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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
Capital Market Labs
25 May 15 14:17:49
Mid-Sized Consumer Durables and Apparel Earnings $VNCE $KBH $RYL $OXM $CROX Chart: http://t.co/dGhl0wLJRZ http://t.co/UuagBUaKzS
Capital Market Labs
25 May 15 00:06:36
Mid-Sized Consumer Durables and Apparel Assets $VNCE $KBH $RYL $OXM $CROX Chart: http://t.co/8yY7MrDudN http://t.co/XiIYl7kLpI
Capital Market Labs
24 May 15 22:08:45
$VNCE Revenue is Growing. #CML_VNCE #CML_Revenue http://t.co/eMkYxR3jXM http://t.co/NMbX8MvuNc
Capital Market Labs
24 May 15 16:09:24
Mid-Sized Consumer Durables and Apparel Debt Level $VNCE $KBH $RYL $CROX $OXM Chart: http://t.co/a8kL77NWzL http://t.co/5ZklteWuMW
Capital Market Labs
24 May 15 14:48:58
Mid-Sized Consumer Durables and Apparel Revenue $VNCE $RYL $KBH $OXM $CROX Chart: http://t.co/li8gpsKir1 http://t.co/x2vXAnY0jT
Capital Market Labs
24 May 15 13:03:22
$VNCE EPS is Accelerating. #CML_VNCE #CML_EPS http://t.co/nta9X8urDC http://t.co/xjrRXXBYsC
InvestWithConf
23 May 15 14:30:02
$VNCE is rated BUY, 21.6% upside by Wall Street analysts based on average ratings/targets http://t.co/m3sSyAvVNf http://t.co/rB6qQnvKIk
Capital Market Labs
23 May 15 05:00:14
$VNCE EPS is Improving. #CML_VNCE #CML_EPS http://t.co/nta9X8urDC http://t.co/awnoh1xdps
Capital Market Labs
23 May 15 03:36:14
$VNCE Revenue and Earnings are Expanding. #CML_VNCE #CML_Revenue #CML_Earnings http://t.co/KU1Tm1SKEc http://t.co/2zMt0oLJG6
Capital Market Labs
23 May 15 02:51:52
$VNCE Cash from Operations is Growing. #CML_VNCE #CML_Cash_from_Operations http://t.co/8nfhd8YSvd http://t.co/6HRZGKgy3F
Capital Market Labs
23 May 15 02:46:12
$VNCE Earnings are Growing. #CML_VNCE #CML_Earnings http://t.co/s0tgbVUmhj http://t.co/v7J073MZHw
The Legacy News
22 May 15 05:57:37
Vince Holding Corp Raised to Hold at Zacks $VNCE http://t.co/n3S9uLlhkC
FinBUZZ Just-IN
21 May 15 21:17:37
Tickers trending on TWTR in last 1 hour $USDJPY $BSE Sensex $EURUSD $VNCE http://t.co/ZtEpdgoCTr
Capital Market Labs
21 May 15 13:53:42
$VNCE EPS is Improving. #CML_VNCE #CML_EPS http://t.co/nta9X8M32c http://t.co/tsXF77BpWb
Dakota Financial
21 May 15 05:39:23
Vince Holding Corp Stock Rating Upgraded by Zacks $VNCE http://t.co/x7mgPUYuzj
BreakingStocksNews
21 May 15 05:28:03
$VNCE: Vince Holding Corp Stock Rating Upgraded by Zacks (VNCE): http://t.co/ggA4CPKMYM
FirstToMarkets
21 May 15 04:00:22
Vince Holding Corp Upgrade by Zacks (Ranked 68th) to Hold $VNCE #VNCE http://t.co/M9ZkV2siGa
FirstToMarkets
21 May 15 03:58:19
Vince Holding Corp Upgrade by Zacks (Ranked 68th) to Hold $VNCE #VNCE http://t.co/M9ZkV2siGa
FirstToMarkets
21 May 15 03:57:25
Vince Holding Corp Upgrade by Zacks (Ranked 68th) to Hold $VNCE #VNCE http://t.co/M9ZkV2siGa
Capital Market Labs
20 May 15 23:12:11
$VNCE Cash from Operations is Growing. #CML_VNCE #CML_Cash_from_Operations http://t.co/8nfhd8YSvd http://t.co/7HNrZs9Ega
FirstToMarkets
20 May 15 19:45:10
Vince Holding Corp Upgrade by Zacks (Ranked 68th) to Hold $VNCE #VNCE http://t.co/CTSfyTUVGf
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20 May 15 19:44:57
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FirstToMarkets
20 May 15 19:43:15
Vince Holding Corp Upgrade by Zacks (Ranked 68th) to Hold $VNCE #VNCE http://t.co/CTSfyTUVGf
FirstToMarkets
20 May 15 19:41:33
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FirstToMarkets
20 May 15 19:30:12
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FirstToMarkets
20 May 15 19:15:15
Vince Holding Corp Upgrade by Zacks (Ranked 68th) to Hold $VNCE #VNCE http://t.co/CTSfyTUVGf
US Banking News
20 May 15 18:46:07
Vince Holding Corp Upgraded by Zacks to Hold $VNCE http://t.co/kud0K7JCPn
FirstToMarkets
20 May 15 18:45:04
Vince Holding Corp Upgrade by Zacks (Ranked 68th) to Hold $VNCE #VNCE http://t.co/9VUuwgKSAN
StockNewsWires
20 May 15 18:37:02
$VNCE: Vince Holding Corp Upgraded by Zacks to "Hold" (VNCE): http://t.co/ihOnW1IHEz
Sleek Money
20 May 15 18:34:48
Vince Holding Corp Upgraded to “Hold” by Zacks $VNCE http://t.co/KtaQndE1Y8
US Consumer News
20 May 15 18:33:43
Vince Holding Corp upgraded by Zacks to hold. http://t.co/7XY0kkmNyl $VNCE #VNCE
FirstToMarkets
20 May 15 18:30:08
Vince Holding Corp Upgrade by Zacks (Ranked 68th) to Hold $VNCE #VNCE http://t.co/CTSfyTUVGf
BreakingStocksNews
20 May 15 18:29:03
$VNCE: Vince Holding Corp Upgraded to “Hold” by Zacks (VNCE): http://t.co/nzaRvwwSJq
Analyst Ratings
20 May 15 18:28:51
Vince Holding Corp upgraded by Zacks to hold. http://t.co/dPqLePZTso $VNCE #VNCE
Ticker Report
20 May 15 18:27:47
Vince Holding Corp Upgraded to “Hold” by Zacks $VNCE http://t.co/HvPuZW93yh
dailystockplays.com
20 May 15 16:14:51
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Capital Market Labs
20 May 15 06:46:48
$VNCE Earnings are Increasing. #CML_VNCE #CML_Earnings http://t.co/s0tgbVUmhj http://t.co/nKsecT4Lsx
Capital Market Labs
20 May 15 01:33:53
$VNCE Revenue and Earnings are Expanding. #CML_VNCE #CML_Revenue #CML_Earnings http://t.co/KU1Tm1SKEc http://t.co/v0bWBJckQM
Capital Market Labs
19 May 15 16:00:38
$VNCE Revenue is Expanding. #CML_VNCE #CML_Revenue http://t.co/eMkYxR3jXM http://t.co/DerSMCgS8Q
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19 May 15 04:36:30
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Don Fishback
19 May 15 04:31:22
Academic Algorithms:(Volatility HV-IV Difference) $BLUE, $VNCE, $BOX, $NAV, $LE http://t.co/o7XDyhVT9I
OptionApps
19 May 15 04:31:22
Academic Algorithms:(Volatility HV-IV Difference) $BLUE, $VNCE, $BOX, $NAV, $LE http://t.co/AULXFFYLJ7
Capital Market Labs
19 May 15 00:08:16
$VNCE EPS is Rising. #CML_VNCE #CML_EPS http://t.co/nta9X8urDC http://t.co/PMfL4UnQsM
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18 May 15 23:18:53
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Capital Market Labs
18 May 15 08:57:00
$VNCE Revenue is Expanding. #CML_VNCE #CML_Revenue http://t.co/eMkYxR3jXM http://t.co/NklMnLJiwZ
Capital Market Labs
17 May 15 17:52:47
$VNCE Cash from Operations is Growing. #CML_VNCE #CML_Cash_from_Operations http://t.co/8nfhd8YSvd http://t.co/KqJSp0pvxK
Capital Market Labs
17 May 15 14:02:19
Mid-Sized Consumer Durables and Apparel Earnings $VNCE $KBH $RYL $OXM $CROX Chart: http://t.co/dGhl0wLJRZ http://t.co/LofosEQ7pe
				
				
By  +Follow November 21, 2013 3:38PM
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