Vince Holding Corp. (VNCE) Q3 2019 Earnings Report, Transcript and Summary

Ladies and gentlemen, thank you for standing by and welcome to Vince Q3 2019 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions] I would now like to hand the conference over to Amy Levy, Vice President of Investor Relations. Thank you. Please go ahead.

Thank you and good afternoon everyone. Welcome to Vince Holding Corp’s third quarter fiscal 2019 earnings conference call. Hosting the call today are, Brendan Hoffman, Chief Executive Officer; and Dave Stefko, Chief Financial Officer. Before we begin, let me remind you that certain statements made on this call may constitute forward-looking statements, which are subject to risks and uncertainties that could cause actual results to differ from those that the company expect. Those risks and uncertainties are described in today’s press release and in the company’s SEC filings, which are available on the company’s website. Investors should not assume that statements made during the call will remain operative at a later time, and the company undertakes no obligation to update any information discussed on the call. In addition, in today’s discussion, the company is presenting its financial results in conformity with GAAP and on an adjusted basis. The adjusted results that the company presents today are non-GAAP measures. Discussions of these non-GAAP measures and information on reconciliations of them to their most comparable GAAP measures are included in today’s press release and related schedules, which are available in the Investors section of the company’s website at investors.vince.com. After the prepared remarks, management will be available to take your questions for as long as time permits. Now, I’ll turn the call over to Brendan.

Thanks, Amy. Let me begin by sharing how excited we are to have recently completed the acquisition of Rebecca Taylor and Parker. With this transaction, we are bringing together three highly recognized distinct brands to create a global contemporary fashion group. We look forward to working with the Rebecca Taylor and Parker management team to grow these brands by employing similar strategies that continue to drive the success we’ve accomplished at Vince. Turning briefly to third quarter performance, which closed prior to the acquisition. We delivered another quarter of strong top and bottom line results at Vince. Our net sales for the quarter grew 3.4% and gross margin expanded 150 basis points to 50.4%. Adjusted net income, despite higher tariff costs increased 28% to $8.7 million or $0.73 per diluted share, compared to net income of $6.8 million or $0.57 per diluted share in the same period last year. In our direct-to-consumer segment, revenue increased 16% led by a 10% comp increase and four net new store openings since the end of the third quarter last year. We saw strong comps across all channels with continued strength in our e-commerce business, driven largely by an increase in transactions. We attribute our performance to strong response to our product, as well as marketing and segmentation strategies that we’ve been executing to drive customer traffic. As we continue to expand offerings within key classifications and test new product categories, as well as build on our marketing initiatives, we expect this strong momentum to continue. For the fourth quarter-to-date, we are pleased with the overall performance in our direct-to-consumer business led by continued strength in e-commerce. Our wholesale channel revenue decreased 3.6% in the third quarter. This decrease was a result of lower shipments to the off-price channel, the acceleration of seasonal wholesale deliveries into the second quarter and seasonal timing of returns. We continue to see robust growth in our sales at the register, which in turn has enabled us to secure more floor space in our key wholesale partner doors. We are excited to have the larger space as it gives us the opportunity to further showcase the essence of the Vince brand. With more impactful visual merchandising, we see potential of build on our momentum as we continue to deliver exceptional products in addition to creative marketing collaborations and events. Sales for fourth quarter-to-date tell us of the traction we are gaining continues. Looking ahead, we remain focused on advancing our strategic initiatives, which include driving growth through our direct-to-consumer business, as we continue to expand our store base in the U.S. and strategically enter international markets, increased market share within the wholesale channel, test new product categories, and define our customer journey, while refining our marketing efforts to drive traffic and conversion in our stores and on our website. Our retail expansion strategy continued to progress with store openings in the U.S. as well as international markets. Our new Fifth Avenue store, which opened in September, is located in a heavily trafficked area of Midtown. This is another example of our opportunistic leasing strategy, and we believe this location serves as an opportunity to further expand brand awareness. At the end of November, we opened in the Mall of Millennia, located in Orlando, further expanding our presence in Florida. We plan to continue to expand our U.S. retail base next year and have identified premier locations, where we can negotiate opportunistic leases that enable us to achieve strong economic returns. In addition, we continue to renegotiate existing store leases upon expiration or kick-out periods, as we leverage our brand strength. We are also exploring relocations to larger footprints or more optimal nearby locations. In terms of global expansion, we saw a strong store opening in South Kensington, London in September and continue our efforts to drive brand awareness in this market, as we expand our presence through additional strategic store openings. We are particularly excited to see evidence that our California essence and vision is translating well in Europe. We also recently mentioned that we have been exploring entrance into the China market alongside our contemporary peers. I’m pleased to announce that we selected a highly experienced partner to help us launch in this market and we are progressing towards solidifying an agreement. The search for premier locations is already underway, and our intention is to launch in fall of 2020. As we expand, our store base globally, our in-store experience that embodies the California vibe will be consistent across retail locations from Melrose to Europe and China. As I mentioned earlier, our e-commerce channel performed exceptionally well in the quarter. This represents another way in which we share our narrative through visual and creative content, that enables us to connect with our guests. Our product expansion strategies are also progressing well. We are building out our sourcing design and production capabilities to support distribution of handbags in extended sizes to enhance sourcing and expansion of our teams. We expect to initiate distribution of our handbag from the wholesale channel in 2021, we plan to initially launch sizes 18 to 24 on our e-commerce in fall 2020, followed by distribution into the wholesale channel. Turning to our marketing strategies. We are focused on both increased engagement with existing customers and driving customers to the brand. These initiatives are all centered around customer connectivity. In addition to utilizing social media ads each season we work with media partners with a similar demographic to share our campaign, drive impressions in click store site. For the fall season, we worked with ShopBAZAAR, the New York Times and GQ to advertise and help build brand awareness. Looking ahead to the fourth quarter and beyond, we have a lot of exciting digital advertising campaigns to come. Furthermore, we continue to create buzz and engage with local communities through influencer partnerships as well as branded and customer-facing events. Our recent partnership with a New York City influencer florist allowed us to create an exclusive custom shoe for Nordstrom as part of their Perfect Pair muse campaign. This partnership included store displays, site experience and e-mail placements to drive awareness. We also continue to work with our influencer agency in Europe. All influencers will be posting fall and holiday product and using the campaign #VinceWomen to measure activities on Instagram. Over the next few quarters, we will continue to develop collaborations and brand partnerships as well as leverage micro and macro brand influences. Turning to our subscription business. We anniversaried the launch of Vince Unfold in November. As a growing number of brands launched online subscription services, we continue to see a steady growth in new sign-ups. We remain pleased with the growth in our subscription base as we believe this model has extended the reach of the brand, and we’ve started to discuss expanding this service to include the men’s category. In summary, we continue to see significant growth opportunity for the Vince brand as we expand our global presence. Based on our strong momentum, we are increasing our strategic investments in fiscal 2019 as we advance our growth strategies, particularly our expansion in China and the acceleration of our CRM initiatives. Now I’d like to spend a moment discussing Rebecca Taylor and Parker. We believe there is meaningful opportunity to grow these brands as we apply the strategic playbook that led to the significantly improved performance we’ve been delivering for the Vince brand. One of the initiatives that we are excited about leveraging from our acquisition is Rebecca Taylor’s new ReCollect program, which launched this fall. This program enables customers to repurpose their Rebecca Taylor clothing in stores or online for a credit towards the next purchase. This is part of the emerging trend of resale clothing designed to drive forward the circular economy and decrease the carbon footprint. Longer term, we will explore expanding this program across brands as part of our effort to heighten our focus on sustainability. Overall, we are pleased to see the enthusiasm for these brands among department and specialty store partners and landlords. I recently met with the team, and we are all very excited to work together to develop these brands over the next few years. Our next step is to reengage our strategic consultants as we work to integrate and develop our strategies with these brands in collaboration with the brand teams. Before turning the call over to Dave, I just want to provide you with a quick update on our outlook. We now expect to provide updated fiscal 2019 guidance by the end of January, which will incorporate the impact of the acquisition as well as our updated outlook for the impact of higher tariffs post September 1, and the incremental strategic investments I mentioned earlier. Note that our outlook for the underlying Vince business excluding these factors remains the same. Dave will discuss this in more detail following his review of our third quarter financial performance. In summary, we now have a diversified portfolio of contemporary brands with high brand recognition and strong growth potential. Over time, I’m confident that we have the potential to double our total company revenue from Vince’s last fiscal 2019 guidance of $295 million to $305 million. We look forward to implementing our strategic initiatives across these brands to drive long-term profitable growth. With that, I’ll turn it over to Dave.

Thank you, Brendan. We were pleased to see the momentum in Vince continue as we gained further traction across our initiatives. We’re also excited to be expanding our brand offering with the recent acquisition of Rebecca Taylor and Parker, which I will discuss later in my remarks. Now I will review our third quarter results, which, outside of certain transaction-related costs, exclude the impact of the acquisition which closed on the first day of our fourth quarter. Third quarter consolidated net sales increased 3.4% to $86.4 million compared to $83.5 million in the same prior year period. Our direct-to-consumer segment sales increased 15.6% to $35.3 million in the third quarter, while comparable sales, including e-commerce, increased 9.5%, due to an increase in transactions and in average dollar sale. Our wholesale channel sales decreased 3.6% to $51.1 million, primarily due to lower shipments to the off-price channel, the acceleration of seasonal wholesale deliveries into the second quarter and also the seasonal timing of returns. Gross profit in the third quarter was $43.5 million or 50.4% of net sales. This compares to $40.8 million or 48.9% net sales in the third quarter last year. 150 basis point increase in gross margin rate was primarily due to channel and product mix, efficiencies in the product development cycle, sourcing initiatives and year-over-year adjustments to inventory reserves. This increase was partially offset by higher sales allowances and the cost of List 3 and List 4 tariffs. Selling, general and administrative expenses in the quarter were $34.5 million or 39.9% of net sales as compared to $31.9 million or 38.2% of net sales for the third quarter of last year. The growth in SG&A dollars was primarily the result of increased compensation and benefits, partially related to growth in stores, cost of approximately $0.7 million related to the acquisition of Rebecca Taylor and Parker, higher occupancy costs related to new stores and investments in our e-commerce and Vince Unfold platforms. Operating income was $9.1 million compared to $9 million in the same period last year. Operating margin was 10.5% of net sales compared to 10.7% for the third quarter of fiscal 2018. Excluding the aforementioned $0.7 million of costs associated with the acquisition of Rebecca Taylor and Parker, adjusted income from operations was $9.8 million. Net income for the third quarter was $8 million or $0.67 per diluted share, compared to $6.8 million or $0.57 per share in the third quarter last year. Excluding the costs associated with the acquisition of Rebecca Taylor and Parker, adjusted net income was $8.7 million or $0.73 per diluted share. This compares to $6.8 million or $0.57 per diluted share in the same period last year. Moving to the balance sheet, we ended the third quarter with $47.4 million of borrowings under our debt agreements. This represents a $15.6 million decrease in our overall borrowings under our debt agreements and was primarily the result of a $13.6 million decrease in net borrowings under our revolving credit facilities, and a $2.1 million of net repayments to the term loan facilities. At the end of the third quarter approximately $52 million was available under our revolving credit facilities. Capital expenditures for the quarter were $1.5 million, primarily attributable to new stores. At the end of the quarter, we operated 63 stores in the U.S. reflecting a net increase of four stores over the prior year period. Turning to tariffs, with respect to the Vince business. As we’ve discussed previously, we have mitigation efforts underway that will partially offset the impact of tariff increases this year. On our second quarter conference call, we communicated that our guidance included $0.5 million of Section 301 tariffs effective May 10, 2019 and excluded $2 million of tariffs effective on or after September 1, 2019. A portion of these costs were reflected in the third quarter results. However, we now expect the tariff increases imposed post September 1 to approximate $1.5 million for fiscal 2019. This reduced estimate reflects lower costs, mostly related to shipments brought in earlier to avoid a tariff hike and the resending of certain tariffs by the government. As we stated last quarter, we will continue to advance our cost mitigation efforts in fiscal 2020, through a number of initiatives without compromising our commitment to quality. With respect to the acquired businesses, they have executed mitigation efforts similar to this. We will further evaluate any additional efforts that may be necessary. Speaking to the acquisition of Rebecca Taylor and Parker that closed on November 3rd, the first day of our fourth quarter, total cash consideration was $19.7 million, reflecting the pay-off of $19.2 million of outstanding debt obligations under the credit facility of the acquired businesses and $0.5 million of assumed compensation expense. We funded the purchase with cash utilizing our existing revolving credit facility, which was increased by $20 million to $100 million simultaneously with the acquisition, thereby providing additional availability to fund further initiatives for both businesses. The credit agreement amendment did not require any changes to covenants related to our credit facilities. As Rebecca Taylor and Parker were acquired from an affiliate of our majority shareholder, the acquisition was reviewed, negotiated and approved by a special committee of the company’s Board of Directors consisting solely of independent directors of Vince, represented by independent advisers. Since the acquisition is a transaction between commonly controlled entities, U.S. generally accepted accounting principles requires the retrospective combination of the entities for all periods presented as if the combination had been in effect since the inception of common control. As such, the acquisition will reflect historical balance sheet data for the acquired businesses instead of reflecting the fair market value of their assets and liabilities at the time of acquisition. The process to combine these businesses from inception is likely to be complete by the end of January, at which time, we’ll provide updated guidance encompassing the acquisition, including the expected dilution impact as well as any changes to our assumptions related to the impact of tariff increases and the incremental strategic investments we have planned for fiscal 2019 that Brendan discussed earlier. As stated in the press release announcing this transaction, we expect the acquisition to be dilutive to fiscal 2019 earnings. I want to reiterate that our outlook for the Vince business remains unchanged, and we are very pleased with the performance of this business. In fact, it is the strong momentum behind Vince brand that gave us the confidence to increase our strategic investments, including those related to our expansion into China as well as our decision to accelerate our CRM investments. We look forward to providing you with additional detail on all of these factors when we provide our fiscal 2019 guidance update by the end of January. Overall, we are pleased with our financial performance in the third quarter and the fourth quarter-to-date. Looking ahead, we have established a strong foundation and look forward to executing the growth strategies that we believe position us to deliver strong, long-term sustainable growth for our shareholders. This concludes my comments regarding our third quarter. We will now take your questions. Operator?

[Operator Instructions] Your first question comes from Dana Telsey with Telsey Advisory Group. Your line is open.

Good afternoon, everyone and congratulations on the nice progress. A couple of questions, as you look at this quarter and the wholesale business, can you please unpack a little bit of what the change was? Less off-price? How did you do with the traditional department stores? Is that what’s leading the higher gross margin? And then in your decision to increase the strategic investments, CRM and China, how much will those get increased by? Or – and what will it allow you to do in terms of timing? And then just lastly on Rebecca Taylor and Parker, Brendan, congratulations, and how do you see their distribution as compared to yours from when you took over the Vince brand? Is there an opportunity for not only sales benefit but also margin benefit? Thank you.

And thanks, Dana. That’s a lot to – let me try to remember all that, so correct – jump back in. But starting with your first question in terms of wholesale shipments for Q3. I mean the challenge was off-price. I mean, there is definitely a change in flow in the way the off-pricers want to take in the merchandise, whereas, in years past, they would pack and hold. They’re becoming more – just tighter on how early they’ll take the goods. And so it’s just caused a little bit of a cadence delay for us that we’re working through. I mean the product itself is selling through very well at the off-price channel. So, it’s a little bit of timing that we continue to plow through. Otherwise, our performance at the register at department stores is amazing. If you go into a Nordstrom’s now, you’ll see we have the best floor space, usually right on top of the escalator, and I’m really quite taken back by how big our floor space has gotten. So, the combination of terrific product and the increased visibility at both Neiman’s and Nordstrom’s has dramatically improved our performance, and we will continue to see that upside in the receipt flow. Although from quarter-to-quarter, it could flow – it could switch – swap around a little bit based on timing. Q2, obviously, we were all rushing to get in some of the – beat the tariffs and so on. But the business is extremely healthy there. And I know they’re both extremely pleased with us, having just been in Seattle a few weeks ago and lots of back and forth with Neiman Marcus. Your second question was regards to the…

Strategic investments.

Yes, strategic investments. So as we’ve discussed in the past, we feel like there’s tremendous momentum now with the Vince brand and that we need to take advantage of the heat the brand’s showing right now. And whether that’d be launching China next year, growing in things – other categories like launching wholesale handbags. Plus sizes, we think, is an enormous opportunity that we’ve experimented around with and are now making the larger investments to bring that to market as well as things like our customer journey and customer marketing that we’re going to invest in technology to enable that throughout 2020 and beyond. So we’ll do a more formal update on that next time we speak and at the ICR Conference. But those are some of the highlights of where we’re starting do the leg work in Q4 to make those investments, in addition to the integration of Rebecca Taylor and Parker. And you asked about how the wholesale accounts – and how we’re thinking about the wholesale accounts. I will tell you, I’ve been really pleased with the excitement around the brands and us taking over the brands. And there seems to be tremendous brand equity for both Rebecca Taylor and Parker based on the enthusiasm of talking to the customers, the wholesale customers, also the landlords, as I mentioned in my remarks, have been reaching out, and I’ve already started to do some site visits to see where we can expand the Rebecca Taylor, specifically, brand in brick-and-mortar, which we know will also help the e-commerce business. As far as on the wholesale side, there’s no immediate plans to make any distribution changes. I mean they have very successful businesses with the majors. And so in the short term, we certainly want to just enhance that. And hopefully, some of the things we can do together will make for a more efficient supply-chain model and also some of the things we’ve learned, hopefully, will help grow their top line. But I think the main focus in terms of what we’ve done here is understanding the opportunistic leases that are out there, and Rebecca Taylor only has a few stores, so we feel like there’s tremendous runway to immediately open up stores using the same sort of financial discipline we’ve done for Vince. Did I answer everything?

Got it. And then – you got it, Brendan, you got the whole thing. I wanted to follow-up on tariffs. Any other thoughts on tariffs, price increases, how those have gone and how you’re thinking about 2020?

Yes. Well, I mean, it changes by the moment, doesn’t it?

It certainly does.

So we’ll see what the recent news are. But anecdotally, as we’ve said, we have priced in the 15% tariffs and the 25 were applicable. Anecdotally, the customers who have come in to buy the line for spring, which was where this was first impacted, we’ve seen no price resistance. I mean they – I think part of it goes to just the momentum of the brand and the intrinsic value in the brand. So, the team has done a wonderful job surgically raising prices, where the product – where there was some room in the product. And so there was no pushback either for spring or pre-fall, which were the collections that we have shown we have shown in market, obviously, those get delivered next month and beyond. We did already raise prices in our replenishment items and that happened at the beginning of November. And so far, so good. We really haven’t seen any dip in, in unit sales and so it’s just been plus retail value based on the higher average value. So again, I think we did that very surgically and it speaks to the strength of the brand that we’re able to do that so seamlessly. To the extent we get some relief, as has been talked about today, that will be obviously welcome news for us and allow us to, hopefully, one, just have higher margins, quite frankly, now that we’ve seen that the prices can be raised. But it also allows us to fund some of these initiatives that we’re talking about. So we’re certainly keeping our fingers crossed that the news that was announced or speculated this afternoon is signed into law.

Thank you. Have a great holiday season.

Thank you, Dana. You too.

Your next question comes from Oliver Chen with Cowen and Company. Your line is open.

Thank you very much. Good evening. The comp was impressive at 9.5%. What are your thoughts on how the comp disaggregated between the e-com transactions and what you’ve been seeing in your physical stores and traffic? Would love your thoughts there.

Yes. I mean, Oliver, we’ve been – we were really pleased with the growth across all three – when we say, three channels, full-price retail, e-commerce and our outlets. And certainly, e-commerce led the way, but all of them had – would on their – individually would be considered healthy increases given everything else going on. So I think it speaks, one, to just the product and the evolution of the product. But also, obviously, the platform we’ve built to amplify that product in terms of all the changes that we’ve gone through over the last couple of years and really seeing that pay off. So it’s pretty evident to us by the – our performance at the department stores that was taking market share from our competitors, and I’m assuming that’s happening in the direct-to-consumer space as well.

Okay. And as we think about wholesale longer term, how do you see that channel growing in terms of what we should model? And also, it looks like you’re gaining a lot of nice share there, would love your thoughts on that. And also how that may relate to the sales allowance that happened on the gross margin? And what are your thoughts about that line item as well with – on the gross...

Yes. Well, I mean, I think that we’re really bullish on our wholesale potential. I mean we did what we had to do a couple of years ago and created a new foundation, and now our business has never been stronger. And again, if you haven’t, although I know you have, and I know Dana has, walked Nordstroms and see the space they’ve devoted to us, not just here in Manhattan, but across the country, and it just speaks volumes for how they believe in the brand and how they’ve gotten behind the brand. And so we had a very exciting meeting with their senior management last month in Seattle, and share really aggressive growth road map for the apparel side, both men’s and women’s. But then also talking about other categories, as I mentioned, handbags and then within apparel, the plus size business, which they’ve really gotten behind. So – and then that doesn’t even speak to the growth we’re seeing globally in our wholesale business. So we feel like there’s – we’ve cleared the decks now where we can grow DTC as fast as we can, and we can grow wholesale as fast as we can, and we’re excited about that. Are you talking to the dilution in Q2 – Q3 specifically? Or general in terms of how that works...

Gross margin impact and sales allowances, and also the outlook for more generally, merchandise margins and discounts and allowances as you – as the environment continues to be promotional at large?

Yes. Well, I mean, again, we’re in a good position because product is doing so well. We, generally speaking, now with both Neiman’s and Nordstrom’s, are running a very clean, naturally margined out business where there’s not the back and forth like there once was or like there is for others. We did do some take backs for Nordstrom’s anniversary sale just because we wanted to fund that as aggressively as we can. And I think I said in my last call that we had record numbers there. And so there is some swaps that happened there that were all good news, win-wins for both of us. But overall, we have done what we’ve done and Nordstrom’s and Nieman’s know this to run a clean, naturally margined out business. And so we are able to do that, and we are going to make sure that we do not get ourselves into a place where the dilutions become unmanageable, which, quite frankly, was where Vince was two or three years ago.

And then Rebecca Taylor and Parker, congrats on those deals. Could you speak to us a little bit about why this was the right time for these deals and what you’re excited about in terms of some of the synergies that you see ahead? And also, how you’ll manage both creative and the incrementality versus cannibalization of the portfolio?

Yes. Well, I mean, I think we’re going to expand on that next month at ICR, so I’ll just touch on it briefly. And I might be a little repetitive here, but we were excited because we knew there was brand equity in Rebecca Taylor and Parker. We felt like we’ve developed a road map here, specifically around DTC and discipline, that seeing how few stores Rebecca Taylor have made us excited about the potential to roll out multiple stores on a financially attractive model and what that will do to the e-commerce business as a halo effect. And at the same time, continuing to grow the wholesale business, Janice and her team have done a great job launching different sub-brands within the label, which have been received very well. They’ve also done some things, as we mentioned – I mentioned in my remarks, around the sharing community and economy, both the rental model like we do at Vince, but also the recollect model. So I think there’s a lot we can learn from there and we’re really just scratching the surface. But – and I think it was the right time for Vince because of what we’ve accomplished here, and we are ready to prove we can chew gum and walk at the same time. And China is a very exciting initiative for us, the new categories and acquisitions. And so it felt like Rebecca Taylor and Parker, as Dave mentioned, the related parties was a good first transaction for us to do, so we can kind of learn this muscle of integrating brands into the Vince Holding Corp. family. And as I mentioned, we have a strategic adviser, a consultant here to help us do that and make sure we do it efficiently and what works best for both – all the brands.

Okay. And our last question. Brendan, and David, you’ve been a pioneer with the subscription models and rethinking how retail is evolving. What are you learning so far in terms of that customer engagement piece and how the customer is behaving with respect to frequency and incrementality as well as loyalty? Would love any thoughts. And where do you see the market

Yes, I mean we’re a year in now with Vince. We anniversaried just a year – last November, and we’re really pleased with the results. Christine Hunsicker and her team at CaaStle have lived up to what they promised, and we’re really thrilled with the reaction by the customer. We think it’s attracting a new customer for us. Where we have done some tests to see the crossover, it seems like it’s – there’s not a high crossover, but we are getting that CaaStle customer. Vince Unfold customer is starting to migrate to the Vince site for some basics that she might want to buy in addition to her fashion, what she’s buying – what she’s using on Vince Unfold. I think we’re just scratching the surface here. And as I mentioned in my remarks, we’re exploring how we – if we launch men’s onto the site, which will better reflect the Vince brand in total, and I think there could be a lot of crossover there. So I think we’re at the point now where we feel comfortable to experiment more with cross-exposing our customers. We’ve just started to market the unfold site in our clearance centers, our outlet centers. So that will be the most visibility we’ve given our existing customer, and I think that will unlock more subscribers and allow us to better answer some of the questions that you asked in terms of what it could mean long term for the growth of the customer base.

Thank you. That’s regards. Happy holidays.

Thanks, Oliver.

This does conclude the Q&A period, I’ll now turn it back over to Brendan Hoffman for any closing remarks.

Well, thank you for joining us today. We’re extremely pleased with the strong momentum in the Vince brand as well as the growth opportunities we see at Rebecca Taylor and Parker. We look forward to sharing more details with you in the future. We will be presenting at the ICR Conference in January. For those of you attending, we look forward to seeing you there. Thank you very much, and happy holidays.

Ladies and gentlemen, this concludes today’s conference call. Thank you for your participation, and you may now disconnect.