Vince Holding Corp.

Hello everyone and welcome to VINC's first quarter 2023 earnings conference call. We will begin in approximately one minute's time. Thank you for your patience. Hello everyone and thank you for standing by for the VINTS first quarter 2023 earnings conference call. My name is Daisy and I'll be coordinating your call today. I would like to hand over to your host, Caitlin Churchill of Investor Relations at VINTS to begin. So Caitlin, please go ahead.

Thank you and good morning everyone. Welcome to VINTS Holding Corp's first quarter fiscal 2023 results conference call. Hosting the call today are Jack Schweifel, Chief Executive Officer, and Amy Levy, 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 the statements made during the call will remain operative at a later time and the company undertakes no obligation to update any financial information discussed on the call. In addition, in today's discussion, the company is presenting its financial results in conformity with GAAP and on an adjusted basis. The adjusted results that the company presents today are non-GAAP measures. Discussion of these non-GAAP on reconciliations of them to their most comparable GAAP measures and related schedules. which are available in the Investors section of the company's website at investors.vince.com. Following today's remarks, there will be no Q&A session. Now I'll turn the call over to Jack.

Thank you, Caitlin, and thank you, everyone, for joining us this morning. I'll begin my discussion with a review of the highlights from Vince Brand's first quarter performance before turning the call over to Amy to discuss our financial results in more detail. Our first quarter results were largely in line with our expectations supported by our efforts to streamline our organization, to focus on our core strengths, while maintaining a disciplined approach to expense management as we continue to navigate a challenging macro environment. As expected, we continued to navigate a challenging macro environment during the first quarter, which impacted our top-line performance across both our wholesale and direct-to-consumer channels. Within both channels, we saw a relative outperformance of stores compared to e-commerce, which we attribute to the broader industry trend occurring with the customer. With respect to our wholesale performance, we have seen pockets of strength with key partners while others remain cautious given the current environment. That said, we believe we are well positioned with the strength of our relationships, and while we are maintaining a prudent outlook for the remainder of the year, we are continuing to stay close and work with our partners as we continue to move through the year. Turning to our direct-to-consumer performance, as I mentioned, like others, we saw customers continue to engage more in stores versus e-commerce during the period, though both channels were impacted by the macro headwinds affecting our consumers. In the direct business, we made the strategic decision to begin to pull back and become more surgical with our promotional cadence, given our improved inventory position. We leveraged insights from our customer data platform to create more targeted events and were encouraged by results we saw particularly in stores and with our reactivated customer segment. Going forward, we will continue to leverage CDP to not only drive better returns through greater personalization, but drive enhanced loyalty and expand our customer base. During the quarter, we continued to see strength in our men's business and took steps to fortify our design team with the addition of our new Vice President of Men's Design, Chris Hay. Chris brings over 20 years of design experience to the team. Chris began his design career in the United Kingdom with Marks & Spencer and then Alexander McQueen, and moved to the United States where he worked for Ralph Lauren, Abercrombie, Gap, and LVMH, as well as launching his own brand, Christopher. As I mentioned on our last call, we recently opened a men's store in the Roosevelt Field Mall on Long Island in New York. and have been very encouraged with the initial results we are seeing. We are continuing to explore opportunities to expand our men's business further over time. Within our women's business, we are seeing her shift to buying closer to need, and so dresses performed very well in the latter half of the quarter, and knits also picked up as the quarter progressed. Across both men's and women's, we also saw customers respond well to our seasonal basics. In our stores in particular, we saw women gravitate to our vibrant color palette, we offered in many of our styles this season. Turning to international, we have continued to open shop-and-shop locations with our recent opening in Harrods in Q1. As we move forward, we are reviewing our international go-to-market strategy and plan to leverage our previously announced new partnership with Authentic Brands Group and their expertise as a global brand development, marketing, and entertainment platform. As a reminder, during the first quarter, we announced our plans to enter into a strategic partnership with Authentic. Through this transaction, which we recently closed following quarter end, we contributed the Vince brand intellectual property to a newly formed Authentic subsidy, ABG Vince, for total consideration of $76.5 million in cash from Authentic and 25 membership interest in ABG Vince. In addition, we entered into an exclusive 10-year license agreement with eight 10-year renewal options to continue to operate the business substantially in the same manner as we do today through our wholesale, retail, and e-commerce channels. Through this arrangement, we have further streamlined our operations to focus on our core strengths. And with the additional capital, we have strengthened our balance sheet and enhanced our ability to execute against our growth initiatives. We look forward to working with ABG while continuing our operations as an independent, publicly traded company with no changes to our governance or ownership structure. As we look to the remainder of fiscal 2023, we are maintaining a cautious outlook with respect to the environment. We are continuing to focus on areas of the business that we can control as we enter this new chapter for Vince. Our first priority will be to focus on driving improved profitability, and we are taking a hard look at our entire cost basis and sourcing needs to continue to find efficiencies to drive margin expansion over time. Before I close, I want to thank our teams for their continued hard work and dedication to Vince. We are excited for this new chapter of the business, and with the strength of our teams, enhanced focus on our initiatives, and partnership with ABJ, we believe we are well positioned to continue to execute and deliver against our objectives to drive long-term success and shareholder value. With that, I turn it over to Amy.