VINCE HOLDING CORP., 10-K filed on 4/25/2018
Annual Report
v3.8.0.1
Document and Entity Information - USD ($)
$ in Millions
12 Months Ended
Feb. 03, 2018
Mar. 30, 2018
Jul. 29, 2017
Document And Entity Information [Abstract]      
Document Type 10-K    
Amendment Flag false    
Document Period End Date Feb. 03, 2018    
Document Fiscal Year Focus 2017    
Document Fiscal Period Focus FY    
Trading Symbol VNCE    
Entity Registrant Name VINCE HOLDING CORP.    
Entity Central Index Key 0001579157    
Current Fiscal Year End Date --02-03    
Entity Well-known Seasoned Issuer No    
Entity Current Reporting Status Yes    
Entity Voluntary Filers No    
Entity Filer Category Non-accelerated Filer    
Entity Common Stock, Shares Outstanding   11,616,500  
Entity Public Float     $ 12.2
v3.8.0.1
Consolidated Balance Sheets - USD ($)
$ in Thousands
Feb. 03, 2018
Jan. 28, 2017
Current assets:    
Cash and cash equivalents $ 5,372 $ 20,978
Trade receivables, net 20,760 10,336
Inventories, net 48,921 38,529
Prepaid expenses and other current assets 6,521 4,768
Total current assets 81,574 74,611
Property and equipment, net 31,608 42,945
Intangible assets, net 77,099 77,698
Goodwill 41,435 41,435
Deferred income taxes 379  
Other assets 2,439 2,791
Total assets 234,534 239,480
Current liabilities:    
Accounts payable 22,556 37,022
Accrued salaries and employee benefits 6,715 3,427
Other accrued expenses 7,906 9,992
Current portion of long-term debt 8,000  
Total current liabilities 45,177 50,441
Long-term debt 40,682 48,298
Deferred rent 15,633 16,892
Other liabilities 58,273 137,830
Commitments and contingencies (Note 5)
Stockholders' equity (deficit):    
Common stock at $0.01 par value (100,000,000 shares authorized, 11,616,500 and 4,942,760 shares issued and outstanding at February 3, 2018 and January 28, 2017, respectively) 116 49
Additional paid-in capital 1,113,342 1,083,172
Accumulated deficit (1,038,624) (1,097,137)
Accumulated other comprehensive loss (65) (65)
Total stockholders' equity (deficit) 74,769 (13,981)
Total liabilities and stockholders' equity (deficit) $ 234,534 $ 239,480
v3.8.0.1
Consolidated Balance Sheets (Parenthetical) - $ / shares
Feb. 03, 2018
Oct. 23, 2017
Oct. 22, 2017
Sep. 06, 2017
Sep. 05, 2017
Jan. 28, 2017
Statement Of Financial Position [Abstract]            
Common stock, par value $ 0.01         $ 0.01
Common stock, shares authorized 100,000,000 100,000,000 250,000,000 250,000,000 100,000,000 100,000,000
Common stock, shares issued 11,616,500         4,942,760
Common stock, shares outstanding 11,616,500         4,942,760
v3.8.0.1
Consolidated Statements of Operations - USD ($)
$ in Thousands
12 Months Ended
Feb. 03, 2018
Jan. 28, 2017
Jan. 30, 2016
Income Statement [Abstract]      
Net sales $ 272,582 $ 268,199 $ 302,457
Cost of products sold 150,793 145,380 169,941
Gross profit 121,789 122,819 132,516
Impairment of goodwill and indefinite-lived intangible asset   53,061  
Selling, general and administrative expenses 140,106 134,430 116,790
(Loss) income from operations (18,317) (64,672) 15,726
Interest expense, net 5,540 3,932 5,680
Other (income) expense, net (81,882) 329 1,733
Income (loss) before income taxes 58,025 (68,933) 8,313
(Benefit) provision for income taxes (572) 93,726 3,214
Net income (loss) $ 58,597 $ (162,659) $ 5,099
Earnings (loss) per share:      
Basic earnings (loss) per share $ 7.70 $ (35.04) $ 1.39
Diluted earnings (loss) per share $ 7.70 $ (35.04) $ 1.36
Weighted average shares outstanding:      
Basic 7,605,822 4,642,053 3,677,043
Diluted 7,608,427 4,642,053 3,752,922
v3.8.0.1
Consolidated Statements of Comprehensive Income (Loss) - USD ($)
$ in Thousands
12 Months Ended
Feb. 03, 2018
Jan. 28, 2017
Jan. 30, 2016
Statement Of Income And Comprehensive Income [Abstract]      
Net income (loss) $ 58,597 $ (162,659) $ 5,099
Comprehensive income (loss) $ 58,597 $ (162,659) $ 5,099
v3.8.0.1
Consolidated Statements of Stockholders' Equity (Deficit) - USD ($)
$ in Thousands
Total
Common Stock [Member]
Additional Paid-In Capital [Member]
Accumulated Deficit [Member]
Accumulated Other Comprehensive Loss [Member]
Beginning Balance at Jan. 31, 2015 $ 71,969 $ 37 $ 1,011,574 $ (939,577) $ (65)
Beginning Balance, shares at Jan. 31, 2015   3,674,824      
Comprehensive income (loss):          
Net income (loss) 5,099     5,099  
Share-based compensation expense 1,259   1,259    
Exercise of stock options 175   175    
Exercise of stock options, shares   2,620      
Restricted stock unit vestings 0 $ 0 0 0 0
Restricted stock unit vestings, shares   497      
Ending Balance at Jan. 30, 2016 78,502 $ 37 1,013,008 (934,478) (65)
Ending Balance, shares at Jan. 30, 2016   3,677,941      
Comprehensive income (loss):          
Net income (loss) (162,659)     (162,659)  
Common stock issuance, net of certain costs 64,110 $ 12 64,098    
Common stock issuance, net of certain costs, shares   1,181,818      
Share-based compensation expense 1,344   1,344    
Exercise of stock options and issuance of common stock under employee stock purchase plan 4,722   4,722    
Exercise of stock options and issuance of common stock under employee stock purchase plan, shares   81,543      
Restricted stock unit vestings 0 $ 0 0 0 0
Restricted stock unit vestings, shares   1,458      
Ending Balance at Jan. 28, 2017 $ (13,981) $ 49 1,083,172 (1,097,137) (65)
Ending Balance, shares at Jan. 28, 2017 4,942,760 4,942,760      
Comprehensive income (loss):          
Net income (loss) $ 58,597     58,597  
Common stock issuance, net of certain costs 28,973 $ 67 28,906    
Common stock issuance, net of certain costs, shares   6,666,666      
Share-based compensation expense 1,138   1,138    
Exercise of stock options and issuance of common stock under employee stock purchase plan 42   42    
Exercise of stock options and issuance of common stock under employee stock purchase plan, shares   4,244      
Restricted stock unit vestings 0 $ 0 0 0 0
Restricted stock unit vestings, shares   3,137      
Shares cancelled as a result of the reverse stock split   (307)      
Cumulative effect of the adoption of new accounting pronouncement     84 (84)  
Ending Balance at Feb. 03, 2018 $ 74,769 $ 116 $ 1,113,342 $ (1,038,624) $ (65)
Ending Balance, shares at Feb. 03, 2018 11,616,500 11,616,500      
v3.8.0.1
Consolidated Statements of Cash Flows - USD ($)
12 Months Ended
Feb. 03, 2018
Jan. 28, 2017
Jan. 30, 2016
Operating activities      
Net income (loss) $ 58,597,000 $ (162,659,000) $ 5,099,000
Add (deduct) items not affecting operating cash flows:      
Impairment of goodwill and indefinite-lived intangible asset   53,061,000  
Depreciation and amortization 10,098,000 8,684,000 8,350,000
Adjustment to Tax Receivable Agreement obligation (82,002,000)    
Impairment of property and equipment 5,111,000 2,082,000 0
Provision for inventories 810,000 839,000 16,263,000
Deferred rent (1,269,000) 413,000 1,723,000
Deferred income taxes (379,000) 93,444,000 2,745,000
Share-based compensation expense 1,138,000 1,344,000 1,259,000
Other 1,240,000 701,000 1,634,000
Changes in assets and liabilities:      
Receivables, net (10,280,000) (936,000) 24,397,000
Inventories (11,202,000) (2,792,000) (15,420,000)
Prepaid expenses and other current assets (1,753,000) 598,000 3,441,000
Accounts payable and accrued expenses (9,785,000) (24,414,000) 1,044,000
Other assets and liabilities (711,000) (25,000) 1,093,000
Net cash (used in) provided by operating activities (40,387,000) (29,660,000) 51,628,000
Investing activities      
Payments for capital expenditures (3,379,000) (14,287,000) (17,591,000)
Net cash used in investing activities (3,379,000) (14,287,000) (17,591,000)
Financing activities      
Proceeds from borrowings under the Revolving Credit Facility 421,403,000 181,367,000 115,127,000
Repayment of borrowings under the Revolving Credit Facility (409,703,000) (191,167,000) (123,127,000)
Repayment of borrowings under the Term Loan Facility (12,000,000)   (20,000,000)
Proceeds from common stock issuance, net of transaction costs 28,973,000 63,773,000  
Proceeds from stock option exercises and issuance of common stock under employee stock purchase plan 42,000 4,722,000 175,000
Financing fees (555,000)   (94,000)
Net cash provided by (used in) financing activities 28,160,000 58,695,000 (27,919,000)
(Decrease) increase in cash and cash equivalents (15,606,000) 14,748,000 6,118,000
Cash and cash equivalents, beginning of period 20,978,000 6,230,000 112,000
Cash and cash equivalents, end of period 5,372,000 20,978,000 6,230,000
Supplemental Disclosures of Cash Flow Information      
Cash payments on Tax Receivable Agreement obligation   29,700,000  
Cash payments for interest 4,682,000 2,952,000 3,838,000
Cash payments for income taxes, net of refunds (239,000) 330,000 1,491,000
Supplemental Disclosures of Non-Cash Investing and Financing Activities      
Capital expenditures in accounts payable and accrued liabilities $ 20,000 $ 1,054,000 $ 309,000
v3.8.0.1
Description of Business and Summary of Significant Accounting Policies
12 Months Ended
Feb. 03, 2018
Organization Consolidation And Presentation Of Financial Statements [Abstract]  
Description of Business and Summary of Significant Accounting Policies

Note 1. Description of Business and Summary of Significant Accounting Policies

On November 27, 2013, Vince Holding Corp. (“VHC” or the “Company”), previously known as Apparel Holding Corp., closed an initial public offering (“IPO”) of its common stock and completed a series of restructuring transactions (the “Restructuring Transactions”) through which Kellwood Holding, LLC acquired the non-Vince businesses, which included Kellwood Company, LLC (“Kellwood Company” or Kellwood”), from the Company. The Company continues to own and operate the Vince business, which includes Vince, LLC.

Prior to the IPO and the Restructuring Transactions, VHC was a diversified apparel company operating a broad portfolio of fashion brands, which included the Vince business. As a result of the IPO and Restructuring Transactions, the non-Vince businesses were separated from the Vince business, and the stockholders immediately prior to the consummation of the Restructuring Transactions (the “Pre-IPO Stockholders”) (through their ownership of Kellwood Holding, LLC) retained the full ownership and control of the non-Vince businesses. The Vince business is now the sole operating business of VHC.

On November 18, 2016, Kellwood Intermediate Holding, LLC and Kellwood Company, LLC entered into a Unit Purchase Agreement with Sino Acquisition, LLC (the “Kellwood Purchaser”) whereby the Kellwood Purchaser agreed to purchase all of the outstanding equity interests of Kellwood Company, LLC. Prior to the closing, Kellwood Intermediate Holding, LLC and Kellwood Company, LLC conducted a pre-closing reorganization pursuant to which certain assets of Kellwood Company, LLC were distributed to a newly formed subsidiary of Kellwood Intermediate Holding, LLC, St. Louis Transition, LLC (“St. Louis, LLC”). The transaction closed on December 21, 2016 (the “Kellwood Sale”).

(A) Description of Business: Established in 2002, Vince is a global luxury apparel and accessories brand best known for creating elevated yet understated pieces for every day. The collections are inspired by the brand’s California origins and embody a feeling of warm and effortless style. Vince designs uncomplicated yet refined pieces that approach dressing with a sense of ease.  Known for its range of luxury products, Vince offers wide array of women’s and men’s ready-to-wear, shoes, and capsule collection of handbags, and home for a global lifestyle. The Company reaches its customers through a variety of channels, specifically through major wholesale department stores and specialty stores in the United States (“U.S.”) and select international markets, as well as through the Company’s branded retail locations and the Company’s website. The Company designs products in the U.S. and sources the vast majority of products from contract manufacturers outside the U.S., primarily in Asia. Products are manufactured to meet the Company’s product specifications and labor standards.

(B) Basis of Presentation: The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”).

The consolidated financial statements include the Company’s accounts and the accounts of the Company’s wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. In the opinion of management, the financial statements contain all adjustments (consisting solely of normal recurring adjustments) and disclosures necessary to make the information presented therein not misleading.

(C) Fiscal Year: The Company operates on a fiscal calendar widely used by the retail industry that results in a given fiscal year consisting of a 52 or 53-week period ending on the Saturday closest to January 31.

 

References to “fiscal year 2017” or “fiscal 2017” refer to the fiscal year ended February 3, 2018;

 

References to “fiscal year 2016” or “fiscal 2016” refer to the fiscal year ended January 28, 2017; and

 

References to “fiscal year 2015” or “fiscal 2015” refer to the fiscal year ended January 30, 2016.

Fiscal 2017 consisted of a 53-week period. Fiscal years 2016 and 2015 consisted of a 52-week period.

(D) Reverse Stock Split: At the close of business on October 23, 2017, the Company effected a 1-for-10 reverse stock split (the “Reverse Stock Split”). The Company’s common stock began trading on a split-adjusted basis when the market opened on October 24, 2017. Pursuant to the Reverse Stock Split, every 10 shares of the Company’s issued and outstanding common stock were automatically converted into one share of common stock. No fractional shares were issued if, as a result of the Reverse Stock Split, a stockholder would otherwise have been entitled to a fractional share. Instead, each stockholder was entitled to receive a cash payment based on a pre-split cash in lieu rate of $0.48, which was the average closing price per share on the New York Stock Exchange for the five consecutive trading days immediately preceding October 23, 2017.

The number of authorized shares of common stock has also been reduced from 250,000,000 to 100,000,000. The Company had increased the number of authorized shares from 100,000,000 to 250,000,000 on September 6, 2017 in connection with the closing of the 2017 Rights Offering and related 2017 Investment Agreement (each as defined below) on September 8, 2017.

The accompanying financial statements and notes to the financial statements give retroactive effect to the Reverse Stock Split for all periods presented, unless otherwise noted. The calculation of basic and diluted net earnings (loss) per share, as presented in the consolidated statements of operations, have been determined based on a retroactive adjustment of weighted average shares outstanding for all periods presented. To reflect the reverse stock split on shareholders’ equity, the Company reclassified an amount equal to the par value of the reduced shares from the common stock par value account to the additional paid in capital account, resulting in no net impact to shareholders' equity on the Consolidated Balance Sheets.

(E) Sources and Uses of Liquidity:  The Company’s sources of liquidity are cash and cash equivalents, cash flows from operations, if any, borrowings available under the Revolving Credit Facility and the Company’s ability to access capital markets. The Company’s primary cash needs are funding working capital requirements, meeting debt service requirements, paying amounts due under the Tax Receivable Agreement and capital expenditures for new stores and related leasehold improvements.

During the last three fiscal years the Company has experienced a decline in operating profitability and in fiscal 2016 and 2017 used cash flows generated from financing activities to fund a portion of its operating cash needs. For the fiscal year ended January 28, 2017 considering the historical sales performance of the Company, actions of lenders and certain vendors, and the difficulties to project the current retail environment, management had concluded that then existing conditions in the business raised substantial doubt about the Company’s ability to meet its financial obligations, specifically to comply with the Consolidated Net Total Leverage Ratio under its Term Loan Facility, and therefore disclosed such conclusion in its Annual Report on Form 10-K for the fiscal year ended January 28, 2017. During fiscal 2017, management fully executed the actions below in order to address and relieve the substantial doubt referenced above and to satisfy the Company’s liquidity needs:

 

In June 2017, the Company entered into a Term Loan Amendment which, among other things, (i) waives the Consolidated Net Total Leverage Ratio (as defined in the Term Loan Facility) covenant for the test periods from July 2017 through and including April 2019; and (ii) requires, beginning with the payment due on or around January 2018, the Company to pay a quarterly amortization payment of $3,000 for such fiscal quarter and $2,000 for each fiscal quarter thereafter, provided that there is not less than $15,000 of “availability” under the Revolving Credit Facility on a pro forma basis immediately before and after giving effect to such amortization payment. See Note 4 “Long-Term Debt and Financing Arrangements” for additional details.

 

 

In June 2017, the Company entered into an amendment to the Revolving Credit Facility which included increasing the borrowing base under the Revolving Credit Facility, thereby increasing availability under this facility. See Note 4 “Long-Term Debt and Financing Arrangements” for additional details.

 

In July 2017, Vince, LLC (“Vince”), an indirect wholly-owned subsidiary of the Company, entered into an agreement with Rebecca Taylor, Inc. (“Rebecca Taylor”) relating to the purchase and resale of certain Vince branded finished goods in order to address recent demands from certain vendors for accelerated payment terms or prepayments as a condition to delivering finished goods to the Company. Using the proceeds that were received from the 2017 Rights Offering and related 2017 Investment Agreement, the Company settled any previously outstanding balances and has returned to normal terms with its key inventory vendors. Additionally, the Company has not utilized the sourcing agreement with Rebecca Taylor since September 2017, and management does not intend to utilize this agreement in the future. See Note 12 “Related Party Transactions” for additional details.

 

 

In August 2017, the Company entered into an Investment Agreement (the “2017 Investment Agreement”) with Sun Cardinal, LLC and SCSF Cardinal, LLC (collectively, the “Sun Cardinal Investors”) and the Company commenced a rights offering (the “2017 Rights Offering”). See Note 12 “Related Party Transactions” for additional details.

 

Management executed cost reduction initiatives in fiscal 2017 in order to improve the Company’s financial performance. The Company entered into limited distribution arrangements with Nordstrom, Inc. and Neiman Marcus Group LTD, which took effect in late fiscal 2017, in order to rationalize its department store distribution strategy which is intended to improve profitability in the Wholesale segment in the future and enable management to focus on other areas of growth for the brand, particularly in the Direct-to-consumer segment. The Company also expanded its product offerings during the fourth quarter of fiscal 2017 with the launch of its capsule home collection and the re-launch of its handbag collection. Management expects that the majority of the benefit from these cost savings and other strategic initiatives will be fully realized in fiscal 2018.

The Company believes these actions will generate sufficient liquidity to fund its working capital and capital expenditure needs, meet its Tax Receivable Agreement obligations, and satisfy its debt maturities and covenants under the Term Loan Facility and Revolving Credit Facility for the next twelve months. While we believe based upon our actions to date that we will have sufficient liquidity for the next twelve months, there can be no assurances in the future that we will be able to generate sufficient cash flow from operations to meet our liquidity needs. The Company’s ability to continue to meet its obligations is dependent on its ability to generate positive cash flow from a combination of initiatives and failure to successfully implement these initiatives could have a material adverse effect on the Company’s liquidity and operations in which case the Company would need to implement alternative plans, such as attempting to obtain other financing, in an effort to satisfy our liquidity needs.

(F) Use of Estimates: The preparation of consolidated financial statements in conformity with GAAP requires that management make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements which affect revenues and expenses during the period reported. Estimates are adjusted when necessary to reflect actual experience. Significant estimates and assumptions may affect many items in the financial statements. Actual results could differ from estimates and assumptions in amounts that may be material to the consolidated financial statements.

Significant estimates inherent in the preparation of the consolidated financial statements include accounts receivable allowances, customer returns, the realizability of inventory, reserves for contingencies, useful lives and impairments of long-lived tangible and intangible assets, Tax Receivable Agreement obligation, and accounting for income taxes and related uncertain tax positions, among others.

(G) Cash and cash equivalents:  All demand deposits and highly liquid short-term deposits with original maturities of three months or less are considered cash equivalents.

(H) Accounts Receivable and Concentration of Credit Risk: The Company maintains an allowance for accounts receivable estimated to be uncollectible. The provision for bad debts is included in selling, general and administrative expense. Substantially all of the Company’s trade receivables are derived from sales to retailers and are recorded at the invoiced amount and do not bear interest. The Company performs ongoing credit evaluations of its wholesale partners’ financial condition and requires collateral as deemed necessary. The past due status of a receivable is based on its contractual terms. Account balances are charged off against the allowance when it is probable the receivable will not be collected.

Accounts receivable are recorded net of allowances including expected future chargebacks from wholesale partners and estimated margin support. It is the nature of the apparel and fashion industry that suppliers similar to the Company face significant pressure from customers in the retail industry to provide allowances to compensate for wholesale partner margin shortfalls. This pressure often takes the form of customers requiring the Company to provide price concessions on prior shipments as a prerequisite for obtaining future orders. Pressure for these concessions is largely determined by overall retail sales performance and, more specifically, the performance of the Company’s products at retail. To the extent the Company’s wholesale partners have more of the Company’s goods on hand at the end of the season, there will be greater pressure for the Company to grant markdown concessions on prior shipments. Accounts receivable balances are reported net of expected allowances for these matters based on the historical level of concessions required and estimates of the level of markdowns and allowances that will be required in the coming season. The Company evaluates the allowance balances on a continual basis and adjusts them as necessary to reflect changes in anticipated allowance activity. The Company also provides an allowance for sales returns based on known trends and historical return rates.

In fiscal 2017, sales to one wholesale partner accounted for more than ten percent of the Company’s net sales. These sales represented 21.9% of fiscal 2017 net sales. In fiscal 2016, sales to three wholesale partners each accounted for more than ten percent of the Company’s net sales. These sales represented 19.6%, 14.4% and 10.8% of fiscal 2016 net sales. In fiscal 2015, sales to three wholesale partners each accounted for more than ten percent of the Company’s net sales. These sales represented 18.3%, 13.8% and 10.8% of fiscal 2015 net sales.

Two wholesale partners each represented greater than ten percent of the Company’s gross accounts receivable balance as of February 3, 2018, with a corresponding aggregate total of 49.4% of such balance. Three wholesale partners each represented greater than ten percent of the Company’s gross accounts receivable balance as of January 28, 2017, with a corresponding aggregate total of 57.5% of such balance.

(I) Inventories: Inventories are stated at the lower of cost or net realizable value. Cost is determined on the first-in, first-out basis. The cost of inventory includes purchase cost as well as sourcing, transportation, duty and other processing costs associated with acquiring, importing and preparing inventory for sale. Inventory costs are included in cost of products sold at the time of their sale. Product development costs are expensed in selling, general and administrative expense when incurred. Inventory values are reduced to net realizable value when there are factors indicating that certain inventories will not be sold on terms sufficient to recover their cost.

Inventories consisted of the following:

 

 

 

February 3,

 

 

January 28,

 

(in thousands)

 

2018

 

 

2017

 

Finished goods

 

$

50,900

 

 

$

40,771

 

Less: reserves

 

 

(1,979

)

 

 

(2,242

)

Total inventories, net

 

$

48,921

 

 

$

38,529

 

 

(J) Property and Equipment: Property and equipment are stated at cost. Depreciation is computed on the straight-line method over estimated useful lives of three to seven years for furniture, fixtures, and equipment. Leasehold improvements are depreciated on the straight-line basis over the shorter of their estimated useful lives or the lease term, excluding renewal terms. Capitalized software is depreciated on the straight-line basis over the estimated economic useful life of the software, generally three to seven years. Maintenance and repair costs are charged to earnings while expenditures for major renewals and improvements are capitalized. Upon the disposition of property and equipment, the accumulated depreciation is deducted from the original cost and any gain or loss is reflected in current earnings. Property and equipment consisted of the following:

 

 

 

February 3,

 

 

January 28,

 

(in thousands)

 

2018

 

 

2017

 

Leasehold improvements

 

$

37,307

 

 

$

41,214

 

Furniture, fixtures and equipment

 

 

11,985

 

 

 

12,267

 

Capitalized software

 

 

11,239

 

 

 

10,862

 

Construction in process

 

 

71

 

 

 

236

 

Total property and equipment

 

 

60,602

 

 

 

64,579

 

Less: accumulated depreciation

 

 

(28,994

)

 

 

(21,634

)

Property and equipment, net

 

$

31,608

 

 

$

42,945

 

 

Depreciation expense was $8,480, $7,070 and $6,426 for fiscal 2017, fiscal 2016 and fiscal 2015, respectively.

(K) Impairment of Long-lived Assets: The Company reviews long-lived assets with a finite life for existence of facts and circumstances which indicate that the useful life is shorter than previously estimated or that the carrying amount of such assets may not be recoverable from future operations based on undiscounted expected future cash flows. Impairment losses are then recognized in operating results to the extent discounted expected future cash flows are less than the carrying value of the asset. The long-lived asset impairment test is dependent on a number of factors, including estimates of future growth, profitability and cash flows, discount rates and other variables. During fiscal 2017 and fiscal 2016, the Company recorded non-cash asset impairment charges of $5,111 and $2,082 within Selling, general and administrative expenses in the Consolidated Statements of Operations, related to the impairment of certain retail stores with asset carrying values that were determined not to be recoverable and exceeded fair value. There were no significant impairment charges related to long-lived assets recorded in fiscal 2015.

(L) Goodwill and Other Intangible Assets: Goodwill and other indefinite-lived intangible assets are tested for impairment at least annually and in an interim period if a triggering event occurs. The Company completed its annual impairment testing on its goodwill and indefinite-lived intangible asset during the fourth quarters of fiscal 2017, fiscal 2016 and fiscal 2015. Goodwill is not allocated to the Company’s operating segments in the measure of segment assets regularly reported to and used by management, however goodwill is allocated to operating segments (goodwill reporting units) for the purpose of the annual impairment test for goodwill.

Goodwill represents the excess of the cost of acquired businesses over the fair market value of the identifiable net assets. The indefinite-lived intangible asset is the Vince tradename.

An entity may elect to perform a qualitative impairment assessment for goodwill and indefinite-lived intangible assets. If adverse qualitative trends are identified during the qualitative assessment that indicate that it is more likely than not that the fair value of a reporting unit or indefinite-lived intangible asset is less than its carrying amount, a quantitative impairment test is required. “Step one” of the quantitative impairment test for goodwill requires an entity to determine the fair value of each reporting unit and compare such fair value to the respective carrying amount. If the estimated fair value of the reporting unit exceeds the carrying value of the net assets assigned to that reporting unit, goodwill is not impaired, and the Company is not required to perform further testing. In accordance with new accounting guidance adopted on January 29, 2017, if the carrying amount of the reporting unit exceeds its estimated fair value, an impairment loss is recorded for the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. Prior to the adoption of the new accounting guidance, if the carrying amount of the reporting unit exceeded its estimated fair value, “step two” of the impairment test was performed in order to determine the amount of the impairment loss. “Step two” of the goodwill impairment test included valuing the tangible and intangible assets of the impaired reporting unit based on the fair value determined in “step one” and calculating the fair value of the impaired reporting unit's goodwill based upon the residual of the summed identified tangible and intangible assets and liabilities. The goodwill impairment test is dependent on a number of factors, including estimates of future growth, profitability and cash flows, discount rates and other variables. The Company bases its estimates on assumptions it believes to be reasonable, but which are unpredictable and inherently uncertain. Actual future results may differ from those estimates.  

The Company estimates the fair value of the tradename intangible asset using a discounted cash flow valuation analysis, which is based on the “relief from royalty” methodology.  This methodology assumes that in lieu of ownership, a third party would be willing to pay a royalty in order to exploit the related benefits of these types of assets. The relief from royalty approach is dependent on a number of factors, including estimates of future growth, royalty rates in the category of intellectual property, discount rates and other variables.  The Company bases its fair value estimates on assumptions it believes to be reasonable, but which are unpredictable and inherently uncertain. Actual future results may differ from those estimates. The Company recognizes an impairment loss when the estimated fair value of the tradename intangible asset is less than the carrying value.

An entity may pass on performing the qualitative assessment for a reporting unit or indefinite-lived intangible asset and directly perform the quantitative assessment. This determination can be made on an asset by asset basis, and an entity may resume performing a qualitative assessment in subsequent periods.

In fiscal 2017, the Company elected to perform a quantitative impairment test on goodwill. The results of the quantitative test did not result in any impairment of goodwill, which amounted to $41,435 as of February 3, 2018, because the fair value of the Company’s Wholesale reporting unit exceeded its carrying value by approximately 35%. Significant assumptions utilized in the discounted cash flow analysis included a discount rate of 15.0%. Significant assumptions utilized in a market-based approach were market multiples ranging from 1.10x to 1.16x.

In fiscal 2016, a quantitative impairment test on goodwill determined that the fair value of the Direct-to-consumer reporting unit was below its carrying value. During fiscal 2016, the sales results within the Direct-to-consumer reporting unit were impacted by continued declines in average order values as well as declines in the number of transactions due to lower conversion rates and reduced traffic and as a result, the Direct-to-consumer reporting unit did not meet expectations resulting in lower current and expected future cash flows. The Company estimated the fair value of its Direct-to-consumer reporting unit using both the income and market valuation approaches, with a weighting of 80% and 20%, respectively. “Step one” of the assessment determined that the fair value of the Direct-to-consumer reporting unit was below the carrying amount by approximately 40%.  Accordingly, “step two” of the assessment was performed, which compared the implied fair value of the goodwill to the carrying value of such goodwill by performing a hypothetical purchase price allocation using the fair value of the reporting unit determined in “step one”. Based on the results from “step two,” the Company recorded a goodwill impairment charge of $22,311, to write-off all of the goodwill in the Direct-to-consumer reporting unit. The charge was recorded in Impairment of goodwill and indefinite-lived intangible asset in the Consolidated Statements of Operations, during the fourth quarter of fiscal 2016. Additionally, the results of “step one” of the assessment determined that the fair value of the Wholesale reporting unit exceeded its carrying amount by approximately 40% and therefore did not result in any impairment of goodwill. However, further declines in the net sales or operating results of the Wholesale reporting unit may result in a partial or full impairment of its goodwill, which amounted to $41,435 as of January 28, 2017. Significant assumptions utilized in the discounted cash flow analysis included a discount rate of 16.0%. Significant assumptions utilized in a market-based approach were market multiples ranging from 0.50x to 0.90x for the Company’s reporting units.

In fiscal 2015, the Company elected to perform a quantitative impairment test on goodwill. The results of the quantitative test did not result in any impairment of goodwill because the fair values of each of the Company’s reporting units exceeded their respective carrying values. As such, the Company was not required to perform “step two” of the impairment test.

In fiscal 2017, the Company elected to perform a quantitative assessment on its tradename intangible asset. The results of the quantitative test did not result in any impairment because the fair value of the Company’s tradename intangible asset exceeded its carrying value. The estimate of fair value of the tradename intangible asset was determined using a discounted cash flow valuation analysis, which was based on the “relief from royalty” methodology. Discount rate assumptions were based on an assessment of the risk inherent in the projected future cash flows generated by the intangible asset. Also subject to judgment are assumptions about royalty rates, which were based on the estimated rates at which similar tradenames are being licensed in the marketplace.

In fiscal 2016, a quantitative assessment of the Company’s tradename intangible asset determined that the fair value of its tradename intangible asset was below its carrying value. During fiscal 2016, the Company’s sales results did not meet expectations resulting in lower current and expected future cash flows. The Company estimated the fair value of its tradename intangible asset using a discounted cash flow valuation analysis, which is based on the “relief from royalty” methodology and determined that the fair value of the tradename intangible asset was below the carrying amount by approximately 30%. Accordingly, the Company recorded an impairment charge for its tradename intangible asset of $30,750, which was recorded in Impairment of goodwill and indefinite-lived intangible asset in the Consolidated Statements of Operations, during the fourth quarter of fiscal 2016. 

In fiscal 2015, the Company elected to perform a quantitative assessment on its tradename intangible asset. The results of the quantitative test did not result in any impairment because the fair value of the Company’s tradename intangible asset exceeded its carrying value.

Determining the fair value of goodwill and other intangible assets is judgmental in nature and requires the use of significant estimates and assumptions, including revenue growth rates and operating margins, discount rates and future market conditions, among others. It is possible that estimates of future operating results could change adversely and impact the evaluation of the recoverability of the carrying value of goodwill and intangible assets and that the effect of such changes could be material.

Definite-lived intangible assets are comprised of customer relationships and are being amortized on a straight-line basis over their useful lives of 20 years.

See Note 2 “Goodwill and Intangible Assets” for more information on the details surrounding goodwill and intangible assets.

(M) Deferred Financing Costs: Deferred financing costs, such as underwriting, financial advisory, professional fees, and other similar fees are capitalized and recognized in interest expense over the contractual life of the related debt instrument using the straight-line method, as this method results in recognition of interest expense that is materially consistent with that of the effective interest method.

(N) Deferred Rent and Deferred Lease Incentives: The Company leases various office spaces, showrooms and retail stores. Many of these operating leases contain predetermined fixed escalations of the minimum rentals during the original term of the lease. For these leases, the Company recognizes the related rental expense on a straight-line basis over the life of the lease and records the difference between the amount charged to operations and amounts paid as deferred rent. Certain of the Company’s retail store leases contain provisions for contingent rent, typically a percentage of retail sales once a predetermined threshold has been met. These amounts are expensed as incurred. Additionally, the Company receives lease incentives in certain leases. These allowances have been deferred and are amortized on a straight-line basis over the life of the lease as a reduction of rent expense.

(O) Revenue Recognition: Sales are recognized when goods are shipped in accordance with customer orders for the Company’s wholesale business, upon receipt by the customer for the Company’s e-commerce business, and at the time of sale to the consumer for the Company’s retail business. Revenue associated with gift cards is recognized upon redemption. For the Company’s wholesale business, amounts billed to customers for shipping and handling costs are not significant. There is no stated obligation to customers after shipment, other than specifically set forth allowances or discounts that are accrued at the time of sale. The rights of inspection or acceptance contained in certain sales agreements are limited to whether the goods received by the Company’s wholesale partners are in conformance with the order specifications.

Estimated amounts of sales discounts, returns and allowances are accounted for as reductions of sales when the associated sale occurs. These estimated amounts are adjusted periodically based on changes in facts and circumstances when the changes become known. Accrued discounts, returns and allowances are included as an offset to accounts receivable in the Consolidated Balance Sheets for the Company’s wholesale business.  

(P) Cost of Products Sold: The Company’s cost of products sold and gross margins may not necessarily be comparable to that of other entities as a result of different practices in categorizing costs. The primary components of the Company’s cost of products sold are as follows:

 

the cost of purchased merchandise, including raw materials;

 

the cost of inbound transportation, including freight;

 

the cost of the Company’s production and sourcing departments;

 

other processing costs associated with acquiring and preparing the inventory for sale; and

 

shrink and valuation reserves.

(Q) Marketing and Advertising: The Company provides cooperative advertising allowances to certain of its customers. These allowances are accounted for as reductions in sales as discussed in “Revenue Recognition” above. Production expense related to company-directed advertising is deferred until the first time at which the advertisement runs. All other expenses related to company-directed advertising are expensed as incurred. Marketing and advertising expense recorded in selling, general and administrative expenses was $8,939, $8,156 and $9,177 in fiscal 2017, fiscal 2016 and fiscal 2015, respectively. At February 3, 2018 and January 28, 2017, deferred production expenses associated with company-directed advertising were $415 and $182, respectively.

(R) Share-Based Compensation: New, modified and unvested share-based payment transactions with employees, such as stock options and restricted stock units, are measured at fair value and recognized as compensation expense over the requisite service period and is included as a component of Selling, general and administrative expenses in the Consolidated Statements of Operations. Additionally, share-based awards granted to non-employees are expensed over the period in which the related services are rendered at their fair value, using the Black Scholes Pricing Model to determine fair value. Forfeitures are accounted for as they occur.  

(S) Income Taxes: The Company accounts for income taxes using the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences of temporary differences between the carrying amounts and tax bases of assets and liabilities at enacted rates. The Company assesses the likelihood of the realization of deferred tax assets and adjusts the carrying amount of these deferred tax assets by a valuation allowance to the extent the Company believes it more likely than not that all or a portion of the deferred tax assets will not be realized. Many factors are considered when assessing the likelihood of future realization of deferred tax assets, including recent earnings results within taxing jurisdictions, expectations of future taxable income, the carryforward periods available and other relevant factors. Changes in the required valuation allowance are recorded in income in the period such determination is made. The Company recognizes tax positions in the Consolidated Balance Sheets as the largest amount of tax benefit that is greater than 50% likely of being realized upon ultimate settlement with tax authorities assuming full knowledge of the position and all relevant facts. Accrued interest and penalties related to unrecognized tax benefits are included in income taxes in the Consolidated Statements of Operations.

(T) Earnings Per Share: Basic earnings (loss) per share is calculated by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Except when the effect would be anti-dilutive, diluted earnings per share is calculated based on the weighted average number of shares of common stock outstanding plus the dilutive effect of share-based awards calculated under the treasury stock method.

(U) Recent Accounting Pronouncements:

Recently Adopted Accounting Pronouncements

In January 2017, the Financial Accounting Standards Board (“FASB”) issued guidance to simplify the accounting for goodwill impairment. The guidance removes “step two” of the goodwill impairment test, which requires a hypothetical purchase price allocation. A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. The guidance is effective for interim and annual impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company adopted this guidance on January 29, 2017.

In March 2016, the FASB issued guidance regarding share-based compensation, to simplify the accounting for share-based payment transactions, including accounting for forfeitures, income tax consequences, classification of awards as either equity or liabilities and classification on the statement of cash flows. This guidance is effective for interim and annual periods beginning after December 15, 2016. The Company adopted the new guidance on January 29, 2017. Upon adoption, excess tax benefits and deficiencies from share-based compensation are recognized as income tax expense or benefit in the statement of operations as discrete items in the reporting period in which they occur, regardless of whether the benefit reduces taxes payable in the current period. As a result of the adoption of this guidance, the Company recognized an increase of $2,350 to deferred tax assets related to net operating loss carryforwards for the excess tax benefits related to share-based compensation and also recognized an increase of an equal amount in the valuation allowance against such increase of deferred tax assets. As permitted by the new guidance, the Company elected to account for forfeitures as they occur which resulted in an increase of $84 to the accumulated deficit within the Consolidated Balance Sheet. The remaining provisions of the new guidance did not have a material effect on the Company’s consolidated financial statements.  

In November 2015, the FASB issued new guidance on the balance sheet classification of deferred taxes, which requires entities to classify deferred tax assets and liabilities as noncurrent in the consolidated balance sheet. Prior to this new guidance, deferred tax assets and liabilities were classified as current or noncurrent amounts in the consolidated balance sheet. This guidance is effective for financial statements issued for interim and annual periods beginning after December 15, 2016. The Company adopted the new guidance on January 29, 2017 and, as a result of the full valuation allowance previously recorded against the Company’s deferred tax assets, it did not have a material effect on the Company’s Consolidated Balance Sheet.

In July 2015, the FASB issued new guidance on accounting for inventory, which requires entities to measure inventory at the lower of cost and net realizable value. This guidance is effective for interim and annual periods beginning on or after December 15, 2016. The Company adopted the new guidance on January 29, 2017 and it did not have a material impact on the Company’s consolidated financial statements.

Recently Issued Accounting Pronouncements

In May 2017, the FASB issued guidance that clarifies when changes to the terms or conditions of a share-based payment award must be accounted for as modifications. The new guidance will be applied prospectively to awards modified on or after the adoption date. The guidance is effective for interim and annual periods beginning after December 15, 2017. The Company will apply this accounting guidance prospectively to any share-based payment awards modified on or after its February 4, 2018 effective date.

In November 2016, the FASB issued guidance that requires the statement of cash flows to explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The guidance is effective for interim and annual periods beginning after December 15, 2017 using a retrospective transition method to each period presented. Early adoption is permitted, including adoption in an interim period. This new guidance is not expected to have a material impact on the Company’s Consolidated Statement of Cash Flows.

In August 2016, the FASB issued guidance which clarifies how companies present and classify certain cash receipts and cash payments in the statement of cash flows. The guidance is effective for interim and annual periods beginning after December 15, 2017 and must be applied using a retrospective transition method to each period presented. The Company is evaluating the impact of the adoption of this guidance but does not expect it to have a material impact on its Consolidated Statement of Cash Flows.

In February 2016, the FASB issued a new lease accounting standard, which requires lessees to recognize right-of-use lease assets and lease liabilities on the balance sheet for those leases currently classified as operating leases. The guidance requires a modified retrospective transition approach, with application in all comparative periods presented. The guidance is effective for interim and annual periods beginning after December 15, 2018. The Company is currently evaluating the impact of adopting this guidance on the consolidated financial statements.

In May 2014, the FASB issued new guidance on revenue recognition accounting, which requires entities to recognize revenue when promised goods or services are transferred to customers and in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Since its issuance, the FASB has amended several aspects of the new guidance. In August 2015, the FASB elected to defer the effective dates for this guidance, which is now effective for interim and annual periods beginning on or after December 15, 2017. The Company’s assessment efforts included reviewing current accounting policies, processes and arrangements to identify potential differences that could arise from the application of the new guidance. The Company adopted the new guidance in first quarter of 2018, using the modified retrospective approach, and will expand its consolidated financial statement disclosures to comply with the new guidance. The Company determined the adoption of the new guidance will not have a material impact on its consolidated financial statements except for balance sheet reclassifications of sales return reserves which will be recorded in the first quarter of 2018 as a separate asset and liability versus the current net presentation and increased footnote disclosures.

v3.8.0.1
Goodwill and Intangible Assets
12 Months Ended
Feb. 03, 2018
Goodwill And Intangible Assets Disclosure [Abstract]  
Goodwill and Intangible Assets

Note 2. Goodwill and Intangible Assets

Net goodwill balances and changes therein by segment were as follows:

 

(in thousands)

 

Wholesale

 

 

Direct-to-consumer

 

 

Total Net Goodwill

 

Balance as of January 30, 2016

 

$

41,435

 

 

$

22,311

 

 

$

63,746

 

Impairment charge

 

 

 

 

 

(22,311

)

 

 

(22,311

)

Balance as of January 28, 2017

 

 

41,435

 

 

 

 

 

 

41,435

 

Balance as of February 3, 2018

 

$

41,435

 

 

$

 

 

$

41,435

 

 

The total carrying amount of goodwill was net of accumulated impairments of $69,253, $69,253 and $46,942 as of February 3, 2018, January 28, 2017 and January 30, 2016, respectively. During the fourth quarter of fiscal 2016, the Company recorded a $22,311 goodwill impairment charge as a result of the Company’s annual goodwill impairment test. See Note 1 “Description of Business and Summary of Significant Accounting Policies – (L) Goodwill and Other Intangible Assets” for additional details. There were no impairments recorded as a result of the Company’s annual goodwill impairment test performed during fiscal 2017 and fiscal 2015.

The following tables present a summary of identifiable intangible assets:

 

(in thousands)

 

Gross Amount

 

 

Accumulated Amortization

 

 

Accumulated Impairments

 

 

Net Book Value

 

Balance as of February 3, 2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortizable intangible assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Customer relationships

 

$

11,970

 

 

$

(5,971

)

 

$

 

 

$

5,999

 

Indefinite-lived intangible asset:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tradename

 

 

101,850

 

 

 

 

 

 

(30,750

)

 

 

71,100

 

Total intangible assets

 

$

113,820

 

 

$

(5,971

)

 

$

(30,750

)

 

$

77,099

 

 

(in thousands)

 

Gross Amount

 

 

Accumulated Amortization

 

 

Accumulated Impairments

 

 

Net Book Value

 

Balance as of January 28, 2017

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortizable intangible assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Customer relationships

 

$

11,970

 

 

$

(5,372

)

 

$

 

 

$

6,598

 

Indefinite-lived intangible asset:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tradename

 

 

101,850

 

 

 

 

 

 

(30,750

)

 

 

71,100

 

Total intangible assets

 

$

113,820

 

 

$

(5,372

)

 

$

(30,750

)

 

$

77,698

 

 

During the fourth quarter of fiscal 2016, the Company recorded a $30,750 impairment charge as a result of the Company’s quantitative assessment on its tradename intangible asset. See Note 1 “Description of Business and Summary of Significant Accounting Policies – (L) Goodwill and Other Intangible Assets” for additional details. No impairments of the Vince tradename were recorded as a result of the Company’s annual asset impairment tests performed during fiscal 2017 and fiscal 2015.

Amortization of identifiable intangible assets was $599, $598 and $598 for fiscal 2017, fiscal 2016 and fiscal 2015, respectively, which is included in Selling, general and administrative expenses on the Consolidated Statements of Operations. Amortization expense for each of the fiscal years 2018 to 2022 is expected to be as follows:

 

 

 

Future

 

(in thousands)

 

Amortization

 

2018

 

$

598

 

2019

 

 

598

 

2020

 

 

598

 

2021

 

 

598

 

2022

 

 

598

 

Total next 5 fiscal years

 

$

2,990

 

 

v3.8.0.1
Fair Value Measurements
12 Months Ended
Feb. 03, 2018
Fair Value Disclosures [Abstract]  
Fair Value Measurements

Note 3. Fair Value Measurements

Accounting Standards Codification (“ASC”) Subtopic 820-10 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. This guidance outlines a valuation framework, creates a fair value hierarchy to increase the consistency and comparability of fair value measurements and details the disclosures that are required for items measured at fair value. Financial assets and liabilities are to be measured using inputs from three levels of the fair value hierarchy as follows:

 

 

Level 1—

 

quoted market prices in active markets for identical assets or liabilities

 

 

 

 

Level 2—

 

observable market-based inputs (quoted prices for similar assets and liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active) or inputs that are corroborated by observable market data

 

 

 

 

Level 3—

 

significant unobservable inputs that reflect the Company’s assumptions and are not substantially supported by market data

 

The Company did not have any non-financial assets or non-financial liabilities recognized at fair value on a recurring basis at February 3, 2018 or January 28, 2017. At February 3, 2018 and January 28, 2017, the Company believes that the carrying values of cash and cash equivalents, receivables and accounts payable approximate fair value, due to the short-term maturity of these instruments. The Company’s debt obligations with a carrying value of $49,900 as of February 3, 2018 are at variable interest rates and management estimates that the fair value of the Company’s outstanding debt obligations was approximately $42,000 based upon quoted prices in markets that are not active, which is considered a Level 2 input.

The Company’s non-financial assets, which primarily consist of goodwill, intangible assets, and property and equipment, are not required to be measured at fair value on a recurring basis and are reported at their carrying values. However, on a periodic basis whenever events or changes in circumstances indicate that their carrying value may not be fully recoverable (and at least annually for goodwill and intangible assets), non-financial assets are assessed for impairment, and if applicable, written down to (and recorded at) fair value.

The following tables present the non-financial assets the Company measured at fair value on a non-recurring basis in fiscal 2017 and fiscal 2016, based on such fair value hierarchy:

 

 

 

Net Carrying

Value as of

 

 

Fair Value Measured and Recorded at Reporting Date Using:

 

 

Total Losses - Year Ended

 

 

(in thousands)

 

February 3, 2018

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

February 3, 2018

 

 

Property and equipment

 

$

493

 

 

$

 

 

$

 

 

$

493

 

 

$

5,111

 

(1)

 

 

 

Net Carrying

Value as of

 

 

Fair Value Measured and Recorded at Reporting Date Using:

 

 

Total Losses - Year Ended

 

 

(in thousands)

 

January 28, 2017

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

January 28, 2017

 

 

Property and equipment

 

$

1,042

 

 

$

 

 

$

 

 

$

1,042

 

 

$

2,082

 

(1)

Goodwill

 

 

41,435

 

 

 

 

 

 

 

 

 

41,435

 

 

 

22,311

 

(2)

Tradename

 

 

71,100

 

 

 

 

 

 

 

 

 

71,100

 

 

 

30,750

 

(2)

 

(1) Recorded within Selling, general and administrative expenses on the Consolidated Statements of Operations. See Note 1 “Description of Business and Summary of Significant Accounting Policies – (K) Impairment of Long-lived Assets” for additional information.

(2) Recorded within Impairment of goodwill and indefinite-lived intangible asset on the Consolidated Statements of Operations. See Note 1 “Description of Business and Summary of Significant Accounting Policies (L) Goodwill and Other Intangible Assets” for additional details.

v3.8.0.1
Long-Term Debt and Financing Arrangements
12 Months Ended
Feb. 03, 2018
Debt Disclosure [Abstract]  
Long-Term Debt and Financing Arrangements

Note 4. Long-Term Debt and Financing Arrangements

Long-term debt consisted of the following:

 

 

 

February 3,

 

 

January 28,

 

(in thousands)

 

2018

 

 

2017

 

Term Loan Facility

 

$

33,000

 

 

$

45,000

 

Revolving Credit Facility

 

 

16,900

 

 

 

5,200

 

Total debt principal

 

 

49,900

 

 

 

50,200

 

Less: current portion of long-term debt

 

 

8,000

 

 

 

 

Less: deferred financing costs

 

 

1,218

 

 

 

1,902

 

Total long-term debt

 

$

40,682

 

 

$

48,298

 

 

Term Loan Facility

On November 27, 2013, in connection with the closing of the IPO and Restructuring Transactions, Vince, LLC and Vince Intermediate Holding, LLC, a direct subsidiary of VHC and the direct parent company of Vince, LLC (“Vince Intermediate”), entered into a $175,000 senior secured term loan facility (as amended from time to time, the “Term Loan Facility”) with the lenders party thereto, Bank of America, N.A. (“BofA”) as administrative agent, JP Morgan Chase Bank and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as joint lead arrangers, and Cantor Fitzgerald as documentation agent. The Term Loan Facility will mature on November 27, 2019. Vince, LLC and Vince Intermediate are borrowers (together, the “Borrowers”) and VHC is a guarantor under the Term Loan Facility.

On June 30, 2017, the Borrowers entered into a Waiver, Consent and First Amendment (the “Term Loan Amendment”) which, among other things, (i) waives the Consolidated Net Total Leverage Ratio (as defined in the Term Loan Facility) covenant (as described below) for the test periods from July 2017 through and including April 2019; (ii) requires the Borrowers, beginning with the payment due on or around January 2018, to pay a quarterly amortization payment of $3,000 for such fiscal quarter and $2,000 for each fiscal quarter thereafter, provided that there is not less than $15,000 of “availability” under the Revolving Credit Facility on a pro forma basis immediately before and after giving effect to such amortization payment; (iii) prohibits the Company from making any payments on the Tax Receivable Agreement (see Note 12 “Related Party Transactions” for further information) before the first amortization payment referenced above is made or if the Borrowers are not current on any of the foregoing amortization payments; (iv) increases the applicable margin by 2.0% per annum on all term loan borrowings; (v) requires the Borrowers to pay a fee to consenting term lenders equal to 0.5% of the outstanding principal amount of such lender’s term loans as of the effective date of the Term Loan Amendment; (vi) eliminates the Borrower’s ability to designate subsidiaries as unrestricted and to make certain payments, restricted payments and investments with certain funds considered “available excess amount” (as defined in the Term Loan Facility); (vii) eliminates the uncommitted incremental facility; and (viii) limits certain intercompany transactions between a loan party and a non-loan party subsidiary. If the Company is unable to make the full amortization payment specified in (ii) above on any of the scheduled amortization payment dates, the Company may defer such payment for up to two fiscal quarters after such payment was due. Any subsequent payments made will first be applied to any previously outstanding amounts. If the Company is unable to make the amortization payment after the permitted two fiscal quarter deferral, it may obtain a note from a third-party to repay such amount.  The note must meet certain terms and conditions as set forth in the Term Loan Amendment. The Term Loan Amendment became effective on September 8, 2017 when the Company received $30,000 of gross proceeds in connection with the 2017 Rights Offering and related 2017 Investment Agreement (see Note 12 “Related Party Transactions” for further details) and used a portion of such proceeds to repay $9,000 in principal amount under the Term Loan Facility.

Effective with the Term Loan Amendment, interest is payable on loans under the Term Loan Facility at a rate of either (i) the Eurodollar rate (subject to a 1.00% floor) plus an applicable margin of 7.00% or (ii) the base rate applicable margin of 6.00%. During the continuance of a payment or bankruptcy event of default, interest will accrue (i) on the overdue principal amount of any loan at a rate of 2% in excess of the rate otherwise applicable to such loan and (ii) on any overdue interest or any other outstanding overdue amount at a rate of 2% in excess of the non-default interest rate then applicable to base rate loans. The Term Loan Facility requires Vince, LLC and Vince Intermediate to make mandatory prepayments upon the occurrence of certain events, including additional debt issuances, common and preferred stock issuances, certain asset sales, and annual payments of 50% of excess cash flow, subject to reductions to 25% and 0% if Vince, LLC and Vince Intermediate maintain a Consolidated Net Total Leverage Ratio of 2.50 to 1.00 and 2.00 to 1.00, respectively, and subject to reductions for voluntary prepayments made during such fiscal year.

The Term Loan Facility contains a requirement that Vince, LLC and Vince Intermediate maintain a “Consolidated Net Total Leverage Ratio” as of the last day of any period of four fiscal quarters not to exceed 3.25 to 1.00. The Term Loan Facility permits Vince Holding Corp. to make a Specified Equity Contribution, as defined under the Agreement, to the Borrowers in order to increase, dollar for dollar, Consolidated EBITDA for such fiscal quarter for the purposes of determining compliance with this covenant at the end of such fiscal quarter and applicable subsequent periods provided that (a) in each four fiscal quarter period there shall be at least two fiscal quarters in which no Specified Equity Contribution is made; (b) no more than five Specified Equity Contributions shall be made in the aggregate during the term of the Agreement; and (c) the amount of any Specified Equity Contribution shall be no greater than the amount required to cause the Company to be in compliance with this covenant. During April 2017, the Company utilized $6,241 of the funds held by Vince Holding Corp. to make a Specified Equity Contribution in connection with the calculation of the Consolidated Net Total Leverage Ratio as of January 28, 2017. In addition, during May and June 2017, the Company utilized $11,831 of the funds held by Vince Holding Corp. to make Specified Equity Contributions in connection with the calculation of the Consolidated Net Total Leverage Ratio as of April 29, 2017. As discussed above, the Term Loan Amendment waives the Consolidated Net Total Leverage Ratio covenant for the test periods from July 2017 through and including April 2019.

In addition, the Term Loan Facility contains customary representations and warranties, other covenants, and events of default, including but not limited to, limitations on the incurrence of additional indebtedness, liens, negative pledges, guarantees, investments, loans, asset sales, mergers, acquisitions, prepayment of other debt, the repurchase of capital stock, transactions with affiliates, and the ability to change the nature of the Company’s business or its fiscal year, and distributions and dividends. The Term Loan Facility generally permits dividends to the extent that no default or event of default is continuing or would result from the contemplated dividend and the pro forma Consolidated Net Total Leverage Ratio after giving effect to such contemplated dividend is at least 0.25 lower than the maximum Consolidated Net Total Leverage Ratio for such quarter in an amount not to exceed the excess available amount, as defined in the loan agreement. All obligations under the Term Loan Facility are guaranteed by VHC and any future material domestic restricted subsidiaries of Vince, LLC and secured by a lien on substantially all of the assets of VHC, Vince, LLC and Vince Intermediate and any future material domestic restricted subsidiaries. As of February 3, 2018, after giving effect to the waiver described above, the Company was in compliance with applicable covenants.

Through February 3, 2018, on an inception to date basis, the Company has made repayments totaling $142,000 in the aggregate on the original $175,000 Term Loan Facility entered into on November 27, 2013, with $12,000 of such repayments made during fiscal 2017. As of February 3, 2018, the Company had $33,000 of debt outstanding under the Term Loan Facility.

Revolving Credit Facility

On November 27, 2013, Vince, LLC entered into a $50,000 senior secured revolving credit facility (as amended from time to time, the “Revolving Credit Facility”) with BofA as administrative agent. Vince, LLC is the borrower and VHC and Vince Intermediate are the guarantors under the Revolving Credit Facility. On June 3, 2015, Vince LLC entered into a first amendment to the Revolving Credit Facility, that among other things, increased the aggregate commitments under the facility from $50,000 to $80,000, subject to a loan cap which is the lesser of (i) the Borrowing Base, as defined in the loan agreement, (ii) the aggregate commitments, or (iii) $70,000 until debt obligations under the Company’s Term Loan Facility have been paid in full, and extended the maturity date from November 27, 2018 to June 3, 2020.

On June 22, 2017, Vince, LLC entered into a second amendment to the Revolving Credit Facility, which among other things, increased availability under the borrowing base by (i) including in the borrowing base up to $5,000 of cash at Vince Holding Corp. so long as such cash is in a deposit account subject to “control” by the agent, (ii) temporarily increasing the concentration limit for accounts due from a specified wholesale partner through July 31, 2017 and (iii) pursuant to a side letter, dated June 22, 2017, entered into between Vince LLC and BofA (the “LC Side Letter”), including in the borrowing base certain letters of credit (the “Specified LCs” as described under “Bank of Montreal Facility” below), issued for the benefit of BofA as credit support for the obligations outstanding under the Revolving Credit Facility. The LC Side Letter terminated when the Specified LCs were released, as described below. In addition, the second amendment changed the financial maintenance covenant in the Revolving Credit Facility from a springing minimum EBITDA covenant to a minimum excess availability covenant that must be satisfied at all times. The new financial maintenance covenant requires the loan parties to have excess availability of not less than the greater of 12.5% of the adjusted loan cap then in effect and $5,000. The second amendment also (x) increased the applicable margin on all borrowings of revolving loans by 0.5% per annum and (y) temporarily lowered the thresholds for what constituted a trigger event through August 15, 2017, such that a trigger event meant the greater of 12.5% of the adjusted loan cap then in effect and $5,000.  Following August 15, 2017, the trigger event means the greater of 15% of the adjusted loan cap then in effect and $6,000. The second amendment also changed the maturity date to the earlier of (a) June 3, 2020 (or a later date as applicable if the lender participates in any extension series) and (b) 120 days prior to the then scheduled maturity date of the Term Loan Facility to the extent that there are outstanding obligations under the Term Loan Facility on such date.  

The Revolving Credit Facility also provides for a letter of credit sublimit of $25,000 (plus any increase in aggregate commitments) and an accordion option that allows for an increase in aggregate commitments up to $20,000. Effective with the second amendment, interest is payable on the loans under the Revolving Credit Facility at either the LIBOR or the Base Rate, in each case, plus an applicable margin of 1.75% to 2.25% for LIBOR loans or 0.75% to 1.75% for Base Rate loans, and in each case subject to a pricing grid based on an average daily excess availability calculation. The “Base Rate” means, for any day, a fluctuating rate per annum equal to the highest of (i) the rate of interest in effect for such day as publicly announced from time to time by BofA as its prime rate; (ii) the Federal Funds Rate for such day, plus 0.50%; and (iii) the LIBOR Rate for a one month interest period as determined on such day, plus 1.0%. During the continuance of an event of default and at the election of the required lender, interest will accrue at a rate of 2% in excess of the applicable non-default rate.

The Revolving Credit Facility also contains representations and warranties, other covenants and events of default that are customary for this type of financing, including limitations on the incurrence of additional indebtedness, liens, negative pledges, guarantees, investments, loans, asset sales, mergers, acquisitions, prepayment of other debt, the repurchase of capital stock, transactions with affiliates, and the ability to change the nature of the Company’s business or its fiscal year. The Revolving Credit Facility generally permits dividends in the absence of any event of default (including any event of default arising from the contemplated dividend), so long as (i) after giving pro forma effect to the contemplated dividend, for the following six months Excess Availability will be at least the greater of 20% of the adjusted loan cap and $10,000 and (ii) after giving pro forma effect to the contemplated dividend, the “Consolidated Fixed Charge Coverage Ratio” for the 12 months preceding such dividend shall be greater than or equal to 1.0 to 1.0 (provided that the Consolidated Fixed Charge Coverage Ratio may be less than 1.0 to 1.0 if, after giving pro forma effect to the contemplated dividend, Excess Availability for the six fiscal months following the dividend is at least the greater of 35% of the adjusted loan cap and $15,000).  As of February 3, 2018, the Company was in compliance with applicable financial covenants. The second amendment replaced and superseded all side letters previously entered into between Vince, LLC and BofA.

On March 28, 2018, Vince, LLC entered into a third amendment to the Revolving Credit Facility. See Note 14 “Subsequent Event” for additional details.

As of February 3, 2018, $38,560 was available under the Revolving Credit Facility, net of the amended loan cap, and there were $16,900 of borrowings outstanding and $8,260 of letters of credit outstanding under the Revolving Credit Facility. The weighted average interest rate for borrowings outstanding under the Revolving Credit Facility as of February 3, 2018 was 3.7%.

As of January 28, 2017, $27,157 was available under the Revolving Credit Facility, net of the amended loan cap, and there were $5,200 of borrowings outstanding and $7,474 of letters of credit outstanding under the Revolving Credit Facility. The weighted average interest rate for borrowings outstanding under the Revolving Credit Facility as of January 28, 2017 was 4.3%.

Bank of Montreal Facility

On June 22, 2017, Vince, LLC entered into a credit facility agreement with the Bank of Montreal to issue the Specified LCs (the “BMO LC Line”), as discussed under the Revolving Credit Facility above. The BMO LC Line was guaranteed by Sun Capital Fund V, L.P., an affiliate of Sun Capital Partners, Inc. The initial BMO LC Line was issued in the amount of $5,000. The maximum draw amount for all Specified LCs was $10,000. The BMO LC Line was unsecured but may have been secured subject to the terms of an intercreditor agreement between BofA and Bank of Montreal. BofA was permitted to draw on the Specified LCs upon the occurrence of certain events specified therein. In the event BofA drew on the Specified LCs upon the occurrence of a draw event, the loan would have been subject to certain customary terms and conditions pursuant to the applicable loan authorization document. The BMO LC Line also could have been released upon request by Vince, LLC so long as the Company had received at least $30,000 of cash proceeds from the 2017 Rights Offering, $15,000 of which must have been used to repay the principal amount of the outstanding loans under the Revolving Credit Facility (without permanent reduction of commitments) or the Excess Availability would have been greater than $10,000 after giving pro forma effect to the 2017 Rights Offering proceeds. The undrawn portion of the face amount of the Specified LCs was subject to a standard 3% annual fee. On October 31, 2017, at the request of the Company, the BMO LC Line was released upon satisfaction of the above release conditions.

v3.8.0.1
Commitments and Contingencies
12 Months Ended
Feb. 03, 2018
Commitments And Contingencies Disclosure [Abstract]  
Commitments and Contingencies

Note 5. Commitments and Contingencies

Leases

The Company leases its office, showroom space and retail stores under operating leases which have remaining terms up to ten years, excluding renewal terms. Most of the Company’s real estate leases contain covenants that require the Company to pay real estate taxes, insurance, and other executory costs. Certain of these leases require contingent rent payments or contain kick-out clauses and/or opt-out clauses, based on the operating results of the retail operations utilizing the leased premises. Rent under leases with scheduled rent changes or lease concessions are recorded on a straight-line basis over the lease term. Rent expense under all operating leases was $22,575, $23,545 and $20,015 for fiscal 2017, fiscal 2016 and fiscal 2015, respectively, the majority of which is recorded within selling, general and administrative expenses.

The future minimum lease payments under operating leases at February 3, 2018 were as follows:

 

 

 

Minimum Lease

 

(in thousands)

 

Payments

 

Fiscal 2018

 

$

21,122

 

Fiscal 2019

 

 

21,291

 

Fiscal 2020

 

 

19,819

 

Fiscal 2021

 

 

18,588

 

Fiscal 2022

 

 

16,506

 

Thereafter

 

 

36,194

 

Total minimum lease payments

 

$

133,520

 

 

Other Contractual Cash Obligations

At February 3, 2018, the Company’s other contractual cash obligations of $43,466 consisted primarily of inventory purchase obligations and service contracts.

Litigation

The Company is a party to legal proceedings, compliance matters, environmental as well as wage and hour and other labor claims that arise in the ordinary course of its business. Although the outcome of such items cannot be determined with certainty, management believes that the ultimate outcome of these items, individually and in the aggregate, will not have a material adverse impact on the Company’s financial position, results of operations or cash flows.

v3.8.0.1
Share-Based Compensation
12 Months Ended
Feb. 03, 2018
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]  
Share-Based Compensation

Note 6. Share-Based Compensation

Employee Stock Plans

Vince 2013 Incentive Plan

In connection with the IPO, the Company adopted the Vince 2013 Incentive Plan, which provides for grants of stock options, stock appreciation rights, restricted stock and other stock-based awards. The aggregate number of shares of common stock which may be issued or used for reference purposes under the Vince 2013 Incentive Plan or with respect to which awards may be granted may not exceed 340,000 shares, as adjusted to reflect the Reverse Stock Split. The shares available for issuance under the Vince 2013 Incentive Plan may be, in whole or in part, either authorized and unissued shares of the Company’s common stock or shares of common stock held in or acquired for the Company’s treasury. In general, if awards under the Vince 2013 Incentive Plan are cancelled for any reason, or expire or terminate unexercised, the shares covered by such award may again be available for the grant of awards under the Vince 2013 Incentive Plan. As of February 3, 2018, there were 150,563 shares under the Vince 2013 Incentive Plan available for future grants. Options granted pursuant to the Vince 2013 Incentive Plan typically vest in equal installments over four years, subject to the employees’ continued employment and expire on the earlier of the tenth anniversary of the grant date or upon termination as outlined in the Vince 2013 Incentive Plan. Restricted stock units granted vest in equal installments over a three-year period or vest in equal installments over four years, subject to the employees’ continued employment.

The consultancy agreements with the non-employee consultants ended in February 2017 and as a result, 17,659 shares were forfeited. In May 2017, the remaining 29,432 previously vested shares expired.

Employee Stock Purchase Plan

The Company maintains an employee stock purchase plan (“ESPP”) for its employees. Under the ESPP, all eligible employees may contribute up to 10% of their base compensation, up to a maximum contribution of $10 per year. The purchase price of the stock is 90% of the fair market value, with purchases executed on a quarterly basis. The plan is defined as compensatory, and accordingly, a charge for compensation expense is recorded to selling, general and administrative expense for the difference between the fair market value and the discounted purchase price of the Company’s Stock. During fiscal 2017 and fiscal 2016, 4,244 and 788 shares of common stock, respectively, were issued under the ESPP. As of February 3, 2018, there were 94,979 shares available for future issuance under the ESPP, as adjusted to reflect the Reverse Stock Split.

Stock Options

A summary of stock option activity for both employees and non-employees for fiscal 2017 is as follows:

 

 

 

Stock Options

 

 

Weighted Average Exercise Price

 

 

Weighted Average Remaining Contractual Term (years)

 

 

Aggregate Intrinsic Value

(in thousands)

 

Outstanding at January 28, 2017

 

 

225,812

 

 

$

45.27

 

 

 

8.9

 

 

$

 

Granted

 

 

19,150

 

 

$

9.90

 

 

 

 

 

 

 

 

 

Exercised

 

 

 

 

$

 

 

 

 

 

 

 

 

 

Forfeited or expired

 

 

(74,205

)

 

$

43.15

 

 

 

 

 

 

 

 

 

Outstanding at February 3, 2018

 

 

170,757

 

 

$

42.23

 

 

 

8.1

 

 

$

32

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vested and exercisable at February 3, 2018

 

 

79,253

 

 

$

45.00

 

 

 

7.9

 

 

$

 

 

Of the above outstanding shares, 91,504 are expected to vest.

As permitted by new accounting guidance that became effective for the Company on January 29, 2017, the Company has elected to account for forfeitures as they occur, which resulted in an increase of $84 to accumulated deficit within the Consolidated Balance Sheet.

The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between the Company’s closing stock price on the last trading day of fiscal 2017 and the exercise price, multiplied by the number of such in-the-money options) that would have been received by the option holders had all options holders exercised their options on February 3, 2018. This amount changes based on the fair market value of the Company’s common stock. Total intrinsic value of options exercised during fiscal 2017, fiscal 2016 and fiscal 2015 (based on the differences between the Company’s stock price on the respective exercise date and the respective exercise price, multiplied by the number of respective options exercised) was $0, $640 and $316, respectively.

The Company’s weighted average assumptions used to estimate the fair value of stock options granted during fiscal 2017, fiscal 2016 and fiscal 2015 were estimated using a Black-Scholes option valuation model. Due to the limited trading history of the Company’s common stock, the volatility and expected term assumptions used were based on averages from a peer group of publicly traded retailers. The risk-free interest rate was based upon the U.S. Treasury yield curve in effect at the grant date.

 

 

 

Fiscal Year

 

 

 

2017

 

 

2016

 

 

2015

 

Weighted-average expected volatility

 

 

39.4

%

 

 

42.6

%

 

 

46.0

%

Expected term (in years)

 

4.7 years

 

 

4.2 years

 

 

4.5 years

 

Risk-free interest rate

 

 

1.9

%

 

 

1.1

%

 

 

1.4

%

Expected dividend yield

 

%

 

 

%

 

 

%

 

 

Based on these assumptions used, the weighted average grant date fair value for options granted to employees during fiscal 2017, fiscal 2016 and fiscal 2015 was $3.57 per share, $12.21 per share and $17.48 per share, respectively. The weighted average grant date fair value for options granted to non-employees in fiscal 2015 was $14.46 per share.

At February 3, 2018, there was $1,034 of unrecognized compensation costs related to stock options granted to employees that will be recognized over a remaining weighted average period of 1.5 years.

Restricted Stock Units

A summary of restricted stock unit activity for fiscal 2017 is as follows:

 

 

 

Restricted Stock Units

 

 

Weighted Average Grant Date Fair Value

 

Nonvested restricted stock units at January 28, 2017

 

 

10,771

 

 

$

65.52

 

Granted

 

 

7,500

 

 

$

6.00

 

Vested

 

 

(3,575

)

 

$

77.50

 

Forfeited

 

 

(1,460

)

 

$

59.80

 

Nonvested restricted stock units at February 3, 2018

 

 

13,236

 

 

$

29.19

 

 

The weighted average grant date fair value for restricted stock units granted during fiscal 2016 and fiscal 2015 was $57.98 and $72.74, respectively. The total fair value of restricted stock units vested during fiscal 2017, fiscal 2016 and fiscal 2015 was $277, $191 and $125, respectively.

At February 3, 2018, there was $267 of unrecognized compensation costs related to restricted stock units that will be recognized over a remaining weighted average period of 1.3 years.

Share-Based Compensation Expense

During fiscal 2017, the Company recognized share-based compensation expense of $1,138 and a related tax benefit of $0. During fiscal 2016, the Company recognized share-based compensation expense of $1,344, including $348 of expense related to non-employees, and a related tax benefit of $0. During fiscal 2015, the Company recognized share-based compensation expense of $1,259, including $160 of expense related to non-employees, and a related tax benefit of $504, including $64 of tax benefit related to non-employees.

v3.8.0.1
Defined Contribution Plan
12 Months Ended
Feb. 03, 2018
Compensation And Retirement Disclosure [Abstract]  
Defined Contribution Plan

Note 7. Defined Contribution Plan

On May 1, 2015, the Company adopted the Vince Holding Corp. 401(k) Plan (“401k Plan”), which is a defined contribution plan covering all U.S.-based employees. Employees who meet certain eligibility requirements may participate in this program by contributing between 1% and 100% of annual compensation to the 401k Plan, subject to IRS limitations. The Company may make matching contributions in an amount equal to 50% of employee contributions up to 3% of eligible compensation. Prior to the adoption of the 401k Plan, employees of the Company participated in the Kellwood Company Retirement Savings Plan administered by Kellwood Holding, LLC. The annual expense incurred by the Company for defined contribution plans was $544, $405 and $426 in fiscal 2017, fiscal 2016 and fiscal 2015, respectively.

v3.8.0.1
Stockholders' Equity
12 Months Ended
Feb. 03, 2018
Equity [Abstract]  
Stockholders' Equity

Note 8. Stockholders’ Equity

Common Stock

The Company currently has authorized for issuance 100,000,000 shares of its voting common stock, par value of $0.01 per share. The Company had increased the number of authorized shares of its voting common stock from 100,000,000 to 250,000,000 on September 6, 2017 in connection with the closing of the 2017 Rights Offering and related 2017 Investment Agreement on September 8, 2017. On October 23, 2017, the Company decreased the number of authorized shares of its voting common stock from 250,000,000 to 100,000,000.

As of February 3, 2018 and January 28, 2017, the Company had 11,616,500 and 4,942,760 shares issued and outstanding, respectively.

Reverse Stock Split

At the close of business on October 23, 2017, the Company effected a 1-for-10 Reverse Stock Split. The Company’s common stock began trading on a split-adjusted basis when the market opened on October 24, 2017. Pursuant to the Reverse Stock Split, every 10 shares of the Company’s issued and outstanding common stock were automatically converted into one share of common stock. No fractional shares were issued if, as a result of the Reverse Stock Split, a stockholder would otherwise have been entitled to a fractional share. Instead, each stockholder was entitled to receive a cash payment based on a pre-split cash in lieu rate of $0.48, which was the average closing price per share on the New York Stock Exchange for the five consecutive trading days immediately preceding October 23, 2017.

2017 Rights Offering

On September 8, 2017, the Company issued an aggregate of 6,666,666 shares in conjunction with the completed 2017 Rights Offering and 2017 Investment Agreement. See Note 12 “Related Party Transactions” for additional information.

2016 Rights Offering

On April 22, 2016, the Company issued an aggregate of 1,181,818 shares in conjunction with the completed 2016 Rights Offering and 2016 Investment Agreement. See Note 12 “Related Party Transactions” for additional information.

Dividends

The Company has not paid dividends, and the Company’s current ability to pay such dividends is restricted by the terms of its debt agreements. The Company’s future dividend policy will be determined on a yearly basis and will depend on earnings, financial condition, capital requirements, and certain other factors. The Company does not expect to declare dividends with respect to its common stock in the foreseeable future.

v3.8.0.1
Earnings Per Share
12 Months Ended
Feb. 03, 2018
Earnings Per Share [Abstract]  
Earnings Per Share

Note 9. Earnings Per Share

The following is a reconciliation of weighted average basic shares to weighted average diluted shares outstanding:

 

 

 

Fiscal Year

 

 

 

2017

 

 

2016

 

 

2015

 

Weighted-average shares—basic

 

 

7,605,822

 

 

 

4,642,053

 

 

 

3,677,043

 

Effect of dilutive equity securities

 

 

2,605

 

 

 

 

 

 

75,879

 

Weighted-average shares—diluted

 

 

7,608,427

 

 

 

4,642,053

 

 

 

3,752,922

 

 

Because the Company incurred a net loss for the fiscal year ended January 28, 2017, weighted-average basic shares and weighted-average diluted shares outstanding are equal for the period.

For the fiscal years ended February 3, 2018, January 28, 2017 and January 30, 2016, 190,363, 171,913 and 73,230 options to purchase common stock, respectively, were excluded from the computation of weighted average shares for diluted earnings per share since the related exercise prices exceeded the average market price of the Company’s common stock and such inclusion would be anti-dilutive.

On September 8, 2017, the Company issued an aggregate of 6,666,666 shares in conjunction with the completed 2017 Rights Offering and 2017 Investment Agreement. See Note 12 “Related Party Transactions” for additional information. On April 22, 2016, the Company issued an aggregate of 1,181,818 shares in conjunction with the completed 2016 Rights Offering and 2016 Investment Agreement. See Note 12 “Related Party Transactions” for additional information.

v3.8.0.1
Income Taxes
12 Months Ended
Feb. 03, 2018
Income Tax Disclosure [Abstract]  
Income Taxes

Note 10. Income Taxes

 

On December 22, 2017, U.S. tax reform legislation known as the Tax Cuts and Jobs Act (the “TCJA”) was signed into law. The TCJA makes substantial changes to U.S. tax law, including a reduction in the corporate tax rate, a limitation on deductibility of interest expense, a limitation on the use of net operating losses to offset future taxable income, and the allowance of immediate expensing of capital expenditures. The Company has estimated the impact of the TCJA incorporating assumptions made based upon its current interpretation of the TCJA in accordance with SEC Staff issued Staff Accounting Bulletin No. 118 (“SAB 118”). Given the timing of the enactment of the TCJA on December 22, 2017, the SEC issued guidance under SAB 118 directing taxpayers to consider the impact of the new legislation as “provisional” when it does not have the necessary information available, prepared or analyzed (including computations) in reasonable detail to complete its accounting for the effects resulting from the change in law. The Company has recognized the provisional tax impacts related to revaluation of its deferred tax assets, and included those amounts in the consolidated financial statements for the year ended February 3, 2018. The actual impact of the TCJA may differ from the Company’s estimates due to, among other things, further refinement of its calculations, changes in interpretations and assumptions made, guidance that may be issued and actions the Company may take as a result of the TCJA. The Company expects the accounting to be completed within the one year measurement period, as allowed under SAB 118.

 

As a result of the enactment of the Tax Cuts and Jobs Act in the U.S., the Company recognized a net income tax benefit of $379 from the valuation allowance release associated with minimum tax credits which can be utilized and/or refunded in the future. The reduction in deferred tax assets due to the rate change from 35% to 21% of $43,655 was offset with a corresponding decrease in valuation allowance of $43,655.

The provision for income taxes consisted of the following:

 

 

Fiscal Year

 

(in thousands)

2017

 

 

2016

 

 

2015

 

Current:

 

 

 

 

 

 

 

 

 

 

 

Domestic:

 

 

 

 

 

 

 

 

 

 

 

Federal

$

(295

)

 

$

 

 

$

(53

)

State

 

32

 

 

 

207

 

 

 

522

 

Foreign

 

70

 

 

 

75

 

 

 

 

Total current

 

(193

)

 

 

282

 

 

 

469

 

Deferred:

 

 

 

 

 

 

 

 

 

 

 

Domestic:

 

 

 

 

 

 

 

 

 

 

 

Federal

 

(379

)

 

 

83,323

 

 

 

2,994

 

State

 

 

 

 

10,121

 

 

 

(249

)

Total deferred

 

(379

)

 

 

93,444

 

 

 

2,745

 

Total provision for income taxes

$

(572

)

 

$

93,726

 

 

$

3,214

 

 

The sources of income (loss) before provision for income taxes are from the United States and the Company’s French branch. The Company files U.S. federal income tax returns and income tax returns in various state and local jurisdictions.

Current income taxes are the amounts payable under the respective tax laws and regulations on each year’s earnings. Deferred income tax assets and liabilities represent the tax effects of revenues, costs and expenses, which are recognized for tax purposes in different periods from those used for financial statement purposes.

A reconciliation of the federal statutory income tax rate to the effective tax rate is as follows:

 

 

Fiscal Year

 

 

2017

 

 

2016

 

 

2015

 

Statutory federal rate

 

33.7

%

 

 

35.0

%

 

 

35.0

%

State taxes, net of federal benefit

 

(4.3

)%

 

 

5.5

%

 

 

6.5

%

Nondeductible Tax Receivable Agreement adjustment (1)

 

(47.6

)%

 

 

0.4

%

 

 

4.1

%

Valuation allowance

 

19.0

%

 

 

(176.8

)%

 

 

(0.5

)%

Return to provision adjustment

 

(0.9

)%

 

 

(0.1

)%

 

 

(2.4

)%

Impact of TCJA and other changes in tax law

 

(0.5

)%

 

—%

 

 

 

(3.2

)%

Rate Differential on Foreign Income

 

0.1

%

 

—%

 

 

—%

 

Other

 

(0.5

)%

 

—%

 

 

 

(0.8

)%

Total

 

(1.0

)%

 

 

(136.0

)%

 

 

38.7

%

 

 

(1)

Non-deductible Tax Receivable Agreement liability revaluation due to TCJA and change in levels of projected pre-tax income. See “Tax Receivable Agreement” under Note 12 “Related Party Transactions” for additional information.

Deferred income tax assets and liabilities consisted of the following:

 

 

February 3,

 

 

January 28,

 

(in thousands)

2018

 

 

2017

 

Deferred tax assets:

 

 

 

 

 

 

 

Depreciation and amortization

$

13,317

 

 

$

28,353

 

Employee related costs

 

2,001

 

 

 

2,361

 

Allowance for asset valuations

 

2,441

 

 

 

4,817

 

Accrued expenses

 

4,725

 

 

 

7,349

 

Net operating losses

 

71,122

 

 

 

83,670

 

Tax credits

 

498

 

 

 

812

 

Other

 

490

 

 

 

489

 

Total deferred tax assets

 

94,594

 

 

 

127,851

 

Less: valuation allowances

 

(92,590

)

 

 

(122,860

)

Net deferred tax assets

 

2,004

 

 

 

4,991

 

Deferred tax liabilities:

 

 

 

 

 

 

 

Cancellation of debt income

 

(1,473

)

 

 

(4,607

)

Other

 

(152

)

 

 

(384

)

Total deferred tax liabilities

 

(1,625

)

 

 

(4,991

)

Net deferred tax assets

$

379

 

 

$

 

Included in:

 

 

 

 

 

 

 

Prepaid expenses and other current assets

$

 

 

$

 

Deferred income taxes

 

379

 

 

 

 

Net deferred tax assets

$

379

 

 

$

 

 

Net operating losses as of February 3, 2018 presented above include prior deductions related to stock options that exceeded expenses previously recognized for financial reporting purposes. There is no excess deduction related to stock option during tax year ended February 3, 2018. Upon adoption on January 29, 2017 of ASU 2016-09, “Improvements to Employee Share-Based Payment Accounting,” the Company recognized an increase of $2,350 to deferred tax assets related to net operating loss carryforwards for the excess tax benefits related to share-based compensation and also recognized an increase of an equal amount in the valuation allowance against such increase of deferred tax assets. Net operating losses as of January 28, 2017 presented above do not include prior deductions related to stock options that exceeded expenses previously recognized for financial reporting purposes in the amount of $2,350, since they did not reduce income taxes payable.

As of February 3, 2018, the Company had a net operating loss of $271,991 (federal tax effected amount of $57,118) for federal income tax purposes that may be used to reduce future federal taxable income. The net operating losses for federal income tax purposes will expire between 2030 and 2038.

As of February 3, 2018, the Company recorded a $16,353 deferred tax asset related to net operating loss carryforwards for state income tax purposes that may be used to reduce future state taxable income. The net operating loss carryforwards for state income tax purposes expire between 2022 and 2038.

As of February 3, 2018, the Company had total deferred tax assets related to net operating loss carryforwards, reduced for uncertain tax positions, of $71,122, of which $55,336 and $15,786 were attributable to federal and domestic state and local jurisdictions, respectively.

The valuation allowance for deferred tax assets was $92,590 (post tax reform) at February 3, 2018, decreasing $30,270 from the valuation allowance for deferred tax assets of $122,860 at January 28, 2017. During fiscal 2017, the Company released valuation allowances in the amount of $30,270, which consists of $44,034 impact from TCJA offset by $13,764 due to current year pre-tax loss. Adjustments to the valuation allowance are made when there is a change in management’s assessment of the amount of deferred tax assets that are realizable.

A reconciliation of the beginning and ending amount of gross unrecognized tax benefits, excluding interest and penalties, is as follows:

 

 

Fiscal Year

 

(in thousands)

2017

 

 

2016

 

 

2015

 

Beginning balance

$

2,339

 

 

$

2,127

 

 

$

4,487

 

Increases for tax positions in current year

 

10

 

 

 

208

 

 

 

72

 

Increases for tax positions in prior years

 

 

 

 

4

 

 

 

27

 

Decreases for tax positions in prior years

 

 

 

 

 

 

 

(2,459

)

Ending balance

$

2,349

 

 

$

2,339

 

 

$

2,127

 

 

 

 

 

 

 

 

 

 

 

 

 

As of February 3, 2018 and January 28, 2017 , unrecognized tax benefits in the amount of $0 and $0, respectively, would impact the Company’s effective tax rate if recognized. It is reasonably possible that within the next 12 months certain temporary unrecognized tax benefits could fully reverse. Should this occur, the Company’s unrecognized tax benefits could be reduced by up to $2,349.

The Company includes accrued interest and penalties on underpayments of income taxes in its income tax provision. As of February 3, 2018 and January 28, 2017, the Company did not have any interest and penalties accrued on its Consolidated Balance Sheets and no related provision or benefit was recognized in each of the Company’s Consolidated Statements of Operations for the years ended February 3, 2018, January 28, 2017 and January 30, 2016. Interest is computed on the difference between the tax position recognized net of any unrecognized tax benefits and the amount previously taken or expected to be taken in the Company’s tax returns.

With limited exceptions, the Company is no longer subject to examination for U.S. federal and state income tax for 2007 and prior.

v3.8.0.1
Segment and Geographical Financial Information
12 Months Ended
Feb. 03, 2018
Segment Reporting [Abstract]  
Segment and Geographical Financial Information

Note 11. Segment and Geographical Financial Information

The Company operates and manages its business by distribution channel and has identified two reportable segments, as further described below. Management considered both similar and dissimilar economic characteristics, internal reporting and management structures, as well as products, customers, and supply chain logistics to identify the following reportable segments:

 

Wholesale segment—consists of the Company’s operations to distribute products to major department stores and specialty stores in the United States and select international markets; and

 

Direct-to-consumer segment—consists of the Company’s operations to distribute products directly to the consumer through its branded full-price specialty retail stores, outlet stores, and e-commerce platform.

The accounting policies of the Company’s reportable segments are consistent with those described in Note 1 “Description of Business and Summary of Significant Accounting Policies.” Unallocated corporate expenses are comprised of selling, general and administrative expenses attributable to corporate and administrative activities (such as marketing, design, finance, information technology, legal and human resource departments), and other charges that are not directly attributable to the Company’s reportable segments. Unallocated corporate assets are comprised of the carrying values of the Company’s goodwill and tradename, deferred tax assets, and other assets that will be utilized to generate revenue for both of the Company’s reportable segments. As the Company’s goodwill and tradename are not allocated to the Company’s reportable segments in the measure of segment assets regularly reported to and used by management, the corresponding impairment charges associated with the goodwill and tradename are not reflected in the operating results of the Company’s reportable segments.

Summary information for the Company’s reportable segments is presented below.

 

 

 

Fiscal Year

 

(in thousands)

 

2017

 

 

2016

 

 

2015

 

Net Sales:

 

 

 

 

 

 

 

 

 

 

 

 

Wholesale

 

$

166,113

 

 

$

170,053

 

 

$

201,182

 

Direct-to-consumer

 

 

106,469

 

 

 

98,146

 

 

 

101,275

 

Total net sales

 

$

272,582

 

 

$

268,199

 

 

$

302,457

 

Income (loss) before income taxes:

 

 

 

 

 

 

 

 

 

 

 

 

Wholesale

 

$

44,496

 

 

$

47,098

 

 

$

61,571

 

Direct-to-consumer (1)

 

 

(97

)

 

 

1,216

 

 

 

7,839

 

Subtotal

 

 

44,399

 

 

 

48,314

 

 

 

69,410

 

Unallocated corporate expenses

 

 

(62,716

)

 

 

(59,925

)

 

 

(53,684

)

Impairment of goodwill and indefinite-lived intangible asset (2)

 

 

 

 

 

(53,061

)

 

 

 

Interest expense, net

 

 

(5,540

)

 

 

(3,932

)

 

 

(5,680

)

Other income (expense), net (3)

 

 

81,882

 

 

 

(329

)

 

 

(1,733

)

Total income (loss) before income taxes

 

$

58,025

 

 

$

(68,933

)

 

$

8,313

 

Depreciation & Amortization:

 

 

 

 

 

 

 

 

 

 

 

 

Wholesale

 

$

1,742

 

 

$

1,754

 

 

$

2,058

 

Direct-to-consumer

 

 

4,928

 

 

 

4,611

 

 

 

4,498

 

Unallocated corporate

 

 

3,428

 

 

 

2,319

 

 

 

1,794

 

Total depreciation & amortization

 

$

10,098

 

 

$

8,684

 

 

$

8,350

 

Capital Expenditures:

 

 

 

 

 

 

 

 

 

 

 

 

Wholesale

 

$

81

 

 

$

650

 

 

$

1,629

 

Direct-to-consumer

 

 

1,662

 

 

 

9,559

 

 

 

9,442

 

Unallocated corporate

 

 

1,636

 

 

 

4,078

 

 

 

6,520

 

Total capital expenditures

 

$

3,379

 

 

$

14,287

 

 

$

17,591

 

 

 

(1) Fiscal 2017 and fiscal 2016 include non-cash impairment charges totaling $5,111 and $2,082, respectively related to property and equipment.  See Note 1 “Description of Business and Summary of Significant Accounting Policies – (K) Impairment of Long-lived Assets” for additional information.

(2) Impairment of goodwill and indefinite-lived intangible asset in fiscal 2016 includes pre-tax impairment charges of $53,061 related to the Company’s goodwill and tradename intangible asset. See Note 1 “Description of Business and Summary of Significant Accounting Policies – (L) Goodwill and Other Intangible Assets” for further details.

(3) Fiscal 2017 includes the $82,002 pre-tax benefit from re-measurement of the liability related to the Tax Receivable Agreement. See Note 12 “Related Party Transactions” for additional information.

Assets for each of the Company’s reportable segments are presented below.

 

 

 

February 3,

 

 

January 28,

 

(in thousands)

 

2018

 

 

2017

 

Total Assets:

 

 

 

 

 

 

 

 

Wholesale

 

$

58,733

 

 

$

44,442

 

Direct-to-consumer

 

 

40,751

 

 

 

45,038

 

Unallocated corporate

 

 

135,050

 

 

 

150,000

 

Total assets

 

$

234,534

 

 

$

239,480

 

 

The Company is domiciled in the U.S. and as of February 3, 2018, had no active international subsidiaries. Although the Company maintains a showroom in Paris through a local branch, substantially all marketing, sales, order management and customer service functions are performed in the U.S. and therefore substantially all of the Company’s sales originate in the U.S.  As a result, net sales by destination are no longer provided. Additionally, substantially all long-lived assets, including property and equipment, are located in the U.S.

v3.8.0.1
Related Party Transactions
12 Months Ended
Feb. 03, 2018
Related Party Transactions [Abstract]  
Related Party Transactions

Note 12. Related Party Transactions

Sourcing Arrangement

On July 13, 2017, Vince, LLC (“Vince”), an indirect wholly-owned subsidiary of the Company, entered into an agreement (the “Sourcing Arrangement”) with Rebecca Taylor, Inc. (“RT”) relating to the purchase and resale of certain Vince branded finished goods (“Vince Goods”), whereby RT has agreed to purchase Vince Goods from approved suppliers pursuant to purchase orders issued to such suppliers (each, a “RT Purchase Order”) at a price specified therein (a “RT Price”) and Vince has agreed to purchase such Vince Goods from RT pursuant to purchase orders issued to RT (each, a “Vince Purchase Order”) at a price specified therein (a “Vince Price”). The Vince Price is at all times equal to 103.5% of the RT price.

Upon receipt of the Vince Purchase Order, RT must issue the RT Purchase Order and apply for a letter of credit to be issued to the applicable supplier in the amount equal to the RT Price, subject to availability under RT’s credit facility.  When the Vince Goods are ready to be delivered, RT must invoice Vince in the amount equal to the Vince Price, which invoice shall be payable by Vince within two business days of receipt of the invoice, which payment term may be extended by RT. In the event Vince fails to make timely payment for any Vince Goods, RT has the right to liquidate such goods in a manner and at a price it deems appropriate in its sole discretion. 

The Sourcing Arrangement contains customary indemnification and representations and warranties. The Sourcing Arrangement may be terminated by either party upon 60 days’ prior written notice to the other party. 

RT is owned by affiliates of Sun Capital Partners, Inc., whose affiliates owned approximately 73% of the outstanding common stock of the Company as of February 3, 2018. During fiscal 2017, the Company has paid $17,834 for orders placed under the Sourcing Arrangement. No new orders have been placed under the Sourcing Arrangement since September 2017.

Shared Services Agreement

In connection with the consummation of the Company’s IPO, Vince, LLC entered into a Shared Services Agreement with Kellwood on November 27, 2013 (the “Shared Services Agreement”) pursuant to which Kellwood provided support services in various areas including, among other things, certain accounting functions, tax, e-commerce operations, distribution, logistics, information technology, accounts payable, credit and collections and payroll and benefits administration. As of the end of fiscal 2016, the Company completed the transition of all functions and systems from Kellwood to the Company’s own systems or processes as well as to third-party service providers. In connection with the Kellwood Sale, the Shared Services Agreement was contributed to St. Louis, LLC. The Shared Services Agreement with St. Louis, LLC has effectively terminated as there are currently no outstanding or further services to be provided thereunder.

The fees for all services received by Vince, LLC under the Shared Services Agreement are at cost. Such costs are the full amount of any and all actual and direct out-of-pocket expenses (including base salary and wages but without providing for any margin of profit or allocation of depreciation or amortization expense) incurred by the service provider or its affiliates in connection with the provision of the services.

The Company is invoiced monthly for the services provided under the Shared Services Agreement and generally is required to pay within 15 business days of receiving such invoice. The payments can be trued-up and can be disputed once each fiscal quarter. For the years ended February 3, 2018, January 28, 2017 and January 30, 2016, the Company recognized $305, $4,256 and $9,357, respectively, of expense within the Consolidated Statements of Operations for services provided under the Shared Services Agreement. As of February 3, 2018 and January 28, 2017, the Company has recorded $82 and $37, respectively, in Other accrued expenses to recognize amounts payable under the Shared Services Agreement.

Tax Receivable Agreement

VHC entered into a Tax Receivable Agreement with the Pre-IPO Stockholders on November 27, 2013. The Company and its former subsidiaries generated certain tax benefits (including NOLs and tax credits) prior to the Restructuring Transactions consummated in connection with the Company’s IPO and will generate certain section 197 intangible deductions (the “Pre-IPO Tax Benefits”), which would reduce the actual liability for taxes that the Company might otherwise be required to pay. The Tax Receivable Agreement provides for payments to the Pre-IPO Stockholders in an amount equal to 85% of the aggregate reduction in taxes payable realized by the Company and its subsidiaries from the utilization of the Pre-IPO Tax Benefits (the “Net Tax Benefit”).

For purposes of the Tax Receivable Agreement, the Net Tax Benefit equals (i) with respect to a taxable year, the excess, if any, of (A) the Company’s liability for taxes using the same methods, elections, conventions and similar practices used on the relevant company return assuming there were no Pre-IPO Tax Benefits over (B) the Company’s actual liability for taxes for such taxable year (the “Realized Tax Benefit”), plus (ii) for each prior taxable year, the excess, if any, of the Realized Tax Benefit reflected on an amended schedule applicable to such prior taxable year over the Realized Tax Benefit reflected on the original tax benefit schedule for such prior taxable year, minus (iii) for each prior taxable year, the excess, if any, of the Realized Tax Benefit reflected on the original tax benefit schedule for such prior taxable year over the Realized Tax Benefit reflected on the amended schedule for such prior taxable year; provided, however, that to extent any of the adjustments described in clauses (ii) and (iii) were reflected in the calculation of the tax benefit payment for any subsequent taxable year, such adjustments shall not be taken into account in determining the Net Tax Benefit for any subsequent taxable year. To the extent that the Company is unable to make the payment under the Tax Receivable

Agreement when due under the terms of the Tax Receivable Agreement for any reason, such payment would be deferred and would

accrue interest at a default rate of LIBOR plus 500 basis points until paid, instead of the agreed rate of LIBOR plus 200 basis points per annum in accordance with the terms of the Tax Receivable Agreement.

While the Tax Receivable Agreement is designed with the objective of causing the Company’s annual cash costs attributable to federal, state and local income taxes (without regard to the Company’s continuing 15% interest in the Pre-IPO Tax Benefits) to be the same as that which the Company would have paid had the Company not had the Pre-IPO Tax Benefits available to offset its federal, state and local taxable income, there are circumstances in which this may not be the case. In particular, the Tax Receivable Agreement provides that any payments by the Company thereunder shall not be refundable. In that regard, the payment obligations under the Tax Receivable Agreement differ from a payment of a federal income tax liability in that a tax refund would not be available to the Company under the Tax Receivable Agreement even if the Company were to incur a net operating loss for federal income tax purposes in a future tax year. Similarly, the Pre-IPO Stockholders will not reimburse the Company for any payments previously made if any tax benefits relating to such payments are subsequently disallowed, although the amount of any such tax benefits subsequently disallowed will reduce future payments (if any) otherwise owed to such Pre-IPO Stockholders. In addition, depending on the amount and timing of the Company’s future earnings (if any) and on other factors including the effect of any limitations imposed on the Company’s ability to use the Pre-IPO Tax Benefits, it is possible that all payments required under the Tax Receivable Agreement could become due within a relatively short period of time following consummation of the Company’s IPO.

If the Company had not entered into the Tax Receivable Agreement, the Company would be entitled to realize the full economic benefit of the Pre-IPO Tax Benefits to the extent allowed by federal, state and local law. The Tax Receivable Agreement is designed with the objective of causing the Company’s annual cash costs attributable to federal, state and local income taxes (without regard to the Company’s continuing 15% interest in the Pre-IPO Tax Benefits) to be the same as the Company would have paid had the Company not had the Pre-IPO Tax Benefits available to offset its federal, state and local taxable income. As a result, stockholders who purchased shares in the IPO are not entitled to the economic benefit of the Pre-IPO Tax Benefits that would have been available if the Tax Receivable Agreement were not in effect, except to the extent of the Company’s continuing 15% interest in the Pre-IPO Benefits.

Additionally, the payments the Company makes to the Pre-IPO Stockholders under the Tax Receivable Agreement are not expected to give rise to any incidental tax benefits to the Company, such as deductions or an adjustment to the basis of the Company’s assets.

An affiliate of Sun Capital may elect to terminate the Tax Receivable Agreement upon the occurrence of a Change of Control (as defined below). In connection with any such termination, the Company is obligated to pay the present value (calculated at a rate per annum equal to LIBOR plus 200 basis points as of such date) of all remaining Net Tax Benefit payments that would be required to be paid to the Pre-IPO Stockholders from such termination date, applying the valuation assumptions set forth in the Tax Receivable Agreement (the “Early Termination Period”). “Change of control,” as defined in the Tax Receivable Agreement shall mean an event or series of events by which (i) VHC shall cease directly or indirectly to own 100% of the capital stock of Vince, LLC; (ii) any “person” or “group” (as such terms are used in Section 13(d) and 14(d) of the Exchange Act), other than one or more permitted investors, shall be the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act) of capital stock having more, directly or indirectly, than 35% of the total voting power of all outstanding capital stock of Vince Holding Corp. in the election of directors, unless at such time the permitted investors are direct or indirect “beneficial owners” (as so defined) of capital stock of Vince Holding Corp. having a greater percentage of the total voting power of all outstanding capital stock of VHC in the election of directors than that owned by each other “person” or “group” described above; (iii) for any reason whatsoever, a majority of the board of directors of VHC shall not be continuing directors; or (iv) a “Change of Control” (or comparable term) shall occur under (x) any term loan or revolving credit facility of VHC or its subsidiaries or (y) any unsecured, senior, senior subordinated or subordinated indebtedness of VHC or its subsidiaries, if, in each case, the outstanding principal amount thereof is in excess of $15,000. The Company may also terminate the Tax Receivable Agreement by paying the Early Termination Payment to the Pre-IPO Stockholders. Additionally, the Tax Receivable Agreement provides that in the event that the Company breaches any material obligations under the Tax Receivable Agreement by operation of law as a result of the rejection of the Tax Receivable Agreement in a case commenced under the Bankruptcy Code, then the Early Termination Payment plus other outstanding amounts under the Tax Receivable Agreement shall become due and payable.

The Tax Receivable Agreement will terminate upon the earlier of (i) the date all such tax benefits have been utilized or expired, (ii) the last day of the tax year including the tenth anniversary of the IPO Restructuring Transactions and (iii) the mutual agreement of the parties thereto, unless earlier terminated in accordance with the terms thereof.

As of February 3, 2018, the Company’s total obligation under the Tax Receivable Agreement is estimated to be $58,616, of which $343 is included as a component of Other accrued expenses and $58,273 is included as Other liabilities on the Consolidated Balance Sheet. The tax benefit payment of $351, including accrued interest, with respect to the 2016 taxable year was paid in the first quarter of fiscal 2018. The tax benefit payment of $7,438, including accrued interest, with respect to the 2015 taxable year was paid in the fourth quarter of fiscal 2016. As a condition of the 2016 Investment Agreement, the Company repaid its obligation, including accrued interest, totaling $22,262, with respect to the 2014 taxable year upon the closing of the 2016 Rights Offering. The Tax Receivable Agreement expires on December 31, 2023. The obligation was originally recorded in connection with the IPO as an adjustment to additional paid-in capital on the Company’s Consolidated Balance Sheet.

During fiscal 2017, the obligation under the Tax Receivable Agreement was adjusted primarily as a result of the enactment of the TCJA in the U.S and the change in levels of projected pre-tax income. The TCJA reduced the U.S. federal corporate tax rate from 35% to 21% which resulted in the re-measurement of liability at the lower tax rate. The adjustment resulted in a net decrease of $82,002 to the liability under the Tax Receivable Agreement with the corresponding adjustment accounted for as a decrease to Other (income) expense, net on the Consolidated Statements of Operations. During fiscal 2016, the obligation under the Tax Receivable Agreement was adjusted primarily as a result of changes in tax laws that impacted the net operating loss deferred tax assets. The adjustment resulted in a net decrease of $209 to the liability under the Tax Receivable Agreement with the corresponding adjustment accounted for as a decrease to Other (income) expense, net on the Consolidated Statements of Operations. During fiscal 2015, the Company adjusted the obligation under the Tax Receivable Agreement in connection with the filing of its 2014 income tax returns and as a result of changes in tax laws that impacted the net operating loss deferred tax assets. These adjustments resulted in a net increase of $1,154 to the pre-IPO deferred tax assets and a net increase of $981 to the liability under the Tax Receivable Agreement with the corresponding net increase accounted for as an adjustment to Other (income) expense, net on the Consolidated Statements of Operations.

Bank of Montreal Facility

On June 22, 2017, Vince, LLC entered into the BMO LC Line with the Bank of Montreal to issue Specified LCs for the benefit of BofA as credit support for the obligations outstanding under the Revolving Credit Facility with BofA. The BMO LC Line was guaranteed by Sun Capital Fund V, L.P., an affiliate of Sun Capital Partners. The initial BMO LC Line was issued in the amount of $5,000. The maximum draw amount for all Specified LCs was $10,000. The Specified LCs were never drawn upon and on October 31, 2017, at the request of the Company and upon the satisfaction of certain release conditions, the BMO LC Line was released.

2017 Investment Agreement and 2017 Rights Offering

On August 10, 2017, the Company entered into an Investment Agreement (the “2017 Investment Agreement”) with Sun Cardinal, LLC and SCSF Cardinal, LLC (collectively, the “Sun Cardinal Investors”) pursuant to which the Company agreed to issue and sell to the Sun Cardinal Investors, and the Sun Cardinal Investors agreed to purchase, an aggregate number of shares of the Company’s common stock equal to (x) $30,000 minus (y) the aggregate proceeds of the 2017 Rights Offering, at the 2017 Rights Offering subscription price per share (prior to adjustment for the Reverse Stock Split) of $0.45, subject to the terms and conditions set forth in the 2017 Investment Agreement (the “Backstop Commitment”). The 2017 Investment Agreement superseded the Rights Offering Commitment Letter, dated May 18, 2017, from Sun Capital Partners V, L.P.

On August 15, 2017, the Company commenced the 2017 Rights Offering, whereby the Company distributed, at no charge, to stockholders of record as of August 14, 2017 (the “2017 Rights Offering Record Date”), rights to purchase new shares of the Company’s common stock at $0.45 per share (prior to adjustment for the Reverse Stock Split). Each stockholder as of the 2017 Rights Offering Record Date (“2017 Rights Holders”) received one non-transferrable right to purchase 1.3475 shares for every share of common stock owned on the 2017 Rights Offering Record Date (the “subscription right”). 2017 Rights Holders who fully exercised their subscription rights were entitled to subscribe for additional shares that remained unsubscribed as a result of any unexercised subscription rights (the “over-subscription right”). The over-subscription right allowed a 2017 Rights Holder to subscribe for an additional amount equal to up to an aggregate of 9.99% of the Company’s outstanding shares of common stock after giving effect to the consummation of the transactions contemplated by the 2017 Rights Offering and the 2017 Investment Agreement, subject to certain limitations and pro rata allocations. Subscription rights could only be exercised for whole numbers of shares; no fractional shares of common stock were issued in the 2017 Rights Offering. The 2017 Rights Offering period expired on August 30, 2017 at 5:00 p.m. New York City time and the Company received subscriptions and oversubscriptions from its existing stockholders (including the Sun Cardinal Investors and their affiliates) resulting in aggregate gross proceeds of $21,976. Additionally, in accordance with the related 2017 Investment Agreement, the Company received $8,024 of gross proceeds from the Sun Cardinal Investors. In total, the Company received gross proceeds of $30,000 as a result of the 2017 Rights Offering and related 2017 Investment Agreement transactions and the Company issued 6,666,666 shares of its common stock.

The Company used a portion of the net proceeds received from the 2017 Rights Offering and related 2017 Investment Agreement to (1) repay $9,000 under the Company’s Term Loan Facility and (2) repay $15,000 under the Company’s Revolving Credit Facility, without a concurrent commitment reduction. The Company used the remaining net proceeds for general corporate purposes, except for $1,823 which was retained at VHC.

As of February 3, 2018, affiliates of Sun Fund V collectively beneficially owned approximately 73% of the Company’s outstanding common stock.

2016 Investment Agreement and 2016 Rights Offering

On March 15, 2016, the Company entered into the 2016 Investment Agreement with the Investors pursuant to which Sun Cardinal and SCSF Cardinal agreed to backstop the 2016 Rights Offering by purchasing at the subscription price (prior to adjustment for the Reverse Stock Split) of $5.50 per share any and all shares not subscribed through the exercise of rights, including the oversubscription. 

On March 29, 2016, the Company commenced the 2016 Rights Offering, whereby the Company distributed, at no charge, to stockholders of record as of March 23, 2016 (the “2016 Rights Offering Record Date”), rights to purchase new shares of the Company’s common stock (prior to adjustment for the Reverse Stock Split) at $5.50 per share. Each stockholder as of the 2016 Rights Offering Record Date (“2016 Rights Holders”) received one non-transferrable right to purchase 0.3191 shares for every share of common stock owned on the 2016 Rights Offering Record Date (the “subscription right”). 2016 Rights Holders who fully exercised their subscription rights were entitled to subscribe for additional shares that remained unsubscribed as a result of any unexercised subscription rights (the “over-subscription right”). The over-subscription right allowed a 2016 Rights Holder to subscribe for an additional number of shares equal to up to 20% of the shares of common stock for which such holder was otherwise entitled to subscribe. Subscription rights could only be exercised for whole numbers of shares; no fractional shares of common stock were issued in the 2016 Rights Offering. The 2016 Rights Offering period expired on April 14, 2016 at 5:00 p.m. New York City time, prior to which payment for all subscription rights required an irrevocable funding of cash to the transfer agent, to be held in an account for the benefit of the Company. The Investors fully subscribed in the 2016 Rights Offering and exercised their oversubscription right. The Company received subscriptions and oversubscriptions from its existing stockholders for a total (prior to adjustment for the Reverse Stock Split) of 11,622,518 shares of its common stock, resulting in aggregate gross proceeds of approximately $63,924. Simultaneous with the closing of the 2016 Rights Offering, the Company received $1,076 of gross proceeds from the 2016 Investment Agreement and issued to the Investors 195,663 shares (prior to adjustment for the Reverse Stock Split) of its common stock in connection therewith. In total, the Company received total gross proceeds of $65,000 as a result of the 2016 Rights Offering and 2016 Investment Agreement transactions and recorded increases (prior to adjustment for the Reverse Stock Split) of $118 within Common Stock and $63,992 within Additional paid-in capital on the consolidated balance sheet. Upon the completion of these transactions, affiliates of Sun Capital owned 58% of the Company’s outstanding common stock.

The Company used a portion of the net proceeds received from the 2016 Rights Offering and 2016 Investment Agreement to (1) repay the amount owed by the Company under the Tax Receivable Agreement (as discussed above) with Sun Cardinal, for itself and as a representative of the other stockholders party thereto, for the tax benefit with respect to the 2014 taxable year including accrued interest, totaling $22,262, and (2) repay all then outstanding indebtedness, totaling $20,000, under the Company’s Revolving Credit Facility. The Company used the remaining net proceeds, which funds were held by VHC until needed by its operating subsidiary, for additional strategic investments and general corporate purposes.

To provide the Company with greater flexibility on certain debt covenants while it was executing brand reset strategies, the Company retained approximately $21,000 of proceeds from the 2016 Rights Offering and related 2016 Investment Agreement at Vince Holding Corp. to be utilized in the event a Specified Equity Contribution (as defined under the Term Loan Facility) was required under the Term Loan Facility. See Note 4 “Long-Term Debt and Financing Arrangements” for additional details.

Sun Capital Consulting Agreement

On November 27, 2013, the Company entered into an agreement with Sun Capital Management to (i) reimburse Sun Capital Management Corp. (“Sun Capital Management”) or any of its affiliates providing consulting services under the agreement for out-of-pocket expenses incurred in providing consulting services to the Company and (ii) provide Sun Capital Management with customary indemnification for any such services.

The agreement is scheduled to terminate on November 27, 2023, the tenth anniversary of the Company’s IPO. Under the consulting agreement, the Company has no obligation to pay Sun Capital Management or any of its affiliates any consulting fees other than those which are approved by a majority of the Company’s directors that are not affiliated with Sun Capital. To the extent such fees are approved in the future, the Company will be obligated to pay such fees in addition to reimbursing Sun Capital Management or any of its affiliates that provide the Company services under the consulting agreement for all reasonable out-of-pocket fees and expenses incurred by such party in connection with the provision of consulting services under the consulting agreement and any related matters. Reimbursement of such expenses shall not be conditioned upon the approval of a majority of the Company’s directors that are not affiliated with Sun Capital Management, and shall be payable in addition to any fees that such directors may approve.

Neither Sun Capital Management nor any of its affiliates are liable to the Company or the Company’s affiliates, security holders or creditors for (1) any liabilities arising out of, related to, caused by, based upon or in connection with the performance of services under the consulting agreement, unless such liability is proven to have resulted directly and primarily from the willful misconduct or gross negligence of such person or (2) pursuing any outside activities or opportunities that may conflict with the Company’s best interests, which outside activities the Company consents to and approves under the consulting agreement, and which opportunities neither Sun Capital Management nor any of its affiliates will have any duty to inform the Company of. In no event will the aggregate of any liabilities of Sun Capital Management or any of its affiliates exceed the aggregate of any fees paid under the consulting agreement.

In addition, the Company is required to indemnify Sun Capital Management, its affiliates and any successor by operation of law against any and all liabilities, whether or not arising out of or related to such party’s performance of services under the consulting agreement, except to the extent proven to result directly and primarily from such person’s willful misconduct or gross negligence. The Company is also required to defend such parties in any lawsuits which may be brought against such parties and advance expenses in connection therewith. In the case of affiliates of Sun Capital Management that have rights to indemnification and advancement from affiliates of Sun Capital, the Company agrees to be the indemnitor of first resort, to be liable for the full amounts of payments of indemnification required by any organizational document of such entity or any agreement to which such entity is a party, and that the Company will not make any claims against any affiliates of Sun Capital Partners for contribution, subrogation, exoneration or reimbursement for which they are liable under any organizational documents or agreement. Sun Capital Management may, in its sole discretion, elect to terminate the consulting agreement at any time. The Company may elect to terminate the consulting agreement if SCSF Cardinal, Sun Cardinal or any of their respective affiliates’ aggregate ownership of the Company’s equity securities falls below 30%.

During fiscal 2017, fiscal 2016 and fiscal 2015, the Company incurred expenses of $34, $121 and $114, respectively, under the Sun Capital Consulting Agreement.

Indemnification Agreements

The Company has entered into indemnification agreements with each of its executive officers and directors. The indemnification agreements provide the executive officers and directors with contractual rights to indemnification, expense advancement and reimbursement, to the fullest extent permitted under the Delaware General Corporation Law (“DGCL”).

Amended and Restated Certificate of Incorporation

The Company’s amended and restated certificate of incorporation provides that for so long as affiliates of Sun Capital own 30% or more of the Company’s outstanding shares of common stock, Sun Cardinal, a Sun Capital affiliate, has the right to designate a majority of the Company’s board of directors. For so long as Sun Cardinal has the right to designate a majority of the Company’s board of directors, the directors designated by Sun Cardinal are expected to constitute a majority of each committee of the Company’s board of directors (other than the Audit Committee), and the chairman of each of the committees (other than the Audit Committee) is expected to be a director serving on the committee who is selected by affiliates of Sun Capital, provided that, at such time as the Company is not a “controlled company” under the NYSE corporate governance standards, the Company’s committee membership will comply with all applicable requirements of those standards and a majority of the Company’s board of directors will be “independent directors,” as defined under the rules of the NYSE, subject to any applicable phase in requirements.

v3.8.0.1
Quarterly Financial Information
12 Months Ended
Feb. 03, 2018
Quarterly Financial Information Disclosure [Abstract]  
Quarterly Financial Information

Note 13. Quarterly Financial Information (unaudited)

Summarized quarterly financial results for fiscal 2017 and fiscal 2016 are as follows:

 

(in thousands, except per share data)

 

First

Quarter

 

 

Second

Quarter

 

 

Third

Quarter

 

 

Fourth Quarter (2)

 

Fiscal 2017:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

$

58,045

 

 

$

60,822

 

 

$

79,067

 

 

$

74,648

 

Gross profit

 

 

25,591

 

 

 

25,556

 

 

 

36,667

 

 

 

33,975

 

Net (loss) income

 

 

(9,290

)

 

 

(10,134

)

 

 

3,509

 

 

 

74,512

 

Basic (loss) earnings per share (1)

 

$

(1.88

)

 

$

(2.05

)

 

$

0.41

 

 

$

6.41

 

Diluted (loss) earnings per share (1)

 

$

(1.88

)

 

$

(2.05

)

 

$

0.41

 

 

$

6.41

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(in thousands, except per share data)

 

First

Quarter

 

 

Second

Quarter

 

 

Third

Quarter

 

 

Fourth Quarter (3)

 

Fiscal 2016:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

$

67,645

 

 

$

60,702

 

 

$

75,973

 

 

$

63,879

 

Gross profit

 

 

28,258

 

 

 

27,387

 

 

 

37,958

 

 

 

29,216

 

Net (loss) income

 

 

(1,924

)

 

 

(1,967

)

 

 

3,380

 

 

 

(162,148

)

Basic (loss) earnings per share (1)

 

$

(0.51

)

 

$

(0.40

)

 

$

0.69

 

 

$

(32.81

)

Diluted (loss) earnings per share (1)

 

$

(0.51

)

 

$

(0.40

)

 

$

0.68

 

 

$

(32.81

)

 

(1)

The sum of the quarterly earnings per share may not equal the full-year amount as the computation of the weighted-average number of shares outstanding for each quarter and the full-year are performed independently.

(2)

Net income, basic earnings per share and diluted earnings per share included the impact of (i) a $5,111 non-cash pre-tax impairment charge related to property and equipment (see Note 1 “Description of Business and Summary of Significant Accounting Policies (K) Impairment of Long-lived Assets” for additional details); and (ii) a $82,002 pre-tax benefit from re-measurement of the liability related to the Tax Receivable Agreement (see Note 12 “Related Party Transactions” for additional details).  

(3)

Net loss, basic loss per share and diluted loss per share include the impact of (i) $53,061 of non-cash pre-tax impairment charges related to goodwill and the tradename intangible asset (see Note 1 “Description of Business and Summary of Significant Accounting Policies (L) Goodwill and Other Intangible Assets” for additional details); (ii) a $2,082 non-cash pre-tax impairment charge related to property and equipment (see Note 1 “Description of Business and Summary of Significant Accounting Policies (K) Impairment of Long-lived Assets” for additional details); and (iii) a $121,836 valuation allowance against the Company’s deferred tax assets (see Note 10 “Income Taxes” for additional details).

v3.8.0.1
Subsequent Event
12 Months Ended
Feb. 03, 2018
Subsequent Events [Abstract]  
Subsequent Event

Note 14. Subsequent Event

On March 28, 2018, Vince, LLC entered into a third amendment to the Revolving Credit Facility. In support of the Company’s previously announced wholesale distribution strategy, the third amendment modified the definition of “Eligible Trade Receivables” such that the applicable Concentration Limit for Accounts due from: (i) Nordstrom is 70% so long as Nordstrom’s credit rating is investment grade BBB- or higher by Standard & Poor’s Financial Services, LLC or Baa3 or higher by Moody’s Analytics, Inc and 50% at all other times; (ii) Neiman Marcus is 30%; and (iii) all other individual account debtors is 20%.

v3.8.0.1
Schedule II Valuation and Qualifying Accounts
12 Months Ended
Feb. 03, 2018
Valuation And Qualifying Accounts [Abstract]  
Schedule II Valuation and Qualifying Accounts

SCHEDULE II

VALUATION AND QUALIFYING ACCOUNTS

(In thousands)

 

 

 

Beginning of Period

 

 

Expense Charges, net of Reversals

 

 

Deductions and Write-offs, net of Recoveries

 

 

End of Period

 

Sales Allowances

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fiscal 2017

 

$

(19,711

)

 

$

(54,265

)

 

$

56,365

 

 

$

(17,611

)

Fiscal 2016

 

 

(12,846

)

 

 

(59,078

)

 

 

52,213

 

 

 

(19,711

)

Fiscal 2015

 

 

(16,098

)

 

 

(55,656

)

 

 

58,908

 

 

 

(12,846

)

Allowance for Doubtful Accounts

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fiscal 2017

 

 

(275

)

 

 

(793

)

 

 

265

 

 

 

(803

)

Fiscal 2016

 

 

(188

)

 

 

(192

)

 

 

105

 

 

 

(275

)

Fiscal 2015

 

 

(379

)

 

 

34

 

 

 

157

 

 

 

(188

)

Provision for Inventories

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fiscal 2017

 

 

(2,062

)

 

 

11

 

 

 

123

 

 

 

(1,928

)

Fiscal 2016

 

 

(13,248

)

 

 

1,864

 

 

 

9,322

 

 

 

(2,062

)

Fiscal 2015

 

 

(6,464

)

 

 

(16,263

)

 

 

9,479

 

 

 

(13,248

)

Valuation Allowances on Deferred Income Taxes

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fiscal 2017

 

 

(122,860

)

 

 

(13,764

)

 

 

44,034

 

 

 

(92,590

)

Fiscal 2016

 

 

(1,024

)

 

 

(121,836

)

 

 

 

 

 

(122,860

)

Fiscal 2015

 

 

(1,074

)

 

 

 

 

 

50

 

 

 

(1,024

)

 

 

v3.8.0.1
Description of Business and Summary of Significant Accounting Policies (Policies)
12 Months Ended
Feb. 03, 2018
Organization Consolidation And Presentation Of Financial Statements [Abstract]  
Description of Business

(A) Description of Business: Established in 2002, Vince is a global luxury apparel and accessories brand best known for creating elevated yet understated pieces for every day. The collections are inspired by the brand’s California origins and embody a feeling of warm and effortless style. Vince designs uncomplicated yet refined pieces that approach dressing with a sense of ease.  Known for its range of luxury products, Vince offers wide array of women’s and men’s ready-to-wear, shoes, and capsule collection of handbags, and home for a global lifestyle. The Company reaches its customers through a variety of channels, specifically through major wholesale department stores and specialty stores in the United States (“U.S.”) and select international markets, as well as through the Company’s branded retail locations and the Company’s website. The Company designs products in the U.S. and sources the vast majority of products from contract manufacturers outside the U.S., primarily in Asia. Products are manufactured to meet the Company’s product specifications and labor standards.

Basis of Presentation

(B) Basis of Presentation: The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”).

The consolidated financial statements include the Company’s accounts and the accounts of the Company’s wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. In the opinion of management, the financial statements contain all adjustments (consisting solely of normal recurring adjustments) and disclosures necessary to make the information presented therein not misleading.

Fiscal Year

(C) Fiscal Year: The Company operates on a fiscal calendar widely used by the retail industry that results in a given fiscal year consisting of a 52 or 53-week period ending on the Saturday closest to January 31.

 

References to “fiscal year 2017” or “fiscal 2017” refer to the fiscal year ended February 3, 2018;

 

References to “fiscal year 2016” or “fiscal 2016” refer to the fiscal year ended January 28, 2017; and

 

References to “fiscal year 2015” or “fiscal 2015” refer to the fiscal year ended January 30, 2016.

Fiscal 2017 consisted of a 53-week period. Fiscal years 2016 and 2015 consisted of a 52-week period.

Reverse Stock Split

(D) Reverse Stock Split: At the close of business on October 23, 2017, the Company effected a 1-for-10 reverse stock split (the “Reverse Stock Split”). The Company’s common stock began trading on a split-adjusted basis when the market opened on October 24, 2017. Pursuant to the Reverse Stock Split, every 10 shares of the Company’s issued and outstanding common stock were automatically converted into one share of common stock. No fractional shares were issued if, as a result of the Reverse Stock Split, a stockholder would otherwise have been entitled to a fractional share. Instead, each stockholder was entitled to receive a cash payment based on a pre-split cash in lieu rate of $0.48, which was the average closing price per share on the New York Stock Exchange for the five consecutive trading days immediately preceding October 23, 2017.

The number of authorized shares of common stock has also been reduced from 250,000,000 to 100,000,000. The Company had increased the number of authorized shares from 100,000,000 to 250,000,000 on September 6, 2017 in connection with the closing of the 2017 Rights Offering and related 2017 Investment Agreement (each as defined below) on September 8, 2017.

The accompanying financial statements and notes to the financial statements give retroactive effect to the Reverse Stock Split for all periods presented, unless otherwise noted. The calculation of basic and diluted net earnings (loss) per share, as presented in the consolidated statements of operations, have been determined based on a retroactive adjustment of weighted average shares outstanding for all periods presented. To reflect the reverse stock split on shareholders’ equity, the Company reclassified an amount equal to the par value of the reduced shares from the common stock par value account to the additional paid in capital account, resulting in no net impact to shareholders' equity on the Consolidated Balance Sheets.

Sources and Uses of Liquidity

(E) Sources and Uses of Liquidity:  The Company’s sources of liquidity are cash and cash equivalents, cash flows from operations, if any, borrowings available under the Revolving Credit Facility and the Company’s ability to access capital markets. The Company’s primary cash needs are funding working capital requirements, meeting debt service requirements, paying amounts due under the Tax Receivable Agreement and capital expenditures for new stores and related leasehold improvements.

During the last three fiscal years the Company has experienced a decline in operating profitability and in fiscal 2016 and 2017 used cash flows generated from financing activities to fund a portion of its operating cash needs. For the fiscal year ended January 28, 2017 considering the historical sales performance of the Company, actions of lenders and certain vendors, and the difficulties to project the current retail environment, management had concluded that then existing conditions in the business raised substantial doubt about the Company’s ability to meet its financial obligations, specifically to comply with the Consolidated Net Total Leverage Ratio under its Term Loan Facility, and therefore disclosed such conclusion in its Annual Report on Form 10-K for the fiscal year ended January 28, 2017. During fiscal 2017, management fully executed the actions below in order to address and relieve the substantial doubt referenced above and to satisfy the Company’s liquidity needs:

 

In June 2017, the Company entered into a Term Loan Amendment which, among other things, (i) waives the Consolidated Net Total Leverage Ratio (as defined in the Term Loan Facility) covenant for the test periods from July 2017 through and including April 2019; and (ii) requires, beginning with the payment due on or around January 2018, the Company to pay a quarterly amortization payment of $3,000 for such fiscal quarter and $2,000 for each fiscal quarter thereafter, provided that there is not less than $15,000 of “availability” under the Revolving Credit Facility on a pro forma basis immediately before and after giving effect to such amortization payment. See Note 4 “Long-Term Debt and Financing Arrangements” for additional details.

 

 

In June 2017, the Company entered into an amendment to the Revolving Credit Facility which included increasing the borrowing base under the Revolving Credit Facility, thereby increasing availability under this facility. See Note 4 “Long-Term Debt and Financing Arrangements” for additional details.

 

In July 2017, Vince, LLC (“Vince”), an indirect wholly-owned subsidiary of the Company, entered into an agreement with Rebecca Taylor, Inc. (“Rebecca Taylor”) relating to the purchase and resale of certain Vince branded finished goods in order to address recent demands from certain vendors for accelerated payment terms or prepayments as a condition to delivering finished goods to the Company. Using the proceeds that were received from the 2017 Rights Offering and related 2017 Investment Agreement, the Company settled any previously outstanding balances and has returned to normal terms with its key inventory vendors. Additionally, the Company has not utilized the sourcing agreement with Rebecca Taylor since September 2017, and management does not intend to utilize this agreement in the future. See Note 12 “Related Party Transactions” for additional details.

 

 

In August 2017, the Company entered into an Investment Agreement (the “2017 Investment Agreement”) with Sun Cardinal, LLC and SCSF Cardinal, LLC (collectively, the “Sun Cardinal Investors”) and the Company commenced a rights offering (the “2017 Rights Offering”). See Note 12 “Related Party Transactions” for additional details.

 

Management executed cost reduction initiatives in fiscal 2017 in order to improve the Company’s financial performance. The Company entered into limited distribution arrangements with Nordstrom, Inc. and Neiman Marcus Group LTD, which took effect in late fiscal 2017, in order to rationalize its department store distribution strategy which is intended to improve profitability in the Wholesale segment in the future and enable management to focus on other areas of growth for the brand, particularly in the Direct-to-consumer segment. The Company also expanded its product offerings during the fourth quarter of fiscal 2017 with the launch of its capsule home collection and the re-launch of its handbag collection. Management expects that the majority of the benefit from these cost savings and other strategic initiatives will be fully realized in fiscal 2018.

The Company believes these actions will generate sufficient liquidity to fund its working capital and capital expenditure needs, meet its Tax Receivable Agreement obligations, and satisfy its debt maturities and covenants under the Term Loan Facility and Revolving Credit Facility for the next twelve months. While we believe based upon our actions to date that we will have sufficient liquidity for the next twelve months, there can be no assurances in the future that we will be able to generate sufficient cash flow from operations to meet our liquidity needs. The Company’s ability to continue to meet its obligations is dependent on its ability to generate positive cash flow from a combination of initiatives and failure to successfully implement these initiatives could have a material adverse effect on the Company’s liquidity and operations in which case the Company would need to implement alternative plans, such as attempting to obtain other financing, in an effort to satisfy our liquidity needs.

Use of Estimates

(F) Use of Estimates: The preparation of consolidated financial statements in conformity with GAAP requires that management make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements which affect revenues and expenses during the period reported. Estimates are adjusted when necessary to reflect actual experience. Significant estimates and assumptions may affect many items in the financial statements. Actual results could differ from estimates and assumptions in amounts that may be material to the consolidated financial statements.

Significant estimates inherent in the preparation of the consolidated financial statements include accounts receivable allowances, customer returns, the realizability of inventory, reserves for contingencies, useful lives and impairments of long-lived tangible and intangible assets, Tax Receivable Agreement obligation, and accounting for income taxes and related uncertain tax positions, among others.

Cash and cash equivalents

(G) Cash and cash equivalents:  All demand deposits and highly liquid short-term deposits with original maturities of three months or less are considered cash equivalents.

Accounts Receivable and Concentration of Credit Risk

(H) Accounts Receivable and Concentration of Credit Risk: The Company maintains an allowance for accounts receivable estimated to be uncollectible. The provision for bad debts is included in selling, general and administrative expense. Substantially all of the Company’s trade receivables are derived from sales to retailers and are recorded at the invoiced amount and do not bear interest. The Company performs ongoing credit evaluations of its wholesale partners’ financial condition and requires collateral as deemed necessary. The past due status of a receivable is based on its contractual terms. Account balances are charged off against the allowance when it is probable the receivable will not be collected.

Accounts receivable are recorded net of allowances including expected future chargebacks from wholesale partners and estimated margin support. It is the nature of the apparel and fashion industry that suppliers similar to the Company face significant pressure from customers in the retail industry to provide allowances to compensate for wholesale partner margin shortfalls. This pressure often takes the form of customers requiring the Company to provide price concessions on prior shipments as a prerequisite for obtaining future orders. Pressure for these concessions is largely determined by overall retail sales performance and, more specifically, the performance of the Company’s products at retail. To the extent the Company’s wholesale partners have more of the Company’s goods on hand at the end of the season, there will be greater pressure for the Company to grant markdown concessions on prior shipments. Accounts receivable balances are reported net of expected allowances for these matters based on the historical level of concessions required and estimates of the level of markdowns and allowances that will be required in the coming season. The Company evaluates the allowance balances on a continual basis and adjusts them as necessary to reflect changes in anticipated allowance activity. The Company also provides an allowance for sales returns based on known trends and historical return rates.

In fiscal 2017, sales to one wholesale partner accounted for more than ten percent of the Company’s net sales. These sales represented 21.9% of fiscal 2017 net sales. In fiscal 2016, sales to three wholesale partners each accounted for more than ten percent of the Company’s net sales. These sales represented 19.6%, 14.4% and 10.8% of fiscal 2016 net sales. In fiscal 2015, sales to three wholesale partners each accounted for more than ten percent of the Company’s net sales. These sales represented 18.3%, 13.8% and 10.8% of fiscal 2015 net sales.

Two wholesale partners each represented greater than ten percent of the Company’s gross accounts receivable balance as of February 3, 2018, with a corresponding aggregate total of 49.4% of such balance. Three wholesale partners each represented greater than ten percent of the Company’s gross accounts receivable balance as of January 28, 2017, with a corresponding aggregate total of 57.5% of such balance.

Inventories

(I) Inventories: Inventories are stated at the lower of cost or net realizable value. Cost is determined on the first-in, first-out basis. The cost of inventory includes purchase cost as well as sourcing, transportation, duty and other processing costs associated with acquiring, importing and preparing inventory for sale. Inventory costs are included in cost of products sold at the time of their sale. Product development costs are expensed in selling, general and administrative expense when incurred. Inventory values are reduced to net realizable value when there are factors indicating that certain inventories will not be sold on terms sufficient to recover their cost.

Inventories consisted of the following:

 

 

 

February 3,

 

 

January 28,

 

(in thousands)

 

2018

 

 

2017

 

Finished goods

 

$

50,900

 

 

$

40,771

 

Less: reserves

 

 

(1,979

)

 

 

(2,242

)

Total inventories, net

 

$

48,921

 

 

$

38,529

 

 

Property and Equipment

(J) Property and Equipment: Property and equipment are stated at cost. Depreciation is computed on the straight-line method over estimated useful lives of three to seven years for furniture, fixtures, and equipment. Leasehold improvements are depreciated on the straight-line basis over the shorter of their estimated useful lives or the lease term, excluding renewal terms. Capitalized software is depreciated on the straight-line basis over the estimated economic useful life of the software, generally three to seven years. Maintenance and repair costs are charged to earnings while expenditures for major renewals and improvements are capitalized. Upon the disposition of property and equipment, the accumulated depreciation is deducted from the original cost and any gain or loss is reflected in current earnings. Property and equipment consisted of the following:

 

 

 

February 3,

 

 

January 28,

 

(in thousands)

 

2018

 

 

2017

 

Leasehold improvements

 

$

37,307

 

 

$

41,214

 

Furniture, fixtures and equipment

 

 

11,985

 

 

 

12,267

 

Capitalized software

 

 

11,239

 

 

 

10,862

 

Construction in process

 

 

71

 

 

 

236

 

Total property and equipment

 

 

60,602

 

 

 

64,579

 

Less: accumulated depreciation

 

 

(28,994

)

 

 

(21,634

)

Property and equipment, net

 

$

31,608

 

 

$

42,945

 

 

Depreciation expense was $8,480, $7,070 and $6,426 for fiscal 2017, fiscal 2016 and fiscal 2015, respectively.

Impairment of Long-lived Assets

(K) Impairment of Long-lived Assets: The Company reviews long-lived assets with a finite life for existence of facts and circumstances which indicate that the useful life is shorter than previously estimated or that the carrying amount of such assets may not be recoverable from future operations based on undiscounted expected future cash flows. Impairment losses are then recognized in operating results to the extent discounted expected future cash flows are less than the carrying value of the asset. The long-lived asset impairment test is dependent on a number of factors, including estimates of future growth, profitability and cash flows, discount rates and other variables. During fiscal 2017 and fiscal 2016, the Company recorded non-cash asset impairment charges of $5,111 and $2,082 within Selling, general and administrative expenses in the Consolidated Statements of Operations, related to the impairment of certain retail stores with asset carrying values that were determined not to be recoverable and exceeded fair value. There were no significant impairment charges related to long-lived assets recorded in fiscal 2015.

Goodwill and Other Intangible Assets

(L) Goodwill and Other Intangible Assets: Goodwill and other indefinite-lived intangible assets are tested for impairment at least annually and in an interim period if a triggering event occurs. The Company completed its annual impairment testing on its goodwill and indefinite-lived intangible asset during the fourth quarters of fiscal 2017, fiscal 2016 and fiscal 2015. Goodwill is not allocated to the Company’s operating segments in the measure of segment assets regularly reported to and used by management, however goodwill is allocated to operating segments (goodwill reporting units) for the purpose of the annual impairment test for goodwill.

Goodwill represents the excess of the cost of acquired businesses over the fair market value of the identifiable net assets. The indefinite-lived intangible asset is the Vince tradename.

An entity may elect to perform a qualitative impairment assessment for goodwill and indefinite-lived intangible assets. If adverse qualitative trends are identified during the qualitative assessment that indicate that it is more likely than not that the fair value of a reporting unit or indefinite-lived intangible asset is less than its carrying amount, a quantitative impairment test is required. “Step one” of the quantitative impairment test for goodwill requires an entity to determine the fair value of each reporting unit and compare such fair value to the respective carrying amount. If the estimated fair value of the reporting unit exceeds the carrying value of the net assets assigned to that reporting unit, goodwill is not impaired, and the Company is not required to perform further testing. In accordance with new accounting guidance adopted on January 29, 2017, if the carrying amount of the reporting unit exceeds its estimated fair value, an impairment loss is recorded for the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. Prior to the adoption of the new accounting guidance, if the carrying amount of the reporting unit exceeded its estimated fair value, “step two” of the impairment test was performed in order to determine the amount of the impairment loss. “Step two” of the goodwill impairment test included valuing the tangible and intangible assets of the impaired reporting unit based on the fair value determined in “step one” and calculating the fair value of the impaired reporting unit's goodwill based upon the residual of the summed identified tangible and intangible assets and liabilities. The goodwill impairment test is dependent on a number of factors, including estimates of future growth, profitability and cash flows, discount rates and other variables. The Company bases its estimates on assumptions it believes to be reasonable, but which are unpredictable and inherently uncertain. Actual future results may differ from those estimates.  

The Company estimates the fair value of the tradename intangible asset using a discounted cash flow valuation analysis, which is based on the “relief from royalty” methodology.  This methodology assumes that in lieu of ownership, a third party would be willing to pay a royalty in order to exploit the related benefits of these types of assets. The relief from royalty approach is dependent on a number of factors, including estimates of future growth, royalty rates in the category of intellectual property, discount rates and other variables.  The Company bases its fair value estimates on assumptions it believes to be reasonable, but which are unpredictable and inherently uncertain. Actual future results may differ from those estimates. The Company recognizes an impairment loss when the estimated fair value of the tradename intangible asset is less than the carrying value.

An entity may pass on performing the qualitative assessment for a reporting unit or indefinite-lived intangible asset and directly perform the quantitative assessment. This determination can be made on an asset by asset basis, and an entity may resume performing a qualitative assessment in subsequent periods.

In fiscal 2017, the Company elected to perform a quantitative impairment test on goodwill. The results of the quantitative test did not result in any impairment of goodwill, which amounted to $41,435 as of February 3, 2018, because the fair value of the Company’s Wholesale reporting unit exceeded its carrying value by approximately 35%. Significant assumptions utilized in the discounted cash flow analysis included a discount rate of 15.0%. Significant assumptions utilized in a market-based approach were market multiples ranging from 1.10x to 1.16x.

In fiscal 2016, a quantitative impairment test on goodwill determined that the fair value of the Direct-to-consumer reporting unit was below its carrying value. During fiscal 2016, the sales results within the Direct-to-consumer reporting unit were impacted by continued declines in average order values as well as declines in the number of transactions due to lower conversion rates and reduced traffic and as a result, the Direct-to-consumer reporting unit did not meet expectations resulting in lower current and expected future cash flows. The Company estimated the fair value of its Direct-to-consumer reporting unit using both the income and market valuation approaches, with a weighting of 80% and 20%, respectively. “Step one” of the assessment determined that the fair value of the Direct-to-consumer reporting unit was below the carrying amount by approximately 40%.  Accordingly, “step two” of the assessment was performed, which compared the implied fair value of the goodwill to the carrying value of such goodwill by performing a hypothetical purchase price allocation using the fair value of the reporting unit determined in “step one”. Based on the results from “step two,” the Company recorded a goodwill impairment charge of $22,311, to write-off all of the goodwill in the Direct-to-consumer reporting unit. The charge was recorded in Impairment of goodwill and indefinite-lived intangible asset in the Consolidated Statements of Operations, during the fourth quarter of fiscal 2016. Additionally, the results of “step one” of the assessment determined that the fair value of the Wholesale reporting unit exceeded its carrying amount by approximately 40% and therefore did not result in any impairment of goodwill. However, further declines in the net sales or operating results of the Wholesale reporting unit may result in a partial or full impairment of its goodwill, which amounted to $41,435 as of January 28, 2017. Significant assumptions utilized in the discounted cash flow analysis included a discount rate of 16.0%. Significant assumptions utilized in a market-based approach were market multiples ranging from 0.50x to 0.90x for the Company’s reporting units.

In fiscal 2015, the Company elected to perform a quantitative impairment test on goodwill. The results of the quantitative test did not result in any impairment of goodwill because the fair values of each of the Company’s reporting units exceeded their respective carrying values. As such, the Company was not required to perform “step two” of the impairment test.

In fiscal 2017, the Company elected to perform a quantitative assessment on its tradename intangible asset. The results of the quantitative test did not result in any impairment because the fair value of the Company’s tradename intangible asset exceeded its carrying value. The estimate of fair value of the tradename intangible asset was determined using a discounted cash flow valuation analysis, which was based on the “relief from royalty” methodology. Discount rate assumptions were based on an assessment of the risk inherent in the projected future cash flows generated by the intangible asset. Also subject to judgment are assumptions about royalty rates, which were based on the estimated rates at which similar tradenames are being licensed in the marketplace.

In fiscal 2016, a quantitative assessment of the Company’s tradename intangible asset determined that the fair value of its tradename intangible asset was below its carrying value. During fiscal 2016, the Company’s sales results did not meet expectations resulting in lower current and expected future cash flows. The Company estimated the fair value of its tradename intangible asset using a discounted cash flow valuation analysis, which is based on the “relief from royalty” methodology and determined that the fair value of the tradename intangible asset was below the carrying amount by approximately 30%. Accordingly, the Company recorded an impairment charge for its tradename intangible asset of $30,750, which was recorded in Impairment of goodwill and indefinite-lived intangible asset in the Consolidated Statements of Operations, during the fourth quarter of fiscal 2016. 

In fiscal 2015, the Company elected to perform a quantitative assessment on its tradename intangible asset. The results of the quantitative test did not result in any impairment because the fair value of the Company’s tradename intangible asset exceeded its carrying value.

Determining the fair value of goodwill and other intangible assets is judgmental in nature and requires the use of significant estimates and assumptions, including revenue growth rates and operating margins, discount rates and future market conditions, among others. It is possible that estimates of future operating results could change adversely and impact the evaluation of the recoverability of the carrying value of goodwill and intangible assets and that the effect of such changes could be material.

Definite-lived intangible assets are comprised of customer relationships and are being amortized on a straight-line basis over their useful lives of 20 years.

See Note 2 “Goodwill and Intangible Assets” for more information on the details surrounding goodwill and intangible assets.

Deferred Financing Costs

(M) Deferred Financing Costs: Deferred financing costs, such as underwriting, financial advisory, professional fees, and other similar fees are capitalized and recognized in interest expense over the contractual life of the related debt instrument using the straight-line method, as this method results in recognition of interest expense that is materially consistent with that of the effective interest method.

Deferred Rent and Deferred Lease Incentives

(N) Deferred Rent and Deferred Lease Incentives: The Company leases various office spaces, showrooms and retail stores. Many of these operating leases contain predetermined fixed escalations of the minimum rentals during the original term of the lease. For these leases, the Company recognizes the related rental expense on a straight-line basis over the life of the lease and records the difference between the amount charged to operations and amounts paid as deferred rent. Certain of the Company’s retail store leases contain provisions for contingent rent, typically a percentage of retail sales once a predetermined threshold has been met. These amounts are expensed as incurred. Additionally, the Company receives lease incentives in certain leases. These allowances have been deferred and are amortized on a straight-line basis over the life of the lease as a reduction of rent expense.

Revenue Recognition

(O) Revenue Recognition: Sales are recognized when goods are shipped in accordance with customer orders for the Company’s wholesale business, upon receipt by the customer for the Company’s e-commerce business, and at the time of sale to the consumer for the Company’s retail business. Revenue associated with gift cards is recognized upon redemption. For the Company’s wholesale business, amounts billed to customers for shipping and handling costs are not significant. There is no stated obligation to customers after shipment, other than specifically set forth allowances or discounts that are accrued at the time of sale. The rights of inspection or acceptance contained in certain sales agreements are limited to whether the goods received by the Company’s wholesale partners are in conformance with the order specifications.

Estimated amounts of sales discounts, returns and allowances are accounted for as reductions of sales when the associated sale occurs. These estimated amounts are adjusted periodically based on changes in facts and circumstances when the changes become known. Accrued discounts, returns and allowances are included as an offset to accounts receivable in the Consolidated Balance Sheets for the Company’s wholesale business.  

Cost of Products Sold

(P) Cost of Products Sold: The Company’s cost of products sold and gross margins may not necessarily be comparable to that of other entities as a result of different practices in categorizing costs. The primary components of the Company’s cost of products sold are as follows:

 

the cost of purchased merchandise, including raw materials;

 

the cost of inbound transportation, including freight;

 

the cost of the Company’s production and sourcing departments;

 

other processing costs associated with acquiring and preparing the inventory for sale; and

 

shrink and valuation reserves.

Marketing and Advertising

(Q) Marketing and Advertising: The Company provides cooperative advertising allowances to certain of its customers. These allowances are accounted for as reductions in sales as discussed in “Revenue Recognition” above. Production expense related to company-directed advertising is deferred until the first time at which the advertisement runs. All other expenses related to company-directed advertising are expensed as incurred. Marketing and advertising expense recorded in selling, general and administrative expenses was $8,939, $8,156 and $9,177 in fiscal 2017, fiscal 2016 and fiscal 2015, respectively. At February 3, 2018 and January 28, 2017, deferred production expenses associated with company-directed advertising were $415 and $182, respectively.

Share-Based Compensation

(R) Share-Based Compensation: New, modified and unvested share-based payment transactions with employees, such as stock options and restricted stock units, are measured at fair value and recognized as compensation expense over the requisite service period and is included as a component of Selling, general and administrative expenses in the Consolidated Statements of Operations. Additionally, share-based awards granted to non-employees are expensed over the period in which the related services are rendered at their fair value, using the Black Scholes Pricing Model to determine fair value. Forfeitures are accounted for as they occur.  

Income Taxes

(S) Income Taxes: The Company accounts for income taxes using the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences of temporary differences between the carrying amounts and tax bases of assets and liabilities at enacted rates. The Company assesses the likelihood of the realization of deferred tax assets and adjusts the carrying amount of these deferred tax assets by a valuation allowance to the extent the Company believes it more likely than not that all or a portion of the deferred tax assets will not be realized. Many factors are considered when assessing the likelihood of future realization of deferred tax assets, including recent earnings results within taxing jurisdictions, expectations of future taxable income, the carryforward periods available and other relevant factors. Changes in the required valuation allowance are recorded in income in the period such determination is made. The Company recognizes tax positions in the Consolidated Balance Sheets as the largest amount of tax benefit that is greater than 50% likely of being realized upon ultimate settlement with tax authorities assuming full knowledge of the position and all relevant facts. Accrued interest and penalties related to unrecognized tax benefits are included in income taxes in the Consolidated Statements of Operations.

Earnings Per Share

(T) Earnings Per Share: Basic earnings (loss) per share is calculated by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Except when the effect would be anti-dilutive, diluted earnings per share is calculated based on the weighted average number of shares of common stock outstanding plus the dilutive effect of share-based awards calculated under the treasury stock method.

Recent Accounting Pronouncements

(U) Recent Accounting Pronouncements:

Recently Adopted Accounting Pronouncements

In January 2017, the Financial Accounting Standards Board (“FASB”) issued guidance to simplify the accounting for goodwill impairment. The guidance removes “step two” of the goodwill impairment test, which requires a hypothetical purchase price allocation. A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. The guidance is effective for interim and annual impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company adopted this guidance on January 29, 2017.

In March 2016, the FASB issued guidance regarding share-based compensation, to simplify the accounting for share-based payment transactions, including accounting for forfeitures, income tax consequences, classification of awards as either equity or liabilities and classification on the statement of cash flows. This guidance is effective for interim and annual periods beginning after December 15, 2016. The Company adopted the new guidance on January 29, 2017. Upon adoption, excess tax benefits and deficiencies from share-based compensation are recognized as income tax expense or benefit in the statement of operations as discrete items in the reporting period in which they occur, regardless of whether the benefit reduces taxes payable in the current period. As a result of the adoption of this guidance, the Company recognized an increase of $2,350 to deferred tax assets related to net operating loss carryforwards for the excess tax benefits related to share-based compensation and also recognized an increase of an equal amount in the valuation allowance against such increase of deferred tax assets. As permitted by the new guidance, the Company elected to account for forfeitures as they occur which resulted in an increase of $84 to the accumulated deficit within the Consolidated Balance Sheet. The remaining provisions of the new guidance did not have a material effect on the Company’s consolidated financial statements.  

In November 2015, the FASB issued new guidance on the balance sheet classification of deferred taxes, which requires entities to classify deferred tax assets and liabilities as noncurrent in the consolidated balance sheet. Prior to this new guidance, deferred tax assets and liabilities were classified as current or noncurrent amounts in the consolidated balance sheet. This guidance is effective for financial statements issued for interim and annual periods beginning after December 15, 2016. The Company adopted the new guidance on January 29, 2017 and, as a result of the full valuation allowance previously recorded against the Company’s deferred tax assets, it did not have a material effect on the Company’s Consolidated Balance Sheet.

In July 2015, the FASB issued new guidance on accounting for inventory, which requires entities to measure inventory at the lower of cost and net realizable value. This guidance is effective for interim and annual periods beginning on or after December 15, 2016. The Company adopted the new guidance on January 29, 2017 and it did not have a material impact on the Company’s consolidated financial statements.

Recently Issued Accounting Pronouncements

In May 2017, the FASB issued guidance that clarifies when changes to the terms or conditions of a share-based payment award must be accounted for as modifications. The new guidance will be applied prospectively to awards modified on or after the adoption date. The guidance is effective for interim and annual periods beginning after December 15, 2017. The Company will apply this accounting guidance prospectively to any share-based payment awards modified on or after its February 4, 2018 effective date.

In November 2016, the FASB issued guidance that requires the statement of cash flows to explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The guidance is effective for interim and annual periods beginning after December 15, 2017 using a retrospective transition method to each period presented. Early adoption is permitted, including adoption in an interim period. This new guidance is not expected to have a material impact on the Company’s Consolidated Statement of Cash Flows.

In August 2016, the FASB issued guidance which clarifies how companies present and classify certain cash receipts and cash payments in the statement of cash flows. The guidance is effective for interim and annual periods beginning after December 15, 2017 and must be applied using a retrospective transition method to each period presented. The Company is evaluating the impact of the adoption of this guidance but does not expect it to have a material impact on its Consolidated Statement of Cash Flows.

In February 2016, the FASB issued a new lease accounting standard, which requires lessees to recognize right-of-use lease assets and lease liabilities on the balance sheet for those leases currently classified as operating leases. The guidance requires a modified retrospective transition approach, with application in all comparative periods presented. The guidance is effective for interim and annual periods beginning after December 15, 2018. The Company is currently evaluating the impact of adopting this guidance on the consolidated financial statements.

In May 2014, the FASB issued new guidance on revenue recognition accounting, which requires entities to recognize revenue when promised goods or services are transferred to customers and in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Since its issuance, the FASB has amended several aspects of the new guidance. In August 2015, the FASB elected to defer the effective dates for this guidance, which is now effective for interim and annual periods beginning on or after December 15, 2017. The Company’s assessment efforts included reviewing current accounting policies, processes and arrangements to identify potential differences that could arise from the application of the new guidance. The Company adopted the new guidance in first quarter of 2018, using the modified retrospective approach, and will expand its consolidated financial statement disclosures to comply with the new guidance. The Company determined the adoption of the new guidance will not have a material impact on its consolidated financial statements except for balance sheet reclassifications of sales return reserves which will be recorded in the first quarter of 2018 as a separate asset and liability versus the current net presentation and increased footnote disclosures.

v3.8.0.1
Description of Business and Summary of Significant Accounting Policies (Tables)
12 Months Ended
Feb. 03, 2018
Organization Consolidation And Presentation Of Financial Statements [Abstract]  
Schedule of Inventories

Inventories consisted of the following:

 

 

 

February 3,

 

 

January 28,

 

(in thousands)

 

2018

 

 

2017

 

Finished goods

 

$

50,900

 

 

$

40,771

 

Less: reserves

 

 

(1,979

)

 

 

(2,242

)

Total inventories, net

 

$

48,921

 

 

$

38,529

 

 

Schedule of Property and Equipment

Property and equipment consisted of the following:

 

 

February 3,

 

 

January 28,

 

(in thousands)

 

2018

 

 

2017

 

Leasehold improvements

 

$

37,307

 

 

$

41,214

 

Furniture, fixtures and equipment

 

 

11,985

 

 

 

12,267

 

Capitalized software

 

 

11,239

 

 

 

10,862

 

Construction in process

 

 

71

 

 

 

236

 

Total property and equipment

 

 

60,602

 

 

 

64,579

 

Less: accumulated depreciation

 

 

(28,994

)

 

 

(21,634

)

Property and equipment, net

 

$

31,608

 

 

$

42,945

 

 

v3.8.0.1
Goodwill and Intangible Assets (Tables)
12 Months Ended
Feb. 03, 2018
Goodwill And Intangible Assets Disclosure [Abstract]  
Summary of Net Goodwill Balances

Net goodwill balances and changes therein by segment were as follows:

 

(in thousands)

 

Wholesale

 

 

Direct-to-consumer

 

 

Total Net Goodwill

 

Balance as of January 30, 2016

 

$

41,435

 

 

$

22,311

 

 

$

63,746

 

Impairment charge

 

 

 

 

 

(22,311

)

 

 

(22,311

)

Balance as of January 28, 2017

 

 

41,435

 

 

 

 

 

 

41,435

 

Balance as of February 3, 2018

 

$

41,435

 

 

$

 

 

$

41,435

 

 

Summary of Identifiable Intangible Assets

The following tables present a summary of identifiable intangible assets:

 

(in thousands)

 

Gross Amount

 

 

Accumulated Amortization

 

 

Accumulated Impairments

 

 

Net Book Value

 

Balance as of February 3, 2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortizable intangible assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Customer relationships

 

$

11,970

 

 

$

(5,971

)

 

$

 

 

$

5,999

 

Indefinite-lived intangible asset:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tradename

 

 

101,850

 

 

 

 

 

 

(30,750

)

 

 

71,100

 

Total intangible assets

 

$

113,820

 

 

$

(5,971

)

 

$

(30,750

)

 

$

77,099

 

 

(in thousands)

 

Gross Amount

 

 

Accumulated Amortization

 

 

Accumulated Impairments

 

 

Net Book Value

 

Balance as of January 28, 2017

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortizable intangible assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Customer relationships

 

$

11,970

 

 

$

(5,372

)

 

$

 

 

$

6,598

 

Indefinite-lived intangible asset:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tradename

 

 

101,850

 

 

 

 

 

 

(30,750

)

 

 

71,100

 

Total intangible assets

 

$

113,820

 

 

$

(5,372

)

 

$

(30,750

)

 

$

77,698

 

 

Schedule of Expected Amortization Expense for Identifiable Intangible Assets

Amortization of identifiable intangible assets was $599, $598 and $598 for fiscal 2017, fiscal 2016 and fiscal 2015, respectively, which is included in Selling, general and administrative expenses on the Consolidated Statements of Operations. Amortization expense for each of the fiscal years 2018 to 2022 is expected to be as follows:

 

 

 

Future

 

(in thousands)

 

Amortization

 

2018

 

$

598

 

2019

 

 

598

 

2020

 

 

598

 

2021

 

 

598

 

2022

 

 

598

 

Total next 5 fiscal years

 

$

2,990

 

 

v3.8.0.1
Fair Value Measurements (Tables)
12 Months Ended
Feb. 03, 2018
Fair Value Disclosures [Abstract]  
Summary of Non-Financial Assets Measured at Fair Value on Nonrecurring Basis

The following tables present the non-financial assets the Company measured at fair value on a non-recurring basis in fiscal 2017 and fiscal 2016, based on such fair value hierarchy:

 

 

 

Net Carrying

Value as of

 

 

Fair Value Measured and Recorded at Reporting Date Using:

 

 

Total Losses - Year Ended

 

 

(in thousands)

 

February 3, 2018

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

February 3, 2018

 

 

Property and equipment

 

$

493

 

 

$

 

 

$

 

 

$

493

 

 

$

5,111

 

(1)

 

 

 

Net Carrying

Value as of

 

 

Fair Value Measured and Recorded at Reporting Date Using:

 

 

Total Losses - Year Ended

 

 

(in thousands)

 

January 28, 2017

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

January 28, 2017

 

 

Property and equipment

 

$

1,042

 

 

$

 

 

$

 

 

$

1,042

 

 

$

2,082

 

(1)

Goodwill

 

 

41,435

 

 

 

 

 

 

 

 

 

41,435

 

 

 

22,311

 

(2)

Tradename

 

 

71,100

 

 

 

 

 

 

 

 

 

71,100

 

 

 

30,750

 

(2)

 

(1) Recorded within Selling, general and administrative expenses on the Consolidated Statements of Operations. See Note 1 “Description of Business and Summary of Significant Accounting Policies – (K) Impairment of Long-lived Assets” for additional information.

(2) Recorded within Impairment of goodwill and indefinite-lived intangible asset on the Consolidated Statements of Operations. See Note 1 “Description of Business and Summary of Significant Accounting Policies (L) Goodwill and Other Intangible Assets” for additional details.

v3.8.0.1
Long-Term Debt and Financing Arrangements (Tables)
12 Months Ended
Feb. 03, 2018
Debt Disclosure [Abstract]  
Summary of Long-Term Debt

Long-term debt consisted of the following:

 

 

 

February 3,

 

 

January 28,

 

(in thousands)

 

2018

 

 

2017

 

Term Loan Facility

 

$

33,000

 

 

$

45,000

 

Revolving Credit Facility

 

 

16,900

 

 

 

5,200

 

Total debt principal

 

 

49,900

 

 

 

50,200

 

Less: current portion of long-term debt

 

 

8,000

 

 

 

 

Less: deferred financing costs

 

 

1,218

 

 

 

1,902

 

Total long-term debt

 

$

40,682

 

 

$

48,298

 

 

v3.8.0.1
Commitments and Contingencies (Tables)
12 Months Ended
Feb. 03, 2018
Commitments And Contingencies Disclosure [Abstract]  
Future Minimum Lease Payments under Operating Leases

The future minimum lease payments under operating leases at February 3, 2018 were as follows:

 

 

 

Minimum Lease

 

(in thousands)

 

Payments

 

Fiscal 2018

 

$

21,122

 

Fiscal 2019

 

 

21,291

 

Fiscal 2020

 

 

19,819

 

Fiscal 2021

 

 

18,588

 

Fiscal 2022

 

 

16,506

 

Thereafter

 

 

36,194

 

Total minimum lease payments

 

$

133,520

 

 

v3.8.0.1
Share-Based Compensation (Tables)
12 Months Ended
Feb. 03, 2018
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]  
Summary of Stock Option Activity for Both Employees and Non-employees

A summary of stock option activity for both employees and non-employees for fiscal 2017 is as follows:

 

 

 

Stock Options

 

 

Weighted Average Exercise Price

 

 

Weighted Average Remaining Contractual Term (years)

 

 

Aggregate Intrinsic Value

(in thousands)

 

Outstanding at January 28, 2017

 

 

225,812

 

 

$

45.27

 

 

 

8.9

 

 

$

 

Granted

 

 

19,150

 

 

$

9.90

 

 

 

 

 

 

 

 

 

Exercised

 

 

 

 

$

 

 

 

 

 

 

 

 

 

Forfeited or expired

 

 

(74,205

)

 

$

43.15

 

 

 

 

 

 

 

 

 

Outstanding at February 3, 2018

 

 

170,757

 

 

$

42.23

 

 

 

8.1

 

 

$

32

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vested and exercisable at February 3, 2018

 

 

79,253

 

 

$

45.00

 

 

 

7.9

 

 

$

 

 

Schedule of Stock-Based Compensation Valuation Assumptions

 

 

 

Fiscal Year

 

 

 

2017

 

 

2016

 

 

2015

 

Weighted-average expected volatility

 

 

39.4

%

 

 

42.6

%

 

 

46.0

%

Expected term (in years)

 

4.7 years

 

 

4.2 years

 

 

4.5 years

 

Risk-free interest rate

 

 

1.9

%

 

 

1.1

%

 

 

1.4

%

Expected dividend yield

 

%

 

 

%

 

 

%

 

 

Schedule of Restricted Stock Units Activity

A summary of restricted stock unit activity for fiscal 2017 is as follows:

 

 

 

Restricted Stock Units

 

 

Weighted Average Grant Date Fair Value

 

Nonvested restricted stock units at January 28, 2017

 

 

10,771

 

 

$

65.52

 

Granted

 

 

7,500

 

 

$

6.00

 

Vested

 

 

(3,575

)

 

$

77.50

 

Forfeited

 

 

(1,460

)

 

$

59.80

 

Nonvested restricted stock units at February 3, 2018

 

 

13,236

 

 

$

29.19

 

 

v3.8.0.1
Earnings Per Share (Tables)
12 Months Ended
Feb. 03, 2018
Earnings Per Share [Abstract]  
Schedule of Reconciliation of Weighted Average Basic Shares to Weighted Average Diluted Shares Outstanding

The following is a reconciliation of weighted average basic shares to weighted average diluted shares outstanding:

 

 

 

Fiscal Year

 

 

 

2017

 

 

2016

 

 

2015

 

Weighted-average shares—basic

 

 

7,605,822

 

 

 

4,642,053

 

 

 

3,677,043

 

Effect of dilutive equity securities

 

 

2,605

 

 

 

 

 

 

75,879

 

Weighted-average shares—diluted

 

 

7,608,427

 

 

 

4,642,053

 

 

 

3,752,922

 

 

v3.8.0.1
Income Taxes (Tables)
12 Months Ended
Feb. 03, 2018
Income Tax Disclosure [Abstract]  
Schedule of Provision for Income Taxes

The provision for income taxes consisted of the following:

 

 

Fiscal Year

 

(in thousands)

2017

 

 

2016

 

 

2015

 

Current:

 

 

 

 

 

 

 

 

 

 

 

Domestic:

 

 

 

 

 

 

 

 

 

 

 

Federal

$

(295

)

 

$

 

 

$

(53

)

State

 

32

 

 

 

207

 

 

 

522

 

Foreign

 

70

 

 

 

75

 

 

 

 

Total current

 

(193

)

 

 

282

 

 

 

469

 

Deferred:

 

 

 

 

 

 

 

 

 

 

 

Domestic:

 

 

 

 

 

 

 

 

 

 

 

Federal

 

(379

)

 

 

83,323

 

 

 

2,994

 

State

 

 

 

 

10,121

 

 

 

(249

)

Total deferred

 

(379

)

 

 

93,444

 

 

 

2,745

 

Total provision for income taxes

$

(572

)

 

$

93,726

 

 

$

3,214

 

 

Schedule of Reconciliation of Federal Statutory Income Tax Rate to Effective Tax Rate

A reconciliation of the federal statutory income tax rate to the effective tax rate is as follows:

 

 

Fiscal Year

 

 

2017

 

 

2016

 

 

2015

 

Statutory federal rate

 

33.7

%

 

 

35.0

%

 

 

35.0

%

State taxes, net of federal benefit

 

(4.3

)%

 

 

5.5

%

 

 

6.5

%

Nondeductible Tax Receivable Agreement adjustment (1)

 

(47.6

)%

 

 

0.4

%

 

 

4.1

%

Valuation allowance

 

19.0

%

 

 

(176.8

)%

 

 

(0.5

)%

Return to provision adjustment

 

(0.9

)%

 

 

(0.1

)%

 

 

(2.4

)%

Impact of TCJA and other changes in tax law

 

(0.5

)%

 

—%

 

 

 

(3.2

)%

Rate Differential on Foreign Income

 

0.1

%

 

—%

 

 

—%

 

Other

 

(0.5

)%

 

—%

 

 

 

(0.8

)%

Total

 

(1.0

)%

 

 

(136.0

)%

 

 

38.7

%

 

 

(1)

Non-deductible Tax Receivable Agreement liability revaluation due to TCJA and change in levels of projected pre-tax income. See “Tax Receivable Agreement” under Note 12 “Related Party Transactions” for additional information.

Schedule of Deferred Income Tax Assets and Liabilities

Deferred income tax assets and liabilities consisted of the following:

 

 

February 3,

 

 

January 28,

 

(in thousands)

2018

 

 

2017

 

Deferred tax assets:

 

 

 

 

 

 

 

Depreciation and amortization

$

13,317

 

 

$

28,353

 

Employee related costs

 

2,001

 

 

 

2,361

 

Allowance for asset valuations

 

2,441

 

 

 

4,817

 

Accrued expenses

 

4,725

 

 

 

7,349

 

Net operating losses

 

71,122

 

 

 

83,670

 

Tax credits

 

498

 

 

 

812

 

Other

 

490

 

 

 

489

 

Total deferred tax assets

 

94,594

 

 

 

127,851

 

Less: valuation allowances

 

(92,590

)

 

 

(122,860

)

Net deferred tax assets

 

2,004

 

 

 

4,991

 

Deferred tax liabilities:

 

 

 

 

 

 

 

Cancellation of debt income

 

(1,473

)

 

 

(4,607

)

Other

 

(152

)

 

 

(384

)

Total deferred tax liabilities

 

(1,625

)

 

 

(4,991

)

Net deferred tax assets

$

379

 

 

$

 

Included in:

 

 

 

 

 

 

 

Prepaid expenses and other current assets

$

 

 

$

 

Deferred income taxes

 

379

 

 

 

 

Net deferred tax assets

$

379

 

 

$

 

 

Reconciliation of Beginning and Ending Amount of Gross Unrecognized Tax Benefits, Excluding Interest and Penalties

A reconciliation of the beginning and ending amount of gross unrecognized tax benefits, excluding interest and penalties, is as follows:

 

 

Fiscal Year

 

(in thousands)

2017

 

 

2016

 

 

2015

 

Beginning balance

$

2,339

 

 

$

2,127

 

 

$

4,487

 

Increases for tax positions in current year

 

10

 

 

 

208

 

 

 

72

 

Increases for tax positions in prior years

 

 

 

 

4

 

 

 

27

 

Decreases for tax positions in prior years

 

 

 

 

 

 

 

(2,459

)

Ending balance

$

2,349

 

 

$

2,339

 

 

$

2,127

 

 

 

 

 

 

 

 

 

 

 

 

 

 

v3.8.0.1
Segment and Geographical Financial Information (Tables)
12 Months Ended
Feb. 03, 2018
Segment Reporting [Abstract]  
Summary of Reportable Segments Information

Summary information for the Company’s reportable segments is presented below.

 

 

 

Fiscal Year

 

(in thousands)

 

2017

 

 

2016

 

 

2015

 

Net Sales:

 

 

 

 

 

 

 

 

 

 

 

 

Wholesale

 

$

166,113

 

 

$

170,053

 

 

$

201,182

 

Direct-to-consumer

 

 

106,469

 

 

 

98,146

 

 

 

101,275

 

Total net sales

 

$

272,582

 

 

$

268,199

 

 

$

302,457

 

Income (loss) before income taxes:

 

 

 

 

 

 

 

 

 

 

 

 

Wholesale

 

$

44,496

 

 

$

47,098

 

 

$

61,571

 

Direct-to-consumer (1)

 

 

(97

)

 

 

1,216

 

 

 

7,839

 

Subtotal

 

 

44,399

 

 

 

48,314

 

 

 

69,410

 

Unallocated corporate expenses

 

 

(62,716

)

 

 

(59,925

)

 

 

(53,684

)

Impairment of goodwill and indefinite-lived intangible asset (2)

 

 

 

 

 

(53,061

)

 

 

 

Interest expense, net

 

 

(5,540

)

 

 

(3,932

)

 

 

(5,680

)

Other income (expense), net (3)

 

 

81,882

 

 

 

(329

)

 

 

(1,733

)

Total income (loss) before income taxes

 

$

58,025

 

 

$

(68,933

)

 

$

8,313

 

Depreciation & Amortization:

 

 

 

 

 

 

 

 

 

 

 

 

Wholesale

 

$

1,742

 

 

$

1,754

 

 

$

2,058

 

Direct-to-consumer

 

 

4,928

 

 

 

4,611

 

 

 

4,498

 

Unallocated corporate

 

 

3,428

 

 

 

2,319

 

 

 

1,794

 

Total depreciation & amortization

 

$

10,098

 

 

$

8,684

 

 

$

8,350

 

Capital Expenditures:

 

 

 

 

 

 

 

 

 

 

 

 

Wholesale

 

$

81

 

 

$

650

 

 

$

1,629

 

Direct-to-consumer

 

 

1,662

 

 

 

9,559

 

 

 

9,442

 

Unallocated corporate

 

 

1,636

 

 

 

4,078

 

 

 

6,520

 

Total capital expenditures

 

$

3,379

 

 

$

14,287

 

 

$

17,591

 

 

 

(1) Fiscal 2017 and fiscal 2016 include non-cash impairment charges totaling $5,111 and $2,082, respectively related to property and equipment.  See Note 1 “Description of Business and Summary of Significant Accounting Policies – (K) Impairment of Long-lived Assets” for additional information.

(2) Impairment of goodwill and indefinite-lived intangible asset in fiscal 2016 includes pre-tax impairment charges of $53,061 related to the Company’s goodwill and tradename intangible asset. See Note 1 “Description of Business and Summary of Significant Accounting Policies – (L) Goodwill and Other Intangible Assets” for further details.

(3) Fiscal 2017 includes the $82,002 pre-tax benefit from re-measurement of the liability related to the Tax Receivable Agreement. See Note 12 “Related Party Transactions” for additional information.

Assets for each of the Company’s reportable segments are presented below.

 

 

 

February 3,

 

 

January 28,

 

(in thousands)

 

2018

 

 

2017

 

Total Assets:

 

 

 

 

 

 

 

 

Wholesale

 

$

58,733

 

 

$

44,442

 

Direct-to-consumer

 

 

40,751

 

 

 

45,038

 

Unallocated corporate

 

 

135,050

 

 

 

150,000

 

Total assets

 

$

234,534

 

 

$

239,480

 

 

v3.8.0.1
Quarterly Financial Information (Tables)
12 Months Ended
Feb. 03, 2018
Quarterly Financial Information Disclosure [Abstract]  
Summary of Quarterly Financial Results

Summarized quarterly financial results for fiscal 2017 and fiscal 2016 are as follows:

 

(in thousands, except per share data)

 

First

Quarter

 

 

Second

Quarter

 

 

Third

Quarter

 

 

Fourth Quarter (2)

 

Fiscal 2017:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

$

58,045

 

 

$

60,822

 

 

$

79,067

 

 

$

74,648

 

Gross profit

 

 

25,591

 

 

 

25,556

 

 

 

36,667

 

 

 

33,975

 

Net (loss) income

 

 

(9,290

)

 

 

(10,134

)

 

 

3,509

 

 

 

74,512

 

Basic (loss) earnings per share (1)

 

$

(1.88

)

 

$

(2.05

)

 

$

0.41

 

 

$

6.41

 

Diluted (loss) earnings per share (1)

 

$

(1.88

)

 

$

(2.05

)

 

$

0.41

 

 

$

6.41

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(in thousands, except per share data)

 

First

Quarter

 

 

Second

Quarter

 

 

Third

Quarter

 

 

Fourth Quarter (3)

 

Fiscal 2016:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

$

67,645

 

 

$

60,702

 

 

$

75,973

 

 

$

63,879

 

Gross profit

 

 

28,258

 

 

 

27,387

 

 

 

37,958

 

 

 

29,216

 

Net (loss) income

 

 

(1,924

)

 

 

(1,967

)

 

 

3,380

 

 

 

(162,148

)

Basic (loss) earnings per share (1)

 

$

(0.51

)

 

$

(0.40

)

 

$

0.69

 

 

$

(32.81

)

Diluted (loss) earnings per share (1)

 

$

(0.51

)

 

$

(0.40

)

 

$

0.68

 

 

$

(32.81

)

 

(1)

The sum of the quarterly earnings per share may not equal the full-year amount as the computation of the weighted-average number of shares outstanding for each quarter and the full-year are performed independently.

(2)

Net income, basic earnings per share and diluted earnings per share included the impact of (i) a $5,111 non-cash pre-tax impairment charge related to property and equipment (see Note 1 “Description of Business and Summary of Significant Accounting Policies (K) Impairment of Long-lived Assets” for additional details); and (ii) a $82,002 pre-tax benefit from re-measurement of the liability related to the Tax Receivable Agreement (see Note 12 “Related Party Transactions” for additional details).  

(3)

Net loss, basic loss per share and diluted loss per share include the impact of (i) $53,061 of non-cash pre-tax impairment charges related to goodwill and the tradename intangible asset (see Note 1 “Description of Business and Summary of Significant Accounting Policies (L) Goodwill and Other Intangible Assets” for additional details); (ii) a $2,082 non-cash pre-tax impairment charge related to property and equipment (see Note 1 “Description of Business and Summary of Significant Accounting Policies (K) Impairment of Long-lived Assets” for additional details); and (iii) a $121,836 valuation allowance against the Company’s deferred tax assets (see Note 10 “Income Taxes” for additional details).

v3.8.0.1
Description of Business and Summary of Significant Accounting Policies - Additional Information (Detail)
3 Months Ended 12 Months Ended
Oct. 23, 2017
$ / shares
shares
Jun. 30, 2017
USD ($)
Feb. 03, 2018
USD ($)
shares
Jan. 28, 2017
USD ($)
shares
Feb. 03, 2018
USD ($)
Customer
shares
Jan. 28, 2017
USD ($)
Customer
shares
Jan. 30, 2016
USD ($)
Customer
Oct. 22, 2017
shares
Sep. 06, 2017
shares
Sep. 05, 2017
shares
Description Of Business And Summary Of Significant Accounting Policies [Line Items]                    
Reverse stock split ratio 0.10                  
Reverse stock split, description         Pursuant to the Reverse Stock Split, every 10 shares of the Company’s issued and outstanding common stock were automatically converted into one share of common stock. No fractional shares were issued if, as a result of the Reverse Stock Split, a stockholder would otherwise have been entitled to a fractional share. Instead, each stockholder was entitled to receive a cash payment based on a pre-split cash in lieu rate of $0.48, which was the average closing price per share on the New York Stock Exchange for the five consecutive trading days immediately preceding October 23, 2017.          
Number of fractional shares | shares 0                  
Stock conversion cash in lieu of share, per share | $ / shares $ 0.48                  
Trading days used for calculating stock conversion cash in lieu of share per share 5 days                  
Common stock, shares authorized | shares 100,000,000   100,000,000 100,000,000 100,000,000 100,000,000   250,000,000 250,000,000 100,000,000
Depreciation expense         $ 8,480,000 $ 7,070,000 $ 6,426,000      
Impairment charges relating to long-lived assets     $ 5,111,000 $ 2,082,000 5,111,000 2,082,000 0      
Impairment of goodwill       22,311,000 0 22,311,000 0      
Goodwill     41,435,000 41,435,000 $ 41,435,000 $ 41,435,000 63,746,000      
Discount rate on assumptions         15.00% 16.00%        
Marketing and advertising expense         $ 8,939,000 $ 8,156,000 9,177,000      
Deferred production expenses associated with company-directed advertising     415,000 182,000 415,000 182,000        
Increase in accumulated deficit with respect to adoption of new guidance     84,000   84,000          
New Accounting Pronouncement [Member]                    
Description Of Business And Summary Of Significant Accounting Policies [Line Items]                    
Increase in accumulated deficit with respect to adoption of new guidance     84,000   84,000          
Increase to deferred tax assets related to net operating loss carryforwards for excess tax benefits related to share-based compensation     $ 2,350,000   2,350,000          
Tradename [Member]                    
Description Of Business And Summary Of Significant Accounting Policies [Line Items]                    
Impairment of indefinite-lived intangible asset       $ 30,750,000 0 $ 30,750,000 0      
Wholesale [Member]                    
Description Of Business And Summary Of Significant Accounting Policies [Line Items]                    
Impairment of goodwill         $ 0          
Percentage of fair value exceeded     35.00% 40.00% 35.00% 40.00%        
Goodwill     $ 41,435,000 $ 41,435,000 $ 41,435,000 $ 41,435,000 $ 41,435,000      
Discounted Cash Flow Valuation Analysis Technique [Member] | Tradename [Member]                    
Description Of Business And Summary Of Significant Accounting Policies [Line Items]                    
Impairment of goodwill         $ 0          
Percentage of fair value below the carrying amount       30.00%   30.00%        
Direct-to-Consumer [Member] | Income Approach Valuation Technique [Member]                    
Description Of Business And Summary Of Significant Accounting Policies [Line Items]                    
Weighting percentage fair value of reporting unit           80.00%        
Direct-to-Consumer [Member] | Income and Market Approach Valuation Technique [Member]                    
Description Of Business And Summary Of Significant Accounting Policies [Line Items]                    
Percentage of fair value below the carrying amount       40.00%   40.00%        
Direct-to-Consumer [Member] | Market Approach Valuation Technique [Member]                    
Description Of Business And Summary Of Significant Accounting Policies [Line Items]                    
Weighting percentage fair value of reporting unit           20.00%        
Customer Relationships [Member]                    
Description Of Business And Summary Of Significant Accounting Policies [Line Items]                    
Estimated economic useful life of intangibles         20 years          
Customer Concentration Risk [Member] | Sales [Member]                    
Description Of Business And Summary Of Significant Accounting Policies [Line Items]                    
Number of wholesale partners each accounted for more than ten percent of net sales | Customer         1 3 3      
Customer Concentration Risk [Member] | Accounts Receivable [Member]                    
Description Of Business And Summary Of Significant Accounting Policies [Line Items]                    
Number of wholesale partners each accounted for more than ten percent of accounts receivable | Customer         2 3        
Wholesale Partner One [Member] | Customer Concentration Risk [Member] | Sales [Member]                    
Description Of Business And Summary Of Significant Accounting Policies [Line Items]                    
Percentage accounted from major customers         21.90% 19.60% 18.30%      
Wholesale Partner Two [Member] | Customer Concentration Risk [Member] | Sales [Member]                    
Description Of Business And Summary Of Significant Accounting Policies [Line Items]                    
Percentage accounted from major customers           14.40% 13.80%      
Wholesale Partner Three [Member] | Customer Concentration Risk [Member] | Sales [Member]                    
Description Of Business And Summary Of Significant Accounting Policies [Line Items]                    
Percentage accounted from major customers           10.80% 10.80%      
Wholesale Partners [Member] | Customer Concentration Risk [Member] | Accounts Receivable [Member]                    
Description Of Business And Summary Of Significant Accounting Policies [Line Items]                    
Percentage accounted from major customers         49.40% 57.50%        
Minimum [Member] | Market Approach Valuation Technique [Member]                    
Description Of Business And Summary Of Significant Accounting Policies [Line Items]                    
Significant assumptions utilization percentage         1.10% 0.50%        
Minimum [Member] | Furniture, Fixtures and Computer Equipment [Member]                    
Description Of Business And Summary Of Significant Accounting Policies [Line Items]                    
Estimated useful lives of property and equipment         3 years          
Minimum [Member] | Capitalized Software [Member]                    
Description Of Business And Summary Of Significant Accounting Policies [Line Items]                    
Estimated economic useful life of capitalized software         3 years          
Maximum [Member] | Market Approach Valuation Technique [Member]                    
Description Of Business And Summary Of Significant Accounting Policies [Line Items]                    
Significant assumptions utilization percentage         1.16% 0.90%        
Maximum [Member] | Furniture, Fixtures and Computer Equipment [Member]                    
Description Of Business And Summary Of Significant Accounting Policies [Line Items]                    
Estimated useful lives of property and equipment         7 years          
Maximum [Member] | Capitalized Software [Member]                    
Description Of Business And Summary Of Significant Accounting Policies [Line Items]                    
Estimated economic useful life of capitalized software         7 years          
Term Loan Facility [Member]                    
Description Of Business And Summary Of Significant Accounting Policies [Line Items]                    
Quarterly amortization payment due around January 2018   $ 3,000,000                
Quarterly amortization payment for fiscal quarter thereafter   2,000,000                
Term Loan Facility [Member] | Minimum [Member]                    
Description Of Business And Summary Of Significant Accounting Policies [Line Items]                    
Credit facility covenant availability amount   $ 15,000,000                
v3.8.0.1
Description of Business and Summary of Significant Accounting Policies - Schedule of Inventories (Detail) - USD ($)
$ in Thousands
Feb. 03, 2018
Jan. 28, 2017
Inventory Disclosure [Abstract]    
Finished goods $ 50,900 $ 40,771
Less: reserves (1,979) (2,242)
Total inventories, net $ 48,921 $ 38,529
v3.8.0.1
Description of Business and Summary of Significant Accounting Policies - Schedule of Property and Equipment (Detail) - USD ($)
$ in Thousands
Feb. 03, 2018
Jan. 28, 2017
Property And Equipment [Line Items]    
Total property and equipment $ 60,602 $ 64,579
Less: accumulated depreciation (28,994) (21,634)
Property and equipment, net 31,608 42,945
Leasehold Improvements [Member]    
Property And Equipment [Line Items]    
Total property and equipment 37,307 41,214
Furniture, Fixtures and Equipment [Member]    
Property And Equipment [Line Items]    
Total property and equipment 11,985 12,267
Capitalized Software [Member]    
Property And Equipment [Line Items]    
Total property and equipment 11,239 10,862
Construction in Process [Member]    
Property And Equipment [Line Items]    
Total property and equipment $ 71 $ 236
v3.8.0.1
Goodwill and Intangible Assets - Summary of Goodwill Balances (Detail) - USD ($)
3 Months Ended 12 Months Ended
Jan. 28, 2017
Feb. 03, 2018
Jan. 28, 2017
Jan. 30, 2016
Goodwill [Line Items]        
Total Net Goodwill   $ 41,435,000 $ 63,746,000  
Impairment charge $ (22,311,000) 0 (22,311,000) $ 0
Total Net Goodwill 41,435,000 41,435,000 41,435,000 63,746,000
Wholesale [Member]        
Goodwill [Line Items]        
Total Net Goodwill   41,435,000 41,435,000  
Impairment charge   0    
Total Net Goodwill $ 41,435,000 $ 41,435,000 41,435,000 41,435,000
Direct-to-Consumer [Member]        
Goodwill [Line Items]        
Total Net Goodwill     22,311,000  
Impairment charge     $ (22,311,000)  
Total Net Goodwill       $ 22,311,000
v3.8.0.1
Goodwill and Intangible Assets - Additional Information (Detail) - USD ($)
3 Months Ended 12 Months Ended
Jan. 28, 2017
Feb. 03, 2018
Jan. 28, 2017
Jan. 30, 2016
Identifiable Intangible Assets [Line Items]        
Accumulated impairments goodwill $ 69,253,000 $ 69,253,000 $ 69,253,000 $ 46,942,000
Impairment of goodwill 22,311,000 0 22,311,000 0
Amortization of identifiable intangible assets   599,000 598,000 598,000
Tradename [Member]        
Identifiable Intangible Assets [Line Items]        
Impairment of indefinite-lived intangible asset $ 30,750,000 $ 0 $ 30,750,000 $ 0
v3.8.0.1
Goodwill and Intangible Assets - Summary of Identifiable Intangible Assets (Detail) - USD ($)
$ in Thousands
Feb. 03, 2018
Jan. 28, 2017
Identifiable Intangible Assets [Line Items]    
Gross Amount $ 113,820 $ 113,820
Accumulated Amortization (5,971) (5,372)
Total Intangible assets, Accumulated impairments (30,750) (30,750)
Net Book Value 77,099 77,698
Tradename [Member]    
Identifiable Intangible Assets [Line Items]    
Gross Amount 101,850 101,850
Total Intangible assets, Accumulated impairments (30,750) (30,750)
Net Book Value 71,100 71,100
Customer Relationships [Member]    
Identifiable Intangible Assets [Line Items]    
Gross Amount 11,970 11,970
Accumulated Amortization (5,971) (5,372)
Net Book Value $ 5,999 $ 6,598
v3.8.0.1
Goodwill and Intangible Assets - Schedule of Expected Amortization Expense for Identifiable Intangible Assets (Detail)
$ in Thousands
Feb. 03, 2018
USD ($)
Goodwill And Intangible Assets Disclosure [Abstract]  
2018 $ 598
2019 598
2020 598
2021 598
2022 598
Total next 5 fiscal years $ 2,990
v3.8.0.1
Fair Value Measurements - Additional Information (Detail) - USD ($)
Feb. 03, 2018
Jan. 28, 2017
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]    
Non-financial assets recognized at fair value $ 0 $ 0
Non-financial liabilities recognized at fair value 0 0
Total long-term debt principal 49,900,000 $ 50,200,000
Level 2 [Member]    
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]    
Fair value of outstanding debt $ 42,000,000  
v3.8.0.1
Fair Value Measurements - Summary of Non-Financial Assets Measured at Fair Value on Nonrecurring Basis (Detail) - USD ($)
3 Months Ended 12 Months Ended
Feb. 03, 2018
Jan. 28, 2017
Feb. 03, 2018
Jan. 28, 2017
Jan. 30, 2016
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]          
Property and equipment $ 31,608,000 $ 42,945,000 $ 31,608,000 $ 42,945,000  
Goodwill 41,435,000 41,435,000 41,435,000 41,435,000 $ 63,746,000
Property and equipment, Total Losses 5,111,000 2,082,000 5,111,000 2,082,000 0
Impairment of goodwill   22,311,000 0 22,311,000 0
Level 3 [Member] | Fair Value Measurements Nonrecurring [Member]          
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]          
Property and equipment, Fair Value 493,000 1,042,000 493,000 1,042,000  
Goodwill, Fair Value   41,435,000   41,435,000  
Tradename [Member]          
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]          
Tradename 71,100,000 71,100,000 71,100,000 71,100,000  
Tradename, Total Losses   30,750,000 0 30,750,000 $ 0
Tradename [Member] | Level 3 [Member] | Fair Value Measurements Nonrecurring [Member]          
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]          
Tradename, Fair Value   71,100,000   71,100,000  
Net Carrying Value [Member]          
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]          
Property and equipment $ 493,000 1,042,000 $ 493,000 1,042,000  
Goodwill   41,435,000   41,435,000  
Net Carrying Value [Member] | Tradename [Member]          
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]          
Tradename   $ 71,100,000   $ 71,100,000  
v3.8.0.1
Long-Term Debt and Financing Arrangements - Summary of Long-Term Debt (Detail) - USD ($)
$ in Thousands
Feb. 03, 2018
Jan. 28, 2017
Nov. 27, 2013
Schedule of Capitalization, Long-term Debt [Line Items]      
Total debt principal $ 49,900 $ 50,200  
Less: current portion of long-term debt 8,000    
Less: deferred financing costs 1,218 1,902  
Long-term debt 40,682 48,298  
Term Loan Facility [Member]      
Schedule of Capitalization, Long-term Debt [Line Items]      
Total debt principal 33,000 45,000 $ 175,000
Revolving Credit Facility [Member]      
Schedule of Capitalization, Long-term Debt [Line Items]      
Total debt principal $ 16,900 $ 5,200  
v3.8.0.1
Long-Term Debt and Financing Arrangements - Additional Information (Detail) - USD ($)
1 Months Ended 2 Months Ended 12 Months Ended 50 Months Ended
Sep. 08, 2017
Jun. 30, 2017
Nov. 27, 2013
Apr. 29, 2017
Jun. 30, 2017
Feb. 03, 2018
Jan. 30, 2016
Feb. 03, 2018
Jan. 28, 2017
Debt Instrument [Line Items]                  
Long-term debt           $ 49,900,000   $ 49,900,000 $ 50,200,000
Payments for term loan facility           12,000,000 $ 20,000,000    
Funds utilized for equity contributions       $ 6,241,000 $ 11,831,000        
2017 Rights Offering and 2017 Investment Agreement [Member]                  
Debt Instrument [Line Items]                  
Gross proceeds from issuance of common stock $ 30,000,000                
Term Loan Facility [Member]                  
Debt Instrument [Line Items]                  
Long-term debt     $ 175,000,000     33,000,000   33,000,000 $ 45,000,000
Debt instrument, maturity date     Nov. 27, 2019            
Quarterly amortization payment due around January 2018   $ 3,000,000              
Quarterly amortization payment for fiscal quarter thereafter   $ 2,000,000              
Applicable margin increased rate   2.00%              
Credit facility fee percentage   0.50%              
Credit facility amendment effective date Sep. 08, 2017                
Payments for term loan facility $ 9,000,000         $ 12,000,000   $ 142,000,000  
Percentage of excess cash flow           50.00%      
Term loan facility description           The Term Loan Facility requires Vince, LLC and Vince Intermediate to make mandatory prepayments upon the occurrence of certain events, including additional debt issuances, common and preferred stock issuances, certain asset sales, and annual payments of 50% of excess cash flow, subject to reductions to 25% and 0% if Vince, LLC and Vince Intermediate maintain a Consolidated Net Total Leverage Ratio of 2.50 to 1.00 and 2.00 to 1.00, respectively, and subject to reductions for voluntary prepayments made during such fiscal year.      
Term Loan Facility [Member] | Interest Rate on Overdue Principal Amount [Member]                  
Debt Instrument [Line Items]                  
Variable rate percentage           2.00%      
Term Loan Facility [Member] | Interest Rate on Overdue Interest or Other Outstanding Amount [Member]                  
Debt Instrument [Line Items]                  
Variable rate percentage           2.00%      
Term Loan Facility [Member] | Eurodollar Rate [Member]                  
Debt Instrument [Line Items]                  
Variable rate percentage 7.00%                
Term Loan Facility [Member] | Base Rate [Member]                  
Debt Instrument [Line Items]                  
Variable rate percentage 6.00%                
Term Loan Facility [Member] | Vince, LLC and Vince Intermediate Holding, LLC [Member]                  
Debt Instrument [Line Items]                  
Reduction in cash flow percentage based on leverage ratio           25.00%      
Reduction in cash flow percentage based on leverage ratio           0.00%      
Net leverage ratio base for twenty five percent reduction           2.50   2.50  
Net leverage ratio base for zero percent reduction           2.00   2.00  
Term Loan Facility [Member] | Minimum [Member]                  
Debt Instrument [Line Items]                  
Credit facility covenant availability amount   $ 15,000,000     $ 15,000,000        
Term Loan Facility [Member] | Minimum [Member] | Pro Forma [Member]                  
Debt Instrument [Line Items]                  
Total secured leverage ratio           0.25      
Term Loan Facility [Member] | Minimum [Member] | Eurodollar Rate [Member]                  
Debt Instrument [Line Items]                  
Debt instrument, accrued interest rate, percentage           1.00%   1.00%  
Term Loan Facility [Member] | Maximum [Member]                  
Debt Instrument [Line Items]                  
Total secured leverage ratio           3.25      
v3.8.0.1
Long-Term Debt and Financing Arrangements - Additional Information 1 (Detail) - USD ($)
12 Months Ended
Aug. 16, 2017
Aug. 15, 2017
Jun. 22, 2017
Jun. 03, 2015
Feb. 03, 2018
Jan. 28, 2017
Nov. 27, 2013
Line of Credit Facility [Line Items]              
Loan cap on revolving credit facility       $ 70,000,000      
Revolving Credit Facility [Member]              
Line of Credit Facility [Line Items]              
Maximum deposit held in borrowing base     $ 5,000,000        
Credit Facility, covenant terms         The new financial maintenance covenant requires the loan parties to have excess availability of not less than the greater of 12.5% of the adjusted loan cap then in effect and $5,000. The second amendment also (x) increased the applicable margin on all borrowings of revolving loans by 0.5% per annum and (y) temporarily lowered the thresholds for what constituted a trigger event through August 15, 2017, such that a trigger event meant the greater of 12.5% of the adjusted loan cap then in effect and $5,000. Following August 15, 2017, the trigger event means the greater of 15% of the adjusted loan cap then in effect and $6,000.    
Percentage of loan greater than Excess Availability 15.00% 12.50% 12.50%        
Amount greater than Excess Availability $ 6,000,000 $ 5,000,000 $ 5,000,000        
Increase in applicable margin on all borrowings     0.50%        
Debt interest terms         Effective with the second amendment, interest is payable on the loans under the Revolving Credit Facility at either the LIBOR or the Base Rate, in each case, plus an applicable margin of 1.75% to 2.25% for LIBOR loans or 0.75% to 1.75% for Base Rate loans, and in each case subject to a pricing grid based on an average daily excess availability calculation. The “Base Rate” means, for any day, a fluctuating rate per annum equal to the highest of (i) the rate of interest in effect for such day as publicly announced from time to time by BofA as its prime rate; (ii) the Federal Funds Rate for such day, plus 0.50%; and (iii) the LIBOR Rate for a one month interest period as determined on such day, plus 1.0%.    
Line of credit facility percentage increase in interest rate in case of default       2.00%      
Consolidated Fixed Charge Coverage Ratio         1.0    
Amount available under the Revolving Credit Facility         $ 38,560,000 $ 27,157,000  
Amount outstanding under the credit facility         16,900,000 5,200,000  
Letters of credit amount outstanding         $ 8,260,000 $ 7,474,000  
Weighted average interest rate for borrowings outstanding         3.70% 4.30%  
Revolving Credit Facility [Member] | Excess Availability Greater than 35% [Member]              
Line of Credit Facility [Line Items]              
Percentage of Excess Availability greater than loan         35.00%    
Pro Forma Excess Availability         $ 15,000,000    
Revolving Credit Facility [Member] | Pro Forma [Member]              
Line of Credit Facility [Line Items]              
Percentage of Excess Availability greater than loan         20.00%    
Pro Forma Excess Availability         $ 10,000,000    
Revolving Credit Facility [Member] | Maximum [Member]              
Line of Credit Facility [Line Items]              
Letters of credit sublimit amount       $ 25,000,000      
Increase in aggregate commitments amount       $ 20,000,000      
Revolving Credit Facility [Member] | Federal Funds Rate [Member]              
Line of Credit Facility [Line Items]              
Variable rate percentage       0.50%      
Revolving Credit Facility [Member] | LIBOR [Member]              
Line of Credit Facility [Line Items]              
Variable rate percentage       1.00%      
Revolving Credit Facility [Member] | LIBOR [Member] | Maximum [Member]              
Line of Credit Facility [Line Items]              
Variable rate percentage       2.25%      
Revolving Credit Facility [Member] | LIBOR [Member] | Minimum [Member]              
Line of Credit Facility [Line Items]              
Variable rate percentage       1.75%      
Revolving Credit Facility [Member] | Base Rate [Member] | Maximum [Member]              
Line of Credit Facility [Line Items]              
Variable rate percentage       1.75%      
Revolving Credit Facility [Member] | Base Rate [Member] | Minimum [Member]              
Line of Credit Facility [Line Items]              
Variable rate percentage       0.75%      
Senior Secured Revolving Credit Facility Due November 27, 2018 [Member]              
Line of Credit Facility [Line Items]              
Maximum borrowing capacity             $ 50,000,000
Revolving credit facility maturity date       Nov. 27, 2018      
Senior Secured Revolving Credit Facility Due June 3, 2020 [Member]              
Line of Credit Facility [Line Items]              
Maximum borrowing capacity       $ 80,000,000      
Revolving credit facility maturity date       Jun. 03, 2020      
Senior Secured Revolving Credit Facility Due June 3, 2020 [Member] | Revolving Credit Facility [Member]              
Line of Credit Facility [Line Items]              
Revolving credit facility maturity date     Jun. 03, 2020        
Revolving credit facility maturity date, description         The second amendment also changed the maturity date to the earlier of (a) June 3, 2020 (or a later date as applicable if the lender participates in any extension series) and (b) 120 days prior to the then scheduled maturity date of the Term Loan Facility to the extent that there are outstanding obligations under the Term Loan Facility on such date.    
v3.8.0.1
Long-Term Debt and Financing Arrangements - Additional Information 2 (Detail) - USD ($)
12 Months Ended
Sep. 08, 2017
Jun. 22, 2017
Apr. 22, 2016
Feb. 03, 2018
Jan. 28, 2017
Jan. 30, 2016
Line of Credit Facility [Line Items]            
Repayment of outstanding indebtedness       $ 409,703,000 $ 191,167,000 $ 123,127,000
2017 Rights Offering and 2017 Investment Agreement [Member]            
Line of Credit Facility [Line Items]            
Gross proceeds from issuance of common stock $ 30,000,000          
Bank Of Montreal Facility [Member]            
Line of Credit Facility [Line Items]            
Credit facility current borrowing amount   $ 5,000,000        
Maximum borrowing capacity   $ 10,000,000        
Credit facility fee percentage   3.00%        
Bank Of Montreal Facility [Member] | Minimum [Member]            
Line of Credit Facility [Line Items]            
Pro Forma Excess Availability   $ 10,000,000        
Bank Of Montreal Facility [Member] | 2017 Rights Offering and 2017 Investment Agreement [Member] | Minimum [Member]            
Line of Credit Facility [Line Items]            
Gross proceeds from issuance of common stock 30,000,000          
Revolving Credit Facility [Member]            
Line of Credit Facility [Line Items]            
Repayment of outstanding indebtedness 15,000,000   $ 20,000,000      
Revolving Credit Facility [Member] | Bank Of Montreal Facility [Member]            
Line of Credit Facility [Line Items]            
Repayment of outstanding indebtedness $ 15,000,000          
v3.8.0.1
Commitments and Contingencies - Additional Information (Detail) - USD ($)
$ in Thousands
12 Months Ended
Feb. 03, 2018
Jan. 28, 2017
Jan. 30, 2016
Loss Contingencies [Line Items]      
Rent expense under operating leases $ 22,575 $ 23,545 $ 20,015
Other contractual cash obligations $ 43,466    
Maximum [Member]      
Loss Contingencies [Line Items]      
Remaining term under operating leases, excluding renewals 10 years    
v3.8.0.1
Commitments and Contingencies - Future Minimum Lease Payments under Operating Leases (Detail)
$ in Thousands
Feb. 03, 2018
USD ($)
Commitments And Contingencies Disclosure [Abstract]  
Fiscal 2018 $ 21,122
Fiscal 2019 21,291
Fiscal 2020 19,819
Fiscal 2021 18,588
Fiscal 2022 16,506
Thereafter 36,194
Total minimum lease payments $ 133,520
v3.8.0.1
Share-Based Compensation - Additional Information (Detail) - USD ($)
1 Months Ended 12 Months Ended
May 31, 2017
Feb. 28, 2017
Feb. 03, 2018
Jan. 28, 2017
Jan. 30, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Stock options, expected to vest     91,504    
Increase in accumulated deficit with respect to adoption of new guidance     $ 84,000    
Total intrinsic value of options exercised     $ 0 $ 640,000 $ 316,000
Weighted average grant date fair value, per share     $ 3.57 $ 12.21 $ 17.48
Share-based compensation expense     $ 1,138,000 $ 1,344,000 $ 1,259,000
Share-based compensation expense, related tax benefit     0 0 $ 504,000
Non-employee Consultants [Member]          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Number of shares forfeited   17,659      
Number of vested shares expired 29,432        
Non-employees [Member]          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Weighted average grant date fair value, per share         $ 14.46
Share-based compensation expense       $ 348,000 $ 160,000
Share-based compensation expense, related tax benefit         $ 64,000
Employee Stock Option [Member]          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Unrecognized compensation costs     $ 1,034,000    
Unrecognized compensation costs, weighted average period for recognition     1 year 6 months    
Restricted Stock Units (RSUs) [Member]          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Unrecognized compensation costs, weighted average period for recognition     1 year 3 months 18 days    
Weighted average grant date fair value, per share     $ 6.00 $ 57.98 $ 72.74
Total fair value of restricted stock units vested     $ 277,000 $ 191,000 $ 125,000
Unrecognized compensation costs     $ 267,000    
Vince 2013 Incentive Plan [Member]          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Stock options granted pursuant to the plan, description     typically vest in equal installments over four years, subject to the employees’ continued employment and expire on the earlier of the tenth anniversary of the grant date or upon termination as outlined in the Vince 2013 Incentive Plan    
Vince 2013 Incentive Plan [Member] | Employee Stock Option [Member]          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Vesting period     4 years    
Employee Stock Purchase Plan [Member]          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Employees contribution, maximum percentage of base compensation     10.00%    
Maximum contribution per employee     $ 10,000    
Percentage of fair market value as purchase price of stock     90.00%    
Shares of common stock issued     4,244 788  
Shares available for future issuance     94,979    
Maximum [Member] | Vince 2013 Incentive Plan [Member]          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Number of shares authorized     340,000    
Number of shares available for future grants     150,563    
Share based compensation, award expiration period     10 years    
Maximum [Member] | Vince 2013 Incentive Plan [Member] | Restricted Stock Units (RSUs) [Member]          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Vesting period     4 years    
Minimum [Member] | Vince 2013 Incentive Plan [Member] | Restricted Stock Units (RSUs) [Member]          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Vesting period     3 years    
v3.8.0.1
Share-Based Compensation - Summary of Stock Option Activity for Both Employees and Non-employees (Detail) - USD ($)
$ / shares in Units, $ in Thousands
12 Months Ended
Feb. 03, 2018
Jan. 28, 2017
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]    
Stock Options, Outstanding at beginning of period 225,812  
Stock Options, Granted 19,150  
Stock Options, Forfeited or expired (74,205)  
Stock Options, Outstanding at end of period 170,757 225,812
Stock Options, Vested and exercisable at February 3, 2018 79,253  
Weighted Average Exercise Price, Outstanding at beginning of period $ 45.27  
Weighted Average Exercise Price, Granted 9.90  
Weighted Average Exercise Price, Forfeited or expired 43.15  
Weighted Average Exercise Price, Outstanding at end of period 42.23 $ 45.27
Weighted Average Exercise Price, Vested and exercisable at February 3, 2018 $ 45.00  
Weighted Average Remaining Contractual Term (years), Outstanding 8 years 1 month 6 days 8 years 10 months 24 days
Weighted Average Remaining Contractual Term (years), Vested and exercisable at February 3, 2018 7 years 10 months 24 days  
Aggregate Intrinsic Value, Outstanding $ 32  
v3.8.0.1
Share-Based Compensation - Schedule of Stock-Based Compensation Valuation Assumptions (Detail)
12 Months Ended
Feb. 03, 2018
Jan. 28, 2017
Jan. 30, 2016
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]      
Weighted-average expected volatility 39.40% 42.60% 46.00%
Expected term (in years) 4 years 8 months 12 days 4 years 2 months 12 days 4 years 6 months
Risk-free interest rate 1.90% 1.10% 1.40%
v3.8.0.1
Share-Based Compensation - Schedule of Restricted Stock Units Activity (Detail) - Restricted Stock Units (RSUs) [Member] - $ / shares
12 Months Ended
Feb. 03, 2018
Jan. 28, 2017
Jan. 30, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Restricted Stock Units, Nonvested restricted stock units at January 28, 2017 10,771    
Restricted Stock Units, Granted 7,500    
Restricted Stock Units, Vested (3,575)    
Restricted Stock Units, Forfeited (1,460)    
Restricted Stock Units, Nonvested restricted stock units at February 3, 2018 13,236 10,771  
Weighted Average Grant Date Fair Value, Nonvested restricted stock units at January 28, 2017 $ 65.52    
Weighted Average Grant Date Fair Value, Granted 6.00 $ 57.98 $ 72.74
Weighted Average Grant Date Fair Value, Vested 77.50    
Weighted Average Grant Date Fair Value, Forfeited 59.80    
Weighted Average Grant Date Fair Value, Nonvested restricted stock units at February 3, 2018 $ 29.19 $ 65.52  
v3.8.0.1
Defined Contribution Plan - Additional Information (Detail) - USD ($)
$ in Thousands
12 Months Ended
May 01, 2015
Feb. 03, 2018
Jan. 28, 2017
Jan. 30, 2016
Defined Contribution Plan Disclosure [Line Items]        
Employee annual contribution percentage, minimum 1.00%      
Employee annual contribution percentage, maximum 100.00%      
Matching contribution percentage by employer 50.00%      
Defined contribution plans annual expense incurred   $ 544 $ 405 $ 426
Maximum [Member]        
Defined Contribution Plan Disclosure [Line Items]        
Percentage of maximum eligible compensation for matching employer contribution 3.00%      
v3.8.0.1
Stockholders' Equity - Additional Information (Detail)
12 Months Ended
Oct. 23, 2017
$ / shares
shares
Sep. 08, 2017
shares
Apr. 22, 2016
shares
Feb. 03, 2018
$ / shares
shares
Oct. 22, 2017
shares
Sep. 06, 2017
shares
Sep. 05, 2017
shares
Jan. 28, 2017
$ / shares
shares
Schedule Of Shareholders Equity [Line Items]                
Common stock, shares authorized 100,000,000     100,000,000 250,000,000 250,000,000 100,000,000 100,000,000
Common stock price per share | $ / shares       $ 0.01       $ 0.01
Common stock, shares issued       11,616,500       4,942,760
Common stock, shares outstanding       11,616,500       4,942,760
Reverse stock split ratio 0.10              
Reverse stock split, description       Pursuant to the Reverse Stock Split, every 10 shares of the Company’s issued and outstanding common stock were automatically converted into one share of common stock. No fractional shares were issued if, as a result of the Reverse Stock Split, a stockholder would otherwise have been entitled to a fractional share. Instead, each stockholder was entitled to receive a cash payment based on a pre-split cash in lieu rate of $0.48, which was the average closing price per share on the New York Stock Exchange for the five consecutive trading days immediately preceding October 23, 2017.        
Number of fractional shares 0              
Stock conversion cash in lieu of share, per share | $ / shares $ 0.48              
Trading days used for calculating stock conversion cash in lieu of share per share 5 days              
2017 Rights Offering and 2017 Investment Agreement [Member] | Prior to Reverse Stock Split [Member]                
Schedule Of Shareholders Equity [Line Items]                
Common stock, shares issued   6,666,666            
2016 Rights Offering and 2016 Investment Agreement [Member]                
Schedule Of Shareholders Equity [Line Items]                
Common stock, shares issued     1,181,818          
v3.8.0.1
Earnings Per Share - Schedule of Reconciliation of Weighted Average Basic Shares to Weighted Average Diluted Shares Outstanding (Detail) - shares
12 Months Ended
Feb. 03, 2018
Jan. 28, 2017
Jan. 30, 2016
Earnings Per Share [Abstract]      
Weighted-average shares—basic 7,605,822 4,642,053 3,677,043
Effect of dilutive equity securities 2,605   75,879
Weighted-average shares—diluted 7,608,427 4,642,053 3,752,922
v3.8.0.1
Earnings Per Share - Additional Information (Detail) - shares
12 Months Ended
Sep. 08, 2017
Apr. 22, 2016
Feb. 03, 2018
Jan. 28, 2017
Jan. 30, 2016
Earnings Per Share Diluted [Line Items]          
Number of anti-dilutive securities     190,363 171,913 73,230
2017 Rights Offering and 2017 Investment Agreement [Member] | Prior to Reverse Stock Split [Member]          
Earnings Per Share Diluted [Line Items]          
Common stock, shares issued 6,666,666        
2016 Rights Offering and 2016 Investment Agreement [Member]          
Earnings Per Share Diluted [Line Items]          
Common stock, shares issued   1,181,818      
v3.8.0.1
Income Taxes - Additional Information (Detail) - USD ($)
3 Months Ended 12 Months Ended
Jan. 28, 2017
Feb. 02, 2019
Feb. 03, 2018
Jan. 28, 2017
Jan. 30, 2016
Jan. 29, 2017
Income Tax Contingency [Line Items]            
Tax Cuts and Jobs Act, net income tax benefit recognized     $ 379,000      
Statutory federal rate     33.70% 35.00% 35.00%  
Reduction in deferred tax assets due to rate change     $ 43,655,000      
Decrease in valuation allowance due to rate change     43,655,000      
Share-based compensation expense, related tax benefit     0 $ 0 $ 504,000  
Net operating loss, Federal tax effected amount     57,118,000      
Deferred tax asset related to net operating loss carryforwards for state income tax purposes     16,353,000      
Deferred tax assets related to net operating loss carryforwards $ 83,670,000   71,122,000 83,670,000    
Valuation Allowance 122,860,000   92,590,000 122,860,000    
Increase (decrease) in deferred tax assets valuation allowance 121,836,000   (30,270,000)      
Valuation allowances impact from TCJA     44,034,000      
Valuation allowances offset amount     13,764,000      
Unrecognized tax benefits that would impact effective tax rate if recognized $ 0   0 0    
Unrecognized tax benefits, period decrease     2,349,000      
Unrecognized tax benefits, income tax penalties and interest accrued     0   0  
Unrecognized tax benefits, interest and penalty provisions (benefit)     0 $ 0 $ 0  
Federal [Member]            
Income Tax Contingency [Line Items]            
Net operating loss     271,991,000      
Net operating loss, Federal tax effected amount     55,336,000      
State and Local [Member]            
Income Tax Contingency [Line Items]            
Deferred tax asset related to net operating loss carryforwards for state income tax purposes     $ 15,786,000      
ASU 2016-09 [Member]            
Income Tax Contingency [Line Items]            
Increase to deferred tax assets related to net operating loss carryforwards for excess tax benefits related to share-based compensation           $ 2,350,000
Scenario Plan [Member]            
Income Tax Contingency [Line Items]            
Statutory federal rate   21.00%        
Maximum [Member]            
Income Tax Contingency [Line Items]            
Statutory federal rate     35.00%      
Maximum [Member] | Federal [Member]            
Income Tax Contingency [Line Items]            
Net operating losses carryforward expiration year end     2038      
Maximum [Member] | State and Local [Member]            
Income Tax Contingency [Line Items]            
Net operating losses carryforward expiration year end     2038      
Minimum [Member] | Federal [Member]            
Income Tax Contingency [Line Items]            
Net operating losses carryforward expiration year end     2030      
Minimum [Member] | State and Local [Member]            
Income Tax Contingency [Line Items]            
Net operating losses carryforward expiration year end     2022      
v3.8.0.1
Income Taxes - Schedule of Provision for Income Taxes (Detail) - USD ($)
$ in Thousands
12 Months Ended
Feb. 03, 2018
Jan. 28, 2017
Jan. 30, 2016
Current:      
Federal $ (295)   $ (53)
State 32 $ 207 522
Foreign 70 75 0
Total current (193) 282 469
Deferred:      
Federal (379) 83,323 2,994
State   10,121 (249)
Total deferred (379) 93,444 2,745
Total provision for income taxes $ (572) $ 93,726 $ 3,214
v3.8.0.1
Income Taxes - Schedule of Reconciliation of Federal Statutory Income Tax Rate to Effective Tax Rate (Detail)
12 Months Ended
Feb. 03, 2018
Jan. 28, 2017
Jan. 30, 2016
Income Tax Disclosure [Abstract]      
Statutory federal rate 33.70% 35.00% 35.00%
State taxes, net of federal benefit (4.30%) 5.50% 6.50%
Nondeductible Tax Receivable Agreement adjustment (1) (47.60%) 0.40% 4.10%
Valuation allowance 19.00% (176.80%) (0.50%)
Return to provision adjustment (0.90%) (0.10%) (2.40%)
Impact of TCJA and other changes in tax law (0.50%)   (3.20%)
Rate Differential on Foreign Income 0.10%    
Other (0.50%)   (0.80%)
Total (1.00%) (136.00%) 38.70%
v3.8.0.1
Income Taxes - Schedule of Deferred Income Tax Assets and Liabilities (Detail) - USD ($)
$ in Thousands
Feb. 03, 2018
Jan. 28, 2017
Deferred tax assets:    
Depreciation and amortization $ 13,317 $ 28,353
Employee related costs 2,001 2,361
Allowance for asset valuations 2,441 4,817
Accrued expenses 4,725 7,349
Net operating losses 71,122 83,670
Tax credits 498 812
Other 490 489
Total deferred tax assets 94,594 127,851
Less: valuation allowances (92,590) (122,860)
Net deferred tax assets 2,004 4,991
Deferred tax liabilities:    
Cancellation of debt income (1,473) (4,607)
Other (152) (384)
Total deferred tax liabilities (1,625) $ (4,991)
Net deferred tax assets 379  
Deferred income taxes $ 379  
v3.8.0.1
Income Taxes - Reconciliation of Beginning and Ending Amount of Gross Unrecognized Tax Benefits, Excluding Interest and Penalties (Detail) - USD ($)
$ in Thousands
12 Months Ended
Feb. 03, 2018
Jan. 28, 2017
Jan. 30, 2016
Income Tax Disclosure [Abstract]      
Beginning balance $ 2,339 $ 2,127 $ 4,487
Increases for tax positions in current year 10 208 72
Increases for tax positions in prior years 0 4 27
Decreases for tax positions in prior years 0 0 (2,459)
Ending balance $ 2,349 $ 2,339 $ 2,127
v3.8.0.1
Segment and Geographical Financial Information - Additional Information (Detail)
12 Months Ended
Feb. 03, 2018
Segments
Segment Reporting [Abstract]  
Number of reportable segments 2
v3.8.0.1
Segment and Geographical Financial Information - Summary of Reportable Segments Information (Detail) - USD ($)
$ in Thousands
3 Months Ended 12 Months Ended
Feb. 03, 2018
Oct. 28, 2017
Jul. 29, 2017
Apr. 29, 2017
Jan. 28, 2017
Oct. 29, 2016
Jul. 30, 2016
Apr. 30, 2016
Feb. 03, 2018
Jan. 28, 2017
Jan. 30, 2016
Segment Reporting Information [Line Items]                      
Net sales $ 74,648 $ 79,067 $ 60,822 $ 58,045 $ 63,879 $ 75,973 $ 60,702 $ 67,645 $ 272,582 $ 268,199 $ 302,457
Income (loss) before income taxes                 58,025 (68,933) 8,313
Impairment of goodwill and indefinite-lived intangible asset         $ (53,061)         (53,061)  
Total depreciation & amortization                 10,098 8,684 8,350
Capital Expenditures                 3,379 14,287 17,591
Operating Segments [Member]                      
Segment Reporting Information [Line Items]                      
Income (loss) before income taxes                 44,399 48,314 69,410
Operating Segments [Member] | Wholesale [Member]                      
Segment Reporting Information [Line Items]                      
Net sales                 166,113 170,053 201,182
Income (loss) before income taxes                 44,496 47,098 61,571
Total depreciation & amortization                 1,742 1,754 2,058
Capital Expenditures                 81 650 1,629
Operating Segments [Member] | Direct-to-Consumer [Member]                      
Segment Reporting Information [Line Items]                      
Net sales                 106,469 98,146 101,275
Income (loss) before income taxes                 (97) 1,216 7,839
Total depreciation & amortization                 4,928 4,611 4,498
Capital Expenditures                 1,662 9,559 9,442
Unallocated Corporate Expenses [Member]                      
Segment Reporting Information [Line Items]                      
Income (loss) before income taxes                 (62,716) (59,925) (53,684)
Total depreciation & amortization                 3,428 2,319 1,794
Capital Expenditures                 1,636 4,078 6,520
Interest Expense, Net [Member]                      
Segment Reporting Information [Line Items]                      
Income (loss) before income taxes                 (5,540) (3,932) (5,680)
Other Income (Expense), Net [Member]                      
Segment Reporting Information [Line Items]                      
Income (loss) before income taxes                 $ 81,882 $ (329) $ (1,733)
v3.8.0.1
Segment and Geographical Financial Information - Summary of Reportable Segments Information (Parenthetical) (Detail) - USD ($)
3 Months Ended 12 Months Ended
Feb. 03, 2018
Jan. 28, 2017
Feb. 03, 2018
Jan. 28, 2017
Jan. 30, 2016
Segment Reporting [Abstract]          
Impairment of property and equipment $ 5,111,000 $ 2,082,000 $ 5,111,000 $ 2,082,000 $ 0
Impairment of goodwill and indefinite-lived intangible asset   $ 53,061,000   $ 53,061,000  
Pre-tax benefit from re-measurement of liability $ 82,002,000   $ 82,002,000    
v3.8.0.1
Segment and Geographical Financial Information - Summary of Assets by Reportable Segments (Detail) - USD ($)
$ in Thousands
Feb. 03, 2018
Jan. 28, 2017
Segment Reporting Information [Line Items]    
Assets $ 234,534 $ 239,480
Unallocated Corporate [Member]    
Segment Reporting Information [Line Items]    
Assets 135,050 150,000
Wholesale [Member] | Operating Segments [Member]    
Segment Reporting Information [Line Items]    
Assets 58,733 44,442
Direct-to-Consumer [Member] | Operating Segments [Member]    
Segment Reporting Information [Line Items]    
Assets $ 40,751 $ 45,038
v3.8.0.1
Related Party Transactions - Additional Information (Detail)
3 Months Ended 5 Months Ended 12 Months Ended 50 Months Ended
Sep. 08, 2017
USD ($)
shares
Aug. 15, 2017
USD ($)
$ / shares
shares
Apr. 22, 2016
USD ($)
shares
Mar. 29, 2016
RightOffering
$ / shares
shares
Jun. 03, 2015
Nov. 27, 2013
USD ($)
Apr. 28, 2018
USD ($)
Jan. 28, 2017
USD ($)
Feb. 03, 2018
USD ($)
Order
Feb. 02, 2019
Feb. 03, 2018
USD ($)
shares
Jan. 28, 2017
USD ($)
shares
Jan. 30, 2016
USD ($)
Feb. 03, 2018
USD ($)
Aug. 10, 2017
USD ($)
$ / shares
Jun. 22, 2017
USD ($)
Mar. 15, 2016
$ / shares
Related Party Transaction [Line Items]                                  
Other accrued expenses               $ 9,992,000 $ 7,906,000   $ 7,906,000 $ 9,992,000   $ 7,906,000      
Other liabilities               137,830,000 $ 58,273,000   $ 58,273,000 137,830,000   58,273,000      
Payment under Tax Receivable Agreements                       $ 29,700,000          
Statutory federal rate                     33.70% 35.00% 35.00%        
Percentage of number of shares pursuant to over subscription       20.00%                          
Fractional shares of common stock issued in rights offering | shares       0                          
Offering period expiration date                     Apr. 14, 2016            
Gross proceeds from issuance of stock     $ 65,000,000                            
Payments for term loan facility                     $ 12,000,000   $ 20,000,000        
Repayment of outstanding indebtedness                     409,703,000 $ 191,167,000 123,127,000        
Subscription of non-transferrable right per share | RightOffering       1                          
Equity impact of the value of shares issued                     $ 28,973,000 $ 64,110,000          
Common Stock [Member]                                  
Related Party Transaction [Line Items]                                  
Common stock, shares issued | shares                     6,666,666 1,181,818          
Equity impact of the value of shares issued                     $ 67,000 $ 12,000          
Additional Paid-In Capital [Member]                                  
Related Party Transaction [Line Items]                                  
Equity impact of the value of shares issued                     28,906,000 64,098,000          
Prior to Reverse Stock Split [Member]                                  
Related Party Transaction [Line Items]                                  
Subscription price | $ / shares       $ 5.50                          
Prior to Reverse Stock Split [Member] | Common Stock [Member]                                  
Related Party Transaction [Line Items]                                  
Equity impact of the value of shares issued     118,000                            
Prior to Reverse Stock Split [Member] | Additional Paid-In Capital [Member]                                  
Related Party Transaction [Line Items]                                  
Equity impact of the value of shares issued     63,992,000                            
Term Loan Facility [Member]                                  
Related Party Transaction [Line Items]                                  
Payments for term loan facility $ 9,000,000                   12,000,000     $ 142,000,000      
Revolving Credit Facility [Member]                                  
Related Party Transaction [Line Items]                                  
Repayment of outstanding indebtedness 15,000,000   20,000,000                            
2017 Rights Offering [Member]                                  
Related Party Transaction [Line Items]                                  
Subscription price | $ / shares   $ 0.45                              
Non-transferrable number of shares purchase rights for each share owned | shares   1.3475                              
Percentage of number of shares pursuant to over subscription   9.99%                              
Fractional shares of common stock issued in rights offering | shares   0                              
Offering period expiration date   Aug. 30, 2017                              
Gross proceeds from issuance of stock 21,976,000                                
2017 Rights Offering and 2017 Investment Agreement [Member]                                  
Related Party Transaction [Line Items]                                  
Gross proceeds from issuance of common stock $ 30,000,000                                
2017 Rights Offering and 2017 Investment Agreement [Member] | Prior to Reverse Stock Split [Member]                                  
Related Party Transaction [Line Items]                                  
Common stock, shares issued | shares 6,666,666                                
2016 Rights Offering [Member]                                  
Related Party Transaction [Line Items]                                  
Non-transferrable number of shares purchase rights for each share owned | shares       0.3191                          
2016 Rights Offering [Member] | Prior to Reverse Stock Split [Member]                                  
Related Party Transaction [Line Items]                                  
Gross proceeds from issuance of stock     $ 63,924,000                            
Common stock, shares issued | shares     11,622,518                            
2016 Rights Offering and 2016 Investment Agreement [Member]                                  
Related Party Transaction [Line Items]                                  
Common stock, shares issued | shares     1,181,818                            
2016 Rights Offering and 2016 Investment Agreement [Member] | Term Loan Facility [Member]                                  
Related Party Transaction [Line Items]                                  
Gross proceeds from issuance of stock                       21,000,000          
2016 Investment Agreement [Member] | Prior to Reverse Stock Split [Member] | Sun Cardinal LLC And SCSF Cardinal LLC [Member]                                  
Related Party Transaction [Line Items]                                  
Subscription price | $ / shares                                 $ 5.50
2016 Investment Agreement [Member] | 2016 Rights Offering [Member] | Prior to Reverse Stock Split [Member] | Sun Cardinal LLC And SCSF Cardinal LLC [Member]                                  
Related Party Transaction [Line Items]                                  
Gross proceeds from issuance of stock     $ 1,076,000                            
Common stock, shares issued | shares     195,663                            
Bank Of Montreal Facility [Member]                                  
Related Party Transaction [Line Items]                                  
Credit facility current borrowing amount                               $ 5,000,000  
Maximum borrowing capacity                               $ 10,000,000  
Bank Of Montreal Facility [Member] | Revolving Credit Facility [Member]                                  
Related Party Transaction [Line Items]                                  
Repayment of outstanding indebtedness $ 15,000,000                                
2014 Taxable Year [Member]                                  
Related Party Transaction [Line Items]                                  
Payment under Tax Receivable Agreements                     $ 22,262,000            
Maximum [Member]                                  
Related Party Transaction [Line Items]                                  
Statutory federal rate                     35.00%            
Minimum [Member] | Bank Of Montreal Facility [Member] | 2017 Rights Offering and 2017 Investment Agreement [Member]                                  
Related Party Transaction [Line Items]                                  
Gross proceeds from issuance of common stock 30,000,000                                
Scenario Plan [Member]                                  
Related Party Transaction [Line Items]                                  
Statutory federal rate                   21.00%              
LIBOR [Member] | Revolving Credit Facility [Member]                                  
Related Party Transaction [Line Items]                                  
Agreed basis spread on variable rate per annum on deferred payment         1.00%                        
LIBOR [Member] | Maximum [Member] | Revolving Credit Facility [Member]                                  
Related Party Transaction [Line Items]                                  
Agreed basis spread on variable rate per annum on deferred payment         2.25%                        
LIBOR [Member] | Minimum [Member] | Revolving Credit Facility [Member]                                  
Related Party Transaction [Line Items]                                  
Agreed basis spread on variable rate per annum on deferred payment         1.75%                        
Vince Holding Corp. [Member] | 2017 Rights Offering and 2017 Investment Agreement [Member]                                  
Related Party Transaction [Line Items]                                  
Funds remaining after equity contribution   $ 1,823,000                              
Tax Receivable Agreement [Member]                                  
Related Party Transaction [Line Items]                                  
Aggregate ownership of equity securities           100.00%                      
Percentage of voting power of all outstanding capital stock           35.00%                      
Debt outstanding principal amount           $ 15,000,000                      
Date of expiration of related party transaction agreement                     Dec. 31, 2023            
Tax Receivable Agreement [Member] | LIBOR [Member]                                  
Related Party Transaction [Line Items]                                  
Calculation of present value obligated to pay on termination           2.00%                      
Rebecca Taylor, Inc. [Member] | Sourcing Arrangement [Member]                                  
Related Party Transaction [Line Items]                                  
Date of related party transaction agreement                     Jul. 13, 2017            
Percentage of Vince price on RT price                     103.50%            
Number of business days to settle invoice                     2 days            
Termination period upon prior written notice to other party                     60 days            
Related party transaction, amounts paid for orders placed                     $ 17,834,000            
Number of new orders placed | Order                 0                
Affiliates of Sun Capital Partners, Inc. [Member]                                  
Related Party Transaction [Line Items]                                  
Common stock ownership percentage by affiliates     58.00%                            
Affiliates of Sun Capital Partners, Inc. [Member] | Vince Holding Corp. [Member]                                  
Related Party Transaction [Line Items]                                  
Common stock ownership percentage by affiliates                 73.00%   73.00%     73.00%      
Kellwood [Member] | Shared Services Agreement [Member]                                  
Related Party Transaction [Line Items]                                  
Date of related party transaction agreement                     Nov. 27, 2013            
Number of business days to settle invoice                     15 days            
Expense for services provided                     $ 305,000 4,256,000 9,357,000        
Other accrued expenses               37,000 $ 82,000   82,000 37,000   $ 82,000      
Pre-IPO Stockholders [Member] | Tax Receivable Agreement [Member]                                  
Related Party Transaction [Line Items]                                  
Aggregate reduction in taxes payable percentage           85.00%                      
Total obligation under Tax Receivable Agreement                 58,616,000   58,616,000     58,616,000      
Current amount of Tax Receivable Agreement obligation included in other accrued expenses                 343,000   343,000     343,000      
Other liabilities                 $ 58,273,000   58,273,000     $ 58,273,000      
Payment under Tax Receivable Agreements               $ 7,438,000                  
Increase (decrease) of liability                     $ (82,002,000) (209,000) 981,000        
Increase of pre-IPO deferred tax assets                         1,154,000        
Pre-IPO Stockholders [Member] | Tax Receivable Agreement [Member] | Scenario Forecast [Member]                                  
Related Party Transaction [Line Items]                                  
Payment under Tax Receivable Agreements             $ 351,000                    
Pre-IPO Stockholders [Member] | Tax Receivable Agreement [Member] | LIBOR [Member]                                  
Related Party Transaction [Line Items]                                  
Default basis spread on variable rate per annum on deferred payment                     5.00%            
Agreed basis spread on variable rate per annum on deferred payment                     2.00%            
Pre-IPO Tax Benefits [Member] | Tax Receivable Agreement [Member]                                  
Related Party Transaction [Line Items]                                  
Percentage interest continued in tax benefits           15.00%                      
Sun Cardinal Investors [Member] | 2017 Investment Agreement [Member]                                  
Related Party Transaction [Line Items]                                  
Gross proceeds from issuance of stock $ 8,024,000                                
Sun Cardinal Investors [Member] | 2017 Investment Agreement and 2017 Rights Offering [Member]                                  
Related Party Transaction [Line Items]                                  
Common stock subscription value                             $ 30,000,000    
Subscription price | $ / shares                             $ 0.45    
Affiliates of Sun Fund V [Member] | Vince Holding Corp. [Member]                                  
Related Party Transaction [Line Items]                                  
Common stock ownership percentage by affiliates                 73.00%   73.00%     73.00%      
Sun Capital Consulting Agreement [Member]                                  
Related Party Transaction [Line Items]                                  
Date of related party transaction agreement                     Nov. 27, 2013            
Reimbursement of expenses incurred                     $ 34,000 $ 121,000 $ 114,000        
Sun Capital Consulting Agreement [Member] | Minimum [Member]                                  
Related Party Transaction [Line Items]                                  
Aggregate ownership of equity securities           30.00%                      
Sun Capital [Member] | Minimum [Member]                                  
Related Party Transaction [Line Items]                                  
Aggregate ownership of equity securities           30.00%                      
v3.8.0.1
Quarterly Financial Information - Summary of Quarterly Financial Results (Detail) - USD ($)
$ / shares in Units, $ in Thousands
3 Months Ended 12 Months Ended
Feb. 03, 2018
Oct. 28, 2017
Jul. 29, 2017
Apr. 29, 2017
Jan. 28, 2017
Oct. 29, 2016
Jul. 30, 2016
Apr. 30, 2016
Feb. 03, 2018
Jan. 28, 2017
Jan. 30, 2016
Quarterly Financial Information Disclosure [Abstract]                      
Net sales $ 74,648 $ 79,067 $ 60,822 $ 58,045 $ 63,879 $ 75,973 $ 60,702 $ 67,645 $ 272,582 $ 268,199 $ 302,457
Gross profit 33,975 36,667 25,556 25,591 29,216 37,958 27,387 28,258 121,789 122,819 132,516
Net (loss) income $ 74,512 $ 3,509 $ (10,134) $ (9,290) $ (162,148) $ 3,380 $ (1,967) $ (1,924) $ 58,597 $ (162,659) $ 5,099
Basic (loss) earnings per share $ 6.41 $ 0.41 $ (2.05) $ (1.88) $ (32.81) $ 0.69 $ (0.40) $ (0.51) $ 7.70 $ (35.04) $ 1.39
Diluted (loss) earnings per share $ 6.41 $ 0.41 $ (2.05) $ (1.88) $ (32.81) $ 0.68 $ (0.40) $ (0.51) $ 7.70 $ (35.04) $ 1.36
v3.8.0.1
Quarterly Financial Information - Summary of Quarterly Financial Results (Parenthetical) (Detail) - USD ($)
3 Months Ended 12 Months Ended
Feb. 03, 2018
Jan. 28, 2017
Feb. 03, 2018
Jan. 28, 2017
Jan. 30, 2016
Quarterly Financial Information Disclosure [Abstract]          
Non-cash pre-tax impairment charge related to property and equipment $ 5,111,000 $ 2,082,000 $ 5,111,000 $ 2,082,000 $ 0
Pre-tax benefit from re-measurement of liability $ 82,002,000   82,002,000    
Impairment of goodwill and indefinite-lived intangible asset   53,061,000   $ 53,061,000  
Increase (decrease) in deferred tax assets valuation allowance   $ 121,836,000 $ (30,270,000)    
v3.8.0.1
Subsequent Event - Additional Information (Detail)
Mar. 28, 2018
Subsequent Event [Line Items]  
Trade receviables, description In support of the Company’s previously announced wholesale distribution strategy, the third amendment modified the definition of “Eligible Trade Receivables” such that the applicable Concentration Limit for Accounts due from: (i) Nordstrom is 70% so long as Nordstrom’s credit rating is investment grade BBB- or higher by Standard & Poor’s Financial Services, LLC or Baa3 or higher by Moody’s Analytics, Inc and 50% at all other times; (ii) Neiman Marcus is 30%; and (iii) all other individual account debtors is 20%.
Subsequent Event [Member] | Nordstrom [Member] | BBB- or Higher by Standard & Poors or Baa3 or Higher by Moodys Analytics [Member]  
Subsequent Event [Line Items]  
Percentage of concentration limit for accounts due from 70.00%
Subsequent Event [Member] | Nordstrom [Member] | All Other Times [Member]  
Subsequent Event [Line Items]  
Percentage of concentration limit for accounts due from 50.00%
Subsequent Event [Member] | Neiman Marcus [Member]  
Subsequent Event [Line Items]  
Percentage of concentration limit for accounts due from 30.00%
Subsequent Event [Member] | All Other Individual Account Debtors [Member]  
Subsequent Event [Line Items]  
Percentage of concentration limit for accounts due from 20.00%
v3.8.0.1
Schedule II - Valuation and Qualifying Accounts (Detail) - USD ($)
$ in Thousands
12 Months Ended
Feb. 03, 2018
Jan. 28, 2017
Jan. 30, 2016
Sales Allowances [Member]      
Valuation and Qualifying Accounts Disclosure [Line Items]      
Beginning of Period $ (19,711) $ (12,846) $ (16,098)
Expense Charges, net of Reversals (54,265) (59,078) (55,656)
Deductions and Write-offs, net of Recoveries 56,365 52,213 58,908
End of Period (17,611) (19,711) (12,846)
Allowance for Doubtful Accounts [Member]      
Valuation and Qualifying Accounts Disclosure [Line Items]      
Beginning of Period (275) (188) (379)
Expense Charges, net of Reversals (793) (192) 34
Deductions and Write-offs, net of Recoveries 265 105 157
End of Period (803) (275) (188)
Provision for Inventories [Member]      
Valuation and Qualifying Accounts Disclosure [Line Items]      
Beginning of Period (2,062) (13,248) (6,464)
Expense Charges, net of Reversals 11 1,864 (16,263)
Deductions and Write-offs, net of Recoveries 123 9,322 9,479
End of Period (1,928) (2,062) (13,248)
Valuation Allowance on Deferred Income Taxes [Member]      
Valuation and Qualifying Accounts Disclosure [Line Items]      
Beginning of Period (122,860) (1,024) (1,074)
Expense Charges, net of Reversals (13,764) (121,836)  
Deductions and Write-offs, net of Recoveries 44,034   50
End of Period $ (92,590) $ (122,860) $ (1,024)