Rent concessions played a significant role in contributing to Vince Holding Corp’s earnings of $5.0 million in the third quarter of 2020. Despite a decrease in sales, the New York-based fashion group was able to leverage rent abatements, deferrals, and reductions to offset declines and manage expenses effectively.
In the midst of a challenging retail landscape due to the Covid-19 pandemic, Vince reported a 34.0% decrease in net sales for the third quarter, totaling $69.0 million compared to the previous year. The flagship Vince brand experienced a 28.7% decline in net sales, with a substantial decrease in wholesale revenue and direct-to-consumer sales. Acquired businesses, Rebecca Taylor and Parker, also saw a significant decline in sales.
Thanks to negotiations with landlords, Vince secured rent concessions that provided a benefit of $4.2 million for the company during the quarter. In addition, the company successfully reduced selling, general, and administrative expenses, contributing to its overall earnings. Interim CEO and CFO, David Stefko, highlighted the sequential improvement in sales trends and operating profit achieved through cost management strategies.
Looking ahead, Vince remains confident in its position as a strong brand in the contemporary luxury segment, with continued demand for its comfort casual luxury products. The company has taken steps to strengthen its financial position, including closing a third lien credit facility post the third quarter to ensure liquidity and financial flexibility. However, due to ongoing uncertainty related to the pandemic, Vince has chosen not to provide financial guidance for the upcoming quarter or fiscal year.
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