Vince Holding Corp.

Ladies and gentlemen, thank you for standing by and welcome to VINCE Q2 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session and instructions will follow at that time. If you require assistance during the conference, please press star zero on your touch-tone telephone. As a reminder, this conference call is being recorded. I would now like to turn the conference over to your host, Ms. Amy Levy, Vice President of Investor Relations. Please go ahead.

Thank you, and good afternoon, everyone. Welcome to Vince Holding Corp's second quarter fiscal 2021 results conference call. Hosting the call today is Jack Schwefel, 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 filings, 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. 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 Jack.

Great. Thank you, Amy. And thank you, everyone, for joining us this afternoon for a discussion on our second quarter performance. Overall, our results reflect a continued recovery of our business as we emerge from the COVID pandemic. We are pleased to see the momentum in our Vince brand approach pre-pandemic levels. This performance reflects the strength of our sophisticated, high-quality women's assortment and continued momentum in our men's business. At Rebecca Taylor, we are in the early stages of our brand turnaround and remain focused on driving key strategies. Turning to the performance of our Vince brand, we delivered strong direct-to-consumer revenue growth compared to fiscal 2019, offset by lower sales in our wholesale channel. We are seeing growing demand for the brand as we continue to deliver beautifully designed collections of high-quality fabrications that have fueled market share gains within the contemporary luxury category for the last four years. Our latest collections have shifted away from home and lounge themes with current emphasis on vacations and a casual wear-to-work aesthetic. We have seen strong response to versatile printed silk dresses that can be dressed up for events or paired with a stylish blazer for the office. We have also seen a pickup in bottoms in the versatile knit dresses as customers seek more away from home styling. In our direct-to-consumer business, the majority of our retail stores have reached pre-pandemic productivity levels. We continue to view stores as an important part of our strategy to build brand awareness and drive customer engagement. New store performance has been highly encouraging, particularly our East Hampton, New York store, which is a perfect location to showcase our sophisticated casual aesthetic. During the second quarter, we opened one full price store in South Park, North Carolina, and three out locations, all operating in lines with expectations. Since the end of the second quarter, we have opened Cherry Creek, Denver, and Roosevelt Field, New York, with strong early results. We continue to focus new store openings in highly favorable locations, all with the short-term renewable leases. In wholesale, while this channel remains challenged, our wholesale distribution enables us to broaden our consumer reach and will remain part of our longer-term distribution strategy. We are extremely pleased with the performance of both women's and men's at the annual Nordstrom Anniversary Sale. we will be launching a Vince crafted collection for Nordstrom and a family cashmere theme for the holidays. We have also been very pleased with the reception of our brand at Bloomingdale's and see opportunity to grow the relationship over time. As we look ahead, we remain confident that we will build this business back to pre pandemic levels. Given the strong consumer demand for the Vince brand in men's, we are exceedingly pleased with the momentum of our business. We are seeing strong response to our fashion knits, polos, and linen shirts in addition to our shirt jackets. We believe that we are extremely well positioned within the contemporary men's category from a style and quality perspective as consumers switch from traditional suits to business casual with a return to office. We also do not see a clear brand leader that has excelled in this category, giving us an opportunity to meaningfully gain market share. As many of you know, loyalty among men tends to be very strong once they have a positive experience with a brand. We plan to continue to expand our assortment, particularly in the outerwear and bottoms categories, to provide a more comprehensive product offering. We are also excited to share that we have recently added a men's selection to Vince Unfold following the success we've had in our women's business. From a brand perspective, we are focused on accelerating our global presence at both Vince and Rebecca Taylor. We recently hired a new global chief marketing and digital officer, Adrian Stevens, to lead this effort. Adrian brings over 30 years of brand experience with iconic companies like Marks & Spencer, also including 10-plus years at LVMH in various roles, most notably at Sephora.com, where he was responsible for online marketing and merchandising. More recently, he spearheaded the move into digital at the specialty retailer World Market, as the Chief Marketing Officer and Head of E-commerce and Digital Strategy. Adrian will oversee all marketing and digital initiatives across the brands, including the overall responsibility for our e-commerce channel. He will ensure that our overarching brand strategies are aligned with our individual channel strategies across e-commerce, omni-channel, and social. He has hit the ground running by implementing a disciplined approach to analytics and data, which is already starting to pay dividends in our paid search channels and our email and SMS programs, which drives over 60% of our e-commerce traffic. As part of this focus on analytics, we are now closely evaluating our mobile business and how to make it work harder in revenue terms. Our email program is already showing an improved trajectory in July and August from previous months, notably on mobile, where we have seen a 30% plus increase in conversion. The team is also starting to test new concepts outside of our current strategies. The teams are planning a major campaign for this holiday where the Thins brand is a logical destination for thoughtful gifting, particularly in the cashmere ranges. At the brand level, we are already working on two overarching brand themes, more of which we will talk about nearer to 2022. As we resume our growth strategies for events, we plan to continue to ramp our marketing investments throughout the remainder of the year, emphasizing those areas where we can directly drive quality traffic into our e-commerce business and measure the return on those efforts. We also remain on track to implement our point-of-sale systems, which will better enable targeted marketing and personalization capabilities. In addition, we spoke about the expansion of our omnichannel capabilities, such as ship from store and buy online and pick up in store, which we continue to expect to complete prior to our fiscal year end. In the international businesses, the effects of the pandemic continue to limit our progress. Our UK store has reopened, and we are encouraged by the London store's welcoming consumers. We are preparing our third shop-and-shop in Spain in October at Castellana in Madrid's Alcorte Angles. We look for bigger and better results in Europe and Asia as COVID-19 is contained. Overall, I am pleased with the momentum in the Vince brand and even more excited about our future. We see significant growth opportunities ahead as we build out our e-commerce capabilities, develop marketing strategies to help amplify brand awareness, and drive greater customer engagement. and continue to build on the momentum in men's to accelerate growth in this category. While our international strategy continues to unfold, I remain highly confident in our ability to expand our presence globally. Turning to Rebecca Taylor, I continue to see the potential for this brand as we execute a similar strategic plan to what drove the success we achieved at Vince. We believe the brand targets an attractive niche with no clear leader providing us with an excellent opportunity to build market share. We were pleased with the spring 21 relaunch of the brand, themed Romanticism Redefined, which represented a small collection with emphasis on feminine, colorful styles skewed towards opening price points as we focused on driving full-price selling. Extending on the relaunch in spring 21, our fall assortment will reflect an expanded collection with an assortment of item categories such as tees and blouses to address more of our lifestyle needs. To support the fall collection, we will be employing a top-of-funnel marketing campaign focused on paid digital, social media, expanding our influencer strategy, and hosting brand events with creative director Stephen Catterton. We already have in works 15- and 30-second messaging from Stephen, which will center around the distinct, unique themes which underpin this season's collection, which go out across Instagram, Facebook, and our own website. This, combined with Rebecca and Friends, will be an important social content initiative which will introduce the brand to a new, wider generation of clients. During the second quarter, we opened three outlet stores with encouraging initial results, and since the end of the second quarter, we opened one full-price location in Roosevelt Field, New York. While we are still in the early stages of this turnaround, we are optimistic with the early progress in redefining our merchandise assortment, enhancing our brand messaging, and optimizing our channel distribution. Before turning the call over to Dave, I would like to address the supply chain issues we are experiencing. While we have brought shipments in early, we continue to see challenges in production with certain factories temporarily shut down due to COVID, ongoing port congestion, and higher freight cost pressures. we will continue to take steps to mitigate the impact in the short term by looking at diversifying our sourcing channel long term. Dave will speak to some of the measures we are currently taking to help offset these pressures shortly. In conclusion, we remain focused on advancing the strategies of our distinct fashion brands while maintaining discipline in how we operate the business for the long-term profitable growth. With that, I will turn it over to Dave.