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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. To read our full disclosure, please go to: http://www.equities.com/disclaimer


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Results for vnce
Analyst Actions
2 Sep 15 07:47:01
$VNCE: Analyst action by B. Riley on Vince Holding: http://t.co/guNVvopd82 http://t.co/pI016MDEs3
WatchTheFunds
2 Sep 15 05:42:02
$VNCE Institutional ownership up 3.71% Q/Q, with 451,579 net purchase http://t.co/i7esTzi8tw http://t.co/oEVlPCZCrV
Social Alpha Inc
2 Sep 15 00:29:57
Hottest stocks on social media: $VNCE $IT $SZO $OUT $TSCO $DNO $DBO $IDE $USL Trade on market buzz http://t.co/JXotpHpS8Z #tradeSentiment
US Banking News
1 Sep 15 23:36:30
$VNCE - Vince Holding Corp #VNCE Set to Announce Quarterly Earnings on Thursday http://t.co/UXglUKAkLg
Consumer News
1 Sep 15 23:33:42
Vince Holding Corp $VNCE Set to Announce Quarterly Earnings on Thursday http://t.co/MG4LzOMf4N #acn
Forex Binary Option
1 Sep 15 23:30:39
RT @AmericanBanking: Vince Holding Corp to release Q215 earnings on Thursday. Analysts expect 0.23 EPS. $VNCE http://t.co/ULf5T0BOhE
US Banking News
1 Sep 15 23:20:45
Vince Holding Corp to release Q215 earnings on Thursday. Analysts expect 0.23 EPS. $VNCE http://t.co/ULf5T0BOhE
Ticker Report
1 Sep 15 23:18:38
Vince Holding Corp $VNCE Set to Announce Quarterly Earnings on Thursday http://t.co/BA2ZTN0ZCA
US Banking News
1 Sep 15 23:17:55
Vince Holding Corp $VNCE Set to Announce Quarterly Earnings on Thursday http://t.co/y6MeNJabYe
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1 Sep 15 23:09:43
Vince Holding Corp $VNCE Set to Announce Quarterly Earnings on Thursday http://t.co/UEYxYPGUhf
FirstToMarkets
1 Sep 15 22:30:08
Vince Holding Corp Reiterated Rating by B. Riley & Co. (Ranked 53rd) to Neutral with 11 PT $VNCE #VNCE http://t.co/qVwiyYadYA
US Consumer News
1 Sep 15 22:16:20
Vince Holding Corp's neutral rating reiterated at B. Riley. $11.00 PT. http://t.co/xz8YUKlgwo $VNCE #VNCE
MarketBeatCom
1 Sep 15 22:15:16
Vince Holding Corp's neutral rating reiterated at B. Riley. $11.00 PT. http://t.co/thu1d4ZiZZ $VNCE #VNCE
Capital Market Labs
1 Sep 15 13:47:46
Website -> http://t.co/L92ehZCZd5 $VNCE Reports Thursday, Consensus Est. Rev: $85.961M, EPS: $0.22 http://t.co/epJcMAlu9v
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1 Sep 15 08:02:10
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WatchTheFunds
1 Sep 15 06:20:02
$VNCE Institutional ownership up 3.71% Q/Q, with 451,579 net purchase http://t.co/i7esTzi8tw http://t.co/lWXhGFOcGn
StockNewsWires
1 Sep 15 01:58:03
$VNCE: Vince Holding Corp. Analyst Rating Update: http://t.co/6TCrsAfUHh
Breaking News Now
1 Sep 15 01:16:04
$VNCE: Vince Holding Corp (VNCE) Scheduled to Post Quarterly Earnings …: http://t.co/2yOd9qARB6
Sleek Money
1 Sep 15 00:51:29
Vince Holding Corp $VNCE Scheduled to Post Quarterly Earnings on Thursday http://t.co/7zXYMyP1RK
Consumer Stocks
1 Sep 15 00:30:15
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1 Sep 15 00:30:14
Vince Holding Corp.: A Chicken With Its Head Cut Off http://t.co/VAwvBrOZvB $VNCE
Capital Market Labs
31 Aug 15 14:00:56
Website -> http://t.co/L92ehZCZd5 $VNCE Reports Thursday, Consensus Est. Rev: $85.961M, EPS: $0.22 http://t.co/YlV3sdpX6h
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ProVesting
31 Aug 15 02:16:02
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WatchTheFunds
30 Aug 15 18:20:02
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Somanath
30 Aug 15 13:54:48
clayton_dd : VNCE Vince Holding Corp. EOD Data http://t.co/RUvdd1T4Az $VNCE $BAC $ORCL … http://t.co/atdA4pVvYt) http://t.co/styozjVhPn
clayton
30 Aug 15 13:48:03
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30 Aug 15 13:44:15
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By  +Follow November 21, 2013 3:38PM
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