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 ☒ 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 ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, ~~or a~~ smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated ~~filer”~~filer,” “smaller reporting company,” and ~~“smaller reporting~~“emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

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 Kellwood Holding, LLC acquired the non-Vince businesses, which included Kellwood Company, LLC (“Kellwood Company” or “Kellwood”), from the Company. The Company continues to own and operate the Vince business, which includes Vince, LLC.

On November 18, 2016, Kellwood Intermediate Holding, LLC and Kellwood Company, LLC entered into a Unit Purchase Agreement with Sino Acquisition, LLC (the “Kellwood Purchaser”) whereby the Kellwood Purchaser agreed to purchase all of the outstanding equity interests of Kellwood Company, LLC. Prior to the closing, Kellwood Intermediate Holding, LLC and Kellwood Company, LLC conducted a pre-closing reorganization pursuant to which certain assets of Kellwood Company, LLC were distributed to a newly formed subsidiary of Kellwood Intermediate Holding, LLC, St. Louis Transition, LLC (“St. Louis, LLC”). The transaction closed on December 21, 2016 (the “Kellwood Sale”). St. Louis, LLC is anticipated to be wound down by or around December 2017.

This ~~report~~Quarterly Report on Form 10-Q, and any statements incorporated by reference herein, contains forward-looking statements under the Private Securities Litigation Reform Act of 1995. Forward-looking statements are indicated by words or phrases 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 results or benefits anticipated. These forward-looking statements are not guarantees of actual results, and 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 maintain adequate cash flow from operations or availability under our revolving credit facility to meet our liquidity needs (including our obligations under the Tax Receivable Agreement with the Pre-IPO Stockholders); our ability to ~~successfully complete the migration of~~continue as a going concern; our ~~systems and processes from Kellwood Company and~~ability to successfully ~~implement~~operate the ~~new~~newly implemented systems, processes and functions ~~following~~recently transitioned from Kellwood Company; our ability to remediate the ~~migration;~~identified material weaknesses in our internal control over financial reporting; our ability to regain compliance with the continued listing standards of the New York Stock Exchange; our ability to commence and complete a potential rights offering; our ability to ensure the proper operation of the distribution facility by a ~~third party~~third-party logistics provider recently transitioned from Kellwood; 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, including in connection with making inventory commitments; our ability to control the level of sales in the off-price channels; our ability to manage excess inventory in a way that will promote the long-term health of the brand; 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 plans, 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 to 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; the impact of recent turnover in the senior management team; the fact that a number of members of the management team have less than one year of tenure with the Company, and the current senior management team has not had a long period of time working together; our ability to attract and retain key personnel; commodity, raw material and other cost increases; compliance with domestic and international 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 filings, including those described in this report on Form 10-Q and our ~~2015 annual report~~2016 Annual Report on Form 10-K filed with the Securities and Exchange Commission on April ~~14, 2016~~28, 2017 (our ~~“2015~~“2016 Annual Report on Form 10-K”) under the heading “Item 1A—Risk Factors.” We intend these forward-looking statements to speak only as of the time of this report on Form 10-Q and do not undertake to update or revise them as more information becomes available, except as required by law.

	October 29,			January 30,			April 29,			January 28,
	2016			2016			2017			2017
Assets
Current assets:
Cash and cash equivalents	$	20,705		$	6,230		$	15,391		$	20,978
Trade receivables, net		16,613			9,400			20,292			10,336
Inventories, net		34,420			36,576			32,213			38,529
Prepaid expenses and other current assets		8,736			8,027			2,868			4,768
Total current assets		80,474			60,233			70,764			74,611
Property, plant and equipment, net		46,097			37,769
Property and equipment, net								42,017			42,945
Intangible assets, net		108,597			109,046			77,548			77,698
Goodwill		63,746			63,746			41,435			41,435
Deferred income taxes and other assets		97,429			92,774
Other assets								2,518			2,791
Total assets	$	396,343		$	363,568		$	234,282		$	239,480

Liabilities and Stockholders' Equity
Liabilities and Stockholders' (Deficit) Equity
Current liabilities:
Accounts payable	$	23,790		$	28,719		$	25,016		$	37,022
Accrued salaries and employee benefits		2,738			5,755			2,671			3,427
Other accrued expenses		13,226			37,174			10,739			9,992
Total current liabilities		39,754			71,648			38,426			50,441
Long-term debt		50,736			57,615			64,395			48,298
Deferred rent		16,795			14,965			16,670			16,892
Other liabilities		140,843			140,838			137,830			137,830

Commitments and contingencies (Note 8)

Stockholders' equity:
Common stock at $0.01 par value (100,000,000 shares authorized, 49,417,711 and 36,779,417 shares issued and outstanding at October 29, 2016 and January 30, 2016, respectively)		494			368
Stockholders' (deficit) equity:
Common stock at $0.01 par value (100,000,000 shares authorized, 49,433,218 and 49,427,606 shares issued and outstanding at April 29, 2017 and January 28, 2017, respectively)								494			494
Additional paid-in capital		1,082,775			1,012,677			1,083,043			1,082,727
Accumulated deficit		(934,989	)		(934,478	)		(1,106,511	)		(1,097,137	)
Accumulated other comprehensive loss		(65	)		(65	)		(65	)		(65	)
Total stockholders' equity		148,215			78,502
Total liabilities and stockholders' equity	$	396,343		$	363,568
Total stockholders' deficit								(23,039	)		(13,981	)
Total liabilities and stockholders' (deficit) equity							$	234,282		$	239,480

	Three Months Ended				Nine Months Ended					Three Months Ended
	October 29,		October 31,		October 29,			October 31,		April 29,			April 30,
	2016		2015		2016			2015		2017			2016
Net sales	$	75,973	$	80,859	$	204,320		$	220,694	$	58,045		$	67,645
Cost of products sold		38,015		40,854		110,717			129,159		32,454			39,387
Gross profit		37,958		40,005		93,603			91,535		25,591			28,258
Selling, general and administrative expenses		31,895		27,662		95,343			80,633		33,784			31,806
Income (loss) from operations		6,063		12,343		(1,740	)		10,902
Loss from operations											(8,193	)		(3,548	)
Interest expense, net		1,023		1,428		2,909			4,367		1,044			881
Other expense, net		191		899		379			1,390		1			160
Income (loss) before income taxes		4,849		10,016		(5,028	)		5,145
Loss before income taxes											(9,238	)		(4,589	)
Provision (benefit) for income taxes		1,469		4,123		(4,517	)		1,824		52			(2,665	)
Net income (loss)	$	3,380	$	5,893	$	(511	)	$	3,321
Earnings (loss) per share:
Basic earnings (loss) per share	$	0.07	$	0.16	$	(0.01	)	$	0.09
Diluted earnings (loss) per share	$	0.07	$	0.16	$	(0.01	)	$	0.09
Net loss										$	(9,290	)	$	(1,924	)
Loss per share:
Basic loss per share										$	(0.19	)	$	(0.05	)
Diluted loss per share										$	(0.19	)	$	(0.05	)
Weighted average shares outstanding:
Basic		49,287,448		36,775,443		45,419,661			36,767,770		49,428,259			38,002,774
Diluted		49,479,905		36,816,972		45,419,661			37,633,633		49,428,259			38,002,774

	Nine Months Ended
	October 29,			October 31,			For the three months ended
	2016			2015			April 29, 2017			April 30, 2016
Operating activities
Net income (loss)	$	(511	)	$	3,321
Net loss							$	(9,290	)	$	(1,924	)
Add (deduct) items not affecting operating cash flows:
Depreciation and amortization		6,203			6,240			2,415			1,902
Provision for inventories		815			17,988			—			388
Deferred rent		596			1,536			(225	)		428
Deferred income taxes		(4,710	)		2,871			—			(2,714	)
Share-based compensation expense		1,383			706			219			514
Other		456			1,268			162			129
Changes in assets and liabilities:
Receivables, net		(7,213	)		14,929			(9,956	)		(7,752	)
Inventories		1,341			(24,464	)		6,316			12,821
Prepaid expenses and other current assets		9			848			1,942			(1,414	)
Accounts payable and accrued expenses		(32,706	)		(1,904	)		(11,352	)		(34,391	)
Other assets and liabilities		185			795			18			17
Net cash (used in) provided by operating activities		(34,152	)		24,134
Net cash used in operating activities								(19,751	)		(31,996	)
Investing activities
Payments for capital expenditures		(12,677	)		(14,107	)		(1,785	)		(3,709	)
Net cash used in investing activities		(12,677	)		(14,107	)		(1,785	)		(3,709	)
Financing activities
Proceeds from borrowings under the Revolving Credit Facility		118,567			108,423			121,083			46,073
Repayment of borrowings under the Revolving Credit Facility		(125,767	)		(98,514	)		(105,147	)		(61,073	)
Repayment of borrowings under the Term Loan Facility		—			(20,000	)
Proceeds from common stock issuance, net of transaction costs		63,773			—			—			63,883
Stock option exercise and issuance of common stock under employee stock purchase plan		4,731			175
Fees paid for Term Loan Facility and Revolving Credit Facility		—			(99	)
Net cash provided by (used in) financing activities		61,304			(10,015	)
Increase in cash and cash equivalents		14,475			12
Proceeds from stock option exercises and issuance of common stock under employee stock purchase plan								13			2,155
Net cash provided by financing activities								15,949			51,038
(Decrease) increase in cash and cash equivalents								(5,587	)		15,333
Cash and cash equivalents, beginning of period		6,230			112			20,978			6,230
Cash and cash equivalents, end of period	$	20,705		$	124		$	15,391		$	21,563

Supplemental Disclosures of Cash Flow Information
Cash payments on TRA obligation	$	22,262		$	—		$	—		$	22,258
Cash payments for interest		2,107			2,945			295			924
Cash payments for income taxes, net of refunds		319			1,235			—			207
Supplemental Disclosures of Non-Cash Investing and Financing Activities
Capital expenditures in accounts payable and accrued liabilities		1,447			517			391			491

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. The Company owns and ~~(ii) the Company continues to own and operate~~operates 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 and other businesses.~~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 through their ownership of Kellwood Holding, LLC.~~businesses. The Vince business is now the sole operating business of ~~Vince~~VHC.

~~In this interim report on Form 10-Q, “Kellwood” refers, as applicable~~LLC and ~~unless otherwise defined, to any of (i) Kellwood Company, (ii)~~ Kellwood Company, LLC ~~(a limited liability company~~entered into a Unit Purchase Agreement with Sino Acquisition, LLC (the “Kellwood Purchaser”) whereby the Kellwood Purchaser agreed to purchase all of the outstanding equity interests of Kellwood Company, LLC. Prior to the closing, Kellwood Intermediate Holding, LLC and Kellwood Company, LLC conducted a pre-closing reorganization pursuant to which certain assets of Kellwood Company, ~~converted at the time~~LLC were distributed to a newly formed subsidiary of ~~the Restructuring Transactions related~~Kellwood Intermediate Holding, LLC, St. Louis Transition, LLC (“St. Louis, LLC”). The transaction closed on December 21, 2016 (the “Kellwood Sale”). St. Louis, LLC is anticipated to ~~the IPO)~~be wound down by or ~~(iii) the operations of the non-Vince businesses after giving effect to the IPO and the related Restructuring Transactions.~~around December 2017.

(A) Description of Business: Established in 2002, Vince is a global luxury brand best known for utilizing luxe fabrications and innovative techniques to create a product assortment that combines urban utility and modern effortless style. From its edited core collection of ultra-soft cashmere knits and cotton tees, Vince has evolved into a global lifestyle brand and destination for both women’s and men’s apparel and accessories. The Company reaches its customers through a variety of channels, specifically through major wholesale department stores and specialty stores in the United States (“U.S.”) and select international markets, as well as through the Company’s branded retail locations and the Company’s website. The Company designs products in the U.S. and sources the vast majority of products from contract manufacturers outside the U.S., primarily in ~~Asia and South America.~~Asia. Products are manufactured to meet the Company’s product specifications and labor standards.

(B) Basis of Presentation: The accompanying condensed 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 “SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted. Therefore, these financial statements should be read in conjunction with VHC’s audited financial statements for the fiscal year ended January ~~30, 2016,~~28, 2017, as set forth in the ~~2015~~2016 Annual Report on Form 10-K.

The condensed consolidated financial statements include the Company’s accounts and the accounts of the Company’s wholly-owned subsidiaries as of ~~October~~April 29, ~~2016.~~2017. All intercompany accounts and transactions have been eliminated. 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. The results of operations for these periods are not necessarily comparable to, or indicative of, results of any other interim period or the fiscal year as a whole.

(C) ~~Rights Offering:~~Sources and Uses of Liquidity: The Company’s sources of liquidity are cash and cash equivalents, cash flows from operations, if any, borrowings available under the Revolving Credit Facility and the Company’s ability to access capital markets. The Company’s primary cash needs are funding working capital requirements, meeting debt service requirements, paying amounts due under the Tax Receivable Agreement and capital expenditures for new stores and related leasehold improvements.

During fiscal ~~year~~ 2015 and fiscal ~~year~~ 2016, the Company ~~has~~ made significant strategic decisions and investments ~~for~~to reset and support the future growth of the Vince brand. Management believes these significant investments are essential to the commitment to developing a strong foundation from which the Company can drive consistent profitable growth for the long term. In order to enhance the Company’s liquidity position in support of these investments, d~~uring~~the Company performed the following actions:

In accordance with the new accounting guidance that became effective for the Company’s fiscal year ended January 28, 2017, management has the responsibility to evaluate whether conditions and/or events raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued. As required by this standard, management’s evaluation does not initially consider the potential mitigating effects of management’s plans that have not been fully implemented as of the date the financial statements are issued. In performing this initial evaluation, management concluded that the following conditions raise substantial doubt about the Company’s ability to meet its financial obligations. Since fiscal 2015, the Company has undertaken the task to reset the brand during a ~~result~~challenging retail environment, making strategic decisions and investments which had a cost to the short-term results but were necessary for the long-term sustainability of the Vince brand. The Company raised $65,000 under the Rights Offering, ~~and related Investment Agreement transactions,~~which was completed in anticipation of the difficulty of these undertakings. During fiscal 2016, the Company’s sales results did not meet expectations. Management’s future projections consider the uncertainty of trends in the retail environment in which the Company ~~received total gross proceeds~~operates, reserves placed on its borrowing capacity under the Revolving Credit Facility (which are reflected in the Company’s availability under the Revolving Credit Facility as of ~~$65,000, issued 11,818,181 shares~~April 29, 2017) and the recent requirements from certain vendors to pay on accelerated terms or to make prepayments in certain instances. Beyond the first fiscal quarter of ~~its common stock~~2017, scenarios, including those beyond the Company’s control, could develop that include unanticipated declines in sales and ~~recorded increases of $118 within Common Stock and $63,992 within Additional paid-in capital~~operating results requiring additional Specified Equity Contributions. Although the Company would have cash retained by Vince Holding Corp. to make additional contributions, there are limits on the ~~condensed consolidated balance sheet.~~number of contributions that can be made in any four fiscal quarter period and there is a limit on the amount of cash that has been retained for the purpose of making Specified Equity Contributions. Additionally, the Company is currently subject to a commercial finance examination as per the terms of the Letter, which could potentially result in future changes to the availability under the Revolving Credit Facility.

Understanding the difficulties to project the current retail environment, the historical sales performance of the Company, the current actions of lenders and vendors, and as management’s plans to mitigate the substantial doubt have not been fully executed, management has therefore concluded there is substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued. Management cannot predict with certainty the impact of various factors, including a challenging retail environment and the additional demands of lenders and vendors on the current financial and operational capabilities of the Company. Absent a timely resolution of the immediate working capital requirements, as discussed in further detail below, the Company could encounter product shipment delays which would adversely impact the business. Additionally, such impact could also give rise to the Company’s inability to service its existing debt or comply with the covenants therein. The Company’s inability to comply with such covenants could result in the amounts outstanding under its debt to become immediately due and the Company might not be able to meet such payment obligations.

As mitigating plans, management continues to have active discussions with lenders and with the Company’s majority shareholder on additional financing options and actions to improve the capital structure of the Company. Specifically, the Company has already received the $30,000 Rights Offering Commitment Letter discussed above. The Company ~~used a portion~~is striving to meet the conditions of ~~the net proceeds received from~~ the Rights Offering ~~and related Investment Agreement~~Commitment Letter which would allow it to ~~(1) repay the amount owed~~pursue a Rights Offering supported by the ~~Company under the Tax Receivable Agreement with~~commitment from Sun Cardinal, for itself and as a representative of the other stockholders party thereto, for the tax benefit with respect to the 2014 taxable year including accrued interest, totaling $22,262 (see Note 11 “Related Party Transactions” for additional details), and (2) repay all then outstanding indebtedness, totaling $20,000, under the Revolving Credit Facility.Fund V. The Company ~~intends to use the remaining net proceeds, which funds are held by Vince Holding Corp. until needed by~~is also in discussions with its ~~operating subsidiary, for additional strategic investments~~Term Loan Facility lenders and ~~general corporate purposes, which may include future amounts owed by the Company under the Tax Receivable Agreement.~~

~~Management believes that the Company’s cash and cash equivalents, expected cash flow from operations and amounts available under the~~its Revolving Credit Facility ~~will be sufficient~~administrative and collateral agent on amendments that would provide relief on covenants and additional borrowing capacity. In addition, the Company is in ongoing discussions with other third parties regarding strategies that would enhance its liquidity needs. Management has also engaged various consulting firms to ~~comply with any covenants~~assist in its pursuit of cost reduction initiatives in order to further improve the Company’s financial performance, benefit the calculation of the Consolidated Net Total Leverage Ratio under the Term Loan Facility and reduce future liquidity needs. While management believes that each of these actions is reasonably possible of occurring, if necessary, and could alleviate the ~~Revolving Credit Facility, fund~~substantial doubt, none of these actions has been executed at the time of the filing of the Company’s ~~debt service requirements, fund the Company’s obligations~~financial statements and therefore cannot be considered as mitigating events under the Tax Receivable Agreement, and fund planned capital expenditures and working capital needs for at least the next twelve months. However, there can be no assurance that the Company will be able to achieve its strategic initiatives in the future and failure to do so would have a significant adverse effect on the Company’s operations.accounting guidance.

The total carrying amount of goodwill for all periods presented was net of accumulated impairments of ~~$46,942.~~$69,253.

~~Identifiable~~The following tables present a summary of identifiable intangible ~~assets summary:~~assets:

(in thousands)	Gross Amount		Accumulated Amortization			Net Book Value		Gross Amount		Accumulated Amortization			Impairment Charge			Net Book Value
Balance as of October 29, 2016
Balance as of April 29, 2017
Amortizable intangible assets:
Customer relationships	$	11,970	$	(5,223	)	$	6,747	$	11,970	$	(5,522	)	$	—		$	6,448
Indefinite-lived intangible assets:
Trademarks		101,850		—			101,850
Indefinite-lived intangible asset:
Tradename									101,850		—			(30,750	)		71,100
Total intangible assets	$	113,820	$	(5,223	)	$	108,597	$	113,820	$	(5,522	)	$	(30,750	)	$	77,548

(in thousands)	Gross Amount		Accumulated Amortization			Net Book Value		Gross Amount		Accumulated Amortization			Impairment Charge			Net Book Value
Balance as of January 30, 2016
Balance as of January 28, 2017
Amortizable intangible assets:
Customer relationships	$	11,970	$	(4,774	)	$	7,196	$	11,970	$	(5,372	)	$	—		$	6,598
Indefinite-lived intangible assets:
Trademarks		101,850		—			101,850
Indefinite-lived intangible asset:
Tradename									101,850		—			(30,750	)		71,100
Total intangible assets	$	113,820	$	(4,774	)	$	109,046	$	113,820	$	(5,372	)	$	(30,750	)	$	77,698

Amortization of identifiable intangible assets was $150 ~~and $149~~ for both the three months ended ~~October~~April 29, ~~2016~~2017 and ~~October 31, 2015, respectively, and $449 and $448 for the nine months ended October 29, 2016 and October 31, 2015, respectively.~~April 30, 2016. The estimated amortization expense for identifiable intangible assets is $598 for each fiscal year for the next five fiscal years.

Accounting Standards Codification (“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:

The Company did not have any non-financial assets or non-financial liabilities recognized at fair value on a recurring basis at ~~October~~April 29, ~~2016~~2017 or January ~~30, 2016.~~28, 2017. At ~~October~~April 29, ~~2016~~2017 and January ~~30, 2016,~~28, 2017, the Company believes that the carrying value of cash and cash equivalents, receivables and accounts payable approximates fair value, due to the ~~short~~short-term maturity of these instruments and would be measured using Level 1 inputs. ~~As the~~The Company’s debt obligations with a carrying value of $66,136 as of ~~October~~April 29, ~~2016~~2017 are at variable interest rates and management estimates that the fair ~~value approximates the carrying~~ value of the Company’s outstanding debt ~~and would be measured using~~obligations was approximately $61,000 based upon quoted prices in markets that are not active, which is considered a Level 2 ~~inputs.~~input.

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 values. 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 ~~indefinite lived~~ intangible assets), non-financial assets are assessed for impairment and, if applicable, written down to (and recorded at) fair value.

Long-term debt consisted of the ~~following as of October 29, 2016 and January 30, 2016:~~following:

	October 29,		January 30,		April 29,		January 28,
(in thousands)	2016		2016		2017		2017
Term Loan Facility	$	45,000	$	45,000	$	45,000	$	45,000
Revolving Credit Facility		7,800		15,000		21,136		5,200
Total long-term debt principal		52,800		60,000		66,136		50,200
Less: Deferred financing costs		2,064		2,385		1,741		1,902
Total long-term debt	$	50,736	$	57,615	$	64,395	$	48,298

On November 27, 2013, in connection with the closing of the IPO and ~~related~~ Restructuring Transactions, Vince, LLC and Vince Intermediate Holding, LLC, a direct subsidiary of VHC and the direct parent company of Vince, LLC (“Vince Intermediate”), entered into a $175,000 senior secured term loan facility (as amended from time to time, the “Term Loan Facility”) with the lenders party thereto, Bank of America, N.A. (“BofA”), as administrative agent, JP Morgan 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. Vince, LLC and Vince Intermediate are borrowers and VHC is a guarantor under the Term Loan Facility.

3.75% to 4.00% based on a consolidated net total 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 requires Vince, LLC and Vince Intermediate to make mandatory prepayments upon the occurrence of certain events, including additional debt issuances, common and preferred stock issuances, certain asset sales, and annual payments of 50% of excess cash flow, subject to reductions to 25% and 0% if Vince, LLC and Vince Intermediate maintain a Consolidated Net Total Leverage Ratio of 2.50 to 1.00 and 2.00 to 1.00, respectively, and subject to reductions for voluntary prepayments made during such fiscal year.

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 3.25 to 1.00. The Term Loan Facility permits Vince Holding Corp. to make a Specified Equity Contribution, as defined under the Agreement, to the Borrowers in order to increase, dollar for dollar, Consolidated EBITDA for such fiscal quarter for the purposes of determining compliance with this covenant at the end of such fiscal quarter and applicable subsequent periods provided that (a) in each four fiscal quarter period there shall be at least two fiscal quarters in which no Specified Equity Contribution is made; (b) no more than five Specified Equity Contributions shall be made in the aggregate during the term of the Agreement; and (c) the amount of any Specified Equity Contribution shall be no greater than the amount required to cause the Company to be in compliance with this covenant.

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~~the Company’s 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 in an amount not to exceed the excess available amount, as defined in the loan agreement. 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. As of ~~October~~April 29, ~~2016,~~2017, the Company was in compliance with applicable financial covenants. During May and June 2017, the Company utilized $11,831 of the funds held by VHC to make a Specified Equity Contribution, as defined under the Term Loan Facility, in connection with the calculation of the Consolidated Net Total Leverage Ratio under the Term Loan Facility as of April 29, 2017 so that the Consolidated Net Total Leverage Ratio would not exceed 3.25 to 1.00.

Through ~~October~~April 29, ~~2016,~~2017, on an inception to date basis, the Company has made voluntary prepayments totaling $130,000 in the aggregate on the original $175,000 Term Loan Facility entered into on November 27, ~~2013. Of the $130,000 of aggregate voluntary~~2013 with no such prepayments made ~~to date, $0 was paid~~ during the ~~nine~~three months ended ~~October~~April 29, ~~2016.~~2017. As of ~~October~~April 29, ~~2016,~~2017, the Company had $45,000 of debt outstanding under the Term Loan Facility.

On November 27, 2013, Vince, LLC entered into a $50,000 senior secured revolving credit facility (as amended from time to time, the “Revolving Credit Facility”) with BofA as administrative agent. Vince, LLC is the borrower and VHC and Vince Intermediate are the guarantors under the Revolving Credit Facility. On June 3, 2015, Vince LLC entered into a first amendment to the Revolving Credit Facility, that among other things, increased the aggregate commitments under the facility from $50,000 to $80,000, subject to a loan cap which is the lesser of (i) the Borrowing Base, as defined in the loan agreement, (ii) the aggregate commitments, or (iii) $70,000 until debt obligations under the Company’s term loan facility have been paid in full, and extended the maturity date from November 27, 2018 to June 3, 2020. The Revolving Credit Facility also provides for a letter of credit sublimit of $25,000 (plus any increase in aggregate commitments) and an accordion option that allows for an increase in aggregate commitments up to $20,000. Interest is payable on the loans under the Revolving Credit Facility at either the LIBOR or the Base Rate, in each case, plus an applicable margin of 1.25% to 1.75% for LIBOR loans or 0.25% to 0.75% for Base Rate loans, and in each case subject to a pricing grid based on an average daily 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.

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 Revolving Credit Facility) equal to or greater than $20,000 measured at the end of each applicable fiscal month for the trailing twelve-month period. ~~The~~As of April 29, 2017, the Company ~~has~~was not ~~been~~ subject to this ~~maintenance requirement~~covenant as Excess Availability was greater than the required minimum. Additionally, in order to increase availability under the Revolving Credit Facility, on March 6, 2017, Vince, LLC entered into a side letter (the “Letter”) with BofA, as administrative agent and collateral agent under the Revolving Credit Facility which temporarily modified the covenant discussed above. The Letter provided that during the period from March 6, 2017 until and through April 30, 2017, the respective thresholds included in the definitions of “Covenant Compliance Event” and “Trigger Event” under the Revolving Credit Facility were temporarily modified to be the greater of (a) 12.5% of the Adjusted Loan Cap (as defined in the Revolving Credit Facility) and (b) $5,000. On April 14, 2017, Vince, LLC and BofA amended and restated the Letter in its entirety (the “Amended Letter”). The Amended Letter provides that during the period from April 13, 2017 until and through July 31, 2017 (the “Letter Period”), the respective thresholds included in the definitions of “Covenant Compliance Event” and “Trigger Event” in the Revolving Credit Facility continue to be temporarily modified to be the greater of (a) 12.5% of the Adjusted Loan Cap (as defined in the Revolving Credit Facility) and (b) $5,000. The Amended Letter further provides that during the Letter Period, so long as the Company’s cash is held in a deposit account of the Company maintained with BofA (the “BofA Account”), the Company may include in the Borrowing Base (i) up to $10,000 of such cash after April 13, 2017 through May 31, 2017 and (ii) up to $5,000 of such cash after May 31, 2017 through July 31, 2017. During the Letter Period, to the extent that the cash and cash equivalents held by the Loan Parties at the close of business on any given day exceeds $1,000 (excluding amounts in the BofA Account and certain other excluded accounts, as well as amounts equal to all undrawn checks and ACH issued in the ordinary course of business for payroll, rent and other accounts payable needs), Vince shall use any such cash in excess of $1,000 to repay the loans under the Revolving Credit Facility.

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~~the Company’s 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 adjusted loan cap and $10,000 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 1.0 to 1.0 (provided that the Consolidated Fixed Charge Coverage Ratio may be less than 1.0 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 adjusted loan cap and $15,000). As of ~~October~~April 29, ~~2016,~~2017, the Company was in compliance with applicable financial covenants.

As of ~~October~~April 29, ~~2016, $31,980~~2017, $15,134 was available under the Revolving Credit Facility, net of the amended loan cap, and there were ~~$7,800~~$21,136 of borrowings outstanding and $7,474 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 ~~October~~April 29, ~~2016~~2017 was ~~4.0%~~2.6%.

As of January ~~30, 2016,~~28, 2017, $27,157 was available under the Revolving Credit Facility, net of the amended loan cap, and there ~~was $15,000~~were $5,200 of borrowings outstanding and ~~$7,522~~$7,474 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 ~~30, 2016~~28, 2017 was ~~2.1%~~4.3%.

	October 29,			January 30,			April 29,			January 28,
(in thousands)	2016			2016			2017			2017
Finished goods	$	37,264		$	49,837		$	34,448		$	40,771
Less: reserves		(2,844	)		(13,261	)		(2,235	)		(2,242	)
Total inventories, net	$	34,420		$	36,576		$	32,213		$	38,529

In connection with the Company’s 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 VHC common stock.

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 anniversaries 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. The Company will not grant any future awards under the 2010 Option Plan. Future awards will be granted under the Vince 2013 Incentive Plan described further below. As of October 29, 2016, there are no options outstanding under the 2010 Stock Option 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 the Company’s common stock or shares of common stock held in or acquired for the Company’s treasury. In general, if awards under the Vince 2013 Incentive Plan are cancelled for any reason, 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 ~~October~~April 29, ~~2016,~~2017, there were ~~1,020,241~~1,178,229 shares under the Vince 2013 Incentive Plan available for future grants. Options granted pursuant to the Vince 2013 Incentive Plan ~~(i)~~typically vest in equal installments ~~over two, 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. ~~Options granted to the non-employee consultants vest 50% after one year, 25% after 18 months and 25% after two years and expire on the earlier of the tenth anniversary of the grant date or~~

~~upon termination as outlined in their grant agreements pursuant to the Vince 2013 Incentive Plan.~~ Restricted stock units granted vest in equal installments over a ~~three year~~three-year period or vest in equal installments over four years, subject to the employees’ continued employment.

The consultancy agreements with the non-employee consultants ended in February 2017 and as a result 176,597 shares were forfeited. In May 2017, the remaining 294,333 previously vested shares expired.

The Company maintains an employee stock purchase plan (“ESPP”) for its employees. Under the ESPP, all eligible employees may contribute up to 10% of their base compensation, up to a maximum contribution of $10 per year. The purchase price of the stock is 90% of the fair market value, with purchases executed on a quarterly basis. The plan is defined as compensatory, and accordingly, a charge for compensation expense is recorded to selling, general and administrative expense for the difference between the fair market value and the discounted purchase price of the Company’s Stock. ~~As of October~~During the three months ended April 29, ~~2016, 9,248~~2017, 4,507 shares of common stock ~~have been~~were issued under the ESPP. During the three months ended April 30, 2016, the activity under the ESPP was not significant.

A summary of stock option activity for both employees and non-employees ~~during~~for the ~~nine~~three months ended ~~October~~April 29, ~~2016~~2017 is as follows:

	Stock Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (years)		Aggregate Intrinsic Value (in thousands)		Stock Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (years)		Aggregate Intrinsic Value (in thousands)
Outstanding at January 30, 2016		2,879,735		$	4.61		8.7	$	2,402
Outstanding at January 28, 2017											2,258,787		$	4.53		8.9	$	—
Granted		703,951		$	5.78						37,500		$	2.76
Exercised		(807,545	)	$	5.79						—		$	—
Forfeited or expired		(531,346	)	$	4.75						(205,421	)	$	4.17
Outstanding at October 29, 2016		2,244,795		$	4.52		9.2	$	2,064
Outstanding at April 29, 2017											2,090,866		$	4.53		8.7	$	—

Vested and exercisable at October 29, 2016		206,082		$	4.29		8.9	$	237
Vested and exercisable at April 29, 2017											686,634		$	4.27		8.6	$	—

Of the above outstanding shares, ~~1,968,008~~1,404,232 are ~~vested or~~ expected to vest.

As permitted by new accounting guidance that became effective for the Company on January 29, 2017, the Company has elected to account for forfeitures as they occur, which resulted in an increase of $84 to accumulated deficit within the Condensed Consolidated Balance Sheet.

A summary of restricted stock unit activity ~~under~~for the ~~Vince 2013 Incentive Plan during the nine~~three months ended ~~October~~April 29, ~~2016~~2017 is as follows:

	Restricted Stock Units			Weighted Average Grant Date Fair Value		Restricted Stock Units			Weighted Average Grant Date Fair Value
Nonvested restricted stock units at January 30, 2016		29,532		$	12.22
Nonvested restricted stock units at January 28, 2017							107,812		$	6.56
Granted		99,478		$	5.80		—		$	—
Vested		(3,320	)	$	16.91		(1,105	)	$	23.20
Forfeited		(2,559	)	$	5.98		—		$	—
Nonvested restricted stock units at October 29, 2016		123,131		$	7.03
Nonvested restricted stock units at April 29, 2017							106,707		$	6.38

The Company recognized share-based compensation expense of ~~$638~~$219 and ~~$1,383,~~$514, including ~~$296~~income of $117 and ~~$709,~~expense of $335, respectively, ~~of expense~~ related to non-employees, during the three ~~and nine~~ months ended ~~October~~April 29, ~~2016. The Company recognized a net reversal, primarily due to option forfeitures as a result of executive departures, of $95~~2017 and ~~expense of $706 during the three and nine months ended October 31, 2015,~~April 30, 2016, respectively.

Basic earnings (loss) per share is ~~computed~~calculated by dividing net income (loss) by the weighted average number of shares of common stock outstanding ~~for~~during the period. Except when the effect would be anti-dilutive, diluted earnings (loss) per share is calculated based on the

weighted average number of ~~outstanding~~ shares of common stock outstanding plus the dilutive effect of share-based awards calculated under the treasury stock method.

The following is a reconciliation of weighted average basic shares to weighted average diluted shares outstanding:

	Three Months Ended				Nine Months Ended				Three Months Ended
	October 29,		October 31,		October 29,		October 31,		April 29,		April 30,
	2016		2015		2016		2015		2017		2016
Weighted-average shares—basic		49,287,448		36,775,443		45,419,661		36,767,770		49,428,259		38,002,774
Effect of dilutive equity securities		192,457		41,529		—		865,863		—		—
Weighted-average shares—diluted		49,479,905		36,816,972		45,419,661		37,633,633		49,428,259		38,002,774

Because the Company incurred a net loss for the ~~nine~~three months ended ~~October~~April 29, 2017 and April 30, 2016, weighted-average basic shares and weighted-average diluted shares outstanding are equal for ~~this period.~~these periods.

For the three months ended ~~October~~April 29, 2017 and April 30, 2016, 2,215,401 and ~~October 31, 2015, 764,431 and 649,236~~854,428 options to purchase shares of the Company’s common stock, respectively, were excluded from the computation of weighted average shares for diluted earnings per share ~~as their effect would have been anti-dilutive. For~~since the ~~nine months ended October 29, 2016 and October 31, 2015, 723,620 and 617,078 options to purchase shares~~related exercise prices exceeded the average market price of the Company’s common stock ~~respectively, were excluded from the computation of diluted earnings per share as their effect~~and such inclusion would ~~have been~~be anti-dilutive.

On April 22, 2016, the Company issued an aggregate of 11,818,181 shares in conjunction with the completed Rights Offering and Investment Agreement. See Note 1 “Description of Business and Basis of Presentation” for additional information.

In the second quarter of 2015, a number of senior management departures occurred. In connection with these departures, the Company had certain obligations under existing employment arrangements with respect to severance and employee related benefits. As a result, the Company recognized a net charge of $3,394 for these departures within selling, general, and administrative expenses on the condensed consolidated statement of operations during fiscal year 2015. This net charge was reflected within the “unallocated corporate expenses” for segment disclosures. These amounts are being paid over a period of six to eighteen months, which began in the third quarter of fiscal 2015.

The following is a reconciliation of the accrued severance and employee related benefits associated with the above charge included within total current liabilities on the condensed consolidated balance sheet:

The Company is a party to legal proceedings, compliance matters and environmental claims that arise in the ordinary course of ~~our~~its business. Although the outcome of such items cannot be determined with certainty, management believes that the ultimate outcome of these items, individually and in the aggregate, will not have a material adverse impact on the Company’s financial position, results of operations or cash flows.

In addition, as described in Note 12 “Subsequent Events”, on May 5, 2017, a complaint was filed in the United States District Court for the Eastern District of New York on behalf of a putative class of the Company’s stockholders, naming the Company as well as Brendan Hoffman, the Company’s Chief Executive Officer, and David Stefko, the Company’s Executive Vice President, Chief Financial Officer, as defendants.

In January 2017, the Financial Accounting Standards Board (“FASB”) issued guidance to simplify the accounting for goodwill impairment. The guidance removes “step two” of the goodwill impairment test, which requires a hypothetical purchase price allocation. A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. The guidance is effective for interim and annual impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company adopted this guidance on January 29, 2017.

In March 2016, the FASB issued guidance regarding share-based compensation, to simplify the accounting for share-based payment transactions, including accounting for forfeitures, income tax consequences, classification of awards as either equity or liabilities and classification on the statement of cash flows. This guidance is effective for interim and annual periods beginning after December 15, 2016. The Company adopted the new guidance on January 29, 2017. Upon adoption, excess tax benefits and deficiencies from share-based compensation are recognized as income tax expense or benefit in the statement of operations as discrete items in the reporting period in which they occur, regardless of whether the benefit reduces taxes payable in the current period. As a result of the adoption of this guidance, the Company recognized an increase of $2,350 to deferred tax assets related to net operating loss carryforwards for the excess tax benefits related to share-based compensation and also recognized an increase of an equal amount in the valuation allowance against such increase of deferred tax assets. As permitted by the new guidance, the Company elected to account for forfeitures as they occur which resulted in an increase of $84 to the accumulated deficit within the Condensed Consolidated Balance Sheet. The remaining provisions of the new guidance did not have a material effect on the Company’s condensed consolidated financial statements.

In November 2015, the FASB issued new guidance on the balance sheet classification of deferred taxes, which requires entities to classify deferred tax assets and liabilities as noncurrent in the consolidated balance sheet. Currently, deferred tax assets and liabilities must be classified as current or noncurrent amounts in the consolidated balance sheet. This guidance is effective for financial statements issued for interim and annual periods beginning after December 15, 2016. The Company adopted the new guidance on January 29, 2017 and, as a result of the full valuation allowance previously recorded against the Company’s deferred tax assets, it did not have a material effect on the Company’s Condensed Consolidated Balance Sheet.

In July 2015, the FASB issued new guidance on accounting for inventory, which requires entities to measure inventory at the lower of cost and net realizable value. This guidance is effective for interim and annual periods beginning on or after December 15, 2016. The Company adopted the new guidance on January 29, 2017 and it did not have a material impact on the Company’s condensed consolidated financial statements.

In November 2016, the FASB issued guidance that requires the statement of cash flows to explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The guidance is effective for interim and annual periods beginning after December 15, 2017 using a retrospective transition method to each period presented. Early adoption is permitted, including adoption in an interim period. This new guidance is not expected to have a material impact on the Company’s Condensed Consolidated Statement of Cash Flows.

In August 2016, the ~~Financial Accounting Standards Board (“FASB”)~~FASB issued guidance which clarifies how companies present and classify certain cash receipts and cash payments in the statement of cash flows. The guidance is effective for interim and annual periods beginning after December 15, 2017 and ~~should~~must be applied using a retrospective transition method to each period presented. The Company is currently evaluating the impact of adopting this guidance on ~~the consolidated statement~~its Condensed Consolidated Statement of ~~cash flows.~~

In March 2016, the FASB issued guidance regarding share-based compensation, to simplify the accounting for share-based payment transactions, including income tax consequences, classification of awards as either equity or liabilities and classification on the statement of cash flows. This guidance is effective for interim and annual periods beginning after December 15, 2016. ~~This new guidance is not expected to have a material impact on the Company’s consolidated financial statements.~~Cash Flows.

In February 2016, the FASB issued a new lease accounting standard, which requires lessees to recognize right-of-use lease assets and lease liabilities on the balance sheet for those leases currently classified as operating leases. The guidance is required to be adopted retrospectively by restating all years presented in the Company’s financial statements. The guidance is effective for interim and annual periods beginning after December 15, 2018. The Company is currently evaluating the impact of adopting this guidance on the consolidated financial statements.

~~In November 2015, the FASB issued new guidance on the balance sheet classificat~~

ion of deferred taxes, which requires entities to classify deferred tax assets and liabilities as noncurrent in the consolidated balance sheet. Currently deferred tax assets and liabilities must be classified as current and noncurrent amounts in the consolidated balance sheet. This guidance is effective for financial statements issued for interim and annual periods beginning after December 15, 2016. The guidance may be applied either prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. The Company will reclassify deferred tax balances, as required.

In July 2015, the FASB issued new guidance on accounting for inventory, which requires entities to measure inventory at the lower of cost and net realizable value. This guidance is effective for interim and annual periods beginning on or after December 15, 2016. This new guidance is not expected to have a material impact on the Company’s consolidated financial statements.

In April 2015, the FASB issued new guidance on accounting for cloud computing fees. If a cloud computing arrangement includes a software license, then the customer should account for the license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the arrangement should be accounted for as a service contract. This guidance is effective for arrangements entered into, or materially modified, in interim and annual periods beginning after December 15, 2015. The Company adopted this accounting guidance for any contracts entered into or materially modified after January 30, 2016. The adoption of this guidance did not have a material effect on the Company’s consolidated financial statements.

In May 2014, the FASB issued new guidance on revenue recognition accounting, which requires entities to recognize revenue when ~~it transfers~~ promised goods or services are transferred to customers and in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Since its issuance, the FASB has amended several aspects of the new guidance. In August 2015, the FASB elected to defer the effective ~~dates. The updated~~dates for this guidance, which is now effective for interim and annual periods beginning on or after December 15, 2017. Early adoption is permitted for interim and annual periods beginning after December 15, 2016. The Company is currently evaluating the impact of the adoption of the new guidance on its consolidated financial statements.

The Company operates and manages its business by distribution channel and has identified two reportable segments, as further described below. Management 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:

The accounting policies of the Company’s reportable segments are consistent with those described in Note 1 to the audited Consolidated Financial Statements of VHC for the fiscal year ended January ~~30, 2016~~28, 2017 included in the ~~2015~~2016 Annual Report on Form 10-K. Unallocated corporate expenses are comprised of selling, general, and administrative expenses attributable to corporate and administrative activities (such as marketing, design, finance, information technology, legal and human resource departments), and other charges that are not directly attributable to the Company’s reportable segments. Unallocated corporate assets are comprised of the carrying values of the Company’s goodwill and ~~unamortized trademark,~~tradename, deferred tax assets, and other assets that will be utilized to generate revenue for both of the Company’s reportable segments.

	Three Months Ended						Nine Months Ended						Three Months Ended
	October 29,			October 31,			October 29,			October 31,			April 29,			April 30,
(in thousands)	2016			2015			2016			2015			2017			2016
Net Sales:
Wholesale	$	51,219		$	56,505		$	135,614		$	153,104		$	35,407		$	44,776
Direct-to-consumer		24,754			24,354			68,706			67,590			22,638			22,869
Total net sales	$	75,973		$	80,859		$	204,320		$	220,694		$	58,045		$	67,645
Income (loss) from Operations:
Wholesale	$	18,416		$	22,233		$	39,422		$	44,249		$	8,966		$	10,274
Direct-to-consumer		990			1,526			2,344			1,970			(1,302	)		1,677
Subtotal		19,406			23,759			41,766			46,219			7,664			11,951
Unallocated expenses		(13,343	)		(11,416	)		(43,506	)		(35,317	)
Total income (loss) from operations	$	6,063		$	12,343		$	(1,740	)	$	10,902
Unallocated corporate expenses														(15,857	)		(15,499	)
Total loss from operations													$	(8,193	)	$	(3,548	)

~~There were no material changes in assets by reportable segment except for unallocated corporate assets which increased from $280,378 at January 30, 2016 to $302,530 at October 29, 2016.~~

In connection with the consummation of the Company’s IPO on November 27, 2013, Vince, LLC entered into a Shared Services Agreement with Kellwood (the “Shared Services Agreement”), pursuant to which Kellwood would provide support services in various areas, including, among other things, certain accounting functions, tax, e-commerce operations, distribution, logistics, information technology, accounts payable, credit and collections and payroll and benefits administration. Sinceareas. As of the ~~IPO,~~end of fiscal 2016 the Company ~~has been working on transitioning certain~~completed the transition of all functions ~~performed by~~and systems from Kellwood ~~under~~to the Company’s own systems or processes as well as to third-party service providers. In connection with the Kellwood Sale, the Shared Services ~~Agreement. Functions that have transitioned~~Agreement was contributed to St. Louis, LLC. St. Louis, LLC continues to provide minor transitional services relating to historical records and legacy functions, which the Company including its outsource service providers, include certain accounting related functions, e-commerce customer service, distribution and logistics, payroll and benefits administration and information technology support for systems that have been implemented. Additionally, to date, the Company has completed the implementation of its own point-of-sale system, third party e-commerce platform, human resource recruitment system, distribution applications, and network infrastructure. The Company is ~~currently~~ in the process of ~~transitioning~~winding down. The Shared Services Agreement will terminate automatically upon the ~~remainder~~termination of all services provided thereunder. After termination of the ~~Kellwood systems and~~agreement, St. Louis, LLC will have no obligation to provide any services including tax, accounts payable, credit and collections, as well as its own enterprise resource planning (“ERP”) and supporting systems and related IT support services. Until those systems are implemented,to the ~~Company will continue to utilize the Kellwood information technology infrastructure under the Shared Services Agreement.~~Company.

The Company is invoiced ~~by Kellwood~~ monthly for the services provided under the Shared Services Agreement and generally is required to pay within 15 business days of receiving such invoice. The payments ~~will~~can be trued-up and can be disputed once each fiscal quarter. For the three months ended ~~October~~April 29, ~~2016~~2017 and ~~October 31, 2015~~April 30, 2016 the Company recognized ~~$635~~$56 and ~~$2,272,~~$2,178, respectively, of expense within the ~~condensed consolidated statements~~Condensed Consolidated Statements of operations for services provided under the Shared Services Agreement. For the nine months ended October 29, 2016 and October 31, 2015, the Company recognized $4,040 and $6,837, respectively, of expense within the condensed consolidated statements of operationsOperations for services provided under the Shared Services Agreement. As of ~~October~~April 29, ~~2016,~~2017, the Company has recorded ~~$478~~$96 in ~~other~~Other accrued expenses to recognize amounts payable ~~to Kellwood~~ under the Shared Services Agreement.

VHC entered into a Tax Receivable Agreement with the Pre-IPO Stockholders on November 27, 2013. The Company and its former subsidiaries ~~have~~ generated certain tax benefits (including NOLs and tax credits) prior to the Restructuring Transactions consummated in connection with the Company’s IPO and will generate certain section 197 intangible deductions (the “Pre-IPO Tax Benefits”), which would reduce the actual liability for taxes that the Company 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 the Company and its 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) the Company’s 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) the Company’s 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 the 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.

The Company had expected to make a required payment under the Tax Receivable Agreement in the fourth quarter of 2015. As a result of lower than expected cash from operations due to weaker than projected performance, and the level of projected availability under the Company’s Revolving Credit Facility, management concluded that the Company would not be able to fund the payment when due. Accordingly, on September 1, 2015, the Company entered into an amendment to the Tax Receivable Agreement with Sun Cardinal, LLC, an affiliate of Sun Capital Partners, Inc., for itself and as a representative of the other stockholders parties thereto. Pursuant to this amendment, Sun Cardinal agreed to postpone payment of the tax benefit with respect to the 2014 taxable year, estimated at $21,762 plus accrued interest, to September 15, 2016. The amendment to the Tax Receivable Agreement also waived the application of a default interest rate at LIBOR plus 500 basis points per annum on the postponed payment. The interest rate on the postponed payment remained at LIBOR plus 200 basis points per annum. As a condition of the Investment Agreement, the Company repaid its obligation, including accrued interest, totaling $22,262, with respect to the 2014 taxable year under the Tax Receivable Agreement upon the closing of the Rights Offering.

As of ~~October~~April 29, ~~2016,~~2017, the Company’s total obligation under the Tax Receivable Agreement is estimated to be ~~$148,167,~~$140,618, of which ~~$7,324~~$2,788 is included as a component of ~~other~~Other accrued expenses and ~~$140,843~~$137,830 is included as a component of ~~other~~Other liabilities on the ~~condensed consolidated balance sheet.~~Condensed Consolidated Balance Sheet. The tax benefit payment, plus accrued interest, with respect to the ~~2015~~2016 taxable year is expected to be paid in the fourth quarter of ~~2016. There is a remaining term of seven years under the Tax Receivable Agreement.~~ ~~During the nine months ended October 29, 2016, the obligation under the~~2017. The Tax Receivable Agreement was adjusted in connection with the reversal of certain valuation allowances. The adjustment resulted in a net increase of $16 to the liability under the Tax Receivable Agreement with the corresponding net increase accounted for as an adjustment to other expense, netexpires on ~~the Condensed Consolidated Statement of Operations.~~December 31, 2023.

On ~~March 15, 2016,~~May 18, 2017, the Company ~~entered into an Investment Agreement with the Investors pursuant to which Sun Cardinal and SCSF Cardinal agreed to backstop~~received a rights offering by purchasing at the subscription price of $5.50 per share any and all shares not subscribed through the exercise of rights, including the oversubscription. The Investment Agreement superseded the Rights Offering Commitment Letter ~~dated December 9, 2015,~~ from Sun ~~Capital Partners~~Fund V ~~L.P., which is disclosed in further detail~~that provides the Company with an amount equal to $30,000 of cash proceeds (the “Contribution Obligation”) in the ~~Company’s 2015 Annual Report on Form 10-K, Note 15 “Related Party Transactions.” Additionally, see Note 1 “Description of Business and Basis of Presentation” for additional information.~~

~~On March 29, 2016,~~event that the Company ~~commenced~~commences a Rights ~~Offering, whereby~~Offering. Such Contribution Obligation will be reduced by any proceeds received from the Rights Offering. The Company ~~distributed, at no charge,~~is required, simultaneously with the funding of the Contribution Obligation by Sun Fund V, or one or more of its affiliates, to ~~stockholders~~issue to Sun Fund V or one or more of ~~record as~~its affiliates the applicable number of ~~March 23, 2016 (the “Rights Offering Record Date”), rights to purchase new~~ shares of the Company’s common stock at ~~$5.50~~the price per ~~share. Each stockholder as of~~share at which participants in the Rights Offering ~~Record Date (“Rights Holders”) received one non-transferrable right~~are entitled to purchase ~~0.3191~~ shares ~~for every share~~ of common stock, ~~owned on~~which price will be mutually agreed between the ~~Rights Offering Record Date (the “subscription right”). Rights Holders who fully exercised their subscription rights were entitled to subscribe for additional shares~~Company and Sun Fund V and approved by the members of the Company’s board of directors that ~~remained unsubscribed as a result~~are not employed by or affiliated with the Company or Sun Fund V. The funding of ~~any unexercised subscription rights (the “over-subscription right”). The over-subscription right allowed a Rights Holder to subscribe for an additional number of shares equal to up to 20%~~the Contribution Obligation, and the issuance of the shares of common stock ~~for which such holder was otherwise entitled~~by the Company, will be made pursuant to ~~subscribe. Subscription rights could only~~an investment agreement in substantially the same form as the investment agreement, dated March 15, 2016, by and among Sun Cardinal, LLC, SCSF Cardinal, LLC and the Company, with any modifications thereto as may be ~~exercised for whole numbers~~mutually agreed between Sun Fund V and the Company. There will be no commitment fee due to Sun Fund V from the Company in connection with the Contribution Obligation. Sun Fund V’s obligations under the Rights Offering Commitment Letter are subject to (i) the Company entering into an amendment to its existing senior secured term loan facility that is acceptable to Sun Fund V in its sole discretion, (ii) no default or event of ~~shares;~~default having occurred under the Company’s Term Loan Facility or Revolving Credit Facility, unless promptly cured or reasonably expected to be promptly cured by the Company and (iii) no ~~fractional shares of common stock were issued~~circumstance existing that has had or would reasonably be expected to have, individually or in the ~~Rights Offering. The~~aggregate, a material adverse effect on the Company and its subsidiaries taken as a whole. Sun Fund V’s obligations under the Rights Offering ~~period expired on April 14, 2016 at 5:00~~Commitment Letter terminate upon the earliest to occur of (A) the consummation of the Rights Offering whereby the Company receives proceeds equal to or exceeding $30,000, (B) 11:59 p.m. New York City time prior to which payment for all subscription rights required an irrevocable funding of cash to the transfer agent, to be held in an account for the benefit of the Company. The Investors fully subscribed inon June 30, 2017 if the Rights Offering ~~and exercised their oversubscription right. The Company~~ ~~received subscriptions and oversubscriptions from its existing stockholders for a total of 11,622,518 shares of its common stock, resulting~~has not commenced by such time (which date to be extended by 45 days in ~~aggregate gross proceeds of approximately $63,924. Simultaneous with~~ the ~~closing of~~event the Company’s registration statement relating to the Rights Offering is reviewed by the ~~Company received $1,076 of gross proceeds from~~SEC) , (C) 11:59 p.m. New York City time on August 1, 2017 (which date to be extended by 45 days in the ~~related Investment Agreement and issued~~event the Company’s registration statement relating to ~~the Investors 195,663 shares of its common stock in connection therewith. In total, the Company received total gross proceeds of $65,000 as a result of~~ the Rights Offering is reviewed by the SEC), and ~~related Investment Agreement transactions.~~ ~~Upon~~(D) the ~~completion~~date Sun Fund V, or its affiliates, fund the Contribution Obligation.

As of ~~these transactions~~,May 19, 2017, affiliates of Sun ~~Capital~~Fund V collectively beneficially owned approximately 58% of the Company’s outstanding common stock.

The Company used a portion of the net proceeds received from the Rights Offering and related Investment Agreement to (1) repay the amount owed by the Company under the Tax Receivable Agreement (as discussed above) with Sun Cardinal, for itself

and as a representative of the other stockholders party thereto, for the tax benefit with respect to the 2014 taxable year including accrued interest, totaling $22,262, and (2) repay all then outstanding indebtedness, totaling $20,000, under the Company’s Revolving Credit Facility. The Company intends to use the remaining net proceeds, which funds are held by Vince Holding Corp. until needed by its operating subsidiary, for additional strategic investments and general corporate purposes, which may include future amounts owed by the Company under the Tax Receivable Agreement.

On November 27, 2013, the Company entered into an agreement with Sun Capital Management to (i) reimburse Sun Capital Management Corp. (“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 the Company and (ii) provide Sun Capital Management with customary indemnification for any such services.

During the three months ended ~~October~~April 29, ~~2016~~2017 and ~~October 31, 2015,~~April 30, 2016, the Company incurred expenses of ~~$27~~$6 and ~~$3,~~$25, respectively, under the Sun Capital Consulting Agreement. During the nine months ended October 29, 2016 and October 31, 2015, the Company incurred expenses of $80 and $32, respectively, for reimbursement of expenses under the Sun Capital Consulting Agreement.

On May 5, 2017, a complaint was filed in the United States District Court for the Eastern District of New York on behalf of a putative class of the Company’s stockholders, naming the Company as well as Brendan Hoffman, the Company’s Chief Executive Officer, and David Stefko, the Company’s Executive Vice President, Chief Financial Officer, as defendants. The complaint, brought on behalf of all persons who purchased the Company’s common stock between December 8, 2016 and April 27, 2017, generally alleges that the Company and the named officers made false and/or misleading statements and/or failed to disclose matters relating to the transition of its ERP systems from Kellwood. The complaint brings causes of action for violations of Section 10(b) and Rule 10b-5 of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”) against the Company and the two named officers and for violations of Section 20(a) of the Exchange Act against the two named officers. The complaint seeks unspecified monetary damages and unspecified costs and fees.

The Company currently believes that the likelihood of an unfavorable judgment arising from this matter is remote based on the information currently available and that the ultimate resolution of this matter will not have a material adverse effect on the Company’s net income, financial condition or liquidity in a future period. However, given the inherent unpredictability of litigation and the fact that this litigation is still in its very early stages, the Company is unable to predict with certainty the outcome of this litigation or reasonably estimate a possible loss or range of loss associated with this litigation at this time. In addition, the Company will be required to expend resources to defend this matter.

On May 18, 2017, the Company received a Rights Offering Commitment Letter from Sun Fund V that provides the Company with an amount equal to $30,000 of cash proceeds in the event that the Company conducts a Rights Offering, subject to certain terms and conditions. See Note 11 “Related Party Transactions” for further information.

ITEMITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This discussion summarizes our consolidated operating results, financial condition and liquidity. The following discussion and analysis should be read in conjunction with our condensed consolidated financial statements and related notes included elsewhere in this report on Form 10-Q. All amounts disclosed are in thousands ~~expect~~except door and store counts, countries, share and per share data and percentages.

For purposes of this report on Form 10-Q, “Vince,” the “Company,” “we,” and “our,” refer to Vince Holding Corp. (“VHC”) and our wholly owned subsidiaries, including Vince Intermediate Holding (“Vince Intermediate”), 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 (the “Restructuring Transactions”) that were completed in connection with our initial public offering (the “IPO”) on November 27, ~~2013.~~2013 and prior to the Kellwood Sale.

This discussion contains forward-looking statements involving risks, uncertainties and assumptions that could cause our results to differ materially from expectations. 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 match inventory purchases with demand, 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~~discussion of the risks facing our business see “Item 1A—Risk Factors” of this report on Form 10-Q as well as in our ~~2015~~2016 Annual Report on Form 10-K.

Established in 2002, Vince is a global luxury brand best known for utilizing luxe fabrications and innovative techniques to create a product assortment that combines urban utility and modern effortless style. From its edited core collection of ultra-soft cashmere knits and cotton tees, Vince has evolved into a global lifestyle brand and destination for both women’s and men’s apparel and accessories. Vince products are sold in prestige distribution worldwide, including approximately ~~2,400~~2,300 distribution locations across ~~approximately~~more than 40 countries. While we have ~~recently~~ experienced a ~~slowdown~~decline in sales, ~~growth,~~ we believe that we can generate growth by improving and expanding our product offering, expanding our selling into additional international markets, and growing our own branded retail and e-commerce direct-to-consumer businesses.

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~~Wholesale and ~~direct-to-consumer.~~Direct-to-consumer.

As of ~~October~~April 29, ~~2016,~~2017, our products are sold at ~~2,337~~2,311 doors through our wholesale partners in the U.S. and international markets and we operated 54 retail stores, including 40 full price stores and 14 outlet stores, throughout the United States.

The following is a summary of highlights during the three months ended ~~October~~April 29, ~~2016:~~2017:

The following table presents, for the periods indicated, our operating results as a percentage of net sales, as well as earnings per share ~~data for the three and nine months ended October 29, 2016 and October 31, 2015:~~data:

	Three Months Ended										Nine Months Ended										Three Months Ended
	October 29, 2016					October 31, 2015					October 29, 2016					October 31, 2015					April 29, 2017						April 30, 2016
																								% of Net						% of Net
(In thousands, except share data, store and door counts and percentages)
																					Amount			Sales			Amount			Sales
(in thousands, except share data, store and door counts and percentages)
Statements of Operations:
Net sales	$	75,973		100.0	%	$	80,859		100.0	%	$	204,320		100.0	%	$	220,694		100.0	%	$	58,045			100.0	%	$	67,645			100.0	%
Cost of products sold		38,015		50.0	%		40,854		50.5	%		110,717		54.2	%		129,159		58.5	%		32,454			55.9	%		39,387			58.2	%
Gross profit		37,958		50.0	%		40,005		49.5	%		93,603		45.8	%		91,535		41.5	%		25,591			44.1	%		28,258			41.8	%
Selling, general and administrative expenses		31,895		42.0	%		27,662		34.2	%		95,343		46.7	%		80,633		36.6	%		33,784			58.2	%		31,806			47.0	%
Income (loss) from operations		6,063		8.0	%		12,343		15.3	%		(1,740	)	(0.9	)%		10,902		4.9	%
Loss from operations																						(8,193	)		(14.1	)%		(3,548	)		(5.2	)%
Interest expense, net		1,023		1.3	%		1,428		1.8	%		2,909		1.4	%		4,367		2.0	%		1,044			1.8	%		881			1.3	%
Other expense, net		191		0.3	%		899		1.1	%		379		0.2	%		1,390		0.6	%		1			0.0	%		160			0.3	%
Income (loss) before income taxes		4,849		6.4	%		10,016		12.4	%		(5,028	)	(2.5	)%		5,145		2.3	%
Loss before income taxes																						(9,238	)		(15.9	)%		(4,589	)		(6.8	)%
Provision (benefit) for income taxes		1,469		2.0	%		4,123		5.1	%		(4,517	)	(2.2	)%		1,824		0.8	%		52			0.1	%		(2,665	)		(4.0	)%
Net income (loss)	$	3,380		4.4	%	$	5,893		7.3	%	$	(511	)	(0.3	)%	$	3,321		1.5	%
Earnings (loss) per share:
Basic earnings (loss) per share	$	0.07				$	0.16				$	(0.01	)			$	0.09
Diluted earnings (loss) per share	$	0.07				$	0.16				$	(0.01	)			$	0.09
Net loss																					$	(9,290	)		(16.0	)%	$	(1,924	)		(2.8	)%
Loss per share:
Basic loss per share																					$	(0.19	)				$	(0.05	)
Diluted loss per share																					$	(0.19	)				$	(0.05	)
Other Operating and Financial Data:
Total wholesale doors at end of period		2,337					2,539					2,337					2,539					2,311						2,345
Total stores at end of period		54					46					54					46					54						51
Comparable sales growth ^{(1) (2)}		-11.7	%				-12.5	%				-14.1	%				1.1	%				-5.7	%					-12.3	%

Three Months Ended ~~October~~April 29, ~~2016~~2017 Compared to Three Months Ended ~~October 31, 2015~~April 30, 2016

Net sales for the three months ended ~~October~~April 29, ~~2016~~2017 were ~~$75,973,~~$58,045, decreasing ~~$4,886,~~$9,600, or ~~6.0%~~14.2%, versus ~~$80,859~~$67,645 for the three months ended ~~October 31, 2015.~~April 30, 2016. Net sales by reportable segment are as follows:

	Three Months Ended				Three Months Ended
	October 29,		October 31,		April 29,		April 30,
(in thousands)	2016		2015		2017		2016
Wholesale	$	51,219	$	56,505	$	35,407	$	44,776
Direct-to-consumer		24,754		24,354		22,638		22,869
Total net sales	$	75,973	$	80,859	$	58,045	$	67,645

Net sales from our Wholesale segment decreased $9,369, or 20.9%, to $35,407 in the three months ended April 29, 2017 from $44,776 in the three months ended April 30, 2016, primarily driven by a reduction in full-price orders as a result of management’s decision to eliminate the summer delivery in the first quarter of 2017.

Net sales from our ~~wholesale~~Direct-to-consumer segment decreased ~~$5,286,~~$231, or ~~9.4%~~1.0%, to ~~$51,219~~$22,638 in the three months ended ~~October~~April 29, ~~2016~~2017 from ~~$56,505~~$22,869 in the three months ended ~~October 31, 2015, primarily driven by a planned reduction in off-price orders.~~

~~Net sales from our direct-to-consumer segment increased $400, or 1.6%, to $24,754 in the three months ended October 29, 2016 from $24,354 in the three months ended October 31, 2015.~~April 30, 2016. Non-comparable sales contributed ~~$3,143~~$1,024 of sales growth, which was ~~partly~~more than offset by a decline in comparable sales of ~~$2,743,~~$1,255, or ~~11.7%~~5.7%, including e-commerce, reflecting a ~~decline~~decrease in average order ~~value as well as a decline in the number of transactions due to lower traffic and a reduction in promotional activity.~~value. Since ~~October 31, 2015, 8~~April 30, 2016, three new stores have opened, bringing our total retail store count to 54 as of ~~October~~April 29, ~~2016,~~2017, compared to 4651 as of the end of the prior year period.

Gross profit decreased ~~5.1%~~9.4% to ~~$37,958~~$25,591 for the three months ended ~~October~~April 29, ~~2016~~2017 versus ~~$40,005~~$28,258 in the prior year ~~third~~first quarter. As a percentage of sales, gross margin was ~~50.0%~~44.1%, compared with ~~49.5%~~41.8% in the prior year ~~third~~first quarter. ~~Gross profit and margin were favorably impacted in the prior year by $1,986 associated with the recovery of inventory write-downs taken in the second quarter of 2015.~~ The total gross margin rate increase was primarily driven by the following factors:

Selling, general and administrative (“SG&A”) expenses for the three months ended ~~October~~April 29, ~~2016~~2017 were ~~$31,895,~~$33,784, increasing ~~$4,233,~~$1,978, or ~~15.3%~~6.2%, versus ~~$27,662~~$31,806 for the three months ended ~~October 31, 2015.~~April 30, 2016. SG&A expenses as a percentage of sales were ~~42.0%~~58.2% and ~~34.2%~~47.0% for the three months ended ~~October~~April 29, ~~2016~~2017 and ~~October 31, 2015,~~April 30, 2016, respectively. As we continue to invest in initiatives that we believe will drive future growth, our SG&A expenses as a percentage of sales have deleveraged. The increase in SG&A expenses compared to the prior fiscal year period is primarily due to:

Operating income from our ~~wholesale~~Wholesale segment decreased ~~$3,817,~~$1,308, or ~~17.2%~~12.7%, to ~~$18,416~~$8,966 in the three months ended ~~October~~April 29, ~~2016~~2017 from ~~$22,233~~$10,274 in the three months ended ~~October 31, 2015.~~April 30, 2016. This decrease was primarily driven by ~~a decrease in gross margin, including the unfavorable impact from year-over-year adjustments in inventory reserves, and~~ the sales volume decrease discussed above.

Operating income from our ~~direct-to-consumer~~Direct-to-consumer segment decreased ~~$536,~~$2,979, or ~~35.1%~~177.6%, to ~~$990~~an operating loss of $1,302 in the three months ended ~~October~~April 29, ~~2016~~2017 from ~~$1,526~~operating income of $1,677 in the three months ended ~~October 31, 2015.~~April 30, 2016. The decrease resulted primarily from the impact of higher SG&A expenses associated with ~~the 8 new stores that have opened since the end of the prior year third quarter, partly offset by an increase~~increased staffing and occupancy costs and higher digital marketing and advertising expenses, as well as a decrease in gross ~~margin, including the favorable impact from year-over-year adjustments in inventory reserves.~~profit.

Unallocated corporate expenses are comprised of ~~selling, general and administrative~~SG&A expenses attributable to corporate and administrative activities (such as marketing, design, finance, information technology, legal and human resources departments), and other charges that are not directly attributable to our reportable segments.

Interest expense ~~decreased $405,~~increased $163, or ~~28.4%~~18.5%, to ~~$1,023~~$1,044 in the three months ended ~~October~~April 29, ~~2016~~2017 from ~~$1,428~~$881 in the three months ended October 31, 2015. The reduction in interest expense is primarily due to lower overall debt balances as a result of voluntary prepayments on our Term Loan Facility during the nine months ended October 31, 2015 and reduced borrowings under the Revolving Credit Facility.April 30, 2016.

Other expense, net decreased ~~$708,~~$159, or ~~78.8%~~99.4%, to ~~$191~~$1 in the three months ended ~~October~~April 29, ~~2016~~2017 from ~~$899~~$160 in the three months ended ~~October 31, 2015 primarily due to an $801 adjustment to the obligation under the Tax Receivable Agreement with the Pre-IPO Stockholders recorded in the prior year.~~April 30, 2016.

Provision (benefit) for income taxes for the three months ended ~~October~~April 29, ~~2016~~2017 was ~~$1,469~~$52 as compared to ~~$4,123~~a benefit of $2,665 for the three months ended ~~October 31, 2015.~~April 30, 2016. Our effective tax rate on pretax ~~income~~loss for the three months ended ~~October~~April 29, 2017 and April 30, 2016 was 0.6% and ~~October 31, 2015 was 30.3% and 41.2%~~58.1%, respectively. The effective tax rate for the three months ended ~~October~~April 29, ~~2016~~2017 differed from the U.S. statutory rate of 35% primarily due to the impact of ~~certain non-deductible executive compensation costs and state taxes,~~the valuation allowance established against our deferred tax assets partly offset by ~~the impact of a change in projected pre-tax income.~~state taxes. The effective tax rate for the three months ended ~~October 31, 2015 differed from the U.S. statutory rate of 35% primarily due to state taxes and non-deductible expenses, partly offset by the return to provision adjustment.~~

~~Nine Months Ended October 29, 2016 Compared to Nine Months Ended October 31, 2015~~

~~Net sales~~ ~~for the nine months ended October 29, 2016 were $204,320, decreasing $16,374, or 7.4%, versus $220,694 for the nine months ended October 31, 2015. Net sales by reportable segment are as follows:~~

Net sales from our wholesale segment decreased $17,490, or 11.4%, to $135,614 in the nine months ended October 29, 2016, from $153,104 in the nine months ended October 31, 2015 primarily driven by the planned reduction in full-price orders, partly offset by higher off-price orders.

Net sales from our direct-to-consumer segment increased $1,116, or 1.7%, to $68,706 in the nine months ended October 29, 2016 from $67,590 in the nine months ended October 31, 2015. Non-comparable sales contributed $10,306 of sales growth which was partly offset by a decline in comparable sales of $9,190, or 14.1%, including e-commerce, reflecting declines in the number of transactions, due to lower conversion rates and reduced traffic and a decrease in average order value. Since October 31, 2015, 8 new stores have opened, bringing our total retail store count to 54 as of October 29, 2016, compared to 46 as of the end of the prior year period.

~~Gross profit~~ increased 2.3% to $93,603 for the nine months ended October 29, 2016 versus $91,535 in the prior year. As a percentage of sales, gross margin was 45.8%, compared with 41.5% in the prior year. Gross profit and margin were negatively impacted in the prior year by net charges totaling $12,461 associated with the Company’s decision to accelerate the disposition of aged and excess product. The total gross margin rate increase was primarily driven by the following factors:

~~SG&A expenses~~ for the nine months ended October 29, 2016 were $95,343, increasing $14,710, or 18.2%, versus $80,633 for the nine months ended October 31, 2015. SG&A expenses as a percentage of sales were 46.7% and 36.6% for the nine months ended October 29, 2016 and October 31, 2015, respectively. As we continue to invest in initiatives that we believe will drive future growth, our SG&A expenses as a percentage of sales have deleveraged. SG&A expenses in the prior year included a $3,025 charge for net management transition costs. The increase in SG&A expenses compared to the prior fiscal year period is primarily due to:

~~The above increases were partially offset by a net charge of $3,025 for management transition costs recorded in the prior year.~~

~~Income (loss) from operations~~ ~~by segment for the nine months ended October 29, 2016 and October 31, 2015 is summarized in the following table:~~

Operating income from our wholesale segment decreased $4,827, or 10.9%, to $39,422 in the nine months ended October 29, 2016 from $44,249 in the nine months ended October 31, 2015. This decrease was primarily driven by lower gross margins resulting from the sales volume decline discussed above, partly offset by the favorable impact from year-over-year adjustments in inventory reserves.

Operating income from our direct-to-consumer segment increased by $374, or 19.0%, to $2,344 in the nine months ended October 29, 2016 from $1,970 in the nine months ended October 31, 2015. The increase resulted primarily from an increase in gross margin including the favorable impact from year-over-year adjustments in inventory reserves, partly offset by the impact of higher SG&A expenses associated with the 8 new stores that have opened since the end of the prior year third quarter.

Unallocated corporate expenses are comprised of selling, general and administrative expenses attributable to corporate and administrative activities (such as marketing, design, finance, information technology, legal and human resources departments), and other charges that are not directly attributable to our reportable segments.

~~Interest expense~~ decreased $1,458, or 33.4%, to $2,909 in the nine months ended October 29, 2016 from $4,367 in the nine months ended October 31, 2015. The reduction in interest expense is primarily due to the lower overall debt balances as a result of voluntary prepayments on our Term Loan Facility during the nine months ended October 31, 2015.

~~Other expense, net~~ decreased $1,011, or 72.7%, to $379 in the nine months ended October 29, 2016 from $1,390 in the nine months ended October 31, 2015 primarily due to an $801 adjustment to the obligation under the Tax Receivable Agreement with the Pre-IPO Stockholders recorded in the prior year.

~~(Benefit) Provision for income taxes~~ for the nine months ended October 29, 2016 was a benefit of $4,517 as compared to expense of $1,824 for the nine months ended October 31, 2015. Our effective tax rate on pretax income for the nine months ended October 29, 2016 and October 31, 2015 was 89.8% and 35.5%, respectively. The effective tax rate for the nine months ended October 29,April 30, 2016 differed from the U.S. statutory rate of 35% primarily due to the impact of certain non-deductible executive compensation costs as well as state taxes. Our effective tax rate for the nine months ended October 31, 2015 differed from the U.S. statutory rate of 35% primarily due to state taxes and non-deductible expenses, mostly offset by the favorable impact of changes to the New York City tax laws that impacted the net operating loss deferred tax assets and the return to provision adjustment.

Our sources of liquidity are cash and cash equivalents, cash flows from operations, if any, borrowings available under the Revolving Credit Facility and our ability to access capital markets. Our primary cash needs are funding working capital ~~expenditures for new stores and related leasehold improvements, for investment in our new information technology systems and related infrastructure,~~requirements, meeting our debt service requirements, paying amounts due under the Tax Receivable Agreement and ~~funding working~~ capital ~~requirements.~~expenditures for new stores and related leasehold improvements. The most significant components of our working capital are cash and cash equivalents, accounts receivable, inventories, accounts payable and other current liabilities.In accordance with new accounting guidance that became effective for fiscal 2016, management has concluded there is substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued. See Note 1 “Description of Business and Basis of Presentation — (C) Sources and Uses of Liquidity” within the notes to the Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q for additional details. In addition, see Part I. Item 1A. “Risk Factors” included in the 2016 Annual Report on Form 10-K.

During April 2017, the Company utilized $6,241 of the funds held by VHC to make a Specified Equity Contribution, as defined under the Term Loan Facility, in connection with the calculation of the Consolidated Net Total Leverage Ratio under the Term Loan Facility as of January 28, 2017 so that the Consolidated Net Total Leverage Ratio would not exceed 3.25 to 1.00. In addition, during May and June 2017, the Company utilized $11,831 of the funds held by Vince Holding Corp. to make a Specified Equity Contribution in connection with the calculation of the Consolidated Net Total Leverage Ratio under the Term Loan Facility as of April 29, 2017 so that the Consolidated Net Total Leverage Ratio would not exceed 3.25 to 1.00. As of June 8, 2017, Vince Holding Corp. retains $3,173 of funds.

Additionally, in order to increase availability under the Revolving Credit Facility, on March 6, 2017, Vince, LLC entered into a side letter (the “Letter”) with BofA, as administrative agent and collateral agent under the Revolving Credit Facility which temporarily modified the covenant that requires that at any point when “Excess Availability” is less than the greater of (i) 15% of the adjusted loan cap (without giving effect to item (iii) of the loan cap described below) or (ii) $10,000, and continuing until Excess Availability exceeds the greater of such amounts for 30 consecutive days, during which time, we must maintain a consolidated EBITDA (as defined in the Revolving Credit Facility) equal to or greater than $20,000 measured at the end of each applicable fiscal month for the trailing twelve-month period. The Letter provided that during the period from March 6, 2017 until and through April 30, 2017, the respective thresholds included in the definitions of “Covenant Compliance Event” and “Trigger Event” under the Revolving Credit Facility were temporarily modified to be the greater of (a) 12.5% of the Adjusted Loan Cap (as defined under the Revolving Credit Facility) and (b) $5,000. On April 14, 2017, Vince, LLC and BofA amended and restated the Letter in its entirety (the “Amended Letter”). The Amended Letter provides that during the period from April 13, 2017 until and through July 31, 2017 (the “Letter Period”), the respective thresholds included in the definitions of “Covenant Compliance Event” and “Trigger Event” in the Revolving

Credit Facility continue to be temporarily modified to be the greater of (a) 12.5% of the Adjusted Loan Cap (as defined in the Revolving Credit Facility) and (b) $5,000. The Amended Letter further provides that during the Letter Period, so long as the Company’s cash is held in a deposit account of the Company maintained with BofA (the “BofA Account”), the Company may include in the Borrowing Base (i) up to $10,000 of such cash after April 13, 2017 through May 31, 2017 and (ii) up to $5,000 of such cash after May 31, 2017 through July 31, 2017. During the Letter Period, to the extent that the cash and cash equivalents held by the Loan Parties at the close of business on any given day exceeds $1,000 (excluding amounts in the BofA Account and certain other excluded accounts, as well as amounts equal to all undrawn checks and ACH issued in the ordinary course of business for payroll, rent and other accounts payable needs), Vince shall use any such cash in excess of $1,000 to repay the loans under the Revolving Credit Facility. Additionally, the Company is currently subject to a commercial finance examination as per the terms of the Letter, which could potentially result in future changes to the availability under the Revolving Credit Facility.

On ~~March 15, 2016,~~May 18, 2017, the Company entered into an Investment Agreement with Sun Cardinal, LLC and SCSF Cardinal, LLC, affiliates of Sun Capital Partners, Inc. (collectively the “Investors”) pursuant to which Sun Cardinal and SCSF Cardinal agreed to backstopreceived a rights offering by purchasing at the subscription price of $5.50 per share any and all shares not subscribed through the exercise of rights, including the oversubscription. The Investment Agreement superseded the Rights Offering Commitment Letter ~~dated December 9, 2015,~~ from Sun Capital Partners V, L.P. ~~See Note 11 “Related Party Transactions” within the notes to the Unaudited Condensed Consolidated Financial Statements in this quarterly report on Form 10-Q for additional information.~~

~~On March 29, 2016,~~(“Sun Fund V”) that provides the Company ~~commenced~~with an amount equal to $30,000 of cash proceeds (the “Contribution Obligation”) in the event that the Company commences a rights offering ~~(the~~of its common stock to its stockholders (a “Rights Offering”)~~, whereby~~. Such Contribution Obligation will be reduced by any proceeds received from the Rights Offering. The Company ~~distributed, at no charge,~~is required, simultaneously with the funding of the Contribution Obligation by Sun Fund V, or one or more of its affiliates, to ~~stockholders~~issue to Sun Fund V or one or more of ~~record as~~its affiliates the applicable number of ~~March 23, 2016 (the “Rights Offering Record Date”), rights to purchase new~~ shares of the Company’s common stock at ~~$5.50~~the price per ~~share. Each stockholder as of~~share at which participants in the Rights Offering ~~Record Date (“Rights Holders”) received one non-transferrable right~~are entitled to purchase ~~0.3191~~ shares ~~for every share~~ of common stock, ~~owned on~~which price will be mutually agreed between the ~~Rights Offering Record Date (the “subscription right”). Rights Holders who fully exercised their subscription rights were entitled to subscribe for additional shares~~Company and Sun Fund V and approved by the members of the Company’s board of directors that ~~remained unsubscribed as a result~~are not employed by or affiliated with the Company or Sun Fund V. The funding of ~~any unexercised subscription rights (the “over-subscription right”). The over-subscription right allowed a Rights Holder to subscribe for an additional number of shares equal to up to 20%~~the Contribution Obligation, and the issuance of the shares of common stock ~~for which such holder was otherwise entitled~~by the Company, will be made pursuant to ~~subscribe. Subscription rights could only~~an investment agreement in substantially the same form as the investment agreement, dated March 15, 2016, by and among Sun Cardinal, LLC, SCSF Cardinal, LLC and the Company, with any modifications thereto as may be ~~exercised for whole numbers~~mutually agreed between Sun Fund V and the Company. There will be no commitment fee due to Sun Fund V from the Company in connection with the Contribution Obligation. Sun Fund V’s obligations under the Rights Offering Commitment Letter are subject to (i) the Company entering into an amendment to its existing senior secured term loan facility that is acceptable to Sun Fund V in its sole discretion, (ii) no default or event of ~~shares;~~default having occurred under the Company’s Term Loan Facility or Revolving Credit Facility, unless promptly cured or reasonably expected to be promptly cured by the Company and (iii) no ~~fractional shares of common stock were issued~~circumstance existing that has had or would reasonably be expected to have, individually or in the ~~Rights Offering. The~~aggregate, a material adverse effect on the Company and its subsidiaries taken as a whole. Sun Fund V’s obligations under the Rights Offering ~~period expired on April 14, 2016 at 5:00~~Commitment Letter terminate upon the earliest to occur of (A) the consummation of the Rights Offering whereby the Company receives proceeds equal to or exceeding $30,000, (B) 11:59 p.m. New York City time prior to which payment for all subscription rights required an irrevocable funding of cash to the transfer agent, to be held in an account for the benefit of the Company. The Investors fully subscribed inon June 30, 2017 if the Rights Offering ~~and exercised their oversubscription right. The Company~~ ~~received subscriptions and oversubscriptions from its existing stockholders for a total of 11,622,518 shares of its common stock, resulting~~has not commenced by such time (which date to be extended by 45 days in ~~aggregate gross proceeds of approximately $63,924. Simultaneous with~~ the ~~closing of~~event the Company’s registration statement relating to the Rights Offering is reviewed by the ~~Company received $1,076 of gross proceeds from~~Securities and Exchange commission (the “SEC”)) , (C) 11:59 p.m. New York City time on August 1, 2017 (which date to be extended by 45 days in the ~~related Investment Agreement and issued~~event the Company’s registration statement relating to ~~the Investors 195,663 shares of its common stock in connection therewith. In total, the Company received total gross proceeds of $65,000 as a result of~~ the Rights Offering is reviewed by the SEC), and ~~related Investment Agreement transactions.~~ ~~Upon~~(D) the ~~completion of these transactions,~~date Sun Fund V, or its affiliates, ~~of Sun Capital owned 58% of our outstanding common stock.~~fund the Contribution Obligation.

The Company used a portion of the net proceeds received from the Rights Offering to (1) repay the amount owed by us under the Tax Receivable Agreement with Sun Cardinal, for itself and as a representative of the other stockholders party thereto, for the tax benefit with respect to the 2014 taxable year including accrued interest, totaling $22,262 (see Note 11 “Related Party Transactions” within the notes to the Unaudited Condensed Consolidated Financial Statements in this quarterly report on Form 10-Q), and (2) repay all then outstanding indebtedness, totaling $20,000, under our Revolving Credit Facility. The Company intends to use the remaining net proceeds, which funds are held by Vince Holding Corp. until needed by our operating subsidiary, for additional strategic investments and general corporate purposes, which may include future amounts owed by us under the Tax Receivable Agreement.

Management believes that our cash and cash equivalents, expected cash flow from operations and amounts available under the Revolving Credit Facility will be sufficient to comply with any covenants under the Term Loan Facility and the Revolving Credit Facility, fund our debt service requirements, fund our obligations under our Tax Receivable Agreement, and fund planned capital expenditures and working capital needs for at least the next twelve months. However, there can be no assurance that we will be able to achieve our strategic initiatives in the future and failure to do so would have a significant adverse effect on our operations.

Net cash used in operating activities during the ~~nine~~three months ended ~~October~~April 29, ~~2016~~2017 was ~~$34,152,~~$19,751, which consisted of a net loss of ~~$511,~~$9,290, impacted by non-cash items of ~~$4,743~~$2,571 and cash used in working capital of ~~$38,384.~~$13,032. Net cash used in working capital primarily resulted from a cash outflow in accounts payable and accrued expenses of ~~$32,706, primarily~~$11,352 due to the ~~payment~~timing of ~~$22,262, including accrued interest, under the Tax Receivable Agreement with Sun Cardinal~~payments to vendors and a cash outflow of ~~$7,213~~$9,956 in receivables, net primarily driven by the timing of ~~sales activity.~~ collections.

Net cash ~~provided by~~used in operating activities during the ~~nine~~three months ended ~~October 31, 2015~~April 30, 2016 was ~~$24,134,~~$31,996, which consisted of a net ~~income~~loss of ~~$3,321,~~$1,924, impacted by non-cash items of ~~$30,609~~$647 and cash used in working capital of ~~$9,796.~~$30,719. Net cash used in working capital primarily resulted from a cash outflow in ~~inventories of $24,464 due to new store additions, increased handbag inventory and higher in-transit inventory and a cash outflow in~~ accounts payable and accrued expenses of ~~$1,904~~$34,391, primarily due to the payment of $22,258, including accrued interest, under the Tax Receivable Agreement with Sun Cardinal as well as the timing of ~~payments.~~payments to vendors and a cash outflow of $7,752 in receivables, net primarily driven by off-price sales activity and settlement of vendor allowances. These cash outflows were partially offset by a cash inflow in ~~accounts receivable~~inventories of ~~$14,929 primarily~~$12,821 due to ~~the timing of current year collections from prior year receivables~~better inventory management partly offset by increased purchases to support new stores and ~~lower wholesale sales performance.~~shop-in-shops.

	Nine Months Ended
	October 29,			October 31,
	2016			2015			For the three months ended
(in thousands)							April 29, 2017			April 30, 2016
Investing activities
Payments for capital expenditures	$	(12,677	)	$	(14,107	)	$	(1,785	)	$	(3,709	)
Net cash used in investing activities	$	(12,677	)	$	(14,107	)	$	(1,785	)	$	(3,709	)

Net cash used in investing activities of ~~$12,677~~$1,785 during the ~~nine~~three months ended ~~October~~April 29, ~~2016~~2017 represents capital expenditures primarily related to the investment in our ~~new systems and related infrastructure and~~ retail store build-outs, including leasehold improvements and store ~~fixtures.~~fixtures and our new systems.

Net cash used in investing activities of ~~$14,107~~$3,709 during the ~~nine~~three months ended ~~October 31, 2015~~April 30, 2016 represents capital expenditures ~~for construction of~~related primarily to retail ~~stores, costs related to the build-out of our new corporate office space~~store build-outs, including leasehold improvements and ~~showroom facilities, costs related to information technology initiatives,~~store fixtures, as well as ~~additional build-out of shop-in-shops within selected wholesale partner locations.~~expenditures for our shop-in-shop spaces operated by certain distribution partners and the investment in our new ERP systems and related infrastructure.

	Nine Months Ended
	October 29,			October 31,
	2016			2015			For the three months ended
(in thousands)							April 29, 2017			April 30, 2016
Financing activities
Proceeds from borrowings under the Revolving Credit Facility	$	118,567		$	108,423		$	121,083		$	46,073
Repayment of borrowings under the Revolving Credit Facility		(125,767	)		(98,514	)		(105,147	)		(61,073	)
Repayment of borrowings under the Term Loan Facility		—			(20,000	)
Proceeds from common stock issuance, net of transaction costs		63,773			—			—			63,883
Stock option exercise and issuance of common stock under employee stock purchase plan		4,731			175
Fees paid for Term Loan Facility and Revolving Credit Facility		—			(99	)
Net cash provided by (used in) financing activities	$	61,304		$	(10,015	)
Proceeds from stock option exercises and issuance of common stock under employee stock purchase plan								13			2,155
Net cash provided by financing activities							$	15,949		$	51,038

Net cash provided by financing activities was ~~$61,304~~$15,949 during the ~~nine~~three months ended ~~October~~April 29, 2017, primarily consisting of $15,936 of net proceeds from borrowings under our Revolving Credit Facility.

Net cash used in financing activities was $51,038 during the three months ended April 30, 2016, primarily consisting of $63,883 of net proceeds received from the issuance of common stock in connection with the rights offering completed ~~Rights Offering of $63,773 and $4,731 of proceeds from stock option exercises,~~during the three months ended April 30, 2016, partially offset by ~~$7,200~~$15,000 of net repayments of ~~borrowings under our Revolving Credit Facility.~~

Net cash used in financing activities was $10,015 during the nine months ended October 31, 2015, primarily consisting of voluntary prepayments totaling $20,000 on the Term Loan Facility, partially offset by $9,909 of net proceeds from borrowings under our Revolving Credit Facility.

On November 27, 2013, Vince, LLC entered into a $50,000 senior secured revolving credit facility (as amended from time to time, the “Revolving Credit Facility”) with Bank of America, N.A. (“BofA”) as administrative agent. Vince, LLC is the borrower and VHC and Vince Intermediate Holding, LLC, a direct subsidiary of VHC and the direct parent company of Vince, LLC (“Vince Intermediate”), are the guarantors under the Revolving Credit Facility. On June 3, 2015, Vince LLC entered into a first amendment to the Revolving Credit Facility, that among other things, increased the aggregate commitments under the facility from $50,000 to $80,000, subject to a loan cap which is the lesser of (i) the Borrowing Base, as defined in the loan agreement, (ii) the aggregate

commitments, or (iii) $70,000 until debt obligations under the Company’s term loan facility have been paid in full, and extended the maturity date from November 27, 2018 to June 3, 2020. The Revolving Credit Facility also provides for a letter of credit sublimit of $25,000 (plus any increase in aggregate commitments) and an accordion option that allows for an increase in aggregate commitments up to $20,000. Interest is payable on the loans under the Revolving Credit Facility at either the LIBOR or the Base Rate, in each case, plus an applicable margin of 1.25% to 1.75% for LIBOR loans or 0.25% to 0.75% for Base Rate loans, and in each case subject to a pricing grid based on an average daily 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 ~~maintenance requirement~~covenant that, at any point when “Excess Availability” is less than the greater of (i) 15% ~~percent~~ of ~~the~~an adjusted loan cap (without giving effect to item (iii) of the loan cap described above) or (ii) $10,000, and continuing until Excess Availability exceeds the greater of such amounts for 30 consecutive days, during which time, weVince, LLC must maintain a consolidated EBITDA (as defined in the Revolving Credit Facility) equal to or greater than $20,000 measured at the end of each applicable fiscal month for the trailing twelve-month period. ~~We have~~As of April 29, 2017, the Company was not ~~been~~ subject to this ~~maintenance requirement~~covenant as Excess Availability was greater than the required minimum. Additionally, in order to increase availability under the Revolving Credit Facility, on March 6, 2017, Vince, LLC entered into a side letter (the “Letter”) with BofA, as administrative agent and collateral agent under the Revolving Credit Facility which temporarily modified the covenant discussed above. The Letter provided that during the period from March 6, 2017 until and through April 30, 2017, the respective thresholds included in the definitions of “Covenant Compliance Event” and “Trigger Event” under the Revolving Credit Facility were temporarily modified to be the greater of (a) 12.5% of the Adjusted Loan Cap (as defined in the Revolving Credit Facility) and (b) $5,000. On April 14, 2017, Vince, LLC and BofA amended and restated the Letter in its entirety (the “Amended Letter”). The Amended Letter provides that during the period from April 13, 2017 until and through July 31, 2017 (the “Letter Period”), the respective thresholds included in the definitions of “Covenant Compliance Event” and “Trigger Event” in the Revolving Credit Facility continue to be temporarily modified to be the greater of (a) 12.5% of the Adjusted Loan Cap (as defined in the Revolving Credit Facility) and (b) $5,000. The Amended Letter further provides that during the Letter Period, so long as the Company’s cash is held in a deposit account of the Company maintained with BofA (the “BofA Account”), the Company may include in the Borrowing Base (i) up to $10,000 of such cash after April 13, 2017 through May 31, 2017 and (ii) up to $5,000 of such cash after May 31, 2017 through July 31, 2017. During the Letter Period, to the extent that the cash and cash equivalents held by the Loan Parties at the close of business on any given day exceeds $1,000 (excluding amounts in the BofA Account an d certain other excluded accounts, as well as amounts equal to all undrawn checks and ACH issued in the ordinary course of business for payroll, rent and other accounts payable needs), Vince shall use any such cash in excess of $1,000 to repay the loans under the Revolving Credit Facility.

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~~the Company’s 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 adjusted loan cap and $10,000 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 1.0 to 1.0 (provided that the Consolidated Fixed Charge Coverage Ratio may be less than 1.0 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 adjusted loan cap and $15,000). As of ~~October~~April 29, ~~2016,~~2017, we were in compliance with applicable financial covenants.

As of ~~October~~April 29, ~~2016,~~2017, the availability under the Revolving Credit Facility was ~~$31,980~~$15,134 net of the amended loan cap and there were ~~$7,800~~$21,136 of borrowings outstanding and $7,474 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 ~~October~~April 29, ~~2016~~2017 was ~~4.0%~~2.6%.

As of ~~October 31, 2015,~~April 30, 2016, the availability on the Revolving Credit Facility was ~~$29,569~~$43,685 and there ~~was $32,909~~were $0 of borrowings outstanding and ~~$7,522~~$7,474 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 October 31, 2015 was 2.3%.~~

On November 27, 2013, in connection with the closing of the IPO and Restructuring Transactions, Vince, LLC and Vince Intermediate entered into a $175,000 senior secured term loan facility (as amended from time to time, the “Term Loan Facility”) with the lenders party thereto, BofA, as administrative agent, JP Morgan 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. Vince, LLC and Vince Intermediate are borrowers and VHC is a guarantor under the Term Loan Facility.

The Term Loan Facility also provides for an incremental facility of up to the greater of $50,000 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 (adjusted to reflect any prepayments), 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 consolidated net total leverage ratio or (ii) the base rate applicable margin of 3.75% to 4.00% based on a consolidated net total 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 requires Vince, LLC and Vince Intermediate to make mandatory prepayments upon the occurrence of certain events, including additional debt issuances, common and preferred stock issuances, certain asset sales, and annual payments of 50% of excess cash flow, subject to reductions to 25% and 0% if Vince, LLC and Vince Intermediate maintain a Consolidated Net Total Leverage Ratio of 2.50 to 1.00 and 2.00 to 1.00, respectively, and subject to reductions for voluntary prepayments made during such fiscal year.

prepayment of other debt, the repurchase of capital stock, transactions with affiliates, and the ability to change the nature of ~~its~~the Company’s 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 in an amount not to exceed the excess available amount, as defined in the loan agreement. All obligations under the Term Loan Facility are guaranteed by ~~Vince Holding Corp.~~VHC 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.,~~VHC, Vince, LLC and Vince Intermediate and any future material domestic restricted subsidiaries. As of ~~October~~April 29, ~~2016,~~2017, we were in compliance with applicable financial covenants.During May and June 2017, the Company utilized $11,831 of the funds held by VHC to make a Specified Equity Contribution, as defined under the Term Loan Facility, in connection with the calculation of the Consolidated Net Total Leverage Ratio under the Term Loan Facility as of April 29, 2017 so that the Consolidated Net Total Leverage Ratio would not exceed 3.25 to 1.00.

Through ~~October~~April 29, ~~2016,~~2017, on an inception to date basis, we have made voluntary prepayments totaling $130,000 in the aggregate on the original $175,000 Term Loan Facility entered into on November 27, ~~2013. Of the $130,000 aggregate voluntary~~2013 with no such prepayments made ~~to date, $0 was paid~~ during the ~~nine~~three months ended ~~October~~April 29, ~~2016.~~2017. As of ~~October~~April 29, ~~2016,~~2017, the Company had $45,000 of debt outstanding under the Term Loan Facility.

We 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.

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 and consumer confidence as well as the impact of adverse weather conditions. In addition,

fluctuations in the amount of 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. We expect such seasonality to continue.

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.

Our discussion of financial condition and results of operations relies on our condensed consolidated financial statements, as set forth in Item 1 of this report on Form 10-Q, which are prepared based on certain critical accounting policies that require management to make judgments and estimates that are subject to varying degrees of uncertainty. While we believe that these accounting policies are based on reasonable measurement criteria, actual future events can and often do result in outcomes materially different from these estimates.

A summary of our critical accounting policies is included in the Management’s Discussion and Analysis of Financial Condition and Results of Operations section of our ~~2015~~2016 Annual Report on Form 10-K. As of ~~October~~April 29, ~~2016,~~2017, there have been no material changes to the critical accounting policies contained therein.

ITEM 3. QUANTITATIVE AND ~~QUALITATIVE~~QUALITATIVE DISCLOSURE 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 an applicable margin of 4.75% to 5.00%. 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 ~~October~~April 29, ~~2016,~~2017, a one percentage point increase in the interest rate on our variable rate debt would result in additional interest expense of approximately ~~$528~~$661 for the ~~$52,800~~$66,136 of borrowings outstanding under the Term Loan Facility and Revolving Credit Facility as of such date, calculated on an annual basis.

We do not ~~currently anticipate~~expect that foreign currency risk, commodity price or inflation risks ~~will~~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.~~

Attached as exhibits to this Quarterly Report on Form 10-Q are certifications of our Chief Executive Officer and Chief Financial Officer. Rule 13a-14 of the Securities Exchange Act of 1934, as amended (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 ~~October~~April 29, ~~2016.~~2017.

~~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~~were not effective due to material weaknesses in our internal control over financial reporting as described below.

As a result of the material weaknesses identified, we performed additional analysis, substantive testing and other post-closing procedures intended to ensure ~~information is recorded, processed, summarized~~that our condensed consolidated financial statements were prepared in accordance with U.S. GAAP. Accordingly, management believes that the condensed consolidated financial statements and ~~reported within~~related notes thereto included in this

Quarterly Report on Form 10-Q fairly present, in all material respects, the Company’s financial condition, results of operations and cash flows for the periods ~~specified~~ presented.

As described in Management’s Report On Internal Control Over Financial Reporting in Item 9A of our Annual Report on Form 10-K for the ~~Securities~~year ended January 28, 2017, we did not design and ~~Exchange Commission’s rules~~implement effective control over risk assessment with regard to our processes and ~~forms~~procedures commensurate with our financial reporting requirements, which deficiency was identified as a material weakness. Specifically, we did not maintain appropriate corporate governance and oversight, change management and system implementation controls intended to address the risks associated with the implementation of our ERP and payroll systems and to ~~provide reasonable assurance~~timely identify and appropriately mitigate such risk prior to transitioning to the new systems.

The risk assessment material weakness contributed to a second material weakness related to the design and maintenance of information technology (“IT”) general controls for information systems that ~~such~~are relevant to the preparation of financial statements. Specifically, the Company did not (i) maintain program change management controls to ensure that information technology program and data changes affecting financial IT applications and underlying accounting records were tested, approved and implemented appropriately; and (ii) maintain adequate user access controls to ensure appropriate segregation of duties and to adequately restrict access to financial applications and data.

These material weaknesses could impact the effectiveness of IT-dependent controls (such as automated controls that address the risk of material misstatement to one or more assertions, along with the IT controls and underlying data that support the effectiveness of system-generated data and reports) and could result in misstatements potentially impacting all financial statement accounts and disclosures, which would not be prevented or detected.

Management has initiated a remediation plan to address the control deficiencies that led to the material weaknesses. The remediation plan includes, but is ~~accumulated~~not limited to:

Our goal is to implement these control improvements during fiscal 2017 and to fully remediate these material weaknesses by the end of 2017, subject to there being sufficient opportunities to conclude, through testing, that the implemented controls are operating effectively. Until the controls are remediated, we will continue to perform additional analysis, substantive testing and other post-closing procedures to ensure that our ~~management, including~~condensed consolidated financial statements are prepared in accordance with U.S. GAAP.

In connection with the remediation plan discussed above, the following changes in our ~~Chief Executive Officer~~internal control over financial reporting (as defined in Rules 13a-15(f) and ~~Chief Financial Officer as appropriate, to allow timely decisions regarding required disclosure.~~15d-15(f) under the Exchange Act) occurred during the fiscal quarter ended April 29, 2017:

A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Accordingly, our disclosure controls and procedures are designed to provide reasonable, not absolute, assurance that the objectives of our disclosure system are met. 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.

There was no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the fiscal quarter ended October 29, 2016 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

On May 5, 2017, a complaint was filed in the United States District Court for the Eastern District of New York on behalf of a putative class of our stockholders, naming us as well as Brendan Hoffman, our Chief Executive Officer, and David Stefko, our Executive Vice President, Chief Financial Officer, as defendants. The complaint, brought on behalf of all persons who purchased our common stock between December 8, 2016 and April 27, 2017, generally alleges that we and the named officers made false and/or misleading statements and/or failed to disclose matters relating to the transition of our ERP systems from Kellwood. The complaint brings causes of action for violations of Section 10(b) and Rule 10b-5 of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”) against us and the two named officers and for violations of Section 20(a) of the Exchange Act against the two named officers. The complaint seeks unspecified monetary damages and unspecified costs and fees.

We currently believe that the likelihood of an unfavorable judgment arising from this matter is remote based on the information currently available and that the ultimate resolution of this matter will not have a material adverse effect on the Company’s business in a future period. However, given the inherent unpredictability of litigation and the fact that this litigation is still in its early stages, the Company is unable to predict with certainty the outcome of this litigation or reasonably estimate a possible loss or range of loss associated with this litigation at this time. In addition, the Company will be required to expend resources to defend this matter.

Additionally, we are a party to other legal proceedings, compliance matters and environmental claims that arise in the ordinary course of our business. Except as disclosed above and in our ~~2015~~2016 Annual Report on Form 10-K, we are not currently a party to any legal proceedings, compliance investigation or environmental claims that we believe would, individually or in the aggregate, have a material adverse effect on our financial position, results of operations, or cash flows although these proceedings and claims are subject to inherent uncertainties.

The risk factors disclosed in ~~our 2015~~the Company’s 2016 Annual Report on Form 10-K, in addition to the other information set forth in this report on Form 10-Q, could materially affect ~~our~~the Company’s business, financial condition or results. The Company’s risk factors have not changed materially from those disclosed in ~~our 2015~~its 2016 Annual Report on Form 10-K other than the following:

We ~~have completed~~are currently not in compliance with the ~~process~~New York Stock Exchange's (“NYSE”) minimum share price requirement and market capitalization requirement, and we are at risk of ~~migrating~~NYSE delisting our ~~U.S. distribution system from Kellwood to a new third party provider. Problems with~~common stock, which could materially impair the liquidity and value of our ~~distribution system, including any disruption caused~~common stock.

Our common stock is currently listed on the NYSE. On May 17, 2017, we were notified by the ~~migration, could materially harm~~NYSE that (i) the average closing price of our ~~ability~~common stock had fallen below $1.00 per share over a period of 30 consecutive trading days, which is the minimum average share price required by NYSE and (ii) the average global market capitalization over a consecutive thirty trading-day period had fallen below $50 million at the same time our stockholders’ equity was less than $50 million. As a result, we are required to ~~meet customer expectations, manage inventory, complete sale transactions~~bring our share price and ~~achieve targeted operating efficiencies.~~

Inconsecutive thirty trading-day average share price (as measured on the ~~U.S., we historically relied on a distribution facility operated by Kellwood in City~~last trading day of ~~Industry, California as part~~any calendar month during the sixth month period following receipt of the ~~Shared Services Agreement.~~NYSE notice (the “Notice”)) above $1.00 per share or NYSE will commence suspension and delisting procedures. In ~~November 2015, we entered into~~addition, if our common stock price remains below the $1.00 per share threshold and falls to the point where NYSE considers the stock price to be “abnormally low,” NYSE has the discretion to begin delisting procedures immediately.

We have submitted a ~~service agreement with a new third-party distribution provider in California and completed~~letter to NYSE (the “Response Letter”), confirming the ~~migration~~receipt of the ~~distribution facility from Kellwood in 2016. Our ability to meet the needs of our wholesale partners~~Notice and our ~~own direct-to-consumer business depends~~intent to cure the deficiencies. The Company must bring its share price and consecutive 30 trading-day average share price above $1.00 per share by November 17, 2017. The Company may regain compliance at any time during this six-month cure period if on the ~~proper operation~~last trading day of ~~this distribution facility.~~any calendar month during such six-month cure period (i) the Company’s closing stock price is at least $1.00 per share and (ii) the Company's consecutive 30-trading day average closing stock price is at least $1.00 per share. The ~~migration of these services from Kellwood required us to implement new system integrations. There can be no assurance that we will not encounter problems~~Company may also pursue corporate actions such as a ~~result~~reverse stock split, which would require the approval of such transition to the new third party provider, including significant chargebacks from our wholesale partners and delays in shipments of merchandise to our customers, which could have a material adverse effect on our business, financial condition, liquidity and results of operations. 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.

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 had previously been subject~~Company’s stockholders.

In addition, on or prior to ~~significant processing delays due~~July 1, 2017, the Company must send to ~~labor issues involving~~NYSE a business plan that demonstrates compliance with the ~~port workers. We~~requirement to maintain business interruption insurance. These policies, however, may not adequately protect us from the adverse effects that could result from significant disruptions to our distribution system, including those that may arise from the migration. If we encounter problems with anya 30-trading day average market capitalization of ~~our distribution systems, our ability to meet customer expectations, manage inventory, complete sales and achieve targeted operating efficiencies could be harmed. Any~~at least $50 million or $50 million of stockholders’ equity within 18 months of receipt of the ~~foregoing factors could have a material adverse effect on our~~Notice. NYSE will review the business ~~financial condition~~plan within 45 days of its submission and ~~operating results.~~

Kellwood has provided us with certain key services for our business since the IPO. We have substantially completed the transition of some of such services to our own systems or processes, and are in the process of transitioning the rest of the services to internal and external resources. If we cannot successfully implement the necessary new systems, processes and functions, or complete the transition of the remaining services from Kellwood, our business, financial condition, results of operations and cash flows could be materially harmed.

Since the IPO and Restructuring Transactions, we have relied on certain administrative and operational support functions and systems of Kellwood to run our business pursuant to a Shared Services Agreement (the “Shared Services Agreement”), dated November 27, 2013, by and between Kellwood and us. To date, we have completed the implementation of our own point-of-sale system, third party e-commerce platform, human resource recruitment system, distribution applications, and network infrastructure. The new systems we have recently implemented may not, initially or at all, operate as successfully as the systems we historically used as such systems were highly customized or proprietary. Moreover, the processes and functions that were transitioned to our internal capabilities may not achieve the appropriate levels of operational efficiency in a timely manner, or at all. In addition, we have transitioned certain support services, including e-commerce operations, distribution, logistics, accounting, payroll, benefits administration, and information technology support for our systems implemented to either internal or external resources. We are currently in the process of transitioning the remainder of the Kellwood systems and services, including tax, accounts payable, credit and collections, as well as our own enterprise resource planning (“ERP”) and supporting systems and related IT support services, and we expect to complete such transition by the end of fiscal 2016. We have engaged third party service providers to assume tax, accounts payable, collections as well as information technology support functions from Kellwood and are in the process of integrating the service providers into our processes. The third party service providers may be unable to effectively replace the functions historically provided by Kellwood in a manner that meets our business needs. If we are unable to successfully implement these new systems, processes and functions, or fail to complete the transition of the remaining systems and functions from Kellwood in a timely manner or as planned, we may be forced to adopt more costly, less capable alternatives to replace those systems and functions and our business and results of operations, cash flows and liquidity may be materially and adversely affected.

The Shared Services Agreement governs the provisions of certain support services to us, including distribution, information technology and back office support by Kellwood, as described above. Kellwood will provide these services until we elect to terminate the provision thereof in accordance with the terms of the agreement. 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’sdetermine

whether the Company has made reasonable demonstration of its ability to come into conformity with the relevant standards within such 18-month period. NYSE will either accept the plan, at which time the Company will be subject to ongoing quarterly monitoring for compliance with the business plan, or NYSE will reject the business plan, at which time the Company will be subject to suspension and delisting proceedings. The Company expects to submit such a business plan to NYSE as soon as practicable.

Pursuant to NYSE rules, the Company’s common stock will continue to be listed and traded on NYSE during the cure periods outlined above, subject to the Company’s compliance with other typical continued listing requirements. The current noncompliance with the standards described above does not affect the Company’s ongoing business operations or its reporting requirements with the SEC, nor does it trigger any violation of its material ~~breach upon 30 days prior notice~~debt covenants or other obligations.

No assurance can be given that the Company will be able to ~~such defaulting party. After termination~~regain compliance with these requirements or maintain compliance with the other continued listing requirements set forth in the NYSE Listed Company Manual. If the Company's common stock ultimately were to be suspended from trading and delisted for any reason, it could have adverse consequences including reduced trading liquidity of our common stock, lower demand and market price for our common stock, adverse publicity and a reduced interest in the Company from investors, analysts and other market participants. In addition, a suspension or delisting could impair the Company’s ability to raise additional capital through the public markets and the Company’s ability to attract and retain employees by means of equity compensation.

In accordance with the new accounting guidance that became effective for fiscal 2016, our management has concluded that there is substantial doubt about our ability to continue as a going concern within one year after the date the financial statements are issued.

In accordance with the new accounting guidance that became effective for fiscal 2016, management has the responsibility to evaluate whether conditions and/or events raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued. As required by this standard, management’s evaluation does not initially consider the potential mitigating effects of management’s plans that have not been fully implemented as of the ~~agreement, Kellwood will have no obligation to provide any services to us. See “Shared Services Agreement” under~~date the financial statements are issued. As further discussed in Note ~~11 “Related Party Transactions”~~1 “Description of Business and Basis of Presentation — (C) Sources and Uses of Liquidity” to the ~~Unaudited~~Condensed Consolidated Financial Statements included in this ~~quarterly report~~Quarterly Report on Form 10-Q, ~~for further details. We~~understanding the difficulties to project the current retail environment and as management’s plans to mitigate the substantial doubt have ~~terminated some~~not been fully executed, our management has concluded there is substantial doubt about our ability to continue as a going concern within one year after the date that the financial statements are issued. Our financial statements do not include any adjustment relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should we be unable to continue as a going concern. Our ability to continue as a going concern depends on the execution of our plans to mitigate the substantial doubt that currently exists, including discussions with existing and prospective lenders and with our majority shareholder on additional financing options and actions to improve the capital structure of the ~~services provided by Kellwood upon completion~~Company and cost containment initiatives. While management believes that these plans are reasonably possible of occurring, it cannot predict with certainty the ~~transition~~impact of various factors, including a challenging retail environment, on the Company’s business operations and financial results. Such impact could give rise to unanticipated capital needs that we may not be able to meet and/or result in our inability to service our existing debt or comply with the covenants therein. If such ~~services~~an event occurs, if we are unsuccessful in securing amendments to our ~~own resources~~existing debt agreements or other financing arrangement or otherwise improving our capital structure, we may be unable to meet our payment obligations as they become due and ~~have given notice~~may be required to ~~Kellwood~~restructure our business. In addition, the inclusion of ~~our intent~~management’s conclusion described above has had and may continue to ~~terminate~~materially adversely affect the ~~remaining services once the transition of those services is complete. If Kellwood encounters any operational or financial issues during the remainder of the transitional period which impact~~Company’s stock price and its ability to provide services pursuant to the Shared Services Agreement, or any failure or significant downtime in our own financial or administrative systems or in Kellwood’s financial or administrative systems occurs during such period, ourrelationships with its customers, vendors and other business ~~could be materially harmed.~~partners.

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

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



Delaware	75-3264870
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)



Large ~~Accelerated Filer~~accelerated filer	☐	Accelerated ~~Filer~~filer	☒

~~Non-Accelerated Filer~~Non-accelerated filer	☐ (Do not check if a smaller reporting company)	Smaller ~~Reporting Company~~reporting company	☐

Emerging growth company	☒



Common Stock	Outstanding at ~~November 30, 2016~~May 31, 2017
Common Stock, $0.01 par value per share	~~49,421,024~~49,433,218 shares

			Page Number
PART I. FINANCIAL INFORMATION

Item 1.	Condensed Consolidated Financial Statements:

	a)	Condensed Consolidated Balance Sheets at ~~October~~April 29, ~~2016~~2017 (unaudited) and January ~~30, 2016~~28, 2017	4

	b)	Unaudited Condensed Consolidated Statements of Operations for the three ~~and nine~~ months ended ~~October~~April 29, ~~2016~~2017 and ~~October 31, 2015~~April 30, 2016	5

	c)	Unaudited Condensed Consolidated Statements of Comprehensive ~~Income (Loss)~~Loss for the three ~~and nine~~ months ended ~~October~~April 29, ~~2016~~2017 and ~~October 31, 2015~~April 30, 2016	6

	d)	Unaudited Condensed Consolidated Statements of Cash Flows for the ~~nine~~three months ended ~~October~~April 29, ~~2016~~2017 and ~~October 31, 2015~~April 30, 2016	7

	e)	Notes to Unaudited Condensed Consolidated Financial Statements	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		1920

Item 3.	Quantitative and Qualitative Disclosure About Market Risk		2928

Item 4.	Controls and Procedures		2928

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings		2930

Item 1A.	Risk Factors		30

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		31

Item 3.	Defaults Upon Senior Securities		31

Item 4.	Mine Safety Disclosures		31

Item 5.	Other Information		3132

Item 6.	Exhibits		3132

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 the Company’s assumptions and are not substantially supported by market data

(in thousands)
Balance at January 30, 2016	$	1,837
Cash payments		(714	)
Balance at April 30, 2016		1,123
Cash payments		(490	)
Balance at July 30, 2016		633
Cash payments		(277	)
Balance at October 29, 2016	$	356

~~10.1†~~10.1		~~Employment~~Side Letter to Credit Agreement, dated as of ~~June 30, 2016, between~~March 6, 2017, by and among Vince, LLC, ~~to Mark Engebretson~~Vince Intermediate Holding, LLC, Vince Holding Corp. and Bank of America, N.A.

~~10.2†~~10.2		~~Amendment No. 1~~Side Letter to ~~Offer Letter,~~Credit Agreement, dated as of ~~September 12, 2016, between~~April 14, 2017, by and among Vince, LLC, ~~to Mark Engebretson~~Vince Intermediate Holding, LLC, Vince Holding Corp. and Bank of America, N.A.

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

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

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

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

101.1		Financial Statements in XBRL Format