In an attempt to reduce expenses by more than $30 million over the following three years, Vince Holding Corp. announced on Tuesday the launch of a new transformation initiative that will streamline operations.
According to the New York-based fashion brand, the transformation program’s main goals are to increase the company’s gross margin profile and drive cost efficiencies by optimizing the breadth and depth of markdowns, cutting back on promotional activity, and streamlining manufacturing and production operations. It also aims to improve efficiency in store operations, corporate overhead, and third-party spend.
Over the next three years, it is anticipated that the transformation initiatives will save over $30 million. Heather Wilberger, Vince’s chief transformation and information officer, will spearhead these efforts and report directly to Jack Schwefel, the company’s chief executive officer.
The news was made a few months after Vince was purchased by the New York brand management company Authentic Brands group in April of this year.
“This year has been a year of significant change for our organization as we continue to position Vince for long-term success,” Schwefel stated.
“We strengthened our balance sheet and gained more financial flexibility as a result of our acquisition with Authentic Brands Group. However, this also led to higher royalties, which we want to counteract with our transformation program.
We have found ways to further optimize our organization and increase operational efficiencies after carefully examining our business and cost structure. We think we are in a good position to produce profitable, sustainable growth and create value for all of our stakeholders because of the transformative steps we are putting in place and our increased focus on our strategic growth objectives.
Vince announced its expectations for the third quarter, which coincided with the news, were $81 million to $83 million in net sales and $0 million to $2 million in operating profitability.
