P180 acquires control of Vince Holdings, bringing Brendan Hoffman back as CEO

Brendan Hoffman will get a second chance at Vince Holding Corp., returning to the business — this time not only as CEO but also as a buyer.

P180, founded last year by Hoffman and CaaStle CEO Christine Hunsicker, has acquired majority control of Vince from Sun Capital.

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Hoffmann and Hunske are looking to implement a new model at the brand that would boost profits by mitigating the potential impact of price cuts through leasing options.

This is an inventory approach that Hunsicker and CaaStle have championed for years, but it's now starting to gain more traction. P180 formed a digital partnership with Elysewalker last year, helping the retailer boost profits as slow-moving merchandise that would have been discounted was rented out. The company took a stake in Altuzarra in October and hopes to help accelerate the business.

But Vince is a bigger proving ground for the P180.

The company has sales of $292.9 million in 2023 and is expected to see low-single-digit revenue declines in 2024, but Vince will still account for 95% of P180's future business.

Things will be different this time around for Vince and Hoffman. Hoffman led the company from 2015 to 2020 and later moved to Wolverine Worldwide.

During his first tour with Vince, Hoffman dabbled in caastle rentals, but he never fully committed to the approach.

That has changed.

“I definitely see the light,” Huffman told WWD.

About seven years ago, Vince launched its Unfold rental subscription service, which pre-allocates inventory to the service.

“When I was in the chair before, Vince Unfold was just a subscription rental,” said Hoffman. “Now, over the past few years I’ve been completely integrated into the CaaStle team (which I view as) an inventory monetization platform.”

Hoffman, who is expected to become Vince's CEO again around February 3, plans to add Borrow, a one-time rental feature that would give consumers the option to rent a single look instead of buying it.

“It also frees up a lot of other decisions around pricing and return policies, all of which lead to more profit,” he said, adding that about half of one-time rentals end up buying the work.

All in all, the change promises to give the brand a new look.

“Leasing is really great for things that are a little bit edgy that you might only want to wear once or twice, whether it's for a special occasion or just to shake up your wardrobe a little bit,” says Hoffman. “If you look at retailers' markdown racks, what's usually left is the more fashionable stuff. Rental is a great channel because it gives consumers another option to partake in that item, but There is no need to make a complete commitment.

“If you can raise the floor of your markdown liability, you can take on more risk on the front end,” he said. “That's why I say this will ultimately drive normal prices.”

This approach takes what Hoffman describes as the industry’s “doomsday cycle” and turns it into a “virtuous cycle.”

“We know it's unorthodox, we know it's different, but I believe the industry is at a crossroads and cookie-cutter approaches are not going to work,” he said. “You're seeing some of the best brands in the world finding themselves in trouble right now. We think now is the time.”

At Vince, Hoffman might move a little quicker than at other brands.

“The fact that it’s Vince, it’s going to land me faster because I know all these guys,” he said. “The CaaStle team also knows Vince because Christine and I met at Vince. I like the brand very much and think it has great potential, and we also think it can be a good platform and engine to support what we are already doing. Some other investments and upcoming investments.”

While Vince is now the largest component of P180, the company (originally called Project 180 because it aimed to revolutionize the retail industry) continues to grow.

Hoffman said the deal will “enhance” the P180.

“Now we have a $300 million brand that is profitable – and we can leverage the technology and methods that CaaStle brings to the table to increase profitability,” he said.

P180 also continues to pursue deals with other brands and plug them into its now much larger platform.

It's been a long journey for Vince, who founded the company in 2002 and sold it to Kellwood Co. in 2006. The company was subsequently taken private by Sun Capital, and Vince eventually spun it out again in 2013 through an initial public offering. But the brand plunged headfirst into a market that was in the midst of serious change.

Last year, Vince sold 75% of its intellectual property to Authentic Brands Group.

As Hoffman and Hunsicker develop Vince, a brand management firm like Authentic could become a powerful ally.

“They need operating companies like ours,” Hoffman said. “That’s what we want to build towards.”

While Vince's business model will adapt, the rest of the company's structure will remain unchanged for the time being.

Vince's Store in Palm Desert, California — Vince in Palm Desert, California.

“It will remain public and over time we will determine what the optimal capital structure is,” Huffman said. “I remember being a small public company was difficult and certainly expensive. So that's a consideration. But it could also end up being the best platform for Vince and the P180.”

The price of the deal was not immediately disclosed, but P180 purchased about 65% of the company's stock from Sun. Before the deal was announced, the stock was trading at $2.31, giving it a total market capitalization of $30 million.

“The acquisition of P180 is a transformative opportunity for Vince,” Chairman Michael Mardy said in a statement. “With this transaction, we will gain access to the working capital, operational expertise and cutting-edge digital capabilities needed to drive the brand’s future success.”

The deal also takes some pressure off the company's balance sheet.

In addition to this attraction, Vince also repaid $20 million of Sun's debt facility by paying $15 million to Sun's SK Financial Services using its asset-backed loan facility. Sun has also forgiven $7 million of the loan, leaving the company with $7.5 million of outstanding principal under the Sun loan.

David Stefko, who has been serving as Vince's interim CEO, will remain on the board.

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