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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
MacroStrategist
3 Jul 15 07:53:57
Top Stock Trade Ideas: $VNCE Forecast for July 10, 2015. Target: 11.36 [-5.02%] Current View: sell http://t.co/BHX4QKctkq
WatchTheFunds
3 Jul 15 02:15:02
$VNCE Institutional ownership up 3.71% Q/Q, with 451,579 net purchase http://t.co/i7esTzi8tw http://t.co/fIQ2mMwXkp
MacroStrategist
2 Jul 15 07:49:30
Top Stock Trade Ideas: $VNCE Forecast for July 09, 2015. Target: 11.20 [-5.08%] Current View: sell http://t.co/BHX4QKctkq
Ultimate Stock Alert
2 Jul 15 07:07:30
$DLHC has pulled back and could be setting up for a move higher. Full DLHC Profile: http://t.co/eZGkZnvpls $NI $CRK $GTS $VNCE $DIS $GE $BAC
MacroStrategist
1 Jul 15 14:23:04
Top Stock Trade Ideas: $VNCE Forecast for July 08, 2015. Target: 11.18 [-5.33%] Current View: sell http://t.co/BHX4QKctkq
ProVesting
1 Jul 15 10:34:04
$VNCE: Earnings Watchlist: Vince Holding Corp. (NYSE:VNCE): http://t.co/11JmeUGoal
MacroStrategist
1 Jul 15 07:50:30
Top Stock Trade Ideas: $VNCE Forecast for July 08, 2015. Target: 11.31 [-5.20%] Current View: sell http://t.co/BHX4QKctkq
SwingTradeBot
1 Jul 15 04:35:44
$VNCE technical alerts: Stochastic Reached Oversold, Lizard Bullish, Doji - Bullish?, Hammer Candl... http://t.co/FkKFsu446o
ProVesting
1 Jul 15 00:59:05
$VNCE: Vince Holding Corp. (NYSE:VNCE) Analyst Rating Update: http://t.co/iHdbhl92q7
Breaking News Now
30 Jun 15 14:55:03
$VNCE: New Insider Transaction on VNCE by See Remarks: http://t.co/AbySEgdGLU
Insider Alerts
30 Jun 15 14:54:07
NEW insider transaction on $VNCE reported a moment ago: http://t.co/D5etAfhZF2
MacroStrategist
30 Jun 15 14:23:31
Top Stock Trade Ideas: $VNCE Forecast for July 07, 2015. Target: 11.38 [-5.01%] Current View: sell http://t.co/BHX4QKctkq
John Green
30 Jun 15 14:19:49
@GuyAdami @karenfinerman if u guys want to buy $KORS just look at $VNCE or $FRAN then call me in the morning for a head examination
WatchTheFunds
30 Jun 15 02:07:01
$VNCE Institutional ownership up 3.71% Q/Q, with 451,579 net purchase http://t.co/i7esTzzJl4 http://t.co/AZNFW2qBvu
Bryon Franzen
29 Jun 15 21:33:39
$vnce dead cat bounce ...watch http://t.co/paxbQNFCr8
MacroStrategist
29 Jun 15 14:20:27
Top Stock Trade Ideas: $VNCE Forecast for July 06, 2015. Target: 11.31 [-5.28%] Current View: sell http://t.co/BHX4QKctkq
Penny Stock Secret
29 Jun 15 13:38:23
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MacroStrategist
29 Jun 15 07:48:56
Top Stock Trade Ideas: $VNCE Forecast for July 06, 2015. Target: 11.38 [-5.01%] Current View: sell http://t.co/BHX4QKctkq
Shiraz Lakhi
29 Jun 15 06:05:10
Heads Up: Biggest "Volume Backed" %Losers in Consumer #Stocks Friday $CTCM $ESI $HEAR $ZQK $VNCE ++ http://t.co/RDNTVwn34y
ProTradersNews
29 Jun 15 05:50:02
$AVEO $VNCE: Why Making Dramatic Moves: AVEO Pharmaceuticals, Inc ...: http://t.co/xtEFnza7Bg
BreakingStocksNews
29 Jun 15 04:59:03
$VNCE: Bank of America Rating Update on Vince Holding Corp. (NYSE:VNCE): http://t.co/MW3k7HOc2G
The Legacy News
29 Jun 15 04:57:52
Vince Holding Corp Rating Reiterated by William Blair $VNCE http://t.co/esRkHDgWns
lookn4wins
29 Jun 15 03:53:15
VNCE Vince Holding Corp. Ex-Div Date http://t.co/BUC5c6pCDz $VNCE $ED $SQQQ $CYBR #VNCE #stocks #nasdaq
lookn4wins
29 Jun 15 03:53:13
VNCE Vince Holding Corp. Day High http://t.co/m4dfz0R5NS $VNCE $XLV $AGTK $XLB #VNCE #tradeideas #finance
Jake13
29 Jun 15 03:52:08
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IH News Desk
29 Jun 15 03:51:34
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Options Answers
29 Jun 15 03:50:59
RT @PolgarStocks: VNCE iPath S&P 500 VIX Short-Term Futures ETN Stock Forum http://t.co/acQCzUVUMq $VNCE $AR $AMGN $LPCN #VNCE #nasdaq #st…
danrocks
29 Jun 15 03:50:37
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clayton
29 Jun 15 03:50:35
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29 Jun 15 03:50:14
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clayton
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clayton
29 Jun 15 03:50:13
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PolgarStocks
29 Jun 15 03:49:57
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Investors Hangout
29 Jun 15 03:49:07
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29 Jun 15 03:49:05
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jim50
29 Jun 15 03:48:06
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29 Jun 15 03:48:05
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Stock Forums
29 Jun 15 03:46:25
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By  +Follow November 21, 2013 3:38PM
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