What:Shares of Vince Holding Corp. (NYSE: VNCE) were down 16.3% as of 10:30 a.m. Tuesday after the contemporary clothing company announced the impending departure of its CEO.
So what: Referring to a "management reorganization" in a press release Monday after the market close, Vince Holding stated CEO Jill Granoff informed the company of her decision in advance, and will remain CEO for a period to ensure a smooth transition. Relatedly, Vince Holding also announced industry veteran Livia Lee has joined the company as its senior vice president of merchandising, and will report to Ms. Granoff before ultimately succeeding her as CEO. Lee, for her part, has experience with other notable brands including Lacoste, Diesel, Ralph Lauren, Victoria's Secret, and Gap.
In addition, Vince announced chief creative officer Karin Gregersen "has decided to elave the company [...]." Vince does not intend to fill Gregersen's position for the time being.
"While this is a bittersweet decision for me," explained Granoff, "it is the right time for me to pass the reigns to the next leader. Vinceis an exceptional brand, and with a strong and seasoned team in place, the Company is well positioned to execute on the opportunities ahead and build on its legacy as one of the preeminent brands in the contemporary space today."
Now what: This isn't Vince Holding's only executive shakeup of late. The news comes less than three weeks after Vince announced then-CFO Lisa Kingler had resigned from the company, which itself helped spur at least one analyst downgrade from Bank of America from "Buy" to "Neutral." The same day, analysts at Piper Jaffray reiterated a "neutral" rating.Similarly this morning, Vince Holding stock suffered another downgrade from analysts at William Blair from "outperform" to "market perform."
It's hard to blame them; though Vince Holding did edge out analysts' estimates on the bottom line by a penny per share last quarter, revenue growth has remained elusive as sales fell 2.3% year over year. And for the current fiscal year, Wall Street expects Vince Holding revenue to climb a modest 1.1%In the end -- and even with shares of Vince Holding trading at a seemingly enticing 10 times both trailing 12-month earnings and next year's expectations, I can't get on board with the stock until the company proves it can retain a solid management team and resume profitable growth.
The article Why Vince Holding Corp. Stock Dropped Today originally appeared on Fool.com.
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