Vince Holding Corp. · NASDAQ:VNCE
Vince — 16th Annual ICR XChange (January 2014)
43 slides from Vince's conference presentation, Jan 13, 2014
Slide 1: ICR Conference: January 2014
VINCE. ICR Conference : January 2014
Slide 2: Forward-Looking Statements
This presentation includes forward-looking statements. Forward-looking statements reflect our current views with respect to, among other things, future events and performance. All statements other than statements of historical facts, including statements regarding our future operating results and fi
Slide 3: Today's Presenters + Agenda
Today’s Presenters + Agenda Jill Granoff Lisa Klinger Chief Executive Chief Financial Officer Officer Agenda Investment Highlights + Brand Story * Growth Initiatives + Financial Performance 2 VINCE.
Slide 4: Investment Highlights
Investment Highlights VINCE.
Slide 5: A Leading Contemporary Apparel Brand
A Leading Contemporary Apparel Brand Everyday Luxury Essentials Modern Effortless Style 4
Slide 6: Sales, Adj. EBITDA, Wholesale Doors and U.S. Retail Stores
Sales Adj. EBITDA (1) Global Wholesale Doors U.S. Retail Stores % Margin 21% 22% Wholesale Full Price Direct-to-Consumer Outlet Note: LTM data reflects results for the 12 months ended November 2, 2013. Store count data as of December 31, 2013. (1) Excludes one-time public company transition costs. 5
Slide 7: Our Investment Highlights
Our Investment Highlights Prominent Accessible Luxury BRAND with Exceptional Customer Loyalty Strength Across Entire Multi-Channel PLATFORM Significant Revenue and Earnings MOMENTUM Clear Trajectory for Continued GROWTH Across Categories, Channels & Geographies World Class TEAM Driving Clearly Defin
Slide 8: Brand Story
Brand Story VINCE.
Slide 9: Our Video
Our Video ; VINCE.
Slide 10: Where We Were, Where We Are
Where We Were Where We Are (1) 2002 2005 2006 2007 2008 2010 2012 / 2013 68% Denim, Leather 32% Knits and Product Core Expansion and Outerwear Sweaters Collections Tops Other 87% Gender Women’s Women’s Expansion Men’s Launch Dual Gender Expansion 13% Women's Men's 85% Retail Multi-Channel Channel Wh
Slide 11: Our Women's Product
Our Women’s Product Clean lines « luxe materials - rich textures - neutral color palette - exceptional fit » uncompromising quality Iconic Cashmere Luxurious Leather Sophisticated Soft Chic Outerwear Sweaters Wovens 1 VINCE.
Slide 12: Our Men's Product
Our Men’s Product Modern and sophisticated aesthetic - luxe fabrics + core, classic color palette + recognized quality Iconic Knitwear Unique Outerwear Luxurious Leather Clean, Cool Denim 1 VINCE.
Slide 13: Our Competitive Positioning
Our Competitive Positioning Vince holds a unique position that bridges the gap between classic and fashion-forward while offering affordable luxury pricing 4 LUXURY sowie enna CELINE Chloé ALEXANDER WANG RALPH LAUREN HELMUT LANG & MICHAEL KORS VINCE. rag & bone — JAMES PERSE FASHION CLASSIC theory D
Slide 14: Wholesale Doors and Shop-in-Shops
1,608 Doors • 11 Shop-in-Shops (2) (1) Based on information shared by wholesale partners for 2012 performance. (2) Door and shop-in-shop count as of December 31, 2013. 13
Slide 15: International: 40+ Countries
International 40+ Countries • 537 Doors • 9 Shop-in-Shops (1) (1) Door and shop-in-shop count as of December 31, 2013. 14
Slide 16: Current U.S. Retail Footprint
Current U.S. Retail Footprint Full-Price Store Outlet Store • First store opened in 2008 • 22 Full Price Stores • 6 Outlets today (1) • Proven success across street, lifestyle, mall and outlet locations in many geographies • Significant white space opportunity (1) Store count as of December 31, 2013
Slide 17: 15 Quarters of Comparable Store Sales Growth
15 Quarters of Comparable Store Sales Growth 35% 34% 30% 29% 23% 20% 19% 17% 15% 12% 9% 7% 5% 2% 2% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2010 2011 2012 2013 16
Slide 18: eCommerce Website and Marketing
eCommerce Website eCommerce Marketing • Launched in 2008 • eCommerce marketing efforts build brand awareness, drive traffic and showcase the brand across channels • Primarily U.S. business Online lookbooks • Fastest growing channel today Email promotions • Strategy focused on driving increased b
Slide 19: Effortlessly Cool, Casually Sophisticated (Women's Customer)
Effortlessly Cool • Casually Sophisticated 44% 29% 30% 23% 23% 18% 13% 12% 9% 18-29 30-39 40-49 50-59 60+ <$50K $50- $100- $200K+ $100K $200K • 25 – 55 – with a sweet spot of 40+ • Metropolitan and fashion savvy • A successful professional or an active stay-at-home mom • Confident, understated and a
Slide 20: Pulled Together, Comfortable with His Own Style (Men's Customer)
Pulled Together • Comfortable with his Own Style 32% 33% 31% 31% 21% 23% 16% 10% 4% 18-29 30-39 40-49 50-59 60+ <$50K $50- $100- $200K+ $100K $200K • 20 – 50 years old – with a sweet spot of 35+ • Successful – working in a creative or professional field • Confident, metropolitan and masculine • Witt
Slide 21: Brand Awareness, Affinity and Purchase Intent
Aided Brand Awareness Brand Affinity Purchase Intent 20% 70% 54% Ralph Lauren 92% Ralph Lauren 61% Ralph Lauren 46% J.Crew 88% Kors 61% Kors 44% Kors 87% Theory 56% Tory Burch 36% DVF 75% Alice + Olivia 54% J.Crew 36% Tory Burch 54% Tory Burch 49% Theory 35% Chloe 54% DVF 47% Alice + Olivia 34% Theo
Slide 22: To Accelerate Our Evolution
To Accelerate Our Evolution U.S. Wholesale Driven Women’s Apparel Business Global Multi-Channel Dual Gender Lifestyle Brand 21
Slide 23: Management Team
Name / Title Jill Lisa Karin Jill Beth Rebecca Michele Jay Deena Granoff Klinger Gregersen Steinberg Cohn Damavandi Sizemore Dubiner Gianoncelli Chief Executive Chief Financial President & SVP, SVP, Retail & Group Pres., SVP, SVP, General SVP, Human Officer Officer Chief Creative Wholesale eCommerce
Slide 24: Growth Initiatives
Growth Initiatives VINCE.
Slide 25: Growth Initiatives
1 Capitalize on New and Existing Product Opportunities 2 Maximize Wholesale Productivity 3 Expand Retail Footprint 4 Accelerate eCommerce Growth 5 Drive International Expansion 6 Increase Brand Awareness 24
Slide 26: Expand Categories: Become the Ultimate Lifestyle Brand
1 Expand Become the Vince Launch New Ultimate Lifestyle Existing Categories Today Brand Categories Dresses Men’s Footwear (Fall ’14) Broaden wear occasion Outerwear Childrenswear (Fall ‘14) Enhance "Head-to-Toe" offering Luxe Loungewear Handbags (2015) "Go to" everyday luxury essen
Slide 27: Maximize Wholesale Productivity
2 Key Opportunities Global Shop-in-Shop Opportunity (1) • Increase penetration in existing doors U.S. TBD Improved space and location International Expanded assortments Elevated men’s collection Product “exclusives” Enhanced marketing and sales support • Selectively open new doors 20 • Opt
Slide 28: 100+ U.S. Retail White Space Opportunity
3 100+ U.S. White Space Opportunity (1) (2) • 100+ U.S. Retail Store Potential (2) Full Price Outlet • Targeting 3:1 Full Price to Outlet Ratio • Potential for new formats and international growth • Sophisticated site selection process Comprehensive real estate strategy High-end streets, lifesty
Slide 29: Website Re-Launch Preview
4 Website Re-Launch Preview • Re-launch website in Q1 2014 More compelling shopping experience to increase visit frequency Richer content and product recommendations Enhanced photography Improved functionality and navigation • Showcase entire breadth and depth of the brand • Ensure digital i
Slide 30: International Expansion: Recent Growth Initiatives
5 Recent Growth Initiatives 1 • Freestanding stores outside the U.S. 1st store in Tokyo, Japan (licensed) 2nd store in Istanbul, Turkey (licensed) More stores to come Canada UK • Increase wholesale presence 9 international shops today Accelerate in-store shop-in-shop development • Establis
Slide 31: Increase Brand Awareness: Co-op Advertising and Marketing
6 Co-op Advertising with Digital and Wholesale Partners Print In-Store Events Social Media Madison Ave, Opening Event Neighborhoods Campaign (Q1 2014 estimated launch) Tokyo Opening Event Editorial Coverage Out-of-Home Lookbooks 30
Slide 32: Why Invest in Vince?
Why Invest in Vince? VINCE. Winning brand with a global opportunity Powerful model delivering strong financial performance Strong momentum with multiple levers for long-term growth Best-In-Class management team to deliver on planned initiatives WINNING BRAND | WINNING FORMULA 31 VINCE.
Slide 33: Financial Performance
Financial Performance VINCE.
Slide 34: Sales and Adjusted EBITDA
Sales $273 $240 $200 $175 $111 $168 2010 2011 2012 LTM Q3'12 YTD Q3'13 YTD % Growth 57% 37% 39% 23% 20% Adjusted EBITDA (1) $59 $43 $52 $35 $44 $24 2010 2011 2012 LTM Q3'12 YTD Q3'13 YTD % Margin 21% 25% 21% 22% 21% 21% Note: LTM financial data as of Q3 2013. (1) Excludes one-time public company tra
Slide 35: Wholesale, Direct-to-Consumer and Comparable Store Sales
$219 $160 $203 $144 $152 $96 Wholesale Sales 2010 2011 2012 LTM Q3'12 YTD Q3'13 YTD % Growth 59% 34% 19% 29% 11% % of Total 86% 87% 85% 80% 86% 80% $54 $41 $37 $24 Direct-to- $23 $16 Consumer Sales 2010 2011 2012 LTM Q3'12 YTD Q3'13 YTD % Growth 49% 60% 73% 50% 70% % of Total 14% 13% 15% 20% 14% 20%
Slide 36: Gross Profit and Adjusted SG&A
Gross Profit • Expansion Opportunities $126 $93 Increased penetration of direct to consumer $108 $76 $86 Enhanced supply chain process $56 Sourcing optimization Pricing optimization 2010 2011 2012 LTM Q3'12 YTD Q3'13 YTD % Margin 50% 49% 45% 47% 45% 46% Adjusted SG&A (1) • Increased SG&A exp
Slide 37: Pro Forma Capitalization
Pro Forma Capitalization Pro-Forma • IPO proceeds and cash from new term Post-IPO loan used to repay the Kellwood Note Receivable Cash and Cash Equivalents $5 Long Term Debt $175 • $50 million ABL facility undrawn following IPO transaction Total Debt $175 Net Debt $170 • Company does not foresee nee
Slide 38: White Space Opportunity and Targeted New Store Economics
Significant White Space Opportunity to Grow Footprint with an 100+ U.S. Retail Store Potential 100+ Full Price 25 Outlet 28 6 75 22 19 3 16 2 1 19 22 15 17 2010 2011 2012 LTM White Space Targeted New Store Economics Full Price Outlet Current 21 6 Stores Long Term U.S. Potential 75+ 25+ Gross Square
Slide 39: Q3 2013 Results
($ in mm) Q3 2012 Q3 2013 YoY Variance • Strong top line performance continued in Q3 2013 Total Net Sales $77.0 $85.8 11.4% Retail Store Count 20 27 7 • Gross Margin expansion of 300 Retail Comparable Store Sales 23.4% 16.5% basis points Gross Profit $35.1 $41.7 18.8% • SG&A expense investment % Mar
Slide 40: Outlook: Net Sales and Net Income Growth
Total Net Sales Growth 15% - 20% Net Income Growth 20% - 25% 39
Slide 41: Our Investment Highlights
Our Investment Highlights Prominent Accessible Luxury BRAND with Exceptional Customer Loyalty Strength Across Entire Multi-Channel PLATFORM Significant Revenue and Earnings MOMENTUM Clear Trajectory for Continued GROWTH Across Categories, Channels & Geographies World Class TEAM Driving Clearly Defin
Slide 42: Appendix
Appendix VINCE.
Slide 43: Adjusted EBITDA Reconciliation
Fiscal Year Q3 YTD ($ in mm) 2010 2011 2012 Q3'12 YTD Q3'13 YTD Net Income (loss) $9.1 $16.7 $10.3 $6.7 $8.8 Interest expense1 7.2 15.0 22.9 16.7 19.3 Provision for income taxes 5.9 10.8 7.0 4.5 5.7 D&A 1.5 1.7 2.0 1.5 1.8 EBITDA $23.6 $44.2 $42.2 $29.5 $35.6 Public company transition costs 2 - - 9.
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