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IPO Report: Apparel Holding (Vince Holding) (VNCE)

By  +Follow November 21, 2013 3:38PM
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Apparel Holding (Vince Holding) (VNCE) is a prominent, high-growth contemporary apparel brand known for its modern, effortless style and everyday luxury essentials.

Nine other operating companies scheduled IPOs for this week.. The full IPO calendar can be found at IPOpremium.

Manager, Joint managers: Goldman Sachs, Baird, BofA Merrill Lynch, Barclays, JP Morgan,  Wells Fargo Securities.  Co-Managers: KeyBanc Capital Markets, Stifel, William Blair. S-1 filed November 12, 2013.

VNCE scheduled a $180 million IPO with a market capitalization of $681 million at a price range midpoint of $18, on the NYSE for Friday, November 22, 2013.

Overview

VNCE is a restructured new company from a company that has an accumulated deficit of almost $1 billion.  On the IPO VNCE will be a clean company paying the equivalent of normal corporate tax rates, will have $17 million in net worth, with only $175 million in long term debt.

There is a tax loss carryforward.  The new VNCE, however, will pay the old shareholders 85% of the tax savings, so for financial analysis purposes we assume VNCE is fully taxed.

For the September 2013 quarter VNCE showed strong growth in top line revenue, driven by

. An increase in the direct to consumer channel with comparable store sales growth of 16.5%,

. Opening of seven additional retail stores, and

. Increased ecommerce sales volume.  

Competitors vary across segment but include other fashion label platforms, including the Jones Group (JNY) , Fifth and Pacific (FNP) , PVH Corp (PVH) , VF Corporation (VFC) , G-III Apparel Group (GIII) and Perry Ellis.  For ratio comparisons see report for subscribers.
 

Valuation Ratios

Mrkt

Price /

Price /

Price /

Price /

% offered

annualizing July 6 mos

Cap (mm)

Sls

Erngs

BkVlue

TanBV

in IPO

Apparel Holding (Vince Holding) (VNCE)

$653

3.6

-8.2

38.4

-4.0

28%

Apparel Holding (Vince Holding) (VNCE)

$653

1.9

25.5

38.4

-4.0

28%

   annualizing Sept qtr

 

 

 

 

 

Glossary

Conclusion
The rating on VNCE is a buy.  See recent developments here.

Business

Apparel Holding

Apparel Holding Corp. is currently a diversified apparel company that designs, manufactures, and markets a collection of fashion brands which include Vince, Rebecca Taylor, David Meister, Sag Harbor, My Michelle and XOXO, along with numerous private label businesses for major retailers.

AHChas four reportable segments which include (i) Vince, contemporary fashion apparel and accessories sold under the Vince® brand name; (ii) American Recreational Products (“ARP”), recreational apparel and products sold under Kelty, Sierra Designs, Ultimate Direction, Slumberjack, Wenzel and Isis brand names; (iii) Juniors, a collection of denim, dresses and sportswear labels sold under the Rewind, My Michelle and Jolt brand name as well as private label; and (iv) Moderate, moderately priced related separates and pants covering career and casual lifestyles sold through wholesale distribution and produced under private labels, as well as under the Sag Harbor and Briggs New York brands.

 After giving effect to the IPO Restructuring Transactions, Apparel Holding Corp. will be renamed Vince Holding Corp. and its assets, liabilities, and operations will consist solely of the Vince business. An investment in VNCE is an investment in the Vince business.

Vince
Vince is a prominent, high-growth (according to the SEC filing) contemporary apparel brand known for its modern, effortless style and everyday luxury essentials.

The Vince brand was founded in 2002 with a collection of stylish women’s knits and cashmere sweaters that rapidly attracted a loyal customer base drawn to the casual sophistication and luxurious feel of its products.

Over the last decade, Vince has generated strong sales momentum and has successfully grown to include a men’s collection in 2007, expanded denim, leather and outerwear lines in 2010 and women’s footwear, which was launched through a licensing partnership in 2012.

VNCE believes that it will achieve continued success by expanding its product assortment and distributing this expanded product assortment through its premier wholesale partners in the U.S. and select international markets, as well as through its growing number of branded retail locations and on its e-commerce platform.

Seasonality
Historicaly VNCE sales are stronger the fall and holiday seasons.

History

Apparel Holding Corp. was formed to hold the assets and liabilities of Kellwood Company in connection with the February 2008 acquisition of Kellwood Company by affiliates of Sun Capital Partners, Inc. (“Sun Capital”).

In September 2012, Kellwood Company transferred the assets and liabilities of the Vince business to Vince, LLC in anticipation of this offering. Immediately prior to the consummation of this offering, affiliates of Sun Capital will engage in a series of transactions pursuant to which they will establish new corporate entities that will retain all of the non-Vince businesses after this offering.

Competition

AHC’s competitors vary across segment but include other fashion label platforms, including the Jones Group, Fifth and Pacific, PVH Corp., VF Corporation, G-III Apparel Group, Ltd. and Perry Ellis.

5% stockholders

Sun Cardinal, LLC and SCSF Cardinal, LLC, affiliates of Sun Capital.

Use of proceeds

VNCE expects to net $159 million from its IPO. Proceeds are allocated as follows:

retain $5.0 million of the net proceeds from this offering for general corporate purposes.

use the remaining $154 million of net proceeds from this offering, together with net borrowings of $169.5 million under VNCE’s new term loan facility, to repay the Kellwood Note Receivable, which would then total $323.5 million.

The final amount of the Kellwood Note Receivable will be adjusted to equal the actual net proceeds from this offering (less the $5.0 million of net offering proceeds to be retained by VNCE for general corporate purposes) and net borrowings under its new term loan facility.

 

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions.


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Results for vnce
penny10x
28 Aug 14 07:00:19
RT @ForTraders: Medbox : Business Mogul Vincent Mehdizadeh to Pen Autobiography for Dunham Books http://t.co/OfFQT87Oum $MDBX $VNCE
The Fly
28 Aug 14 03:51:32
$VNCE Vince Holding shares should be bought into Q2 results, says Piper Jaffray: Full Story http://t.co/NX7h8xGGkh
Stock Signaling
27 Aug 14 21:31:09
Yesterday's All-Time Highs: $WMS $ZTS $IG $DEPO $HAIN $ZPIN $SEP $MPAA $VNCE $BRFS $MOBL $OKE $MFRM $KN $REGN http://t.co/Vtx6dLy0Nw #stocks
Financial Headlines
27 Aug 14 12:53:24
$VNCE: VINCE HOLDING CORP. Files SEC form 8-K, Change in Directors or Principal Officers http://t.co/nIE6uAdzlO http://t.co/EilkY3GV3N
Stock Signaling
27 Aug 14 12:01:18
All-Time Highs: $ZTS $IG $DEPO $HAIN $ZPIN $SEP $MPAA $VNCE $BRFS $MOBL $OKE $MFRM $KN $REGN $RGA http://t.co/Vtx6dLy0Nw #investing #markets
Trend Trading
27 Aug 14 06:50:39
$VNCE a young stock close to a big Cup and Handle breakout. Closely to watch.
Michael Lamothe
27 Aug 14 06:48:15
ChartYourTrade's "Shooting Stars" from 8/26 w/ notes, analysis & annotated charts: $vnce $bita & $twtr http://t.co/rooljLjBzx
Muathe
26 Aug 14 20:01:07
BO IDEAS [ As Per VIDEO http://t.co/SHhWd0BIHE ] $DXCM $DYAX $ENZ $GTAT $HPJ $KERX $SQBG $TWTR $VNCE http://t.co/5x5sYxr0t9
LT
26 Aug 14 19:58:07
$VNCE tested the 38 B/O on decent volume. IBD 93 rating. EPS on 9/3. http://t.co/DbMn4pKH95
Stock Market News
26 Aug 14 17:53:32
$VNCE: UPCOMING DEADLINE: The Law Offices of Vincent Wong Notify Investors of ... http://t.co/RpGVM4r5ir http://t.co/wC4gmFLdma
Michael Lamothe
26 Aug 14 17:30:25
Today's biggest advancers and ChartYourTrade's "Shooting Stars" are $VNCE $BITA & $TWTR Notes, charts, & analysis: http://t.co/eTcrcfDA6q
12Stocks.com
26 Aug 14 16:04:02
SmallCap #Stocks Trend $ISIS $WTSL $VICR $DAKT $CLDX $NLNK $ACHN $MXWL $VMEM $VNCE $MED $BIND $MILL more@ http://t.co/Giravo3fg9
12Stocks.com
26 Aug 14 16:03:45
Smallcap #Stocks Performance $GALE $ISIS $WTSL $VICR $ZGNX $DAKT $CLDX $NLNK $ACHN $MXWL $VMEM $VNCE more@ http://t.co/Giravo3fg9
Equities.com
26 Aug 14 14:34:21
Vince Holding Corp (VNCE) Jumps 8.27% on August 26 $vnce http://t.co/IScA9pyn69
12Stocks.com
26 Aug 14 13:01:46
SmallCap #Stocks Trend $WTSL $ACHN $ENPH $ISIS $CLDX $NLNK $MED $DAKT $STRP $VNCE $XNPT $ENZN $MILL more@ http://t.co/Giravo3fg9
Stock News Headlines
26 Aug 14 06:53:20
$VNCE: Soros-Backed Insurer Tops Paulson Bets as U.S. Rules Loom http://t.co/7ABKKcRoM1 http://t.co/3UjQQNgPJi
Darwin Alpha Ltd
26 Aug 14 06:21:01
#DarwinAlpha reiterates its #buy on #VinceHoldings. The shares are now up over 100%. New target is $38 $VNCE
4-traders.com
26 Aug 14 02:05:03
Medbox : Business Mogul Vincent Mehdizadeh to Pen Autobiography for Dunham Books http://t.co/OfFQT87Oum $MDBX $VNCE
David
22 Aug 14 06:50:06
@Stephanie_Link Steph do you think the fast growing $VNCE Vince Holding is a like a smaller version of $KORS ?
				
				
By  +Follow November 21, 2013 3:38PM
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