The team at Vince Holding wasted no time getting its high-end
contemporary fashion brand all glammed up with new products and
categories after hitting the Wall Street runway late last
Vince is a premium clothing brand known for its collection of
everyday luxury essentials for women -- from slouchy cashmere
sweaters and understated leather jackets for colder temperatures
to flowy silk blouses and linen pants for the warm seasons.
Since going public in November,Vince (
) has woven a new pattern for growth, which includes expanding
its product offerings into new categories such as handbags. The
idea is to evolve into a lifestyle brand and strengthen its
position with the company's wholesale partners, including upscale
department stores such as Neiman Marcus,Nordstrom (
) and Saks Fifth Avenue (owned by Canada'sHudson's Bay (HBC), as
well as its own namesake retail stores.
Men And Children Next
In addition to women's clothing, which accounts for about 85%
of sales, Vince offers women's footwear through a licensing
arrangement and is about to launch men's footwear with the same
licensing partner,Brown Shoe (
). The line will come out in July, according to WWD.com.
Vince also plans to launch children's apparel through a
licensing partner in this year's second half. Early next year,
the company plans to launch a handbag collection and other
"This is a company that starts with a very distinct point of
view in apparel, which today makes up the majority of its
business," said Piper Jaffray analyst Erinn Murphy.
"It's taking that everyday luxury aesthetic and pushing it
into different categories," she said. "The biggest opportunity is
their next big launch of handbags and accessories in early
The move into handbags and accessories would put Vince in a
market between players like "jet-set" lifestyle brandMichael Kors
) and traditional European luxury players such as Celine and
Louis Vuitton, Murphy adds.
Murphy says that Vince is positioned to fare well in this
category. It's a premium brand that's priced closer to luxury
than so-called "accessible luxury," she says, with sweaters from
around $225 to $400, leather jackets at $995 and tops from $100
"What's unique about its positioning is it's taking what we
believe is white space in the handbag market," said Murphy.
She expects Vince's handbags to be priced between $700 to
$1,000 in department stores, which she says would be a "sweet
There are few brands around that price point, she says, which
means Vince could capture not only the "trade-up consumer but the
That price would compare with handbags priced at around $300
to $400, where there are many competitors -- such as Michael
), Tory Burch andKate Spade (KATE).
Sweet Spot In Pricing
The luxury end of the market is priced between $1,200 and
As Vince extends into accessories, it has a "good opportunity"
in that space, Murphy adds.
"It already has a captive audience in the premium wholesale
market domestically because of how well it's performing in
women's apparel," she said.
Murphy says that Vince prevails as the No. 1 contemporary
apparel brand in Nordstrom, Saks and Neiman Marcus.
Vince has been faring handsomely on the financial front with
its current lineup of products. In its fourth quarter ended Feb.
1, its first as a public company, earnings grew 15% to 23 cents a
share. Sales grew 21% to $87.8 million.
Analysts surveyed by Thomson Reuters expect earnings to rise
21% to 88 cents a share in 2015. They see a 30% gain in 2016 and
a 13% increase in 2017.
Prior to the IPO and related restructuring transactions, Vince
Holding was a diversified apparel company operating a broad
portfolio of fashion brands, including Vince. As a result of the
IPO and the related restructuring transaction, the non-Vince
businesses were separated out, and Vince became the sole
operating business of Vince Holding.
Management is eying several growth drivers for the company in
addition to expansion into new product categories.
Covering New Territory
As of March 27, Vince had 28 stores in the U.S., 22 of which
are full-price stores and six of which are outlet stores. It's on
track to open six to eight new stores in the 2014 fiscal year,
with a "strong pipeline for 2015 and beyond," said CEO Jill
Granoff on the fourth-quarter conference call.
Murphy estimates that Vince could grow its retail-store base
domestically to 100 over time.
As of Feb. 1, Vince products were sold to consumers via about
2,300 points of distribution through its wholesale partners.
Vince's U.S. wholesale business represented 71% of sales in
fiscal 2013, and international wholesale represented 8%.
In fiscal 2013, Vince opened 90 new shop-in-shops globally in
the wholesale channel, and it expects to open more.
"Given the success" of its shop-in-shop investments last year,
it's planning to open an additional 15 to 25 domestic shops in
fiscal 2014, to bring the total at the end of fiscal year to 26
to 36 domestic shops, Granoff said on the call.
On the product front, the company is looking to expand its
existing categories with an "increased focus" on outerwear and
dresses, said Granoff. It's also planning to launch an "elevated"
product assortment in its men's business in the fall.
Vince is also pursuing international expansion, which includes
opening free-standing stores.
The company recently opened its second Vince store in
Istanbul, Turkey, with its distribution partner. Vince is also
actively looking to lease its first international showroom in
Paris to further build the brand's European business, Granoff
William Blair & Co. analyst Amy Noblin called Vince a
"rapidly growing accessible-luxury brand" in her initiation
report on the company.
She said it's "well positioned" to capitalize on three trends
including the "growth in the number of and wealth of global
luxury consumers; a designer customer that is trading down; and
consumers increasingly cross-shopping and mixing higher- and
Noblin says the Vince brand has developed a "cult following"
for its everyday luxury essential products.
"The brand differentiates itself through a clean, modern and
somewhat timeless aesthetic that is comfortable and effortless,"