Friday, March 20, 2015

Vince to Ramp Up Store Openings as Department Stores Fail to Boost Business

Vince to Ramp Up Store Openings as Department Stores Fail to Boost Business:

Vince's spring campaign. Photo: Vince
Vince's spring campaign. Photo: Vince
You may encounter Vince's sweaters and $200 silk blouses most often in department stores, but that's about to change. Now that it's a publicly traded company, Vince is taking more control of its brand by shifting its revenue model away from wholesale and toward its own retail channels, following in the steps of luxury brands like Prada and Burberry.

In 2012, Vince's business was 85 percent wholesale; now, it's down to 75 percent. The goal, execs said on the company's 2014 earnings call Thursday morning, is to balance the business so that 60 percent of sales are coming in from wholesale, and 40 percent are through retail.

Though the brand was already moving in that direction, the final quarter of the year reinforced the plan. Overall sales grew 7.9 percent to $94.7 million, yet wholesale revenue declined slightly (by 0.6 percent) to $68.9 million. The cause? Department stores have been buying more conservatively, purchasing less product up front and reordering as needed.

On top of that, Vince execs say that those same stores have been focusing their expansion efforts on off-price locations — Nordstrom Rack rather than the full-priced Nordstrom, for instance — which gives Vince the added pressure of making sure its luxe brand image doesn't head downstream.

So it's growing its own store fleet, with eight to 10 openings planned for the coming year,, and the ultimate goal of having 100 Vince stores up and running in the U.S. Currently, there are 38. The company is also working on international expansion, having opened a Paris showroom earlier this month, and is preparing to touch down in Selfridges in London and Printemps in Paris by fall 2015. (The challenges with department stores are limited to domestic partners, it seems.)

Wherever you are, keep your eyes peeled for a Vince store near you.

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