Vince Holding Corp. Annual Report 2014

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FY2014 Annual Report · Vince Holding Corp.

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

(Mark One)
È ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

‘ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

For the fiscal year ended January 31, 2015

SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 001-36212

VINCE HOLDING CORP.

(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of
incorporation or organization)

75-3264870
(I.R.S. Employer
Identification No.)

500 5th Avenue—20th Floor
New York, New York 10110
(Address of principal executive offices) (Zip code)
(212) 515-2600
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class

Common Stock, $0.01 par value per share

Name of Exchange on Which Registered

New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities
Act. Yes ‘ No È

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the
Act. Yes ‘ No È

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days. Yes È No ‘

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every
Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the
preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes È No ‘

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation of S-K (§ 229.405 of this chapter) is not
contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. È

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2
of the Exchange Act. (Check one):
Large accelerated filer ‘
Non-accelerated filer ‘ (Do not check if a smaller reporting company)
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ‘ No È
The aggregate market value of the registrant’s Common Stock held by non-affiliates as of August 2, 2014, the last day of the
registrant’s most recently completed second quarter, was approximately $553.1 million based on a closing price per share of $33.16 as
reported on the New York Stock Exchange on August 1, 2014. As of March 20, 2015, there were 36,748,245 shares of the registrant’s
Common Stock outstanding.
Portions of the registrant’s definitive proxy statement to be filed with the Securities and Exchange Commission in connection with the
registrant’s 2015 annual meeting of stockholders are incorporated by reference into Part III of this annual report on Form 10-K.

È
Accelerated filer
Smaller reporting company ‘

Table of Contents

PART I.
Item 1. Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 1A. Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 1B. Unresolved Staff Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 2.
Item 3.
Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 4. Mine Safety Disclosures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

PART II.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases

of Equity Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 6.
Selected Consolidated Financial Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations . .
Item 7A. Quantitative and Qualitative Disclosures About Market Risk . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 8.
Financial Statements and Supplementary Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 9. Changes in and Disagreements With Accountants on Accounting and Financial

Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 9A. Controls and Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 9B. Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

PART III.
Item 10. Directors, Executive Officers and Corporate Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 11. Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 13. Certain Relationships and Related Transactions, and Director Independence . . . . . . . . . . . . . .
Item 14. Principal Accountant Fees and Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

PART IV.
Item 15. Exhibits, Financial Statement Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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INTRODUCTORY NOTE

On November 27, 2013, Vince Holding Corp. (“VHC” or the “Company”), previously known as Apparel

Holding Corp., closed an initial public offering (“IPO”) of its common stock and completed a series of
restructuring transactions (the “Restructuring Transactions”) through which (i) Kellwood Holding, LLC acquired
the non-Vince businesses, which include Kellwood Company, LLC (“Kellwood Company” or “Kellwood”), from
the Company and (ii) the Company continues to own and operate the Vince business, which includes Vince,
LLC.

Prior to the IPO and the Restructuring Transactions, VHC was a diversified apparel company operating a
broad portfolio of fashion brands, which included the Vince business. As a result of the IPO and Restructuring
Transactions, the non-Vince businesses were separated from the Vince business, and the stockholders
immediately prior to the consummation of the Restructuring Transactions (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. Historical financial information
for the non-Vince businesses has been presented as a component of discontinued operations, until the businesses
were separated on November 27, 2013, in this annual report on Form 10-K and our Consolidated Financial
Statements and related notes included herein.

DISCLOSURES REGARDING FORWARD-LOOKING STATEMENTS

This annual report on Form 10-K, and certain information incorporated by reference herein, contains
forward-looking statements under the Private Securities Litigation Reform Act of 1995. Such statements often
include words such as “may,” “will,” “should,” “believe,” “expect,” “seek,” “anticipate,” “intend,” “estimate,”
“plan,” “target,” “project,” “forecast,” “envision” and other similar phrases. Although we believe the
assumptions and expectations reflected in these forward-looking statements are reasonable, these assumptions
and expectations may not prove to be correct and we may not achieve the financial results or benefits anticipated.
These forward-looking statements are not guarantees of actual results. Our actual results may differ materially
from those suggested in the forward-looking statements. These forward-looking statements involve a number of
risks and uncertainties, some of which are beyond our control, including, without limitation: our ability to remain
competitive in the areas of merchandise quality, price, breadth of selection, and customer service; our ability to
anticipate and/or react to changes in customer demand and attract new customers; changes in consumer
confidence and spending; our ability to maintain projected profit margins; unusual, unpredictable and/or severe
weather conditions; the execution and management of our retail store growth, including the availability and cost
of acceptable real estate locations for new store openings; the execution and management of our international
expansion, including our ability to promote our brand and merchandise outside the U.S. and find suitable partners
in certain geographies, our ability to expand our product offerings into new product categories including the
ability find suitable licensing partners; our ability to successfully implement our marketing initiatives; our ability
to protect our trademarks in the U.S. and internationally; our ability to maintain the security of electronic and
other confidential information; serious disruptions and catastrophic events; changes in global economies and
credit and financial markets; competition; our ability to attract and retain key personnel; commodity, raw
material and other cost increases; compliance with laws, regulations and orders; changes in laws and regulations;
outcomes of litigation and proceedings and the availability of insurance, indemnification and other third-party
coverage of any losses suffered in connection therewith; tax matters and other factors as set forth from time to
time in our Securities and Exchange Commission (“SEC”) filings, including those described in this annual report
on Form 10-K under “Item 1A—Risk Factors.” We intend these forward-looking statements to speak only as of
the time of this annual report on Form 10-K and do not undertake to update or revise them as more information
becomes available.

ITEM 1.

BUSINESS.

Part I

For purposes of this annual report on Form 10-K, “Vince,” the “Company,” “we,” “us,” and “our,” refer

to Vince Holding Corp. (“VHC”) and its wholly owned subsidiaries, including Vince Intermediate Holding,
LLC and Vince, LLC. References to “Kellwood” refer, as applicable, to Kellwood Holding, LLC and its
consolidated subsidiaries (including Kellwood Company, LLC) or the operations of the non-Vince businesses
after giving effect to the Restructuring Transactions.

Overview

Vince is a leading contemporary fashion brand best known for modern effortless style and everyday luxury

essentials. Founded in 2002, the brand now offers a wide range of women’s, men’s and children’s apparel,
women’s and men’s footwear, and handbags. Vince products are sold in prestige distribution worldwide,
including over 2,400 distribution points across 45 countries. Vince has generated strong sales momentum over
the last decade. We believe that we will achieve continued success by expanding our product assortment
distributed through premier wholesale partners in the U.S. and select international markets, as well as in our own
branded retail locations and on our e-commerce platform. We have a small number of wholesale partners who
account for a significant portion of our net sales. Net sales to the full-price, off-price and e-commerce operations
of our three largest wholesale partners were 49% of our total revenue for fiscal 2014 and 46% of our total
revenue for fiscal 2013. These partners include Nordstrom, Saks Fifth Avenue and Neiman Marcus, each
accounting for more than 10% of our total revenue for fiscal 2014 and fiscal 2013. 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.

We serve our customers through a variety of channels that reinforce the Vince brand image. Our diversified

channel strategy allows us to introduce our products to customers through multiple distribution points that are
reported in two segments: wholesale and direct-to-consumer. Our wholesale segment is comprised of sales to
premier department stores and specialty stores in the U.S. and in select international markets, with U.S.
wholesale representing 67% of our fiscal 2014 sales and the total wholesale segment representing 76% of our
fiscal 2014 sales. We believe that our success in the U.S. wholesale channel and our strong relationships with
premier wholesale partners provide opportunities for continued growth. These growth initiatives include creating
enhanced product assortments and brand extensions through both in-house development activities and licensing
arrangements, as well as continuing the build-out of branded shop-in-shops in select wholesale partner locations.
We also believe international wholesale, which represented 9% of net sales for fiscal 2014 compared to 8% in
fiscal 2013, presents a significant growth opportunity as we strengthen our presence in existing geographies and
introduce Vince in new markets globally. Our wholesale segment also includes our licensing business related to
our licensing arrangements for our women’s and men’s footwear and children’s apparel line.

Our direct-to-consumer segment includes our retail and outlet stores and our e-commerce business. In 2008,

we initiated a direct-to-consumer strategy with the opening of our first retail store. During fiscal year 2014, we
opened nine new stores consisting of six full-price retail stores and three outlet locations. As of January 31, 2015,
we operated 37 stores, consisting of 28 full-price retail stores and nine outlet locations. Based on a combination
of third-party analyses and internal projections, we believe that the U.S. market can currently support at least 100
free-standing Vince store locations. The direct-to-consumer segment also includes our e-commerce website,
www.vince.com, which was launched in 2008 and re-launched with enhancements to the website during fiscal
2014. The direct-to-consumer segment accounted for 24% of fiscal 2014 net sales compared to 21% of net sales
in the prior year. We expect sales from this channel to continue to grow as we drive productivity in existing
stores, open new stores and continue to make improvements in our e-commerce business.

Vince 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 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;

• References to “fiscal year 2012” or “fiscal 2012” refer to the fiscal year ended February 2, 2013.

Each of fiscal years 2014 and 2013 consisted of a 52-week period and fiscal year 2012 consisted of a

53-week period.

Vince Holding Corp., previously named Apparel Holding Corp., was incorporated in Delaware in February

2008 in connection with the acquisition of Kellwood Company by affiliates of Sun Capital Partners, Inc. (“Sun
Capital”). In September 2012, Kellwood Company formed Vince, LLC and all assets constituting the Vince
business were contributed to Vince, LLC at such time (the “Vince Transfer”). On November 27, 2013, Apparel
Holding Corp. was renamed Vince Holding Corp. in connection with the consummation of the IPO. Certain
restructuring transactions were completed in connection with the consummation of the IPO. These transactions,
among other things, included Kellwood Holding, LLC acquiring the non-Vince businesses, which include
Kellwood Company, LLC, from the Company; and the Company continues to own and operate the Vince
business, which includes Vince, LLC. The restructuring transactions separated the Vince and non-Vince
businesses on November 27, 2013. Any and all debt obligations outstanding at the time of the restructuring
transactions either remained with Kellwood Holding, LLC and its subsidiaries (i.e. the non-Vince businesses)
and/or were discharged, repurchased or refinanced in connection with the consummation of the IPO. Historical
financial information for the non-Vince businesses has been presented as a component of discontinued
operations, until the businesses were separated on November 27, 2013, in this annual report on Form 10-K and
our Consolidated Financial Statements and related notes included herein. Our principal executive office is
located at 500 Fifth Avenue, 20th Floor, New York, New York 10110 and our telephone number is
(212) 515-2600. Our corporate website address is www.vince.com.

Brand and Products

Vince is a leading contemporary fashion brand best known for modern effortless style and every luxury

essentials. The Vince brand was founded in 2002 with a collection of stylish women’s knits and cashmere
sweaters that rapidly attracted a loyal customer base drawn to the casual sophistication and luxurious feel of our
products. Over the last decade, Vince has generated strong sales momentum and has successfully grown to
include a men’s collection in 2007, denim, leather and outerwear lines in 2010 and a women’s handbag line in
2014. In addition, through licensing partnerships, we launched women’s footwear in 2012, men’s footwear in
2014 and children’s apparel in 2014. The Vince brand is synonymous with a clean, timeless aesthetic,
sophisticated design and superior quality. We believe these attributes have generated strong customer loyalty and
have enabled us to hold a distinctive position among contemporary fashion brands. We also believe that we will
achieve continued success by expanding our product assortment and distributing this expanded product
assortment through our premier wholesale partners in the U.S. and select international markets, as well as
through our growing number of branded retail locations and on our e-commerce platform.

Since our inception in 2002, we have offered contemporary apparel with a focus on clean and authentic
design and superior quality. We believe that our differentiated design aesthetic and strong attention to detail and
fit allow us to maintain premium pricing, and that the combination of quality and value positions Vince as an
everyday luxury brand that encourages repeat purchases among our customers.

Over 88% of Vince’s sales were comprised of women’s products in fiscal 2014, with particular strength in

sweaters, dresses, pants and outerwear. The women’s line under the Vince brand includes seasonal collections of

luxurious cashmere sweaters and silk blouses, leather and suede leggings and jackets, dresses, denim, pants,
tanks and t-shirts, handbags and a growing assortment of outerwear. The men’s collection under the Vince brand
includes t-shirts, knit and woven tops, sweaters, denim, pants, blazers, outerwear and stylish leather jackets.

We have identified additional brand extension opportunities, including elevating our men’s collection,
expanding outerwear, women’s pants and dresses, and implementing a replenishment program for core items. In
addition, through our licensing arrangements, we also offer women’s and men’s footwear and children’s apparel.
We continue to evaluate other brand extension opportunities through both in-house development activities as
well as through potential licensing arrangements with third parties.

Design and Merchandising

Our product design and merchandising efforts are led by our President and Chief Creative Officer and a
team of designers and merchandisers. Our design team is focused on developing an elevated collection of Vince
apparel and accessories that build upon the brand’s product heritage of modern, effortless style and everyday
luxury essentials. The current design vision is to create a cohesive and compelling product assortment with
sophisticated head-to-toe looks for multiple wear occasions. Our design efforts are supported by well-established
product development and production teams and processes that enable us to bring new products to market quickly.
We are looking to further build our merchant capabilities and believe continued collaboration between design
and merchandising will ensure we respond to consumer preferences and market trends with new innovative
product offerings while maintaining our core fashion foundation.

Business Segments

We serve our customers through a variety of channels that reinforce the Vince brand image. Our diversified

channel strategy allows us to introduce our products to customers through multiple distribution points that are
reported in two segments: wholesale and direct-to-consumer.

(in thousands)

Net Sales by Segment

Fiscal Year

2014

2013

2012(a)

Wholesale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Direct-to-consumer . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$259,418
80,978

$229,114
59,056

$203,107
37,245

Total net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$340,396

$288,170

$240,352

(a) Fiscal 2012 contained 53 weeks. The additional week contributed approximately $17.6 million and $0.9

million of net sales to the wholesale and direct-to-consumer segments, respectively.

Wholesale Segment

Our wholesale segment is comprised of sales to premier department stores and specialty stores in the U.S.

and in select international markets, with U.S. wholesale representing 67% and international wholesale
representing 9% of our net sales for fiscal 2014. Our products are currently sold in 45 countries. As of
January 31, 2015, our products were sold to consumers at approximately 2,400 doors through our wholesale
partners. In addition, we also have shop-in-shops which are operated by our domestic and international wholesale
partners where we sell the merchandise to the partners on a wholesale basis, recognizing revenue upon shipment
of goods when title and risk of loss passes to the wholesale partner. The shop-in-shops are dedicated spaces
within the selling floors of select domestic and international wholesale partners where Vince product is
prominently displayed and sold. Vince generally provides the shop-in-shop fixtures needed to build out the
spaces within the department stores operated by our wholesale partners. As of January 31, 2015, there were 42
shop-in-shops consisting of 29 shop-in-shops with our U.S. wholesale partners and 13 shop-in-shops with our
international wholesale partners. We also have two international free-standing stores in Tokyo and Istanbul that

are owned and operated through distribution arrangements whereby Vince provides the merchandise to the
distribution partners for sale in the free-standing store which solely sells Vince product. Our wholesale segment
also includes our licensing business related to our licensing arrangements for our women’s and men’s footwear
and children’s apparel line. Under these licensing arrangements we launched women’s footwear in fiscal 2012
and in fiscal 2014 we launched men’s footwear and children’s apparel. The licensed products, including footwear
and children’s apparel are sold in our own stores and by our licensee to select wholesale partners, and we earn a
royalty based on net sales to the wholesale partners.

Direct-to-Consumer Segment

Our direct-to-consumer segment includes our retail and outlet stores and our e-commerce business. In 2008,

we initiated a direct-to-consumer strategy with the opening of our first retail store. As of January 31, 2015, we
operated 37 stores, which consisted of 28 full-price retail stores and nine outlet locations. The direct-to-consumer
segment also includes our e-commerce website, www.vince.com, which was launched in 2008 and re-launched
with website enhancements during fiscal 2014. The direct-to-consumer segment accounted for approximately
24% of fiscal 2014 net sales compared to 21% in the prior year. We expect sales from this channel to continue to
grow as we drive productivity in existing stores, open new stores and continue to make improvements in our e-
commerce business.

The following table details the number of retail stores we operated for the past three fiscal years:

Beginning of fiscal year
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Opened . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Closed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . —

28
9

19
3

22
7
(1) —

End of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Fiscal
2014

Fiscal
2013

Fiscal
2012

Marketing, Advertising and Public Relations

We use marketing, advertising and public relations as critical tools to deliver a consistent and compelling

brand message. Our marketing is focused on showcasing our product and sophisticated style, as well as building
an emotional connection with the customer. The Vince brand image is developed and cultivated by dedicated
creative, marketing, visual merchandising and public relations teams that, along with the Vince design team and
select outside agencies, work closely to communicate a consistent brand message across various consumer
touchpoints.

We engage in a wide range of marketing programs that include traditional media (direct mail, print
advertising, cooperative advertising with wholesale partners and outdoor advertising), digital media (email and
web) and social media (Facebook, Twitter, Instagram and Pinterest) to drive traffic across channels. We believe
our customers will continue to be receptive to our marketing and social media efforts, which, in management’s
opinion, have presented us with a strong new marketing channel to reach existing and prospective customers. We
use Facebook as the main social media hub to generate conversation about the brand through daily lifestyle posts,
focusing on product launches, style tips and in-store events. Social media platforms like Instagram allow us to
tell our brand story creatively by offering behind-the-scenes access to events, press reviews and the Vince
showroom, as well as featuring Vince enthusiasts wearing our products. In addition, the growing number of visits
to www.vince.com, which totaled 3.9 million in fiscal 2014, representing a 50% increase from fiscal 2013,
provides an opportunity to grow our customer base and communicate directly with our customers.

Our public relations team conducts a wide variety of press activities to reinforce the Vince brand image and
create excitement around the brand. Vince apparel, handbags and footwear have appeared in the pages of major
fashion magazines such as Vogue, Harper’s Bazaar, Elle, W, GQ, Esquire and Vanity Fair. Well-known trend
setters in entertainment and fashion are also regularly seen wearing the Vince brand.

Sourcing and Manufacturing

Vince does not own or operate any manufacturing facilities. We contract for the purchase of finished goods

with manufacturers who are responsible for the entire manufacturing process, including the purchase of piece
goods and trim. Although we do not have long-term written contracts with manufacturers, we have long-standing
relationships with a diverse base of vendors which we believe to be mutually satisfactory. We work with over 30
manufacturers across five countries, with 88% of our products produced in China in fiscal 2014. For cost and
control purposes, we contract with select third-party vendors in the U.S. to produce a small portion of our
merchandise that includes woven pants and products manufactured with man-made fibers.

All of our garments are produced according to our specifications, and we require that all of our
manufacturers adhere to strict regulatory compliance and standards of conduct. Our vendors’ factories are
monitored by our production team to ensure quality control, and they are monitored by independent third-party
inspectors we employ for compliance with local manufacturing standards and regulations on an annual basis. Our
quality assurance staff in the U.S. and Asia also monitors our vendors’ manufacturing facilities regularly,
providing technical assistance and performing in-line and final audits to ensure the highest possible quality.

Shared Services Agreement

In connection with the consummation of the IPO, Vince, LLC entered into a shared services agreement with

Kellwood Company, LLC on November 27, 2013 (the “Shared Services Agreement”) pursuant to which
Kellwood Company, LLC provides certain support services, including distribution, information technology and
back office support. Kellwood will provide these services until we elect to terminate the provision thereof in
accordance with the terms of such agreement. Some of the Kellwood systems we continue to use following the
IPO include enterprise resourcing planning, or “ERP”, human resource management systems and distribution
applications. In conjunction with our separation from Kellwood, we are in the process of separating our assets
from those of Kellwood. We have recently commenced the development and implementation of our own ERP
system and IT infrastructure, engaged with a new e-commerce platform provider and migrated the human
resource recruitment system. Refer to the discussion under “Information Systems” below for further information
on our ERP implementation. See also “Item 1A. Risk Factors—Kellwood provides us with certain key services
for our business, some of which we are in the process of transitioning to our own systems. If Kellwood fails to
perform its obligations to us during the period of transition or if we cannot successfully transition these services
to our own systems, our business, financial condition, results of operations and cash flows could be materially
harmed.” In addition, see “Shared Services Agreement” under Note 15 to the Consolidated Financial Statements
in this annual report on Form 10-K for further information.

Distribution Facilities

Pursuant to the Shared Services Agreement, Kellwood provides distribution facilities and services to us in

the U.S. These services include distribution, storage and fulfillment. Kellwood will continue to provide these
services to us until such time as we elect to terminate the provision of such services in accordance with the terms
of the Shared Services Agreement. See “Shared Services Agreements” under Note 15 to the Consolidated
Financial Statements in this annual report on Form 10-K for additional information regarding the Shared Services
Agreement.

As of January 31, 2015, we operated out of three distribution centers, two located in the U.S. and one in
Belgium. The primary warehouse, located in City of Industry, California, includes 75,000 square feet dedicated
to fulfilling orders for our wholesale partners and retail locations. An adjacent warehouse spanning 22,000 square
feet supports Vince’s e-commerce business and offers additional capacity to support our projected growth over
the next several years. Our space in both of the California warehouses utilize warehouse management systems
that are fully customer and vendor compliant and are completely integrated with our current ERP and accounting
systems.

The warehouse in Belgium is operated by a third-party logistics provider and supports our wholesale orders

for customers located primarily in Europe. The warehouse management systems of the Belgium warehouse are
integrated with our current ERP systems to provide us with near real-time visibility into our international
distribution.

We believe we have sufficient capacity in our domestic and international distribution facilities to support

our continued growth.

Information Systems

Kellwood has continued to provide certain information technology services to us and will continue to do so

until such time as we elect to terminate provision of such services in accordance with the terms of the Shared
Services Agreement. These services currently include information technology planning and administration,
desktop support and help desk, our ERP system, financial applications, warehouse systems, reporting and
analysis applications and our retail and e-commerce interfaces.

Our current ERP system was developed from a core system that is widely used in the apparel and fashion
industry, which we have customized to suit our inventory management and order processing requirements. We
have integrated Oracle Financials with our ERP system to meet our financial reporting and accounting
requirements. Additionally, we use a suite of third-party hosted retail applications integrated with our ERP
system that provide us with merchandising, retail inventory management, point-of-sale systems, customer
relationship management and retail accounting. Our retail applications are supported through a “Software as a
Service” model, which allows for new implementations to occur quickly. Our ERP and warehouse management
systems are also integrated with a hosted, third-party e-commerce platform. During fiscal 2014, we commenced
the development and implementation of our own ERP system and IT infrastructure, engaged with a new e-
commerce platform provider and migrated the human resource recruitment system. The ERP implementation is
expected to be completed by the end of the third quarter of fiscal 2015. The new ERP system is based on a
system from Microsoft Dynamics AX and is cloud based. It will replace our current Oracle Financials and retail
related sub systems.

See “—Shared Services Agreement,” “Item 1A. Risk Factors—Kellwood provides us with certain key
services for our business, some of which we are in the process of transitioning to our own systems. If Kellwood
fails to perform its obligations to us during the period of transition or if we cannot successfully transition these
services to our own systems, our business, financial condition, results of operations and cash flows could be
materially harmed.” In addition, see “Shared Services Agreement” under Note 15 to the Consolidated Financial
Statements in this annual report on form 10-K for further information.

Seasonality

The apparel and fashion industry in which we operate is cyclical and, consequently, our revenues are
affected by general economic conditions and the seasonal trends characteristic to the apparel and fashion
industry. Purchases of apparel are sensitive to a number of factors that influence the level of consumer spending,
including economic conditions and the level of disposable consumer income, consumer debt, interest rates,
consumer confidence as well as the impact from adverse weather conditions. In addition, fluctuations in sales in
any fiscal quarter are affected by the timing of seasonal wholesale shipments and other events affecting direct-to-
consumer sales; as such, the financial results for any particular quarter may not be indicative of results for the
fiscal year.

Competition

We face strong competition in each of the product categories and markets where we compete on the basis of

style, quality, price and brand recognition. Some of our competitors have achieved significant recognition for
their brand names or have substantially greater financial, marketing, distribution and other resources than us.
However, we believe that we have established a sustainable advantage and distinct position in the current

marketplace, driven by a product assortment that combines classic and fashion-forward styling, and a pricing
strategy that offers customers accessible luxury. Our competitors are varied but include Theory, Helmut Lang,
Rag & Bone, Joie, J Brand, James Perse and J. Crew, among others.

Employees

As of January 31, 2015, we had 498 employees, of which 272 were employed in retail stores. Except for one

employee in France, who is covered by a collective bargaining agreement pursuant to French law, none of our
employees are currently covered by a collective bargaining agreement, and we believe our employee relations are
good.

Trademarks and Licensing

We own the Vince trademark for the production, marketing and distribution of our products in the U.S. and

internationally. We have registered the trademark domestically and have registrations on file or pending in a
number of foreign jurisdictions. We intend to continue to strategically register, both domestically and
internationally, trademarks that we use today and those we develop in the future. We license the domain name for
our website, www.vince.com, pursuant to a license agreement. Under this license agreement, we have an
exclusive, irrevocable license to use the www.vince.com domain name without restriction at a nominal annual
cost. While we may terminate such license agreement at our discretion, the agreement does not provide for
termination by the licensor. We also own unregistered copyright rights in our design marks.

Available Information

We make available free of charge on our website, www.vince.com, copies of our annual reports on Form
10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and all amendments to these reports filed or
furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), as soon as reasonably practicable after filing such material electronically with, or otherwise furnishing it
to, the Securities and Exchange Commission (the “SEC”). The reference to our website address does not
constitute incorporation by reference of the information contained on the website, and the information contained
on the website is not part of this annual report on Form 10-K.

ITEM 1A. RISK FACTORS.

The following risk factors should be carefully considered when evaluating our business and the forward-

looking statements in this annual report on Form 10-K. See “Disclosures Regarding Forward-Looking
Statements.”

Risks Related to Our Business

Intense competition in the apparel and fashion industry could reduce our sales and profitability.

As a fashion company, we face intense competition from other domestic and foreign apparel, footwear and

accessories manufacturers and retailers. Competition may result in pricing pressures, reduced profit margins, lost
market share or failure to grow our market share, any of which could substantially harm our business and results
of operations. Competition is based on many factors including, without limitation, the following:

•

establishing and maintaining favorable brand recognition;

developing products that appeal to consumers;

pricing products appropriately;

determining and maintaining product quality;

obtaining access to sufficient floor space in retail locations;

•

providing appropriate services and support to retailers;

• maintaining and growing market share;

•

hiring and retaining key employees; and

protecting intellectual property.

Competition in the apparel and fashion industry is intense and is dominated by a number of very large

brands, many of which have longer operating histories, larger customer bases, more established relationships
with a broader set of suppliers, greater brand recognition and greater financial, research and development,
marketing, distribution and other resources than we do. These capabilities of our competitors may allow them to
better withstand downturns in the economy or apparel and fashion industry. Any increased competition, or our
failure to adequately address any of these competitive factors, could result in reduced sales, which could
adversely affect our business, financial condition and operating results.

Competition, along with such other factors as consolidation within the retail industry and changes in
consumer spending patterns, could also result in significant pricing pressure and cause the sales environment to
be more promotional, as it was in 2014. If promotional pressure remains intense, either through actions of our
competitors or through customer expectations, this may cause us to reduce our sales prices to our wholesale
partners and retail consumers, which could cause our gross margins to decline if we are unable to appropriately
manage inventory levels and/or otherwise offset price reductions with comparable reductions in our operating
costs. If our sales prices decline and we fail to sufficiently reduce our product costs or operating expenses, our
profitability may decline, which could have a material adverse effect on our business, financial condition and
operating results.

General economic conditions in the U.S. and other parts of the world, including a continued weakening of the
economy and restricted credit markets, can affect consumer confidence and consumer spending patterns.

The apparel industry has historically been subject to cyclical variations, recessions in the general economy

or uncertainties regarding future economic prospects that affect consumer spending habits which could
negatively impact our business overall, the carrying value of our tangible and intangible assets and specifically
sales, gross margins and profitability. The success of our operations depends on consumer spending. Consumer
spending is impacted by a number of factors, including actual and perceived economic conditions affecting
disposable consumer income (such as unemployment, wages, energy costs and consumer debt levels), business
conditions, interest rates and availability of credit and tax rates in the general economy and in the international,
regional and local markets in which our products are sold.

Recent global economic conditions have included significant recessionary pressures and declines in
employment levels, disposable income and actual and/or perceived wealth and further declines in consumer
confidence and economic growth. The recent depressed economic environment was characterized by a decline in
consumer discretionary spending and has disproportionately affected retailers and sellers of consumer goods,
particularly those whose goods are viewed as discretionary or luxury purchases, including fashion apparel and
accessories such as ours. During such recessionary periods, we may have to increase the number of promotional
sales or otherwise dispose of inventory which we have previously paid to manufacture. While we have seen
occasional signs of stabilization in the North American markets during 2013 and 2014, the recent recession may
have resulted in a shift in consumer spending habits that makes it unlikely that spending will return to prior levels
for the foreseeable future as the promotional environment has continued and may continue going forward. Such
factors as well as another shift towards recessionary conditions could adversely impact our sales volumes and
overall profitability in the future.

Further, growing concerns that European countries could default on their national debt have caused
instability in the European economy, which is one of the areas that we are currently targeting for international
expansion. Continued economic and political volatility and declines in the value of the Euro or other foreign

currencies could negatively impact the global economy as a whole and have a material adverse effect on the
profitability and liquidity of our international operations, as well as hinder our ability to grow through expansion
in the international markets. In addition, domestic and international political situations also affect consumer
confidence. The threat, outbreak or escalation of terrorism, military conflicts or other hostilities around the world
could lead to decreases in consumer spending.

Our business depends on a strong brand image, and if we are not able to maintain or enhance our brand,
particularly in new markets where we have limited brand recognition, we may be unable to sell sufficient
quantities of our merchandise, which would harm our business and cause our results of operations to suffer.

We believe that maintaining and enhancing the Vince brand is critical to maintaining and expanding our
customer base. Maintaining and enhancing our brand may require us to make substantial investments in areas
such as visual merchandising (including working with our wholesale partners to transform select Vince displays
into branded shop-in-shops), marketing and advertising, employee training and store operations. A primary
component of our strategy involves expanding into other geographic markets and working with existing
wholesale partners, particularly within the U.S. We anticipate that, as our business expands into new markets and
further penetrates existing markets, and as the markets in which we operate become increasingly competitive,
maintaining and enhancing our brand may become increasingly difficult and expensive. Certain of our
competitors in the fashion industry have faced adverse publicity surrounding the quality, attributes and
performance of their products. Our brand may similarly be adversely affected if our public image or reputation is
tarnished by failing to maintain high standards for merchandise quality and integrity. Any negative publicity
about these types of concerns may reduce demand for our merchandise. Maintaining and enhancing our brand
will depend largely on our ability to be a leader in the contemporary fashion industry and to continue to provide
high quality products. If we are unable to maintain or enhance our brand image, our results of operations may
suffer and our business may be harmed.

A substantial portion of our revenue is derived from a small number of large wholesale partners, and the loss
of any of these wholesale partners could substantially reduce our total revenue.

We have a small number of wholesale partners who account for a significant portion of our net sales. Net

sales to the full-price, off-price and e-commerce operations of our three largest wholesale partners were 49% of
our total revenue for fiscal 2014. These partners include Nordstrom, Saks Fifth Avenue and Neiman Marcus,
each accounting for more than 10% of our total revenue for fiscal 2014. We do not have written agreements with
any of our wholesale partners, and purchases generally occur on an order-by-order basis. A decision by any of
our major wholesale partners, whether motivated by marketing strategy, competitive conditions, financial
difficulties or otherwise, to significantly decrease the amount of merchandise purchased from us or our licensing
partners, or to change their manner of doing business with us or our licensing partners, could substantially reduce
our revenue and have a material adverse effect on our profitability. Furthermore, due to the concentration of our
wholesale partner base, our results of operations could be adversely affected if any of these wholesale partners
fails to satisfy its payment obligations to us when due. During the past several years, the retail industry has
experienced a great deal of ownership change, and we expect such change will continue. In addition, store
closings by our wholesale partners decrease the number of stores carrying our products, while the remaining
stores may purchase a smaller amount of our products and may reduce the retail floor space designated for our
brand. In the future, retailers may further consolidate, undergo restructurings or reorganizations, realign their
affiliations or reposition their stores’ target markets. Any of these types of actions could decrease the number of
stores that carry our products or increase the ownership concentration within the retail industry. These changes
could decrease our opportunities in the market, increase our reliance on a diminishing number of large wholesale
partners and decrease our negotiating strength with our wholesale partners. These factors could have a material
adverse effect on our business, financial condition and operating results.

We may not be able to successfully expand our wholesale partnership base or grow our presence with existing
wholesale partners.

As part of our growth strategy, we intend to increase productivity and penetration with existing wholesale

partners and form relationships with new, international wholesale partners. These initiatives may include the
establishment of additional shop-in-shops within select department stores. The location of Vince displays or
shop-in-shops within department stores is controlled in large part by our wholesale partners. Although the
investments made by us and our wholesale partners in the development and installation of Vince displays and
shop-in-shops decreases the risk that our wholesale partners will require us to move to a less desirable area of
their store or reduce the space allocated to such displays and shops, they are not contractually prohibited from
doing so or required to grant additional or more desirable space to us. While expanding the number of shop-in-
shops is part of our growth strategy, there can be no assurances we will be able to align our wholesale partners
with this strategy and continue to receive floor space from our wholesale partners to open or expand shop-in-
shops.

Our ability to attract customers to our stores depends heavily on successfully locating our stores in suitable
locations and any impairment of a store location, including any decrease in customer traffic, could cause our
sales to be less than expected.

Our approach to identifying locations for our retail stores typically favors street and mall locations near
luxury and contemporary retailers that we believe are consistent with our key customers’ demographics and
shopping preferences. Sales at these stores are derived, in part, from the volume of foot traffic in these locations.
Changes in areas around our existing retail locations that result in reductions in customer foot traffic or otherwise
render the locations unsuitable could cause our sales to be less than expected and the related leases are generally
non-cancelable. Store locations may become unsuitable due to, and our sales volume and customer traffic
generally may be harmed by, among other things:

•

economic downturns in a particular area;

competition from nearby retailers selling similar apparel or accessories;

changing consumer demographics in a particular market;

changing preferences of consumers in a particular market;

the closing or decline in popularity of other businesses located near our stores; and

store impairments due to acts of God or terrorism.

Our ability to successfully open and operate new retail stores depends on many factors, including, among

others, our ability to:

•

identify new markets where our products and brand image will be accepted or the performance of
our retail stores will be successful;

obtain desired locations, including store size and adjacencies, in targeted malls or streets;

negotiate acceptable lease terms, including desired rent and tenant improvement allowances, to
secure suitable store locations;

achieve brand awareness, affinity and purchase intent in the new markets;

hire, train and retain store associates and field management;

assimilate new store associates and field management into our corporate culture;

source and supply sufficient inventory levels; and

successfully integrate new retail stores into our existing operations and information technology
systems, which will initially be provided by Kellwood under the terms of the Shared Services
Agreement.

As of January 31, 2015, we had 37 stores, which consisted of 28 full-price retail stores and nine outlet
locations. We plan to increase our store base over the next three to five years, including the expected openings of
eight to 10 new stores in fiscal 2015. Our new stores, however, may not be immediately profitable and we may
incur losses until these stores become profitable. Unavailability of desired store locations, delays in the
acquisition or opening of new stores, delays or costs resulting from a decrease in commercial development due to
capital restraints, difficulties in staffing and operating new store locations or a lack of customer acceptance of
stores in new market areas may negatively impact our new store growth and the costs or the profitability
associated with new stores. There can be no assurance that we will open the planned number of stores in fiscal
2015 or thereafter. Any failure to successfully open and operate new stores may adversely affect our business,
financial condition and operating results.

As we expand our store base, we may be unable to maintain or grow comparable store sales or average sales
per square foot at the same rates that we have achieved in the past, which could cause our share price to
decline.

As we expand our store base, we may not be able to maintain or grow at the same rates of comparable store
sales growth that we have achieved historically. In addition, we may not be able to maintain or grow our historic
average sales per square foot as we move into new markets. If our future comparable store sales or average sales
per square foot decline or fail to meet market expectations, the price of our common stock could decline. In
addition, the aggregate results of operations through our wholesale partners and at our retail locations have
fluctuated in the past and can be expected to continue to fluctuate in the future. A variety of factors affect both
comparable store sales and average sales per square foot, including, among others, consumer spending patterns,
fashion trends, competition, current economic conditions, pricing, inflation, the timing of the release of new
merchandise and promotional events, changes in our product assortment, the success of marketing programs and
weather conditions. If we misjudge the market for our products, we may incur excess inventory for some of our
products and miss opportunities for other products. These factors may cause our comparable store sales results
and average sales per square foot in the future to be materially lower than recent periods or our expectations,
which could harm our results of operations and result in a decline in the price of our common stock.

We have grown rapidly in recent years and we have limited operating experience as a team at our current
scale of operations. If we are unable to manage our operations at our current size or are unable to manage
any future growth effectively, our business results and financial performance may suffer.

We have expanded our operations rapidly since our inception in 2002, and we have limited operating
experience at our current size. Our business has grown significantly over the past three years, as we have grown
our total net sales from $240.4 million in fiscal 2012 to $340.4 million in fiscal 2014. We have made and are
making investments to support our near and longer-term growth. If our operations continue to grow over the
longer term, of which there can be no assurance, we will be required to expand our sales and marketing, product
development and distribution functions, to upgrade our management information systems and other processes,
and to obtain more space for our expanding administrative support and other headquarters personnel. Our
expansion may exceed the capacity that Kellwood is able to provide, on attractive pricing terms or at all, under
the terms of the Shared Services Agreement (as more fully described below in “—Problems with our distribution
system could harm our ability to meet customer expectations, manage inventory, complete sales and achieve
targeted operating efficiencies”). Our continued growth could strain our existing resources, and we could
experience operating difficulties, including obtaining sufficient raw materials at acceptable prices, securing
manufacturing capacity to produce our products and experiencing delays in production and shipments. These
difficulties would likely lead to a decrease in net revenue, income from operations and the price of our common
stock.

Kellwood provides us with certain key services for our business, some of which we are in the process of
transitioning to our own systems. If Kellwood fails to perform its obligations to us during the period of
transition or if we cannot successfully transition these services to our own systems, our business, financial
condition, results of operations and cash flows could be materially harmed.

Prior to the IPO and Restructuring Transactions that closed on November 27, 2013, we operated as a
business unit of Kellwood, and we historically relied on the financial resources and the administrative and
operational support systems of Kellwood to run our business. Some of the Kellwood systems we continue to use
following the IPO and Restructuring Transactions include ERP, human resource management systems and
distribution applications. In conjunction with our separation from Kellwood, we are in the process of separating
our assets from those of Kellwood. We have recently commenced the development and implementation of our
own ERP system and IT infrastructure, engaged with a new e-commerce platform provider and migrated the
human resource recruitment system. The new systems we implement may not operate as successfully as the
systems we historically used as such systems are highly customized or proprietary. Moreover, we may be unable
to obtain necessary goods, technology and services to continue replacing the Kellwood systems at prices and on
terms as favorable as those available to us prior to the separation, which could increase our costs and reduce our
profitability. If we fail to successfully transition the systems, our business and results of operations may be
materially and adversely affected.

We entered into a Shared Services Agreement in connection with the IPO and Restructuring Transactions on
November 27, 2013. The Shared Services Agreement governs the provisions by which Kellwood provides certain
support services to us, including distribution, information technology and back office support. Kellwood will
provide these services until we elect to terminate the provision thereof in accordance with the terms of such
agreement or, for services which require a term as a matter of law or which are based on a third-party agreement
with a set term, the related termination date specified in the schedule thereto. Upon the termination of certain
services, Kellwood may no longer be in a position to provide certain 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. The Shared Services Agreement will terminate automatically upon the termination of all
services provided thereunder, unless earlier terminated by either party in connection with the other party’s
material breach upon 30 days prior notice to such defaulting party. After termination of the agreement, Kellwood
will have no obligation to provide any services to us. See “Shared Services Agreement” under Note 15 to the
Consolidated Financial Statements in this annual report on Form 10-K for a description of these services. The
services provided under the Shared Services Agreement (as may be amended from time to time) may not be
sufficient to meet our needs and we may not be able to replace these services at favorable costs and on favorable
terms, if at all. In addition, Kellwood has experienced financial difficulty in the past. For example, in 2009,
Kellwood’s independent auditors raised substantial doubt regarding Kellwood’s ability to continue as a going
concern. If Kellwood encounters any issues during the transitional period which impact its ability to provide
services pursuant to the Shared Services Agreement, our business could be materially harmed. Any failure or
significant downtime in our own financial or administrative systems or in Kellwood’s financial or administrative
systems during the transitional period and any difficulty in separating our assets from Kellwood’s assets and
integrating newly acquired assets into our business could result in unexpected costs, impact our results or prevent
us from paying our suppliers and employees and performing other administrative services on a timely basis and
materially harm our business, financial condition, results of operations and cash flows.

System security risk issues could disrupt our internal operations or information technology services, and any
such disruption could negatively impact our net sales, increase our expenses and harm our reputation.

Experienced computer programmers and hackers, and even internal users, may be able to penetrate our

network security and misappropriate our confidential information or that of third parties, including our
customers, create system disruptions or cause shutdowns. In addition, employee error, malfeasance or other
errors in the storage, use or transmission of any such information could result in a disclosure to third parties
outside of our network. As a result, we could incur significant expenses addressing problems created by any such

inadvertent disclosure or any security breaches of our network. This risk is heightened because we collect and
store customer information, including credit card information, and use certain customer information for our
marketing purposes. In addition, we rely on third parties for the operation of our website, www.vince.com, and for
the various social media tools and websites we use as part of our marketing strategy.

Consumers are increasingly concerned over the security of personal information transmitted over the
internet, consumer identity theft and user privacy, and any compromise of customer information could subject us
to customer or government litigation and harm our reputation, which could adversely affect our business and
growth. Moreover, we could incur significant expenses or disruptions of our operations in connection with
system failures or breaches. In addition, sophisticated hardware and operating system software and applications
that we procure form third parties may contain defects in design or manufacture, including “bugs” and other
problems that could unexpectedly interfere with the operation of our systems. The costs to us to eliminate or
alleviate security problems, viruses and bugs, or any problems associated with the outsourced services could be
significant, and the efforts to address these problems could result in interruptions, delays or cessation of service
that may impede our sales, distribution or other critical functions. In addition to taking the necessary precautions
ourselves, we require that third-party service providers implement reasonable security measures to protect our
customers’ identity and privacy. We do not, however, control these third-party service providers and cannot
guarantee that no electronic or physical computer break-ins and security breaches will occur in the future.
Finally, we could incur significant costs in complying with the multitude of state, federal and foreign laws
regarding the use and unauthorized disclosure of personal information, to the extent they are applicable.

Any disputes that arise between us and Kellwood with respect to our past and ongoing relationships could
harm our business operations.

Disputes may arise between Kellwood and us in a number of areas relating to our past and ongoing

relationships, including:

•

intellectual property and technology matters;

labor, tax, employee benefit, indemnification and other matters arising from our separation from
Kellwood;

employee retention and recruiting;

business combinations involving us;

the nature, quality and pricing of transitional services Kellwood has agreed to provide us; and

business opportunities that may be attractive to both Kellwood and us.

We may not be able to resolve any potential conflicts, and even if we do, the resolution may be less
favorable than if we were dealing with an unaffiliated party. As of January 31, 2015, affiliates of Sun Capital,
who also control Kellwood, owned approximately 55% of our common stock. Additionally, Sun Cardinal, LLC,
an affiliate of Sun Capital, has the ability to designate a majority of our directors.

Our limited operating experience and brand recognition in international markets may delay our expansion
strategy and cause our business and growth to suffer.

We face additional risks with respect to our strategy to expand internationally, including our efforts to

further expand our business in Canada, select European countries, Asia and the Middle East through
arrangements with international partners. Our current operations are based largely in the U.S., with international
sales representing approximately 9% of net sales for fiscal 2014. Therefore we have a limited number of
customers and experience in operating outside of the U.S. We also do not have extensive experience with
regulatory environments and market practices outside of the U.S. and cannot guarantee, notwithstanding our
international partners’ familiarity with such environments and market practices, that we will be able to penetrate
or successfully operate in any market outside of the U.S. Many of these markets have different operational

characteristics, including employment and labor regulations, transportation, logistics, real estate (including lease
terms) and local reporting or legal requirements. Furthermore, consumer demand and behavior, as well as style
preferences, size and fit, and purchasing trends, may differ in these markets and, as a result, sales of our product
may not be successful, or the margins on those sales may not be in line with those that we currently anticipate. In
addition, in many of these markets there is significant competition to attract and retain experienced and talented
employees. Failure to develop new markets outside of the U.S. or disappointing sales growth outside of the U.S.
may harm our business and results of operations.

Our plans to improve and expand our product offerings may not be successful, and the implementation of
these plans may divert our operational, managerial and administrative resources, which could harm our
competitive position and reduce our net revenue and profitability.

In addition to our store expansion strategy, we plan to grow our business by increasing our core product

offerings, which includes expanding our men’s collection and women’s bottoms, dresses and outerwear
assortment. We also plan to develop and introduce select new product categories and may pursue select
additional licensing opportunities such as eyewear, fragrance and fashion accessories.

The principal risks to our ability to successfully carry out our plans to improve and expand our product

offerings are that:

•

if our expected product offerings fail to maintain and enhance our brand identity, our image may
be diminished or diluted and our sales may decrease;

if we fail to find and enter into relationships with external partners with the necessary specialized
expertise or execution capabilities, we may be unable to offer our planned product extensions or to
realize the additional revenue we have targeted for those extensions; and

the use of licensing partners may limit our ability to conduct comprehensive final quality checks
on merchandise before it is shipped to our stores or to our wholesale partners.

In addition, our ability to successfully carry out our plans to improve and expand our product offerings may

be affected by economic and competitive conditions, changes in consumer spending patterns and changes in
consumer preferences and style trends. These plans could be abandoned, could cost more than anticipated and
could divert resources from other areas of our business, any of which could impact our competitive position and
reduce our net revenue and profitability.

Our current and future licensing arrangements may not be successful and may make us susceptible to the
actions of third parties over whom we have limited control.

We currently have licensing agreements for women’s footwear, men’s footwear and children’s apparel. In

the future, we may enter into select additional licensing arrangements for product offerings which require
specialized expertise. We may also enter into select licensing agreements pursuant to which we may grant third
parties the right to distribute and sell our products in certain geographic areas. Although we have taken and will
continue to take steps to select potential licensing partners carefully and monitor the activities of our licensing
partners (through, among other things, approval rights over product design, production quality, packaging,
merchandising, marketing, distribution and advertising), such arrangements may not be successful. Our licensing
partners may fail to fulfill their obligations under their license agreements or have interests that differ from or
conflict with our own, such as the pricing of our products and the offering of competitive products. In addition,
the risks applicable to the business of our licensing partners may be different than the risks applicable to our
business, including risks associated with each such partner’s ability to:

•

obtain capital;

exercise operational and financial control over its business;

• manage its labor relations;

• maintain relationships with suppliers;

• manage its credit and bankruptcy risks; and

• maintain customer relationships.

Any of the foregoing risks, or the inability of any of our licensing partners to successfully market our
products or otherwise conduct its business, may result in loss of revenue and competitive harm to our operations
in regions or product categories where we have entered into such licensing arrangements.

Our business will suffer if we fail to respond to changing customer tastes.

Customer tastes can change rapidly. We may not be able to anticipate, gauge or respond to these changes

within a timely manner. We may also not be able to continue to satisfy our customers’ existing tastes and
preferences. If we misjudge the market for products or product groups, or if we fail to identify and respond
appropriately to changing consumer demands, we may be faced with unsold finished goods inventory, which
could materially adversely affect expected operating results and decrease sales, gross margins and profitability.

If we are unable to accurately forecast customer demand for our products, our manufacturers may not be able
to deliver products to meet our requirements, and this could result in delays in the shipment of products to our
stores and to wholesale partners.

We stock our stores, and provide inventory to our wholesale partners, based on our or their estimates of
future demand for particular products. Our inventory management and planning team determines the number of
pieces of each product that we will order from our manufacturers based upon past sales of similar products, sales
trend information and anticipated demand at our suggested retail prices. However, if our inventory and planning
team fails to accurately forecast customer demand, we may experience excess inventory levels or a shortage of
products. There can be no assurance that we will be able to successfully manage our inventory at a level
appropriate for future customer demand.

Factors that could affect our inventory management and planning team’s ability to accurately forecast

customer demand for our products include:

•

a substantial increase or decrease in demand for our products or for products of our competitors;

our failure to accurately forecast customer acceptance for our new products;

new product introductions or pricing strategies by competitors;

• more limited historical store sales information for our newer markets;

• weakening of economic conditions or consumer confidence in the future, which could reduce

demand for discretionary items, such as our products; and

•

acts or threats of war or terrorism which could adversely affect consumer confidence and spending
or interrupt production and distribution of our products and our raw materials.

Because of our rapid growth, we have occasionally placed insufficient levels of desirable product with our
wholesale partners and in our retail locations such that we were unable to fully satisfy customer demand at those
locations. We cannot guarantee that we will be able to match supply with demand in all cases in the future,
whether as a result of our inability to produce sufficient levels of desirable product or our failure to forecast
demand accurately. As a result of these inabilities or failures, we may encounter difficulties in filling customer
orders or in liquidating excess inventory at discount prices and may experience significant write-offs.
Additionally, if we over-produce a product based on an aggressive forecast of demand, retailers may not be able
to sell the product and cancel future orders or require give backs. These outcomes could have a material adverse
effect on brand image and adversely impact sales, gross margins and profitability.

Our senior management team has limited experience working together as a group, and may not be able to
manage our business effectively.

Our CEO, Jill Granoff, and CFO, Lisa Klinger, joined the company in 2012. Many of the other members of

our senior management team, including our President and Chief Creative Officer, Karin Gregersen, have been
with us less than 2 years. As a result, our senior management team has limited experience working together as a
group. This lack of shared experience could negatively impact our senior management team’s ability to quickly
and efficiently respond to problems and effectively manage our business. If our management team is not able to
work together as a group, our results of operations may suffer and our business may be harmed.

If we lose key personnel, or are unable to attract, assimilate and retain new employees, we may not be able to
successfully operate or grow our business.

Our continued success is dependent on the ability to attract, assimilate, retain and motivate qualified

management, designers, administrative talent and sales associates to support existing operations and future
growth. Competition for qualified talent in the apparel and fashion industry is intense, and we compete for these
individuals with other companies that in many cases have greater financial and other resources. The loss of the
services of any members of senior management or the inability to attract and retain other qualified executives
could have a material adverse effect on our business, results of operations and financial condition. In addition, we
will need to continue to attract, assimilate, retain and motivate highly talented employees with a range of other
skills and experience, especially at the store management levels. Although we have hired and trained new store
managers and experienced sales associates at several of our retail locations, competition for employees in our
industry is intense and we may from time to time experience difficulty in retaining our associates or attracting the
additional talent necessary to support the growth of our business. These problems could be exacerbated as we
embark on our strategy of opening new retail stores over the next several years. We will also need to attract,
assimilate and retain other professionals across a range of disciplines, including design, production, sourcing and
international business, as we develop new product categories and continue to expand our international presence.
Furthermore, we will need to continue to recruit employees to provide, or enter into consulting or outsourcing
arrangements with respect to the provision of, services provided by Kellwood under the Shared Services
Agreement when Kellwood no longer provides such services thereunder. If we are unable to attract, assimilate
and retain additional employees with the necessary skills, we may not be able to grow or successfully operate our
business.

Our competitive position could suffer if our intellectual property rights are not protected.

We believe that our trademarks and designs are of great value. From time to time, third parties have
challenged, and may in the future try to challenge, our ownership of our intellectual property. In some cases,
third parties with similar trademarks or other intellectual property may have pre-existing and potentially
conflicting trademark registrations. We rely on cooperation from third parties with similar trademarks to be able
to register our trademarks in jurisdictions in which such third parties have already registered their trademarks.
We are susceptible to others imitating our products and infringing our intellectual property rights. Imitation or
counterfeiting of our products or infringement of our intellectual property rights could diminish the value of our
brands or otherwise adversely affect our revenues. The actions we have taken to establish and protect our
trademarks and other intellectual property rights may not be adequate to prevent imitation of our products by
others or to prevent others from seeking to invalidate our trademarks or block sales of our products as a violation
of the trademarks and intellectual property rights of others. In addition, others may assert rights in, or ownership
of, our trademarks and other intellectual property rights or in similar marks or marks that we license and/or
market and we may not be able to successfully resolve these conflicts to our satisfaction. We may need to resort
to litigation to enforce our intellectual property rights, which could result in substantial costs and diversion of
resources. Successful infringement claims against us could result in significant monetary liability or prevent us
from selling some of our products. In addition, resolution of claims may require us to redesign our products,
license rights from third parties or cease using those rights altogether. Any of these events could harm our
business and cause our results of operations, liquidity and financial condition to suffer.

We license our website domain name from a third-party. Pursuant to the license agreement (the “Domain
License Agreement”), our license to use www.vince.com will expire in 2018 and will automatically renew for
successive one year periods, subject to our right to terminate the arrangement with or without cause; provided,
that we must pay the applicable early termination fee and provide 30 days prior notice in connection with a
termination without cause. The licensor has no termination rights under the Domain License Agreement. Any
failure by the licensor to perform its obligations under the License Agreement could adversely affect our brand
and make it more difficult for users to find our website.

Problems with our distribution system could harm our ability to meet customer expectations, manage
inventory, complete sales and achieve targeted operating efficiencies.

In the U.S., we rely on a distribution facility operated by Kellwood in City of Industry, California. Our
ability to meet the needs of our wholesale partners and our own retail stores depends on the proper operation of
this distribution facility. Kellwood will continue to provide distribution services, until we elect to terminate such
services, as part of the Shared Services Agreement. We also have a warehouse in Belgium operated by a
third-party logistics provider to support our wholesale orders for customers located primarily in Europe. There
can be no assurance that we will be able to enter into other contracts for an alternate or replacement distribution
centers on acceptable terms or at all. Such an event could disrupt our operations. In addition, because
substantially all of our products are distributed from one location, our operations could also be interrupted by
labor difficulties, or by floods, fires, earthquakes or other natural disasters near such facility. For example, a
majority of our ocean shipments go through the ports in Los Angeles, which were recently subject to significant
processing delays due to labor issues involving the port workers. We maintain business interruption insurance
and are a beneficiary under similar Kellwood insurance policies related to Kellwood assets or services we utilize
under the Shared Services Agreement. These policies, however, may not adequately protect us from the adverse
effects that could result from significant disruptions to our distribution system. If we encounter problems with
our distribution system, our ability to meet customer expectations, manage inventory, complete sales and achieve
targeted operating efficiencies could be harmed. Any of the foregoing factors could have a material adverse
effect on our business, financial condition and operating results.

The extent of our foreign sourcing may adversely affect our business.

Our products are primarily produced by, and purchased or procured from, independent manufacturing
contractors located outside of the U.S., with approximately 96% of our total revenue for fiscal 2014 attributable
to manufacturing contractors located outside of the U.S. These manufacturing contractors are located mainly in
countries in Asia and South America, with approximately 88% of our purchases for fiscal 2014 attributable to
manufacturing contractors located in China. A manufacturing contractor’s failure to ship products to us in a
timely manner or to meet the required quality standards could cause us to miss the delivery date requirements of
our customers for those items. The failure to make timely deliveries may cause customers to cancel orders, refuse
to accept deliveries or demand reduced prices, any of which could have a material adverse effect on us. As a
result of the magnitude of our foreign sourcing, our business is subject to the following risks:

•

political and economic instability in countries or regions, especially Asia, including heightened
terrorism and other security concerns, which could subject imported or exported goods to
additional or more frequent inspections, leading to delays in deliveries or impoundment of goods;

imposition of regulations, quotas and other trade restrictions relating to imports, including quotas
imposed by bilateral textile agreements between the U.S. and foreign countries;

imposition of increased duties, taxes and other charges on imports;

labor union strikes at ports through which our products enter the U.S.;

labor shortages in countries where contractors and suppliers are located;

a significant decrease in availability or an increase in the cost of raw materials;

•

restrictions on the transfer of funds to or from foreign countries;

disease epidemics and health-related concerns, which could result in closed factories, reduced
workforces, scarcity of raw materials and scrutiny or embargoing of goods produced in infected
areas;

the migration and development of manufacturing contractors, which could affect where our
products are or are planned to be produced;

increases in the costs of fuel, travel and transportation;

reduced manufacturing flexibility because of geographic distance between our foreign
manufacturers and us, increasing the risk that we may have to mark down unsold inventory as a
result of misjudging the market for a foreign-made product; and

violations by foreign contractors of labor and wage standards and resulting adverse publicity.

If these risks limit or prevent us from manufacturing products in any significant international market,
prevent us from acquiring products from foreign suppliers, or significantly increase the cost of our products, our
operations could be seriously disrupted until alternative suppliers are found or alternative markets are developed,
which could negatively impact our business.

We do not have written agreements with any of our third-party manufacturing contractors. As a result, any

single manufacturing contractor could unilaterally terminate its relationship with us at any time. One of our
manufacturers in China, with whom we have worked for over five years, accounted for the production of
approximately 16% of our finished products during fiscal 2014. Supply disruptions from this manufacturer (or
any of our other manufacturers) could have a material adverse effect on our ability to meet customer demands, if
we are unable to source suitable replacement materials at acceptable prices or at all. Our inability to promptly
replace manufacturing contractors that terminate their relationships with us or cease to provide high quality
products in a timely and cost-efficient manner could have a material adverse effect on our business, financial
condition and operating results.

Fluctuations in the price, availability and quality of raw materials could cause delays and increase costs and
cause our operating results and financial condition to suffer.

Fluctuations in the price, availability and quality of the fabrics or other raw materials, particularly cotton,

silk, leather and synthetics used in our manufactured apparel, could have a material adverse effect on cost of
sales or our ability to meet customer demands. The prices of fabrics depend largely on the market prices of the
raw materials used to produce them. The price and availability of the raw materials and, in turn, the fabrics used
in our apparel may fluctuate significantly, depending on many factors, including crop yields, weather patterns,
labor costs and changes in oil prices. We may not be able to create suitable design solutions that utilize raw
materials with attractive prices or, alternatively, to pass higher raw materials prices and related transportation
costs on to our customers. We are not always successful in our efforts to protect our business from the volatility
of the market price of raw materials, and our business can be materially affected by dramatic movements in
prices of raw materials. The ultimate effect of this change on our earnings cannot be quantified, as the effect of
movements in raw materials prices on industry selling prices are uncertain, but any significant increase in these
prices could have a material adverse effect on our business, financial condition and operating results.

Our reliance on independent manufacturers could cause delays or quality issues which could damage
customer relationships.

We use independent manufacturers to assemble or produce all of our products, whether inside or outside the
U.S. We are dependent on the ability of these independent manufacturers to adequately finance the production of
goods ordered and maintain sufficient manufacturing capacity. The use of independent manufacturers to produce
finished goods and the resulting lack of direct control could subject us to difficulty in obtaining timely delivery
of products of acceptable quality. We generally do not have long-term contracts with any independent

manufacturers. Alternative manufacturers, if available, may not be able to provide us with products or services of
a comparable quality, at an acceptable price or on a timely basis. Identifying a suitable supplier is an involved
process that requires us to become satisfied with their quality control, responsiveness and service, financial
stability and labor and other ethical practices. There can be no assurance that there will not be a disruption in the
supply of our products from independent manufacturers or, in the event of a disruption, that we would be able to
substitute suitable alternative manufacturers in a timely manner. The failure of any independent manufacturer to
perform or the loss of any independent manufacturer could have a material adverse effect on our business, results
of operations and financial condition.

If our independent manufacturers fail to use ethical business practices and comply with applicable laws and
regulations, our brand image could be harmed due to negative publicity.

We have established and currently maintain operating guidelines which promote ethical business practices

such as fair wage practices, compliance with child labor laws and other local laws. While we monitor compliance
with those guidelines, we do not control our independent manufacturers or their business practices. Accordingly,
we cannot guarantee their compliance with our guidelines. A lack of demonstrated compliance could lead us to
seek alternative suppliers, which could increase our costs and result in delayed delivery of our products, product
shortages or other disruptions of our operations.

Violation of labor or other laws by our independent manufacturers or the divergence of an independent
manufacturer’s labor or other practices from those generally accepted as ethical in the U.S. or other markets in
which we do business could also attract negative publicity for us and our brand. From time to time, our audit
results have revealed a lack of compliance in certain respects, including with respect to local labor, safety and
environmental laws. Other fashion companies have faced criticism after highly-publicized incidents or
compliance issues have occurred or been exposed at factories producing their products. To the extent our
manufacturers do not bring their operations into compliance with such laws or resolve material issues identified
in any of our audit results, we may face similar criticism and negative publicity. This could diminish the value of
our brand image and reduce demand for our merchandise. In addition, other fashion companies have encountered
organized boycotts of their products in such situations. If we, or other companies in our industry, encounter
similar problems in the future, it could harm our brand image, stock price and results of operations.

Monitoring compliance by independent manufacturers is complicated by the fact that expectations of ethical

business practices continually evolve, may be substantially more demanding than applicable legal requirements
and are driven in part by legal developments and by diverse groups active in publicizing and organizing public
responses to perceived ethical shortcomings. Accordingly, we cannot predict how such expectations might
develop in the future and cannot be certain that our guidelines would satisfy all parties who are active in
monitoring and publicizing perceived shortcomings in labor and other business practices worldwide.

Our operating results are subject to seasonal and quarterly variations in our net revenue and income from
operations, which could cause the price of our common stock to decline.

We have experienced, and expect to continue to experience, seasonal variations in our net revenue and

income from operations. Seasonal variations in our net revenue are primarily related to increased sales of our
products during our fiscal third and fourth quarters, reflecting our historical strength in sales during the fall and
holiday seasons. Historically, seasonable variations in our income from operations have been driven principally
by increased net revenue in such fiscal quarters.

Our rapid growth may have overshadowed whatever seasonal or cyclical factors might have influenced our

business to date. In addition, as our revenue mix evolves over time to include more sales from additional retail
stores, we may see an increase in the percentage of sales occurring during the fourth quarter. Such seasonal or
cyclical variations in our business may harm our results of operations in the future, if we do not plan inventory
appropriately, if customer shopping patterns fluctuate during such seasonal periods or if bad weather during the
fourth quarter constrains shopping activity.

Any future seasonal or quarterly fluctuations in our results of operations may not match the expectations of
market analysts and investors to assess the longer-term profitability and strength of our business at any particular
point, which could lead to increased volatility in our stock price. Increased volatility could cause our stock price
to suffer in comparison to less volatile investments.

We are subject to risks associated with leasing retail and office space, are generally subject to long-term
non-cancelable leases and are required to make substantial lease payments under our operating leases, and
any failure to make these lease payments when due would likely harm our business, profitability and results of
operations.

We do not own any of our stores, or our offices including our New York and Los Angeles offices, or our
showroom space in Paris but instead lease all of such space under operating leases. Our leases generally have
initial terms of 10 years, and generally can be extended only for one additional 5-year term. All of our leases
require a fixed annual rent, and most require the payment of additional rent if store sales exceed a negotiated
amount. Most of our leases are “net” leases, which require us to pay all of the cost of insurance, taxes,
maintenance and utilities, and we generally cannot cancel these leases at our option. Additionally, certain of our
leases allow the lessor to terminate the lease if we do not achieve a specified gross sales threshold. We have
experienced circumstances in the past where landlords have attempted to invoke these contractual provisions.
Although we believe we will achieve the required threshold to continue those leases, we cannot assure you that
we will do so. Any loss of our store locations due to underperformance may harm our results of operations, stock
price and reputation.

Payments under these leases account for a significant portion of our selling, general and administrative
expenses. For example, as of January 31, 2015, we were a party to operating leases associated with our retail
stores and our office and showroom spaces requiring future minimum lease payments of $15.6 million in the
aggregate through fiscal 2015 and approximately $134.5 million thereafter. We expect that any new retail stores
we open will also be leased by us under operating leases, which will further increase our operating lease expenses
and require significant capital expenditures. Our substantial operating lease obligations could have significant
negative consequences, including, among others:

•

increasing our vulnerability to general adverse economic and industry conditions;

limiting our ability to obtain additional financing;

requiring a substantial portion of our available cash to pay our rental obligations, thus reducing cash
available for other purposes;

limiting our flexibility in planning for or reacting to changes in our business or in the industry in which
we compete; and

placing us at a disadvantage with respect to some of our competitors.

We depend on cash flow from operations to pay our lease expenses and to fulfill our other cash needs. If our

business does not generate sufficient cash flow from operating activities, and sufficient funds are not otherwise
available to us from borrowings under our credit facilities or from other sources, we may not be able to service
our operating lease expenses, grow our business, respond to competitive challenges or fund our other liquidity
and capital needs, which would harm our business.

In addition, additional sites that we lease are likely to be subject to similar long-term non-cancelable leases.

If an existing or future store is not profitable, and we decide to close it, we may nonetheless be committed to
perform our obligations under the applicable lease including, among other things, paying the base rent for the
balance of the lease term if we cannot negotiate a mutually acceptable termination payment. In addition, as our
leases expire, we may fail to negotiate renewals, either on commercially acceptable terms or at all, which could
cause us to close stores in desirable locations or incur costs in relocating our office space. Of our existing leases,
no existing retail leases expire in fiscal 2015. If we are unable to enter into new leases or renew existing leases on
terms acceptable to us or be released from our obligations under leases for stores that we close, our business,
profitability and results of operations may be harmed.

The Patient Protection and Affordable Care Act may materially increase our costs and/or make it harder for
us to compete as an employer.

The Patient Protection and Affordable Care Act imposed new mandates on employers, requiring employers

with 50 or more full-time employees to provide “credible” health insurance to employees or pay a financial
penalty. Given our current health plan design, and assuming the law is implemented without significant changes,
these mandates could materially increase our costs. Moreover, if we choose to opt out of offering health
insurance to our employees, we may become less attractive as an employer and it may be harder for us to
compete for qualified employees.

Changes in laws, including employment laws and laws related to our merchandise, could make conducting
our business more expensive or otherwise change the way we do business.

We are subject to numerous regulations, including labor and employment, customs, truth-in-advertising,

consumer protection, and zoning and occupancy laws and ordinances that regulate retailers generally or govern
the importation, promotion and sale of merchandise and the operation of stores and warehouse facilities. If these
regulations were to change or were violated by our management, employees, vendors, independent manufacturers
or partners, the costs of certain goods could increase, or we could experience delays in shipments of our products,
be subject to fines or penalties, or suffer reputational harm, which could reduce demand for our merchandise and
hurt our business and results of operations.

In addition to increased regulatory compliance requirements, changes in laws could make ordinary conduct
of business more expensive or require us to change the way we do business. For example, changes in federal and
state minimum wage laws could raise the wage requirements for certain of our employees at our retail locations,
which would increase our selling costs and may cause us to reexamine our wage structure for such employees.
Other laws related to employee benefits and treatment of employees, including laws related to limitations on
employee hours, supervisory status, leaves of absence, mandated health benefits, overtime pay, unemployment
tax rates and citizenship requirements, could negatively impact us, by increasing compensation and benefits costs
which would in turn reduce our profitability.

Moreover, changes in product safety or other consumer protection laws could lead to increased costs to us

for certain merchandise, or additional labor costs associated with readying merchandise for sale. It is often
difficult for us to plan and prepare for potential changes to applicable laws and future actions or payments related
to such changes could be material to us.

Our operations are restricted by our new credit facilities entered into on November 27, 2013.

We entered into a revolving credit facility and a term loan facility in connection with the IPO and
Restructuring Transactions closed on November 27, 2013. Our new facilities contain significant restrictive
covenants. These covenants may impair our financing and operational flexibility and make it difficult for us to
react to market conditions and satisfy our ongoing capital needs and unanticipated cash requirements.
Specifically, such covenants will likely restrict our ability and, if applicable, the ability of our subsidiaries to,
among other things:

•

incur additional debt;

• make certain investments and acquisitions;

•

enter into certain types of transactions with affiliates;

use assets as security in other transactions;

pay dividends;

sell certain assets or merge with or into other companies;

•

guarantee the debt of others;

enter into new lines of businesses;

• make capital expenditures;

•

prepay, redeem or exchange our debt; and

form any joint ventures or subsidiary investments.

Our ability to comply with the covenants and other terms of our debt obligations will depend on our future

operating performance. If we fail to comply with such covenants and terms, we would be required to obtain
waivers from our lenders to maintain compliance with our debt obligations. If we are unable to obtain any
necessary waivers and the debt is accelerated, a material adverse effect on our financial condition and future
operating performance would likely result. The terms of our debt obligations may restrict or delay our ability to
fulfill our obligations under the Tax Receivable Agreement. In accordance with the terms of the Tax Receivable
Agreement, delayed or unpaid amounts thereunder would accrue interest at a default rate of one-year LIBOR plus
200 basis points until paid. Our obligations under the Tax Receivable Agreement could result in a failure to
comply with covenants or financial ratios required by our debt financing agreements and could result in an event
of default under such a debt financing. See “Tax Receivable Agreement” under Note 15 to the Consolidated
Financial Statements in this annual report on Form 10-K for further information.

We are required to pay to the Pre-IPO Stockholders 85% of certain tax benefits, and could be required to
make substantial cash payments in which our stockholders will not participate.

We entered into a Tax Receivable Agreement with the Pre-IPO Stockholders in connection with the IPO and

Restructuring Transactions which closed on November 27, 2013. Under the Tax Receivable Agreement, we will
be obligated to pay to the Pre-IPO Stockholders an amount equal to 85% of the cash savings in federal, state and
local income tax realized by us by virtue of our future use of the federal, state and local net operating losses
(“NOLs”) held by us as of November 27, 2013, together with section 197 intangible deductions (collectively, the
“Pre-IPO Tax Benefits”). “Section 197 intangible deductions” means amortization deductions with respect to
certain amortizable intangible assets which are held by us and our subsidiaries immediately after November 27,
2013. Cash tax savings generally will be computed by comparing our actual federal, state and local income tax
liability to the amount of such taxes that we would have been required to pay had such Pre-IPO Tax Benefits not
been available to us. While payments made under the Tax Receivable Agreement will depend upon a number of
factors, including the amount and timing of taxable income we generate in the future and any future limitations
that may be imposed on our ability to use the Pre-IPO Tax Benefits, the payments could be substantial. Assuming
the federal, state and local corporate income tax rates presently in effect, no material change in applicable tax law
and no limitation on our ability to use the Pre-IPO Tax Benefits under Section 382 of the U.S. Internal Revenue
Code, as amended (the “Code”), the estimated cash benefit of the full use of these Pre-IPO Tax Benefits would
be approximately $202 million, of which 85%, or approximately $172 million, is potentially payable to the
Pre-IPO Stockholders under the terms of the Tax Receivable Agreement. The Tax Receivable Agreement
accordingly could require us to make substantial cash payments.

Although we are not aware of any issue that would cause the U.S. Internal Revenue Service (the “IRS”) to

challenge any tax benefits arising under the Tax Receivable Agreement, the affiliates of Sun Capital will not
reimburse us for any payments previously made if such benefits subsequently were disallowed, although the
amount of any tax savings subsequently disallowed will reduce any future payment otherwise owed to the
Pre-IPO Stockholders. For example, if our determinations regarding the applicability (or lack thereof) and
amount of any limitations on the NOLs under Section 382 of the Code were to be successfully challenged by the
IRS after payments relating to such NOLs had been made to the Pre-IPO Stockholders, we would not be
reimbursed by the Pre-IPO Stockholders and our recovery would be limited to the extent of future payments (if
any) otherwise remaining under the Tax Receivable Agreement. As a result, in such circumstances we could
make payments to the Pre-IPO Stockholders under the Tax Receivable Agreement in excess of our actual cash

tax savings. Furthermore, while we will generally only make payments under the Tax Receivable Agreement
after we have recognized a cash flow benefit from the utilization of the Pre-IPO Tax Benefits (other than upon a
change of control or other acceleration event), the payments required under the agreement could require us to use
a substantial portion of our cash from operations for those purposes.

At the effective date of the Tax Receivable Agreement, the liability recognized was accounted for in our

financial statements as a reduction of additional paid-in capital. Subsequent changes in the Tax Receivable
Agreement liability will be recorded through earnings in operating expenses. Even if the NOLs are available to
us, the Tax Receivable Agreement will operate to transfer 85% of the benefit to the Pre-IPO Stockholders.
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.

Federal and state laws impose substantial restrictions on the utilization of NOL carry-forwards in the event
of an “ownership change,” as defined in Section 382 of the Code. Under the rules, such an ownership change is
generally any change in ownership of more than 50 percent of a company’s stock within a rolling three-year
period, as calculated in accordance with the rules. The rules generally operate by focusing on changes in
ownership among stockholders considered by the rules as owning directly or indirectly 5% or more of the stock
of the company and any change in ownership arising from new issuances of stock by the company.

While we have performed an analysis under Section 382 of the Code that indicates the IPO and

Restructuring Transactions would not constitute an ownership change, such technical guidelines are complex and
subject to significant judgment and interpretation. With the IPO and Restructuring Transactions and other
transactions that have occurred over the past three years, we may trigger or have already triggered an “ownership
change” limitation. We may also experience ownership changes in the future as a result of subsequent shifts in
stock ownership. As a result, if we earn net taxable income, our ability to use the pre-change NOL carry-forwards
(after giving effect to payments to be made to the Pre-IPO Stockholders under the Tax Receivable Agreement) to
offset U.S. federal taxable income may be subject to limitations, which could potentially result in increased
future tax liability to us. Notwithstanding the foregoing, our analysis to date under Section 382 of the Code
indicates that the IPO Restructuring Transactions have not triggered an “ownership change” limitation.

If we did not enter 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, including Section 382
of the Code. Subject to exceptions, 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, we will not be 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 Tax Benefits).

In certain cases, payments under the Tax Receivable Agreement to the Pre-IPO stockholders may be
accelerated and/or significantly exceed the actual benefits we realize in respect of the Pre-IPO Tax Benefits.

Upon the election of an affiliate of Sun Capital to terminate the Tax Receivable Agreement pursuant to a

change in control (as defined in the Tax Receivable Agreement) or upon our election to terminate the Tax
Receivable Agreement early, all of our payment and other obligations under the Tax Receivable Agreement will
be accelerated and will become due and payable. Additionally, the Tax Receivable Agreement provides that in
the event that we breach any of our 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 Title 11 of the
United States Code (the “Bankruptcy Code”) then all of our payment and other obligations under the Tax
Receivable Agreement will be accelerated and will become due and payable.

In the case of any such acceleration, we would be required to make an immediate payment equal to 85% of

the present value of the tax savings represented by any portion of the Pre-IPO Tax Benefits for which payment
under the Tax Receivable Agreement has not already been made, which upfront payment may be made years in
advance of the actual realization of such future benefits. Such payments could be substantial and could exceed
our actual cash tax savings from the Pre-IPO Tax Benefits. In these situations, our obligations under the Tax
Receivable Agreement could have a substantial negative impact on our liquidity and could have the effect of
delaying, deferring or preventing certain mergers, asset sales, other forms of business combinations or other
changes of control. There can be no assurance that we will have sufficient cash available or that we will be able
to finance our obligations under the Tax Receivable Agreement.

If we were to elect to terminate the Tax Receivable Agreement, based on a discount rate equal to monthly
LIBOR plus 200 basis points, we estimate that we would be required to pay approximately $159 million in the
aggregate under the Tax Receivable Agreement.

We could incur significant costs in complying with environmental, health and safety laws or as a result of
satisfying any liability or obligation imposed under such laws.

Our operations are subject to various federal, state, local and foreign environmental, health and safety laws
and regulations. We could be held liable for the costs to address contamination of any real property ever owned,
operated or used as a disposal site. In addition, in the event that Kellwood becomes financially incapable of
addressing the environmental liability incurred prior to the structural reorganization separating Kellwood from
Vince that occurred on November 27, 2013, a third party may file suit and attempt to allege that Kellwood and
Vince engaged in a fraudulent transfer by arguing that the purpose of the separation of the non-Vince assets from
Vince Holding Corp. was to insulate our assets from the environmental liability. For example, pursuant to a
Consent Decree with the U.S. Environmental Protection Agency (“EPA”) and the State of Missouri, a non-Vince
subsidiary, which was separated from us in the Restructuring Transactions, is conducting a cleanup of
contamination at the site of a plant in New Haven, Missouri, which occurred between 1973 and 1985. Kellwood
has posted a letter of credit in the amount of $5.9 million as a performance guarantee for the estimated cost of the
required remediation work. If, despite the financial assurance provided by Kellwood as required by the EPA,
Kellwood became financially unable to address this remediation, and if the corporate separateness of Vince is
disregarded or if a fraudulent transfer is found to have occurred, we could be liable for the full amount of the
remediation. If this were to occur or if we were to become liable for other environmental liabilities or obligations,
it could have a material adverse effect on our business, financial condition or results of operations.

We will continue to incur significant expenses as a result of being a public company, which will negatively
impact our financial performance and could cause our results of operations and financial condition to suffer.

We will continue to incur significant legal, accounting, insurance, share-based compensation and other
expenses as a result of being a public company. The Sarbanes-Oxley Act, as well as related rules implemented by
the SEC and the securities regulators and by the NYSE, have required changes in corporate governance practices
of public companies. We expect that compliance with these laws, rules and regulations, including compliance with
Section 404(b) of the Sarbanes-Oxley Act once we are no longer an emerging growth company, will substantially
increase our expenses, including our legal and accounting costs, and make some activities more time-consuming
and costly. We also expect these laws, rules and regulations to make it more expensive for us to obtain director
and officer liability insurance and we may be required to accept reduced policy limits and coverage or to incur
substantially higher costs to obtain the same or similar coverage. As a result, it may be more difficult for us to
attract and retain qualified persons to serve on our board of directors or as officers. To assist in the recruitment of
qualified directors, officers and other members of senior management and to help align their interests with those of
our stockholders, we have made and intend to continue to make equity grants under our current management
equity incentive plan (the “Vince 2013 Incentive Plan”). As a result of the foregoing, we expect an increase in
legal, accounting, insurance, share-based compensation and certain other expenses in the future, which will
negatively impact our financial performance and could cause our results of operations and financial condition to
suffer.

Risks Related to Our Structure and Ownership

We are a “controlled company,” controlled by investment funds advised by affiliates of Sun Capital, whose
interests in our business may be different from yours.

Affiliates of Sun Capital owned approximately 55% of our outstanding common stock as of March 20,
2015. As such, affiliates of Sun Capital will, for the foreseeable future, have significant influence over our
reporting and corporate management and affairs, and will be able to control virtually all matters requiring
stockholder approval. For so long as affiliates of Sun Capital own 30% or more of our outstanding shares of
common stock, Sun Cardinal, LLC, an affiliate of Sun Capital, will have the right to designate a majority of our
board of directors. For so long as affiliates of Sun Capital have the right to designate a majority of our board of
directors, the directors designated by affiliates of Sun Capital 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 such committee who is
designated 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 applicable phase-in rules).

As a “controlled company,” the rules of the NYSE exempt us from the obligation to comply with certain
corporate governance requirements, including the requirements that a majority of our board of directors consists
of “independent directors,” as defined under such rules, and that we have nominating and corporate governance
and compensation committees that are each composed entirely of independent directors. These exemptions do
not modify the requirement for a fully independent audit committee, which we have. Similarly, once we are no
longer a “controlled company,” we must comply with the independent board committee requirements as they
relate to the nominating and corporate governance and compensation committees, which are permitted to be
phased-in as follows: (1) one independent committee member on the date we cease to be a “controlled company”;
(2) a majority of independent committee members within 90 days of such date; and (3) all independent
committee members within one year of such date. Additionally, we will have 12 months from the date we cease
to be a “controlled company” to have a majority of independent directors on our board of directors.

Affiliates of Sun Capital control actions to be taken by us, our board of directors and our stockholders,

including amendments to our amended and restated certificate of incorporation and amended and restated
bylaws and approval of significant corporate transactions, including mergers and sales of substantially all of
our assets. The directors designated by affiliates of Sun Capital have the authority, subject to the terms of our
indebtedness and the rules and regulations of the NYSE, to issue additional stock, implement stock repurchase
programs, declare dividends and make other decisions. The NYSE independence standards are intended to
ensure that directors who meet the independence standard are free of any conflicting interest that could
influence their actions as directors. Our amended and restated certificate of incorporation provides that the
doctrine of “corporate opportunity” does not apply against Sun Capital or its affiliates, or any of our directors
who are associates of, or affiliated with, Sun Capital, in a manner that would prohibit them from investing in
competing businesses or doing business with our partners or customers. It is possible that the interests of Sun
Capital and its affiliates may in some circumstances conflict with our interests and the interests of our other
stockholders, including you. For example, Sun Capital may have different tax positions from other
stockholders which could influence their decisions regarding whether and when we should dispose of assets,
whether and when we should incur new or refinance existing indebtedness, especially in light of the existence
of the Tax Receivable Agreement, and whether and when we should terminate the Tax Receivable Agreement
and accelerate our obligations thereunder. In addition, the structuring of future transactions may take into
consideration tax or other considerations of Sun Capital and its affiliates even where no similar benefit would
accrue to us. See “Tax Receivable Agreement” under Note 15 to the Consolidated Financial Statements in this
annual report on Form 10-K for additional information.

We are a holding company and we are dependent upon distributions from our subsidiaries to pay dividends,
taxes and other expenses.

Vince Holding Corp. is a holding company with no material assets other than its ownership of membership

interests in Vince Intermediate Holding, LLC, a holding company that has no material assets other than its
interest in Vince, LLC. Neither Vince Holding Corp. nor Vince Intermediate Holding, LLC have any
independent means of generating revenue. To the extent that we need funds, for a cash dividend to holders of our
common stock or otherwise, and Vince Intermediate Holding, LLC or Vince, LLC is restricted from making such
distributions under applicable law or regulation or is otherwise unable to provide such funds, it could materially
adversely affect our liquidity and financial condition.

We file consolidated income tax returns on behalf of Vince Holding Corp. and Vince Intermediate Holding,

LLC. Most of our future tax obligations will likely be attributed to the operations of Vince, LLC. Accordingly,
most of the payments against the Tax Receivable Agreement will be attributed to the operations of Vince, LLC.
We intend to cause Vince, LLC to pay distributions or make funds available to us in an amount sufficient to
allow us to pay our taxes and any payments due to certain of our stockholders under the Tax Receivable
Agreement. If, as a consequence of these various limitations and restrictions, we do not have sufficient funds to
pay tax or other liabilities, we may have to borrow funds and thus our liquidity and financial condition could be
materially adversely affected. To the extent that we are unable to make payments under the Tax Receivable
Agreement for any reason, such payments will be deferred and will accrue interest at a default rate of one-year
LIBOR plus 500 basis points until paid. See “Tax Receivable Agreement” under Note 15 to the Consolidated
Financial Statements in this annual report on Form 10-K for more information regarding the terms of the Tax
Receivable Agreement.

Anti-takeover provisions of Delaware law and our amended and restated certificate of incorporation and
bylaws could delay and discourage takeover attempts that stockholders may consider to be favorable.

Our amended and restated certificate of incorporation and amended and restated bylaws contain provisions

that may make the acquisition of our Company more difficult without the approval of our board of directors.
These provisions include:

•

the classification of our board of directors so that not all members of our board of directors are elected
at one time;

the authorization of the issuance of undesignated preferred stock, the terms of which may be
established and the shares of which may be issued without stockholder approval, and which may
include super voting, special approval, dividend, or other rights or preferences superior to the rights of
the holders of common stock;

stockholder action can only be taken at a special or regular meeting and not by written consent
following the time that Sun Capital and its affiliates cease to beneficially own a majority of our
common stock;

advance notice procedures for nominating candidates to our board of directors or presenting matters at
stockholder meetings;

removal of directors only for cause following the time that Sun Capital and its affiliates cease to
beneficially own a majority of our common stock;

allowing Sun Cardinal to fill any vacancy on our board of directors for so long as affiliates of Sun
Capital own 30% or more of our outstanding shares of common stock and thereafter, allowing only our
board of directors to fill vacancies on our board of directors; and

following the time that Sun Capital and its affiliates cease to beneficially own a majority of our
common stock, super-majority voting requirements to amend our bylaws and certain provisions of our
certificate of incorporation.

Our amended and restated certificate of incorporation also contains a provision that provides us with
protections similar to Section 203 of the Delaware General Corporation Law (“DGCL”), and prevents us from
engaging in a business combination, such as a merger, with a person or group who acquires at least 15% of our
voting stock for a period of three years from the date such person became an interested stockholder, unless board
or stockholder approval is obtained prior to acquisition. However, our amended and restated certificate of
incorporation also provides that both Sun Capital and its affiliates and any persons to whom a Sun Capital
affiliate sells its common stock will be deemed to have been approved by our board of directors.

These anti-takeover provisions and other provisions under Delaware law could discourage, delay or prevent

a transaction involving a change of control of our Company, even if doing so would benefit our stockholders.
These provisions could also discourage proxy contests and make it more difficult for you and other stockholders
to elect directors of your choosing and to cause us to take other corporate actions you desire.

Our amended and restated certificate of incorporation also provides that the Court of Chancery of the State of
Delaware will be the sole and exclusive forum for substantially all disputes between us and our stockholders,
which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our
directors, officers or employees.

Our amended and restated certificate of incorporation provides that the Court of Chancery of the State of

Delaware is, to the fullest extent permitted by applicable law, the sole and exclusive forum for any of the
following: any derivative action or proceeding brought on our behalf; any action asserting a breach of fiduciary
duty; any action asserting a claim against us arising under the Delaware General Corporation Law, our amended
and restated certificate of incorporation or our amended and restated bylaws; or any action asserting a claim
against us that is governed by the internal affairs doctrine. The choice of forum provision may limit a
stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our
directors, officers or other employees, which may discourage such lawsuits against us and our directors, officers
and other employees. Alternatively, if a court were to find the choice of forum provision contained in our
amended and restated certificate of incorporation to be inapplicable or unenforceable in an action, we may incur
additional costs associated with resolving such action in other jurisdictions, which could adversely affect our
business and financial condition.

We are an “emerging growth company” and have elected to comply with reduced public company reporting
requirements, which could make our common stock less attractive to investors.

We are an “emerging growth company,” as defined by the JOBS Act. For as long as we continue to be an

emerging growth company, we have chosen to take advantage of certain exemptions from various public
company reporting requirements. These exemptions include, but are not limited to, (i) not being required to
comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, (ii) reduced
disclosure obligations regarding executive compensation in our periodic reports, proxy statements and
registration statements, and (iii) exemptions from the requirements of holding a nonbinding advisory vote on
executive compensation and stockholder approval of any golden parachute payments not previously approved.
We could be an emerging growth company for up to five years after the first sale of our common equity
securities pursuant to an effective registration statement under the Securities Act of 1933, as amended (the
“Securities Act”), which such fifth anniversary will occur in 2018. However, if certain events occur prior to the
end of such five-year period, including if we become a “large accelerated filer,” our annual gross revenues
exceed $1.0 billion or we issue more than $1.0 billion of non-convertible debt in any three-year period, we would
cease to be an emerging growth company prior to the end of such five-year period. We will become a large
accelerated filer the year after we have an aggregate worldwide market value of the voting and non-voting
common equity held by non-affiliates of $700 million or more. We have taken advantage of certain of the
reduced disclosure obligations regarding executive compensation in this annual report on Form 10-K and may
elect to take advantage of other reduced burdens in future filings. As a result, the information we provide to
holders of our common stock may be different than you might receive from other public reporting companies in

which you hold equity interests. We cannot predict if investors will find our common stock less attractive as a
result of our reliance on these exemptions. If some investors find our common stock less attractive as a result of
any choice we make to reduce disclosure, there may be a less active trading market for our common stock and the
price for our common stock may be more volatile.

As an emerging growth company we are not required to comply with the rules of the SEC implementing
Section 404(b) of the Sarbanes-Oxley Act and therefore our independent registered public accounting firm is not
required to formally attest to the effectiveness of our internal controls over financial reporting until the year
following the year we cease to be an emerging growth company. We are required, however, to comply with the
SEC’s rules implementing Section 302 and 404 other than 404(b) of the Sarbanes-Oxley Act. These rules require
management to certify financial and other information in our quarterly and annual reports and provide an annual
management report on the effectiveness of controls over financial reporting. If we are unable to conclude that we
have effective internal control over financial reporting, our independent registered public accounting firm is
unable to provide us with an unqualified report as and when required by Section 404 or we are required to restate
our financial statements, we may fail to meet our public reporting obligations and investors could lose confidence
in our reported financial information, which could have a negative impact on the trading price of our stock.

Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards
until such time as those standards apply to private companies. However, we have irrevocably elected not to avail
ourselves of this extended transition period for complying with new or revised accounting standards and,
therefore, we will be subject to the same new or revised accounting standards as other public companies that are
not emerging growth companies.

ITEM 1B. UNRESOLVED STAFF COMMENTS.

None.

ITEM 2.

PROPERTIES.

We do not own any real estate. Our 33,009 square-foot principal executive and administrative offices are

located at 500 Fifth Avenue, 19th and 20th Floors, New York, New York 10110 and are leased under an
agreement expiring in April 2025. In July 2014, we signed a lease for a 28,541 square-foot design studio located
at 900 N. Cahuenga Blvd., Los Angeles, California leased under an agreement expiring in July 2020. We moved
into the new design studio space in February 2015 after the expiration in January 2015 of our previous 17,640
square-foot design studio at 5410 Wilshire Boulevard, Los Angeles, California. In December 2014, we signed a
lease for a 4,209 square-foot showroom space in Paris, France which opened in March 2015, and is leased under
an agreement expiring in December 2020.

As of January 31, 2015, we leased approximately 81,374 gross square feet related to our 37 retail stores. Our

leases generally have initial terms of 10 years and cannot be extended or can be extended for one additional
5-year term. Our leases require a fixed annual rent, and most require the payment of additional rent if store sales
exceed a negotiated amount. Most of our leases are “net” leases, which require us to pay all of the cost of
insurance, taxes, maintenance and utilities. Although we generally cannot cancel these leases at our option,
certain of our leases allow us, and in some cases, the lessor, to terminate the lease if we do not achieve a
specified gross sales threshold.

The following store list shows the location, opening date, type and size of our retail locations as of January 31,
2015:

Vince Location

State

Opening Date

. . . . . . . . . . . . . . . . . . . . . . NY July 25, 2009

Robertson (Los Angeles) . . . . . . . . . . . . . . . . . CA April 9, 2008
Melrose (Los Angeles) . . . . . . . . . . . . . . . . . . . CA September 4, 2008
Washington St. (Meatpacking - Women’s) . . . NY February 3, 2009
Prince St. (Nolita)
San Francisco . . . . . . . . . . . . . . . . . . . . . . . . . . CA October 15, 2009
Chicago . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
IL October 1, 2010
Madison Ave. . . . . . . . . . . . . . . . . . . . . . . . . . . NY August 3, 2012
Westport . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CT March 28, 2013
Greenwich . . . . . . . . . . . . . . . . . . . . . . . . . . . . CT
Mercer St. (Soho) . . . . . . . . . . . . . . . . . . . . . . . NY August 22, 2013
Columbus Ave. (Upper West Side) . . . . . . . . . NY December 18, 2013
Washington St. (Meatpacking - Men’s) . . . . . . NY June 2, 2014
Newbury St. (Boston)
. . . . . . . . . . . . . . . . . . . MA May 24, 2014
Pasadena . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CA August 7, 2014
PA August 4, 2014
Walnut St. (Philadelphia) . . . . . . . . . . . . . . . . .

July 19, 2013

Type

Street
Street
Street
Street
Street
Street
Street
Street
Street
Street
Street
Street
Street
Street
Street

Gross Square
Feet

Selling Square
Feet

1,151
1,537
2,000
1,396
1,895
2,590
3,503
1,801
2,463
4,500
4,465
1,827
4,124
3,475
3,250

938
1,385
1,600
1,108
1,408
1,371
1,928
1,344
1,724
3,080
3,126
1,027
3,100
2,200
2,000

Total Street (15): . . . . . . . . . . . . . . . . . . . . . .

39,977

27,339

Mall
Malibu . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CA August 9, 2009
Mall
Dallas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . TX August 28, 2009
Mall
Boca Raton . . . . . . . . . . . . . . . . . . . . . . . . . . . .
FL October 13, 2009
Mall
Copley Place (Boston) . . . . . . . . . . . . . . . . . . . MA October 20, 2009
Mall
White Plains . . . . . . . . . . . . . . . . . . . . . . . . . . . NY November 6, 2009
Atlanta . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GA April 16, 2010
Mall
Palo Alto . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CA September 17, 2010 Mall
Mall
Bellevue Square . . . . . . . . . . . . . . . . . . . . . . . . WA November 5, 2010
Mall
Manhasset (Long Island) . . . . . . . . . . . . . . . . . NY April 22, 2011
Newport Beach . . . . . . . . . . . . . . . . . . . . . . . . CA May 20, 2011
Mall
The Grove . . . . . . . . . . . . . . . . . . . . . . . . . . . . CA November 20, 2012 Mall
Mall
Bal Harbour . . . . . . . . . . . . . . . . . . . . . . . . . . .
Mall
Chestnut Hill

. . . . . . . . . . . . . . . . . . . . . . . . . . MA July 25, 2014

FL October 4, 2014

Total Mall and Lifestyle Centers (13)

. . . . .

Total Full-Price (28) . . . . . . . . . . . . . . . . . . . .

June 17, 2009

Orlando . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Outlet
Cabazon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CA November 11, 2011 Outlet
Riverhead . . . . . . . . . . . . . . . . . . . . . . . . . . . . . NY November 30, 2012 Outlet
Outlet
Chicago . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
IL August 1, 2013
Outlet
Seattle . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . WA August 30, 2013
Outlet
Las Vegas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . NV October 3, 2013
Outlet
San Marcos . . . . . . . . . . . . . . . . . . . . . . . . . . . TX October 10, 2014
Carlsbad . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CA October 24, 2014
Outlet
Wrentham . . . . . . . . . . . . . . . . . . . . . . . . . . . . . MA September 29, 2014 Outlet

Total Outlets (9) . . . . . . . . . . . . . . . . . . . . . . .

Total (37) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

797
1,368
1,547
1,370
1,325
1,643
2,028
1,460
1,414
1,656
1,862
2,600
2,357

21,427

61,404

2,065
2,066
2,100
2,611
2,214
2,028
2,433
2,453
2,000

19,970

81,374

705
1,182
1,199
1,015
1,045
1,356
1,391
1,113
1,000
1,242
1,160
1,820
1,886

16,114

43,453

1,446
1,653
1,490
1,828
1,550
1,420
1,703
1,717
1,400

14,207

57,660

ITEM 3.

LEGAL PROCEEDINGS.

We are subject to various legal proceedings and claims, which arise in the ordinary course of our business.

Although the outcome of these and other claims cannot be predicted with certainty, management does not believe
that the ultimate resolution of these matters will have a material adverse effect on our financial condition, cash
flows or results of operation.

ITEM 4. MINE SAFETY DISCLOSURES.

Not applicable.

Part II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER
MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

Market Information

Our common stock has been traded on the New York Stock Exchange under the symbol “VNCE” since
November 22, 2013. Prior to that time there was no public market for our stock. The following table sets forth the
high and low sale prices of our common stock as reported on the New York Stock Exchange:

Market Price

High

Low

Fiscal 2014:

Fourth quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Third quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Second quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
First quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$37.68
$39.08
$38.00
$28.00

$22.07
$29.67
$24.19
$22.53

Fiscal 2013:

Fourth quarter (since November 22, 2013) . . . . . . . . . . . .

$32.76

$22.84

Record Holders

As of March 20, 2015 there were 3 record holders of our common stock.

Dividends

We have never paid cash dividends on our common stock. We currently intend to retain all available funds

and any future earnings to fund the development and growth of our business, and we do not anticipate paying any
cash dividends in the foreseeable future. In addition, because we are a holding company, our ability to pay
dividends depends on our receipt of cash distributions from our subsidiaries. The terms of our indebtedness
substantially restrict the ability to pay dividends. See “Current Existing Credit Facilities and Debt (Post IPO and
Restructuring Transactions)” under “Item 7—Management’s Discussion and Analysis of Financial Condition and
Results of Operations—Liquidity and Capital Resources” of this annual report on Form 10-K for a description of
the related restrictions.

Any future determination to pay dividends will be at the discretion of our board of directors and will depend
on our financial condition, results of operations, capital requirements, restrictions contained in current and future
financing instruments and other factors that our board of directors deems relevant.

Performance Graph

The following graph shows a monthly comparison of the cumulative total return on a $100 investment in the

Company’s common stock, the Standard & Poor’s 500 Stock Index and the Standard & Poor’s Retail Select
Industry Index. The cumulative total return for the Vince Holding Corp. common stock assumes an initial
investment of $100 in the common stock of the Company on November 22, 2013, which was the Company’s first
day of trading on the New York Stock Exchange after its IPO. The cumulative total returns for the Standard &
Poor’s 500 Stock Index and the Standard & Poor’s Retail Select Industry Index assume an initial investment of
$100 on October 31, 2013. The comparison also assumes the reinvestment of any dividends. The stock price
performance included in this graph is not necessarily indicative of future stock price performance.

COMPARISON OF 14 MONTH CUMULATIVE TOTAL RETURN*
Among Vince Holding Corp., the S&P 500 Index,
and S&P Retailing Index

$140

$120

$100

$80

$60

$40

$20

$0
11/22/13 11/13

12/13

1/14

2/14

3/14

4/14

5/14

6/14

7/14

8/14

9/14

10/14

11/14

12/14

1/15

Vince Holding Corp.

S&P 500

S&P Retailing Index

*$100 invested on 11/22/13 in stock or 10/31/13 in index, including reinvestment of dividends.
Fiscal year ending January 31.

This performance graph and related information shall not be deemed “soliciting material” or to be “filed”

with the SEC, nor shall such information be incorporated by reference into any future filing under the Securities
or the Securities Exchange Act of 1934, as amended (the “Exchange Act”) except to the extent we specifically
incorporate it by reference into such filing.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

We did not repurchase any shares of common stock during the three months ended January 31, 2015.

Unregistered Sales of Equity Securities

We did not sell any unregistered securities during fiscal year 2014.

ITEM 6.

SELECTED CONSOLIDATED FINANCIAL DATA.

The selected historical consolidated financial data set forth below for each of the years in the four-year
period ended January 31, 2015 and as of January 31, 2015 have been derived from our audited consolidated
financial statements.

The historical results presented below are not necessarily indicative of the results expected for any future
period. The information should be read in conjunction with “Item 7—Management’s Discussion and Analysis of
Financial Condition and Results of Operations” of this annual report on Form 10-K and our Consolidated
Financial Statements and related notes included herein.

Fiscal Year (1)

(In thousands, except for share data)

2014

2013

2012

2011

Statement of Operations Data
Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Cost of products sold . . . . . . . . . . . . . . . . . . . . . . . . . . . .

340,396 $
173,567

288,170 $
155,154

240,352 $
132,156

175,255
89,545

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gross profit
Selling, general and administrative expenses (2) . . . . . . .

166,829
96,579

Income from operations . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense, net (3) . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other expense, net

Income (loss) before income taxes . . . . . . . . . . . . . . . . .
Provision for income taxes . . . . . . . . . . . . . . . . . . . . . . . .

Net income (loss) from continuing operations . . . . . . . . .
Net loss from discontinued operations, net of tax . . . . . .

70,250
9,698
835

59,717
23,994

35,723
—

133,016
83,663

49,353
18,011
679

30,663
7,268

23,395
(50,815)

108,196
67,260

40,936
68,684
769

(28,517)
1,178

(29,695)
(78,014)

85,710
42,793

42,917
81,364
478

(38,925)
2,997

(41,922)
(105,944)

Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

35,723 $

(27,420) $ (107,709) $ (147,866)

Basic earnings (loss) per share:

Basic earnings (loss) per share from continuing

operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

0.97 $

0.83 $

(1.13) $

(1.60)

Basic loss per share from discontinued

operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

—

(1.81)

(2.98)

Basic earnings (loss) per share . . . . . . . . . . . . . . . . . . . . . $

0.97 $

(0.98) $

(4.11) $

(4.04)

(5.64)

Diluted earnings (loss) per share:

Diluted earnings (loss) per share from continuing

operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

0.93 $

0.83 $

(1.13) $

(1.60)

Diluted loss per share from discontinued

operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

—

(1.81)

(2.98)

Diluted earnings (loss) per share . . . . . . . . . . . . . . . . . . . $

0.93 $

(0.98) $

(4.11) $

(4.04)

(5.64)

Weighted average shares outstanding:
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

36,730,490
38,244,906

28,119,794
28,272,925

26,211,130
26,211,130

(In thousands)

Balance Sheet Data:
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Working capital
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other liabilities (long-term) (4) . . . . . . . . . . . . . . . . . . . . . . . . .
Stockholders’ equity (deficit) . . . . . . . . . . . . . . . . . . . . . . . . . . .

As of

January 31,
2015

February 1,
2014

February 2,
2013

January 28,
2012

112
16,650
382,198
88,000
146,063
71,969

$ 21,484
65,398
414,342
170,000
169,015
33,551

317
9,746
442,124
391,434
—

1,839
(2,149)
468,445
605,292
—

(561,265)

(743,021)

Fiscal Year (1)

(In thousands, except for percentages, door counts and store counts)

2014

2013

2012

2011

Other Operating and Financial Data:
Net Sales by Segment:

Wholesale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Direct-to-Consumer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$259,418
80,978

$229,114
59,056

$203,107
37,245

$151,921
23,334

Total net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$340,396

$288,170

$240,352

$175,255

Total wholesale doors at end of period . . . . . . . . . . . . . . . . . . . . . .
Total stores at end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Comparable store sales growth (5) . . . . . . . . . . . . . . . . . . . . . . . . .
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capital expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,394
37
7.8%

$
5,267
$ 19,699

2,300
28
20.6%
$
2,785
$ 10,073

$
$

2,145
22
20.8%
2,009
1,821

1,761
19
7.6%

$
$

1,701
1,450

(1) Fiscal year ends on Saturday closest to January 31. Fiscal 2014 (ended January 31, 2015), fiscal 2013

(ended February 1, 2014) and fiscal 2011 (ended January 28, 2012) consisted of 52 weeks. Fiscal 2012
(ended February 2, 2013) consisted of 53 weeks.

(2)

(3)

Includes the impact of public company transition costs of approximately $9,751 and $9,331 in fiscal 2013
and 2012, respectively. Also includes costs associated with the Secondary Offering (as defined herein) of
$571 in fiscal 2014.

Interest expense prior to the Company’s IPO in November 2013 is associated with the Sun Promissory
Notes and the Sun Capital Loan Agreement (both as defined herein). Interest expense after the IPO in
November 2013 represents interest and amortization of deferred financing costs incurred in connection with
the Company’s $175,000 Term Loan Facility and $50,000 Revolving Credit Facility.

(4) Other liabilities includes the impact of recording the long-term portion of the Tax Receivable Agreement

with the Pre-IPO Stockholders entered into in November 2013, which represents our obligation to pay 85%
of estimated cash savings on federal, state and local income taxes realized by us through our use of certain
net tax assets retained by us subsequent to the completion of the IPO and Restructuring Transactions
executed in November 2013.

(5) Comparable Store Sales Policy:

A store is included in the comparable store sales calculation after it has completed at least 12 full fiscal
months of operations. Non-comparable store sales include new stores which have not completed at least 12
full fiscal months of operations and sales from closed stores. In the event that we relocate, or change square
footage of an existing store, we would treat that store as a non-comparable store until it has completed at
least 12 full fiscal months of operation following the relocation or square footage adjustment. For 53-week
fiscal years, we do not adjust comparable store sales to exclude the additional week.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.

This discussion summarizes our consolidated operating results, financial condition and liquidity during each

of the years in the three-year period ended January 31, 2015. Our fiscal year ends on the Saturday closest to
January 31. Fiscal years 2014, 2013 and 2012 ended on January 31, 2015, February 1, 2014 and February 2,
2013, respectively. Fiscal years 2014 and 2013 consisted of 52 weeks and fiscal year 2012 consisted of 53 weeks.
The following discussion and analysis should be read in conjunction with our consolidated financial statements
and related notes included elsewhere in this annual report on Form 10-K.

On November 27, 2013, Vince Holding Corp. completed the IPO and the Restructuring Transactions. As a

result, the non-Vince businesses were separated from the Vince business. The Vince business is now the sole
operating business of Vince Holding Corp. Historical financial information for the non-Vince businesses has
been included as discontinued operations until the businesses were separated on November 27, 2013.

This discussion contains forward-looking statements involving risks, uncertainties and assumptions that
could cause our results to differ materially from expectations. Factors that might cause such differences include
those described under “Item 1A—Risk Factors,” “Disclosures Regarding Forward-Looking Statements” and
elsewhere in this annual report on Form 10-K.

Executive Overview

Vince is a leading contemporary fashion brand best known for modern effortless style and everyday luxury

As of January 31, 2015, we sold our products at 2,394 doors through our wholesale partners in the U.S. and

international markets and we operated 37 retail stores, including 28 full price stores and nine outlet stores,
throughout the United States.

The following is a summary of fiscal 2014 highlights:

• Our net sales totaled $340.4 million, reflecting an 18.1% increase over prior year net sales of $288.2

million.

• Our wholesale net sales increased 13.2% to $259.4 million and our direct-to-consumer net sales

increased 37.1% to $81.0 million.

• Operating income increased 42.3% to $70.3 million, or 20.6% of net sales, which represents a 340

basis point improvement over the prior year.

• We made voluntary prepayments totaling $105.0 million on the Term Loan Facility. As of January 31,
2015, we had $88.0 million of total debt outstanding comprised of $65.0 million outstanding on our
Term Loan Facility and $23.0 million outstanding on our Revolving Credit Facility.

• We opened nine new retail stores during fiscal year 2014 and increased our wholesale door count by 94

additional doors.

• Certain selling stockholders of the Company, including affiliates of Sun Capital (collectively with the

other selling stockholders, the “Selling Stockholders”), completed a secondary offering (the
“Secondary Offering”) of common stock of the Company on July 1, 2014. Following the Secondary
Offering, affiliates of Sun Capital held 54.6% of the Company’s common stock. We did not receive
any proceeds from the Secondary Offering.

We serve our customers through a variety of channels that reinforce the Vince brand image. Our diversified

channel strategy allows us to introduce our products to customers through multiple distribution points that are
reported in two segments: wholesale and direct-to-consumer.

The following is a summary of our wholesale and direct-to-consumer net sales for fiscal years 2014, 2013

and 2012:

(in thousands)

Net Sales by Segment

Fiscal Year

2014

2013

2012

Wholesale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Direct-to-consumer . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$259,418
80,978

$229,114
59,056

$203,107
37,245

Total net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$340,396

$288,170

$240,352

We have expanded our operations rapidly since our inception in 2002, and we have limited operating

experience at our current size. Our growth in net sales has also led to increased selling, general and
administrative expenses. We have made and are making investments to support our near and longer-term growth.
If our operations continue to grow over the longer term, of which there can be no assurance, we will be required
to expand our sales and marketing, product development and distribution functions, to upgrade our management
information systems and other processes, and to obtain more space for our expanding administrative support and
other headquarters personnel.

While we believe our growth strategy offers significant opportunities, it also presents risks and challenges,

including among others, the risks that we may not be able to hire and train qualified associates, that our new
product offerings and expanded sales channels may not maintain or enhance our brand image and that our
distribution facilities and information systems may not be adequate to support our growth plans. For a more
complete discussions of risks facing our business see “Item 1A—Risk Factors” of this annual report on
Form 10-K.

Results of Operations

Fiscal 2014 Compared to Fiscal 2013

The following table presents, for the periods indicated, our operating results as a percentage of net sales as

well as earnings per share data:

(In thousands, except share data, store and door counts,
and percentages)

Amount

% of Net
Sales

Amount

% of Net
Sales

Amount

Percent

Fiscal Year Ended

January 31, 2015

February 1, 2014

Variances

Statement of Operations:
Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cost of products sold . . . . . . . . . . . . . . . . . . . . . . .

$340,396
173,567

100.0% $288,170
51.0% 155,154

100.0% $52,226
53.8% 18,413

Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Selling, general and administrative expenses . . . .

166,829
96,579

Income from operations . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . .
Interest expense, net
Other expense, net . . . . . . . . . . . . . . . . . . . . . . . . .

Income before income taxes . . . . . . . . . . . . . . . . .
Provision for income taxes . . . . . . . . . . . . . . . . . .

Net income from continuing operations . . . . . . . .
Net loss from discontinued operations, net of

70,250
9,698
835

59,717
23,994

35,723

18.1%
11.9%

25.4%
15.4%

49.0% 133,016
28.4% 83,663

20.6% 49,353
2.8% 18,011
679
0.3%

17.5% 30,663
7,268
7.0%

46.2% 33,813
29.0% 12,916

17.2% 20,897
6.3% (8,313)
156
0.2%

42.3%
(46.2)%
23.0%

10.7% 29,054
2.5% 16,726

94.8%
230.1%

10.5% 23,395

8.2% 12,328

52.7%

taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

—

(50,815)

(17.6)% 50,815

(100.0)%

Net income (loss)

. . . . . . . . . . . . . . . . . . . . . . . . .

$ 35,723

10.5% $ (27,420)

(9.4)% $63,143

(230.3)%

Basic earnings (loss) per share:
Basic EPS—continuing operations . . . . . . . . . . . .
Basic EPS—discontinued operations . . . . . . . . . .

Basic EPS—Total . . . . . . . . . . . . . . . . . . . . . . . . .

Diluted earnings (loss) per share:
Diluted EPS—continuing operations . . . . . . . . . .
Diluted EPS—discontinued operations . . . . . . . . .

Diluted EPS—Total . . . . . . . . . . . . . . . . . . . . . . . .

Other Operating and Financial Data:
Total wholesale doors at end of period . . . . . . . . .
Total stores at end of period . . . . . . . . . . . . . . . . .
Comparable store sales growth . . . . . . . . . . . . . . .

0.97
—

0.97

0.93
—

0.93

2,394
37
7.8%

0.83
(1.81)

(0.98)

0.83
(1.81)

(0.98)

2,300
28
20.6%

Net Sales for the fiscal year ended January 31, 2015 were $340.4 million, increasing $52.2 million, or 18.1%
versus $288.2 million for the fiscal year ended February 1, 2014. The increase in sales compared to the prior year
is due to an increase in volume across both of our business segments. The following is a summary of our net
sales by segment for the fiscal year ended January 31, 2015 and the fiscal year ended February 1, 2014:

(in thousands)

Net Sales by Segment

Fiscal Year Ended

January 31,
2015

February 1,
2014

Net Sales:
Wholesale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Direct-to-consumer . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$259,418
80,978

$229,114
59,056

Total net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$340,396

$288,170

Net sales from our wholesale segment increased $30.3 million, or 13.2%, to $259.4 million in the fiscal year

ended January 31, 2015 from $229.1 million in the fiscal year ended February 1, 2014 driven by strong
performance in both our domestic and international markets. The expansion of our wholesale business
contributed to the sales increase as our wholesale door counts increased by a net 94 wholesale doors and we
opened 21 additional shop-in-shops that are operated by our domestic and international partners. Additionally,
there are two international free-standing stores which are operated by our distribution partners, one in Tokyo that
opened in the fall of 2013, and one in Istanbul that opened in the spring of 2014.

Net sales from our direct-to-consumer segment increased $21.9 million, or 37.1%, to $81.0 million in the

fiscal year ended January 31, 2015 from $59.1 million in the fiscal year ended February 1, 2014. This sales
growth was due to (i) comparable retail store sales growth of 7.8% which was driven primarily by increased
transactions and contributed $3.3 million, (ii) opening nine new stores as compared to the end of the prior fiscal
year (bringing our total retail store count to 37 as of January 31, 2015, compared to 28 as of February 1, 2014)
inclusive of non-comparable sales growth contributing $15.3 million, and (iii) e-commerce sales growth
contributing $3.3 million.

Gross Profit/Gross Margin rate increased 280 basis points to 49.0% for the fiscal year ended January 31,
2015 compared to 46.2% for the fiscal year ended February 1, 2014. The total gross margin rate increase was
driven primarily by the following factors:

•

Increased sales penetration of the international and licensing businesses contributed 80 basis points of
improvement;

• Continued supply chain efficiencies including our strategic shift to transport more of our product by
sea versus air as well as other operational improvements contributed 80 basis points of improvement;

•

Increased sales penetration of the direct-to-consumer segment contributed 90 basis points of
improvement; and

Favorable impact from inventory reserve related adjustments contributed 50 basis points of
improvement.

• The above increases were partially offset by the impact of certain product mix which had a negative

impact of (20) basis points.

Selling, general and administrative expenses (“SG&A”) for the fiscal year ended January 31, 2015 were
$96.6 million, increasing $12.9 million, or 15.4%, versus $83.7 million for the fiscal year ended February 1,
2014. The increase in SG&A expenses compared to the prior year period were primarily due to:

•

Increase in compensation expense of $7.3 million, including share-based and incentive compensation,
employee benefits and related increases due to hiring and retaining additional employees to support our
growth plans;

Increase in rent and occupancy costs of $5.6 million due primarily to new retail store openings and our
new headquarter office spaces;

Increase in marketing, advertising and promotional expenses of $2.6 million to support our efforts to
increase brand awareness, drive traffic and build customer loyalty;

Increase in depreciation expense of $2.4 million due to new stores, shop-in-shop expenditures and our
new headquarter office spaces;

Increase in other costs of $2.2 million consisting of increases in areas such as design and development,
travel, consulting and legal;

Increase in public company expenses of $1.9 million due to costs incurred to be a stand-alone public
company; and

•

Increase of $0.6 million related to fees incurred in connection with the Secondary Offering completed
in July 2014.

• The above increases were partially offset by the decrease in public company transition costs of $9.8

million incurred in the prior fiscal year in preparation for our IPO that was completed on November 27,
2013.

The following is a summary of our operating income by segment for the fiscal year ended January 31, 2015

and the fiscal year ended February 1, 2014:

(in thousands)

Operating Income by Segment

Fiscal Year Ended

January 31,
2015

February 1,
2014

Wholesale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Direct-to-consumer . . . . . . . . . . . . . . . . . . . . . . . . . . .

$100,623
14,556

Subtotal

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unallocated expenses . . . . . . . . . . . . . . . . . . . . . . . . .

115,179
(44,929)

$ 81,822
10,435

92,257
(42,904)

Total operating income . . . . . . . . . . . . . . . . . . . .

$ 70,250

$ 49,353

Operating income from our wholesale segment increased $18.8 million, or 23.0%, to $100.6 million in the
fiscal year ended January 31, 2015 from $81.8 million in the fiscal year ended February 1, 2014. This increase
was driven primarily from the sales volume increase of $30.3 million and gross margin rate improvement noted
above as well as the impact of wholesale segment operating expenses which were lower as a percentage of net
sales versus the prior fiscal year.

Operating income from our direct-to-consumer segment increased $4.1 million, or 39.5% to $14.6 million in
the fiscal year ended January 31, 2015 from $10.4 million in the fiscal year ended February 1, 2014. The increase
resulted primarily from the sales volume increase of $21.9 million and gross margin rate improvement noted
above which more than offset the additional operating expenses incurred, primarily as a result of opening new
stores, during the period to support the sales growth.

Interest expense for the fiscal year ended January 31, 2015 was $9.7 million, decreasing $8.3 million, or
46.2%, versus $18.0 million for the fiscal year ended February 1, 2014. Interest expense decreased as we had
lower average debt balances period over period. The decrease in overall debt balances was primarily due to
certain affiliates of Sun Capital contributing certain outstanding indebtedness to the Company in June 2013, thus
eliminating interest expense on approximately $407.5 million in debt at that time. On November 27, 2013, in
connection with the IPO and Restructuring Transactions, we entered into a $175.0 million Term Loan Facility
and a $50.0 million Revolving Credit Facility. Interest expense for fiscal 2014 relates to interest charges under
these facilities.

Other expense, net, was $0.8 million for the fiscal year ended January 31, 2015 compared to $0.7 million for

the fiscal year ended February 1, 2014.

Provision for income taxes for the fiscal year ended January 31, 2015 was $24.0 million as compared to
$7.3 million for the fiscal year ended February 1, 2014. Our effective tax rate on pretax income for the fiscal year
ended January 31, 2015 and the fiscal year ended February 1, 2014 was 40.2% and 23.7%, respectively. The rate
for the fiscal year ended January 31, 2015 differed from the U.S. statutory rate of 35.0% primarily due to state
taxes. The rate for the fiscal year ended February 1, 2014 differed from the U.S. statutory rate of 35.0% primarily
due to changes in our valuation allowance offset in part by state taxes and nondeductible interest.

Net loss from discontinued operations

The separation of the non-Vince businesses was completed on November 27, 2013. Net loss from

discontinued operations was $50.8 million for the fiscal year ended February 1, 2014.

Net income (loss)

Net income was $35.7 million for the fiscal year ended January 31, 2015, increasing $63.1 million from a
net loss of $(27.4) million for the fiscal year ended February 1, 2014. The increase in net income was primarily
due to increased income from operations of $20.9 million, reduced interest expense of $8.3 million and a lower
net loss from discontinued operations of $50.8 million, partially offset by the increase in income taxes of $16.7
million.

Results of Operations

Fiscal 2013 Compared to Fiscal 2012

The following table presents, for the periods indicated, our operating results as a percentage of net sales as

well as earnings per share data:

Fiscal Year Ended

February 1, 2014

February 2, 2013

Variances

(In thousands, except share data, store and door counts, and
percentages)

Amount

% of Net
Sales

Amount

% of Net
Sales

Amount

Percent

Statement of Operations:
Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $288,170
155,154
Cost of products sold . . . . . . . . . . . . . . . . . . . . . . . .

100.0% $ 240,352
53.8% 132,156

100.0% $ 47,818
55.0% 22,998

Gross profit
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Selling, general and administrative expenses . . . . .

133,016
83,663

46.2% 108,196
67,260
29.0%

45.0% 24,820
28.0% 16,403

19.9%
17.4%

22.9%
24.4%

Income from operations . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . .
Interest expense, net
Other expense, net . . . . . . . . . . . . . . . . . . . . . . . . . .

Income (loss) before income taxes . . . . . . . . . . . . .
Provision for income taxes . . . . . . . . . . . . . . . . . . .

Net income (loss) from continuing operations . . . .
Net loss from discontinued operations, net of

49,353
18,011
679

30,663
7,268

23,395

17.2%
6.3%
0.2%

40,936
68,684
769

17.0%
8,417
28.6% (50,673)
(90)
0.3%

20.6%
(73.8)%
(11.7)%

10.7% (28,517)
1,178
2.5%

(11.9)% 59,180 (207.5)%
517.0%
6,090

0.5%

8.2% (29,695)

(12.4)% 53,090 (178.8)%

taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(50,815)

(17.6)% (78,014)

(32.5)% 27,199

(34.9)%

Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (27,420)

(9.4)%$(107,709)

(44.9)%$ 80,289

(74.5)%

Basic earnings (loss) per share:
Basic EPS—continuing operations . . . . . . . . . . . . . $
Basic EPS—discontinued operations . . . . . . . . . . .

0.83
(1.81)

Basic EPS—Total

. . . . . . . . . . . . . . . . . . . . . . . . . . $

(0.98)

Diluted earnings (loss) per share:
Diluted EPS—continuing operations . . . . . . . . . . . $
Diluted EPS—discontinued operations . . . . . . . . . .

0.83
(1.81)

Diluted EPS—Total . . . . . . . . . . . . . . . . . . . . . . . . . $

(0.98)

Other Operating and Financial Data:
Total wholesale doors at end of period . . . . . . . . . .
Total stores at end of period . . . . . . . . . . . . . . . . . .
Comparable store sales growth . . . . . . . . . . . . . . . .

2,300
28
20.6%

(1.13)
(2.98)

(4.11)

(1.13)
(2.98)

(4.11)

2,145
22
20.8%

Net Sales for the fiscal year ended February 1, 2014 were $288.2 million, increasing $47.8 million, or
19.9%, versus $240.4 million for the fiscal year ended February 2, 2013. The increase in sales compared to the
prior year is due to an increase in volume across both of our business segments. The following is a summary of
our net sales by segment for the fiscal year ended February 1, 2014 and the fiscal year ended February 2, 2013:

(in thousands)

Net Sales by Segment

Fiscal Year Ended

February 1,
2014

February 2,
2013

Net Sales:
Wholesale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Direct-to-consumer . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$229,114
59,056

$203,107
37,245

Total net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$288,170

$240,352

Net sales from our wholesale segment increased $26.0 million, or 12.8%, to $229.1 million in the fiscal year

ended February 1, 2014 from $203.1 million in the fiscal year ended February 2, 2013. We increased volume
with many of our premier wholesale partners through increased sales productivity in existing doors, including our
first women’s shop-in-shop at Saks Fifth Avenue, opened in September 2012, and the opening of 20 additional
shop-in-shops with our domestic and international partners. Additionally, there is one international free-standing
store in Tokyo that is operated by one of our distribution partners that opened in the fall of 2013.

Net sales from our direct-to-consumer segment increased $21.8 million, or 58.6%, to $59.1 million in the

fiscal year ended February 1, 2014 from $37.2 million in the fiscal year ended February 2, 2013. This sales
growth was due to (i) comparable retail store sales growth of 20.6% contributing $5.5 million, (ii) opening six
net new stores as compared to the prior year (bringing our total retail store count to 28 as of February 1, 2014,
compared to 22 as of February 2, 2013) inclusive of non-comparable sales growth contributing $12.7 million, and
(iii) e-commerce sales growth contributing $3.5 million.

Gross Profit/Gross Margin rate increased 120 basis points to 46.2% for the fiscal year ended February 1,
2014 compared to 45.0% for the fiscal year ended February 2, 2013. The total margin rate increase was driven by
a higher percentage of our sales coming from the direct-to-consumer segment, in which we generally recognize
higher margins, and an increased percentage of full-price to off-price sales in our wholesale segment. The margin
rate was unfavorably impacted during the fiscal year ended February 1, 2014 by increased inventory reserves,
and increased margin assistance provided to our wholesale partners.

Selling, general and administrative expenses for the fiscal year ended February 1, 2014 were $83.7 million,
increasing $16.4 million, or 24.4%, versus $67.3 million for the fiscal year ended February 2, 2013. The increase
in SG&A expenses compared to the prior year period was primarily due to:

•

Increased compensation expense of $5.5 million related to hiring and retaining certain key employees;

Increased store expenses and depreciation expense of $4.5 million due primarily to new retail store
openings; and

Increased design, development and marketing expenses of $6.0 million to support our efforts to
increase brand awareness, drive traffic, build customer loyalty and open new retail stores.

The following is a summary of our operating income by segment for the fiscal year ended February 1, 2014

and the fiscal year ended February 2, 2013:

(in thousands)

Wholesale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Direct-to-consumer . . . . . . . . . . . . . . . . . . . . . . . . . . .

Subtotal

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unallocated expenses . . . . . . . . . . . . . . . . . . . . . . . . .

Operating Income by Segment

Fiscal Year Ended

February 1,
2014

February 2,
2013

$ 81,822
10,435

92,257
(42,904)

$ 72,913
4,465

77,378
(36,442)

Total operating income . . . . . . . . . . . . . . . . . . . .

$ 49,353

$ 40,936

Operating income from our wholesale segment increased $8.9 million, or 12.2%, to $81.8 million in the

fiscal year ended February 1, 2014 from $72.9 million in the fiscal year ended February 2, 2013. This increase
was driven primarily from the sales volume increase of $26.0 million and a decrease in operating expenses as a
percentage of wholesale sales, partially offset by a reduction in the gross margin rate primarily due to charges
associated with recording additional inventory reserves. The decrease in operating expenses as a percentage of
net wholesale sales resulted as our net wholesale sales grew at a rate greater than our expenses during fiscal
2013.

Operating income from our direct-to-consumer segment increased $6.0 million, or 133.7% to $10.4 million

in the fiscal year ended February 1, 2014 from $4.5 million in the fiscal year ended February 2, 2013. The
increase resulted primarily from the sales volume increase of $21.8 million which more than offset the additional
operating expenses incurred during the period to support the sales growth.

Interest expense for the fiscal year ended February 1, 2014 was $18.0 million, decreasing $50.7 million, or

73.8%, versus $68.7 million for the fiscal year ended February 2, 2013. Interest expense decreased as we had
lower average debt balances period over period. The decrease in overall debt balances was primarily due to
certain affiliates of Sun Capital contributing certain outstanding indebtedness to the Company in June 2013, thus
eliminating interest expense on approximately $407.5 million in debt at that time. On November 27, 2013, in
connection with the IPO and Restructuring Transactions, we entered into the Term Loan Facility and the
Revolving Credit Facility.

Other expense, net, was $0.7 million for the fiscal year ended February 1, 2014 as compared to $0.8 million

for the fiscal year ended February 2, 2013.

Provision for income taxes for the fiscal year ended February 1, 2014 was $7.3 million, increasing
$6.1 million versus $1.2 million for the fiscal year ended February 2, 2013. Our effective tax rate on pretax
income for the fiscal year ended February 1, 2014 and the fiscal year ended February 2, 2013 was 23.7% and
(4.1%), respectively. The rates for the fiscal year ended February 1, 2014 and the fiscal year ended February 2,
2013 differed from the U.S. statutory rate of 35.0% primarily due to state taxes, nondeductible interest and
changes in our valuation allowances.

Net loss from discontinued operations

The separation of the non-Vince businesses was completed on November 27, 2013. Net loss from

discontinued operations was $50.8 million for the fiscal year ended February 1, 2014, decreasing $27.2 million,
or 34.9%, from a net loss of $78.0 million for the fiscal year ended February 2, 2013.

Net loss

Net loss was $27.4 million for the fiscal year ended February 1, 2014, decreasing $80.3 million, or 74.5%,

from a net loss of $107.7 million for the fiscal year ended February 2, 2013. The reduction in our net loss was
primarily due to increased income from operations of $8.4 million, reduced interest expense of $50.7 million and
a lower net loss from discontinued operations of $27.2 million, partially offset by the increase in income taxes of
$6.1 million.

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 businesses are now owned by Kellwood Holding, LLC, which
is controlled by affiliates of Sun Capital. As the Company and Kellwood Holding, LLC were under the common
control of affiliates of Sun Capital, this separation transaction resulted in a $73.1 million 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 for the non-Vince

businesses, through the separation on 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.

In connection with the Restructuring Transactions, the Company issued a promissory note (the “Kellwood
Note Receivable”) to Kellwood Company, LLC, in the amount of $341.5 million. Following the completion of
the IPO and the Company’s entry into the Term Loan Facility and the Revolving Credit Facility, the Company
used proceeds from the IPO and borrowings under the Term Loan Facility to repay the Kellwood Note
Receivable, which proceeds, in turn, were primarily used by Kellwood to repay, discharge or repurchase
indebtedness of Kellwood Company, LLC. As a result, neither Vince Holding Corp. nor any of its consolidated
subsidiaries have any obligations with respect to the Wells Fargo Facility, the Cerberus Term Loan, the Sun
Term Loan Agreements, any 12.875% Notes or any 7.625% Notes, which are each described below under
“Financing Activities”.

The separation of the non-Vince businesses was completed on November 27, 2013. Accordingly, there are

no results from discontinued operations reflected on the Consolidated Financial Statements for the fiscal year
ended January 31, 2015. The results of the non-Vince businesses included in discontinued operations for the
fiscal years ended February 1, 2014 and February 2, 2013 are summarized in the following table below (in
thousands, except effective tax rates).

Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cost of products sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Selling, general and administrative expenses . . . . . . . . . .
Restructuring, environmental and other charges . . . . . . . .
Impairment of long-lived assets . . . . . . . . . . . . . . . . . . . .
Change in fair value of contingent consideration . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense, net
Other expense, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss before income taxes . . . . . . . . . . . . . . . . . . . . . . . . .
Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net loss from discontinued operations, net of taxes . . . . .

Fiscal Year

2013

2012

$400,848
313,620
87,228
98,016
1,628
1,399
1,473
46,677
498
(62,463)
(11,648)
$ (50,815)

$514,806
409,763
105,043
132,871
5,732
6,497
(7,162)
55,316
(9,776)
(78,435)
(421)
$ (78,014)

Effective tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

18.6%

0.5%

Net loss from discontinued operations—Fiscal 2013 Compared to Fiscal 2012

The separation of the non-Vince businesses was completed on November 27, 2013. Net loss from

discontinued operations was $50.8 million for the fiscal year ended February 1, 2014, decreasing $27.2 million,
or 34.9%, from a net loss of $78.0 million for the fiscal year ended February 2, 2013. Results for fiscal 2013
include two fewer months compared to fiscal 2012 and were positively impacted by income tax benefit of $11.6
million. This tax benefit was generated primarily as a result of the release of valuation allowance related to the
allocation of a disallowed tax loss on the sale of a trademark to intangibles with indefinite lives, resulting in
fewer deferred tax liabilities that cannot be offset against deferred tax assets for valuation allowance purposes.

Liquidity and Capital Resources

Vince Holding Corp.’s sources of liquidity are our cash and cash equivalents, cash flows from operations
and borrowings available under the Revolving Credit Facility. Our primary cash needs are capital expenditures
for new stores and related leasehold improvements, for our new offices and showroom spaces, meeting our debt
service requirements, paying amounts due per the Tax Receivable Agreement, and funding working capital
requirements. The most significant components of our working capital are cash and cash equivalents, accounts
receivable, inventories, accounts payable and other current liabilities. See “—Outlook” below.

On November 27, 2013, in connection with the consummation of the IPO and Restructuring Transactions, all

previously outstanding debt obligations either remained with Kellwood (i.e. the non-Vince businesses) or were
discharged, repurchased or refinanced. In connection with the consummation of these transactions, Vince Holding
Corp. entered into the Term Loan Facility and Revolving Credit Facility, which are discussed further below.

Operating Activities

(in thousands)

Operating activities
Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less: Net loss from discontinued operations . . . . . . . . . . . . . . . . .
Add (deduct) items not affecting operating cash flows:

Fiscal Year

2014

2013

2012

$35,723
—

$(27,420)
(50,815)

$(107,709)
(78,014)

Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of intangible assets . . . . . . . . . . . . . . . . . . . . .
Amortization of deferred financing costs . . . . . . . . . . . . . . .
Amortization of deferred rent
. . . . . . . . . . . . . . . . . . . . . . . .
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Share-based compensation expense . . . . . . . . . . . . . . . . . . .
Capitalized PIK Interest
. . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss on disposal of property, plant and equipment . . . . . . . .
Changes in assets and liabilities: . . . . . . . . . . . . . . . . . . . . . .
Receivable, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inventories, net
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prepaid expenses and other current assets . . . . . . . . . . .
Accounts payable and accrued expenses . . . . . . . . . . . .
Other assets and liabilities . . . . . . . . . . . . . . . . . . . . . . .

4,668
599
1,532
3,045
23,248
1,896
—
—

6,401
(3,463)
2,809
3,066
742

2,186
599
178
465
7,225
347
15,883
262

(6,265)
(15,069)
1,681
3,235
(156)

1,411
598
—
426
1,147
—
68,684
—

(7,459)
(8,360)
(2,455)
17,208
(131)

Net cash provided by operating activities—continuing

operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

80,266

33,966

41,374

Net cash used in operating activities—discontinued

operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

—

(54,667)

(67,408)

Net cash provided by/(used in) operating activities . . . . . . . . . . .

$80,266

$(20,701)

$ (26,034)

Continuing operations

Net cash provided by operating activities during fiscal 2014 was $80.3 million, which consisted of net
income from continuing operations of $35.7 million, impacted by non-cash items of $35.0 million and cash
provided by working capital of $9.6 million. Net cash provided by working capital was, in part, due to a decrease
in receivables of $6.4 million driven largely by higher trade deductions, a decrease of $2.8 million in prepaid
expenses and other current assets and a $3.1 million increase in accounts payable and accrued expenses. This was
partially offset by a $3.5 million increase in inventory due to increased inventory purchases to support new stores
and shop-in-shops and the impact of higher intransit inventory resulting primarily from a change in our shipping
strategy to an FOB shipment basis.

Net cash provided by operating activities during fiscal 2013 primarily consists of net income (loss), adjusted
for certain non-cash items including PIK interest on the Sun Promissory Notes and Sun Capital Loan Agreement,
which was later contributed as capital, as well as depreciation, amortization and changes in deferred income taxes
and the effects of changes in working capital and other activities.

Net cash provided by operating activities during fiscal 2012 was $41.4 million, which consisted of net loss
of $29.7 million, impacted by non-cash items of $72.3 million and cash used in working capital of $1.2 million.
Non-cash expenses primarily consisted of PIK interest expense of $68.7 million. Net cash used in working
capital primarily resulted from an increase in inventories, net of $8.4 million due to timing of inventory receipts
and an increase in receivables, net of $7.5 million due to the timing of customer receipts. This was partially offset
by increases in our accounts payable and other accrued expenses of $17.2 million due to the timing of vendor
payments as well as the accrual of $6.4 million in transition payment to our founders, which was subsequently
paid during fiscal 2013.

Discontinued operations

Net cash used in operating activities for 2013 was $54.7 million, which consisted of net loss of

$50.8 million adjusted for non-cash charges of $15.3 million, and cash used in working capital of $19.2 million.

Net cash used in operating activities for 2012 was $67.4 million, which consisted of net loss of

$78.0 million adjusted for non-cash charges of $25.5 million, and cash used in working capital of $14.9 million.

Investing Activities

(in thousands)

Investing activities

Fiscal Year

2014

2013

2012

Payments for capital expenditures . . . . . . . . . . . . . . . . . . . . . .
Payments for contingent purchase price . . . . . . . . . . . . . . . . .

$(19,699)

$(10,073)

—

$ (1,821)
(806)

Net cash used in investing activities—continuing operations . . . . .
Net cash (used in)/provided by investing activities—discontinued
operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(19,699)

(10,073)

(2,627)

—

(5,936)

20,088

Net cash (used in)/provided by investing activities . . . . . . . . . . . . .

$(19,699)

$(16,009)

$17,461

Continuing operations

Net cash used in investing activities of $19.7 million during fiscal 2014 represents capital expenditures
related to retail store build-outs, including leasehold improvements and store fixtures as well as expenditures for
our shop-in-shop spaces operated by certain distribution partners and the costs related to the build-out of our new
corporate office spaces and showroom facilities.

Net cash used in investing activities of $10.1 million during fiscal 2013 represents capital expenditures,

primarily related to retail store build-outs, including leasehold improvements and store fixtures

Net cash used in investing activities of $2.6 million during fiscal 2012 is primarily attributable to capital

expenditures and cash payments paid to CRL Group (former owners of the Vince business) related to the
acquisition of the Vince business as a result of achievement of performance goals as specified in the related
purchase agreement.

Discontinued operations

Net cash used in investing activities for 2013 was $5.9 million, primarily consisting of $7.1 million of cash
and cash equivalents retained by the non-Vince business after the Restructuring Transactions. Additionally there
were $4.8 million in payments for capital expenditures and other assets related to the non-Vince business during
the year, offset in part by proceeds from the sale of various assets of the non-Vince business prior to the
Restructuring Transactions of $5.4 million, net of selling costs.

Net cash provided by investing activities for 2012 was $20.1 million, consisting of proceeds from the sale of

various assets of the non-Vince business of $28.9 million, net of selling costs, offset in part by payments for
capital expenditures and other assets of the non-Vince business of $8.3 million.

Financing Activities

(in thousands)

Financing activities

Fiscal Year

2014

2013

2012

Proceeds from borrowings under the Revolving Credit Facility . . . . . . . . $ 50,500 $
Payments for Revolving Credit Facility . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from borrowings under the Term Loan Facility . . . . . . . . . . . . .
Payments for Term Loan Facility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payment for Kellwood Note Receivable . . . . . . . . . . . . . . . . . . . . . . . . . .
Fees paid for Term Loan Facility and Revolving Credit Facility . . . . . . .
Proceeds from common stock issuance, net of certain transaction

— $
—
175,000
(5,000)
— (341,500)
(5,146)
(114)

(27,500)
—

(105,000)

costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stock option exercise . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

—
175

Net cash (used in)/provided by financing activities—continuing operations . .
Net cash provided by financing activities—discontinued operations . . . . . . . .

(81,939)
—

186,000
42

9,396
46,917

—
—
—
—
—
—

—
—

—
8,615

Net cash (used in)/provided by financing activities . . . . . . . . . . . . . . . . . . . . . . $ (81,939) $ 56,313 $

8,615

Continuing operations

Net cash provided by financing activities primarily relates to borrowings and repayments of the debt
obligations and debt issuance costs related thereto, as well as activity related to the issuance of our common
stock and exercise of employee stock options.

Net cash used by financing activities was $81.9 million during fiscal 2014, primarily consisting of voluntary

prepayments totaling $105.0 million on the Term Loan Facility, partially offset by $23.0 million of net
borrowings under our Revolving Credit Facility.

Net cash provided by financing activities was $9.4 million during fiscal 2013, primarily consisting of

$186.0 million of proceeds from the issuance of common stock, net of certain transactions costs, on
November 27, 2013. In connection with the IPO and the Restructuring Transactions discussed elsewhere in this

annual report in Form 10-K, the Company made borrowings of $175.0 million under the Term Loan Facility and
also entered into an agreement for the Revolving Credit Facility, for which we paid $5.1 million in debt issuance
costs. Proceeds from the IPO and borrowings under the Term Loan Facility were then used to repay the
Kellwood Note Receivable of $341.5 million. In January of fiscal 2013, the Company made a voluntary
prepayment of $5.0 million on the Term Loan Facility.

Discontinued operations

Net cash provided by financing activities during fiscal 2013 was $46.9 million, primarily consisting of

$5.0 million borrowings under the Sun Term Loan Agreements, as well a $41.9 million net increase in
borrowings under the Kellwood revolving credit facilities, net of fees paid.

Net cash provided by financing activities during fiscal 2012 was $8.6 million, primarily consisting of

$30.0 million borrowings under the Sun Term Loan Agreements and $1.9 million in payments under the
Rebecca Taylor earnout agreement, offset in part by $15.0 million payments for debt extinguishment during the
year as well as $1.0 million in fees paid related to financing agreements.

Current Existing Credit Facilities and Debt (Post IPO and Restructuring Transactions)

Revolving Credit Facility

On November 27, 2013, in connection with the closing of the IPO and Restructuring Transactions, Vince,
LLC entered into a senior secured revolving credit facility (the “Revolving Credit Facility”). Bank of America,
N.A. (“BofA”) serves as administrative agent under this facility. This Revolving Credit Facility provides for a
revolving line of credit of up to $50.0 million maturing on November 27, 2018. The Revolving Credit Facility
also provides for a letter of credit sublimit of $25.0 million (plus any increase in aggregate commitments) and for
an increase in aggregate commitments of up to $20.0 million. Vince, LLC is the borrower and Vince Holding
Corp. and Vince Intermediate Holding, LLC are the guarantors under the Revolving Credit Facility. Interest is
payable on the loans under the Revolving Credit Facility, at either the LIBOR or the Base Rate, in each case,
with applicable margins subject to a pricing grid based on an 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 requirement that, at any point when “Excess Availability” is less
than the greater of (i) 15% percent of the loan cap or (ii) $7.5 million, and continuing until Excess Availability
exceeds the greater of such amounts for 30 consecutive days, during which time, Vince, LLC must maintain a
consolidated EBITDA (as defined in the related credit agreement) equal to or greater than $20.0 million. We
have not been subject to this maintenance requirement since Excess Availability has been 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 aggregate lending commitments and $7.5 million 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 1.1 to 1.0 (provided that the Consolidated Fixed Charge Coverage
Ratio may be less than 1.1 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 aggregate
lending commitments and $10 million). We are in compliance with applicable financial covenants.

As of January 31, 2015, the availability under the $50.0 million Revolving Credit Facility was $19.4
million. As of January 31, 2015, there was $23.0 million of borrowings outstanding and $7.6 million 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%. There were no borrowings
outstanding under the Revolving Credit Facility as of February 1, 2014.

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 a $175.0 million senior secured term loan credit facility (the “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. On November 27, 2013, net borrowings under
the Term Loan Facility were used at closing, together with proceeds from the IPO, to repay the Kellwood Note
Receivable issued by Vince Intermediate to Kellwood Company, LLC immediately prior to the consummation of
the IPO as part of the Restructuring Transactions.

The Term Loan Facility also provides for an incremental facility of up to the greater of $50.0 million 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, 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 leverage ratio or (ii) the base rate applicable margin of 3.75% to 4.00% based on a 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 non-default interest
rate then applicable to base rate loans.

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. All obligations under the Term Loan Facility are guaranteed by Vince Holding Corp. and any future
material domestic restricted subsidiaries of Vince, LLC and secured by a lien on substantially all of the assets of
Vince Holding Corp., Vince, LLC and Vince Intermediate and any future material domestic restricted
subsidiaries. We are in compliance with applicable financial covenants.

Through January 31, 2015, on an inception to date basis, we have made voluntary prepayments totaling
$110.0 million in the aggregate on the original $175.0 million Term Loan Facility entered into on November 27,
2013. Of the total $110.0 million aggregate voluntary prepayments, $105.0 million were paid during fiscal 2014.
The voluntary prepayments of $105.0 million made during the current fiscal year were partially funded by $23.0
million of net borrowings under the Revolving Credit Facility. As of January 31, 2015 we had $65.0 million of
debt outstanding under the Term Loan Facility.

Credit Facilities and Debt Prior to IPO and Restructuring Transactions which occurred on November 27,
2013

Sun Promissory Notes

On May 2, 2008, Vince Holding Corp. issued the Sun Promissory Notes in amounts totaling $300.0 million.
The unpaid principal balance of the note accrued interest at 12% per annum until the maturity date of October 15,
2016, at which point any unpaid principal balance of the note would have accrued interest at a rate of 14% per
annum until the note was paid in full. No interest was paid on the Sun Promissory Notes.

On December 28, 2012, all interest accrued under the note prior to July 19, 2012 was waived. This resulted

in an increase to additional paid-in-capital in the amount of $270.8 million as both parties were under the
common control of affiliates of Sun Capital.

Effective June 18, 2013, an affiliate of Sun Capital contributed $407.5 million of indebtedness under the
Sun Capital Loan Agreement and the Sun Promissory Notes as a capital contribution to Vince Holding Corp., and
as a result, no amount remains outstanding under either instrument.

Sun Capital Loan Agreement

Vince Holding Corp. was party to the Sun Capital Loan Agreement with SCSF Kellwood Finance, LLC
(“SCSF Finance”) and Sun Kellwood Finance (as successors to Bank of Montreal) for a $72.0 million line of
credit. Under the terms of this agreement, as amended from time to time, interest accrued at the greater of prime
plus 2% per annum or LIBOR plus 4.75% per annum and was due by the last day of each fiscal quarter.

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 (which was the scheduled maturity date).
As all parties were under the common control of affiliates of Sun Capital, this transaction resulted in a capital
contribution of $18.2 million, which was recorded as an adjustment to additional paid-in-capital as of February 2,
2013.

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 party
thereto (“the “Wells Fargo Facility”). The Wells Fargo Facility provided a non-amortizing senior revolving credit
facility with aggregate lending commitments of $155.0 million. The 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
plus, at the borrowers’ election, LIBOR or a Base Rate). 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 giving effect to such amendment and restatement, neither Vince Holding Corp.
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, entered
into a Term Loan Agreement (the “Term Loan Agreement”), as amended, with Cerberus Business Finance, LLC,
as agent and the lenders from time to time party thereto. The Term Loan Agreement provided the borrowers with
a non-amortizing secured term loan in an aggregate amount of $55.0 million (the “Cerberus Term Loan”), of
which $10.0 million 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 and
8.25%-8.75% for Reference Rate Loans) plus, at the borrower’s election, LIBOR or a Reference Rate as defined
in the Term Loan Agreement. The Term Loan Agreement also provided for a portion of such interest equal to
1.0% 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 borrowers, including the assets of
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 Company’s repayment of the Kellwood Note
Receivable, as such neither Vince Holding Corp. 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, 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 borrowers, which included the assets of Vince, LLC, which security
interest was contractually subordinated to the security interests of the lenders under Wells Fargo Facility and the
Cerberus Term Loan. The borrowings under the Sun Term Loan Agreements bore interest at a rate per annum of
5.0%-6.0%, paid-in-kind and added to the principal amount of such term loans. On November 27, 2013, in
connection with the closing of the IPO and Restructuring Transactions, the obligations under the Sun Term Loan
Agreements were discharged through (i) the application of Kellwood Note Receivable proceeds repaid by the
Company and (ii) capital contributions by Sun Capital affiliates, as such neither Vince Holding Corp. nor any of
its subsidiaries have any obligations thereunder.

12.875% Notes

Interest on the 12.875% Second-Priority Senior Secured Payment-In-Kind Notes due 2014 (the “12.875%
Notes”) of Kellwood Company 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 by the Company, at which time Vince, LLC was 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 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 $33.5 million 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 approximately $4.6 million in aggregate principal amount of the 7.625% Notes. After giving effect to

these settlements, approximately $48.8 million of the 7.625% Notes remain issued and outstanding; provided,
that neither Vince Holding Corp. nor its subsidiaries are a guarantor or obligor of such notes.

Outlook

Currently, our short-term and long-term liquidity needs arise primarily from debt service, amounts payable
under our Tax Receivable Agreement, capital expenditures and working capital requirements associated with our
growth strategies. Management believes that our current balances of cash and cash equivalents, cash flow from
operations and amounts available under the Revolving Credit Facility will be adequate to fund our debt service
requirements, obligations under our Tax Receivable Agreement, planned capital expenditures and working
capital needs for at least the next twelve months. Our ability to make planned capital expenditures, to fund our
debt service requirements and to remain in compliance with our financial covenants, and to fund operations
depends on our future operating performance, which in turn, may be impacted by prevailing economic conditions
and other financial and business factors, some of which are beyond our control.

Capital expenditures are expected to increase as we continue to invest in the direct-to-consumer store
expansion and wholesale shop-in-shop build-out. In fiscal 2015, we project capital expenditures to aggregate
$17.0 million to $20.0 million related to our new and remodeled stores, shop-in-shop build-outs, our new Paris
showroom, LA design studio and other corporate activities, including capital spending on our information system
infrastructure.

Off-Balance Sheet Arrangements

Vince Holding Corp. did not have any relationships with unconsolidated organizations or financial
partnerships, such as structured finance or special purpose entities, that would have been established for the
purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes during
the periods presented herein.

Contractual Obligations

The following table summarizes our contractual obligations as of January 31, 2015 and the effect such

obligations are expected to have on our liquidity and cash flows in future periods:

(In thousands)

Operating lease obligations . . . . . . . . . . . . . . . . . . . . . .
Unrecognized tax benefits (2)
Long-term debt obligations . . . . . . . . . . . . . . . . . . . . . .
Interest on long-term debt (3) . . . . . . . . . . . . . . . . . . . .
Tax Receivable Agreement (4) . . . . . . . . . . . . . . . . . . .

Future payments due by period (1)

Less than
1 Year

1 to 3 years

3 to 5 years

More than
5 Years

Total

$15,593

$35,789

$ 35,169

$63,516

$150,067

—
—
22,869

—
—
—

88,000
—
—

—
—
—

88,000
—
168,932

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$38,462

$35,789

$123,169

$63,516

$406,999

(1) Vince, LLC has entered into the Shared Services Agreement with Kellwood Company, LLC pursuant to

which Kellwood provides support services in various operational areas including, among other things,
distribution, information technology and back office support (as described in “Certain Relationships and
Related Party Transactions—Shared Services Agreement”). We have excluded the amounts due under such
agreement from the table herein as we cannot precisely estimate the future payments to be made thereunder
and timing thereof. However, we currently expect to pay between $7.0 million to $9.0 million on an
annualized basis for services provided by Kellwood under the Shared Services Agreement.

(2) As of January 31, 2015, we have recorded $4.5 million of unrecognized tax benefits, excluding interest and
penalties. We are unable to make reliable estimates of cash flows by period due to the inherent uncertainty
surrounding the effective settlement of these positions.

(3) The Term Loan Facility has interest payable at LIBOR (subject to a 1.00% floor) plus 4.75% or the base rate

(subject to a 2% floor) plus 3.75%. The weighted average interest rate on the borrowings under the
Revolving Credit Facility as of January 31, 2015 was 2.1%.

(4) Vince Holding Corp. entered into the Tax Receivable Agreement with the Pre-IPO Stockholders (as

described in “Shared Services Agreement” under Note 15 to the Consolidated Financial Statements in this
annual report on Form 10-K.) We cannot, however, reliably estimate in which future periods these amounts
would become due, other than those amounts expected to be paid within one year. The amount set forth in
the “Total” column represents the remaining obligation as of January 31, 2015 under the Tax Receivable
Agreement.

Inflation

While inflation may impact our sales, cost of goods sold and expenses, we believe the effects of inflation on
our results of operations and financial condition are not significant. While it is difficult to accurately measure the
impact of inflation, management believes it has not been significant and cannot provide any assurances that our
results of operations and financial condition will not be materially impacted by inflation in the future.

Critical Accounting Policies

Management’s discussion and analysis of financial condition and results of operations is based upon our
consolidated financial statements, which have been prepared in accordance with accounting principles generally
accepted in the United States of America. The preparation of these financial statements requires estimates and
judgments that affect the reported amounts of our assets, liabilities, revenues and expenses. Management bases
estimates on historical experience and other assumptions it believes to be reasonable under the circumstances and
evaluates these estimates on an on-going basis. Actual results may differ from these estimates under different
assumptions or conditions.

The following critical accounting polices reflect the significant estimates and judgments used in the

preparation of our consolidated financial statements. With respect to critical accounting policies, even a relatively
minor variance between actual and expected experience can potentially have a materially favorable or
unfavorable impact on subsequent consolidated results of operations. For more information on our accounting
policies, please refer to the Notes to Consolidated Financial Statements in this annual report on Form 10-K.

Revenue Recognition

Sales are recognized when goods are shipped in accordance with customer orders for the wholesale and
e-commerce businesses, and at the time of sale to consumer for the retail business. 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. Accrued discounts, returns and allowances are included as an offset to accounts
receivable.

Accounts Receivable—Reserves for Allowances

Accounts receivable are recorded net of allowances for expected future chargebacks and margin support
from wholesale partners. It is the nature of the apparel industry that suppliers like us face significant pressure
from wholesale partners in the retail industry to provide allowances to compensate for their 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.

Accounts Receivable—Allowance for Doubtful Accounts

We maintain an allowance for doubtful accounts receivable for estimated losses resulting from wholesale
partners that are unable to meet their financial obligations. Our estimation of the allowance for doubtful accounts
involves consideration of the financial condition of specific customers as well as general estimates of future
collectability based on historical experience and expected future trends. The estimation of these factors involves
significant judgment. In addition, actual collection experience, and thus bad debt expense, can be significantly
impacted by the financial difficulties of as few as one customer.

Inventory Valuation

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. Our products can be classified into two types:
replenishment and non-replenishment. Replenishment items are those basics that are not highly seasonal or
dependent on fashion trends. The same products are sold by retailers 12 months a year and styles evolve slowly.
Retailers generally replenish their stocks of these items as they are sold. Only a relatively small portion of our
business involves replenishment items.

The majority of our products consist of items that are non-replenishment as a result of being tied to a season.

For these products, the selling season generally ranges from three to six months. The value of this seasonal
merchandise might be sufficient for us to generate a profit over its cost throughout the season, but after its season
a few months later the same inventory might be saleable at less than cost. The value may rise again the following
year when the season in which the goods sell approaches—or it may not, depending on the level of prior year
merchandise on the market and on year-to-year fashion changes.

The majority of out-of-season inventories may be sold to off-price retailers and other customers who serve a

customer base that will purchase prior year fashions in addition to liquidation through our Vince outlets. The
amount, if any, that these customers will pay for prior year fashions is determined by the desirability of the
inventory itself as well as the general level of prior year goods available to these customers. The assessment of
inventory value, as a result, is highly subjective and requires an assessment of the seasonality of the inventory, its
future desirability, and future price levels in the off-price sector.

Many of our products are purchased for and sold to specific customers’ orders. Others are purchased in
anticipation of selling them to a specific customer based on historical trends. The loss of a major customer,
whether due to the customer’s financial difficulty or other reasons, could have a significant negative impact on
the value of the inventory expected to be sold to that customer. This negative impact can also extend to purchase
obligations for goods that have not yet been received. These obligations involve product to be received into
inventory over the next one to six months.

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.

Fair Value Assessments of 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 2014, fiscal 2013 and fiscal 2012.

In September 2011, the Financial Accounting Standards Board (“FASB”) issued an amendment to ASC
Topic 350 Intangibles-Goodwill and Other. Under this amendment, an entity may elect to perform a qualitative
impairment assessment for goodwill. If adverse 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 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 goodwill performed for fiscal years beginning after December 15, 2011. We adopted this
amendment during fiscal 2012.

In fiscal 2014, fiscal 2013 and fiscal 2012, we performed 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, FASB issued Accounting Standards Update No. 2012-02, Intangibles—Goodwill and Other

(Topic 350): Testing Indefinite Lived Assets for Impairment. 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 fiscal 2014, fiscal 2013 and fiscal 2012, 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.

Provision for 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 our
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.

Recent Accounting Pronouncements

For information on certain recently issued or proposed accounting standards which may impact Vince
Holding Corp., please refer to the notes to Consolidated Financial Statements in this annual report on Form 10-K.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Our principal market risk relates to interest rate sensitivity, which is the risk that changes in interest rates

will reduce our net income or net assets. Our variable rate debt consists of borrowings under the Term Loan
Facility and Revolving Credit Facility. Our current interest rate on the Term Loan Facility is based on the
Eurodollar rate (subject to a 1.00% floor) plus 4.75%. Our interest rate on the Revolving Credit Facility is based
on the Eurodollar rate or the Base Rate (as defined in the Revolving Credit Facility) with applicable margins
subject to a pricing grid based on excess availability. As of January 31, 2015, a one percentage point increase in
the interest rate on our variable rate debt would result in additional interest expense of approximately $0.9
million for the $88.0 million borrowings outstanding under the Term Loan Facility and Revolving Credit Facility
as of such date, calculated on an annual basis.

We do not believe that foreign currency risk, commodity price or inflation risks are expected to be material
to our business or our consolidated financial position, results of operations or cash flows. Substantially all of our
foreign sales and purchases are made in U.S. dollars.

ITEM 8.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

See “Index to Financial Statements,” which is located on page F-1 appearing at the end of this annual report

on Form 10-K.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.

None.

ITEM 9A. CONTROLS AND PROCEDURES.

Disclosure Controls and Procedures

Attached as exhibits to this Annual Report on Form 10-K are certifications of our Chief Executive Officer
and Chief Financial Officer. Rule 13a-14 of the Exchange Act requires that we include these certifications with
this report. This Controls and Procedures section includes information concerning the disclosure controls and
procedures referred to in the certifications. You should read this section in conjunction with the certifications.

Under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer,

management has evaluated the effectiveness of the design and operation of our disclosure controls and
procedures (as defined in Rules 13a-15(e) or 15d-15(e) of the Exchange Act) as of January 31, 2015.

We evaluate the effectiveness of our disclosure controls and procedures on at least a quarterly basis. Based
upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls

and procedures are effective to ensure information is recorded, processed, summarized and reported within the
periods specified in the Securities and Exchange Commission’s rules and forms and to provide reasonable assurance
that such information is accumulated and communicated to our management, including our Chief Executive Officer
and Chief Financial Officer as appropriate, to allow timely decisions regarding required disclosure.

Limitations on the Effectiveness of Disclosure Controls and Procedures

In designing and evaluating our disclosure controls and procedures, we recognized that disclosure controls

and procedures, no matter how well conceived and well operated, can provide only reasonable, not absolute,
assurance that the objectives of the disclosure controls and procedures are met. Additionally, in designing
disclosure controls and procedures, our management necessarily was required to apply its judgment in evaluating
the cost-benefit relationship of possible disclosure controls and procedures. We have also designed our disclosure
controls and procedures based in part upon assumptions about the likelihood of future events, and there can be no
assurance that any design will succeed in achieving its stated goals under all potential future conditions.

Changes in Internal Control Over Financial Reporting

There was no change in our internal control over financial reporting that occurred during our latest fiscal
quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial
reporting.

Management’s Annual Report on Internal Control Over Financial Reporting

Management, including our Chief Executive Officer and Chief Financial Officer, is responsible for

establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) and
15d-15(f) under the Exchange Act). Our internal control over financial reporting is a process to provide
reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with generally accepted accounting principles. Our internal control over
financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in
reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (ii) provide
reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles, and that our receipts and expenditures are being made
only in accordance with authorizations of our management and directors; and (iii) provide reasonable assurance
regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could
have a material effect on our financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect
misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance
with respect to financial statement preparation and presentation. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in
conditions or that the degree of compliance with the policies or procedures may deteriorate.

Management assessed the effectiveness of our internal control over financial reporting as of January 31,
2015. In making this assessment, management used the criteria established by the Committee of Sponsoring
Organizations of the Treadway Commission (“COSO”) in Internal Control-Integrated Framework (2013). Based
on this assessment, management has concluded that, as of January 31, 2015, our internal control over financial
reporting was effective, at a reasonable assurance level.

Because we are an emerging growth company under the JOBS Act, this Annual Report on Form 10-K does

not include an attestation report of our independent registered public accounting firm.

ITEM 9B. OTHER INFORMATION.

None.

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.

The information required by this Item is incorporated herein by reference from the Company’s definitive
proxy statement to be filed with the Securities and Exchange Commission in connection with the registrant’s
2015 annual meeting of stockholders.

ITEM 11. EXECUTIVE COMPENSATION.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
AND RELATED STOCKHOLDERS MATTERS.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

Part IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.

(a) Financial Statements and Financial statement Schedules. See “Index to the Audited Consolidated

Financial Statements” which is located on F-1 of this annual report on Form 10-K.

(b) Exhibits. See the exhibit index which is included herein.

Exhibit Listing:

Exhibit
Number

Exhibit Description

3.1

3.2

4.1

4.2

10.1

10.2

10.3

10.4

10.5

Amended & Restated Certificate of Incorporation of Vince Holding Corp. (incorporated by reference
to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the Securities Exchange
Commission on November 27, 2013)

Amended & Restated Bylaws of Vince Holding Corp. (incorporated by reference to Exhibit 3.1 to
the Company’s Current Report on Form 8-K filed with the Securities Exchange Commission on
November 27, 2013)

Form of Stock certificate (incorporated by reference to Exhibit 4.1 to the Company’s Registration
Statement on Form S-1 (File No. 333-191336) filed with the Securities Exchange Commission on
November 12, 2013)

Registration Agreement, dated as of February 20, 2008, among Apparel Holding Corp., Sun
Cardinal, LLC, SCSF Cardinal, LLC and the Other Investors party thereto (incorporated by
reference to Exhibit 4.2 to the Company’s Registration Statement on Form S-1 (File No. 333-
191336) filed with the Securities Exchange Commission on September 24, 2013)

Shared Services Agreement, dated as of November 27, 2013, between Vince, LLC and Kellwood
Company, LLC (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on
Form 8-K filed with the Securities Exchange Commission on November 27, 2013)

Tax Receivable Agreement, dated as of November 27, 2013, between Vince Intermediate Holding,
LLC, the Stockholders, and Sun Cardinal, LLC as Stockholder Representative (incorporated by
reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the Securities
Exchange Commission on November 27, 2013)

Consulting Agreement, dated as of November 27, 2013, between Vince Holding Corp. and Sun
Capital Partners Management V, LLC (incorporated by reference to Exhibit 10.3 to the Company’s
Current Report on Form 8-K filed with the Securities Exchange Commission on November 27, 2013)

Credit Agreement, dated as of November 27, 2013, by and among Vince, LLC, Vince Intermediate
Holding, LLC, Bank of America, N.A., as Administrative Agent, J.P. Morgan Securities LLC, as
Syndication Agent, Bank of America, N.A., Merrill Lynch, Pierce, Fenner & Smith Incorporated and
J.P. Morgan Securities LLC, as Joint Lead Arrangers and Joint Bookrunners, and Cantor Fitzgerald
Securities, as Documentation Agent (incorporated by reference to Exhibit 10.5 to the Company’s
Current Report on Form 8-K filed with the Securities Exchange Commission on November 27, 2013)

Credit Agreement, dated as of November 27, 2013, by and among Vince, LLC, the guarantors party
thereto, Bank of America, N.A., as Agent, the other lenders party thereto and Merrill Lynch, Pierce,
Fenner & Smith Incorporated, as Sole Lead Arranger and Sole Book Runner ( incorporated by
reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed with the Securities
Exchange Commission on November 27, 2013 )

Exhibit
Number

10.6†

10.7†

10.8†

10.9†

10.10†

10.11†

10.12†

10.13†

10.14†

10.15†

10.16†

10.17†

10.18†

Exhibit Description

Employment Agreement, dated as of May 4, 2012, between Jill Granoff and Kellwood Company
(incorporated by reference to Exhibit 10.48 to the Company’s Registration Statement on Form S-1
(File No. 333-191336) filed with the Securities Exchange Commission on September 24, 2013)

Amendment to Employment Agreement, dated as of December 30, 2012, between Jill Granoff and
Kellwood Company (incorporated by reference to Exhibit 10.49 to the Company’s Registration
Statement on Form S-1 (File No. 333-191336) filed with the Securities Exchange Commission on
September 24, 2013)

Amendment No. 2 to Employment Agreement, dated as of September 24, 2013, between Jill Granoff
and Kellwood Company (incorporated by reference to Exhibit 10.50 to the Company’s Registration
Statement on Form S-1 (File No. 333-191336) filed with the Securities Exchange Commission on
September 24, 2013)

Debt Recovery Bonus Side Letter Agreement, dated June 11, 2013, between Jill Granoff and
Kellwood Company (incorporated by reference to Exhibit 10.51 to the Company’s Registration
Statement on Form S-1 (File No. 333-191336) filed with the Securities Exchange Commission on
September 24, 2013)

Employment Agreement, dated March 2013, between Karin Gregersen and Vince, LLC
(incorporated by reference to Exhibit 10.51 to the Company’s Annual Report on Form 10-K filed on
April 4, 2014)

Employment Agreement, dated April 5 2013, between Michele Sizemore and Vince, LLC
(incorporated by reference to Exhibit 10.52 to the Company’s Annual Report on Form 10-K filed on
April 4, 2014)

Employment Agreement, dated September 25, 2013, between Jay Dubiner and Vince, LLC
(incorporated by reference to Exhibit 10.53 to the Company’s Annual Report on Form 10-K filed on
April 4, 2014)

Employment Agreement, dated November 21, 2014, between Melissa Wallace and Vince Holding
Corp.

Assignment and Assumption Agreement, dated as of November 27, 2013, by and among Kellwood
Company, LLC, Apparel Holding Corp. and Jill Granoff (incorporated by reference to Exhibit 10.55
to the Company’s Annual Report on Form 10-K filed on April 4, 2014)

Employment Offer Letter, dated as of November 2, 2012, between Lisa Klinger and Kellwood
Company (incorporated by reference to Exhibit 10.52 to the Company’s Registration Statement on
Form S-1 (File No. 333-191336) filed with the Securities Exchange Commission on September 24,
2013)

Assignment and Assumption Agreement, dated as of November 27, 2013, by and between Kellwood
Company, LLC and Apparel Holding Corp. (incorporated by reference to Exhibit 10.57 to the
Company’s Annual Report on Form 10-K filed on April 4, 2014)

2010 Stock Option Plan of Kellwood Company (incorporated by reference to Exhibit 10.56 to the
Company’s Registration Statement on Form S-1 (File No. 333-191336) filed with the Securities
Exchange Commission on September 24, 2013)

Form of 2010 Stock Option Plan grant agreement for executive officers (incorporated by reference to
Exhibit 10.57 to the Company’s Registration Statement on Form S-1 (File No. 333-191336) filed with
the Securities Exchange Commission on September 24, 2013)

Exhibit
Number

10.19†

10.20†

10.21†

10.22†

10.23†

10.24†

10.25†

10.26†

10.27†

10.28†

10.29†

10.30†

21.1

23.1

31.1

31.2

Exhibit Description

2010 Stock Plan of Kellwood Company Grant Agreement, dated as of May 4, 2012, by and between
Kellwood Company and Jill Granoff (incorporated by reference to Exhibit 10.43 to the Company’s
Registration Statement on Form S-1 (File No. 333-191336) filed with the Securities Exchange
Commission on September 24, 2013)

Amendment to Grant Agreement, between Kellwood Company and Jill Granoff (incorporated by
reference to Exhibit 10.59 to the Company’s Registration Statement on Form S-1 (File No. 333-
191336) filed with the Securities Exchange Commission on September 24, 2013)

First Amendment to Grant Agreement, dated December 30, 2012, between Kellwood Company and
Jill Granoff ( incorporated by reference to Exhibit 10.60 to the Company’s Registration Statement on
Form S-1 (File No. 333-191336) filed with the Securities Exchange Commission on September 24,
2013 )

Second Amendment to Grant Agreement, dated November 26, 2013, between Kellwood Company
and Jill Granoff (incorporated by reference to Exhibit 10.12 to the Company’s Current Report on
Form 8-K filed with the Securities Exchange Commission on November 27, 2013)

2010 Stock Plan of Kellwood Company Grant Agreement, dated as of December 10, 2012, by and
between Kellwood Company and Lisa Klinger (incorporated by reference to Exhibit 10.61 to the
Company’s Registration Statement on Form S-1 (File No. 333-191336) filed with the Securities
Exchange Commission on September 24, 2013)

First Amendment to Grant Agreement, dated November 26, 2013, between Kellwood Company and
Lisa Klinger (incorporated by reference to Exhibit 10.13 to the Company’s Current Report on Form
8-K filed with the Securities Exchange Commission on November 27, 2013)

Form of Indemnification Agreement (for directors and officers affiliated with Sun Capital Partners)
(incorporated by reference to Exhibit 10.6 to the Company’s Current Report on Form 8-K filed on
November 27, 2013)

Form of Indemnification Agreement (for directors and officers not affiliated with Sun Capital
Partners) (incorporated by reference to Exhibit 10.7 to the Company’s Current Report on Form 8-K
filed on November 27, 2013)

Vince Holding Corp. 2013 Incentive Plan (incorporated by reference to Exhibit 10.66 to the
Company’s Registration Statement on Form S-1 (File No. (333-191336) filed with the Securities
Exchange Commission on November 12, 2013)

Form of Non-Qualified Stock Option Agreement (incorporated by reference to Exhibit 10.15 to the
Company’s Current Report on Form 8-K filed on November 27, 2013)

Form of Restricted Stock Unit Agreement (incorporated by reference to Exhibit 10.16 to the
Company’s Current Report on Form 8-K filed on November 27, 2013)

Form of Vince Holding Corp. 2013 Employee Stock Purchase Plan (incorporated by reference to
Exhibit 10.67 to the Company’s Registration Statement on Form S-1 (File No. (333-191336) filed
with the Securities Exchange Commission on November 12, 2013)

List of subsidiaries of Vince Holding Corp. (incorporated by reference to Exhibit 21.1 to the
Company’s Annual Report on Form 10-K filed on April 4, 2014)

Consent of PricewaterhouseCoopers LLP

CEO Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

CFO Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Exhibit
Number

32.1

32.2

Exhibit Description

CEO Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002

CFO Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002

101

Financial Statements in XBRL Format

† Indicates exhibits that constitute management contracts or compensatory plans or arrangements

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the

registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

VINCE HOLDING CORP.

By:

/s/ Jill Granoff

Name: Jill Granoff
Title: Chairman and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been

signed by the following persons in the capacities and on the dates listed.

Signature

Title

Date

/s/ Jill Granoff
Jill Granoff

/s/ Lisa Klinger

Lisa Klinger

/s/ Jonathan H. Borell

Jonathan H. Borell

/s/ Robert A. Bowman

Robert A. Bowman

/s/ Mark E. Brody

Mark E. Brody

/s/ Jerome Griffith

Jerome Griffith

/s/ Marc J. Leder

Marc J. Leder

/s/ Steven M. Liff

Steven M. Liff

/s/ Eugenia Ulasewicz

Eugenia Ulasewicz

Chairman and Chief Executive
Officer (principal executive officer)

March 27, 2015

Chief Financial Officer and
Treasurer (principal financial and
accounting officer)

Director

INDEX TO THE AUDITED CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Financial Statements

Report of PricewaterhouseCoopers LLP, Independent Registered Public Accounting Firm on

Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Balance Sheets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Statements of Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Statements of Comprehensive Income (Loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Statements of Stockholders’ Equity (Deficit) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Statements of Cash Flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F-2
F-3
F-4
F-5
F-6
F-7
F-9

Financial Statement Schedules

Schedule II—Valuation and Qualifying Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-39

F-1

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of Vince Holding Corp.:

In our opinion, the consolidated financial statements listed in the accompanying index present fairly, in all
material respects, the financial position of Vince Holding Corp. and its subsidiaries at January 31, 2015 and
February 1, 2014, and the results of their operations and their cash flows for each of the three years in the period
ended January 31, 2015 in conformity with accounting principles generally accepted in the United States of
America. In addition, in our opinion, the financial statement schedule listed in the accompanying index presents
fairly, in all material respects, the information set forth therein when read in conjunction with the related
consolidated financial statements. These financial statements and financial statement schedule are the
responsibility of the Company’s management. Our responsibility is to express an opinion on these financial
statements and financial statement schedule based on our audits. We conducted our audits of these statements in
accordance with the standards of the Public Company Accounting Oversight Board (United States). Those
standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the accounting principles used and significant
estimates made by management, and evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

/s/ PricewaterhouseCoopers LLP
New York, New York
March 27, 2015

F-2

VINCE HOLDING CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)

January 31,
2015

February 1,
2014

Assets
Current assets:

Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trade receivables, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inventories, net
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prepaid expenses and other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Property, plant and equipment:

Building and improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Machinery and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capitalized software . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Construction in process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less: accumulated depreciation and amortization . . . . . . . . . . . . . . . . . . . . .

112
33,797
37,419
9,812

81,140

27,645
5,384
1,341
3,369

37,739
(9,390)

Property, plant and equipment, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Intangible assets, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Goodwill
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred income taxes and other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

28,349
109,644
63,746
99,319

21,484
40,198
33,956
8,093

103,731

15,355
2,439
630
1,200

19,624
(6,009)

13,615
110,243
63,746
123,007

Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 382,198

$ 414,342

Liabilities and Stockholders’ Equity
Current liabilities:

Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued salaries and employee benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term debt
Deferred rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

29,118
7,380
27,992

64,490
88,000
11,676
146,063

23,847
5,425
9,061

38,333
170,000
3,443
169,015

Commitments and contingencies (Note 13)

Stockholders’ equity:

Common stock at $0.01 par value (100,000,000 shares authorized, 36,748,245

and 36,723,727 shares issued and outstanding at January 31, 2015 and
February 1, 2014, respectively) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Additional paid-in capital
Accumulated deficit
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accumulated other comprehensive loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

367
1,011,244
(939,577)
(65)

367
1,008,549
(975,300)
(65)

Total stockholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

71,969

33,551

Total liabilities and stockholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 382,198

$ 414,342

See accompanying notes to Consolidated Financial Statements.

F-3

VINCE HOLDING CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data and share amounts)

Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cost of products sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Selling, general and administrative expenses . . . . . . . . . . . . . . . . . . .

Income from operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense, net
Other expense, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Income (loss) before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provision for income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Net income (loss) from continuing operations . . . . . . . . . . . . . . . . . .
Net loss from discontinued operations, net of tax . . . . . . . . . . . . . . . .

Net income (loss)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Basic earnings (loss) per share:

Basic earnings (loss) per share from continuing operations . . . .
Basic loss per share from discontinued operations . . . . . . . . . . .

Basic earnings (loss) per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Diluted earnings (loss) per share:

Diluted earnings (loss) per share from continuing operations . .
Diluted loss per share from discontinued operations . . . . . . . . .

Diluted earnings (loss) per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Weighted average shares outstanding:
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2014

340,396
173,567

166,829
96,579

70,250
9,698
835

59,717
23,994

35,723
—

35,723

0.97
—

0.97

0.93
—

0.93

Fiscal Year

2013

288,170
155,154

133,016
83,663

49,353
18,011
679

30,663
7,268

23,395
(50,815)

2012

240,352
132,156

108,196
67,260

40,936
68,684
769

(28,517)
1,178

(29,695)
(78,014)

(27,420) $ (107,709)

0.83
(1.81)

(0.98) $

0.83
(1.81)

(0.98) $

(1.13)
(2.98)

(4.11)

(1.13)
(2.98)

(4.11)

36,730,490
38,244,906

28,119,794
28,272,925

26,211,130
26,211,130

See accompanying notes to Consolidated Financial Statements.

F-4

VINCE HOLDING CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(In thousands)

Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency translation adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$35,723
—

$(27,420) $(107,709)
(3)

Comprehensive income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$35,723

$(27,419) $(107,712)

Fiscal Year

2014

2013

2012

See accompanying notes to Consolidated Financial Statements

F-5

VINCE HOLDING CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)
(In thousands, except share amounts)

Common Stock

Number of
Shares
Outstanding

Par
Value

Additional
Paid-In Capital

Accumulated
Deficit

Accumulated
Other
Comprehensive
Loss

Total
Stockholders’
Equity (Deficit)

Balance as of January 28, 2012 . . . . . . 26,211,130 $262 $
Comprehensive loss:

96,951

$(840,171)

$ (63)

$(743,021)

— —

—

(107,709)

—

(107,709)

— —
— —

—
367

—
—

—

(3)

—

(3)
367

289,101

386,419

(947,880)

(66)

(561,265)

(27,420)

—

(27,420)

Net loss . . . . . . . . . . . . . . . . . . . . .
Foreign currency translation

adjustment

. . . . . . . . . . . . . . . . .
Share-based compensation expense . . . .
Capital contribution from

stockholders . . . . . . . . . . . . . . . . . . . .

— —

289,101

Balance as of February 2, 2013 . . . . . . 26,211,130 262
Comprehensive loss:

Net loss . . . . . . . . . . . . . . . . . . . . .
Foreign currency translation

— —

adjustment

. . . . . . . . . . . . . . . . .

— —

Common stock issuance, net of certain

costs . . . . . . . . . . . . . . . . . . . . . . . . . . 10,000,000 100

Share-based compensation expense . . . .
Exercise of stock options . . . . . . . . . . . .
Capital contribution from

— —

512,597

—

185,900
898
37

stockholders . . . . . . . . . . . . . . . . . . . .

— —

407,527

Recognition of certain deferred tax

assets, net . . . . . . . . . . . . . . . . . . . . . .

— —

127,833

Recognition of tax receivable

agreement obligation . . . . . . . . . . . . .
Separation of non-Vince businesses and

settlement of Kellwood Note
Receivable . . . . . . . . . . . . . . . . . . . . .

— —

(173,146)

— —

73,081

Balance as of February 1, 2014 . . . . . . 36,723,727 367
Comprehensive income:

1,008,549

(975,300)

Net income . . . . . . . . . . . . . . . . . . .
Share-based compensation expense . . . .
Exercise of stock options . . . . . . . . . . . .
Restricted stock unit vesting . . . . . . . . .
Tax receivable agreement obligation

— —
— —
22,018 —
2,500 —

—
1,896
175
—

35,723
—
—
—

adjustment

. . . . . . . . . . . . . . . . . . . . .

— —

624

—

Balance as of January 31, 2015 . . . . . . 36,748,245 $367 $1,011,244

$(939,577)

$ (65)

$ 71,969

See accompanying notes to Consolidated Financial Statements.

F-6

—

—
—
—

—

—
—
—

—

(65)

—
—
—
—

—

186,000
898
42

407,527

127,833

(173,146)

73,081

33,551

35,723
1,896
175
—

624

VINCE HOLDING CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)

Operating activities
Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less: Net loss from discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Add (deduct) items not affecting operating cash flows:

Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of deferred financing costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of deferred rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Share-based compensation expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capitalized PIK Interest
Loss on disposal of property, plant and equipment
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Changes in assets and liabilities: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Receivable, net
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inventories, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prepaid expenses and other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounts payable and accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other assets and liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Net cash provided by operating activities—continuing operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash used in operating activities—discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Net cash provided by/(used in) operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Investing activities

Fiscal Year

2014

2013

2012

$ 35,723
—

$ (27,420) $(107,709)
(78,014)

(50,815)

4,668
599
1,532
3,045
23,248
1,896
—
—

6,401
(3,463)
2,809
3,066
742

80,266
—

80,266

2,186
599
178
465
7,225
347
15,883
262

(6,265)
(15,069)
1,681
3,235
(156)

33,966
(54,667)

1,411
598
—
426
1,147
—
68,684
—

(7,459)
(8,360)
(2,455)
17,208
(131)

41,374
(67,408)

(20,701)

(26,034)

Payments for capital expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payments for contingent purchase price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Net cash used in investing activities—continuing operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash (used in)/provided by investing activities—discontinued operations . . . . . . . . . . . . . . . . . . . .

(19,699)
—

(10,073)
—

(10,073)
(5,936)

(1,821)
(806)

(2,627)
20,088

Net cash (used in)/provided by investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(19,699)

(16,009)

17,461

Financing activities

Proceeds from borrowings under the Revolving Credit Facility . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payments for Revolving Credit Facility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from borrowings under the Term Loan Facility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payments for Term Loan Facility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payment for Kellwood Note Receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fees paid for Term Loan Facility and Revolving Credit Facility . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from common stock issuance, net of certain transaction costs . . . . . . . . . . . . . . . . . . . . .
Stock option exercise . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

50,500
(27,500)
—

(105,000)

—
(114)
—
175

—
—

175,000
(5,000)
(341,500)
(5,146)
186,000
42

Net cash (used in)/provided by financing activities—continuing operations . . . . . . . . . . . . . . . . . . . . . .
Net cash provided by financing activities—discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(81,939)
—

Net cash (used in)/provided by financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(81,939)

(Decrease) increase in cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash and cash equivalents, beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(21,372)
21,484

Cash and cash equivalents, end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less: Cash and cash equivalents of discontinued operations, end of period . . . . . . . . . . . . . . . . . . . . . .

Cash and cash equivalents of continuing operations, end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

112
—

112

See accompanying notes to Consolidated Financial Statements

F-7

—
—
—
—
—
—
—
—

—
8,615

8,615

42
1,839

1,881
(1,564)

9,396
46,917

56,313

19,603
1,881

21,484
—

$ 21,484

317

VINCE HOLDING CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)

Fiscal Year

2014

2013

2012

Supplemental Disclosures of Cash Flow Information, continuing

operations

Cash payments on TRA obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash payments for interest
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash payments for income taxes, net of refunds . . . . . . . . . . . . . . . . . . . . . . . . .
Supplemental Disclosures of Cash Flow Information, discontinued

$3,199
8,737
88

— $

1,018
31

—
—
18

operations

Cash payments for interest
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash payments for income taxes, net of refunds . . . . . . . . . . . . . . . . . . . . . . . . .
Supplemental Disclosures of Non-Cash Investing and Financing Activities
Capital expenditures in accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Forgiveness of principal and capitalized and accrued interest on related-party

debt

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capital contribution from stockholder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Supplemental Disclosures of Non-Cash Investing and Financing

Activities, discontinued operations

—
—

452

—
—

20,644
566

30,454
882

222

160

(407,527)
407,527

(289,101)
289,101

Accrued adjustment to sale proceeds from disposed business . . . . . . . . . . . . . .

—

221

See accompanying notes to Consolidated Financial Statements

F-8

VINCE HOLDING CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except per share data and share amounts)

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 31, 2015 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, men’s and children’s apparel, women’s and men’s footwear, and handbags. We reach our customers
through a variety of channels, specifically through premier 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.

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 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;

• References to “fiscal year 2012” or “fiscal 2012” refer to the fiscal year ended February 2, 2013.

Fiscal years 2014 and 2013 consisted of a 52-week period and fiscal year 2012 consisted of a 53-week

period.

F-9

(D) 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, accounting for income taxes and related uncertain
tax positions and valuation of share-based compensation, among others.

(E) 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 2014, fiscal 2013, or fiscal 2012.

(F) 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).

Balance, beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provisions for bad debt expense . . . . . . . . . . . . . . . . . . . . . . . . . .
Bad debts written off . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 353
168
(142)

$ 279
249
(175)

$ 450
314
(485)

Balance, end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 379

$ 353

$ 279

2014

2013

2012

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. Account balances are charged off against the allowance when we believe 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 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

F-10

operations. These sales represented 19.8%, 12.8% and 12.8% of fiscal 2013 net sales. In fiscal 2012, sales to
three wholesale partners each accounted for more than ten percent of our net sales from continuing operations.
These sales represented 21.4%, 15.5% and 14.3% of fiscal 2012 net sales.

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. In fiscal 2013, accounts receivable from three wholesale partners
each accounted for more than ten percent of our gross accounts receivable in continuing operations. These
receivables represented 25.7%, 24.8% and 13.4% of fiscal 2013 gross accounts receivable.

(G) 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 31,
2015

February 1,
2014

Finished goods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Work in process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Raw materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$37,395
—
24

Total inventories, net

. . . . . . . . . . . . . . . . . . . . . . . . . . .

37,419

$32,946
98
912

33,956

Net of reserves of: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 6,471

$ 3,929

(H) 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.
Depreciation expense related to continuing operations was $4,668, $2,186 and $1,411 for fiscal 2014, 2013 and
2012, respectively.

(I) 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 impairment charges for continuing operations related to long-lived
assets recorded in fiscal 2014, fiscal 2013 or fiscal 2012.

(J) 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
2014, fiscal 2013 and fiscal 2012. 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

F-11

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 an asset by asset 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 fiscal 2014, 2013 and fiscal 2012, we performed 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.

In fiscal 2014, 2013 and fiscal 2012, 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

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 for more information on the details surrounding goodwill and intangible assets.

F-12

(K) 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.

(L) 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.

(M) Revenue Recognition: Sales are recognized when goods are shipped in accordance with customer

orders for our wholesale business and e-commerce businesses, and at the time of sale to the consumer for our
retail business. 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).

Balance, beginning of year . . . . . . . . . . . . . . . . . . . . . . .
Provision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Utilization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 9,265
54,467
(47,634)

$ 7,179
39,171
(37,085)

$ 4,347
29,400
(26,568)

Balance, end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 16,098

$ 9,265

$ 7,179

2014

2013

2012

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.

(N) 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 as charged by
Kellwood Company, LLC as part of the Shared Services Agreement; and

shrink and valuation reserves.

(O) 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.

F-13

Marketing and advertising expense recorded in selling, general and administrative expenses for continuing
operations was $7,427, $4,858, and $2,591 in fiscal 2014, 2013 and 2012, respectively. At January 31, 2015 and
February 1, 2014, deferred production expenses associated with company-directed advertising were $643 and
$305, respectively.

(P) 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.

(Q) 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.

(R) Recent Accounting Pronouncements

In January 2015, the Financial Accounting Standards Board (“FASB”) issued ASU 2015-01, Income
Statement-Extraordinary and Unusual Items—Simplifying Income Statement Presentation by Eliminating the
Concept of Extraordinary Items. ASU 2015-01 eliminates from GAAP the concept of extraordinary items. ASU
2015-01 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15,
2015, with early adoption permitted. The standard primarily involves presentation and disclosure and, therefore,
is not expected to have a material impact on our financial position and results of operations.

F-14

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 remain 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);

F-15

•

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 provides for a revolving line of credit of up to $50,000;

• 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;

•

Shared Services Agreement—Vince, LLC entered into the Shared Services Agreement with Kellwood
Company, LLC pursuant to which Kellwood Company, LLC provides 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.

F-16

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 is $175,000 outstanding under
our new Term Loan Facility.

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. Other than the
payments for services provided under this agreement, we do not expect any future cash flows related to the non-
Vince business.

F-17

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 years ended February 1, 2014 and February 2, 2013
are summarized in the following table (in thousands).

Fiscal Year

2013

2012

Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cost of products sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$400,848
313,620

$514,806
409,763

Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Selling, general and administrative expenses . . . . . . . . . . . . . . . . . .
Restructuring, environmental and other charges . . . . . . . . . . . . . . . .
Impairment of long-lived assets . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Change in fair value of contingent consideration . . . . . . . . . . . . . . .
Interest expense, net
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other expense, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

87,228
98,016
1,628
1,399
1,473
46,677
498

Loss before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(62,463)
(11,648)

105,043
132,871
5,732
6,497
(7,162)
55,316
(9,776)

(78,435)
(421)

Net loss from discontinued operations, net of taxes . . . . . . . . . . . . .

$ (50,815)

$ (78,014)

Effective tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

18.6%

0.5%

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.

The fiscal 2012 effective tax rate for discontinued operations differ from the U.S. statutory rate of 35%

primarily due to a full valuation allowance on current year deferred tax assets offset in part by state taxes.

At February 1, 2014, there are no remaining assets or liabilities of the non-Vince businesses reflected in the

consolidated balance sheet.

Financing arrangements of the non-Vince business

Short-term borrowings represent borrowings under the Wells Fargo Facility (as defined herein), as amended.

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

F-18

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.

F-19

Note 4. Goodwill and Intangible Assets

Goodwill balances and changes therein subsequent to the February 2, 2013 Consolidated Balance Sheet are

as follows (in thousands).

Gross Goodwill

Accumulated
Impairment

Net Goodwill

Balance as of February 2, 2013 . . . . . . . . . . .

$110,688

$(46,942)

$63,746

Balance as of February 1, 2014 . . . . . . . . . . .

$110,688

$(46,942)

$63,746

Balance as of January 31, 2015 . . . . . . . . . . .

$110,688

$(46,942)

$63,746

Identifiable intangible assets summary (in thousands):

Gross Amount

Accumulated
Amortization

Net Book
Value

Balance as of February 1, 2014:
Amortizable intangible assets:

Customer relationships . . . . . . . . . . . . . . . . .

$ 11,970

$(3,577)

8,393

Indefinite-lived intangible assets:

Trademarks . . . . . . . . . . . . . . . . . . . . . . . . . .

101,850

—

101,850

Total intangible assets . . . . . . . . . . . . . . . . . . . . .

$113,820

$(3,577)

$110,243

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

Amortization of identifiable intangible assets was $599, $599 and $598 for fiscal 2014, 2013 and 2012,
respectively, which is included in selling, general and administrative expenses on the Consolidated Statements of
Operations. Amortization expense for each of the fiscal years 2015 to 2019 is expected to be as follows (in
thousands).

2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total next 5 fiscal years . . . . . . . . . . . . . . . . . . . . . . . . . . .

Future
Amortization

$ 598
598
598
598
598

$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 2014, 2013 or 2012.
In fiscal 2014, 2013 and 2012, we performed 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.

F-20

Additionally, there were no impairments recorded as a result of our annual goodwill impairment test during

fiscal 2014, 2013 or 2012. In fiscal 2014, 2013 and 2012, we used a qualitative analysis to assess the goodwill
and determined that it was not more likely than not that the fair value was less than the carrying value, as allowed
by the Intangible—Goodwill and Other Topic of ASC.

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 31, 2015 or February 1, 2014. At January 31, 2015 and February 1, 2014, 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. As the Company’s debt obligation as of January 31, 2015 is
at variable rates, there is no significant difference between the fair value and carrying value of the Company’s
debt.

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.

Note 6. Financing Arrangements

Revolving Credit Facility

On November 27, 2013, Vince, LLC entered into the Revolving Credit Facility in connection with the

closing of the IPO and Restructuring Transactions. Bank of America, N.A. (“BofA”) serves as administrative
agent for this facility. The Revolving Credit Facility provides for a revolving line of credit of up to $50,000 and
matures on November 27, 2018. The Revolving Credit Facility also provides for a letter of credit sublimit of
$25,000 (plus any increase in aggregate commitments) and for an increase in aggregate commitments of up to
$20,000. Vince, LLC is the borrower and VHC and Vince Intermediate Holding, LLC (“Vince Intermediate”) are
the guarantors under the new Revolving Credit Facility. Interest is payable on the loans under the Revolving
Credit Facility, at either the LIBOR or the Base Rate, in each case, with applicable margins subject to a pricing
grid based on an 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.

F-21

The Revolving Credit Facility contains a requirement that, at any point when “Excess Availability” is less

than the greater of (i) 15% percent of the loan cap or (ii) $7,500, and continuing until Excess Availability
exceeds the greater of such amounts for 30 consecutive days, during which time, Vince must maintain a
consolidated EBITDA (as defined in the Revolving Credit Facility) equal to or greater than $20,000. We have not
been subject to this maintenance requirement since Excess Availability has been 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 aggregate lending commitments and $7,500 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 1.1 to 1.0 (provided that the Consolidated Fixed Charge Coverage Ratio
may be less than 1.1 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 aggregate lending commitments
and $10,000).

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%. There were no borrowings outstanding under the Revolving
Credit Facility as of February 1, 2014.

Note 7. Long-Term Debt

Long-term debt consisted of the following as of, January 31, 2015 and February 1, 2014 (in thousands).

Term Loan Facility . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Revolving Credit Facility . . . . . . . . . . . . . . . . . . . . . . . .

$65,000
23,000

$170,000
—

Total long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$88,000

$170,000

January 31,
2015

February 1,
2014

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. 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

F-22

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 leverage ratio or (ii) the base rate applicable margin of 3.75% to 4.00% based on a 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 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. 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 31, 2015, on an inception to date basis, the Company has made voluntary prepayments
totaling $110,000 in the aggregate on the original $175,000 Term Loan Facility entered into on November 27,
2013. Of the $110,000 aggregate voluntary prepayments made to date, $105,000 was paid during fiscal 2014.
The voluntary prepayments of $105,000 made during the current fiscal year were partially funded by $23,000 of
net borrowings under the Revolving Credit Facility. As of January 31, 2015 the Company had $65,000 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.

F-23

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.

Note 8. 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 $16,161, $10,467 and $7,448 for 2014, 2013 and 2012, respectively.

The future minimum lease payments under operating leases at January 31, 2015 were as follows (in

thousands):

2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total minimum lease payments . . . . . . . . . . . . . . . . . . . . . . .

F-24

Minimum
Lease
Payments

$ 15,593
17,877
17,912
17,655
17,514
63,516
$150,067

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 anniversary 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 shall 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 for any reason cancelled, 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 31, 2015, there were 2,514,959 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 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.

F-25

Stock Options

A summary of stock option activity for fiscal 2014 is as follows:

Outstanding at February 1, 2014 . . . . . . . . . . . . . . . .
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Forfeited or expired . . . . . . . . . . . . . . . . . . . . . . . . . .

Stock Options

2,289,530
577,437
(22,018)
(118,780)

Outstanding at January 31, 2015 . . . . . . . . . . . . . . . .

2,726,169

Vested or expected to vest at January 31, 2015 . . . .
Vested and exercisable at January 31, 2015 . . . . . . .

2,726,169
653,861

Weighted
Average
Remaining
Contractual
Term
(years)

Aggregate
Intrinsic
Value

8.8

8.2

8.2
7.5

$33,367

$33,367
$11,181

Weighted
Average
Exercise
Price

$ 8.26
$32.82
$ 7.99
$14.88

$13.18

$13.18
$ 6.35

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 2014 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 31, 2015. This amount changes based on the fair market
value of the Company’s common stock. Total intrinsic value of options exercised during fiscal 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 $620.

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%. 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. Based on these assumptions used, the weighted average grant date fair value for options granted
during fiscal 2014 and for the options granted on November 21, 2013 in connection with our IPO was $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 31, 2015 there was $11,504 of unrecognized compensation costs related to stock options that

will be recognized over a remaining weighted average period of 3.3 years.

F-26

Restricted Stock Units

A summary of restricted stock unit activity for fiscal 2014 is as follows:

Nonvested restricted stock units at February 1, 2014 . . . . . . . . . . . .
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Vested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Restricted
Stock
Units

7,500
7,384
(2,500)
—

Nonvested restricted stock units at January 31, 2015 . . . . . . . . . . . .

12,384

Weighted
Average
Grant Date
Fair Value

$20.00
$30.47
$20.00
—

$26.24

The fair value of restricted stock units is based on the market price of the Company’s stock on the date of

the grant and is amortized to compensation expense on a straight-line basis over the requisite service period,
which is generally over a three year vesting period, subject to continued service and applicable conditions of the
Vince 2013 Incentive Plan.

At January 31, 2015 there was $289 of unrecognized compensation costs related to restricted stock units that

will be recognized over a remaining weighted average period of 2.4 years.

Share-Based Compensation Expense

Share-based compensation expense is recognized over the requisite service period of the each share-based

payment award and the expense is included as a component of selling, general and administrative expenses in the
Consolidated Statements of Operations. During fiscal 2014 we recognized share-based compensation expense of
$1,896 and a related tax benefit of approximately $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 approximately
$139. During fiscal year 2013, from the beginning of the fiscal year through our IPO date, and in fiscal 2012 we
recognized share-based compensation expense of $551 and $367, respectively, 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 these periods, the Company did not recognize the related tax benefit on the share-based
compensation expense.

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 31, 2015 and February 1, 2014 we had 36,748,245 and 36,723,727 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

F-27

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.

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. As fiscal year ended February 2, 2013
included a net loss, there were no dilutive securities as the impact would have been anti-dilutive.

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

outstanding:

Fiscal Year Ended

January 31,
2015

February 1,
2014

February 2,
2013

Weighted-average shares—basic . . . . . . . . . . . .
Effect of dilutive equity securities . . . . . . . . . . .

36,730,490
1,514,416

28,119,794
153,131

26,211,130

—

Weighted-average shares—diluted . . . . . . . . . . .

38,244,906

28,272,925

26,211,130

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 and February 2, 2013.

Note 12. Income Taxes

The provision for income taxes for continuing operations consists of the following (in thousands):

2014

2013

2012

Current:

Domestic:

Federal
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

759
344
—

$ —
43
—

$ —
31
—

Total current . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred:

1,103

Domestic:

Total deferred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

20,416
2,475
—

22,891

6,333
905
(13)

7,225

1,030
124
(7)

1,147

Total provision for income taxes . . . . . . . . . . . . . . . . . . . . . .

$23,994

$7,268

$1,178

F-28

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:

Statutory federal rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
State taxes, net of federal benefit
. . . . . . . . . . . . . . . . . . . . . . . . . . .
Nondeductible interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Nondeductible transaction costs . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2014

2013

2012

35.0% 35.0% (35.0)%
5.7% 9.5% 7.4%
0.0% 18.1% 84.3%
0.0% 6.7% 0.0%
(0.7)% (45.5)% (52.7)%
0.2% (0.1)% 0.1%

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

40.2% 23.7% 4.1%

Deferred income tax assets and liabilities for continuing operations consisted of the following (in thousands):

January 31,
2015

February 1,
2014

Deferred tax assets:

Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . .
Employee related costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Allowance for asset valuations . . . . . . . . . . . . . . . . . . . . . . . .
Accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net operating losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax credits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 29,935
3,503
3,172
3,933
65,111
888
90

$ 44,742
2,048
2,454
1,589
80,936
—
1,067

Total deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less: valuation allowances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

106,632
(1,074)

132,836
(1,843)

Net deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

105,558

130,993

Deferred tax liabilities:

Cancellation of debt income . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(8,876)
(493)

(9,369)

(11,095)
—

(11,095)

Net deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 96,189

$119,898

Included in:

Prepaid expenses and other current assets . . . . . . . . . . . . . . .
Deferred income taxes and other assets . . . . . . . . . . . . . . . . .

4,015
92,174

4,476
115,422

Net deferred income tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 96,189

$119,898

As of January 31, 2015, 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 2034.
The valuation allowance of $1,074 at January 31, 2015 and $1,843 at February 1, 2014, 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.

F-29

Net operating losses as of January 31, 2015 presented above do not include fiscal 2014 and 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, 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 $769 in the fiscal year
ended January 31, 2015 and decreased by $62,924 in the fiscal year ended February 1, 2014.

A reconciliation of the beginning and ending amount of unrecognized tax benefits, excluding interest and

penalties, is as follows (in thousands):

Beginning balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Increases for tax positions in current year . . . . . . . . . . . . . .
Increases for tax positions in prior years . . . . . . . . . . . . . . .
Decreases for tax positions in prior years . . . . . . . . . . . . . .
Settlements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Lapse in statute of limitations . . . . . . . . . . . . . . . . . . . . . . .
Restructuring Transactions . . . . . . . . . . . . . . . . . . . . . . . . .

2014

2013

2012

$ 3,693
2,397
135
(1,738)
—
—
—

$ 9,378
3,743
356
(4,186)
(3,022)
(102)
(2,474)

$11,057
2,199
52
(102)
(2,105)
(1,723)
—

Ending balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 4,487

$ 3,693

$ 9,378

As of January 31, 2015 and February 1, 2014, unrecognized tax benefits in the amount of $2,195 (net of tax)

and $2,155 (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 $2,054.

We include accrued interest and penalties on underpayments of income taxes in our income tax provision.

As of January 31, 2015 and February 1, 2014, we did not have any interest and penalties accrued on our
Consolidated Balance Sheets. Net interest and penalty provisions (benefit) of $0, $(232) and $600 were
recognized in our Consolidated Statements of Operations for the years ended January 31, 2015, February 1, 2014
and February 2, 2013, 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.

Note 13. Commitments and Contingencies

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.

F-30

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 premier 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 to the Consolidated

Financial Statements. 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 capitalized deferred financing costs, the
carrying values of our goodwill and unamortized trademark, debt and 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 $22,595, $16,916, and $9,907 have been excluded from the net sales totals presented
below for fiscal 2014, fiscal 2013, and fiscal 2012, 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 (in thousands).

Fiscal Year

2014

2013

2012

Net Sales:
Wholesale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Direct-to-consumer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$259,418
80,978

$229,114
59,056

$203,107
37,245

Total net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$340,396

$288,170

$240,352

Operating Income:
Wholesale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Direct-to-consumer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$100,623
14,556

$ 81,822
10,435

$ 72,913
4,465

Subtotal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unallocated expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

115,179
(44,929)

92,257
(42,904)

77,378
(36,442)

Total operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 70,250

$ 49,353

$ 40,936

Depreciation & Amortization:
Wholesale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Direct-to-consumer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unallocated corporate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total depreciation & amortization . . . . . . . . . . . . . . . . . . .

Capital Expenditures:
Wholesale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Direct-to-consumer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unallocated corporate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,962
2,950
355

5,267

2,076
8,117
9,506

1,204
1,581
—

2,785

1,832
8,241
—

915
1,094
—

2,009

459
1,362
—

Total capital expenditure . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 19,699

$ 10,073

1,821

Total Assets:
Wholesale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Direct-to-consumer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unallocated corporate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

January 31,
2015

February 1,
2014

$ 70,635
33,793
277,770

$382,198

$ 78,122
24,169
312,051

$414,342

F-31

Sales results are presented on a geographic basis below, in thousands. We predominately operate within the

U.S. and sell our products in 45 countries either directly to premier department and specialty stores, or through
distribution relationships with highly-regarded 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

2014

2013

2012

Net Sales:
Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
International . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$310,179
30,217

$265,622
22,548

$221,632
18,720

Total net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$340,396

$288,170

$240,352

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 provides 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.

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. As of January 31, 2015, we have recorded $753 in other accrued expenses to recognize amounts payable
to Kellwood under the Shared Services Agreement.

Tax Receivable Agreement

Vince Holding Corp. entered into the 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

F-32

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

F-33

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 31, 2015, our obligation under the Tax Receivable Agreement was $168,932, which has a

remaining term of nine 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 $22,869 is recorded
as a component of other accrued expenses and $146,063 as other liabilities on our Consolidated Balance Sheet as
of January 31, 2015. 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 tax benefit payment with
respect to the 2014 taxable year totaling approximately $22,869 plus accrued interest is expected to be paid in the
fourth quarter of 2015.

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

F-34

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 Chief Executive Officer

Our 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 CEO at the closing of our IPO.

Earnout Agreement

In connection with the acquisition of the Vince business, Kellwood entered into an earnout agreement with

CRL Group (former owners of the Vince business) providing for contingent earnout payments as additional
consideration for the purchase of substantially all of the assets and properties of CRL Group (the “Earnout
Agreement”). The Earnout Agreement provides for the payment of contingent annual earnout payments to CRL
Group for five periods between 2007 and 2011, with the contingent amounts earned based on the amount of net
sales and gross margin in each such period. The Earnout Agreement also provides for a cumulative contingent
payment based on the amount of net sales during the Earnout Agreement period. Kellwood made payments under
the Earnout Agreement of $806 during fiscal 2012 and no payments were made during fiscal 2014 and fiscal
2013.

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

F-35

and Sun Capital Loan Agreement (as defined in Note 7). Subsequent to 2008, Kellwood Company made
borrowings under the Sun Term Loan Agreements (as defined in Note 3) 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. 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.

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 $79, $404 and $779 for management fees to Sun Capital in other expense, net, in the
Consolidated Statements of Operations for fiscal 2014, fiscal 2013, and fiscal 2012, respectively. The remaining
fees charged to the non-Vince businesses of $1,537, and $1,668 are included within net loss from discontinued
operations in the Consolidated Statements of Operations for fiscal 2013 and fiscal 2012, respectively.

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.

F-36

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%.

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.

F-37

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.

Note 16. Quarterly Financial Information (unaudited)

Summarized quarterly financial results for fiscal 2014 and fiscal 2013 (in thousands, except per share data):

First
Quarter

Second
Quarter

Third
Quarter

Fourth
Quarter

Fiscal 2014:
Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 53,452 $ 89,326 $102,947 $94,671
45,756
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gross profit
10,527
Net income from continuing operations . . . . . . . . . . . . . . . .
—
Net loss from discontinued operations, net of tax . . . . . . . . .
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10,527
Basic earnings per share (1):

50,648
13,311
—
13,311

26,411
1,384
—
1,384

44,014
10,501
—
10,501

Basic earnings per share from continuing operations . . $
Basic loss per share from discontinued operations . . . . $ — $ — $ — $ —

0.36 $

0.04 $

0.29 $

0.29

Diluted earnings per share (1):

Diluted earnings per share from continuing

operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

0.28
Diluted loss per share from discontinued operations . . . $ — $ — $ — $ —

0.35 $

0.04 $

0.27 $

Fiscal 2013:
Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 40,363 $ 74,294 $ 85,755 $87,758
40,142
Gross profit
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8,311
Net (loss) income from continuing operations . . . . . . . . . . .
(7,729)
Net loss from discontinued operations, net of tax . . . . . . . . .
582
Net (loss) income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Basic earnings (loss) per share (1):

17,513
(9,779)
(5,330)
(15,109)

33,638
8,395
(18,929)
(10,534)

41,723
16,468
(18,827)
(2,359)

Basic (loss) earnings per share from continuing

operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Basic loss per share from discontinued operations . . . . $

(0.37) $
0.32 $
(0.21) $ (0.72) $

0.63 $
0.24
(0.72) $ (0.22)

Diluted earnings (loss) per share (1):

Diluted (loss) earnings per share from continuing

operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Diluted loss per share from discontinued operations . . . $

(0.37) $
(0.21) $

0.32 $
(0.72) $

0.62 $
0.24
(0.71) $ (0.22)

(1) 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.

F-38

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 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fiscal 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fiscal 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ (9,265)
(7,179)
(4,347)

$(54,467)
(39,171)
(29,400)

$ 47,634
37,085
26,568

$(16,098)
(9,265)
(7,179)

Allowance for Doubtful Accounts

(353)
(279)
(450)

(168)
(249)
(314)

142
175
485

(379)
(353)
(279)

Valuation Allowances on Deferred Income Taxes

(1,843)
(64,767)
$(49,933)

—
(78,855)
$(28,362)

769
141,779 (a)
$ 13,528

(1,074)
(1,843)
$(64,767)

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

F-39

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Exhibit 31.1

CEO CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
(15 U.S.C. SECTION 1350)

I, Jill Granoff, certify that:

1. I have reviewed this annual report on Form 10-K of Vince Holding Corp.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly
present in all material respects the financial condition, results of operations and cash flows of the registrant as of,
and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over
financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be
designed under our supervision, to ensure that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in
which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting
to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in accordance with generally accepted
accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report
our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation;

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred
during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual
report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control
over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal
control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of
directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over
financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process,
summarize, and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role
in the registrant’s internal control over financial reporting.

/s/ Jill Granoff
Jill Granoff
Chairman and Chief Executive Officer
(principal executive officer)

March 27, 2015

Exhibit 31.2

CFO CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
(15 U.S.C. SECTION 1350)

I, Lisa Klinger, certify that:

1. I have reviewed this annual report on Form 10-K of Vince Holding Corp.;

b) Any fraud, whether or not material, that involves management or other employees who have a significant role
in the registrant’s internal control over financial reporting.

/s/ Lisa Klinger
Lisa Klinger
Chief Financial Officer and Treasurer
(principal financial and accounting officer)

March 27, 2015

Exhibit 32.1

CERTIFICATIONS OF CHIEF EXECUTIVE OFFICER PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
(18 U.S.C. SECTION 1350)

In connection with the Annual Report of Vince Holding Corp. (the “Company”), on Form 10-K for the year
ended January 31, 2015 as filed with the Securities and Exchange Commission (the “Report”), Jill Granoff, Chief
Executive Officer of the Company, does hereby certify, pursuant to § 906 of the Sarbanes-Oxley Act of 2002 (18
U.S.C. § 1350), that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities
Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and
result of operations of the Company at the dates and for the periods indicated in the Report.

A signed original of this written statement required by Section 906, or other document authenticating,
acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of
this written statement required by Section 906, has been provided to the Company and will be retained by the
Company and furnished to the Securities and Exchange Commission or its staff upon request.

The undersigned expressly disclaims any obligation to update the foregoing certification except as required by
law.

/s/ Jill Granoff

Jill Granoff
Chairman and Chief Executive Officer
(principal executive officer)

March 27, 2015

Exhibit 32.2

CERTIFICATIONS OF CHIEF FINANCIAL OFFICER PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
(18 U.S.C. SECTION 1350)

In connection with the Annual Report of Vince Holding Corp. (the “Company”), on Form 10-K for the year
ended January 31, 2015 as filed with the Securities and Exchange Commission (the “Report”), Lisa Klinger,
Chief Financial Officer of the Company, does hereby certify, pursuant to § 906 of the Sarbanes-Oxley Act of
2002 (18 U.S.C. § 1350), that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities
Exchange Act of 1934, as amended; and

The undersigned expressly disclaims any obligation to update the foregoing certification except as required by
law.

/s/ Lisa Klinger

Lisa Klinger
Chief Financial Officer
(principal financial and accounting officer)

March 27, 2015