Vince Holding Corp.

Ladies and gentlemen, thank you for standing by and welcome to VINCE Q1 2020 Preliminary Results Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during this session, you will need to press star 1 on your telephone. If you require any further assistance, please press star 0. I would now like to hand the conference over to Amy Lee, Vice President, Investor Relations. Thank you. Please go ahead.

Thank you, and good afternoon, everyone. Welcome to Vince Holding Corp.'s first quarter fiscal 2020 preliminary results conference call. Hosting the call today are Brendan Hoffman, Chief Executive Officer, and Dave Stefko, Chief Financial Officer. Before we begin, let me remind you that certain statements made on this call may constitute forward-looking statements which are subject to risks and uncertainties that could cause actual results to differ from those that the company expects. Those risks and uncertainties are described in today's press release and in the company's SEC filing, which are available on the company's website. Investors should not assume that statements made during the call will remain operative at a later time, and the company undertakes no obligation to update any information discussed on the call. The preliminary results discussed on today's call are subject to change following the completion of quarterly financial closing procedures. and do not include the non-cash impact of goodwill and intangible asset impairment charges, long-lived asset or other finite-lived intangible asset impairment charges, which are expected to have a material impact on the company's reported results. After the prepared remarks, management will be available to take your questions for as long as time permits. Now, I'll turn the call over to Brendan.

Thank you, Amy. Thanks for joining us today. I hope that everyone and their families remain healthy and safe. The world has changed dramatically over the last several months with the outbreak of the COVID-19 pandemic and the protests against racial inequality across our country. This is certainly a pivotal time in our history and we hope for a meaningful path to recovery and equality. Turning to our business, while we were pleased with the continued momentum in February, At the onset of the pandemic and subsequent temporary store closures, we had to respond quickly to the downturn in our business. I am extremely grateful to our teams for their hard work and commitment as we continue to operate our business through the COVID-19 health crisis. They have demonstrated resiliency, agility, and creativity when executing under pressure and with limited resources. While our priorities have been shifted towards actions necessary to manage our brand through the difficult environment, I am no less excited about the long-term opportunities for our business. The Vince brand has been steadily gaining market share over the last three years, illustrating its strong and growing following. And we are still in the early endings of our growth strategies. The brand has a distinct aesthetic of effortless luxury and provides comfortable essentials that align perfectly with a stay-at-home lifestyle. The versatility and effortless appeal plays well into the widely publicized trend towards comfort. Rebecca Taylor has its own modern luxury aesthetic where we see white space opportunity in the contemporary fashion landscape. We have become even more confident that we can create the success we've achieved at Vince by executing a similar strategic playbook. While we look forward to fully resuming our strategies for these brands, our near-term priorities have been focused on reducing costs and enhancing liquidity. We reduced costs primarily through furloughs and temporary salary reductions, and we began negotiations with our vendors and landlords regarding payment terms. We also amended both our revolving credit facility and term loan agreements, which temporarily increased availability under the revolver's borrowing base and deferred principal payments on our term loan. We were also able to relax covenants for both. Dave will provide more detail on our cost reduction and liquidity measures. In addition, Sun Capital, our controlling shareholder, committed up to $8 million if needed over the next 12 months. We remain appreciative of their ongoing support. We also redirected efforts towards Vince's e-commerce channel, which represented nearly 30% of our direct-to-consumer business in 2019, to serve and engage with our customers. We remained active in email, Instagram, and social media, providing content relevant to the current environment and fueling demands. Our marketing focused on continued customer engagement online. We shifted our tone across channels to speak to our community with a sense of awareness and concern and where possible to offer inspiration. The response has been enormously positive. After donating over 30,000 masks made in our partner factory to aid healthcare workers in COVID-19 relief, partnering directly with the hardest hit New York City and Los Angeles hospitals with the help of Million Mask Challenge, The announcement on Instagram received thousands of likes, one of our highest engagements post to date. We were able to build on that momentum, partnering with our community of vendors and creatives to donate items for the Vince Auction for Relief, raising more than $15,000 for Meals on Wheels and God's Love We Deliver. We've also taken this opportunity to build our brand identity through our community and interests. Our community of creatives and influencers are sharing their personal stories while sheltering in place, offering recipes, their favorite fitness activities, books, wellness rituals, gardening advice, and glimpses into how they're wearing Vince at home. These efforts helped to accelerate e-commerce growth for the first quarter from the increase we generated in fiscal 2019. At our wholesale partners, the online business for Vince was similarly robust. The band at Nordstrom.com was so strong and they did such a great job unlocking their store inventory to fulfill orders that they ended their first quarter virtually flat to the prior year and out-the-door omnichannel sales events. In addition to driving revenue, we were able to monetize a healthy portion of our online inventory. We did this at heightened promotional levels to ensure we were in a healthy inventory position in terms of both level and quality as we head into the fall season. While we expect the near-term environment to remain promotional, we remain committed to positioning Vince as a full-price brand and we'll work our way back to tailoring our message around newness and lifestyle, starting in the back half of the year. At Rebecca Taylor, the integration process is underway. With the leaner staff, the Vince team has stepped in to work with the existing team, which we believe will accelerate our path to success. Our strategic plan, which will follow a similar roadmap to that of Vince, is in progress and we continue to see excellent new growth opportunities given the strong brand recognition and the opportunity within the contemporary market that we anticipate post-COVID. Steven Katherin, who joined us in January as creative director for our acquired brands, has already begun to put his mark on the Rebecca Taylor brand aesthetic as we develop our path forward. Notably, we are excited to see the enthusiasm from our wholesale partners who recognize the brand equity of Rebecca Taylor how it could potentially fill a white space on the contemporary floor, and the knowledge of what we have been able to accomplish at Vince. While 2019 represented a challenging year for Rebecca Taylor, we remain confident that by instituting the Vince playbook, we can rejuvenate this brand in a similar fashion. Turning to Parker, while the integration plans have started, we have made the decision to pause the creation of new product for the business in order to preserve cash and narrow our focus as we navigate through the pandemic. We continue to believe that the brand complements our portfolio, but given the current environment, we decided that we need to narrow the focus of our resources. As we look forward, we are beginning to resume some of our brand strategies for VIMS by leveraging our talented team, operational capabilities, and infrastructure. We are embracing the work from home culture, which we are finding highly efficient and productive. That said, this will not fully replace the physical group setting that I believe is a critical part of the creative process. E-commerce continues to perform well with higher traffic and conversion. As we further develop our omnichannel capabilities, we see continued outsized growth from this channel. While the retail landscape is changing, stores remain an important part of our longer-term strategy under the proper structure and as a complement to our digital focus. We are taking a disciplined approach to reopening stores with 10 open as of today, three in Texas, One in Atlanta, one in Arizona, and five in Florida. We have additional stores planned to open later this week. As we reopen, we are following all state and local guidelines to ensure we do this in a safe and productive way. While still early, performance has exceeded our expectations. As part of our retail expansion plans, we are leveraging the market disruption by working with landlords to identify opportunities to obtain additional short-term Low Capax Leases with beneficial terms for both our Vince and Rebecca Taylor brands, especially as it allows us to get concessions to manage through the shutdown recovery period. In the wholesale business, while we expect to continue to drive growth through current partners, we are also looking to selectively broaden our brand footprint. Given the success we've had in regaining a market leadership position, building our way to premium positioning and extended floor space and partner doors, We are seeing increased demand for the Vince brand and will consider potential opportunities to further expand our wholesale presence. Our holiday market, where we showcase our collection to wholesale customers, took place virtually last week. The team did a remarkable job preparing a video to elegantly showcase the collections. The show was a success and the buyers were extremely complimentary of both the collections and our ability to bring them to life through the video presentations. This is a great example of the talent, creativity, and agility of our teams, even while working from home. Our subscription business, Vince Unfold, while impacted by the health crisis, held up better than expected and delivered substantial growth on a year-over-year basis. We have a great partnership with Castle, and I continue to believe the subscription business will be a part of the future industry landscape. We plan to extend this to our men's business when the time is right and remain excited about the potential. We have continued to skew our marketing investments towards digital through email, Instagram, and social media, and are pleased to see an uptick in return on spend. Our email campaigns are driving the strongest engagement, and as our list grows, we will increasingly leverage segmentation strategies to tailor messaging to customers based on purchasing behavior. As we look at our international business, in China, we continue to review our options, including e-commerce and stores. We will monitor the environment and our business to determine the right time to resume our expansion plans in this region. In Europe, prior to COVID, we were pleased with the performance of our first London store. We will monitor the environment and evaluate timing on resuming our expansion plans in Europe, as well as explore other countries where we've had strong interest in opening stores to leverage the Vince brand either directly or through partnerships. Capital expenditure projects, including our new point Our focus has continued on the integration of Rebecca Taylor and Parker, as well as on the merging our Vince warehouses to provide a fully integrated omnichannel experience. As we get further into bringing stores online, we will evaluate and restart expansion of our retail footprint. While we recognize that the recovery will take time, we are taking actions that we believe will enable us to emerge from this health crisis and resume our growth strategies with a disciplined and methodical approach. We believe that we are strategically well-positioned within the contemporary landscape to gain further market share given the momentum of our Vince brand, our brand aesthetic, and the resilience of our customer base. We will continue to leverage the strengths of the Vince team to drive forward the reset of Rebecca Taylor and longer-term Parker. We look forward to providing further updates as the situation evolves. Now I will turn it over to Dave to further review our financial results. Dave? Thank you, Brendan.