor and Parker segment sales combined due to the wind down of the Rebecca Taylor business.
The wholesale segment sales plunged 22 per cent to $36.4 million, while direct-to-consumer segment sales tumbled 3.7 per cent to $32.9 million.
The company swung to a net income of $29.5 million from a net loss last year. Excluding the gain from the IP sale and transaction expenses, the company’s adjusted net loss was at $0.5 million.
Vince previously announced it would sell its IP to Authentic Brand Group’s newly formed subsidiary ABG Vince, where the struggling retailer would receive $76.5 million in cash and a 25 per cent stake in the subsidiary.
Gross profit during the quarter to July 29 slid to $32.3 million, representing 46.6 per cent of net sales. The company said that the higher net margin rate was due to lower freight costs, favorable year-over-year adjustments to inventory reserves, and about 120 basis points related to the wind down of the Rebecca Taylor business, which historically had low overall gross margin.
