VINCE HOLDING CORP., 10-K filed on 4/14/2016
Annual Report
Document and Entity Information (USD $)
In Millions, except Share data, unless otherwise specified
12 Months Ended
Jan. 30, 2016
Mar. 31, 2016
Aug. 1, 2015
Document And Entity Information [Abstract]
 
 
 
Document Type
10-K 
 
 
Amendment Flag
false 
 
 
Document Period End Date
Jan. 30, 2016 
 
 
Document Fiscal Year Focus
2015 
 
 
Document Fiscal Period Focus
FY 
 
 
Trading Symbol
VNCE 
 
 
Entity Registrant Name
VINCE HOLDING CORP. 
 
 
Entity Central Index Key
0001579157 
 
 
Current Fiscal Year End Date
--01-30 
 
 
Entity Well-known Seasoned Issuer
No 
 
 
Entity Current Reporting Status
Yes 
 
 
Entity Voluntary Filers
No 
 
 
Entity Filer Category
Accelerated Filer 
 
 
Entity Common Stock, Shares Outstanding
 
37,108,682 
 
Entity Public Float
 
 
$ 164.1 
Consolidated Balance Sheets (USD $)
In Thousands, unless otherwise specified
Jan. 30, 2016
Jan. 31, 2015
Current assets:
 
 
Cash and cash equivalents
$ 6,230 
$ 112 
Trade receivables, net
9,400 
33,797 
Inventories, net
36,576 
37,419 
Prepaid expenses and other current assets
8,027 
9,812 
Total current assets
60,233 
81,140 
Property, plant and equipment, net
37,769 
28,349 
Intangible assets, net
109,046 
109,644 
Goodwill
63,746 
63,746 
Deferred income taxes and other assets
92,774 
95,769 
Total assets
363,568 
378,648 
Current liabilities:
 
 
Accounts payable
28,719 
29,118 
Accrued salaries and employee benefits
5,755 
7,380 
Other accrued expenses
37,174 
27,992 
Total current liabilities
71,648 
64,490 
Long-term debt
57,615 
84,450 
Deferred rent
14,965 
11,676 
Other liabilities
140,838 
146,063 
Commitments and contingencies (Note 8)
   
   
Stockholders' equity:
 
 
Common stock at $0.01 par value (100,000,000 shares authorized, 36,779,417 and 36,748,245 shares issued and outstanding at January 30, 2016 and January 31, 2015, respectively)
368 
367 
Additional paid-in capital
1,012,677 
1,011,244 
Accumulated deficit
(934,478)
(939,577)
Accumulated other comprehensive loss
(65)
(65)
Total stockholders' equity
78,502 
71,969 
Total liabilities and stockholders' equity
$ 363,568 
$ 378,648 
Consolidated Balance Sheets (Parenthetical) (USD $)
Jan. 30, 2016
Jan. 31, 2015
Nov. 27, 2013
Nov. 21, 2013
Statement Of Financial Position [Abstract]
 
 
 
 
Common stock, par value
$ 0.01 
$ 0.01 
$ 0.01 
 
Common stock, shares authorized
100,000,000 
100,000,000 
 
 
Common stock, shares issued
36,779,417 
36,748,245 
 
10,000,000 
Common stock, shares outstanding
36,779,417 
36,748,245 
 
 
Consolidated Statements of Operations (USD $)
In Thousands, except Share data, unless otherwise specified
12 Months Ended
Jan. 30, 2016
Jan. 31, 2015
Feb. 1, 2014
Income Statement [Abstract]
 
 
 
Net sales
$ 302,457 
$ 340,396 
$ 288,170 
Cost of products sold
169,941 
173,567 
155,154 
Gross profit
132,516 
166,829 
133,016 
Selling, general and administrative expenses
116,790 
96,579 
83,663 
Income from operations
15,726 
70,250 
49,353 
Interest expense, net
5,680 
9,698 
18,011 
Other expense, net
1,733 
835 
679 
Income before income taxes
8,313 
59,717 
30,663 
Provision for income taxes
3,214 
23,994 
7,268 
Net income from continuing operations
5,099 
35,723 
23,395 
Net loss from discontinued operations, net of tax
 
 
(50,815)
Net income (loss)
$ 5,099 
$ 35,723 
$ (27,420)
Basic earnings (loss) per share:
 
 
 
Basic earnings per share from continuing operations
$ 0.14 
$ 0.97 
$ 0.83 
Basic loss per share from discontinued operations
 
 
$ (1.81)
Basic earnings (loss) per share
$ 0.14 
$ 0.97 
$ (0.98)
Diluted earnings (loss) per share:
 
 
 
Diluted earnings per share from continuing operations
$ 0.14 
$ 0.93 
$ 0.83 
Diluted loss per share from discontinued operations
 
 
$ (1.81)
Diluted earnings (loss) per share
$ 0.14 
$ 0.93 
$ (0.98)
Weighted average shares outstanding:
 
 
 
Basic
36,770,430 
36,730,490 
28,119,794 
Diluted
37,529,227 
38,244,906 
28,272,925 
Consolidated Statements of Comprehensive Income (Loss) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Jan. 30, 2016
Jan. 31, 2015
Feb. 1, 2014
Statement Of Income And Comprehensive Income [Abstract]
 
 
 
Net income (loss)
$ 5,099 
$ 35,723 
$ (27,420)
Foreign currency translation adjustment
 
 
Comprehensive income (loss)
$ 5,099 
$ 35,723 
$ (27,419)
Consolidated Statements of Stockholders' Equity (Deficit) (USD $)
In Thousands, except Share data, unless otherwise specified
Total
Common Stock [Member]
Additional Paid-In Capital [Member]
Accumulated Deficit [Member]
Accumulated Other Comprehensive Loss [Member]
Beginning Balance at Feb. 02, 2013
$ (561,265)
$ 262 
$ 386,419 
$ (947,880)
$ (66)
Beginning Balance, shares at Feb. 02, 2013
 
26,211,130 
 
 
 
Comprehensive income (loss):
 
 
 
 
 
Net income (loss)
(27,420)
 
 
(27,420)
 
Foreign currency translation adjustment
 
 
 
Common stock issuance, net of certain costs
186,000 
100 
185,900 
 
 
Common stock issuance, net of certain costs, shares
 
10,000,000 
 
 
 
Share-based compensation expense
898 
 
898 
 
 
Exercise of stock options
42 
37 
 
 
Exercise of stock options, shares
 
512,597 
 
 
 
Capital contribution from stockholders
407,527 
 
407,527 
 
 
Recognition of certain deferred tax assets, net
127,833 
 
127,833 
 
 
Recognition of tax receivable agreement obligation
(173,146)
 
(173,146)
 
 
Separation of non-Vince businesses and settlement of Kellwood Note Receivable
73,081 
 
73,081 
 
 
Ending Balance at Feb. 01, 2014
33,551 
367 
1,008,549 
(975,300)
(65)
Ending Balance, shares at Feb. 01, 2014
 
36,723,727 
 
 
 
Comprehensive income (loss):
 
 
 
 
 
Net income (loss)
35,723 
 
 
35,723 
 
Share-based compensation expense
1,896 
 
1,896 
 
 
Exercise of stock options
175 
 
175 
 
 
Exercise of stock options, shares
 
22,018 
 
 
 
Restricted stock unit vestings
Restricted stock unit vestings, shares
 
2,500 
 
 
 
Tax receivable agreement obligation adjustment
624 
 
624 
 
 
Ending Balance at Jan. 31, 2015
71,969 
367 
1,011,244 
(939,577)
(65)
Ending Balance, shares at Jan. 31, 2015
36,748,245 
36,748,245 
 
 
 
Comprehensive income (loss):
 
 
 
 
 
Net income (loss)
5,099 
 
 
5,099 
 
Share-based compensation expense
1,259 
 
1,259 
 
 
Exercise of stock options
175 
174 
 
 
Exercise of stock options, shares
26,209 
26,209 
 
 
 
Restricted stock unit vestings
Restricted stock unit vestings, shares
 
4,963 
 
 
 
Ending Balance at Jan. 30, 2016
$ 78,502 
$ 368 
$ 1,012,677 
$ (934,478)
$ (65)
Ending Balance, shares at Jan. 30, 2016
36,779,417 
36,779,417 
 
 
 
Consolidated Statements of Cash Flows (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Jan. 30, 2016
Jan. 31, 2015
Feb. 1, 2014
Operating activities
 
 
 
Net income (loss)
$ 5,099 
$ 35,723 
$ (27,420)
Less: Net loss from discontinued operations
 
 
(50,815)
Add (deduct) items not affecting operating cash flows:
 
 
 
Depreciation
7,752 
4,668 
2,186 
Provision for inventories
16,263 
3,719 
3,738 
Amortization of intangible assets
598 
599 
599 
Amortization of deferred financing costs
1,259 
1,532 
178 
Amortization of deferred rent
1,723 
3,045 
465 
Deferred income taxes
2,745 
23,248 
7,225 
Share-based compensation expense
1,259 
1,896 
347 
Capitalized PIK Interest
 
 
15,883 
Loss on disposal of property, plant and equipment
375 
 
262 
Changes in assets and liabilities:
 
 
 
Receivables, net
24,397 
6,401 
(6,265)
Inventories
(15,420)
(7,182)
(18,807)
Prepaid expenses and other current assets
3,441 
2,809 
1,681 
Accounts payable and accrued expenses
1,044 
3,066 
3,235 
Other assets and liabilities
1,093 
742 
(156)
Net cash provided by operating activities—continuing operations
51,628 
80,266 
33,966 
Net cash used in operating activities—discontinued operations
 
 
(54,667)
Net cash provided by (used in) operating activities
51,628 
80,266 
(20,701)
Investing activities
 
 
 
Payments for capital expenditures
(17,591)
(19,699)
(10,073)
Net cash used in investing activities—continuing operations
(17,591)
(19,699)
(10,073)
Net cash used in investing activities—discontinued operations
 
 
(5,936)
Net cash used in investing activities
(17,591)
(19,699)
(16,009)
Financing activities
 
 
 
Proceeds from borrowings under the Revolving Credit Facility
115,127 
50,500 
 
Payments for Revolving Credit Facility
(123,127)
(27,500)
 
Proceeds from borrowings under the Term Loan Facility
 
 
175,000 
Payments for Term Loan Facility
(20,000)
(105,000)
(5,000)
Payment for Kellwood Note Receivable
 
 
(341,500)
Fees paid for Term Loan Facility and Revolving Credit Facility
(94)
(114)
(5,146)
Proceeds from common stock issuance, net of certain transaction costs
 
 
186,000 
Stock option exercise
175 
175 
42 
Net cash (used in) provided by financing activities—continuing operations
(27,919)
(81,939)
9,396 
Net cash provided by financing activities—discontinued operations
 
 
46,917 
Net cash (used in) provided by financing activities
(27,919)
(81,939)
56,313 
Increase (decrease) in cash and cash equivalents
6,118 
(21,372)
19,603 
Cash and cash equivalents, beginning of period
112 
21,484 
1,881 
Cash and cash equivalents, end of period
6,230 
112 
21,484 
Cash and cash equivalents
6,230 
112 
21,484 
Supplemental Disclosures of Cash Flow Information
 
 
 
Cash payments on TRA obligation
 
3,199 
 
Cash payments for interest
3,838 
8,737 
1,018 
Cash payments for income taxes, net of refunds
1,491 
88 
31 
Supplemental Disclosures of Non-Cash Investing and Financing Activities
 
 
 
Capital expenditures in accounts payable
309 
452 
222 
Discontinued Operations [Member]
 
 
 
Supplemental Disclosures of Cash Flow Information
 
 
 
Cash payments for income taxes, net of refunds
 
 
566 
Cash payments for interest
 
 
$ 20,644 
Description of Business and Summary of Significant Accounting Policies
Description of Business and Summary of Significant Accounting Policies

Note 1. Description of Business and Summary of Significant Accounting Policies

On November 27, 2013, Vince Holding Corp. (“VHC”), previously known as Apparel Holding Corp., closed an initial public offering of its common stock and completed a series of restructuring transactions through which (i) Kellwood Holding, LLC acquired the non-Vince businesses, which include Kellwood Company, LLC, from the Company and (ii) the Company continues to own and operate the Vince business, which includes Vince, LLC.

The historical financial information presented herein as of January 30, 2016 includes only the Vince businesses and all historical financial information prior to November 27, 2013 includes the Vince business as continuing operations and the non-Vince businesses as a component of discontinued operations.

(A) Description of Business: Vince is a leading contemporary fashion brand best known for modern effortless style and everyday luxury essentials. Established in 2002, the brand now offers a wide range of women’s and men’s apparel, women’s and men’s footwear, and handbags. We reach our customers through a variety of channels, specifically through major wholesale department stores and specialty stores in the United States (“U.S.”) and select international markets, as well as through our branded retail locations and our website. We design our products in the U.S. and source the vast majority of our products from contract manufacturers outside the U.S., primarily in Asia and South America. Products are manufactured to meet our product specifications and labor standards.

(B) Basis of Presentation: The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”).

The consolidated financial statements include our accounts and the accounts of our wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. The amounts and disclosures included in the notes to the consolidated financial statements, unless otherwise indicated, are presented on a continuing operations basis. In the opinion of management, the financial statements contain all adjustments (consisting solely of normal recurring adjustments) and disclosures necessary to make the information presented therein not misleading. As used in this report, unless the context requires otherwise, “our,” “us” and “we” refer to VHC and its consolidated subsidiaries.

Certain reclassifications have been made to the prior periods’ financial information in order to conform to the current period’s presentation. The reclassification had no impact on previously reported net income or stockholders’ equity.

(C) Fiscal Year: VHC operates on a fiscal calendar widely used by the retail industry that results in a given fiscal year consisting of a 52 or 53-week period ending on the Saturday closest to January 31 of the following year.

 

·

References to “fiscal year 2015” or “fiscal 2015” refer to the fiscal year ended January 30, 2016;

 

·

References to “fiscal year 2014” or “fiscal 2014” refer to the fiscal year ended January 31, 2015;

 

·

References to “fiscal year 2013” or “fiscal 2013” refer to the fiscal year ended February 1, 2014.

Fiscal years 2015, 2014 and 2013 consisted of a 52-week period.

(D) Our Business and Liquidity: During fiscal 2015 we have experienced declining sales and additional costs associated with making strategic investments for the future growth of the VINCE brand, including costs associated with the write-down of excess inventory, consulting agreements with our co-founders and the reorganization of our management team. We have undertaken steps to enhance our liquidity position that we expect will allow us to maintain a net debt balance sufficient to comply with any covenants under the Term Loan Facility and the Revolving Credit Facility, as well as provide additional cash for use in our operations as we make these investments. Accordingly, on December 9, 2015 we received a Rights Offering Commitment Letter from Sun Capital Partners V, L.P. (“Sun Fund V”) that commits Sun Fund V to provide the Company with an amount equal to $65,000 of cash proceeds in the event that the Company conducts a rights offering for its common stock to its stockholders (a “Rights Offering”). Such contribution was to be reduced by any proceeds received from the Rights Offering. On March 15, 2016, the Company entered into an Investment Agreement with Sun Cardinal, LLC and SCSF Cardinal, LLC, affiliates of Sun Capital Partners, Inc. (collectively the “Investors”), which supersedes the Rights Offering Commitment Letter.

Pursuant to the terms of the Investment Agreement, the Investors have agreed to backstop the Rights Offering by purchasing at the subscription price of $5.50 per share any and all shares not subscribed through the exercise of rights, including the oversubscription. Consummation of the Rights Offering and the transactions contemplated by the Investment Agreement are subject to customary closing conditions as well as specific representations, warranties and covenants that all parties are required to satisfy up to and through the closing of the transactions contemplated in the Investment Agreement, which is estimated to occur on about April 21, 2016, but can be no later than April 30, 2016. The Investment Agreement can be terminated by either party if the counterparty breaches any of the representations, warranties and covenants, as applicable to them, as set forth in the agreement. Representations, warranties and covenants that require adherence by the Company include among others, compliance with debt covenant requirements under the Company’s credit agreements and closing the backstop commitment by no later than April 30, 2016.

On March 29, 2016, the Company commenced the Rights Offering, whereby the Company distributed, at no charge, to stockholders of record as of March 23, 2016 (the “Rights Offering Record Date”), rights to purchase 11,818,181 new shares of the Company’s common stock at $5.50 per share. Each stockholder as of the Rights Offering Record Date (“Rights Holder”) received one non-transferrable right for every share of common stock owned on the Rights Offering Record Date (the “subscription right”). Rights Holders who fully exercise their subscription rights are entitled to subscribe for additional shares that remain unsubscribed as a result of any unexercised subscription rights (the “over-subscription right”). The over-subscription right allows a Rights Holder to subscribe for an additional number of shares equal to up to 20% of the shares of common stock for which such holder was otherwise entitled to subscribe. Subscription rights may only be exercised for whole numbers of shares; no fractional shares of common stock will be issued in the Rights Offering. The Rights Offering period expired on April 14, 2016 at 5:00 p.m. New York City time, prior to which payment for all subscription rights required an irrevocable funding of cash to the transfer agent, to be held in an account for the benefit of the Company. The Investors have fully subscribed in the Rights Offering and exercised their oversubscription right. Under the terms of the Investment Agreement, the Investors will fund the difference between the Rights Offering proceeds and $65,000 on or about April 21, 2016, but no later than April 30, 2016, concurrently with the closing of the Rights Offering.

The Company intends to use a portion of the net proceeds received from the Rights Offering to (1) repay the amount owed by us under the Tax Receivable Agreement with Sun Cardinal, for itself and as a representative of the other stockholders party thereto, for the tax benefit with respect to the 2014 taxable year, equal to $21,762 plus accrued interest (see Note 15 “Related Party Transactions” for additional details), and (2) repay all outstanding indebtedness under our Revolving Credit Facility. The Company intends to use the remaining net proceeds for general corporate purposes, which may include future amounts owed by us under the Tax Receivable Agreement.

The Company believes that proceeds from the Rights Offering and Investment Agreement along with cash flows generated from operations will provide sufficient liquidity for the Company to comply with covenants under the Term Loan Facility and Revolving Credit Facility as well as provide additional cash for use in our operations.  Failure to receive the proceeds from Rights Offering and Investment Agreement could have a material adverse effect on our ability to comply with our debt covenant requirements and fund operations and capital expenditures in fiscal 2016.

(E) Use of Estimates: The preparation of consolidated financial statements in conformity with GAAP requires that management make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements which affect revenues and expenses during the period reported. Estimates are adjusted when necessary to reflect actual experience. Significant estimates and assumptions may affect many items in the financial statements. Actual results could differ from estimates and assumptions in amounts that may be material to the consolidated financial statements.

Significant estimates inherent in the preparation of the consolidated financial statements include accounts receivable allowances, customer returns, the realizability of inventory, reserves for contingencies, useful lives and impairments of long-lived tangible and intangible assets, and accounting for income taxes and related uncertain tax positions, among others.

(F) Cash and cash equivalents:  All demand deposits and highly liquid short-term deposits with original maturities of three months or less maintained under cash management activities are considered cash equivalents. The effect of foreign currency exchange rate fluctuations on cash and cash equivalents was not significant for fiscal 2015, fiscal 2014, or fiscal 2013.

(G) Accounts Receivable and Concentration of Credit Risk: We maintain an allowance for accounts receivable estimated to be uncollectible. The activity in this allowance for continuing operations is summarized as follows:

 

(in thousands)

 

2015

 

 

2014

 

 

2013

 

Balance, beginning of year

 

$

379

 

 

$

353

 

 

$

279

 

Provisions for bad debt expense, net of reversals

 

 

(34

)

 

 

168

 

 

 

249

 

Bad debts written off

 

 

(157

)

 

 

(142

)

 

 

(175

)

Balance, end of year

 

$

188

 

 

$

379

 

 

$

353

 

 

The provision for bad debts is included in selling, general and administrative expense. Substantially all of our trade receivables are derived from sales to retailers and are recorded at the invoiced amount and do not bear interest. We perform ongoing credit evaluations of our wholesale partners’ financial condition and require collateral as deemed necessary. The past due status of a receivable is based on its contractual terms. Account balances are charged off against the allowance when it is probable the receivable will not be collected.

Accounts receivable are recorded net of allowances for expected future chargebacks and margin support from wholesale partners. It is the nature of the apparel and fashion industry that suppliers like us face significant pressure from customers in the retail industry to provide allowances to compensate for wholesale partner margin shortfalls. This pressure often takes the form of customers requiring us to provide price concessions on prior shipments as a prerequisite for obtaining future orders. Pressure for these concessions is largely determined by overall retail sales performance and, more specifically, the performance of our products at retail. To the extent our wholesale partners have more of our goods on hand at the end of the season, there will be greater pressure for us to grant markdown concessions on prior shipments. Our accounts receivable balances are reported net of expected allowances for these matters based on the historical level of concessions required and our estimates of the level of markdowns and allowances that will be required in the coming season in order to collect the receivables. We evaluate the allowance balances on a continual basis and adjust them as necessary to reflect changes in anticipated allowance activity. We also provide an allowance for sales returns based on historical return rates.

In fiscal 2015, sales to three wholesale partners each accounted for more than ten percent of our net sales from continuing operations. These sales represented 18.3%, 13.8% and 10.8% of fiscal 2015 net sales. In fiscal 2014, sales to three wholesale partners each accounted for more than ten percent of our net sales from continuing operations. These sales represented 23.2%, 13.2% and 12.3% of fiscal 2014 net sales. In fiscal 2013, sales to three wholesale partners each accounted for more than ten percent of our net sales from continuing operations. These sales represented 19.8%, 12.8% and 12.8% of fiscal 2013 net sales.

In fiscal 2015, accounts receivable from three wholesale partners each accounted for more than ten percent of our gross accounts receivable in continuing operations. These receivables represented 19.3%, 17.8% and 14.7% of fiscal 2015 gross accounts receivable. In fiscal 2014 accounts receivable from four wholesale partners each accounted for more than ten percent of our gross accounts receivable in continuing operations. These receivables represented 24.5%, 13.8%, 12.7% and 11.4% of fiscal 2014 gross accounts receivable.

(H) Inventories: Inventories are stated at the lower of cost or market. Cost is determined on the first-in, first-out basis. The cost of inventory includes manufacturing or purchase cost as well as sourcing, transportation, duty and other processing costs associated with acquiring, importing and preparing inventory for sale. Inventory costs are included in cost of products sold at the time of their sale. Product development costs are expensed in selling, general and administrative expense when incurred. Inventory values are reduced to net realizable value when there are factors indicating that certain inventories will not be sold on terms sufficient to recover their cost.

Inventories of continuing operations consist of the following:

 

(in thousands)

 

January 30,

2016

 

 

January 31,

2015

 

Finished goods

 

$

36,576

 

 

$

37,395

 

Raw materials

 

 

 

 

 

24

 

Total inventories, net

 

$

36,576

 

 

$

37,419

 

Net of reserves of:

 

$

13,261

 

 

$

6,471

 

 

As of January 30, 2016, the lower of cost or market reserve included a write-down of the carrying value for certain excess inventory and aged product to its estimated net realizable value, as during the three months ended August 1, 2015 the Company recorded a charge of $14,447 associated with inventory that no longer supports the Company's prospective brand positioning strategy. As a result of changes in our estimates, during the three months ended October 31, 2015 and January 30, 2016, the Company recorded pre-tax income of $1,986 and $2,161, respectively, associated with the recovery of the inventory write-down taken in the three months ended August 1, 2015.

 

(I) Property, Plant and Equipment: Property, plant and equipment are stated at cost. Depreciation is computed on the straight-line method over estimated useful lives of 3 to 10 years for furniture, fixtures, and computer equipment. Leasehold improvements are amortized on the straight-line basis over the shorter of their estimated useful lives or the remaining lease term, excluding renewal terms. Capitalized software is amortized on the straight-line basis over the estimated economic useful life of the software, generally three to five years. Maintenance and repair costs are charged to earnings while expenditures for major renewals and improvements are capitalized. Upon the disposition of property, plant and equipment, the accumulated depreciation is deducted from the original cost and any gain or loss is reflected in current earnings. Property, plant and equipment consist of the following:

 

 

 

January 30,

 

 

January 31,

 

(in thousands)

 

2016

 

 

2015

 

Building and improvements

 

$

38,452

 

 

$

27,645

 

Machinery and equipment

 

 

8,236

 

 

 

5,384

 

Capitalized software

 

 

1,764

 

 

 

1,341

 

Construction in process

 

 

4,716

 

 

 

3,369

 

Total property, plant and equipment

 

 

53,168

 

 

 

37,739

 

Less: accumulated depreciation and amortization

 

 

(15,399

)

 

 

(9,390

)

Property, plant and equipment, net

 

$

37,769

 

 

$

28,349

 

 

Depreciation expense related to continuing operations was $6,426, $3,381 and $1,562 for fiscal 2015, fiscal 2014 and fiscal 2013, respectively.

(J) Impairment of Long-lived Assets: We review long-lived assets with a finite life for existence of facts and circumstances which indicate that the useful life is shorter than previously estimated or the carrying amount may not be recoverable from future operations based on undiscounted expected future cash flows. Impairment losses are then recognized in operating results to the extent discounted expected future cash flows are less than the carrying value of the asset. There were no material impairment charges for continuing operations related to long-lived assets recorded in fiscal 2015, fiscal 2014 or fiscal 2013.

(K) Goodwill and Other Intangible Assets: Goodwill and other indefinite-lived intangible assets are tested for impairment at least annually and in an interim period if a triggering event occurs. We completed our annual impairment testing on our goodwill and indefinite-lived intangible assets during the fourth quarters of fiscal 2015, fiscal 2014 and fiscal 2013. Goodwill is not allocated to our operating segments in the measure of segment assets regularly reported to and used by management, however goodwill is allocated to operating segments (goodwill reporting units) for the sole purpose of the annual impairment test for goodwill.

Goodwill represents the excess of the cost of acquired businesses over the fair market value of the identifiable net assets. Indefinite-lived intangible assets are primarily company-owned trademarks. As the acquisition by Kellwood Company of the net assets of Vince occurred prior to the current requirements of ASC Topic 805 Business Combinations, the additional purchase consideration paid to the former owners of Vince subsequent to the acquisition date was recorded as an addition to the purchase price, and therefore goodwill, once determined.

In September 2011, the Financial Accounting Standards Board (“FASB”) issued an amendment to the Intangibles-Goodwill and Other topic of Accounting Standards Codification (“ASC”). Under this amendment, an entity may elect to perform a qualitative impairment assessment for goodwill. If adverse qualitative trends are identified during the qualitative assessment that indicate that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, a quantitative impairment test is required. “Step one” of this quantitative impairment test requires that the fair value of the reporting unit be estimated and compared to its carrying amount. If the carrying amount exceeds the estimated fair value of the asset, “step two” of the impairment test is performed to calculate the impairment loss. An impairment loss is recognized to the extent the carrying amount of the reporting unit exceeds the implied fair value.

An entity may pass on performing the qualitative assessment for a reporting unit and directly perform “step one” of the assessment. This determination can be made on a reporting unit by reporting unit basis, and an entity may resume performing a qualitative assessment in subsequent periods. This amendment is effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. We adopted this amendment during fiscal year 2012.

In light of the decline in our sales over recent periods, in fiscal 2015 we elected to perform a quantitative impairment test on the goodwill. The results of the quantitative test did not result in any impairment of goodwill because the fair values of each of the Company’s reporting units exceeded their respective carrying values. As such, we were not required to perform “step two” of the impairment test. In fiscal 2014 and fiscal 2013, we elected to perform a qualitative assessment on the goodwill and determined that it was not more likely than not that the carrying value of the reporting unit was greater than the fair value. As such, we were not required to perform “step two” of the impairment test.

In July 2012, the FASB issued Accounting Standards Update No. 2012-02, Intangibles—Goodwill and Other (Topic 350): Testing Indefinite Lived Assets for Impairment (“ASU 2012-02”). Under this amendment, an entity may elect to perform a qualitative impairment assessment for indefinite-lived intangible assets similar to the goodwill impairment testing guidance discussed above.

An entity may pass on performing the qualitative assessment for an indefinite-lived intangible asset and directly perform “step one” of the assessment. This determination can be made on an asset by asset basis, and an entity may resume performing a qualitative assessment in subsequent periods. The amendment is effective for annual and interim impairment tests for indefinite-lived intangible assets performed for fiscal years beginning after September 15, 2012. We early adopted this amendment during fiscal 2012.

In light of the decline in our sales over recent periods, in fiscal 2015 we elected to perform a quantitative assessment on indefinite-lived intangible assets. The results of the quantitative test did not result in any impairment because the fair value of the Company’s indefinite-lived intangible asset exceeded its carrying value. As such we were not required to perform “step two” of the impairment test. In fiscal 2014 and fiscal 2013, we elected to perform a qualitative assessment on indefinite-lived intangible assets and determined that it was not more likely than not that the carrying value of the assets exceeded the fair value. As such we were not required to perform “step two” of the impairment test.

Determining the fair value of goodwill and other intangible assets is judgmental in nature and requires the use of significant estimates and assumptions, including revenue growth rates and operating margins, discount rates and future market conditions, among others. It is possible that estimates of future operating results could change adversely and impact the evaluation of the recoverability of the carrying value of goodwill and intangible assets and that the effect of such changes could be material.

Definite-lived intangible assets are comprised of customer relationships and are being amortized on a straight-line basis over their useful lives of 20 years.

See Note 4 “Goodwill and Intangible Assets” for more information on the details surrounding goodwill and intangible assets.

(L) Deferred Financing Costs: Deferred financing costs, such as underwriting, financial advisory, professional fees, and other similar fees are capitalized and recognized in interest expense over the contractual life of the related debt instrument using the straight-line method, as this method results in recognition of interest expense that is materially consistent with that of the effective interest method.

(M) Deferred Rent and Deferred Lease Incentives: We lease various office spaces, showrooms and retail stores. Many of these operating leases contain predetermined fixed escalations of the minimum rentals during the original term of the lease. For these leases, we recognize the related rental expense on a straight-line basis over the life of the lease and record the difference between the amount charged to operations and amounts paid as deferred rent. Certain of our retail store leases contain provisions for contingent rent, typically a percentage of retail sales once a predetermined threshold has been met. These amounts are expensed as incurred. Additionally, we received lease incentives in certain leases. These allowances have been deferred and are amortized on a straight-line basis over the life of the lease as a reduction of rent expense.

(N) Revenue Recognition: Sales are recognized when goods are shipped in accordance with customer orders for our wholesale business, upon receipt by the customer for our e-commerce business, and at the time of sale to the consumer for our retail business. Revenue associated with gift cards is recognized upon redemption. The estimated amounts of sales discounts, returns and allowances are accounted for as reductions of sales when the associated sale occurs. These estimated amounts are adjusted periodically based on changes in facts and circumstances when the changes become known to us. Accrued discounts, returns and allowances are included as an offset to accounts receivable in the Consolidated Balance Sheets for our wholesale business. The activity in the accrued discounts, returns and allowances account for continuing operations is summarized as follows:

 

(in thousands)

 

2015

 

 

2014

 

 

2013

 

Balance, beginning of year

 

$

16,098

 

 

$

9,265

 

 

$

7,179

 

Provision

 

 

55,656

 

 

 

54,467

 

 

 

39,171

 

Utilization

 

 

(58,908

)

 

 

(47,634

)

 

 

(37,085

)

Balance, end of year

 

$

12,846

 

 

$

16,098

 

 

$

9,265

 

 

For our wholesale business, amounts billed to customers for shipping and handling costs are not significant. Our stated terms are FOB shipping point. There is no stated obligation to customers after shipment, other than specifically set forth allowances or discounts that are accrued at the time of sale. The rights of inspection or acceptance contained in certain sales agreements are limited to whether the goods received by our wholesale partners are in conformance with the order specifications.

(O) Cost of Products Sold: Our cost of products sold and gross margins may not necessarily be comparable to that of other entities as a result of different practices in categorizing costs. The primary components of our cost of products sold are as follows:

 

·

the cost of purchased merchandise, including raw materials;

 

·

the cost of inbound transportation, including freight;

 

·

the cost of our production and sourcing departments;

 

·

other processing costs associated with acquiring and preparing the inventory for sale; and

 

·

shrink and valuation reserves.

(P) Marketing and Advertising: We provide cooperative advertising allowances to certain of our customers. These allowances are accounted for as reductions in sales as discussed in “Revenue Recognition” above. Production expense related to company-directed advertising is deferred until the first time at which the advertisement runs. Communication expense related to company-directed advertising is expensed as incurred. Marketing and advertising expense recorded in selling, general and administrative expenses for continuing operations was $9,177, $7,427 and $4,858 in fiscal 2015, fiscal 2014 and fiscal 2013, respectively. At January 30, 2016 and January 31, 2015, deferred production expenses associated with company-directed advertising were $416 and $643, respectively.

(Q) Share-Based Compensation: New, modified and unvested share-based payment transactions with employees, such as stock options, are measured at fair value and recognized as compensation expense over the requisite service period and is included as a component of selling, general and administrative expenses in the Consolidated Statements of Operations. Additionally, share-based awards granted to non-employees are expensed over the period in which the related services are rendered at their fair value, using the Black Scholes Pricing Model to determine the fair value.

(R) Income Taxes: We account for income taxes using the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences of temporary differences between the carrying amounts and tax bases of assets and liabilities at enacted rates. We determine the appropriateness of valuation allowances in accordance with the “more likely than not” recognition criteria. We recognize tax positions in the Consolidated Balance Sheets as the largest amount of tax benefit that is greater than 50% likely of being realized upon ultimate settlement with tax authorities assuming full knowledge of the position and all relevant facts. Accrued interest and penalties related to unrecognized tax benefits are included in income taxes in the Consolidated Statements of Operations.

(S) Earnings Per Share: Basic net income (loss) per share is calculated by dividing net income (loss) by the weighted average number of shares outstanding during the period. Diluted net income (loss) per share is calculated similarly, but includes potential dilution from the exercise of stock options for which future service is required as a condition to deliver the underlying stock.

(T) Recent Accounting Pronouncements: In November 2015, new accounting guidance on the balance sheet classification of deferred taxes was issued, which requires entities to classify deferred tax assets and liabilities as noncurrent in the consolidated balance sheet. Currently deferred tax assets and liabilities must be classified as current and noncurrent amounts in the consolidated balance sheet. This guidance is effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. The guidance may be applied either prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. The Company is currently evaluating the impact of adopting this guidance on the consolidated financial statements.

In July 2015, new accounting guidance on accounting for inventory was issued, which requires entities to measure inventory at the lower of cost and net realizable value. This guidance is effective for interim and annual periods beginning on or after December 15, 2016. The Company is currently evaluating the impact of the adoption of the new accounting guidance on its consolidated financial statements.

In April 2015, the FASB issued ASU 2015-03, “Interest-Imputation of Interest.” The standard requires deferred financing costs to be presented on the balance sheet as a direct deduction from the carrying amount of the related debt liability, consistent with debt discounts, instead of being presented as a deferred asset in the balance sheet. ASU 2015-03 does not change the recognition and measurement guidance for deferred financing costs. Once adopted, entities are required to apply the new guidance retrospectively to all prior periods presented. ASU 2015-03 is effective for annual periods beginning after December 15, 2015, and interim periods within those fiscal years and early application is permitted. The Company has elected to early adopt the standard, effective February 1, 2015 and accordingly, the consolidated balance sheets as of January 30, 2016 and January 31, 2015 reflect the deferred financing costs as a direct deduction from the carrying amount of our long-term debt. Refer to Note 7 “Long-Term Debt”, for further information.

In April 2015, the FASB issued ASU No. 2015-05, “Customer's Accounting for Fees Paid in a Cloud Computing Arrangement,” which provides guidance on accounting for cloud computing fees. If a cloud computing arrangement includes a software license, then the customer should account for the license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the arrangement should be accounted for as a service contract. This guidance is effective for arrangements entered into, or materially modified, in interim and annual periods beginning after December 15, 2015. Retrospective application is permitted but not required. The adoption of this guidance is not expected to have a material effect on the Company's consolidated financial statements.

In May 2014, FASB issued revenue recognition guidance (ASU No. 2014-09). The new accounting guidance requires entities to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.  In August 2015, FASB elected to defer the effective dates (ASU No. 2015-14). The updated guidance is now effective for interim and annual periods beginning on or after December 15, 2017.  Early adoption is permitted for annual periods beginning after December 15, 2016, including interim reporting periods within that reporting period.  The Company is currently evaluating the impact of the adoption of the new guidance on its financial statements.

The IPO and Restructuring Transactions
The IPO and Restructuring Transactions

Note 2. The IPO and Restructuring Transactions

Initial Public Offering

On November 27, 2013, VHC completed an initial public offering (“IPO”) of 10,000,000 shares of VHC common stock at a public offering price of $20.00 per share. The selling stockholders in the offering sold an additional 1,500,000 shares of VHC common stock to the underwriters in the IPO. Shares of the Company’s common stock are listed on the New York Stock Exchange under the ticker symbol “VNCE”. VHC received net proceeds of $177,000, after deducting underwriting discounts, commissions and offering expenses from its sale of shares in the IPO. The Company retained approximately $5,000 of such proceeds for general corporate purposes and used the remaining net proceeds, together with net borrowings under the Term Loan Facility (described under Note 7 “Long-Term Debt”) to repay a promissory note (“the Kellwood Note Receivable”) issued to Kellwood Company, LLC in connection with the Restructuring Transactions (described below) which occurred immediately prior to the consummation of the IPO. Proceeds from the repayment of the Kellwood Note Receivable were used to repay or discharge certain existing debt of Kellwood Company.

In connection with the IPO and the Restructuring Transactions described below, we separated the Vince and non-Vince businesses on November 27, 2013. Any and all debt obligations outstanding at the time of the transactions either remained with Kellwood Intermediate Holding, LLC and its subsidiaries (i.e. the non-Vince businesses) and/or were discharged, repurchased or refinanced. See information below for a summary of the Company’s Revolving Credit Facility and Term Loan Facility.

Stock split

In connection with the IPO, VHC’s board of directors approved the conversion of all non-voting common stock into voting common stock on a one for one basis, and a 28.5177 for one split of its common stock. Accordingly, all references to share and per share information in all periods presented have been adjusted to reflect the stock split. The par value per share of common stock was changed to $0.01 per share.

Restructuring Transactions

The following transactions were consummated as part of the Restructuring Transactions:

 

·

Affiliates of Sun Capital contributed certain indebtedness under the Sun Term Loan Agreements as a capital contribution to Vince Holding Corp. (the “Additional Sun Capital Contribution”);

 

·

Vince Holding Corp. contributed such indebtedness to Kellwood Company as a capital contribution, at which time such indebtedness was cancelled;

 

·

Vince Intermediate Holding, LLC was formed and became a direct subsidiary of Vince Holding Corp.;

 

·

Kellwood Company, LLC (which was converted from Kellwood Company in connection with the Restructuring Transactions) was contributed to Vince Intermediate Holding, LLC;

 

·

Vince Holding Corp. and Vince Intermediate Holding, LLC entered into the Transfer Agreement with Kellwood Company, LLC;

 

·

Kellwood Company, LLC distributed 100% of Vince, LLC’s membership interests to Vince Intermediate Holding, LLC, who issued the Kellwood Note Receivable to Kellwood Company, LLC. Proceeds from the repayment of the Kellwood Note Receivable were used to, among other things, repay, discharge or repurchase indebtedness of Kellwood Company, LLC;

 

·

Kellwood Holding, LLC was formed by Vince Intermediate Holding, LLC and Vince Intermediate Holding, LLC, through a series of steps, contributed 100% of the membership interests of Kellwood Company, LLC to Kellwood Intermediate Holding, LLC (which was formed as a wholly-owned subsidiary of Kellwood Holding, LLC);

 

·

100% of the membership interests of Kellwood Holding, LLC were distributed to the Pre-IPO Stockholders;

 

·

Revolving Credit Facility—Vince, LLC entered into a new senior secured revolving credit facility. Bank of America, N.A. (“BofA”) serves as administrative agent under this new facility. This revolving credit facility provided for a revolving line of credit of up to $50,000 (see Note 6 “Financing Arrangements” for additional details);

 

·

Term Loan Facility—Vince, LLC and Vince Intermediate Holding, LLC entered into a new $175,000 senior secured term loan credit facility with the lenders party thereto, BofA, as administrative agent, J.P. Morgan Chase Bank and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as joint lead arrangers (see Note 7 “Long-Term Debt” for additional details);

 

·

Shared Services Agreement—Vince, LLC entered into the Shared Services Agreement with Kellwood Company, LLC pursuant to which Kellwood Company, LLC would provide support services to Vince, LLC in various operational areas including, among other things, distribution, logistics, information technology, accounts payable, credit and collections, and payroll and benefits;

 

·

Tax Receivable Agreement—The Company entered into the Tax Receivable Agreement with its stockholders immediately prior to the consummation of the Restructuring Transactions (the “Pre-IPO Stockholders”). The Tax Receivable Agreement provides for payments to the Pre-IPO Stockholders in an amount equal to 85% of the aggregate reduction in taxes payable realized by the Company and its subsidiaries from the utilization of certain tax benefits (including net operating losses and tax credits generated prior to the IPO and certain section 197 intangible deductions); and

 

·

The conversion of all of our issued and outstanding non-voting common stock into common stock on a one-for-one basis and the subsequent stock split of our common stock on a 28.5177 for one basis, at which time Apparel Holding Corp. became Vince Holding Corp.

As a result of the IPO and Restructuring Transactions, the non-Vince businesses were separated from the Vince business, and the Pre-IPO Stockholders (through their ownership of Kellwood Holding, LLC) retained the full ownership and control of the non-Vince businesses. The Vince business is now the sole operating business of Vince Holding Corp., with the Pre-IPO stockholders retaining approximately a 68% ownership (calculated immediately after consummation of the IPO).

Immediately after the consummation of the IPO and as described below, Vince Holding Corp. contributed the net proceeds from the IPO to Vince Intermediate Holding, LLC. Vince Intermediate Holding, LLC used such proceeds, less approximately $5,000 retained for general corporate purposes, and approximately $169,500 of net borrowings under its Term Loan Facility to immediately repay the Kellwood Note Receivable. There was no outstanding balance on the Kellwood Note Receivable after giving effect to such repayment. Proceeds from the repayment of the Kellwood Note Receivable were used to (i) repay, discharge or repurchase indebtedness of Kellwood Company, LLC in connection with the closing of the IPO (including approximately $9,100 of accrued and unpaid interest on such indebtedness), and (ii) pay (A) the restructuring fee payable to Sun Capital Management and (B) the debt recovery bonus payable to our Chief Executive Officer, all after giving effect to the Additional Sun Capital Contribution. The Kellwood Note Receivable did not include amounts outstanding under the Wells Fargo Facility. Kellwood Company, LLC refinanced the Wells Fargo Facility in connection with the consummation of the IPO. Neither Vince Holding Corp. nor Vince, LLC guarantee or are a borrower party to the refinanced credit facility.

Kellwood Company, LLC used the proceeds from the repayment of the Kellwood Note Receivable to, after giving effect to the Additional Sun Capital Contribution, (i) repay, at closing, all indebtedness outstanding under (A) the Cerberus Term Loan and (B) the Sun Term Loan Agreements, (ii) redeem at par all of the 12.875% Notes, pursuant to an unconditional redemption notice issued at the closing of the IPO, plus, with respect to clauses (i) and (ii), fees, expenses and accrued and unpaid interest thereon, (iii) pay a restructuring fee equal to $3,300 to Sun Capital Management pursuant to the Management Services Agreement, and (iv) pay a debt recovery bonus to our Chief Executive Officer.

In addition, Kellwood Company conducted a tender offer for all of its outstanding 7.625% Notes, at par plus accrued and unpaid interest thereon, using proceeds from the repayment of the Kellwood Note Receivable. On November 27, 2013, in connection with the closing of the IPO and as an early settlement of the tender offer, Kellwood Company, LLC accepted for purchase (and cancelled) approximately $33,474 in aggregate principal amount of the 7.625% Notes. On December 12, 2013, as part of the final settlement of the tender offer, Kellwood Company, LLC accepted for purchase (and cancelled) an additional $4,670 in aggregate principal amount of the 7.625% Notes. After giving effect to these settlements, approximately $48,808 of the 7.625% Notes remain issued and outstanding; provided, that neither VHC, nor Vince Intermediate nor Vince, LLC are a guarantor or obligor of such notes.

In addition, Kellwood Company, LLC refinanced the Wells Fargo Facility (as defined below), to among other things, remove Vince, LLC as an obligor thereunder.

After completion of these various transactions (including the Additional Sun Capital Contribution) and payments and application of the net proceeds from the repayment of the Kellwood Note Receivable, Vince, LLC’s obligations under the Wells Fargo Facility, the Cerberus Term Loan, the Sun Term Loan Agreements and the 12.875% Notes were terminated or discharged. Neither VHC, nor Vince Intermediate Holding, LLC nor Vince, LLC is a guarantor or obligor of the 7.625% Notes or the refinanced Wells Fargo Facility. Thereafter, VHC is not responsible for the obligations described above and the only outstanding obligations of Vince Holding Corp. and its subsidiaries immediately after the consummation of the IPO was $175,000 outstanding under the Term Loan Facility.

Discontinued Operations
Discontinued Operations

Note 3. Discontinued Operations

On November 27, 2013, in connection with the IPO and Restructuring Transactions, we separated the Vince and non-Vince businesses whereby the non-Vince business is now owned by Kellwood Holding, LLC, of which 100% of the membership interests are owned by the Pre-IPO Stockholders. In connection with the Restructuring Transactions, the Company issued the Kellwood Note Receivable to Kellwood Company, LLC, in the amount of $341,500, which was immediately repaid with proceeds from the IPO and borrowings under the new term loan facility. There was no remaining balance on the Kellwood Note Receivable after such repayment. Proceeds from the repayment of the Kellwood Note Receivable were used by Kellwood to (i) repay, discharge or repurchase indebtedness of Kellwood Company, LLC (including approximately $9,100 of accrued and unpaid interest on such indebtedness), and (ii) pay (A) the restructuring fee payable to Sun Capital Management and (B) the debt recovery bonus payable to our Chief Executive Officer.

As the Company and Kellwood Holding, LLC are under the common control of affiliates of Sun Capital, this separation transaction resulted in a $73,081 adjustment to additional paid in capital on our Consolidated Balance Sheet at February 1, 2014.

As a result of the separation with the non-Vince businesses, the financial results of the non-Vince businesses, through the separation date of November 27, 2013, are now included in results from discontinued operations. The non-Vince businesses continue to operate as a stand-alone company. Due to differences in the basis of presentation for discontinued operations and the basis of presentation as a stand-alone company, the financial results of the non-Vince businesses included within discontinued operations of the Company may not be indicative of actual financial results of the non-Vince businesses as a stand-alone company.

On November 27, 2013, we entered into a Shared Services agreement with Kellwood pursuant to which Kellwood provides support services in various operational areas as further discussed in Note 15 “Related Party Transactions”. Other than the payments for services provided under this agreement, we do not expect any future cash flows related to the non-Vince business.

The results of the non-Vince businesses included in discontinued operations (through the separation of the non-Vince businesses on November 27, 2013) for the fiscal year ended February 1, 2014 is summarized in the following table:

 

 

 

Fiscal Year

 

(in thousands, except effective tax rate)

 

2013

 

Net sales

 

$

400,848

 

Cost of products sold

 

 

313,620

 

Gross profit

 

 

87,228

 

Selling, general and administrative expenses

 

 

98,016

 

Restructuring, environmental and other charges

 

 

1,628

 

Impairment of long-lived assets

 

 

1,399

 

Change in fair value of contingent consideration

 

 

1,473

 

Interest expense, net

 

 

46,677

 

Other expense, net

 

 

498

 

Loss before income taxes

 

 

(62,463

)

Income taxes

 

 

(11,648

)

Net loss from discontinued operations, net of taxes

 

$

(50,815

)

Effective tax rate

 

 

18.6

%

 

The fiscal 2013 effective tax rate for discontinued operations differs from the U.S. statutory rate of 35% primarily due to the release of valuation allowance. The release in valuation allowance is primarily due to the allocation of the disallowed tax loss on the sale of a trademark to intangible assets with indefinite lives resulting in fewer deferred tax liabilities that cannot be offset against deferred tax assets for valuation allowance purposes.

Financing arrangements of the non-Vince business

Wells Fargo Facility

On October 19, 2011 Kellwood Company and certain of its domestic subsidiaries, as borrowers, entered into a credit agreement with Wells Fargo Bank, National Association, as agent, and lenders from time to time (the “Wells Fargo Facility”). The Wells Fargo Facility provided a non-amortizing senior revolving credit facility with aggregate lending commitments of $160,000, of which $5,000 was permanently extinguished during fiscal 2012. The amount which the borrowers could borrow was determined on the basis of a borrowing base formula, and borrowings were secured by a first-priority security interest in substantially all of the assets of the borrowers, including the assets of Vince, LLC. Borrowings bore interest at a rate per annum equal to an applicable margin (generally 1.25%-1.75% per annum at the borrowers’ election, LIBOR or a Base Rate (as defined in the Wells Fargo Facility)). On November 27, 2013, in connection with the consummation of the IPO and Restructuring Transactions, the Wells Fargo Facility was amended and restated in accordance with its terms. After such amendment and restatement, neither VHC nor any of its subsidiaries have any obligations thereunder.

Cerberus Term Loan

On October 19, 2011, Kellwood Company and certain of its domestic subsidiaries, as borrowers (the “Cerberus Borrowers”), entered into a term loan agreement (the “Term Loan Agreement”), as amended, with Cerberus Business Finance, LLC (the “Agent”), as agent and the lenders from time to time party thereto. The Term Loan Agreement provided the Cerberus Borrowers with a non-amortizing secured Cerberus Term Loan in an aggregate amount of $55,000 (the “Cerberus Term Loan”), of which $10,000 was repaid during fiscal 2012. All borrowings under the Cerberus Term Loan bore interest at a rate per annum equal to an applicable margin (10.25%-11.25% per annum for LIBOR Rate Loans (as defined in the Term Loan Agreement) and 7.75%-8.75% for Reference Rate Loans (as defined in the Term Loan Agreement)) plus, at the Cerberus Borrowers’ election, LIBOR or a Reference Rate as defined in the Term Loan Agreement. The agreement also provided for a portion of such interest equal to 1% per annum to be paid-in-kind and added to the principal amount of such term loans. The Cerberus Term Loan was secured by a security interest in substantially all of the assets of the Cerberus Borrowers, including Vince, LLC. On November 27, 2013, in connection with the closing of the IPO and Restructuring Transactions, the Cerberus Term Loan was repaid with the proceeds from the repayment of the Kellwood Note Receivable, as such neither VHC nor any of its subsidiaries have any obligations thereunder.

Sun Term Loan Agreements

Since fiscal year 2009, Kellwood Company and certain of its domestic subsidiaries, as borrowers (the “Sun Term Loan Borrowers”), entered into various term loan agreements (“Sun Term Loan Agreements”) with affiliates of Sun Capital, as lenders, and Sun Kellwood Finance, as collateral agent. The Sun Term Loan Agreements were secured by a security interest in substantially all of the assets of the Sun Term Loan Borrowers, which included the assets of Vince, LLC, which security interest was contractually subordinated to the security interests of the lenders under the Wells Fargo Facility and the Cerberus Term Loan. These term loans bore interest at a rate per annum of 5.0%-6.0% paid-in-kind and added to the principal amounts of such term loans. On November 27, 2013, in connection with the closing of the IPO and Restructuring Transactions, the Sun Term Loan Agreements were discharged through (i) the application of the Kellwood Note Receivable proceeds and (ii) capital contributions by Sun Capital affiliates, as such neither VHC nor any of its subsidiaries have any obligations thereunder.

12.875% Notes

Interest on the 12.875% 2009 Debentures due December 31, 2014 of Kellwood Company (the “12.875% Notes”) was paid (a) in cash at a rate of 7.875% per annum payable in January and July; and (b) in the form of PIK interest at a rate of 5.0% per annum (“PIK Interest”) payable either by increasing the principal amount of the outstanding 12.875% Notes, or by issuing additional 12.875% Notes with a principal amount equal to the PIK Interest accrued for the interest period. The 12.875% Notes were guaranteed by various of Kellwood Company’s subsidiaries on a secured basis (including the assets of Vince, LLC), which security interest was contractually subordinated to security interests of lenders under the Wells Fargo Facility, the Cerberus Term Loan and the Sun Term Loan Agreements. On November 27, 2013, in connection with the closing of the IPO and Restructuring Transactions, the 12.875% Notes were redeemed with proceeds from the repayment of the Kellwood Note Receivable, at which time VHC and all subsidiaries were released as a guarantor and the obligations under the indenture were satisfied and discharged.

7.625% Notes

Interest on the 7.625% 1997 Debentures due October 15, 2017 of Kellwood Company (the “7.625% Notes”) was payable in cash at a rate of 7.625% per annum in April and October. On November 27, 2013, in connection with the closing of the IPO and as an early settlement of the tender offer, Kellwood Company, LLC accepted for purchase (and cancelled) approximately $33,474 in aggregate principal amount of the 7.625% Notes. On December 12, 2013, as part of the final settlement of the tender offer, Kellwood Company, LLC accepted for purchase (and cancelled) an additional $4,670 in aggregate principal amount of the 7.625% Notes. After giving effect to these settlements, approximately $48,809 of the 7.625% Notes remain issued and outstanding; provided, that neither VHC nor its subsidiaries are a guarantor or obligor of such notes.

Goodwill and Intangible Assets
Goodwill and Intangible Assets

Note 4. Goodwill and Intangible Assets

Net goodwill balances and changes therein subsequent to the February 1, 2014 Consolidated Balance Sheet by segment are as follows:

 

(in thousands)

 

Wholesale

 

 

Direct-to-consumer

 

 

Total Net Goodwill

 

Balance as of February 1, 2014

 

$

41,435

 

 

$

22,311

 

 

$

63,746

 

Balance as of January 31, 2015

 

$

41,435

 

 

$

22,311

 

 

$

63,746

 

Balance as of January 30, 2016

 

$

41,435

 

 

$

22,311

 

 

$

63,746

 

 

The total carrying amount of goodwill for all periods presented was net of accumulated impairments of $46,942. There were no impairments recorded as a result of our annual goodwill impairment test during fiscal 2015, 2014 or 2013.

Identifiable intangible assets summary:

 

(in thousands)

 

Gross Amount

 

 

Accumulated

Amortization

 

 

Net Book

Value

 

Balance as of January 31, 2015:

 

 

 

 

 

 

 

 

 

 

 

 

Amortizable intangible assets:

 

 

 

 

 

 

 

 

 

 

 

 

Customer relationships

 

$

11,970

 

 

$

(4,176

)

 

$

7,794

 

Indefinite-lived intangible assets:

 

 

 

 

 

 

 

 

 

 

 

 

Trademarks

 

 

101,850

 

 

 

 

 

 

101,850

 

Total intangible assets

 

$

113,820

 

 

$

(4,176

)

 

$

109,644

 

 

(in thousands)

 

Gross Amount

 

 

Accumulated

Amortization

 

 

Net Book

Value

 

Balance as of January 30, 2016

 

 

 

 

 

 

 

 

 

 

 

 

Amortizable intangible assets:

 

 

 

 

 

 

 

 

 

 

 

 

Customer relationships

 

$

11,970

 

 

 

(4,774

)

 

$

7,196

 

Indefinite-lived intangible assets:

 

 

 

 

 

 

 

 

 

 

 

 

Trademarks

 

 

101,850

 

 

 

 

 

 

101,850

 

Total intangible assets

 

$

113,820

 

 

$

(4,774

)

 

$

109,046

 

 

Amortization of identifiable intangible assets was $598, $599 and $599 for fiscal 2015, 2014 and 2013, respectively, which is included in selling, general and administrative expenses on the Consolidated Statements of Operations. Amortization expense for each of the fiscal years 2016 to 2020 is expected to be as follows:

 

 

 

Future

 

(in thousands)

 

Amortization

 

2016

 

$

598

 

2017

 

 

598

 

2018

 

 

598

 

2019

 

 

598

 

2020

 

 

598

 

Total next 5 fiscal years

 

$

2,990

 

 

Identifiable indefinite-lived intangible assets represent the Vince trademark. No impairments of the Vince trademark were recorded as a result of our annual asset impairment tests during fiscal years 2015, 2014 or 2013. In fiscal 2015, we elected to perform a quantitative assessment on indefinite-lived intangible assets. The results of the quantitative test did not result in any impairment because the fair value of the Company’s indefinite-lived intangible asset exceeded its carrying value. In fiscal 2014 and 2013, we elected to perform the qualitative assessment on the Vince Trademark as allowed by the Intangible—Goodwill and Other Topic of ASC and determined that it was not more likely than not that the carrying value exceeded the fair value of the asset.

Fair Value
Fair Value

Note 5. Fair Value

ASC Subtopic 820-10 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. This guidance outlines a valuation framework, creates a fair value hierarchy to increase the consistency and comparability of fair value measurements, and details the disclosures that are required for items measured at fair value. Financial assets and liabilities are to be measured using inputs from three levels of the fair value hierarchy as follows:

 

 

Level 1—

 

quoted market prices in active markets for identical assets or liabilities

 

 

 

 

Level 2—

 

observable market-based inputs (quoted prices for similar assets and liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active) or inputs that are corroborated by observable market data

 

 

 

 

Level 3—

 

significant unobservable inputs that reflect our assumptions and are not substantially supported by market data

 

The Company did not have any non-financial assets or non-financial liabilities recognized at fair value on a recurring basis at January 30, 2016 or January 31, 2015. At January 30, 2016 and January 31, 2015, the Company believes that the carrying value of cash and cash equivalents, receivables and accounts payable approximates fair value, due to the short maturity of these instruments and would be measured using Level 1 inputs. As the Company’s debt obligations as of January 30, 2016 are at variable rates, the fair value approximates the carrying value of the Company’s debt and would be measured using Level 2 inputs.

The Company’s non-financial assets, which primarily consist of goodwill, intangible assets, and property and equipment, are not required to be measured at fair value on a recurring basis and are reported at their carrying value. However, on a periodic basis whenever events or changes in circumstances indicate that their carrying value may not be fully recoverable (and at least annually for goodwill and intangible assets), non-financial assets are assessed for impairment, if applicable, written down to (and recorded at) fair value.

Financing Arrangements
Financing Arrangements

Note 6. Financing Arrangements

Revolving Credit Facility

On November 27, 2013, Vince, LLC entered into a $50,000 senior secured revolving credit facility (as amended from time to time, the “Revolving Credit Facility”) with Bank of America, N.A. (“BofA”) as administrative agent. Vince, LLC is the borrower and VHC and Vince Intermediate Holding, LLC, a direct subsidiary of VHC and the direct parent company of Vince, LLC (“Vince Intermediate”), are the guarantors under the Revolving Credit Facility. On June 3, 2015, Vince LLC entered into a first amendment to the Revolving Credit Facility, that among other things, increased the aggregate commitments under the facility from $50,000 to $80,000, subject to a loan cap which is the lesser of (i) the Borrowing Base, as defined in the loan agreement, (ii) the aggregate commitments or (iii) $70,000 until debt obligations under the Company’s term loan facility have been paid in full, and extended the maturity date from November 27, 2018 to June 3, 2020.  The Revolving Credit Facility also provides for a letter of credit sublimit of $25,000 (plus any increase in aggregate commitments) and an accordion option that allows for an increase in aggregate commitments up to $20,000. Interest is payable on the loans under the Revolving Credit Facility at either the LIBOR or the Base Rate, in each case, plus an applicable margin of 1.25% to 1.75% for LIBOR loans or 0.25% to 0.75% for Base Rate loans, and in each case subject to a pricing grid based on an average daily excess availability calculation. The “Base Rate” means, for any day, a fluctuating rate per annum equal to the highest of (i) the rate of interest in effect for such day as publicly announced from time to time by BofA as its prime rate; (ii) the Federal Funds Rate for such day, plus 0.50%; and (iii) the LIBOR Rate for a one month interest period as determined on such day, plus 1.0%. During the continuance of an event of default and at the election of the required lender, interest will accrue at a rate of 2% in excess of the applicable non-default rate.

The Revolving Credit Facility contains a maintenance requirement that, at any point when “Excess Availability” is less than the greater of (i) 15% percent of an adjusted loan cap (without giving effect to item (iii) of the loan cap described above) or (ii) $10,000, and continuing until Excess Availability exceeds the greater of such amounts for 30 consecutive days, during which time, we must maintain a consolidated EBITDA (as defined in the Revolving Credit Facility) equal to or greater than $20,000 measured at the end of each applicable fiscal month for the trailing twelve-month period. We have not been subject to this maintenance requirement as Excess Availability was greater than the required minimum.

The Revolving Credit Facility contains representations and warranties, other covenants and events of default that are customary for this type of financing, including limitations on the incurrence of additional indebtedness, liens, negative pledges, guarantees, investments, loans, asset sales, mergers, acquisitions, prepayment of other debt, the repurchase of capital stock, transactions with affiliates, and the ability to change the nature of its business or its fiscal year. The Revolving Credit Facility generally permits dividends in the absence of any event of default (including any event of default arising from the contemplated dividend), so long as (i) after giving pro forma effect to the contemplated dividend, for the following six months Excess Availability will be at least the greater of 20% of the adjusted loan cap and $10,000 and (ii) after giving pro forma effect to the contemplated dividend, the “Consolidated Fixed Charge Coverage Ratio” for the 12 months preceding such dividend shall be greater than or equal to 1.0 to 1.0 (provided that the Consolidated Fixed Charge Coverage Ratio may be less than 1.0 to 1.0 if, after giving pro forma effect to the contemplated dividend, Excess Availability for the six fiscal months following the dividend is at least the greater of 35% of the adjusted loan cap and $15,000).  We are in compliance with applicable financial covenants.

As of January 30, 2016, the availability under the $80,000 Revolving Credit Facility was $28,127. As of January 30, 2016 there was $15,000 of borrowings outstanding and $7,522 of letters of credit outstanding under the Revolving Credit Facility. The weighted average interest rate for borrowings outstanding under the Revolving Credit Facility as of January 30, 2016 was 2.1%.

As of January 31, 2015, the availability under the $50,000 Revolving Credit Facility was $19,353. As of January 31, 2015, there was $23,000 of borrowings outstanding and $7,647 of letters of credit outstanding under the Revolving Credit Facility. The weighted average interest rate for borrowings outstanding under the Revolving Credit Facility as of January 31, 2015 was 2.1%.

Long-Term Debt
Long-Term Debt

Note 7. Long-Term Debt

Long-term debt consisted of the following as of, January 30, 2016 and January 31, 2015:

 

(in thousands)

 

January 30,

2016

 

 

January 31,

2015

 

Term Loan Facility

 

$

45,000

 

 

$

65,000

 

Revolving Credit Facility

 

 

15,000

 

 

 

23,000

 

Total long-term debt principal

 

 

60,000

 

 

 

88,000

 

Less: Deferred financing costs (1)

 

 

2,385

 

 

 

3,550

 

Total long-term debt

 

$

57,615

 

 

$

84,450

 

 

(1)

Pursuant to new accounting guidance issued by the Financial Accounting Standards Board (“FASB”) in April 2015, entities are no longer required to present deferred financing costs as a deferred asset. The guidance is effective for our fiscal year beginning in 2016, however, the Company has early adopted this accounting standard update effective as of February 1, 2015 and accordingly, the January 31, 2015 comparative balance sheet was adjusted to conform to the new classification presentation. There was no other impact on the financial statements related to the adoption other than the reclassification change on the consolidated balance sheet. Refer to Note 1 “Description of Business and Summary of Significant Accounting Policies”, for further information regarding the accounting standard update.

Term Loan Facility

On November 27, 2013, in connection with the closing of the IPO and Restructuring Transactions, Vince, LLC and Vince Intermediate entered into the $175,000 Term Loan Facility with the lenders party thereto, BofA, as administrative agent, JPMorgan Chase Bank and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as joint lead arrangers, and Cantor Fitzgerald as documentation agent. The Term Loan Facility will mature on November 27, 2019. Vince, LLC and Vince Intermediate are borrowers and VHC is a guarantor under the Term Loan Facility. On November 27, 2013, net proceeds from the Term Loan Facility were used, at closing, to repay the Kellwood Note Receivable.

The Term Loan Facility also provides for an incremental facility of up to the greater of $50,000 and an amount that would result in the consolidated net total secured leverage ratio not exceeding 3.00 to 1.00, in addition to certain other rights to refinance or repurchase portions of the term loan. The Term Loan Facility is subject to quarterly amortization of principal equal to 0.25% of the original aggregate principal amount of the Term Loan Facility (adjusted to reflect any prepayments), with the balance payable at final maturity. Interest is payable on loans under the Term Loan Facility at a rate of either (i) the Eurodollar rate (subject to a 1.00% floor) plus an applicable margin of 4.75% to 5.00% based on a consolidated net total leverage ratio or (ii) the base rate applicable margin of 3.75% to 4.00% based on a consolidated net total leverage ratio. During the continuance of a payment or bankruptcy event of default, interest will accrue (i) on the overdue principal amount of any loan at a rate of 2% in excess of the rate otherwise applicable to such loan and (ii) on any overdue interest or any other outstanding overdue amount at a rate of 2% in excess of the nondefault interest rate then applicable to base rate loans. The Term Loan Facility requires Vince, LLC and Vince Intermediate to make mandatory prepayments upon the occurrence of certain events, including additional debt issuances, common and preferred stock issuances, certain asset sales, and annual payments of 50% of excess cash flow, subject to reductions to 25% and 0% if Vince, LLC and Vince Intermediate maintain a Consolidated Net Total Leverage Ratio of 2.50 to 1.00 and 2.00 to 1.00, respectively, and subject to reductions for voluntary prepayments made during such fiscal year.

The Term Loan Facility contains a requirement that Vince, LLC and Vince Intermediate maintain a “Consolidated Net Total Leverage Ratio” as of the last day of any period of four fiscal quarters not to exceed 3.75 to 1.00 for the fiscal quarters ending February 1, 2014 through November 1, 2014, 3.50 to 1.00 for the fiscal quarters ending January 31, 2015 through October 31, 2015, and 3.25 to 1.00 for the fiscal quarter ending January 30, 2016 and each fiscal quarter thereafter. In addition, the Term Loan Facility contains customary representations and warranties, other covenants, and events of default, including but not limited to, limitations on the incurrence of additional indebtedness, liens, negative pledges, guarantees, investments, loans, asset sales, mergers, acquisitions, prepayment of other debt, the repurchase of capital stock, transactions with affiliates, and the ability to change the nature of its business or its fiscal year, and distributions and dividends. The Term Loan Facility generally permits dividends to the extent that no default or event of default is continuing or would result from the contemplated dividend and the pro forma Consolidated Net Total Leverage Ratio after giving effect to such contemplated dividend is at least 0.25 lower than the maximum Consolidated Net Total Leverage Ratio for such quarter in an amount not to exceed the excess available amount, as defined in the loan agreement. All obligations under the Term Loan Facility are guaranteed by VHC and any future material domestic restricted subsidiaries of Vince, LLC and secured by a lien on substantially all of the assets of VHC, Vince, LLC and Vince Intermediate and any future material domestic restricted subsidiaries. We are in compliance with applicable financial covenants.

Through January 30, 2016, on an inception to date basis, the Company has made voluntary prepayments totaling $130,000 in the aggregate on the original $175,000 Term Loan Facility entered into on November 27, 2013. Of the $130,000 of aggregate voluntary prepayments made to date, $20,000 was paid during fiscal 2015. As of January 30, 2016 the Company had $45,000 of debt outstanding under the Term Loan Facility.

Sun Promissory Notes

On May 2, 2008, VHC entered into a $225,000 Senior Subordinated Promissory Note and a $75,000 Senior Subordinated Promissory Note with Sun Kellwood Finance, LLC (“Sun Kellwood Finance”), an affiliate of Sun Capital Partners, Inc. We collectively refer to these notes as our “Sun Promissory Notes”. The unpaid principal balance of the notes accrue interest at 15% per annum until the maturity date of October 15, 2011, at which point any unpaid principal balance of the notes shall accrue interest at a rate of 17% per annum until the notes are paid in full. All interest which is not paid in cash on or before the last day of each calendar month are deemed paid in kind and added to the principal balance of the notes unless an election is made otherwise.

On July 19, 2012, Vince Holding Corp. amended the Sun Promissory Notes to extend the maturity date to October 15, 2016 and reduce the interest rate to 12% per annum until maturity, at which point any unpaid principal balance of the notes shall accrue interest at a rate of 14% per annum until the notes are paid in full.

On December 28, 2012, Sun Kellwood Finance, LLC (“Sun Capital Finance”) waived all interest capitalized and accrued under the notes prior to July 19, 2012. As both parties were under the common control of affiliates of Sun Capital Partners, Inc. (“Sun Capital”), this transaction resulted in a capital contribution of $270,852 which was recorded as an adjustment to additional paid in capital on our Consolidated Balance Sheet as of February 2, 2013.

On June 18, 2013, Sun Kellwood Finance assigned all title and interest in the Sun Promissory Notes to Sun Cardinal, LLC (“Sun Cardinal”). Immediately following the assignment, Sun Cardinal contributed all outstanding principal and interest due under these notes as of June 18, 2013 to the capital of VHC. As both parties were under common control of affiliates of Sun Capital at such time, this transaction resulted in a capital contribution of $334,595, which was recorded as an adjustment to VHC’s additional paid in capital on the Consolidated Balance Sheet as of February 1, 2014.

Sun Capital Loan Agreement

VHC was party to a Loan Authorization Agreement, originally dated February 13, 2008, by and between VHC (as the successor entity to Cardinal Integrated, LLC), SCSF Kellwood Finance, LLC (“SCSF Finance”) and Sun Kellwood Finance (as successors to Bank of Montreal) for a $72,000 line of credit, and $69,485 principal balance, which we refer to as the “Sun Capital Loan Agreement”. Under the terms of this agreement, as amended from time to time, interest accrued at a rate equal to the rate per annum announced by the Bank of Montreal, Chicago, Illinois, from time to time as its prime commercial rate, or equivalent, for U.S. dollar loans to borrowers located in the U.S. plus 2%. Interest on the loan was due by the last day of each fiscal quarter and is payable either in immediately available funds on each interest payment date or by adding such interest to the unpaid principal balance of the loan on each interest payment date. The original maturity date of the loan was August 6, 2009. On July 19, 2012, the maturity date of the loan was extended to August 6, 2014.

On December 28, 2012, Sun Kellwood Finance and SCSF Finance waived all interest capitalized and accrued under the loan authorization agreement prior to July 19, 2012. As all parties were under the common control of affiliates of Sun Capital, this transaction resulted in a capital contribution of $18,249, which was recorded as an adjustment to additional paid in capital on our Consolidated Balance Sheet as of February 2, 2013.

On June 18, 2013, Sun Kellwood Finance and SCSF Finance assigned all title and interest in the note under the Sun Capital Loan Agreement to Sun Cardinal. Immediately following the assignment, Sun Cardinal contributed all outstanding principal and interest due under this note as of June 18, 2013 to the capital of VHC. As all parties were under common control of affiliates of Sun Capital at such time, this transaction resulted in a capital contribution of $72,932, which was recorded as an adjustment to VHC’s additional paid in capital on the Consolidated Balance Sheet as of February 1, 2014.

Commitments and Contingencies
Commitments and Contingencies

Note 8. Commitments and Contingencies

Leases

We lease substantially all of our office and showroom space, retail stores and certain machinery and equipment under operating leases having remaining terms up to eleven years, excluding renewal terms. Most of our real estate leases contain covenants that require us to pay real estate taxes, insurance, and other executory costs. Certain of these leases require contingent rent payments, kick-out clauses and/or opt-out clauses, based on the operating results of the retail operations utilizing the leased premises. Rent under leases with scheduled rent changes or lease concessions are recorded on a straight-line basis over the lease term. Rent expense under all operating leases was $20,015, $16,161 and $10,467 for fiscal 2015, fiscal 2014 and fiscal 2013, respectively, the majority of which is recorded within selling, general and administrative expenses.

The future minimum lease payments under operating leases at January 30, 2016 were as follows:

 

 

 

Minimum Lease

 

(in thousands)

 

Payments

 

Fiscal 2016

 

$

20,083

 

Fiscal 2017

 

 

20,891

 

Fiscal 2018

 

 

20,712

 

Fiscal 2019

 

 

20,653

 

Fiscal 2020

 

 

19,584

 

Thereafter

 

 

67,444

 

Total minimum lease payments

 

$

169,367

 

Other Contractual Cash Obligations

At January 30, 2016, our other contractual cash obligations of $25,981 consist primarily of inventory purchase obligations and service contracts.

Restructuring Charges

In the second quarter of fiscal 2015, a number of senior management departures and announced departures occurred. In connection with these departures and announced departures, the Company has certain obligations under existing employment arrangements with respect to severance and employee related benefits. As a result, the Company recognized a charge of $3,717 for these expected departures within selling, general, and administrative expenses on the condensed consolidated statement of operations for the three months ended August 1, 2015. In the fourth quarter of fiscal 2015, the Company recorded $323 of pre-tax income within selling, general and administrative expenses associated with the recovery of severance expense. This net charge is reflected within the “unallocated corporate expenses” for segment disclosures. These amounts will be paid over a period of six to eighteen months, which began in the third quarter of fiscal 2015.

The following is a reconciliation of the accrued severance and employee related benefits included within total current liabilities on the consolidated balance sheet:

 

(in thousands)

 

 

 

 

Balance at August 1, 2015

 

$

3,717

 

Cash payments

 

 

(1,557

)

Non-cash recovery

 

 

(323

)

Balance at January 30, 2016

 

$

1,837

 

Litigation

We are currently party to various legal proceedings. While management currently believes that the ultimate outcome of these proceedings, individually and in the aggregate, will not have a material adverse impact on our financial position or results of operations or cash flows, litigation is subject to inherent uncertainties.

Share-Based Compensation
Share-Based Compensation

 Note 9. Share-Based Compensation

Prior to November 27, 2013, Vince Holding Corp. did not have convertible equity or convertible debt securities, any of which could result in share-based compensation expense. In connection with the IPO, which closed on November 27, 2013, and the separation of the Vince and non-Vince businesses, VHC assumed Kellwood Company’s remaining obligations under the 2010 Stock Option Plan of Kellwood Company (the “2010 Option Plan”) and all Kellwood Company stock options previously issued to Vince employees under such plan became options to acquire shares of VHC common stock. Additionally, VHC assumed Kellwood Company’s obligations with respect to the vested Kellwood Company stock options previously issued to Kellwood Company employees, which options were cancelled in exchange for shares of VHC common stock. Accordingly, option information presented below for previously issued Kellwood Company stock options under the 2010 Option Plan has been adjusted to account for the split of the Company’s common stock and applicable conversion to options to acquire shares of Vince Holding Corp. common stock.

Employee Stock Plans

2010 Option Plan

Kellwood Company had convertible equity securities that result in recognition of share-based compensation expense. On June 30, 2010, the board of directors approved the 2010 Stock Option Plan. On November 21, 2013 and as discussed above, VHC assumed Kellwood Company’s remaining obligations under the 2010 Option Plan; provided, that none of the issued and outstanding options (after giving effect to such assumption and the stock split effected as part of the Restructuring Transactions) were exercisable until the consummation of the IPO. Additionally, prior to the consummation of the IPO and after giving effect to the assumption described in this paragraph, VHC and the Vince employees to whom options had been previously granted under the 2010 Option Plan, amended the related grant agreements to eliminate, effective as of the consummation of the IPO, restrictions on the exercisability of the subject employees vested options.

Prior to the IPO, the 2010 Option Plan, as amended, provided for the grant of options to acquire up to 2,752,155 shares of Kellwood Company common stock. The options granted pursuant to the 2010 Option Plan (i) vest in five equal installments on the first, second, third, fourth, and fifth anniversaries of the grant date, subject to the employee’s continued employment and, (ii) expire on the earlier of the tenth anniversary of the grant date or upon termination of employment. We will not grant any future awards under the 2010 Option Plan. Future awards will be granted under the Vince 2013 Incentive Plan described further below.

Vince 2013 Incentive Plan

In connection with the IPO, the Company adopted the Vince 2013 Incentive Plan, which provides for grants of stock options, stock appreciation rights, restricted stock and other stock-based awards. The aggregate number of shares of common stock which may be issued or used for reference purposes under the Vince 2013 Incentive Plan or with respect to which awards may be granted may not exceed 3,400,000 shares. The shares available for issuance under the Vince 2013 Incentive Plan may be, in whole or in part, either authorized and unissued shares of our common stock or shares of common stock held in or acquired for our treasury. In general, if awards under the Vince 2013 Incentive Plan are cancelled for any reason, or expire or terminate unexercised, the shares covered by such award may again be available for the grant of awards under the Vince 2013 Incentive Plan. As of January 30, 2016, there were 1,391,996 shares under the Vince 2013 Incentive Plan available for future grants. Options granted pursuant to the Vince 2013 Incentive Plan (i) vest in equal installments over two, three or four years or at 33 1/3% per year beginning in year two, over four years, subject to the employees’ continued employment and (ii) expire on the earlier of the tenth anniversary of the grant date or upon termination as outlined in the Vince 2013 Incentive Plan. Restricted stock units granted vest in equal installments over a three year period.

On October 2, 2015 the Company completed a tender offer to exchange certain options to purchase shares of its common stock, whether vested or unvested, from eligible employees. The exchange ratio for this offer was one-to-one (one stock option exchanged for every one new stock option granted). As a result of the tender offer, 346,004 stock options were cancelled and options to purchase the same amount of shares were granted with an exercise price of $3.60. The Company will recognize incremental expense of $456 over the requisite service period as a result of this exchange. The purpose of this exchange was to foster retention of our valuable employees and better align the interests of our employees and shareholders to maximize shareholder value.

On November 23, 2015, the Company granted a total of 400,000 options to certain non-employee consultants with an exercise price of $3.63. The options granted to the non-employee consultants vest 50% after one year, 25% after 18 months and 25% after two years and expire on the earlier of the tenth anniversary of the grant date or upon termination as outlined in their grant agreements pursuant to the Vince 2013 Incentive Plan. The weighted average grant date fair value for options granted to non-employees was $1.45 per share.

Stock Options

A summary of stock option activity for both employees and non-employees for fiscal 2015 is as follows:

 

 

 

Stock Options

 

 

Weighted

Average

Exercise

Price

 

 

Weighted

Average

Remaining

Contractual

Term

(years)

 

 

Aggregate

Intrinsic

Value

(in thousands)

 

Outstanding at January 31, 2015

 

 

2,726,169

 

 

$

13.18

 

 

 

8.2

 

 

$

33,367

 

Granted

 

 

2,173,273

 

 

$

4.32

 

 

 

 

 

 

 

 

 

Exercised

 

 

(26,209

)

 

$

6.64

 

 

 

 

 

 

 

 

 

Forfeited or expired

 

 

(1,993,498

)

 

$

15.98

 

 

 

 

 

 

 

 

 

Outstanding at January 30, 2016

 

 

2,879,735

 

 

$

4.61

 

 

 

8.7

 

 

$

2,402

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vested and exercisable at January 30, 2016

 

 

827,553

 

 

$

5.89

 

 

 

6.3

 

 

$

-

 

 

Of the above outstanding shares, 1,806,901 are vested or expected to vest.

The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between the Company’s closing stock price on the last trading day of fiscal 2015 and the exercise price, multiplied by the number of such in-the-money options) that would have been received by the option holders had all options holders exercised their options on January 30, 2016. This amount changes based on the fair market value of the Company’s common stock. Total intrinsic value of options exercised during fiscal 2015 and 2014 (based on the differences between the Company’s stock price on the respective exercise date and the respective exercise price, multiplied by the number of respective options exercised) was $316 and $620, respectively.

The Company’s weighted average assumptions used to estimate the fair value of stock options granted on November 21, 2013 in connection with our IPO and the options granted during fiscal 2014 and fiscal 2015 were estimated using a Black-Scholes option valuation model. Due to the limited trading history of the Company’s common stock, the volatility and expected term assumptions used were based on averages from a peer group of publicly traded retailers. The risk-free interest rate was based upon the U.S. Treasury five year yield curve.

 

 

 

Fiscal Year

 

 

 

2015

 

 

2014

 

Weighted-average expected volatility

 

 

46.0

%

 

 

51.1

%

Expected term (in years)

 

4.5 years

 

 

4.5 years

 

Risk-free interest rate

 

 

1.4

%

 

 

1.4

%

Expected dividend yield

 

 

%

 

 

%

 

The Company’s weighted average assumptions used to estimate the fair value of stock options granted on November 21, 2013 in connection with our IPO and the options granted during fiscal 2014 were estimated using a Black-Scholes option valuation model and were as follows. Expected term of 4.5 years, expected volatility of 51.1%, risk-free interest rate of 1.4% and expected dividend yield of 0.0%.

Based on these assumptions used, the weighted average grant date fair value for options granted to employees during fiscal 2015, 2014 and for the options granted on November 21, 2013 in connection with our IPO was $1.75 per share, $14.13 per share and $8.82 per share, respectively.

The fair value of stock options granted in fiscal 2012 through October 2013 was determined at the grant date using a Black-Scholes option valuation model, which requires us to make several significant assumptions including risk-free interest rate, volatility, expected term, and discount factors for shareholders in a privately-held company. The estimated term of 6.5 years for these options was developed using a simplified method permitted by SEC Staff Accounting Bulletin Topic 14: Share-Based Payment, available for companies with “plain-vanilla” options and have limited historical exercise data. Our selected volatility rate of 55.0% was estimated using both: (i) volatility reported by companies comparable to Kellwood Company with publicly-traded stock, and (ii) calculated volatility of companies comparable to Kellwood Company with publicly-traded stock using historical stock prices. We applied a cumulative discount factor to the price per share of 36.25% to adjust for the lack of marketability of the shares, as well as the impact of the shares representing a minority interest in a privately-held company. Our estimates were developed using market data for companies comparable to Kellwood Company and empirical studies regarding the impact on the value of private-company shares resulting from transfer restrictions. Finally, the risk-free rate of 0.85% is based upon the U.S. Treasury five year yield curve.

At January 30, 2016 there was $5,636 of unrecognized compensation costs related to stock options granted to employees that will be recognized over a remaining weighted average period of 2.6 years.

Restricted Stock Units

A summary of restricted stock unit activity for fiscal 2015 is as follows:

 

 

 

Restricted

Stock

Units

 

 

Weighted

Average

Grant Date

Fair Value

 

Nonvested restricted stock units at January 31, 2015

 

 

12,384

 

 

$

26.24

 

Granted

 

 

22,111

 

 

$

7.27

 

Vested

 

 

(4,963

)

 

$

25.20

 

Nonvested restricted stock units at January 30, 2016

 

 

29,532

 

 

$

12.22

 

 

The weighted average grant date fair value for restricted stock units granted during fiscal 2014 and for the restricted stock units granted on November 21, 2013 in connection with our IPO was $30.47 and $20.00. The total fair value of restricted stock units vested during fiscal 2015 and fiscal 2014 was $125 and $50, respectively.

At January 30, 2016 there was $300 of unrecognized compensation costs related to restricted stock units that will be recognized over a remaining weighted average period of 2.0 years.

Share-Based Compensation Expense

During fiscal 2015 we recognized share-based compensation expense of $1,259, including $160 of expense related to non-employees, and a related tax benefit of $504, including $64 of tax benefit related to non-employees. During fiscal 2014 we recognized share-based compensation expense of $1,896 and a related tax benefit of $758. During fiscal 2013, from our IPO through the end of the fiscal year, we recognized share-based compensation expense of $347 and a related tax benefit of $139. During fiscal year 2013, from the beginning of the fiscal year through our IPO date we recognized share-based compensation expense of $551 which was included in net loss from discontinued operations as such expense was a component of the non-Vince businesses which were separated from the Vince business on November 27, 2013. In addition, as a result of the deferred tax valuation allowance during this period, the Company did not recognize the related tax benefit on the share-based compensation expense.

Stockholders' Equity
Stockholders' Equity

Note 10. Stockholders’ Equity

Common Stock:

We currently have authorized for issuance 100,000,000 shares of our Voting Common Stock, par value of $0.01 per share. As of January 30, 2016 and January 31, 2015 we had 36,779,417 and 36,748,245 shares issued and outstanding, respectively (after giving effect to the conversion of all our issued and outstanding non-voting common stock into common stock on a one-for-one basis and the subsequent split of our common stock on a one for 28.5177 basis, as part of the Restructuring Transactions).

Secondary Offering of Common Stock:

In July 2014, certain selling stockholders of VHC, including affiliates of Sun Capital (the “Selling Stockholders”), sold 4,975,254 shares of VHC’s common stock at a public offering price of $34.50 per share in a secondary public offering (the “Secondary Offering”). The total shares sold include 648,946 shares sold by the Selling Stockholders pursuant to the exercise by the underwriters of their option to purchase additional shares. The Company did not receive any proceeds from the Secondary Offering. Immediately following the Secondary Offering, affiliates of Sun Capital beneficially owned 54.6% of VHC’s issued and outstanding common stock. The Company incurred approximately $571 of expenses in connection with the Secondary Offering during fiscal 2014.

Dividends:

We have not paid dividends, and our current ability to pay such dividends is restricted by the terms of our debt agreements. Our future dividend policy will be determined on a yearly basis and will depend on earnings, financial condition, capital requirements, and certain other factors. We do not expect to declare dividends with respect to our common stock in the foreseeable future.

 

Earnings Per Share
Earnings Per Share

Note 11. Earnings Per Share

All share information presented below and herein has been adjusted to reflect the stock split approved by VHC’s board of directors as of November 27, 2013. The fiscal year ended February 1, 2014 includes the impact of 10,000,000 shares issued by the Company on November 21, 2013.

The following is a reconciliation of weighted average basic shares to weighted average diluted shares outstanding:

 

 

 

Fiscal Year Ended

 

 

 

January 30, 2016

 

 

January 31, 2015

 

 

February 1, 2014

 

Weighted-average shares—basic

 

 

36,770,430

 

 

 

36,730,490

 

 

 

28,119,794

 

Effect of dilutive equity securities

 

 

758,797

 

 

 

1,514,416

 

 

 

153,131

 

Weighted-average shares—diluted

 

 

37,529,227

 

 

 

38,244,906

 

 

 

28,272,925

 

 

For the fiscal year ended January 30, 2016, 732,303 options to purchase common stock were excluded from the computation of weighted average shares for diluted earnings per share since the related exercises prices exceeded the average market price of the Company’s common stock and such inclusion would be anti-dilutive. For the fiscal year ended January 31, 2015, 123,959 options to purchase common stock were excluded from the computation of weighted average shares for diluted earnings per share since the related exercises prices exceeded the average market price of the Company’s common stock and such inclusion would be anti-dilutive. There were no antidilutive securities in the fiscal year ended February 1, 2014.

On March 29, 2016, the Company commenced a rights offering and intends to issue an additional 11,818,181 shares. See Note 17 “Subsequent Event” for additional information.

Income Taxes
Income Taxes

Note 12. Income Taxes

The provision for income taxes for continuing operations consists of the following:

 

(in thousands)

 

Fiscal

2015

 

 

Fiscal

2014

 

 

Fiscal

2013

 

Current:

 

 

 

 

 

 

 

 

 

 

 

 

Domestic:

 

 

 

 

 

 

 

 

 

 

 

 

Federal

 

$

(53

)

 

$

759

 

 

$

 

State

 

 

522

 

 

 

344

 

 

 

43

 

Foreign

 

 

 

 

 

 

 

 

 

Total current

 

 

469

 

 

 

1,103

 

 

 

43

 

Deferred:

 

 

 

 

 

 

 

 

 

 

 

 

Domestic:

 

 

 

 

 

 

 

 

 

 

 

 

Federal

 

 

2,994

 

 

 

20,416

 

 

 

6,333

 

State

 

 

(249

)

 

 

2,475

 

 

 

905

 

Foreign

 

 

 

 

 

 

 

 

(13

)

Total deferred

 

 

2,745

 

 

 

22,891

 

 

 

7,225

 

Total provision for income taxes

 

$

3,214

 

 

$

23,994

 

 

$

7,268

 

 

The sources of income (loss) for continuing operations before provision for income taxes are from the United States for all years. We file U.S. federal income tax returns and income tax returns in various state and local jurisdictions.

Current income taxes are the amounts payable under the respective tax laws and regulations on each year’s earnings. A reconciliation of the federal statutory income tax rate to the effective tax rate is as follows:

 

 

 

 

Fiscal

2015

 

 

Fiscal

2014

 

 

Fiscal

2013

 

Statutory federal rate

 

 

35.0

%

 

 

35.0

%

 

 

35.0

%

State taxes, net of federal benefit

 

 

6.5

%

 

 

5.7

%

 

 

9.5

%

Nondeductible Tax Receivable Agreement adjustment

 

 

4.1

%

 

 

0.0

%

 

 

0.0

%

Nondeductible interest

 

 

0.0

%

 

 

0.0

%

 

 

18.1

%

Nondeductible transaction costs

 

 

0.0

%

 

 

0.0

%

 

 

6.7

%

Valuation allowance

 

 

(0.5

)%

 

 

(0.7

)%

 

 

(45.5

)%

Return to provision adjustment

 

 

(2.4

)%

 

 

0.0

%

 

 

0.0

%

Changes in tax laws

 

 

(3.2

)%

 

 

0.0

%

 

 

0.0

%

Other

 

 

(0.8

)%

 

 

0.2

%

 

 

(0.1

)%

Total

 

 

38.7

%

 

 

40.2

%

 

 

23.7

%

 

Deferred income tax assets and liabilities for continuing operations consisted of the following:

 

(in thousands)

 

January 30,

2016

 

 

January 31,

2015

 

Deferred tax assets:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

$

17,071

 

 

$

29,935

 

Employee related costs

 

 

2,163

 

 

 

3,503

 

Allowance for asset valuations

 

 

2,551

 

 

 

3,172

 

Accrued expenses

 

 

6,088

 

 

 

3,933

 

Net operating losses

 

 

72,465

 

 

 

65,111

 

Tax credits

 

 

812

 

 

 

888

 

Other

 

 

457

 

 

 

90

 

Total deferred tax assets

 

 

101,607

 

 

 

106,632

 

Less: valuation allowances

 

 

(1,024

)

 

 

(1,074

)

Net deferred tax assets

 

 

100,583

 

 

 

105,558

 

Deferred tax liabilities:

 

 

 

 

 

 

 

 

Cancellation of debt income

 

 

(6,657

)

 

 

(8,876

)

Other

 

 

(482

)

 

 

(493

)

Total deferred tax liabilities

 

 

(7,139

)

 

 

(9,369

)

Net deferred tax assets

 

$

93,444

 

 

$

96,189

 

Included in:

 

 

 

 

 

 

 

 

Prepaid expenses and other current assets

 

$

4,164

 

 

$

4,015

 

Deferred income taxes and other assets

 

 

89,280

 

 

 

92,174

 

Net deferred income tax assets

 

$

93,444

 

 

$

96,189

 

 

As of January 30, 2016, various federal and state net operating losses were available for carryforward to offset future taxable income. Substantially all of these net operating losses will expire between 2030 and 2036. The valuation allowance of $1,024 at January 30, 2016 and $1,074 at January 31, 2015, reflects management’s assessment, based on available information, that it is more likely than not that a portion of the deferred tax assets will not be realized due to the inability to generate sufficient state taxable income. Adjustments to the valuation allowance are made when there is a change in management’s assessment of the amount of deferred tax assets that are realizable.

Net operating losses as of January 30, 2016 presented above do not include fiscal 2015, fiscal 2014 and fiscal 2013 deductions related to stock options that exceeded expenses previously recognized for financial reporting purposes since they have not yet reduced income taxes payable. The excess deduction will reduce income taxes payable and increase additional paid in capital by $2,732 when ultimately deducted in a future year. Net operating losses as of January 31, 2015 presented above do not include fiscal 2014 and fiscal 2013 deductions related to stock options that exceeded expenses previously recognized for financial reporting purposes since they have not yet reduced income taxes payable. The excess deduction will reduce income taxes payable and increase additional paid in capital by $2,675 when ultimately deducted in a future year.

As discussed in Note 2 “The IPO and Restructuring Transactions”, we completed an IPO during fiscal 2013. The completion of the IPO and Restructuring Transactions resulted in the non-Vince businesses being separated from the Vince business. As a result, the Company determined that the full valuation allowance on the U.S. net deferred tax assets was no longer necessary. Since the IPO and Restructuring Transactions occurred between related parties and were considered one integrated transaction along with the establishment of the Tax Receivable Agreement liability, the offset of the release of the valuation allowance was recorded as an adjustment to additional paid-in capital on our Consolidated Balance Sheet at February 1, 2014 in accordance with ASC 740-20-45-11(g). The total valuation allowance on deferred tax assets for continuing operations decreased on a net basis by $50 in the fiscal year ended January 30, 2016 and decreased by $769 in the fiscal year ended January 31, 2015.

A reconciliation of the beginning and ending amount of gross unrecognized tax benefits, excluding interest and penalties, is as follows:

 

(in thousands)

 

Fiscal

2015

 

 

Fiscal

2014

 

 

Fiscal

2013

 

Beginning balance

 

$

4,487

 

 

$

3,693

 

 

$

9,378

 

Increases for tax positions in current year

 

 

72

 

 

 

2,397

 

 

 

3,743

 

Increases for tax positions in prior years

 

 

27

 

 

 

135

 

 

 

356

 

Decreases for tax positions in prior years

 

 

(2,459

)

 

 

(1,738

)

 

 

(4,186

)

Settlements

 

 

 

 

 

 

 

 

(3,022

)

Lapse in statute of limitations

 

 

 

 

 

 

 

 

(102

)

Restructuring Transactions

 

 

 

 

 

 

 

 

(2,474

)

Ending balance

 

$

2,127

 

 

$

4,487

 

 

$

3,693

 

 

As of January 30, 2016 and January 31, 2015, unrecognized tax benefits in the amount of $2,161 (net of tax) and $2,195 (net of tax), respectively, would impact our effective tax rate if recognized. It is reasonably possible that within the next 12 months certain temporary unrecognized tax benefits could fully reverse. Should this occur, our unrecognized tax benefits could be reduced by up to $72.

We include accrued interest and penalties on underpayments of income taxes in our income tax provision. As of January 30, 2016 and January 31, 2015, we did not have any interest and penalties accrued on our Consolidated Balance Sheets. Net interest and penalty provisions (benefit) of $0, $0 and $(232) were recognized in our Consolidated Statements of Operations for the years ended January 30, 2016, January 31, 2015 and February 1, 2014, respectively. Interest is computed on the difference between the tax position recognized net of any unrecognized tax benefits and the amount previously taken or expected to be taken in our tax returns.

All amounts above related to unrecognized tax benefits include continuing and discontinued operations until the separation of the Vince and non-Vince businesses on November 27, 2013, and the Vince business after such date.

With limited exceptions, we are no longer subject to examination for U.S. federal and state income tax for 2007 and prior.

Defined Contribution Plan
Defined Contribution Plan

Note 13. Defined Contribution Plan

We maintain the Vince Holding Corp. 401k Plan, which is a defined contribution plan covering all U.S.-based employees. Employees who meet certain eligibility requirements may participate in this program by contributing between 1% and 100% of annual compensation, subject to IRS limitations. We will make matching contributions in an amount equal to 50% of employee contributions up to 3% of eligible compensation. The annual expense incurred by the Company for this defined contribution plan was $426, $344, and $232 in fiscal 2015, fiscal 2014 and fiscal 2013, respectively.

Segment and Geographical Financial Information
Segment and Geographical Financial Information

Note 14. Segment and Geographical Financial Information

We operate and manage our business by distribution channel and have identified two reportable segments, as further described below. We considered both similar and dissimilar economic characteristics, internal reporting and management structures, as well as products, customers, and supply chain logistics to identify the following reportable segments:

 

·

Wholesale segment—consists of our operations to distribute products to major department stores and specialty stores in the United States and select international markets.

 

·

Direct-to-consumer segment—consists of our operations to distribute products directly to the consumer through our branded full-price specialty retail stores, outlet stores, and e-commerce platform.

The accounting policies of our segments are consistent with those described in Note 1 “Description of Business and Summary of Significant Accounting Policies”. Unallocated corporate expenses are comprised of selling, general, and administrative expenses attributable to corporate and administrative activities, and other charges that are not directly attributable to our operating segments. Unallocated corporate assets are comprised of the carrying values of our goodwill and unamortized trademark, deferred tax assets, and other assets that will be utilized to generate revenue for both of our reportable segments.

Our wholesale segment sells apparel to our direct-to-consumer segment at cost. The wholesale intercompany sales of $29,063, $22,595 and $16,916 have been excluded from the net sales totals presented below for fiscal 2015, fiscal 2014, and fiscal 2013, respectively. Furthermore, as intercompany sales are sold at cost, no intercompany profit is reflected in operating income presented below.

Summary information for our operating segments is presented below.

 

 

 

Fiscal Year

 

(in thousands)

 

2015

 

 

2014

 

 

2013

 

Net Sales:

 

 

 

 

 

 

 

 

 

 

 

 

Wholesale

 

$

201,182

 

 

$

259,418

 

 

$

229,114

 

Direct-to-consumer

 

 

101,275

 

 

 

80,978

 

 

 

59,056

 

Total net sales

 

$

302,457

 

 

$

340,396

 

 

$

288,170

 

Income from Operations:

 

 

 

 

 

 

 

 

 

 

 

 

Wholesale

 

$

61,571

 

 

$

100,623

 

 

$

81,822

 

Direct-to-consumer

 

 

7,839

 

 

 

14,556

 

 

 

10,435

 

Subtotal

 

 

69,410

 

 

 

115,179

 

 

 

92,257

 

Unallocated expenses

 

 

(53,684

)

 

 

(44,929

)

 

 

(42,904

)

Total income from operations

 

$

15,726

 

 

$

70,250

 

 

$

49,353

 

Depreciation & Amortization:

 

 

 

 

 

 

 

 

 

 

 

 

Wholesale

 

$

2,058

 

 

$

1,962

 

 

$

1,204

 

Direct-to-consumer

 

 

4,498

 

 

 

2,950

 

 

 

1,581

 

Unallocated corporate

 

 

1,794

 

 

 

355

 

 

 

 

Total depreciation & amortization

 

$

8,350

 

 

$

5,267

 

 

$

2,785

 

Capital Expenditures:

 

 

 

 

 

 

 

 

 

 

 

 

Wholesale

 

$

1,629

 

 

$

2,076

 

 

$

1,832

 

Direct-to-consumer

 

 

9,442

 

 

 

8,117

 

 

 

8,241

 

Unallocated corporate

 

 

6,520

 

 

 

9,506

 

 

 

 

Total capital expenditure

 

$

17,591

 

 

$

19,699

 

 

$

10,073

 

 

(in thousands)

 

January 30,

2016

 

 

January 31,

2015

 

Total Assets:

 

 

 

 

 

 

 

 

Wholesale

 

$

47,757

 

 

$

70,635

 

Direct-to-consumer

 

 

35,433

 

 

 

33,793

 

Unallocated corporate

 

 

280,378

 

 

 

274,220

 

Total assets

 

$

363,568

 

 

$

378,648

 

 

Sales results are presented on a geographic basis below. We predominately operate within the U.S. and sell our products in 38 countries either directly to major department and specialty stores, or through distribution relationships with international partners with exclusive rights to certain territories. Sales are presented based on customer location. Substantially all long-lived assets, including property, plant and equipment and fixtures installed at our retailer sites, are located in the U.S.

 

 

 

Fiscal Year

 

(in thousands)

 

2015

 

 

2014

 

 

2013

 

Net Sales:

 

 

 

 

 

 

 

 

 

 

 

 

United States

 

$

273,655

 

 

$

310,179

 

 

$

265,622

 

Other countries

 

 

28,802

 

 

 

30,217

 

 

 

22,548

 

Total net sales

 

$

302,457

 

 

$

340,396

 

 

$

288,170

 

 

 

Our net sales by major product category are as follows:

 

 

 

Fiscal Year

 

 

 

2015

 

 

2014

 

 

2013

 

(in thousands)

 

Amount

 

 

% of Total

 

 

Amount

 

 

% of Total

 

 

Amount

 

 

% of Total

 

Women's collection

 

$

272,338

 

 

 

90

%

 

$

301,076

 

 

 

89

%

 

$

253,647

 

 

 

88

%

Men's collection

 

 

22,685

 

 

 

8

%

 

 

35,417

 

 

 

10

%

 

 

33,612

 

 

 

12

%

Other

 

 

7,434

 

 

 

2

%

 

 

3,903

 

 

 

1

%

 

 

911

 

 

 

0

%

 

 

$

302,457

 

 

 

100

%

 

$

340,396

 

 

 

100

%

 

$

288,170

 

 

 

100

%

 

Related Party Transactions
Related Party Transactions

Note 15. Related Party Transactions

Shared Services Agreement

On November 27, 2013, Vince, LLC entered into the Shared Services Agreement with Kellwood pursuant to which Kellwood would provide certain support services in various operational areas including, among other things, e-commerce operations, distribution, logistics, information technology, accounts payable, credit and collections and payroll and benefits. Since the IPO, we have been working on transitioning certain back office functions performed by Kellwood under the Shared Services Agreement. Among these functions that have transitioned to Vince are certain accounting related functions as well as benefits administration. We have also been working on developing our own information technology infrastructure and are now in the process of implementing our own enterprise resource planning (“ERP”) system, point-of-sale systems, e-commerce platform and supporting systems. We are also in the process of migrating our U.S. distribution system from Kellwood to a new third party provider. Until those systems are implemented, we will continue to utilize the Kellwood information technology infrastructure, including e-commerce platform systems, under the Shared Services Agreement.

The Shared Services Agreement may be modified or supplemented to include new services under terms and conditions to be mutually agreed upon in good faith by the parties. The fees for all services received by Vince, LLC from Kellwood, including any new services mutually agreed upon by the parties, will be at cost. Such costs shall be the full amount of any and all actual and direct out-of-pocket expenses (including base salary and wages but without providing for any margin of profit or allocation of depreciation or amortization expense) incurred by the service provider or its affiliates in connection with the provision of the services.

We may terminate any or all of the services at any time for any reason (with or without cause) upon giving Kellwood the required advance notice for termination for that particular service. Additionally, the provision of the following services, which are services which require a term as a matter of law and services which are based on a third-party agreement with a set term, shall terminate automatically upon the related date specified on the schedules to the Shared Services Agreement: Building Services NY; Tax; and Compensation & Benefits. If no specific notice requirement has been provided, 90 days prior written notice shall be required to be given. Upon the termination of certain services, Kellwood may no longer be in a position to provide certain other related services. Kellwood must notify us within 10 days following our request to terminate any services if they will no longer be able to provide other related services. Assuming we proceed with our request to terminate the original services, such related services shall also be terminated in connection with such termination.

We are invoiced by Kellwood monthly for these amounts and generally be required to pay within 15 business days of receiving such invoice. The payments will be trued-up and can be disputed once each fiscal quarter. For the years ended January 30, 2016, January 31, 2015 and February 1, 2014 we recognized $9,357, $11,436 and $13,729, respectively, of expense within the statement of operations for services provided under the Shared Services Agreement. As of January 30, 2016 and January 31, 2015, we have recorded $858 and $753, respectively in other accrued expenses to recognize amounts payable to Kellwood under the Shared Services Agreement.

Tax Receivable Agreement

VHC entered into a Tax Receivable Agreement with the Pre-IPO Stockholders on November 27, 2013. We and our former subsidiaries generated certain tax benefits (including NOLs and tax credits) prior to the Restructuring Transactions consummated in connection with our IPO and will generate certain section 197 intangible deductions (the “Pre-IPO Tax Benefits”), which would reduce the actual liability for taxes that we might otherwise be required to pay. The Tax Receivable Agreement provides for payments to the Pre-IPO Stockholders in an amount equal to 85% of the aggregate reduction in taxes payable realized by us and our subsidiaries from the utilization of the Pre-IPO Tax Benefits (the “Net Tax Benefit”).

For purposes of the Tax Receivable Agreement, the Net Tax Benefit equals (i) with respect to a taxable year, the excess, if any, of (A) our liability for taxes using the same methods, elections, conventions and similar practices used on the relevant company return assuming there were no Pre-IPO Tax Benefits over (B) our actual liability for taxes for such taxable year (the “Realized Tax Benefit”), plus (ii) for each prior taxable year, the excess, if any, of the Realized Tax Benefit reflected on an amended schedule applicable to such prior taxable year over the Realized Tax Benefit reflected on the original tax benefit schedule for such prior taxable year, minus (iii) for each prior taxable year, the excess, if any, of the Realized Tax Benefit reflected on the original tax benefit schedule for such prior taxable year over the Realized Tax Benefit reflected on the amended schedule for such prior taxable year; provided, however, that to extent any of the adjustments described in clauses (ii) and (iii) were reflected in the calculation of the tax benefit payment for any subsequent taxable year, such adjustments shall not be taken into account in determining the Net Tax Benefit for any subsequent taxable year.

While the Tax Receivable Agreement is designed with the objective of causing our annual cash costs attributable to federal, state and local income taxes (without regard to our continuing 15% interest in the Pre-IPO Tax Benefits) to be the same as that which we would have paid had we not had the Pre-IPO Tax Benefits available to offset our federal, state and local taxable income, there are circumstances in which this may not be the case. In particular, the Tax Receivable Agreement provides that any payments by us thereunder shall not be refundable. In that regard, the payment obligations under the Tax Receivable Agreement differ from a payment of a federal income tax liability in that a tax refund would not be available to us under the Tax Receivable Agreement even if we were to incur a net operating loss for federal income tax purposes in a future tax year. Similarly, the Pre-IPO Stockholders will not reimburse us for any payments previously made if any tax benefits relating to such payments are subsequently disallowed, although the amount of any such tax benefits subsequently disallowed will reduce future payments (if any) otherwise owed to such Pre-IPO Stockholders. In addition, depending on the amount and timing of our future earnings (if any) and on other factors including the effect of any limitations imposed on our ability to use the Pre-IPO Tax Benefits, it is possible that all payments required under the Tax Receivable Agreement could become due within a relatively short period of time following consummation of our IPO.

If we had not entered into the Tax Receivable Agreement, we would be entitled to realize the full economic benefit of the Pre-IPO Tax Benefits to the extent allowed by federal, state and local law. The Tax Receivable Agreement is designed with the objective of causing our annual cash costs attributable to federal, state and local income taxes (without regard to our continuing 15% interest in the Pre-IPO Tax Benefits) to be the same as we would have paid had we not had the Pre-IPO Tax Benefits available to offset our federal, state and local taxable income. As a result, stockholders who purchased shares in the IPO are not entitled to the economic benefit of the Pre-IPO Tax Benefits that would have been available if the Tax Receivable Agreement were not in effect, except to the extent of our continuing 15% interest in the Pre-IPO Benefits.

Additionally, the payments we make to the Pre-IPO Stockholders under the Tax Receivable Agreement are not expected to give rise to any incidental tax benefits to us, such as deductions or an adjustment to the basis of our assets.

An affiliate of Sun Capital may elect to terminate the Tax Receivable Agreement upon the occurrence of a Change of Control (as defined below). In connection with any such termination, we are obligated to pay the present value (calculated at a rate per annum equal to LIBOR plus 200 basis points as of such date) of all remaining Net Tax Benefit payments that would be required to be paid to the Pre-IPO Stockholders from such termination date, applying the valuation assumptions set forth in the Tax Receivable Agreement (the “Early Termination Period”). “Change of control,” as defined in the Tax Receivable Agreement shall mean an event or series of events by which (i) Vince Holding Corp. shall cease directly or indirectly to own 100% of the capital stock of Vince, LLC; (ii) any “person” or “group” (as such terms are used in Section 13(d) and 14(d) of the Exchange Act), other than one or more permitted investors, shall be the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act) of capital stock having more, directly or indirectly, than 35% of the total voting power of all outstanding capital stock of Vince Holding Corp. in the election of directors, unless at such time the permitted investors are direct or indirect “beneficial owners” (as so defined) of capital stock of Vince Holding Corp. having a greater percentage of the total voting power of all outstanding capital stock of Vince Holding Corp. in the election of directors than that owned by each other “person” or “group” described above; (iii) for any reason whatsoever, a majority of the board of directors of Vince Holding Corp. shall not be continuing directors; or (iv) a “Change of Control” (or comparable term) shall occur under (x) any term loan or revolving credit facility of Vince Holding Corp. or its subsidiaries or (y) any unsecured, senior, senior subordinated or subordinated indebtedness of Vince Holding Corp. or its subsidiaries, if, in each case, the outstanding principal amount thereof is in excess of $15,000. We may also terminate the Tax Receivable Agreement by paying the Early Termination Payment to the Pre-IPO Stockholders. Additionally, the Tax Receivable Agreement provides that in the event that we breach any material obligations under the Tax Receivable Agreement by operation of law as a result of the rejection of the Tax Receivable Agreement in a case commenced under the Bankruptcy Code, then the Early Termination Payment plus other outstanding amounts under the Tax Receivable Agreement shall become due and payable.

The Tax Receivable Agreement will terminate upon the earlier of (i) the date all such tax benefits have been utilized or expired, (ii) the last day of the tax year including the tenth anniversary of the IPO Restructuring Transactions and (iii) the mutual agreement of the parties thereto, unless earlier terminated in accordance with the terms thereof.

As of January 30, 2016, our obligation under the Tax Receivable Agreement was $169,913, which has a remaining term of eight years. The obligation was originally recorded in connection with the IPO as an adjustment to additional paid-in capital on our Consolidated Balance Sheet. Approximately $29,075 is recorded as a component of other accrued expenses and $140,838 as other liabilities on our Consolidated Balance Sheet as of January 30, 2016. During fiscal 2015, we adjusted the obligation under the Tax Receivable Agreement in connection with the filing of our 2014 income tax returns and as a result of changes in tax laws that impacted the net operating loss deferred tax assets. These adjustments resulted in a net increase of $1,154 to the pre-IPO deferred tax assets and a net increase of $981 to the liability under the Tax Receivable Agreement with the corresponding net increase accounted for as an adjustment to other expense, net on the Consolidated Statement of Operations. During fiscal year 2014, we adjusted the obligation under the Tax Receivable Agreement in connection with the filing of our 2013 income tax returns. The return to provision adjustment resulted in a net reduction of $818 to the pre-IPO deferred tax assets and a net reduction of $1,442 to the liability under the Tax Receivable Agreement with the corresponding net increase of $624 accounted for as an adjustment to additional paid in-capital. In addition, we made our first tax benefit payment with respect to the 2013 taxable year of $3,199 including accrued interest which was paid during the fourth quarter of fiscal 2014.

The Company had expected to make a required payment under the Tax Receivable Agreement in the fourth quarter of fiscal 2015. As a result of lower than expected cash from operations due to weaker than projected performance, and the level of projected availability under the Company’s Revolving Credit Facility, we concluded that we would not be able to fund the payment when due. Accordingly, on September 1, 2015, we entered into an amendment to the Tax Receivable Agreement with Sun Cardinal, LLC, an affiliate of Sun Capital Partners, Inc., for itself and as a representative of the other stockholders parties thereto. Pursuant to this amendment, Sun Cardinal agreed to postpone payment of the tax benefit with respect to the 2014 taxable year, currently estimated at $21,762 plus accrued interest to September 15, 2016. The amendment to the Tax Receivable Agreement also waived the application of a default interest rate at LIBOR plus 500 basis points per annum on the postponed payment. The interest rate on the postponed payment will remain at LIBOR plus 200 basis points per annum. The tax benefit payment with respect to the 2015 taxable year totaling $7,313 plus accrued interest is expected to be paid in the fourth quarter of 2016.

Rights Offering Commitment Letter

On December 9, 2015 we received a Rights Offering Commitment Letter from Sun Fund V that provides the Company with an amount equal to $65,000 of cash proceeds in the event that the Company conducts a Rights Offering (the “Contribution Obligation”). Such Contribution Obligation will be reduced by any proceeds received from the Rights Offering. The Company is required, simultaneously with the funding of the Contribution Obligation by Sun Fund V, or one or more of its affiliates, to issue to Sun Fund V or one or more of its affiliates the applicable number of shares of the Company’s common stock at the lesser of (i) a price per share equal to a 20% discount to the 30 day average trading price of the Company’s common stock on The New York Stock Exchange immediately prior to the date of the Rights Offering Commitment Letter, (ii) a price per share equal to a 20% discount to the 30 day average trading price of the Company’s common stock on The New York Stock Exchange immediately prior to the commencement of the Rights Offering and (iii) the price per share at which participants in the Rights Offering are entitled to purchase shares of new common stock issued by the Company. Sun Fund V will receive customary terms and conditions, to be negotiated between Sun Fund V and the Company, for providing the Contribution Obligation. If the Rights Offering has not commenced by March 8, 2016, the Company will pay Sun Fund V an amount equal to $950 in the event that the Company completes a Rights Offering. Sun Fund V subsequently extended the commencement deadline to March 29, 2016. Sun Fund V’s obligations terminate upon the earliest to occur of (A) the consummation of the Rights Offering whereby the Company receives proceeds equal to or exceeding $65,000, (B) 11:59 p.m. New York City time on April 7, 2016 if the Rights Offering has not commenced by such time, (C) 11:59 p.m. New York City time on April 30, 2016, and (D) the date Sun Fund V, or its affiliates, funds the Contribution Obligation. The Company would be required to use a portion of proceeds from the Rights Offering or the Contribution Obligation to satisfy its current obligation with respect to the 2014 taxable year under the Tax Receivable Agreement as amended (as discussed above), currently estimated at $21,762 plus accrued interest, and payable on September 15, 2016. On March 29, 2016, the Company commenced the rights offering. The Rights Offering Commitment Letter was superseded by the Investment Agreement entered into by and among the Company, Sun Cardinal, LLC and SCSF Cardinal, LLC. See Note 17 “Subsequent Event” for additional details.

Transfer Agreement

On November 27, 2013, Kellwood and Vince Intermediate Holding, LLC entered into a transfer agreement (the “Transfer Agreement”). Pursuant to the terms of the Transfer Agreement, the following transactions occurred:

 

·

Kellwood distributed the Vince, LLC equity interests to Vince Intermediate Holding, LLC in exchange for a $341,500 promissory note issued by Vince Intermediate Holding, LLC (the “Kellwood Note Receivable”).

 

·

Vince Intermediate Holding, LLC immediately repaid the Kellwood Note Receivable in full using approximately $172,000 of net proceeds from the IPO along with $169,500 of net borrowings under the new Term Loan Facility. Using the proceeds from the repayment of the Kellwood Note Receivable, after giving effect to the contribution of $70,100 of indebtedness under the Sun Term Loan Agreements to the capital of Vince Holding Corp. by affiliates of Sun Capital, Kellwood repaid and discharged the indebtedness outstanding under its revolving credit facility and the Sun Term Loan Agreements, and redeemed all of its issued and outstanding 12.875% Notes. Kellwood also redeemed $38,100 aggregate principal amount of its 7.125% Notes, at par pursuant to a tender offer. In addition, Kellwood also used such proceeds to pay certain restructuring fees to Sun Capital Management. Kellwood also paid a debt recovery bonus of $6,000 to our Chief Executive Officer.

 

·

Kellwood refinanced its Wells Fargo Facility to, among other things, release Vince, LLC as a guarantor or obligor thereunder.

In accordance with the terms of the Transfer Agreement, Kellwood has agreed to indemnify us for any losses which we may suffer, sustain or become subject to, relating to the Kellwood business or in connection with any contract contributed to us by Kellwood which is not by its terms permitted to be assigned. Kellwood has also agreed to indemnify us for any losses associated with its failure to satisfy its obligations under the Transfer Agreement with respect to the repayment, repurchase, discharge or refinancing of certain of its indebtedness, as described in the immediately prior paragraph (including with respect to the removal of Vince, LLC as an obligor or guarantor under its refinanced revolving credit facility). Additionally, Vince Intermediate Holding, LLC has agreed to indemnify Kellwood against any losses which Kellwood may suffer, sustain or become subject to relating to the Vince business. The parties also agreed, upon the request of either the other party to, without further consideration, execute and deliver, or cause to be executed and delivered, such other instruments of conveyance, transfer, assignment and confirmation, and shall take or cause to be taken, such further or other actions as the other party may deem necessary or desirable to carry out the intent and purpose of the Transfer Agreement and give effect to the transactions contemplated thereby.

Kellwood Note Receivable

Vince Intermediate Holding, LLC issued the Kellwood Note Receivable in the aggregate principal amount of $341,500 to Kellwood Company, LLC on November 27, 2013, immediately prior to the consummation of our IPO. Vince Intermediate Holding, LLC repaid the Kellwood Note Receivable on the same day, using net proceeds from our IPO and net borrowings under the Term Loan Facility. No interest accrued under the Kellwood Note Receivable as the Kellwood Note Receivable was repaid on the date of issuance.

Debt Recovery Bonus to Our Former Chief Executive Officer (“CEO”)

Our former CEO received a debt recovery bonus of $6,000 (which included $440 of a prior unpaid debt recovery bonus) in connection with the repayment of certain Kellwood indebtedness, calculated as 4.4% of the related debt recovery, on November 27, 2013. Kellwood used proceeds from the repayment of the Kellwood Note Receivable to pay this bonus to our former CEO at the closing of our IPO.

Certain Indebtedness to Affiliates of Sun Capital

We had substantial indebtedness owed to affiliates of Sun Capital after giving effect to the acquisition of Kellwood Company by affiliates of Sun Capital Partners, Inc. in February 2008 under the Sun Promissory Notes and Sun Capital Loan Agreement (as defined in Note 7 “Long-Term Debt”). Subsequent to 2008, Kellwood Company made borrowings under the Sun Term Loan Agreements (as defined in Note 3 “Discontinued Operations”) to fund negative cash flows of the non-Vince business. All amounts owed by Vince Holding Corp. under these agreements were discharged as of February 1, 2014, as further discussed below.

On December 28, 2012, Sun Kellwood Finance waived all interest capitalized and accrued under the Sun Promissory notes prior to July 19, 2012. Additionally, Sun Kellwood Finance and SCSF Finance waived all interest capitalized and accrued under the Sun Capital Loan Agreement prior to July 19, 2012. As all parties were under the common control of affiliates of Sun Capital, both transactions resulted in capital contributions of $270,852 and $18,249 for the Sun Promissory Notes and Sun Capital Loan Agreement, respectively. The capital contributions were recorded as adjustments to additional paid in capital on our Consolidated Balance Sheet as of February 2, 2013. These transactions had no significant income tax consequences. The remaining principal and capitalized PIK interest owed under these agreements of $391,434 were reported within long-term debt on the Consolidated Balance Sheet as of February 2, 2013.

On June 18, 2013, Sun Kellwood Finance and SCSF Finance assigned all title and interest in both the Sun Promissory Notes and note under our Sun Capital Loan Agreement to Sun Cardinal, LLC. Immediately following the assignment of these notes, Sun Cardinal contributed all outstanding principal and interest due under these notes as of June 18, 2013 to the capital of Vince Holding Corp. As all parties were under the common control of Sun Capital at such time, these transactions were recorded in the second quarter of fiscal 2013 as increases to Vince Holding Corp.’s additional paid in capital in the amounts of $334,595 and $72,932 for the Sun Promissory Notes and Sun Capital Loan Agreement, respectively. As a result, Vince Holding Corp. has been discharged of all obligations under both agreements. See Note 7 “Long-Term Debt”. Immediately prior to the Restructuring Transactions, affiliates of Sun Capital contributed $38,683 of principal under the Sun Term Loan Agreements to the capital of Kellwood Company.

On November 27, 2013, subsequent to the closing of the IPO and in connection with the Restructuring Transactions, all remaining debt obligations to affiliates of Sun Capital under the Sun Term Loan Agreements were retained by Kellwood Company, amounting to $83,355 (including accrued interest). Kellwood Company immediately discharged all obligations under these agreements through the application of a portion of the Kellwood Note Receivable proceeds. See Note 3 “Discontinued Operations”.

Management Services Agreement

In connection with the acquisition of Kellwood Company by affiliates of Sun Capital in 2008, Sun Capital Partners Management V, LLC, an affiliate of Sun Capital, entered into the Management Services Agreement (the “Management Services Agreement”) with Kellwood Company. Under this agreement, Sun Capital Management provided Kellwood Company with consulting and advisory services, including services relating to financing alternatives, financial reporting, accounting and management information systems. In exchange, Kellwood Company reimbursed Sun Capital Management for reasonable out-of-pocket expenses incurred in connection with providing consulting and advisory services, additional and customary and reasonable fees for management consulting services provided in connection with corporate events, and also paid an annual management fee equal to $2,200 which was prepaid in equal quarterly installments, a portion of which was charged to the Vince business. We reported $0, $79, and $404 for management fees to Sun Capital in other expense, net, in the Consolidated Statements of Operations for fiscal 2015, fiscal 2014 and fiscal 2013, respectively. The remaining fees charged to the non-Vince businesses of $1,537 are included within net loss from discontinued operations in the Consolidated Statements of Operations for fiscal 2013.

Upon the consummation of certain corporate events involving Kellwood Company or its direct or indirect subsidiaries, Kellwood Company was required to pay Sun Capital Management a transaction fee in an amount equal to 1% of the aggregate consideration paid to or by Kellwood Company and any of its direct or indirect subsidiaries or stockholders. We incurred no material transaction fees payable to Sun Capital Management during all periods presented on the Consolidated Statement of Operations.

On November 27, 2013, in connection with the closing of the IPO and Restructuring Transactions, VHC was released from the terms of the Management Services Agreement between Kellwood Company and Sun Capital Management.

Sun Capital Consulting Agreement

On November 27, 2013, we entered into an agreement with Sun Capital Management to (i) reimburse Sun Capital Management or any of its affiliates providing consulting services under the agreement for out-of-pocket expenses incurred in providing consulting services to us and (ii) provide Sun Capital Management with customary indemnification for any such services.

The agreement is scheduled to terminate on the tenth anniversary of our IPO (i.e. November 27, 2023). Under the consulting agreement, we have no obligation to pay Sun Capital Management or any of its affiliates any consulting fees other than those which are approved by a majority of our directors that are not affiliated with Sun Capital. To the extent such fees are approved in the future, we will be obligated to pay such fees in addition to reimbursing Sun Capital Management or any of its affiliates that provide us services under the consulting agreement for all reasonable out-of-pocket fees and expenses incurred by such party in connection with the provision of consulting services under the consulting agreement and any related matters. Reimbursement of such expenses shall not be conditioned upon the approval of a majority of our directors that are not affiliated with Sun Capital Management, and shall be payable in addition to any fees that such directors may approve.

Neither Sun Capital Management nor any of its affiliates are liable to us or our affiliates, security holders or creditors for (1) any liabilities arising out of, related to, caused by, based upon or in connection with the performance of services under the consulting agreement, unless such liability is proven to have resulted directly and primarily from the willful misconduct or gross negligence of such person or (2) pursuing any outside activities or opportunities that may conflict with our best interests, which outside activities we consent to and approve under the consulting agreement, and which opportunities neither Sun Capital Management nor any of its affiliates will have any duty to inform us of. In no event will the aggregate of any liabilities of Sun Capital Management or any of its affiliates exceed the aggregate of any fees paid under the consulting agreement.

In addition, we are required to indemnify Sun Capital Management, its affiliates and any successor by operation of law against any and all liabilities, whether or not arising out of or related to such party’s performance of services under the consulting agreement, except to the extent proven to result directly and primarily from such person’s willful misconduct or gross negligence. We are also required to defend such parties in any lawsuits which may be brought against such parties and advance expenses in connection therewith. In the case of affiliates of Sun Capital Management that have rights to indemnification and advancement from affiliates of Sun Capital, we agree to be the indemnitor of first resort, to be liable for the full amounts of payments of indemnification required by any organizational document of such entity or any agreement to which such entity is a party, and that we will not make any claims against any affiliates of Sun Capital Partners for contribution, subrogation, exoneration or reimbursement for which they are liable under any organizational documents or agreement. Sun Capital Management may, in its sole discretion, elect to terminate the consulting agreement at any time. We may elect to terminate the consulting agreement if SCSF Cardinal, Sun Cardinal or any of their respective affiliates’ aggregate ownership of our equity securities falls below 30%.

During fiscal 2015, fiscal 2014 and fiscal 2013, we paid Sun Capital Management $114, $76 and $0, respectively, for reimbursement of expenses under the Sun Capital Consulting Agreement.

Indemnification Agreements

We entered into indemnification agreements with each of our executive officers and directors on November 27, 2013. The indemnification agreements provide the executive officers and directors with contractual rights to indemnification, expense advancement and reimbursement, to the fullest extent permitted under the DGCL.

Amended and Restated Certificate of Incorporation

Our amended and restated certificate of incorporation provides that for so long as affiliates of Sun Capital own 30% or more of our outstanding shares of common stock, Sun Cardinal, a Sun Capital affiliate, has the right to designate a majority of our board of directors. For so long as Sun Cardinal has the right to designate a majority of our board of directors, the directors designated by Sun Cardinal are expected to constitute a majority of each committee of our board of directors (other than the Audit Committee), and the chairman of each of the committees (other than the Audit Committee) is expected to be a director serving on the committee who is selected by affiliates of Sun Capital, provided that, at such time as we are not a “controlled company” under the NYSE corporate governance standards, our committee membership will comply with all applicable requirements of those standards and a majority of our board of directors will be “independent directors,” as defined under the rules of the NYSE, subject to any applicable phase in requirements.

Executive Officers

Mark E. Brody served as the Company’s Interim Chief Executive Officer from September 1, 2015 through October 22, 2015 when the Board approved the appointment of Brendan L. Hoffman to serve as the Chief Executive Officer of the Company, effective immediately. Mr. Brody remained with the Company in a non-executive capacity through a transition period which ended on November 20, 2015. Mr. Brody also served as Interim Chief Financial Officer and Treasurer of the Company from June 2015 through September 1, 2015. Mr. Brody received $63 per month and the reimbursement of reasonable cost of transportation and housing on a tax grossed-up basis during his employment with the Company. Mr. Brody also serves, and will continue to serve, as a member of the Board and received no additional compensation for serving as a director of the Company.

David Stefko served as the Interim Chief Financial Officer and Treasurer of the Company from September 1, 2015 through January 14, 2016, when he was appointed our permanent Chief Financial Officer, effective immediately. Mr. Stefko received $43 per month and the reimbursement of reasonable cost of transportation and housing on a tax grossed-up basis during the period he served as the Interim Chief Financial Officer and Treasurer of the Company.  

Both Mr. Brody and Mr. Stefko were employees of Sun Capital Partners, Inc. prior to their appointment to the positions at the Company, remained covered by Sun Capital Partners, Inc.’s health and welfare benefit plans and continued to be eligible to receive a bonus under the Sun Capital Partners, Inc. annual bonus plan related to their work at Sun Capital Partners, Inc. Affiliates of Sun Capital Partners, Inc. owed approximately 56% of the outstanding shares of our common stock as of January 30, 2016. Mr. Brody has returned to his former position and is a partner in one or more investment partnerships that are affiliated with Sun Capital Partners, Inc. that beneficially own shares of common stock of the Company. Mr. Stefko resigned from his position at Sun Capital Partners, Inc. on January 13, 2016.

Quarterly Financial Information
Quarterly Financial Information

Note 16. Quarterly Financial Information (unaudited)

Summarized quarterly financial results for fiscal 2015 and fiscal 2014:

 

(in thousands, except per share data)

 

 

 

First

Quarter

 

 

Second

Quarter (1)

 

 

Third

Quarter (2)

 

 

Fourth

Quarter (3)

 

Fiscal 2015:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

 

 

$

59,842

 

 

$

79,993

 

 

$

80,859

 

 

$

81,763

 

Gross profit

 

 

 

 

30,741

 

 

 

20,789

 

 

 

40,005

 

 

 

40,981

 

Net income (loss)

 

 

 

 

2,454

 

 

 

(5,026

)

 

 

5,893

 

 

 

1,778

 

Basic earnings (loss) per share (4)

 

 

 

$

0.07

 

 

$

(0.14

)

 

$

0.16

 

 

$

0.05

 

Diluted earnings (loss) per share (4)

 

 

 

$

0.06

 

 

$

(0.14

)

 

$

0.16

 

 

$

0.05

 

 

 

 

 

First

Quarter

 

 

Second

Quarter (5)

 

 

Third

Quarter

 

 

Fourth

Quarter

 

Fiscal 2014:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

 

 

$

53,452

 

 

$

89,326

 

 

$

102,947

 

 

$

94,671

 

Gross profit

 

 

 

 

26,411

 

 

 

44,014

 

 

 

50,648

 

 

 

45,756

 

Net income

 

 

 

 

1,384

 

 

 

10,501

 

 

 

13,311

 

 

 

10,527

 

Basic earnings per share (4)

 

 

 

$

0.04

 

 

$

0.29

 

 

$

0.36

 

 

$

0.29

 

Diluted earnings per share (4)

 

 

 

$

0.04

 

 

$

0.27

 

 

$

0.35

 

 

$

0.28

 

 

(1)

Includes the impact of $14,447 of pre-tax expense within cost of products sold associated with inventory write-downs primarily related to excess out of season and current inventory and $2,861 of pre-tax expense within selling, general and administrative expenses associated with executive severance costs partly offset by the favorable impact of executive stock option forfeitures.

(2)

Includes the impact of $1,986 of pre-tax income within cost of products sold associated with the favorable impact of the recovery on inventory write downs taken in the second quarter and $164 pre-tax expense within selling, general and administrative expenses associated with executive search costs partly offset by the favorable impact of executive stock option forfeitures.

(3)

Includes the impact of $2,161 of pre-tax income within cost of products sold associated with the favorable impact of the recovery on inventory write downs taken in the second quarter and $323 pre-tax income within selling, general and administrative expenses associated with the favorable adjustment to management transitions costs taken in the second quarter. Additionally, gross profit, net income (loss) and diluted earnings (loss) per share in the fourth quarter were overstated by $530, $313 and $0.01, respectively, as a result of an immaterial error in inventory valuation during the third quarter.

(4)

The sum of the quarterly earnings per share may not equal the full-year amount as the computation of weighted-average number of shares outstanding for each quarter and the full-year are performed independently.

(5)

Includes the impact of $571 of pre-tax expense within selling, general and administrative expenses associated with costs incurred by the Company related to the Secondary Offering completed in July 2014.

Subsequent Event
Subsequent Event

Note 17. Subsequent Event

On March 29, 2016, the Company commenced a rights offering (the “Rights Offering”), whereby the Company distributed, at no charge, to stockholders of record as of March 23, 2016 (the “Rights Offering Record Date”), rights to purchase new shares of the Company’s common stock at $5.50 per share. Each stockholder as of the Rights Offering Record Date (“Rights Holders”) received one non-transferrable right for every share of common stock owned on the Rights Offering Record Date (the “subscription right”). Rights Holders who fully exercise their subscription rights are entitled to subscribe for additional shares that remain unsubscribed as a result of any unexercised subscription rights (the “over-subscription right”). The over-subscription right allows a Rights Holder to subscribe for an additional number of shares equal to up to 20% of the shares of common stock for which such holder was otherwise entitled to subscribe. Subscription rights may only be exercised for whole numbers of shares; no fractional shares of common stock will be issued in the Rights Offering. The Rights Offering period expired on April 14, 2016 at 5:00 p.m. New York City time, prior to which payment for all subscription rights required an irrevocable funding of cash to the transfer agent, to be held in an account for the benefit of the Company. The Investors have fully subscribed in the Rights Offering and exercised their oversubscription right. Under the terms of the Investment Agreement, the Investors will fund the difference between the Rights Offering proceeds and $65,000 on or about April 21, 2016, but no later than April 30, 2016, concurrently with the closing of the Rights Offering.

The Company intends to issue 11,818,181 additional shares to raise gross proceeds of $65,000. The Company intends to use a portion of the net proceeds received from the Rights Offering to (1) repay the amount owed by us under the Tax Receivable Agreement with Sun Cardinal, for itself and as a representative of the other stockholders party thereto, for the tax benefit with respect to the 2014 taxable year, equal to $21,762 plus accrued interest (see Note 15 “Related Party Transactions” for additional details), and (2) repay all outstanding indebtedness under our Revolving Credit Facility. The Company intends to use the remaining net proceeds for general corporate purposes, which may include future amounts owed by us under the Tax Receivable Agreement.

On March 15, 2016, the Company also entered into an Investment Agreement with Sun Cardinal, LLC and SCSF Cardinal, LLC, affiliates of Sun Capital Partners, Inc., pursuant to which Sun Cardinal and SCSF Cardinal have agreed to backstop the rights offering by purchasing at the subscription price of $5.50 per share any and all shares not subscribed through the exercise of rights, including the oversubscription. Consummation of the rights offering and the transactions contemplated by the Investment Agreement are subject to customary closing conditions. The Investment Agreement supersedes the Rights Offering Commitment Letter, dated December 9, 2015, from Sun Capital Partners V, L.P., which is disclosed in further detail in Note 15 “Related Party Transactions.”

Schedule II Valuation and Qualifying Accounts
Schedule II Valuation and Qualifying Accounts

SCHEDULE II

VALUATION AND QUALIFYING ACCOUNTS

(In thousands)

 

 

 

Beginning of

Period

 

 

Expenses

Charges, net

of

Reversals

 

 

Deductions

and Write-offs

net of

Recoveries

 

 

End of

Period

 

Sales Allowances

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fiscal 2015

 

$

(16,098

)

 

$

(55,656

)

 

$

58,908

 

 

$

(12,846

)

Fiscal 2014

 

 

(9,265

)

 

 

(54,467

)

 

 

47,634

 

 

 

(16,098

)

Fiscal 2013

 

 

(7,179

)

 

 

(39,171

)

 

 

37,085

 

 

 

(9,265

)

Allowance for Doubtful Accounts

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fiscal 2015

 

 

(379

)

 

 

34

 

 

 

157

 

 

 

(188

)

Fiscal 2014

 

 

(353

)

 

 

(168

)

 

 

142

 

 

 

(379

)

Fiscal 2013

 

 

(279

)

 

 

(249

)

 

 

175

 

 

 

(353

)

Provision for Inventories

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fiscal 2015

 

 

(6,464

)

 

 

(16,263

)

 

 

9,479

 

 

 

(13,248

)

Fiscal 2014

 

 

(3,868

)

 

 

(3,719

)

 

 

1,123

 

 

 

(6,464

)

Fiscal 2013

 

 

(1,263

)

 

 

(3,738

)

 

 

1,133

 

 

 

(3,868

)

Valuation Allowances on Deferred Income Taxes

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fiscal 2015

 

 

(1,074

)

 

 

 

 

 

50

 

 

 

(1,024

)

Fiscal 2014

 

 

(1,843

)

 

 

 

 

 

769

 

 

 

(1,074

)

Fiscal 2013

 

 

(64,767

)

 

 

(78,855

)

 

 

141,779

 

(a)

 

(1,843

)

 

(a)

The reduction in the Valuation Allowance on Deferred Income Taxes recorded in Fiscal 2013 includes $127,833 that was recognized as an increase to additional paid-in capital in Stockholders’ Equity.

 

Description of Business and Summary of Significant Accounting Policies (Policies)

(A) Description of Business: Vince is a leading contemporary fashion brand best known for modern effortless style and everyday luxury essentials. Established in 2002, the brand now offers a wide range of women’s and men’s apparel, women’s and men’s footwear, and handbags. We reach our customers through a variety of channels, specifically through major wholesale department stores and specialty stores in the United States (“U.S.”) and select international markets, as well as through our branded retail locations and our website. We design our products in the U.S. and source the vast majority of our products from contract manufacturers outside the U.S., primarily in Asia and South America. Products are manufactured to meet our product specifications and labor standards.

(B) Basis of Presentation: The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”).

The consolidated financial statements include our accounts and the accounts of our wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. The amounts and disclosures included in the notes to the consolidated financial statements, unless otherwise indicated, are presented on a continuing operations basis. In the opinion of management, the financial statements contain all adjustments (consisting solely of normal recurring adjustments) and disclosures necessary to make the information presented therein not misleading. As used in this report, unless the context requires otherwise, “our,” “us” and “we” refer to VHC and its consolidated subsidiaries.

Certain reclassifications have been made to the prior periods’ financial information in order to conform to the current period’s presentation. The reclassification had no impact on previously reported net income or stockholders’ equity.

(C) Fiscal Year: VHC operates on a fiscal calendar widely used by the retail industry that results in a given fiscal year consisting of a 52 or 53-week period ending on the Saturday closest to January 31 of the following year.

 

·

References to “fiscal year 2015” or “fiscal 2015” refer to the fiscal year ended January 30, 2016;

 

·

References to “fiscal year 2014” or “fiscal 2014” refer to the fiscal year ended January 31, 2015;

 

·

References to “fiscal year 2013” or “fiscal 2013” refer to the fiscal year ended February 1, 2014.

Fiscal years 2015, 2014 and 2013 consisted of a 52-week period.

(D) Our Business and Liquidity: During fiscal 2015 we have experienced declining sales and additional costs associated with making strategic investments for the future growth of the VINCE brand, including costs associated with the write-down of excess inventory, consulting agreements with our co-founders and the reorganization of our management team. We have undertaken steps to enhance our liquidity position that we expect will allow us to maintain a net debt balance sufficient to comply with any covenants under the Term Loan Facility and the Revolving Credit Facility, as well as provide additional cash for use in our operations as we make these investments. Accordingly, on December 9, 2015 we received a Rights Offering Commitment Letter from Sun Capital Partners V, L.P. (“Sun Fund V”) that commits Sun Fund V to provide the Company with an amount equal to $65,000 of cash proceeds in the event that the Company conducts a rights offering for its common stock to its stockholders (a “Rights Offering”). Such contribution was to be reduced by any proceeds received from the Rights Offering. On March 15, 2016, the Company entered into an Investment Agreement with Sun Cardinal, LLC and SCSF Cardinal, LLC, affiliates of Sun Capital Partners, Inc. (collectively the “Investors”), which supersedes the Rights Offering Commitment Letter.

Pursuant to the terms of the Investment Agreement, the Investors have agreed to backstop the Rights Offering by purchasing at the subscription price of $5.50 per share any and all shares not subscribed through the exercise of rights, including the oversubscription. Consummation of the Rights Offering and the transactions contemplated by the Investment Agreement are subject to customary closing conditions as well as specific representations, warranties and covenants that all parties are required to satisfy up to and through the closing of the transactions contemplated in the Investment Agreement, which is estimated to occur on about April 21, 2016, but can be no later than April 30, 2016. The Investment Agreement can be terminated by either party if the counterparty breaches any of the representations, warranties and covenants, as applicable to them, as set forth in the agreement. Representations, warranties and covenants that require adherence by the Company include among others, compliance with debt covenant requirements under the Company’s credit agreements and closing the backstop commitment by no later than April 30, 2016.

On March 29, 2016, the Company commenced the Rights Offering, whereby the Company distributed, at no charge, to stockholders of record as of March 23, 2016 (the “Rights Offering Record Date”), rights to purchase 11,818,181 new shares of the Company’s common stock at $5.50 per share. Each stockholder as of the Rights Offering Record Date (“Rights Holder”) received one non-transferrable right for every share of common stock owned on the Rights Offering Record Date (the “subscription right”). Rights Holders who fully exercise their subscription rights are entitled to subscribe for additional shares that remain unsubscribed as a result of any unexercised subscription rights (the “over-subscription right”). The over-subscription right allows a Rights Holder to subscribe for an additional number of shares equal to up to 20% of the shares of common stock for which such holder was otherwise entitled to subscribe. Subscription rights may only be exercised for whole numbers of shares; no fractional shares of common stock will be issued in the Rights Offering. The Rights Offering period expired on April 14, 2016 at 5:00 p.m. New York City time, prior to which payment for all subscription rights required an irrevocable funding of cash to the transfer agent, to be held in an account for the benefit of the Company. The Investors have fully subscribed in the Rights Offering and exercised their oversubscription right. Under the terms of the Investment Agreement, the Investors will fund the difference between the Rights Offering proceeds and $65,000 on or about April 21, 2016, but no later than April 30, 2016, concurrently with the closing of the Rights Offering.

The Company intends to use a portion of the net proceeds received from the Rights Offering to (1) repay the amount owed by us under the Tax Receivable Agreement with Sun Cardinal, for itself and as a representative of the other stockholders party thereto, for the tax benefit with respect to the 2014 taxable year, equal to $21,762 plus accrued interest (see Note 15 “Related Party Transactions” for additional details), and (2) repay all outstanding indebtedness under our Revolving Credit Facility. The Company intends to use the remaining net proceeds for general corporate purposes, which may include future amounts owed by us under the Tax Receivable Agreement.

The Company believes that proceeds from the Rights Offering and Investment Agreement along with cash flows generated from operations will provide sufficient liquidity for the Company to comply with covenants under the Term Loan Facility and Revolving Credit Facility as well as provide additional cash for use in our operations.  Failure to receive the proceeds from Rights Offering and Investment Agreement could have a material adverse effect on our ability to comply with our debt covenant requirements and fund operations and capital expenditures in fiscal 2016.

(E) Use of Estimates: The preparation of consolidated financial statements in conformity with GAAP requires that management make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements which affect revenues and expenses during the period reported. Estimates are adjusted when necessary to reflect actual experience. Significant estimates and assumptions may affect many items in the financial statements. Actual results could differ from estimates and assumptions in amounts that may be material to the consolidated financial statements.

Significant estimates inherent in the preparation of the consolidated financial statements include accounts receivable allowances, customer returns, the realizability of inventory, reserves for contingencies, useful lives and impairments of long-lived tangible and intangible assets, and accounting for income taxes and related uncertain tax positions, among others.

(F) Cash and cash equivalents:  All demand deposits and highly liquid short-term deposits with original maturities of three months or less maintained under cash management activities are considered cash equivalents. The effect of foreign currency exchange rate fluctuations on cash and cash equivalents was not significant for fiscal 2015, fiscal 2014, or fiscal 2013.

(G) Accounts Receivable and Concentration of Credit Risk: We maintain an allowance for accounts receivable estimated to be uncollectible. The activity in this allowance for continuing operations is summarized as follows:

 

(in thousands)

 

2015

 

 

2014

 

 

2013

 

Balance, beginning of year

 

$

379

 

 

$

353

 

 

$

279

 

Provisions for bad debt expense, net of reversals

 

 

(34

)

 

 

168

 

 

 

249

 

Bad debts written off

 

 

(157

)

 

 

(142

)

 

 

(175

)

Balance, end of year

 

$

188

 

 

$

379

 

 

$

353

 

 

The provision for bad debts is included in selling, general and administrative expense. Substantially all of our trade receivables are derived from sales to retailers and are recorded at the invoiced amount and do not bear interest. We perform ongoing credit evaluations of our wholesale partners’ financial condition and require collateral as deemed necessary. The past due status of a receivable is based on its contractual terms. Account balances are charged off against the allowance when it is probable the receivable will not be collected.

Accounts receivable are recorded net of allowances for expected future chargebacks and margin support from wholesale partners. It is the nature of the apparel and fashion industry that suppliers like us face significant pressure from customers in the retail industry to provide allowances to compensate for wholesale partner margin shortfalls. This pressure often takes the form of customers requiring us to provide price concessions on prior shipments as a prerequisite for obtaining future orders. Pressure for these concessions is largely determined by overall retail sales performance and, more specifically, the performance of our products at retail. To the extent our wholesale partners have more of our goods on hand at the end of the season, there will be greater pressure for us to grant markdown concessions on prior shipments. Our accounts receivable balances are reported net of expected allowances for these matters based on the historical level of concessions required and our estimates of the level of markdowns and allowances that will be required in the coming season in order to collect the receivables. We evaluate the allowance balances on a continual basis and adjust them as necessary to reflect changes in anticipated allowance activity. We also provide an allowance for sales returns based on historical return rates.

In fiscal 2015, sales to three wholesale partners each accounted for more than ten percent of our net sales from continuing operations. These sales represented 18.3%, 13.8% and 10.8% of fiscal 2015 net sales. In fiscal 2014, sales to three wholesale partners each accounted for more than ten percent of our net sales from continuing operations. These sales represented 23.2%, 13.2% and 12.3% of fiscal 2014 net sales. In fiscal 2013, sales to three wholesale partners each accounted for more than ten percent of our net sales from continuing operations. These sales represented 19.8%, 12.8% and 12.8% of fiscal 2013 net sales.

In fiscal 2015, accounts receivable from three wholesale partners each accounted for more than ten percent of our gross accounts receivable in continuing operations. These receivables represented 19.3%, 17.8% and 14.7% of fiscal 2015 gross accounts receivable. In fiscal 2014 accounts receivable from four wholesale partners each accounted for more than ten percent of our gross accounts receivable in continuing operations. These receivables represented 24.5%, 13.8%, 12.7% and 11.4% of fiscal 2014 gross accounts receivable.

(H) Inventories: Inventories are stated at the lower of cost or market. Cost is determined on the first-in, first-out basis. The cost of inventory includes manufacturing or purchase cost as well as sourcing, transportation, duty and other processing costs associated with acquiring, importing and preparing inventory for sale. Inventory costs are included in cost of products sold at the time of their sale. Product development costs are expensed in selling, general and administrative expense when incurred. Inventory values are reduced to net realizable value when there are factors indicating that certain inventories will not be sold on terms sufficient to recover their cost.

Inventories of continuing operations consist of the following:

 

(in thousands)

 

January 30,

2016

 

 

January 31,

2015

 

Finished goods

 

$

36,576

 

 

$

37,395

 

Raw materials

 

 

 

 

 

24

 

Total inventories, net

 

$

36,576

 

 

$

37,419

 

Net of reserves of:

 

$

13,261

 

 

$

6,471

 

 

As of January 30, 2016, the lower of cost or market reserve included a write-down of the carrying value for certain excess inventory and aged product to its estimated net realizable value, as during the three months ended August 1, 2015 the Company recorded a charge of $14,447 associated with inventory that no longer supports the Company's prospective brand positioning strategy. As a result of changes in our estimates, during the three months ended October 31, 2015 and January 30, 2016, the Company recorded pre-tax income of $1,986 and $2,161, respectively, associated with the recovery of the inventory write-down taken in the three months ended August 1, 2015.

(I) Property, Plant and Equipment: Property, plant and equipment are stated at cost. Depreciation is computed on the straight-line method over estimated useful lives of 3 to 10 years for furniture, fixtures, and computer equipment. Leasehold improvements are amortized on the straight-line basis over the shorter of their estimated useful lives or the remaining lease term, excluding renewal terms. Capitalized software is amortized on the straight-line basis over the estimated economic useful life of the software, generally three to five years. Maintenance and repair costs are charged to earnings while expenditures for major renewals and improvements are capitalized. Upon the disposition of property, plant and equipment, the accumulated depreciation is deducted from the original cost and any gain or loss is reflected in current earnings. Property, plant and equipment consist of the following:

 

 

 

January 30,

 

 

January 31,

 

(in thousands)

 

2016

 

 

2015

 

Building and improvements

 

$

38,452

 

 

$

27,645

 

Machinery and equipment

 

 

8,236

 

 

 

5,384

 

Capitalized software

 

 

1,764

 

 

 

1,341

 

Construction in process

 

 

4,716

 

 

 

3,369

 

Total property, plant and equipment

 

 

53,168

 

 

 

37,739

 

Less: accumulated depreciation and amortization

 

 

(15,399

)

 

 

(9,390

)

Property, plant and equipment, net

 

$

37,769

 

 

$

28,349

 

 

Depreciation expense related to continuing operations was $6,426, $3,381 and $1,562 for fiscal 2015, fiscal 2014 and fiscal 2013, respectively.

(J) Impairment of Long-lived Assets: We review long-lived assets with a finite life for existence of facts and circumstances which indicate that the useful life is shorter than previously estimated or the carrying amount may not be recoverable from future operations based on undiscounted expected future cash flows. Impairment losses are then recognized in operating results to the extent discounted expected future cash flows are less than the carrying value of the asset. There were no material impairment charges for continuing operations related to long-lived assets recorded in fiscal 2015, fiscal 2014 or fiscal 2013.

(K) Goodwill and Other Intangible Assets: Goodwill and other indefinite-lived intangible assets are tested for impairment at least annually and in an interim period if a triggering event occurs. We completed our annual impairment testing on our goodwill and indefinite-lived intangible assets during the fourth quarters of fiscal 2015, fiscal 2014 and fiscal 2013. Goodwill is not allocated to our operating segments in the measure of segment assets regularly reported to and used by management, however goodwill is allocated to operating segments (goodwill reporting units) for the sole purpose of the annual impairment test for goodwill.

Goodwill represents the excess of the cost of acquired businesses over the fair market value of the identifiable net assets. Indefinite-lived intangible assets are primarily company-owned trademarks. As the acquisition by Kellwood Company of the net assets of Vince occurred prior to the current requirements of ASC Topic 805 Business Combinations, the additional purchase consideration paid to the former owners of Vince subsequent to the acquisition date was recorded as an addition to the purchase price, and therefore goodwill, once determined.

In September 2011, the Financial Accounting Standards Board (“FASB”) issued an amendment to the Intangibles-Goodwill and Other topic of Accounting Standards Codification (“ASC”). Under this amendment, an entity may elect to perform a qualitative impairment assessment for goodwill. If adverse qualitative trends are identified during the qualitative assessment that indicate that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, a quantitative impairment test is required. “Step one” of this quantitative impairment test requires that the fair value of the reporting unit be estimated and compared to its carrying amount. If the carrying amount exceeds the estimated fair value of the asset, “step two” of the impairment test is performed to calculate the impairment loss. An impairment loss is recognized to the extent the carrying amount of the reporting unit exceeds the implied fair value.

An entity may pass on performing the qualitative assessment for a reporting unit and directly perform “step one” of the assessment. This determination can be made on a reporting unit by reporting unit basis, and an entity may resume performing a qualitative assessment in subsequent periods. This amendment is effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. We adopted this amendment during fiscal year 2012.

In light of the decline in our sales over recent periods, in fiscal 2015 we elected to perform a quantitative impairment test on the goodwill. The results of the quantitative test did not result in any impairment of goodwill because the fair values of each of the Company’s reporting units exceeded their respective carrying values. As such, we were not required to perform “step two” of the impairment test. In fiscal 2014 and fiscal 2013, we elected to perform a qualitative assessment on the goodwill and determined that it was not more likely than not that the carrying value of the reporting unit was greater than the fair value. As such, we were not required to perform “step two” of the impairment test.

In July 2012, the FASB issued Accounting Standards Update No. 2012-02, Intangibles—Goodwill and Other (Topic 350): Testing Indefinite Lived Assets for Impairment (“ASU 2012-02”). Under this amendment, an entity may elect to perform a qualitative impairment assessment for indefinite-lived intangible assets similar to the goodwill impairment testing guidance discussed above.

An entity may pass on performing the qualitative assessment for an indefinite-lived intangible asset and directly perform “step one” of the assessment. This determination can be made on an asset by asset basis, and an entity may resume performing a qualitative assessment in subsequent periods. The amendment is effective for annual and interim impairment tests for indefinite-lived intangible assets performed for fiscal years beginning after September 15, 2012. We early adopted this amendment during fiscal 2012.

In light of the decline in our sales over recent periods, in fiscal 2015 we elected to perform a quantitative assessment on indefinite-lived intangible assets. The results of the quantitative test did not result in any impairment because the fair value of the Company’s indefinite-lived intangible asset exceeded its carrying value. As such we were not required to perform “step two” of the impairment test. In fiscal 2014 and fiscal 2013, we elected to perform a qualitative assessment on indefinite-lived intangible assets and determined that it was not more likely than not that the carrying value of the assets exceeded the fair value. As such we were not required to perform “step two” of the impairment test.

Determining the fair value of goodwill and other intangible assets is judgmental in nature and requires the use of significant estimates and assumptions, including revenue growth rates and operating margins, discount rates and future market conditions, among others. It is possible that estimates of future operating results could change adversely and impact the evaluation of the recoverability of the carrying value of goodwill and intangible assets and that the effect of such changes could be material.

Definite-lived intangible assets are comprised of customer relationships and are being amortized on a straight-line basis over their useful lives of 20 years.

See Note 4 “Goodwill and Intangible Assets” for more information on the details surrounding goodwill and intangible assets.

(L) Deferred Financing Costs: Deferred financing costs, such as underwriting, financial advisory, professional fees, and other similar fees are capitalized and recognized in interest expense over the contractual life of the related debt instrument using the straight-line method, as this method results in recognition of interest expense that is materially consistent with that of the effective interest method.

(M) Deferred Rent and Deferred Lease Incentives: We lease various office spaces, showrooms and retail stores. Many of these operating leases contain predetermined fixed escalations of the minimum rentals during the original term of the lease. For these leases, we recognize the related rental expense on a straight-line basis over the life of the lease and record the difference between the amount charged to operations and amounts paid as deferred rent. Certain of our retail store leases contain provisions for contingent rent, typically a percentage of retail sales once a predetermined threshold has been met. These amounts are expensed as incurred. Additionally, we received lease incentives in certain leases. These allowances have been deferred and are amortized on a straight-line basis over the life of the lease as a reduction of rent expense.

(N) Revenue Recognition: Sales are recognized when goods are shipped in accordance with customer orders for our wholesale business, upon receipt by the customer for our e-commerce business, and at the time of sale to the consumer for our retail business. Revenue associated with gift cards is recognized upon redemption. The estimated amounts of sales discounts, returns and allowances are accounted for as reductions of sales when the associated sale occurs. These estimated amounts are adjusted periodically based on changes in facts and circumstances when the changes become known to us. Accrued discounts, returns and allowances are included as an offset to accounts receivable in the Consolidated Balance Sheets for our wholesale business. The activity in the accrued discounts, returns and allowances account for continuing operations is summarized as follows:

 

(in thousands)

 

2015

 

 

2014

 

 

2013

 

Balance, beginning of year

 

$

16,098

 

 

$

9,265

 

 

$

7,179

 

Provision

 

 

55,656

 

 

 

54,467

 

 

 

39,171

 

Utilization

 

 

(58,908

)

 

 

(47,634

)

 

 

(37,085

)

Balance, end of year

 

$

12,846

 

 

$

16,098

 

 

$

9,265

 

 

For our wholesale business, amounts billed to customers for shipping and handling costs are not significant. Our stated terms are FOB shipping point. There is no stated obligation to customers after shipment, other than specifically set forth allowances or discounts that are accrued at the time of sale. The rights of inspection or acceptance contained in certain sales agreements are limited to whether the goods received by our wholesale partners are in conformance with the order specifications.

(O) Cost of Products Sold: Our cost of products sold and gross margins may not necessarily be comparable to that of other entities as a result of different practices in categorizing costs. The primary components of our cost of products sold are as follows:

 

·

the cost of purchased merchandise, including raw materials;

 

·

the cost of inbound transportation, including freight;

 

·

the cost of our production and sourcing departments;

 

·

other processing costs associated with acquiring and preparing the inventory for sale; and

 

·

shrink and valuation reserves.

(P) Marketing and Advertising: We provide cooperative advertising allowances to certain of our customers. These allowances are accounted for as reductions in sales as discussed in “Revenue Recognition” above. Production expense related to company-directed advertising is deferred until the first time at which the advertisement runs. Communication expense related to company-directed advertising is expensed as incurred. Marketing and advertising expense recorded in selling, general and administrative expenses for continuing operations was $9,177, $7,427 and $4,858 in fiscal 2015, fiscal 2014 and fiscal 2013, respectively. At January 30, 2016 and January 31, 2015, deferred production expenses associated with company-directed advertising were $416 and $643, respectively.

(Q) Share-Based Compensation: New, modified and unvested share-based payment transactions with employees, such as stock options, are measured at fair value and recognized as compensation expense over the requisite service period and is included as a component of selling, general and administrative expenses in the Consolidated Statements of Operations. Additionally, share-based awards granted to non-employees are expensed over the period in which the related services are rendered at their fair value, using the Black Scholes Pricing Model to determine the fair value.

(R) Income Taxes: We account for income taxes using the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences of temporary differences between the carrying amounts and tax bases of assets and liabilities at enacted rates. We determine the appropriateness of valuation allowances in accordance with the “more likely than not” recognition criteria. We recognize tax positions in the Consolidated Balance Sheets as the largest amount of tax benefit that is greater than 50% likely of being realized upon ultimate settlement with tax authorities assuming full knowledge of the position and all relevant facts. Accrued interest and penalties related to unrecognized tax benefits are included in income taxes in the Consolidated Statements of Operations.

(S) Earnings Per Share: Basic net income (loss) per share is calculated by dividing net income (loss) by the weighted average number of shares outstanding during the period. Diluted net income (loss) per share is calculated similarly, but includes potential dilution from the exercise of stock options for which future service is required as a condition to deliver the underlying stock.

(T) Recent Accounting Pronouncements: In November 2015, new accounting guidance on the balance sheet classification of deferred taxes was issued, which requires entities to classify deferred tax assets and liabilities as noncurrent in the consolidated balance sheet. Currently deferred tax assets and liabilities must be classified as current and noncurrent amounts in the consolidated balance sheet. This guidance is effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. The guidance may be applied either prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. The Company is currently evaluating the impact of adopting this guidance on the consolidated financial statements.

In July 2015, new accounting guidance on accounting for inventory was issued, which requires entities to measure inventory at the lower of cost and net realizable value. This guidance is effective for interim and annual periods beginning on or after December 15, 2016. The Company is currently evaluating the impact of the adoption of the new accounting guidance on its consolidated financial statements.

In April 2015, the FASB issued ASU 2015-03, “Interest-Imputation of Interest.” The standard requires deferred financing costs to be presented on the balance sheet as a direct deduction from the carrying amount of the related debt liability, consistent with debt discounts, instead of being presented as a deferred asset in the balance sheet. ASU 2015-03 does not change the recognition and measurement guidance for deferred financing costs. Once adopted, entities are required to apply the new guidance retrospectively to all prior periods presented. ASU 2015-03 is effective for annual periods beginning after December 15, 2015, and interim periods within those fiscal years and early application is permitted. The Company has elected to early adopt the standard, effective February 1, 2015 and accordingly, the consolidated balance sheets as of January 30, 2016 and January 31, 2015 reflect the deferred financing costs as a direct deduction from the carrying amount of our long-term debt. Refer to Note 7 “Long-Term Debt”, for further information.

In April 2015, the FASB issued ASU No. 2015-05, “Customer's Accounting for Fees Paid in a Cloud Computing Arrangement,” which provides guidance on accounting for cloud computing fees. If a cloud computing arrangement includes a software license, then the customer should account for the license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the arrangement should be accounted for as a service contract. This guidance is effective for arrangements entered into, or materially modified, in interim and annual periods beginning after December 15, 2015. Retrospective application is permitted but not required. The adoption of this guidance is not expected to have a material effect on the Company's consolidated financial statements.

In May 2014, FASB issued revenue recognition guidance (ASU No. 2014-09). The new accounting guidance requires entities to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.  In August 2015, FASB elected to defer the effective dates (ASU No. 2015-14). The updated guidance is now effective for interim and annual periods beginning on or after December 15, 2017.  Early adoption is permitted for annual periods beginning after December 15, 2016, including interim reporting periods within that reporting period.  The Company is currently evaluating the impact of the adoption of the new guidance on its financial statements.

Description of Business and Summary of Significant Accounting Policies (Tables)

We maintain an allowance for accounts receivable estimated to be uncollectible. The activity in this allowance for continuing operations is summarized as follows:

 

(in thousands)

 

2015

 

 

2014

 

 

2013

 

Balance, beginning of year

 

$

379

 

 

$

353

 

 

$

279

 

Provisions for bad debt expense, net of reversals

 

 

(34

)

 

 

168

 

 

 

249

 

Bad debts written off

 

 

(157

)

 

 

(142

)

 

 

(175

)

Balance, end of year

 

$

188

 

 

$

379

 

 

$

353

 

 

Inventories of continuing operations consist of the following:

 

(in thousands)

 

January 30,

2016

 

 

January 31,

2015

 

Finished goods

 

$

36,576

 

 

$

37,395

 

Raw materials

 

 

 

 

 

24

 

Total inventories, net

 

$

36,576

 

 

$

37,419

 

Net of reserves of:

 

$

13,261

 

 

$

6,471

 

 

Property, plant and equipment consist of the following:

 

 

January 30,

 

 

January 31,

 

(in thousands)

 

2016

 

 

2015

 

Building and improvements

 

$

38,452

 

 

$

27,645

 

Machinery and equipment

 

 

8,236

 

 

 

5,384

 

Capitalized software

 

 

1,764

 

 

 

1,341

 

Construction in process

 

 

4,716

 

 

 

3,369

 

Total property, plant and equipment

 

 

53,168

 

 

 

37,739

 

Less: accumulated depreciation and amortization

 

 

(15,399

)

 

 

(9,390

)

Property, plant and equipment, net

 

$

37,769

 

 

$

28,349

 

 

The activity in the accrued discounts, returns and allowances account for continuing operations is summarized as follows:

 

(in thousands)

 

2015

 

 

2014

 

 

2013

 

Balance, beginning of year

 

$

16,098

 

 

$

9,265

 

 

$

7,179

 

Provision

 

 

55,656

 

 

 

54,467

 

 

 

39,171

 

Utilization

 

 

(58,908

)

 

 

(47,634

)

 

 

(37,085

)

Balance, end of year

 

$

12,846

 

 

$

16,098

 

 

$

9,265

 

 

Discontinued Operations (Tables)
Schedule of Results of Non-Vince Businesses Included in Discontinued Operations

The results of the non-Vince businesses included in discontinued operations (through the separation of the non-Vince businesses on November 27, 2013) for the fiscal year ended February 1, 2014 is summarized in the following table:

 

 

 

Fiscal Year

 

(in thousands, except effective tax rate)

 

2013

 

Net sales

 

$

400,848

 

Cost of products sold

 

 

313,620

 

Gross profit

 

 

87,228

 

Selling, general and administrative expenses

 

 

98,016

 

Restructuring, environmental and other charges

 

 

1,628

 

Impairment of long-lived assets

 

 

1,399

 

Change in fair value of contingent consideration

 

 

1,473

 

Interest expense, net

 

 

46,677

 

Other expense, net

 

 

498

 

Loss before income taxes

 

 

(62,463

)

Income taxes

 

 

(11,648

)

Net loss from discontinued operations, net of taxes

 

$

(50,815

)

Effective tax rate

 

 

18.6

%

 

Goodwill and Intangible Assets (Tables)

Net goodwill balances and changes therein subsequent to the February 1, 2014 Consolidated Balance Sheet by segment are as follows:

 

(in thousands)

 

Wholesale

 

 

Direct-to-consumer

 

 

Total Net Goodwill

 

Balance as of February 1, 2014

 

$

41,435

 

 

$

22,311

 

 

$

63,746

 

Balance as of January 31, 2015

 

$

41,435

 

 

$

22,311

 

 

$

63,746

 

Balance as of January 30, 2016

 

$

41,435

 

 

$

22,311

 

 

$

63,746

 

 

Identifiable intangible assets summary:

 

(in thousands)

 

Gross Amount

 

 

Accumulated

Amortization

 

 

Net Book

Value

 

Balance as of January 31, 2015:

 

 

 

 

 

 

 

 

 

 

 

 

Amortizable intangible assets:

 

 

 

 

 

 

 

 

 

 

 

 

Customer relationships

 

$

11,970

 

 

$

(4,176

)

 

$

7,794

 

Indefinite-lived intangible assets:

 

 

 

 

 

 

 

 

 

 

 

 

Trademarks

 

 

101,850

 

 

 

 

 

 

101,850

 

Total intangible assets

 

$

113,820

 

 

$

(4,176

)

 

$

109,644

 

 

(in thousands)

 

Gross Amount

 

 

Accumulated

Amortization

 

 

Net Book

Value

 

Balance as of January 30, 2016

 

 

 

 

 

 

 

 

 

 

 

 

Amortizable intangible assets:

 

 

 

 

 

 

 

 

 

 

 

 

Customer relationships

 

$

11,970

 

 

 

(4,774

)

 

$

7,196

 

Indefinite-lived intangible assets:

 

 

 

 

 

 

 

 

 

 

 

 

Trademarks

 

 

101,850

 

 

 

 

 

 

101,850

 

Total intangible assets

 

$

113,820

 

 

$

(4,774

)

 

$

109,046

 

 

Amortization of identifiable intangible assets was $598, $599 and $599 for fiscal 2015, 2014 and 2013, respectively, which is included in selling, general and administrative expenses on the Consolidated Statements of Operations. Amortization expense for each of the fiscal years 2016 to 2020 is expected to be as follows:

 

 

 

Future

 

(in thousands)

 

Amortization

 

2016

 

$

598

 

2017

 

 

598

 

2018

 

 

598

 

2019

 

 

598

 

2020

 

 

598

 

Total next 5 fiscal years

 

$

2,990

 

 

Long-Term Debt (Tables)
Summary of Long-Term Debt

Long-term debt consisted of the following as of, January 30, 2016 and January 31, 2015:

 

(in thousands)

 

January 30,

2016

 

 

January 31,

2015

 

Term Loan Facility

 

$

45,000

 

 

$

65,000

 

Revolving Credit Facility

 

 

15,000

 

 

 

23,000

 

Total long-term debt principal

 

 

60,000

 

 

 

88,000

 

Less: Deferred financing costs (1)

 

 

2,385

 

 

 

3,550

 

Total long-term debt

 

$

57,615

 

 

$

84,450

 

 

(1)

Pursuant to new accounting guidance issued by the Financial Accounting Standards Board (“FASB”) in April 2015, entities are no longer required to present deferred financing costs as a deferred asset. The guidance is effective for our fiscal year beginning in 2016, however, the Company has early adopted this accounting standard update effective as of February 1, 2015 and accordingly, the January 31, 2015 comparative balance sheet was adjusted to conform to the new classification presentation. There was no other impact on the financial statements related to the adoption other than the reclassification change on the consolidated balance sheet. Refer to Note 1 “Description of Business and Summary of Significant Accounting Policies”, for further information regarding the accounting standard update.

Commitments and Contingencies (Tables)

The future minimum lease payments under operating leases at January 30, 2016 were as follows:

 

 

 

Minimum Lease

 

(in thousands)

 

Payments

 

Fiscal 2016

 

$

20,083

 

Fiscal 2017

 

 

20,891

 

Fiscal 2018

 

 

20,712

 

Fiscal 2019

 

 

20,653

 

Fiscal 2020

 

 

19,584

 

Thereafter

 

 

67,444

 

Total minimum lease payments

 

$

169,367

 

 

The following is a reconciliation of the accrued severance and employee related benefits included within total current liabilities on the consolidated balance sheet:

 

(in thousands)

 

 

 

 

Balance at August 1, 2015

 

$

3,717

 

Cash payments

 

 

(1,557

)

Non-cash recovery

 

 

(323

)

Balance at January 30, 2016

 

$

1,837

 

 

Share-Based Compensation (Tables)

A summary of stock option activity for both employees and non-employees for fiscal 2015 is as follows:

 

 

 

Stock Options

 

 

Weighted

Average

Exercise

Price

 

 

Weighted

Average

Remaining

Contractual

Term

(years)

 

 

Aggregate

Intrinsic

Value

(in thousands)

 

Outstanding at January 31, 2015

 

 

2,726,169

 

 

$

13.18

 

 

 

8.2

 

 

$

33,367

 

Granted

 

 

2,173,273

 

 

$

4.32

 

 

 

 

 

 

 

 

 

Exercised

 

 

(26,209

)

 

$

6.64

 

 

 

 

 

 

 

 

 

Forfeited or expired

 

 

(1,993,498

)

 

$

15.98

 

 

 

 

 

 

 

 

 

Outstanding at January 30, 2016

 

 

2,879,735

 

 

$

4.61

 

 

 

8.7

 

 

$

2,402

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vested and exercisable at January 30, 2016

 

 

827,553

 

 

$

5.89

 

 

 

6.3

 

 

$

-

 

 

 

 

 

Fiscal Year

 

 

 

2015

 

 

2014

 

Weighted-average expected volatility

 

 

46.0

%

 

 

51.1

%

Expected term (in years)

 

4.5 years

 

 

4.5 years

 

Risk-free interest rate

 

 

1.4

%

 

 

1.4

%

Expected dividend yield

 

 

%

 

 

%

 

A summary of restricted stock unit activity for fiscal 2015 is as follows:

 

 

 

Restricted

Stock

Units

 

 

Weighted

Average

Grant Date

Fair Value

 

Nonvested restricted stock units at January 31, 2015

 

 

12,384

 

 

$

26.24

 

Granted

 

 

22,111

 

 

$

7.27

 

Vested

 

 

(4,963

)

 

$

25.20

 

Nonvested restricted stock units at January 30, 2016

 

 

29,532

 

 

$

12.22

 

 

Earnings Per Share (Tables)
Schedule of Reconciliation of Weighted Average Basic Shares to Weighted Average Diluted Shares Outstanding

The following is a reconciliation of weighted average basic shares to weighted average diluted shares outstanding:

 

 

 

Fiscal Year Ended

 

 

 

January 30, 2016

 

 

January 31, 2015

 

 

February 1, 2014

 

Weighted-average shares—basic

 

 

36,770,430

 

 

 

36,730,490

 

 

 

28,119,794

 

Effect of dilutive equity securities

 

 

758,797

 

 

 

1,514,416

 

 

 

153,131

 

Weighted-average shares—diluted

 

 

37,529,227

 

 

 

38,244,906

 

 

 

28,272,925

 

 

Income Taxes (Tables)

The provision for income taxes for continuing operations consists of the following:

 

(in thousands)

 

Fiscal

2015

 

 

Fiscal

2014

 

 

Fiscal

2013

 

Current:

 

 

 

 

 

 

 

 

 

 

 

 

Domestic:

 

 

 

 

 

 

 

 

 

 

 

 

Federal

 

$

(53

)

 

$

759

 

 

$

 

State

 

 

522

 

 

 

344

 

 

 

43

 

Foreign

 

 

 

 

 

 

 

 

 

Total current

 

 

469

 

 

 

1,103

 

 

 

43

 

Deferred:

 

 

 

 

 

 

 

 

 

 

 

 

Domestic:

 

 

 

 

 

 

 

 

 

 

 

 

Federal

 

 

2,994

 

 

 

20,416

 

 

 

6,333

 

State

 

 

(249

)

 

 

2,475

 

 

 

905

 

Foreign

 

 

 

 

 

 

 

 

(13

)

Total deferred

 

 

2,745

 

 

 

22,891

 

 

 

7,225

 

Total provision for income taxes

 

$

3,214

 

 

$

23,994

 

 

$

7,268

 

 

A reconciliation of the federal statutory income tax rate to the effective tax rate is as follows:

 

 

 

Fiscal

2015

 

 

Fiscal

2014

 

 

Fiscal

2013

 

Statutory federal rate

 

 

35.0

%

 

 

35.0

%

 

 

35.0

%

State taxes, net of federal benefit

 

 

6.5

%

 

 

5.7

%

 

 

9.5

%

Nondeductible Tax Receivable Agreement adjustment

 

 

4.1

%

 

 

0.0

%

 

 

0.0

%

Nondeductible interest

 

 

0.0

%

 

 

0.0

%

 

 

18.1

%

Nondeductible transaction costs

 

 

0.0

%

 

 

0.0

%

 

 

6.7

%

Valuation allowance

 

 

(0.5

)%

 

 

(0.7

)%

 

 

(45.5

)%

Return to provision adjustment

 

 

(2.4

)%

 

 

0.0

%

 

 

0.0

%

Changes in tax laws

 

 

(3.2

)%

 

 

0.0

%

 

 

0.0

%

Other

 

 

(0.8

)%

 

 

0.2

%

 

 

(0.1

)%

Total

 

 

38.7

%

 

 

40.2

%

 

 

23.7

%

 

Deferred income tax assets and liabilities for continuing operations consisted of the following:

 

(in thousands)

 

January 30,

2016

 

 

January 31,

2015

 

Deferred tax assets:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

$

17,071

 

 

$

29,935

 

Employee related costs

 

 

2,163

 

 

 

3,503

 

Allowance for asset valuations

 

 

2,551

 

 

 

3,172

 

Accrued expenses

 

 

6,088

 

 

 

3,933

 

Net operating losses

 

 

72,465

 

 

 

65,111

 

Tax credits

 

 

812

 

 

 

888

 

Other

 

 

457

 

 

 

90

 

Total deferred tax assets

 

 

101,607

 

 

 

106,632

 

Less: valuation allowances

 

 

(1,024

)

 

 

(1,074

)

Net deferred tax assets

 

 

100,583

 

 

 

105,558

 

Deferred tax liabilities:

 

 

 

 

 

 

 

 

Cancellation of debt income

 

 

(6,657

)

 

 

(8,876

)

Other

 

 

(482

)

 

 

(493

)

Total deferred tax liabilities

 

 

(7,139

)

 

 

(9,369

)

Net deferred tax assets

 

$

93,444

 

 

$

96,189

 

Included in:

 

 

 

 

 

 

 

 

Prepaid expenses and other current assets

 

$

4,164

 

 

$

4,015

 

Deferred income taxes and other assets

 

 

89,280

 

 

 

92,174

 

Net deferred income tax assets

 

$

93,444

 

 

$

96,189

 

 

A reconciliation of the beginning and ending amount of gross unrecognized tax benefits, excluding interest and penalties, is as follows:

 

(in thousands)

 

Fiscal

2015

 

 

Fiscal

2014

 

 

Fiscal

2013

 

Beginning balance

 

$

4,487

 

 

$

3,693

 

 

$

9,378

 

Increases for tax positions in current year

 

 

72

 

 

 

2,397

 

 

 

3,743

 

Increases for tax positions in prior years

 

 

27

 

 

 

135

 

 

 

356

 

Decreases for tax positions in prior years

 

 

(2,459

)

 

 

(1,738

)

 

 

(4,186

)

Settlements

 

 

 

 

 

 

 

 

(3,022

)

Lapse in statute of limitations

 

 

 

 

 

 

 

 

(102

)

Restructuring Transactions

 

 

 

 

 

 

 

 

(2,474

)

Ending balance

 

$

2,127

 

 

$

4,487

 

 

$

3,693

 

 

Segment and Geographical Financial Information (Tables)

Summary information for our operating segments is presented below.

 

 

 

Fiscal Year

 

(in thousands)

 

2015

 

 

2014

 

 

2013

 

Net Sales:

 

 

 

 

 

 

 

 

 

 

 

 

Wholesale

 

$

201,182

 

 

$

259,418

 

 

$

229,114

 

Direct-to-consumer

 

 

101,275

 

 

 

80,978

 

 

 

59,056

 

Total net sales

 

$

302,457

 

 

$

340,396

 

 

$

288,170

 

Income from Operations:

 

 

 

 

 

 

 

 

 

 

 

 

Wholesale

 

$

61,571

 

 

$

100,623

 

 

$

81,822

 

Direct-to-consumer

 

 

7,839

 

 

 

14,556

 

 

 

10,435

 

Subtotal

 

 

69,410

 

 

 

115,179

 

 

 

92,257

 

Unallocated expenses

 

 

(53,684

)

 

 

(44,929

)

 

 

(42,904

)

Total income from operations

 

$

15,726

 

 

$

70,250

 

 

$

49,353

 

Depreciation & Amortization:

 

 

 

 

 

 

 

 

 

 

 

 

Wholesale

 

$

2,058

 

 

$

1,962

 

 

$

1,204

 

Direct-to-consumer

 

 

4,498

 

 

 

2,950

 

 

 

1,581

 

Unallocated corporate

 

 

1,794

 

 

 

355

 

 

 

 

Total depreciation & amortization

 

$

8,350

 

 

$

5,267

 

 

$

2,785

 

Capital Expenditures:

 

 

 

 

 

 

 

 

 

 

 

 

Wholesale

 

$

1,629

 

 

$

2,076

 

 

$

1,832

 

Direct-to-consumer

 

 

9,442

 

 

 

8,117

 

 

 

8,241

 

Unallocated corporate

 

 

6,520

 

 

 

9,506

 

 

 

 

Total capital expenditure

 

$

17,591

 

 

$

19,699

 

 

$

10,073

 

 

(in thousands)

 

January 30,

2016

 

 

January 31,

2015

 

Total Assets:

 

 

 

 

 

 

 

 

Wholesale

 

$

47,757

 

 

$

70,635

 

Direct-to-consumer

 

 

35,433

 

 

 

33,793

 

Unallocated corporate

 

 

280,378

 

 

 

274,220

 

Total assets

 

$

363,568

 

 

$

378,648

 

 

Sales results are presented on a geographic basis below

 

 

Fiscal Year

 

(in thousands)

 

2015

 

 

2014

 

 

2013

 

Net Sales:

 

 

 

 

 

 

 

 

 

 

 

 

United States

 

$

273,655

 

 

$

310,179

 

 

$

265,622

 

Other countries

 

 

28,802

 

 

 

30,217

 

 

 

22,548

 

Total net sales

 

$

302,457

 

 

$

340,396

 

 

$

288,170

 

 

Our net sales by major product category are as follows:

 

 

 

Fiscal Year

 

 

 

2015

 

 

2014

 

 

2013

 

(in thousands)

 

Amount

 

 

% of Total

 

 

Amount

 

 

% of Total

 

 

Amount

 

 

% of Total

 

Women's collection

 

$

272,338

 

 

 

90

%

 

$

301,076

 

 

 

89

%

 

$

253,647

 

 

 

88

%

Men's collection

 

 

22,685

 

 

 

8

%

 

 

35,417

 

 

 

10

%

 

 

33,612

 

 

 

12

%

Other

 

 

7,434

 

 

 

2

%

 

 

3,903

 

 

 

1

%

 

 

911

 

 

 

0

%

 

 

$

302,457

 

 

 

100

%

 

$

340,396

 

 

 

100

%

 

$

288,170

 

 

 

100

%

 

Quarterly Financial Information (Tables)
Summary of Quarterly Financial Results

Summarized quarterly financial results for fiscal 2015 and fiscal 2014:

 

(in thousands, except per share data)

 

 

 

First

Quarter

 

 

Second

Quarter (1)

 

 

Third

Quarter (2)

 

 

Fourth

Quarter (3)

 

Fiscal 2015:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

 

 

$

59,842

 

 

$

79,993

 

 

$

80,859

 

 

$

81,763

 

Gross profit

 

 

 

 

30,741

 

 

 

20,789

 

 

 

40,005

 

 

 

40,981

 

Net income (loss)

 

 

 

 

2,454

 

 

 

(5,026

)

 

 

5,893

 

 

 

1,778

 

Basic earnings (loss) per share (4)

 

 

 

$

0.07

 

 

$

(0.14

)

 

$

0.16

 

 

$

0.05

 

Diluted earnings (loss) per share (4)

 

 

 

$

0.06

 

 

$

(0.14

)

 

$

0.16

 

 

$

0.05

 

 

 

 

 

First

Quarter

 

 

Second

Quarter (5)

 

 

Third

Quarter

 

 

Fourth

Quarter

 

Fiscal 2014:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

 

 

$

53,452

 

 

$

89,326

 

 

$

102,947

 

 

$

94,671

 

Gross profit

 

 

 

 

26,411

 

 

 

44,014

 

 

 

50,648

 

 

 

45,756

 

Net income

 

 

 

 

1,384

 

 

 

10,501

 

 

 

13,311

 

 

 

10,527

 

Basic earnings per share (4)

 

 

 

$

0.04

 

 

$

0.29

 

 

$

0.36

 

 

$

0.29

 

Diluted earnings per share (4)

 

 

 

$

0.04

 

 

$

0.27

 

 

$

0.35

 

 

$

0.28

 

 

(1)

Includes the impact of $14,447 of pre-tax expense within cost of products sold associated with inventory write-downs primarily related to excess out of season and current inventory and $2,861 of pre-tax expense within selling, general and administrative expenses associated with executive severance costs partly offset by the favorable impact of executive stock option forfeitures.

(2)

Includes the impact of $1,986 of pre-tax income within cost of products sold associated with the favorable impact of the recovery on inventory write downs taken in the second quarter and $164 pre-tax expense within selling, general and administrative expenses associated with executive search costs partly offset by the favorable impact of executive stock option forfeitures.

(3)

Includes the impact of $2,161 of pre-tax income within cost of products sold associated with the favorable impact of the recovery on inventory write downs taken in the second quarter and $323 pre-tax income within selling, general and administrative expenses associated with the favorable adjustment to management transitions costs taken in the second quarter. Additionally, gross profit, net income (loss) and diluted earnings (loss) per share in the fourth quarter were overstated by $530, $313 and $0.01, respectively, as a result of an immaterial error in inventory valuation during the third quarter.

(4)

The sum of the quarterly earnings per share may not equal the full-year amount as the computation of weighted-average number of shares outstanding for each quarter and the full-year are performed independently.

(5)

Includes the impact of $571 of pre-tax expense within selling, general and administrative expenses associated with costs incurred by the Company related to the Secondary Offering completed in July 2014.

Description of Business and Summary of Significant Accounting Policies - Additional Information (Detail) (USD $)
3 Months Ended 12 Months Ended 0 Months Ended 0 Months Ended
Jan. 30, 2016
Oct. 31, 2015
Aug. 1, 2015
Jan. 30, 2016
Jan. 31, 2015
Feb. 1, 2014
Jan. 30, 2016
Customer Relationships [Member]
Jan. 30, 2016
Property, Plant and Equipment [Member]
Jan. 31, 2015
Property, Plant and Equipment [Member]
Feb. 1, 2014
Property, Plant and Equipment [Member]
Jan. 30, 2016
Furniture, Fixtures and Computer Equipment [Member]
Minimum [Member]
Jan. 30, 2016
Furniture, Fixtures and Computer Equipment [Member]
Maximum [Member]
Jan. 30, 2016
Capitalized Software [Member]
Minimum [Member]
Jan. 30, 2016
Capitalized Software [Member]
Maximum [Member]
Jan. 30, 2016
Customer Concentration Risk [Member]
Sales [Member]
Customer
Jan. 31, 2015
Customer Concentration Risk [Member]
Sales [Member]
Customer
Feb. 1, 2014
Customer Concentration Risk [Member]
Sales [Member]
Customer
Jan. 30, 2016
Customer Concentration Risk [Member]
Accounts Receivable [Member]
Customer
Jan. 31, 2015
Customer Concentration Risk [Member]
Accounts Receivable [Member]
Customer
Jan. 30, 2016
Wholesale Partner One [Member]
Customer Concentration Risk [Member]
Sales [Member]
Jan. 31, 2015
Wholesale Partner One [Member]
Customer Concentration Risk [Member]
Sales [Member]
Feb. 1, 2014
Wholesale Partner One [Member]
Customer Concentration Risk [Member]
Sales [Member]
Jan. 30, 2016
Wholesale Partner One [Member]
Customer Concentration Risk [Member]
Accounts Receivable [Member]
Jan. 31, 2015
Wholesale Partner One [Member]
Customer Concentration Risk [Member]
Accounts Receivable [Member]
Jan. 30, 2016
Wholesale Partner Two [Member]
Customer Concentration Risk [Member]
Sales [Member]
Jan. 31, 2015
Wholesale Partner Two [Member]
Customer Concentration Risk [Member]
Sales [Member]
Feb. 1, 2014
Wholesale Partner Two [Member]
Customer Concentration Risk [Member]
Sales [Member]
Jan. 30, 2016
Wholesale Partner Two [Member]
Customer Concentration Risk [Member]
Accounts Receivable [Member]
Jan. 31, 2015
Wholesale Partner Two [Member]
Customer Concentration Risk [Member]
Accounts Receivable [Member]
Jan. 30, 2016
Wholesale Partner Three [Member]
Customer Concentration Risk [Member]
Sales [Member]
Jan. 31, 2015
Wholesale Partner Three [Member]
Customer Concentration Risk [Member]
Sales [Member]
Feb. 1, 2014
Wholesale Partner Three [Member]
Customer Concentration Risk [Member]
Sales [Member]
Jan. 30, 2016
Wholesale Partner Three [Member]
Customer Concentration Risk [Member]
Accounts Receivable [Member]
Jan. 31, 2015
Wholesale Partner Three [Member]
Customer Concentration Risk [Member]
Accounts Receivable [Member]
Jan. 31, 2015
Wholesale Partner Four [Member]
Customer Concentration Risk [Member]
Accounts Receivable [Member]
Mar. 29, 2016
Subsequent Event [Member]
RightOffering
Mar. 15, 2016
Subsequent Event [Member]
Sun Cardinal LLC And SCSF Cardinal LLC [Member]
Investment Agreement [Member]
Dec. 9, 2015
Rights Offering Commitment Letter [Member]
Description Of Business And Summary Of Significant Accounting Policies [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Proceed from contribution obligation
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 65,000,000 
Subscription price
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 5.50 
$ 5.50 
 
Right offering distribution charge
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Common stock issuance, net of certain costs, shares
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
11,818,181 
 
 
Subscription of non-transferrable right per share
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Percentage of number of shares pursuant to over subscription
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
20.00% 
 
 
Fractional shares of common stock issued in rights offering
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Offering period expiration date
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Apr. 14, 2016 
 
 
Rights offering gross proceeds
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
65,000,000 
 
 
Expected payment under Tax Receivable Agreements
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
21,762,000 
 
 
Number of wholesale partners each accounted for more than ten percent of net sales
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Percentage accounted from major customers
 
 
 
 
 
 
 
 
 
 
 
 
 
 
10.00% 
10.00% 
10.00% 
10.00% 
10.00% 
18.30% 
23.20% 
19.80% 
19.30% 
24.50% 
13.80% 
13.20% 
12.80% 
17.80% 
13.80% 
10.80% 
12.30% 
12.80% 
14.70% 
12.70% 
11.40% 
 
 
 
Number of wholesale partners each accounted for more than ten percent of accounts receivable
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Inventory write down non-recurring
 
 
14,447,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pre-tax income associated with recovery of inventory write-down
2,161,000 
1,986,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Estimated useful lives of property, plant and equipment
 
 
 
 
 
 
 
 
 
 
3 years 
10 years 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Estimated economic useful life of capitalized software
 
 
 
 
 
 
 
 
 
 
 
 
3 years 
5 years 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Depreciation expense
 
 
 
7,752,000 
4,668,000 
2,186,000 
 
6,426,000 
3,381,000 
1,562,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Impairment of goodwill
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Impairment of intangible assets, indefinite-lived (excluding goodwill)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Impairment charges relating to long-lived assets
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Estimated economic useful life of intangibles
 
 
 
 
 
 
20 years 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Marketing and advertising expense
 
 
 
9,177,000 
7,427,000 
4,858,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Deferred production expenses associated with company-directed advertising
$ 416,000 
 
 
$ 416,000 
$ 643,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Description of Business and Summary of Significant Accounting Policies - Summary of Allowance for Accounts Receivable Estimated to be Uncollectible for Continuing Operations (Detail) (Allowance for Doubtful Accounts [Member], USD $)
In Thousands, unless otherwise specified
12 Months Ended
Jan. 30, 2016
Jan. 31, 2015
Feb. 1, 2014
Allowance for Doubtful Accounts [Member]
 
 
 
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
 
 
Balance, beginning of year
$ 379 
$ 353 
$ 279 
Provisions for bad debt expense, net of reversals
(34)
168 
249 
Bad debts written off
(157)
(142)
(175)
Balance, end of year
$ 188 
$ 379 
$ 353 
Description of Business and Summary of Significant Accounting Policies - Schedule of Inventories of Continuing Operations (Detail) (USD $)
In Thousands, unless otherwise specified
Jan. 30, 2016
Jan. 31, 2015
Inventory Disclosure [Abstract]
 
 
Finished goods
$ 36,576 
$ 37,395 
Raw materials
 
24 
Total inventories, net
36,576 
37,419 
Net of reserves of:
$ 13,261 
$ 6,471 
Description of Business and Summary of Significant Accounting Policies - Schedule of Property, Plant and Equipment (Detail) (USD $)
In Thousands, unless otherwise specified
Jan. 30, 2016
Jan. 31, 2015
Property Plant And Equipment [Abstract]
 
 
Building and improvements
$ 38,452 
$ 27,645 
Machinery and equipment
8,236 
5,384 
Capitalized software
1,764 
1,341 
Construction in process
4,716 
3,369 
Total property, plant and equipment
53,168 
37,739 
Less: accumulated depreciation and amortization
(15,399)
(9,390)
Property, plant and equipment, net
$ 37,769 
$ 28,349 
Description of Business and Summary of Significant Accounting Policies - Summary of Accrued Discounts, Returns and Allowances (Detail) (Sales Allowances [Member], USD $)
In Thousands, unless otherwise specified
12 Months Ended
Jan. 30, 2016
Jan. 31, 2015
Feb. 1, 2014
Sales Allowances [Member]
 
 
 
Valuation and Qualifying Accounts Disclosure [Line Items]
 
 
 
Balance, beginning of year
$ 16,098 
$ 9,265 
$ 7,179 
Provision
55,656 
54,467 
39,171 
Utilization
(58,908)
(47,634)
(37,085)
Balance, end of year
$ 12,846 
$ 16,098 
$ 9,265 
The IPO and Restructuring Transactions - Additional Information (Detail) (USD $)
0 Months Ended 0 Months Ended 0 Months Ended
Nov. 27, 2013
Jan. 30, 2016
Jan. 31, 2015
Nov. 21, 2013
Nov. 27, 2013
12.875% Notes [Member]
Jan. 30, 2016
7.625% Notes [Member]
Dec. 12, 2013
7.625% Notes [Member]
Nov. 27, 2013
7.625% Notes [Member]
Jan. 30, 2016
Revolving Credit Facility [Member]
Jan. 31, 2015
Revolving Credit Facility [Member]
Nov. 27, 2013
Revolving Credit Facility [Member]
Jan. 30, 2016
Term Loan Facility [Member]
Jan. 31, 2015
Term Loan Facility [Member]
Nov. 27, 2013
Term Loan Facility [Member]
Nov. 27, 2013
Sun Capital Partners Management [Member]
Nov. 27, 2013
Vince, LLC [Member]
Nov. 27, 2013
Kellwood [Member]
Nov. 27, 2013
Kellwood [Member]
Pre-IPO Stockholders [Member]
Nov. 27, 2013
Sun Capital [Member]
Nov. 27, 2013
Initial Public Offering [Member]
Nov. 27, 2013
Over Allotment Option [Member]
Subsidiary, Sale of Stock [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Common stock issued
 
36,779,417 
36,748,245 
10,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
10,000,000 
 
Common stock price per share
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 20.00 
 
Shares sold by selling shareholders
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1,500,000 
Proceeds from initial public offering
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 177,000,000 
 
Proceeds retained by company for general corporate purposes
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
5,000,000 
 
 
5,000,000 
 
Stock split ratio
28.5177 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Common stock price per share
$ 0.01 
$ 0.01 
$ 0.01 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Percentage of membership interests distributed
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
100.00% 
100.00% 
100.00% 
 
 
 
Credit facility, maximum borrowing capacity
 
 
 
 
 
 
 
 
 
 
50,000,000 
 
 
 
 
 
 
 
 
 
 
Long-term debt
 
 
 
 
 
 
 
 
 
 
 
45,000,000 
 
175,000,000 
 
 
 
 
 
 
 
Aggregate reduction in taxes payable percentage
85.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ownership percentage
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
68.00% 
 
 
Net borrowings under new Term Loan Facility
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
169,500,000 
 
 
 
 
Outstanding balance on Note Receivable
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Accrued and unpaid interest
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
9,100,000 
 
 
 
 
Debt instrument, interest rate
 
 
 
 
12.875% 
7.625% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Transaction fee
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3,300,000 
 
 
 
 
 
 
Purchased (and cancelled) in aggregate principal amount
 
 
 
 
 
 
4,670,000 
33,474,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
Aggregate principal amount outstanding
 
$ 60,000,000 
$ 88,000,000 
 
 
 
$ 48,808,000 
 
$ 15,000,000 
$ 23,000,000 
 
$ 45,000,000 
$ 65,000,000 
 
 
 
 
 
 
 
 
Discontinued Operations - Additional Information (Detail) (USD $)
12 Months Ended 12 Months Ended 12 Months Ended 12 Months Ended 0 Months Ended
Jan. 30, 2016
Jan. 31, 2015
Feb. 1, 2014
Feb. 2, 2013
Jan. 30, 2016
12.875% 2009 Debentures due December 31, 2014 [Member]
Nov. 27, 2013
12.875% 2009 Debentures due December 31, 2014 [Member]
Nov. 27, 2013
12.875% 2009 Debentures due December 31, 2014 [Member]
Payment in Cash Note [Member]
Jan. 30, 2016
7.625% 1997 Debentures due October 15, 2017 [Member]
Dec. 12, 2013
7.625% 1997 Debentures due October 15, 2017 [Member]
Nov. 27, 2013
7.625% 1997 Debentures due October 15, 2017 [Member]
Feb. 2, 2013
Cerberus Term Loan Agreement [Member]
Oct. 19, 2011
Cerberus Term Loan Agreement [Member]
Nov. 27, 2013
Payment in Kind (PIK) Note [Member]
12.875% 2009 Debentures due December 31, 2014 [Member]
Oct. 19, 2011
Minimum [Member]
Cerberus Term Loan Agreement [Member]
Nov. 27, 2013
Minimum [Member]
Sun Term Loan Agreements [Member]
Oct. 19, 2011
Maximum [Member]
Cerberus Term Loan Agreement [Member]
Nov. 27, 2013
Maximum [Member]
Sun Term Loan Agreements [Member]
Feb. 2, 2013
Wells Fargo Facility [Member]
Oct. 19, 2011
Wells Fargo Facility [Member]
Oct. 19, 2011
Wells Fargo Facility [Member]
Minimum [Member]
Base Rate [Member]
Oct. 19, 2011
Wells Fargo Facility [Member]
Maximum [Member]
Base Rate [Member]
Nov. 27, 2013
Kellwood [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Percentage of membership interests distributed
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
100.00% 
Notes receivable immediately repaid
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 341,500,000 
Notes receivable outstanding balance from related parties
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Accrued and unpaid interest
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
9,100,000 
Separation of non-Vince businesses and settlement of Kellwood note receivable
 
 
73,081,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. statutory rate, percentage
35.00% 
35.00% 
35.00% 
35.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Aggregate lending commitments of credit facility
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
160,000,000 
 
 
 
Credit facility extinguished amount
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
5,000,000 
 
 
 
 
Credit facility interest rate
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1.25% 
1.75% 
 
Term loan aggregate amount
 
 
 
 
 
 
 
 
 
 
 
55,000,000 
 
 
 
 
 
 
 
 
 
 
Term loan repaid amount
 
 
 
 
 
 
 
 
 
 
10,000,000 
 
 
 
 
 
 
 
 
 
 
 
LIBOR interest rate
 
 
 
 
 
 
 
 
 
 
 
 
 
10.25% 
 
11.25% 
 
 
 
 
 
 
Reference rate
 
 
 
 
 
 
 
 
 
 
 
 
 
7.75% 
 
8.75% 
 
 
 
 
 
 
Percentage of interest to be paid-in-kind
 
 
 
 
 
 
 
 
 
 
 
1.00% 
 
 
 
 
 
 
 
 
 
 
Debt instrument, interest rate
 
 
 
 
 
12.875% 
7.875% 
 
 
7.625% 
 
 
5.00% 
 
5.00% 
 
6.00% 
 
 
 
 
 
Debt instrument, interest rate terms
 
 
 
 
Interest on the 12.875% 2009 Debentures due December 31, 2014 of Kellwood Company (the “12.875% Notes”) was paid (a) in cash at a rate of 7.875% per annum payable in January and July; and (b) in the form of PIK interest at a rate of 5.0% per annum (“PIK Interest”) payable either by increasing the principal amount of the outstanding 12.875% Notes, or by issuing additional 12.875% Notes with a principal amount equal to the PIK Interest accrued for the interest period. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt instrument, maturity date
 
 
 
 
 
 
 
Oct. 15, 2017 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Purchased (and cancelled) in aggregate principal amount
 
 
 
 
 
 
 
 
4,670,000 
33,474,000 
 
 
 
 
 
 
 
 
 
 
 
 
Aggregate principal amount outstanding
$ 60,000,000 
$ 88,000,000 
 
 
 
 
 
 
$ 48,809,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
Discontinued Operations - Schedule of Results of Non-Vince Businesses Included in Discontinued Operations (Detail) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Feb. 1, 2014
Discontinued Operations And Disposal Groups [Abstract]
 
Net sales
$ 400,848 
Cost of products sold
313,620 
Gross profit
87,228 
Selling, general and administrative expenses
98,016 
Restructuring, environmental and other charges
1,628 
Impairment of long-lived assets
1,399 
Change in fair value of contingent consideration
1,473 
Interest expense, net
46,677 
Other expense, net
498 
Loss before income taxes
(62,463)
Income taxes
(11,648)
Net loss from discontinued operations, net of taxes
$ (50,815)
Effective tax rate
18.60% 
Goodwill and Intangible Assets - Summary of Goodwill Balances (Detail) (USD $)
In Thousands, unless otherwise specified
Jan. 30, 2016
Jan. 31, 2015
Feb. 1, 2014
Goodwill [Line Items]
 
 
 
Total Net Goodwill
$ 63,746 
$ 63,746 
$ 63,746 
Wholesale [Member]
 
 
 
Goodwill [Line Items]
 
 
 
Total Net Goodwill
41,435 
41,435 
41,435 
Direct-to-Consumer [Member]
 
 
 
Goodwill [Line Items]
 
 
 
Total Net Goodwill
$ 22,311 
$ 22,311 
$ 22,311 
Goodwill and Intangible Assets - Additional Information (Detail) (USD $)
12 Months Ended
Jan. 30, 2016
Jan. 31, 2015
Feb. 1, 2014
Identifiable Intangible Assets [Line Items]
 
 
 
Accumulated impairments goodwill, net
$ 46,942,000 
$ 46,942,000 
$ 46,942,000 
Impairment of goodwill
Amortization of identifiable intangible assets
598,000 
599,000 
599,000 
Impairment charges relating to long-lived assets
Trademarks [Member]
 
 
 
Identifiable Intangible Assets [Line Items]
 
 
 
Impairment charges relating to long-lived assets
$ 0 
$ 0 
$ 0 
Goodwill and Intangible Assets - Summary of Identifiable Intangible Assets (Detail) (USD $)
In Thousands, unless otherwise specified
Jan. 30, 2016
Jan. 31, 2015
Identifiable Intangible Assets [Line Items]
 
 
Accumulated Amortization
$ (4,774)
$ (4,176)
Gross Amount
113,820 
113,820 
Net Book Value
109,046 
109,644 
Trademarks [Member]
 
 
Identifiable Intangible Assets [Line Items]
 
 
Gross Amount
101,850 
101,850 
Net Book Value
101,850 
101,850 
Customer Relationships [Member]
 
 
Identifiable Intangible Assets [Line Items]
 
 
Gross Amount
11,970 
11,970 
Accumulated Amortization
(4,774)
(4,176)
Net Book Value
$ 7,196 
$ 7,794 
Goodwill and Intangible Assets - Schedule of Expected Amortization Expense for Identifiable Intangible Assets (Detail) (USD $)
In Thousands, unless otherwise specified
Jan. 30, 2016
Goodwill And Intangible Assets Disclosure [Abstract]
 
2016
$ 598 
2017
598 
2018
598 
2019
598 
2020
598 
Total next 5 fiscal years
$ 2,990 
Fair Value - Additional Information (Detail) (USD $)
Jan. 30, 2016
Jan. 31, 2015
Fair Value Disclosures [Abstract]
 
 
Non-financial assets recognized at fair value
$ 0 
$ 0 
Non-financial liabilities recognized at fair value
$ 0 
$ 0 
Financing Arrangements - Additional Information (Detail) (USD $)
0 Months Ended 12 Months Ended
Jun. 3, 2015
Jan. 30, 2016
Jan. 31, 2015
Nov. 27, 2013
Line of Credit Facility [Line Items]
 
 
 
 
Loan cap on revolving credit facility
$ 70,000,000 
 
 
 
Revolving Credit Facility [Member]
 
 
 
 
Line of Credit Facility [Line Items]
 
 
 
 
Maximum borrowing capacity
 
 
 
50,000,000 
Debt interest terms
 
Interest is payable on the loans under the Revolving Credit Facility at either the LIBOR or the Base Rate, in each case, plus an applicable margin of 1.25% to 1.75% for LIBOR loans or 0.25% to 0.75% for Base Rate loans, and in each case subject to a pricing grid based on an average daily excess availability calculation. The “Base Rate” means, for any day, a fluctuating rate per annum equal to the highest of (i) the rate of interest in effect for such day as publicly announced from time to time by BofA as its prime rate; (ii) the Federal Funds Rate for such day, plus 0.50%; and (iii) the LIBOR Rate for a one month interest period as determined on such day, plus 1.0%. 
 
 
Line of credit facility percentage increase in interest rate in case of default
2.00% 
 
 
 
Percentage of loan greater than Excess Availability
 
15.00% 
 
 
Amount greater than Excess Availability
 
10,000,000 
 
 
Excess Availability period
 
30 days 
 
 
Consolidated EBITDA amount
 
20,000,000 
 
 
Credit Facility, covenant terms
 
at any point when “Excess Availability” is less than the greater of (i) 15% percent of an adjusted loan cap (without giving effect to item (iii) of the loan cap described above) or (ii) $10,000, and continuing until Excess Availability exceeds the greater of such amounts for 30 consecutive days, during which time, we must maintain a consolidated EBITDA (as defined in the Revolving Credit Facility) equal to or greater than $20,000 measured at the end of each applicable fiscal month for the trailing twelve-month period. 
 
 
Consolidated Fixed Charge Coverage Ratio
 
1.0 
 
 
Amount available under the Revolving Credit Facility
 
28,127,000 
19,353,000 
 
Amount outstanding under the credit facility
 
15,000,000 
23,000,000 
 
Letters of credit amount outstanding
 
7,522,000 
7,647,000 
 
Weighted average interest rate for borrowings outstanding
 
2.10% 
2.10% 
 
Revolving Credit Facility [Member] |
Pro Forma [Member]
 
 
 
 
Line of Credit Facility [Line Items]
 
 
 
 
Percentage of Excess Availability greater than loan
 
20.00% 
 
 
Pro Forma Excess Availability
 
10,000,000 
 
 
Revolving Credit Facility [Member] |
Excess Availability Greater than 35% [Member]
 
 
 
 
Line of Credit Facility [Line Items]
 
 
 
 
Percentage of Excess Availability greater than loan
 
35.00% 
 
 
Pro Forma Excess Availability
 
15,000,000 
 
 
Revolving Credit Facility [Member] |
Maximum [Member]
 
 
 
 
Line of Credit Facility [Line Items]
 
 
 
 
Letters of credit sublimit amount
25,000,000 
 
 
 
Increase in aggregate commitments amount
20,000,000 
 
 
 
Revolving Credit Facility [Member] |
LIBOR [Member]
 
 
 
 
Line of Credit Facility [Line Items]
 
 
 
 
Variable rate percentage
1.00% 
 
 
 
Revolving Credit Facility [Member] |
LIBOR [Member] |
Maximum [Member]
 
 
 
 
Line of Credit Facility [Line Items]
 
 
 
 
Variable rate percentage
1.75% 
 
 
 
Revolving Credit Facility [Member] |
LIBOR [Member] |
Minimum [Member]
 
 
 
 
Line of Credit Facility [Line Items]
 
 
 
 
Variable rate percentage
1.25% 
 
 
 
Revolving Credit Facility [Member] |
Base Rate [Member] |
Maximum [Member]
 
 
 
 
Line of Credit Facility [Line Items]
 
 
 
 
Variable rate percentage
0.75% 
 
 
 
Revolving Credit Facility [Member] |
Base Rate [Member] |
Minimum [Member]
 
 
 
 
Line of Credit Facility [Line Items]
 
 
 
 
Variable rate percentage
0.25% 
 
 
 
Revolving Credit Facility [Member] |
Federal Funds Rate [Member]
 
 
 
 
Line of Credit Facility [Line Items]
 
 
 
 
Variable rate percentage
0.50% 
 
 
 
Senior Secured Revolving Credit Facility Due November 27, 2018 [Member]
 
 
 
 
Line of Credit Facility [Line Items]
 
 
 
 
Maximum borrowing capacity
 
 
50,000,000 
50,000,000 
Revolving credit facility maturity date
Nov. 27, 2018 
 
 
 
Senior Secured Revolving Credit Facility Due June 3, 2020 [Member]
 
 
 
 
Line of Credit Facility [Line Items]
 
 
 
 
Maximum borrowing capacity
$ 80,000,000 
$ 80,000,000 
 
 
Revolving credit facility maturity date
Jun. 03, 2020 
 
 
 
Long-Term Debt - Summary of Long-Term Debt (Detail) (USD $)
In Thousands, unless otherwise specified
Jan. 30, 2016
Jan. 31, 2015
Feb. 2, 2013
Schedule of Capitalization, Long-term Debt [Line Items]
 
 
 
Total long-term debt principal
$ 60,000 
$ 88,000 
 
Less: Deferred financing costs
2,385 
3,550 
 
Total long-term debt
57,615 
84,450 
391,434 
Term Loan Facility [Member]
 
 
 
Schedule of Capitalization, Long-term Debt [Line Items]
 
 
 
Total long-term debt principal
45,000 
65,000 
 
Revolving Credit Facility [Member]
 
 
 
Schedule of Capitalization, Long-term Debt [Line Items]
 
 
 
Total long-term debt principal
$ 15,000 
$ 23,000 
 
Long-Term Debt - Additional Information (Detail) (USD $)
12 Months Ended 0 Months Ended 0 Months Ended 0 Months Ended 12 Months Ended 0 Months Ended 12 Months Ended 26 Months Ended 0 Months Ended
Jan. 30, 2016
Jan. 31, 2015
Feb. 1, 2014
Nov. 27, 2013
Feb. 1, 2015
Sun Promissory Notes [Member]
Jun. 18, 2013
Sun Promissory Notes [Member]
Dec. 28, 2012
Sun Promissory Notes [Member]
May 2, 2008
Sun Promissory Notes [Member]
Feb. 1, 2015
Sun Promissory Notes [Member]
Extended Credit Agreement [Member]
Jul. 19, 2012
Sun Promissory Notes [Member]
Extended Credit Agreement [Member]
Jun. 18, 2013
Sun Capital Loan Agreement [Member]
Dec. 28, 2012
Sun Capital Loan Agreement [Member]
Jan. 30, 2016
Sun Capital Loan Agreement [Member]
Feb. 13, 2008
Sun Capital Loan Agreement [Member]
May 2, 2008
Senior Subordinated Promissory Notes One [Member]
Sun Promissory Notes [Member]
May 2, 2008
Senior Subordinated Promissory Notes One [Member]
Sun Promissory Notes [Member]
Sun Kellwood Finance, LLC [Member]
Nov. 27, 2013
Term Loan Facility [Member]
Jan. 30, 2016
Term Loan Facility [Member]
Jan. 30, 2016
Term Loan Facility [Member]
Nov. 27, 2013
Term Loan Facility [Member]
Interest Rate on Overdue Principal Amount [Member]
Nov. 27, 2013
Term Loan Facility [Member]
Interest Rate on Overdue Interest or Other Outstanding Amount [Member]
Nov. 27, 2013
Term Loan Facility [Member]
Vince, LLC [Member]
Nov. 27, 2013
Term Loan Facility [Member]
Vince Intermediate Holding, LLC [Member]
Nov. 27, 2013
Term Loan Facility [Member]
Minimum [Member]
Nov. 27, 2013
Term Loan Facility [Member]
Minimum [Member]
Pro Forma [Member]
Nov. 27, 2013
Term Loan Facility [Member]
Minimum [Member]
Eurodollar Rate [Member]
Nov. 27, 2013
Term Loan Facility [Member]
Minimum [Member]
Base Rate [Member]
Nov. 27, 2013
Term Loan Facility [Member]
Maximum [Member]
Nov. 27, 2013
Term Loan Facility [Member]
Maximum [Member]
Fiscal Year 2014 [Member]
Nov. 27, 2013
Term Loan Facility [Member]
Maximum [Member]
Fiscal Year 2015 [Member]
Nov. 27, 2013
Term Loan Facility [Member]
Maximum [Member]
Fiscal Year 2016 [Member]
Nov. 27, 2013
Term Loan Facility [Member]
Maximum [Member]
Eurodollar Rate [Member]
Nov. 27, 2013
Term Loan Facility [Member]
Maximum [Member]
Base Rate [Member]
Debt Instrument [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Long-term debt
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 175,000,000 
$ 45,000,000 
$ 45,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt instrument, maturity date
 
 
 
 
Oct. 15, 2011 
 
 
 
Oct. 15, 2016 
 
 
 
Aug. 06, 2009 
 
 
 
Nov. 27, 2019 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Incremental facility
 
 
 
50,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amortization of principal, percentage
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
0.25% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Variable rate percentage
 
 
 
 
 
 
 
 
 
 
 
 
2.00% 
 
 
 
 
 
 
2.00% 
2.00% 
 
 
 
 
4.75% 
3.75% 
 
 
 
 
5.00% 
4.00% 
Total secured leverage ratio
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1.00 
0.25 
 
 
3.00 
3.75 
3.50 
3.25 
 
 
Debt instrument, accrued interest rate, percentage
 
 
 
 
 
 
 
15.00% 
 
12.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1.00% 
 
 
 
 
 
 
 
Term loan facility description
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The Term Loan Facility requires Vince, LLC and Vince Intermediate to make mandatory prepayments upon the occurrence of certain events, including additional debt issuances, common and preferred stock issuances, certain asset sales, and annual payments of 50% of excess cash flow, subject to reductions to 25% and 0% if Vince, LLC and Vince Intermediate maintain a Consolidated Net Total Leverage Ratio of 2.50 to 1.00 and 2.00 to 1.00, respectively, and subject to reductions for voluntary prepayments made during such fiscal year. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net total leverage ratio
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2.50 
2.00 
 
 
 
 
 
 
 
 
 
 
Percentage of excess cash flow
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
50.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Reduction in cash flow percentage based on leverage ratio
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
25.00% 
0.00% 
 
 
 
 
 
 
 
 
 
 
Payments for term loan facility
20,000,000 
105,000,000 
5,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
20,000,000 
130,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt instrument, principal amount
 
 
 
 
 
 
 
 
 
 
 
 
 
 
225,000,000 
75,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt instrument, accrued interest rate after maturity date
 
 
 
 
 
 
 
17.00% 
 
14.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Capital contribution fiscal 2012
 
 
 
 
 
 
270,852,000 
 
 
 
 
18,249,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Capital contribution fiscal 2013
 
 
 
 
 
334,595,000 
 
 
 
 
72,932,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt instrument, extended maturity date
 
 
 
 
 
 
 
 
 
 
 
 
Aug. 06, 2014 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Credit facility, maximum borrowing capacity
 
 
 
 
 
 
 
 
 
 
 
 
 
72,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amount outstanding under the credit facility
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 69,485,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt instrument, interest rate terms
 
 
 
 
 
 
 
 
 
 
 
 
Under the terms of this agreement, as amended from time to time, interest accrued at a rate equal to the rate per annum announced by the Bank of Montreal, Chicago, Illinois, from time to time as its prime commercial rate, or equivalent, for U.S. dollar loans to borrowers located in the U.S. plus 2%. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commitments and Contingencies - Additional Information (Detail) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended 12 Months Ended 3 Months Ended 12 Months Ended
Jan. 30, 2016
Jan. 30, 2016
Jan. 30, 2016
Jan. 31, 2015
Feb. 1, 2014
Aug. 1, 2015
Severance and Employee Related Benefits [Member]
Jan. 30, 2016
Maximum [Member]
Loss Contingencies [Line Items]
 
 
 
 
 
 
 
Remaining term under operating leases, excluding renewals
 
 
 
 
 
 
11 years 
Rent expense under operating leases
 
 
$ 20,015 
$ 16,161 
$ 10,467 
 
 
Other contractual cash obligations
25,981 
25,981 
25,981 
 
 
 
 
Severance and employee related benefits
 
 
 
 
 
3,717 
 
Recovery of severance cost
$ 323 
$ 323 
 
 
 
 
 
Commitments and Contingencies - Future Minimum Lease Payments under Operating Leases (Detail) (USD $)
In Thousands, unless otherwise specified
Jan. 30, 2016
Commitments And Contingencies Disclosure [Abstract]
 
Fiscal 2016
$ 20,083 
Fiscal 2017
20,891 
Fiscal 2018
20,712 
Fiscal 2019
20,653 
Fiscal 2020
19,584 
Thereafter
67,444 
Total minimum lease payments
$ 169,367 
Share-Based Compensation - Additional Information (Detail) (USD $)
2 Months Ended 10 Months Ended 12 Months Ended 21 Months Ended 0 Months Ended 12 Months Ended 0 Months Ended 12 Months Ended 0 Months Ended 12 Months Ended 0 Months Ended 12 Months Ended 0 Months Ended 12 Months Ended 12 Months Ended
Feb. 1, 2014
Nov. 27, 2013
Jan. 30, 2016
Jan. 31, 2015
Feb. 1, 2014
Oct. 31, 2013
Nov. 21, 2013
Initial Public Offering [Member]
Jan. 30, 2016
Initial Public Offering [Member]
Jan. 31, 2015
Initial Public Offering [Member]
Jan. 30, 2016
Non-employees [Member]
Jan. 30, 2016
Employee Stock Option
Nov. 21, 2013
Restricted Stock Units (RSUs) [Member]
Jan. 30, 2016
Restricted Stock Units (RSUs) [Member]
Jan. 31, 2015
Restricted Stock Units (RSUs) [Member]
Jan. 30, 2016
2010 Option Plan [Member]
Oct. 31, 2015
Vince 2013 Incentive Plan [Member]
Jan. 30, 2016
Vince 2013 Incentive Plan [Member]
Nov. 23, 2015
Vince 2013 Incentive Plan [Member]
Non-employee Consultants [Member]
Jan. 30, 2016
Vince 2013 Incentive Plan [Member]
Non-employee Consultants [Member]
Oct. 31, 2015
Vince 2013 Incentive Plan [Member]
Tender Offer Exchange
Nov. 23, 2015
Vince 2013 Incentive Plan [Member]
Tranche One [Member]
Non-employee Consultants [Member]
Nov. 23, 2015
Vince 2013 Incentive Plan [Member]
Tranche Two [Member]
Non-employee Consultants [Member]
Nov. 23, 2015
Vince 2013 Incentive Plan [Member]
Tranche Three [Member]
Non-employee Consultants [Member]
Jan. 30, 2016
Vince 2013 Incentive Plan [Member]
Employee Stock Option
Tranche One [Member]
Jan. 30, 2016
Vince 2013 Incentive Plan [Member]
Employee Stock Option
Tranche Two [Member]
Jan. 30, 2016
Vince 2013 Incentive Plan [Member]
Employee Stock Option
Tranche Three [Member]
Jan. 30, 2016
Vince 2013 Incentive Plan [Member]
Restricted Stock Units (RSUs) [Member]
Jan. 30, 2016
Maximum [Member]
Vince 2013 Incentive Plan [Member]
Jan. 30, 2016
Maximum [Member]
Kellwood [Member]
2010 Option Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Grant of options provided to acquire common stock prior to IPO
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2,752,155 
Stock options granted pursuant to the plan, description
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(i) vest in five equal installments on the first, second, third, fourth, and fifth anniversaries of the grant date, subject to the employee’s continued employment and, (ii) expire on the earlier of the tenth anniversary of the grant date or upon termination of employment. 
 
vest in equal installments over two, three or four years or at 33 1/3% per year beginning in year two, over four years, subject to the employees’ continued employment and (ii) expire on the earlier of the tenth anniversary of the grant date or upon termination as outlined in the Vince 2013 Incentive Plan. 
 
The options granted to the non-employee consultants vest 50% after one year, 25% after 18 months and 25% after two years and expire on the earlier of the tenth anniversary of the grant date or upon termination as outlined in their grant agreements pursuant to the Vince 2013 Incentive Plan. 
 
 
 
 
 
 
 
 
 
 
Vesting period
 
 
 
 
 
 
 
 
 
 
 
 
 
 
5 years 
 
 
 
 
 
1 year 
18 months 
2 years 
2 years 
3 years 
4 years 
3 years 
 
 
Number of shares authorized
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3,400,000 
 
Number of shares available for future grants
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1,391,996 
 
Vesting percentage of options granted
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
50.00% 
25.00% 
25.00% 
33.33% 
33.33% 
33.33% 
 
 
 
Tender offer completion date
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Oct. 02, 2015 
 
 
 
 
 
 
 
 
 
 
 
 
 
Exchange ratio of stock option
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
one-to-one 
 
 
 
 
 
 
 
 
 
 
 
 
Share-based compensation cancelled in period
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
346,004 
 
 
 
 
 
 
 
 
 
Exercise price
 
 
$ 4.32 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 3.63 
 
$ 3.60 
 
 
 
 
 
 
 
 
 
Incremental expense
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 456,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
Options granted
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
400,000 
 
 
 
 
 
 
 
 
 
 
 
Weighted average grant date fair value, per share
 
 
 
 
 
 
$ 8.82 
$ 1.75 
$ 14.13 
 
 
 
 
 
 
 
 
$ 1.45 
 
 
 
 
 
 
 
 
 
 
 
Stock options, vested or expected to vest
 
 
1,806,901 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total intrinsic value of options exercised
 
 
316,000 
620,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S Treasury yield curve
 
 
5 years 
5 years 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Expected term
 
 
4 years 6 months 
4 years 6 months 
 
6 years 6 months 
4 years 6 months 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Expected volatility
 
 
46.00% 
51.10% 
 
55.00% 
51.10% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Risk-free interest rate
 
 
1.40% 
1.40% 
 
0.85% 
1.40% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Expected dividend yield
 
 
 
 
 
 
0.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cumulative discount factor to adjust for lack of marketability of shares
 
 
 
 
 
36.25% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Unrecognized compensation costs
 
 
 
 
 
 
 
 
 
 
5,636,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Unrecognized compensation costs, weighted average period for recognition
 
 
 
 
 
 
 
 
 
 
2 years 7 months 6 days 
 
2 years 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted average grant date fair value, per share
 
 
 
 
 
 
 
 
 
 
 
$ 20.00 
$ 7.27 
$ 30.47 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total fair value of restricted stock units vested
 
 
 
 
 
 
 
 
 
 
 
 
125,000 
50,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Unrecognized compensation costs
 
 
 
 
 
 
 
 
 
 
 
 
300,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Share-based compensation expense
347,000 
551,000 
1,259,000 
1,896,000 
347,000 
 
 
 
 
160,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Share-based compensation expense, related tax benefit
$ 139,000 
$ 0 
$ 504,000 
$ 758,000 
 
 
 
 
 
$ 64,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Share-Based Compensation - Summary of Stock Option Activity for Both Employees and Non-employees (Detail) (USD $)
In Thousands, except Share data, unless otherwise specified
12 Months Ended
Jan. 30, 2016
Jan. 31, 2015
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
 
 
Stock Options, Outstanding at beginning of period
2,726,169 
 
Stock Options, Granted
2,173,273 
 
Stock Options, Exercised
(26,209)
 
Stock Options, Forfeited or expired
(1,993,498)
 
Stock Options, Outstanding at end of period
2,879,735 
2,726,169 
Stock Options, Vested and exercisable at January 30, 2016
827,553 
 
Weighted Average Exercise Price, Outstanding at beginning of period
$ 13.18 
 
Weighted Average Exercise Price, Granted
$ 4.32 
 
Weighted Average Exercise Price, Exercised
$ 6.64 
 
Weighted Average Exercise Price, Forfeited or expired
$ 15.98 
 
Weighted Average Exercise Price, Outstanding at end of period
$ 4.61 
$ 13.18 
Weighted Average Exercise Price, Vested and exercisable at January 30, 2016
$ 5.89 
 
Weighted Average Remaining Contractual Term (years), Outstanding
8 years 8 months 12 days 
8 years 2 months 12 days 
Weighted Average Remaining Contractual Term (years), Outstanding, Vested and exercisable at January 30, 2016
6 years 3 months 18 days 
 
Aggregate Intrinsic Value, Outstanding
$ 2,402 
$ 33,367 
Aggregate Intrinsic Value, Vested and exercisable at January 30, 2016
$ 0 
 
Share-Based Compensation - Schedule of Stock-Based Compensation Valuation Assumptions (Detail)
12 Months Ended 21 Months Ended
Jan. 30, 2016
Jan. 31, 2015
Oct. 31, 2013
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
 
 
 
Weighted-average expected volatility
46.00% 
51.10% 
55.00% 
Expected term (in years)
4 years 6 months 
4 years 6 months 
6 years 6 months 
Risk-free interest rate
1.40% 
1.40% 
0.85% 
Share-Based Compensation - Schedule of Restricted Stock Units Activity (Detail) (Restricted Stock Units (RSUs) [Member], USD $)
0 Months Ended 12 Months Ended
Nov. 21, 2013
Jan. 30, 2016
Jan. 31, 2015
Restricted Stock Units (RSUs) [Member]
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Restricted Stock Units, Nonvested restricted stock units at January 31, 2015
 
12,384 
 
Restricted Stock Units, Granted
 
22,111 
 
Restricted Stock Units, Vested
 
(4,963)
 
Restricted Stock Units, Nonvested restricted stock units at January 30, 2016
 
29,532 
12,384 
Weighted Average Grant Date Fair Value, Nonvested restricted stock units at January 31, 2015
 
$ 26.24 
 
Weighted Average Grant Date Fair Value, Granted
$ 20.00 
$ 7.27 
$ 30.47 
Weighted Average Grant Date Fair Value, Vested
 
$ 25.20 
 
Weighted Average Grant Date Fair Value, Nonvested restricted stock units at January 30, 2016
 
$ 12.22 
$ 26.24 
Stockholders' Equity - Additional Information (Detail) (USD $)
In Thousands, except Share data, unless otherwise specified
0 Months Ended 3 Months Ended 12 Months Ended 0 Months Ended
Nov. 27, 2013
Aug. 2, 2014
Jan. 31, 2015
Feb. 1, 2014
Jan. 30, 2016
Nov. 21, 2013
Nov. 27, 2013
Sun Capital [Member]
Jul. 31, 2014
Secondary Offering [Member]
Jul. 31, 2014
Secondary Offering [Member]
Sun Capital [Member]
Schedule Of Shareholders Equity [Line Items]
 
 
 
 
 
 
 
 
 
Common stock, shares authorized
 
 
100,000,000 
 
100,000,000 
 
 
 
 
Common stock price per share
$ 0.01 
 
$ 0.01 
 
$ 0.01 
 
 
 
 
Common stock, shares issued
 
 
36,748,245 
 
36,779,417 
10,000,000 
 
 
 
Common stock, shares outstanding
 
 
36,748,245 
 
36,779,417 
 
 
 
 
Stock split ratio
28.5177 
 
 
 
 
 
 
 
 
Shares sold by selling shareholders
 
 
 
 
 
 
 
 
4,975,254 
Common stock price per share
 
 
 
 
 
 
 
$ 34.50 
 
Common stock shares sold pursuant to exercise of underwriters option
 
 
 
 
 
 
 
648,946 
 
Proceeds from secondary offering
 
 
 
$ 186,000 
 
 
 
$ 0 
 
Ownership percentage
 
 
 
 
 
 
68.00% 
 
54.60% 
Expenses in connection with Secondary Offering
 
$ 571 
$ 571 
 
 
 
 
 
 
Earnings Per Share - Additional Information (Detail)
12 Months Ended 0 Months Ended
Jan. 30, 2016
Jan. 31, 2015
Feb. 1, 2014
Nov. 21, 2013
Mar. 29, 2016
Subsequent Event [Member]
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
 
 
 
 
 
Common stock issued
36,779,417 
36,748,245 
 
10,000,000 
 
Number of anti-dilutive securities
732,303 
123,959 
 
 
Issuance of additional shares
 
 
 
 
11,818,181 
Earnings Per Share - Schedule of Reconciliation of Weighted Average Basic Shares to Weighted Average Diluted Shares Outstanding (Detail)
12 Months Ended
Jan. 30, 2016
Jan. 31, 2015
Feb. 1, 2014
Earnings Per Share [Abstract]
 
 
 
Weighted-average shares—basic
36,770,430 
36,730,490 
28,119,794 
Effect of dilutive equity securities
758,797 
1,514,416 
153,131 
Weighted-average shares—diluted
37,529,227 
38,244,906 
28,272,925 
Income Taxes - Schedule of Provision for Income Taxes for Continuing Operations (Detail) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Jan. 30, 2016
Jan. 31, 2015
Feb. 1, 2014
Current:
 
 
 
Federal
$ (53)
$ 759 
 
State
522 
344 
43 
Foreign
Total current
469 
1,103 
43 
Deferred:
 
 
 
Federal
2,994 
20,416 
6,333 
State
(249)
2,475 
905 
Foreign
 
 
(13)
Total deferred
2,745 
22,891 
7,225 
Total provision for income taxes
$ 3,214 
$ 23,994 
$ 7,268 
Income Taxes - Schedule of Reconciliation of Federal Statutory Income Tax Rate to Effective Tax Rate (Detail)
12 Months Ended
Jan. 30, 2016
Jan. 31, 2015
Feb. 1, 2014
Feb. 2, 2013
Income Tax Disclosure [Abstract]
 
 
 
 
Statutory federal rate
35.00% 
35.00% 
35.00% 
35.00% 
State taxes, net of federal benefit
6.50% 
5.70% 
9.50% 
 
Nondeductible Tax Receivable Agreement adjustment
4.10% 
0.00% 
0.00% 
 
Nondeductible interest
0.00% 
0.00% 
18.10% 
 
Nondeductible transaction costs
0.00% 
0.00% 
6.70% 
 
Valuation allowance
(0.50%)
(0.70%)
(45.50%)
 
Return to provision adjustment
(2.40%)
0.00% 
0.00% 
 
Changes in tax laws
(3.20%)
0.00% 
0.00% 
 
Other
(0.80%)
0.20% 
(0.10%)
 
Total
38.70% 
40.20% 
23.70% 
 
Income Taxes - Schedule of Deferred Income Tax Assets and Liabilities for Continuing Operations (Detail) (USD $)
In Thousands, unless otherwise specified
Jan. 30, 2016
Jan. 31, 2015
Deferred tax assets:
 
 
Depreciation and amortization
$ 17,071 
$ 29,935 
Employee related costs
2,163 
3,503 
Allowance for asset valuations
2,551 
3,172 
Accrued expenses
6,088 
3,933 
Net operating losses
72,465 
65,111 
Tax credits
812 
888 
Other
457 
90 
Total deferred tax assets
101,607 
106,632 
Less: valuation allowances
(1,024)
(1,074)
Net deferred tax assets
100,583 
105,558 
Deferred tax liabilities:
 
 
Cancellation of debt income
(6,657)
(8,876)
Other
(482)
(493)
Total deferred tax liabilities
(7,139)
(9,369)
Net deferred income tax assets
93,444 
96,189 
Prepaid expenses and other current assets
4,164 
4,015 
Deferred income taxes and other assets
$ 89,280 
$ 92,174 
Income Taxes - Additional Information (Detail) (USD $)
12 Months Ended
Jan. 30, 2016
Jan. 31, 2015
Feb. 1, 2014
Income Tax Contingency [Line Items]
 
 
 
Valuation Allowance
$ 1,024,000 
$ 1,074,000 
 
Increase in additional paid in capital
2,732,000 
2,675,000 
 
Increase (decrease) in deferred tax assets valuation allowance
(50,000)
(769,000)
 
Unrecognized tax benefits that would impact effective tax rate if recognized
2,161,000 
2,195,000 
 
Unrecognized tax benefits, period decrease
72,000 
 
 
Unrecognized tax benefits, income tax penalties and interest accrued
 
Unrecognized tax benefits, interest and penalty provisions (benefit)
$ 0 
$ 0 
$ (232,000)
Minimum [Member]
 
 
 
Income Tax Contingency [Line Items]
 
 
 
Net operating losses carryforward expiration year end
2030 
 
 
Maximum [Member]
 
 
 
Income Tax Contingency [Line Items]
 
 
 
Net operating losses carryforward expiration year end
2036 
 
 
Income Taxes - Reconciliation of Beginning and Ending Amount of Gross Unrecognized Tax Benefits, Excluding Interest and Penalties (Detail) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Jan. 30, 2016
Jan. 31, 2015
Feb. 1, 2014
Income Tax Disclosure [Abstract]
 
 
 
Beginning balance
$ 4,487 
$ 3,693 
$ 9,378 
Increases for tax positions in current year
72 
2,397 
3,743 
Increases for tax positions in prior years
27 
135 
356 
Decreases for tax positions in prior years
(2,459)
(1,738)
(4,186)
Settlements
 
 
(3,022)
Lapse in statute of limitations
 
 
(102)
Restructuring Transactions
 
 
(2,474)
Ending balance
$ 2,127 
$ 4,487 
$ 3,693 
Defined Contribution Plan - Additional Information (Detail) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Jan. 30, 2016
Jan. 31, 2015
Feb. 1, 2014
Defined Contribution Plan Disclosure [Line Items]
 
 
 
Employee annual contribution percentage, minimum
1.00% 
 
 
Employee annual contribution percentage, maximum
100.00% 
 
 
Matching contribution percentage by employer
50.00% 
 
 
Defined contribution plan annual expense incurred
$ 426 
$ 344 
$ 232 
Maximum [Member]
 
 
 
Defined Contribution Plan Disclosure [Line Items]
 
 
 
Percentage of maximum eligible compensation for matching employer contribution
3.00% 
 
 
Segment and Geographical Financial Information - Additional Information (Detail) (USD $)
3 Months Ended 12 Months Ended
Jan. 30, 2016
Oct. 31, 2015
Aug. 1, 2015
May 2, 2015
Jan. 31, 2015
Nov. 1, 2014
Aug. 2, 2014
May 3, 2014
Jan. 30, 2016
Country
Segments
Jan. 31, 2015
Feb. 1, 2014
Segment Reporting Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Number of reportable segments
 
 
 
 
 
 
 
 
 
 
Gross profit
$ 40,981,000 
$ 40,005,000 
$ 20,789,000 
$ 30,741,000 
$ 45,756,000 
$ 50,648,000 
$ 44,014,000 
$ 26,411,000 
$ 132,516,000 
$ 166,829,000 
$ 133,016,000 
Product sale, number of countries
 
 
 
 
 
 
 
 
38 
 
 
Intercompany Sales [Member]
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Gross profit
 
 
 
 
 
 
 
 
Wholesale [Member] |
Intercompany Sales [Member]
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Wholesale intercompany sales excluded from net sales
 
 
 
 
 
 
 
 
$ 29,063,000 
$ 22,595,000 
$ 16,916,000 
Segment and Geographical Financial Information - Summary of Operating Segments Information (Detail) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 12 Months Ended
Jan. 30, 2016
Oct. 31, 2015
Aug. 1, 2015
May 2, 2015
Jan. 31, 2015
Nov. 1, 2014
Aug. 2, 2014
May 3, 2014
Jan. 30, 2016
Jan. 31, 2015
Feb. 1, 2014
Segment Reporting Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Net sales
$ 81,763 
$ 80,859 
$ 79,993 
$ 59,842 
$ 94,671 
$ 102,947 
$ 89,326 
$ 53,452 
$ 302,457 
$ 340,396 
$ 288,170 
Income from operations
 
 
 
 
 
 
 
 
15,726 
70,250 
49,353 
Total depreciation & amortization
 
 
 
 
 
 
 
 
8,350 
5,267 
2,785 
Capital Expenditures
 
 
 
 
 
 
 
 
17,591 
19,699 
10,073 
Operating Segments [Member]
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Income from operations
 
 
 
 
 
 
 
 
69,410 
115,179 
92,257 
Operating Segments [Member] |
Wholesale [Member]
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Net sales
 
 
 
 
 
 
 
 
201,182 
259,418 
229,114 
Income from operations
 
 
 
 
 
 
 
 
61,571 
100,623 
81,822 
Total depreciation & amortization
 
 
 
 
 
 
 
 
2,058 
1,962 
1,204 
Capital Expenditures
 
 
 
 
 
 
 
 
1,629 
2,076 
1,832 
Operating Segments [Member] |
Direct-to-Consumer [Member]
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Net sales
 
 
 
 
 
 
 
 
101,275 
80,978 
59,056 
Income from operations
 
 
 
 
 
 
 
 
7,839 
14,556 
10,435 
Total depreciation & amortization
 
 
 
 
 
 
 
 
4,498 
2,950 
1,581 
Capital Expenditures
 
 
 
 
 
 
 
 
9,442 
8,117 
8,241 
Unallocated Corporate [Member]
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Income from operations
 
 
 
 
 
 
 
 
(53,684)
(44,929)
(42,904)
Total depreciation & amortization
 
 
 
 
 
 
 
 
1,794 
355 
 
Capital Expenditures
 
 
 
 
 
 
 
 
$ 6,520 
$ 9,506 
 
Segment and Geographical Financial Information - Summary of Assets by Operating Segments (Detail) (USD $)
In Thousands, unless otherwise specified
Jan. 30, 2016
Jan. 31, 2015
Segment Reporting Information [Line Items]
 
 
Assets
$ 363,568 
$ 378,648 
Unallocated Corporate [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Assets
280,378 
274,220 
Wholesale [Member] |
Operating Segments [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Assets
47,757 
70,635 
Direct-to-Consumer [Member] |
Operating Segments [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Assets
$ 35,433 
$ 33,793 
Segment and Geographical Financial Information - Summary of Sales Results on Geographic Basis (Detail) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 12 Months Ended
Jan. 30, 2016
Oct. 31, 2015
Aug. 1, 2015
May 2, 2015
Jan. 31, 2015
Nov. 1, 2014
Aug. 2, 2014
May 3, 2014
Jan. 30, 2016
Jan. 31, 2015
Feb. 1, 2014
Segment Reporting Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Net sales
$ 81,763 
$ 80,859 
$ 79,993 
$ 59,842 
$ 94,671 
$ 102,947 
$ 89,326 
$ 53,452 
$ 302,457 
$ 340,396 
$ 288,170 
United States [Member]
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Net sales
 
 
 
 
 
 
 
 
273,655 
310,179 
265,622 
Other countries [Member]
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Net sales
 
 
 
 
 
 
 
 
$ 28,802 
$ 30,217 
$ 22,548 
Segment and Geographical Financial Information - Summary of Net Sales by Major Product category (Detail) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 12 Months Ended
Jan. 30, 2016
Oct. 31, 2015
Aug. 1, 2015
May 2, 2015
Jan. 31, 2015
Nov. 1, 2014
Aug. 2, 2014
May 3, 2014
Jan. 30, 2016
Jan. 31, 2015
Feb. 1, 2014
Segment Reporting Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Net sales
$ 81,763 
$ 80,859 
$ 79,993 
$ 59,842 
$ 94,671 
$ 102,947 
$ 89,326 
$ 53,452 
$ 302,457 
$ 340,396 
$ 288,170 
Sales Revenue, Goods, Net [Member] |
Product Concentration Risk [Member]
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Percentage of net sales
 
 
 
 
 
 
 
 
100.00% 
100.00% 
100.00% 
Women's Collection [Member]
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Net sales
 
 
 
 
 
 
 
 
272,338 
301,076 
253,647 
Women's Collection [Member] |
Sales Revenue, Goods, Net [Member] |
Product Concentration Risk [Member]
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Percentage of net sales
 
 
 
 
 
 
 
 
90.00% 
89.00% 
88.00% 
Men's Collection [Member]
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Net sales
 
 
 
 
 
 
 
 
22,685 
35,417 
33,612 
Men's Collection [Member] |
Sales Revenue, Goods, Net [Member] |
Product Concentration Risk [Member]
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Percentage of net sales
 
 
 
 
 
 
 
 
8.00% 
10.00% 
12.00% 
Other [Member]
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Net sales
 
 
 
 
 
 
 
 
$ 7,434 
$ 3,903 
$ 911 
Other [Member] |
Sales Revenue, Goods, Net [Member] |
Product Concentration Risk [Member]
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Percentage of net sales
 
 
 
 
 
 
 
 
2.00% 
1.00% 
0.00% 
Related Party Transactions - Additional Information (Detail) (USD $)
0 Months Ended 12 Months Ended 0 Months Ended 0 Months Ended 12 Months Ended 0 Months Ended 0 Months Ended 12 Months Ended 12 Months Ended 0 Months Ended 12 Months Ended 0 Months Ended 3 Months Ended 12 Months Ended 0 Months Ended 12 Months Ended 12 Months Ended 0 Months Ended
Nov. 27, 2013
Jan. 31, 2015
Jan. 30, 2016
Feb. 2, 2013
Jun. 18, 2013
Sun Promissory Notes [Member]
Dec. 28, 2012
Sun Promissory Notes [Member]
May 2, 2008
Sun Promissory Notes [Member]
Jun. 18, 2013
Sun Capital Loan Agreement [Member]
Dec. 28, 2012
Sun Capital Loan Agreement [Member]
Jan. 30, 2016
Sun Capital Loan Agreement [Member]
Nov. 27, 2013
12.875% Notes [Member]
Nov. 27, 2013
Kellwood Note Receivable [Member]
Nov. 27, 2013
Tax Receivable Agreement [Member]
Nov. 27, 2013
Tax Receivable Agreement [Member]
LIBOR Rate [Member]
Dec. 9, 2015
Rights Offering Commitment Letter [Member]
Jan. 30, 2016
Rights Offering Commitment Letter [Member]
Nov. 27, 2013
Debt Recovery Bonus [Member]
Feb. 1, 2014
Management Services Agreement [Member]
Discontinued Operations [Member]
Nov. 27, 2013
Kellwood [Member]
Jan. 30, 2016
Kellwood [Member]
Shared Services Agreement [Member]
Jan. 31, 2015
Kellwood [Member]
Shared Services Agreement [Member]
Feb. 1, 2014
Kellwood [Member]
Shared Services Agreement [Member]
Nov. 27, 2013
Kellwood [Member]
Sun Term Loan Agreements [Member]
Nov. 27, 2013
Pre-IPO Stockholders [Member]
Tax Receivable Agreement [Member]
Jan. 31, 2015
Pre-IPO Stockholders [Member]
Tax Receivable Agreement [Member]
Jan. 30, 2016
Pre-IPO Stockholders [Member]
Tax Receivable Agreement [Member]
Jan. 31, 2015
Pre-IPO Stockholders [Member]
Tax Receivable Agreement [Member]
Nov. 27, 2013
Pre-IPO Tax Benefits [Member]
Tax Receivable Agreement [Member]
Sep. 1, 2015
Sun Cardinal, LLC [Member]
Tax Receivable Agreement [Member]
LIBOR [Member]
Nov. 27, 2013
Sun Term Loan Agreements [Member]
Jun. 18, 2013
Sun Term Loan Agreements [Member]
Jan. 30, 2016
Sun Capital [Member]
Jan. 31, 2015
Sun Capital [Member]
Feb. 1, 2014
Sun Capital [Member]
Nov. 27, 2013
Sun Capital [Member]
Minimum [Member]
Jan. 30, 2016
Sun Capital Consulting Agreement [Member]
Jan. 31, 2015
Sun Capital Consulting Agreement [Member]
Feb. 1, 2014
Sun Capital Consulting Agreement [Member]
Nov. 27, 2013
Sun Capital Consulting Agreement [Member]
Minimum [Member]
Sep. 1, 2015
Interim Chief Executive Officer [Member]
Sep. 1, 2015
Interim Chief Financial Officer and Treasurer [Member]
Jan. 30, 2016
Affiliates of Sun Capital Partners Inc [Member]
Related Party Transaction [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Date of related party transaction agreement
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Nov. 27, 2013 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Related party transaction termination of contract description
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
If no specific notice requirement has been provided, 90 days prior written notice shall be required to be given. Upon the termination of certain services, Kellwood may no longer be in a position to provide certain other related services. Kellwood must notify us within 10 days following our request to terminate any services if they will no longer be able to provide other related services. Assuming we proceed with our request to terminate the original services, such related services shall also be terminated in connection with such termination. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of business days require for receiving invoice from related party
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
15 days 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Expense for services provided
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 9,357,000 
$ 11,436,000 
$ 13,729,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other accrued expenses
 
27,992,000 
37,174,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
858,000 
753,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Aggregate reduction in taxes payable percentage
85.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
85.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Percentage interest continued in tax benefits
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
15.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Calculation of present value obligated to pay on termination
 
 
 
 
 
 
 
 
 
 
 
 
 
2.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Aggregate ownership of equity securities
 
 
 
 
 
 
 
 
 
 
 
 
100.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Percentage of voting power of all outstanding capital stock
 
 
 
 
 
 
 
 
 
 
 
 
35.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt outstanding principal amount
 
 
 
 
 
 
 
 
 
 
 
 
15,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total obligation under Tax Receivable Agreement
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
169,913,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Tax receivable agreement period
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
8 years 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Current amount of Tax Receivable Agreement obligation included in other accrued expenses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
29,075,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other liabilities
 
146,063,000 
140,838,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
140,838,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Increase of pre-IPO deferred tax assets
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1,154,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Increase of liability
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
981,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Reduction of pre-IPO deferred tax assets
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
818,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Reduction of liability
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1,442,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Tax receivable agreement obligation adjustment
 
624,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
624,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash payments on Tax Receivable Agreements obligation
 
3,199,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3,199,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Future payments under tax receivable agreements postponed
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
21,762,000 
7,313,000 
21,762,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basis spread on variable rate per annum for postponed payments waived
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
5.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basis spread on variable rate per annum for postponed payments
 
 
 
 
 
 
 
 
 
2.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
Proceed from contribution obligation
 
 
 
 
 
 
 
 
 
 
 
 
 
 
65,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Contribution obligation, funding description
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The Company is required, simultaneously with the funding of the Contribution Obligation by Sun Fund V, or one or more of its affiliates, to issue to Sun Fund V or one or more of its affiliates the applicable number of shares of the Company’s common stock at the lesser of (i) a price per share equal to a 20% discount to the 30 day average trading price of the Company’s common stock on The New York Stock Exchange immediately prior to the date of the Rights Offering Commitment Letter, (ii) a price per share equal to a 20% discount to the 30 day average trading price of the Company’s common stock on The New York Stock Exchange immediately prior to the commencement of the Rights Offering and (iii) the price per share at which participants in the Rights Offering are entitled to purchase shares of new common stock issued by the Company. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Discount percentage on average trading price
 
 
 
 
 
 
 
 
 
 
 
 
 
 
20.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of days of average trading price considered for calculating price per share
 
 
 
 
 
 
 
 
 
 
 
 
 
 
30 days 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Contribution obligation, payable upon non commencement, amount
 
 
 
 
 
 
 
 
 
 
 
 
 
 
950,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Contribution obligation, termination description
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
upon the earliest to occur of (A) the consummation of the Rights Offering whereby the Company receives proceeds equal to or exceeding $65,000, (B) 11:59 p.m. New York City time on April 7, 2016 if the Rights Offering has not commenced by such time, (C) 11:59 p.m. New York City time on April 30, 2016, and (D) the date Sun Fund V, or its affiliates, funds the Contribution Obligation. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Future payments under tax receivable agreements
 
 
 
 
 
 
 
 
 
 
 
 
 
 
21,762,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Promissory notes issued
 
 
 
 
 
 
 
 
 
 
 
341,500,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net proceeds from IPO used to repay promissory notes
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
172,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net borrowings
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
169,500,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Note receivable repaid
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
70,100,000 
 
 
 
 
 
 
 
 
 
 
 
 
Debt interest rate percentage
 
 
 
 
 
 
15.00% 
 
 
 
12.875% 
 
 
 
 
 
 
 
7.125% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amount of debt purchased
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
38,100,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt recovery bonus
6,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest accrued
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Unpaid debt recovery bonus
440,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Percentage of related debt recovery
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4.40% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Capital contribution fiscal 2012
 
 
 
 
 
270,852,000 
 
 
18,249,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Long-term debt
 
84,450,000 
57,615,000 
391,434,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Capital contribution fiscal 2013
 
 
 
 
334,595,000 
 
 
72,932,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
38,683,000 
 
 
 
 
 
 
 
 
 
 
 
Net Borrowings
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
83,355,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual management fee
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2,200,000 
 
 
 
 
 
 
 
 
Management fees paid
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
79,000 
404,000 
 
 
 
 
 
 
 
 
Management fees expense
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1,537,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Transaction fee
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1.00% 
 
 
 
 
 
 
 
 
 
 
Material transaction fees payable
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Aggregate ownership of equity securities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
30.00% 
 
 
 
30.00% 
 
 
 
Reimbursement of expenses paid
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
114,000 
76,000 
 
 
 
 
Contributed Service Fees
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 63,000 
$ 43,000 
 
Common stock ownership percentage by affiliates
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
56.00% 
Quarterly Financial Information - Summary of Quarterly Financial Results (Detail) (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended 12 Months Ended
Jan. 30, 2016
Oct. 31, 2015
Aug. 1, 2015
May 2, 2015
Jan. 31, 2015
Nov. 1, 2014
Aug. 2, 2014
May 3, 2014
Jan. 30, 2016
Jan. 31, 2015
Feb. 1, 2014
Quarterly Financial Information Disclosure [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Net sales
$ 81,763 
$ 80,859 
$ 79,993 
$ 59,842 
$ 94,671 
$ 102,947 
$ 89,326 
$ 53,452 
$ 302,457 
$ 340,396 
$ 288,170 
Gross profit
40,981 
40,005 
20,789 
30,741 
45,756 
50,648 
44,014 
26,411 
132,516 
166,829 
133,016 
Net income (loss)
$ 1,778 
$ 5,893 
$ (5,026)
$ 2,454 
$ 10,527 
$ 13,311 
$ 10,501 
$ 1,384 
$ 5,099 
$ 35,723 
$ (27,420)
Basic earnings (loss) per share
$ 0.05 
$ 0.16 
$ (0.14)
$ 0.07 
$ 0.29 
$ 0.36 
$ 0.29 
$ 0.04 
$ 0.14 
$ 0.97 
$ (0.98)
Diluted earnings (loss) per share
$ 0.05 
$ 0.16 
$ (0.14)
$ 0.06 
$ 0.28 
$ 0.35 
$ 0.27 
$ 0.04 
$ 0.14 
$ 0.93 
$ (0.98)
Quarterly Financial Information - Summary of Quarterly Financial Results (Parenthetical) (Detail) (USD $)
3 Months Ended 12 Months Ended
Jan. 30, 2016
Oct. 31, 2015
Aug. 1, 2015
May 2, 2015
Jan. 31, 2015
Nov. 1, 2014
Aug. 2, 2014
May 3, 2014
Jan. 30, 2016
Jan. 31, 2015
Feb. 1, 2014
Quarterly Financial Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Inventory write down non-recurring
 
 
$ 14,447,000 
 
 
 
 
 
 
 
 
Management transition costs
 
164,000 
2,861,000 
 
 
 
 
 
 
 
 
Pre-tax income associated with recovery of inventory write-down
2,161,000 
1,986,000 
 
 
 
 
 
 
 
 
 
Adjustment to management transition costs
323,000 
 
 
 
 
 
 
 
 
 
 
Gross profit
40,981,000 
40,005,000 
20,789,000 
30,741,000 
45,756,000 
50,648,000 
44,014,000 
26,411,000 
132,516,000 
166,829,000 
133,016,000 
Net income (loss)
1,778,000 
5,893,000 
(5,026,000)
2,454,000 
10,527,000 
13,311,000 
10,501,000 
1,384,000 
5,099,000 
35,723,000 
(27,420,000)
Diluted earnings (loss) per share
 
 
 
 
 
 
 
 
$ 0.14 
$ 0.93 
$ 0.83 
Expenses in connection with Secondary Offering
 
 
 
 
 
 
571,000 
 
 
571,000 
 
Reconciliation Of Overstatement [Member]
 
 
 
 
 
 
 
 
 
 
 
Quarterly Financial Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Gross profit
530,000 
 
 
 
 
 
 
 
 
 
 
Net income (loss)
$ 313,000 
 
 
 
 
 
 
 
 
 
 
Diluted earnings (loss) per share
$ 0.01 
 
 
 
 
 
 
 
 
 
 
Subsequent Event - Additional Information (Detail) (Subsequent Event [Member], USD $)
In Thousands, except Share data, unless otherwise specified
0 Months Ended
Mar. 29, 2016
RightOffering
Mar. 15, 2016
Sun Cardinal LLC And SCSF Cardinal LLC [Member]
Investment Agreement [Member]
Subsequent Event [Line Items]
 
 
Subscription price
$ 5.50 
$ 5.50 
Subscription of non-transferrable right per share
 
Percentage of number of shares pursuant to over subscription
20.00% 
 
Fractional shares of common stock issued in rights offering
 
Offering period expiration date
Apr. 14, 2016 
 
Common stock issuance, shares
11,818,181 
 
Rights offering gross proceeds
$ 65,000 
 
Expected payment under Tax Receivable Agreements
$ 21,762 
 
Schedule II - Valuation and Qualifying Accounts (Detail) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Jan. 30, 2016
Jan. 31, 2015
Feb. 1, 2014
Sales Allowances [Member]
 
 
 
Valuation and Qualifying Accounts Disclosure [Line Items]
 
 
 
Beginning of Period
$ (16,098)
$ (9,265)
$ (7,179)
Expenses Charges, net of Reversals
(55,656)
(54,467)
(39,171)
Deductions and Write-offs net of Recoveries
58,908 
47,634 
37,085 
End of Period
(12,846)
(16,098)
(9,265)
Allowance for Doubtful Accounts [Member]
 
 
 
Valuation and Qualifying Accounts Disclosure [Line Items]
 
 
 
Beginning of Period
(379)
(353)
(279)
Expenses Charges, net of Reversals
34 
(168)
(249)
Deductions and Write-offs net of Recoveries
157 
142 
175 
End of Period
(188)
(379)
(353)
Provision for Inventories [Member]
 
 
 
Valuation and Qualifying Accounts Disclosure [Line Items]
 
 
 
Beginning of Period
(6,464)
(3,868)
(1,263)
Expenses Charges, net of Reversals
(16,263)
(3,719)
(3,738)
Deductions and Write-offs net of Recoveries
9,479 
1,123 
1,133 
End of Period
(13,248)
(6,464)
(3,868)
Valuation Allowance on Deferred Income Taxes [Member]
 
 
 
Valuation and Qualifying Accounts Disclosure [Line Items]
 
 
 
Beginning of Period
(1,074)
(1,843)
(64,767)
Expenses Charges, net of Reversals
 
 
(78,855)
Deductions and Write-offs net of Recoveries
50 
769 
141,779 
End of Period
$ (1,024)
$ (1,074)
$ (1,843)
Schedule II - Valuation and Qualifying Accounts (Parenthetical) (Detail) (Valuation Allowance on Deferred Income Taxes [Member], USD $)
In Thousands, unless otherwise specified
12 Months Ended
Feb. 1, 2014
Valuation Allowance on Deferred Income Taxes [Member]
 
Valuation and Qualifying Accounts Disclosure [Line Items]
 
Increase to additional paid-in capital in Stockholders' Equity
$ 127,833