Vince Holding Corp. Amends Term Loan and Revolving Credit Facility Agreements
July 05 2017 - 4:10PM
Business Wire
Vince Holding Corp. (NYSE:VNCE), a leading global luxury apparel
and accessories brand (“Vince” or the “Company”), today announced
that it has reached an agreement to amend its Senior Secured Term
Loan Facility to waive the consolidated net total leverage ratio
covenant requirement through, and including, the first quarter of
fiscal 2019. As previously announced, the Company also reached an
agreement to amend its Revolving Credit Facility, immediately
providing an additional $5 million in borrowing capacity under such
facility, which may be increased by an additional $5 million as
described below.
Brendan Hoffman, Chief Executive Officer, commented, “We are
very pleased to have obtained amended agreements with our lenders.
These steps, together with the completion of our proposed rights
offering, will provide Vince with additional liquidity and improve
the capital structure of the company. Importantly, we believe this
should relieve many of the pressures that had previously led
management to conclude that there was doubt about our ability to
continue as a going concern. We also expect that this will
alleviate the pressures on our borrowing capacity that we have seen
from the accelerated terms and prepayment requirements imposed by
certain vendors. We anticipate that the waiver of our covenant
requirement through the first quarter of 2019, as well as the
additional liquidity that we are injecting into the business, will
enable us to continue to focus on driving momentum and improving
performance throughout the business.”
The amendment to the Company’s Senior Secured Term Loan Facility
waives the consolidated net total leverage ratio covenant
requirement under its agreement through, and including, the first
quarter of fiscal 2019. The amendment is subject to certain terms
and conditions, including that $9 million of proceeds from the
proposed Rights Offering will be used to pay down the debt under
the Term Loan. The Company also agreed to additional amortization
payments and modifications to certain negative and affirmative
covenants, as well as a 2% increase in the interest rate and
consent fees in the amount of 0.5% of the outstanding debt held by
the consenting lenders.
The Company also previously announced that it entered into an
amendment to its Revolving Credit Facility agreement, which
provides an additional $5 million of borrowing capacity to the
Company in exchange for the issuance of a letter of credit in the
same amount for the benefit of the Revolving Credit Facility lender
by Bank of Montreal. The letter of credit may be increased by an
additional $5 million, in which case the Company’s availability
under the Revolving Credit Facility would also increase by such
amount. In addition, the amendment allows Vince to include larger
portions of certain trade receivables in the borrowing capacity
until July 31, 2017. The Company agreed to a 0.5% increase in the
interest rate and is required to pay $15 million of the outstanding
debt under the Revolving Credit Facility upon the completion of the
proposed rights offering without any concurrent commitment
reduction, which will create an equal amount of borrowing capacity
under the facility upon paydown.
ABOUT VINCE
Established in 2002, Vince is a global luxury brand best known
for utilizing luxe fabrications and innovative techniques to create
a product assortment that combines urban utility and modern
effortless style. From its edited core collection of ultra-soft
cashmere knits and cotton tees, Vince has evolved into a global
lifestyle brand and destination for both women’s and men’s apparel
and accessories. As of April 29, 2017, Vince products were sold in
prestige distribution worldwide, including approximately 2,300
distribution locations across more than 40 countries. With
corporate headquarters in New York and its design studio in Los
Angeles, the Company operated 40 full-price retail stores, 14
outlet stores and its e-commerce site, vince.com. Please visit
www.vince.com for more information.
This document, and any statements incorporated by reference
herein, contains forward-looking statements under the Private
Securities Litigation Reform Act of 1995. Forward-looking
statements include the statements regarding, among other things,
our current expectations about the Company's future results and
financial condition, revenues, store openings and closings,
margins, expenses and earnings and are indicated by words or
phrases such as "may," "will," "should," "believe," "expect,"
"seek," "anticipate," "intend," "estimate," "plan," "target,"
"project," "forecast," "envision" and other similar phrases.
Although we believe the assumptions and expectations reflected in
these forward-looking statements are reasonable, these assumptions
and expectations may not prove to be correct and we may not achieve
the results or benefits anticipated. These forward-looking
statements are not guarantees of actual results, and our actual
results may differ materially from those suggested in the
forward-looking statements. These forward-looking statements
involve a number of risks and uncertainties, some of which are
beyond our control, including, without limitation: our ability to
maintain adequate cash flow from operations or availability under
our revolving credit facility to meet our liquidity needs
(including our obligations under the Tax Receivable Agreement with
the Pre-IPO Stockholders); our ability to continue as a going
concern; our ability to successfully complete the proposed rights
offering; our ability to successfully operate the newly implemented
systems, processes, and functions recently transitioned from
Kellwood Company; our ability to remediate the identified material
weaknesses in our internal control over financial reporting; our
ability to regain compliance with the continued listing standards
of the New York Stock Exchange; our ability to ensure the proper
operation of the distribution facility by a third party logistics
provider recently transitioned from Kellwood; our ability to remain
competitive in the areas of merchandise quality, price, breadth of
selection, and customer service; our ability to anticipate and/or
react to changes in customer demand and attract new customers,
including in connection with making inventory commitments; our
ability to control the level of sales in the off-price channels;
our ability to manage excess inventory in a way that will promote
the long-term health of the brand; changes in consumer confidence
and spending; our ability to maintain projected profit margins;
unusual, unpredictable and/or severe weather conditions; the
execution and management of our retail store growth plans,
including the availability and cost of acceptable real estate
locations for new store openings; the execution and management of
our international expansion, including our ability to promote our
brand and merchandise outside the U.S. and find suitable partners
in certain geographies; our ability to expand our product offerings
into new product categories, including the ability to find suitable
licensing partners; our ability to successfully implement our
marketing initiatives; our ability to protect our trademarks in the
U.S. and internationally; our ability to maintain the security of
electronic and other confidential information; serious disruptions
and catastrophic events; changes in global economies and credit and
financial markets; competition; our ability to attract and retain
key personnel; commodity, raw material and other cost increases;
compliance with domestic and international laws, regulations and
orders; changes in laws and regulations; outcomes of litigation and
proceedings and the availability of insurance, indemnification and
other third-party coverage of any losses suffered in connection
therewith; tax matters; and other factors as set forth from time to
time in our Securities and Exchange Commission filings, including
under the heading "Item 1A—Risk Factors" in our Annual Report on
Form 10-K and our Quarterly Reports on Form 10Q. We intend these
forward-looking statements to speak only as of the time of this
release and do not undertake to update or revise them as more
information becomes available, except as required by law.
This press release is also available on the Vince Holding Corp.
website (http://investors.vince.com/).
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version on businesswire.com: http://www.businesswire.com/news/home/20170705005867/en/
Investor Relations:ICR, Inc.Jean Fontana,
646-277-1200Jean.fontana@icrinc.com
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