Vince confronted with sales decline for the first time
In November 2013, Vince went public and from then it had an astronomical run, with sales rapidly increasing in every quarter. But, suddenly the horizon is appearing bleak. In July, out of the blue Vince’s chief creative officer and CEO jointly resigned. And just after seven weeks the news came that there was a decline in sales. On a yearly basis, in the 2nd fiscal quarter the net sales decreased by 10.4% to $80 million. And, the net income fell from $10.5 million during the same period as compared to the previous year.
The company had been vigorously moving its business afar from wholesale, as in March it noted that department stores bought conservatively, purchased fewer products in advance and reordered only as per need, it did not bid well in the long-term. The reorders and follow-throughs did not meet the expectations and the retail partners had a lot of inventories left with them. Mark Brody, the interim CEO stated that in order to strengthen its brand positioning and to follow its strategy of reducing sales to retailers, they decided to do away with the major part of the last year product.
On a happy note, Vince’s own stores’ sales have increased. Currently, the company is running a total of 42 stores. Brody also stated that the organisation will be focussing on making extraordinary products with proper fits and style according to the customer’s expectations. He also commented that the company was taking great steps to upgrade its product and to improve its operational performance, inclusive of tighter procurement and inventory practices. He added that it will also help to carefully manage the distribution in the price channel. On the Friday morning, the investors did not seem at all happy with the fall in the prices of shares to $5.79.