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VIA EDGAR
United States Securities and Exchange Commission
Division of Corporation Finance
Office of Trade & Services
100 F Street, N.E.
Washington, D.C. 20549
Attention: Suying Li; Joel Parker; Nicholas Lamparski; Jacqueline Kaufman
Re: | Winc, Inc. |
Registration Statement on Form 10 | |
Filed on August 27, 2021, as amended | |
File No. 000-56336 |
Ladies and Gentlemen:
On behalf of Winc, Inc. (the “Company”), we submit this letter to the staff (the “Staff”) of the Securities and Exchange Commission (the “Commission”). The Company originally filed the above-referenced Registration Statement on Form 10 with the Commission on August 27, 2021 (as amended, the “Registration Statement”).
In this letter, the bold and italicized paragraph below corresponds to the numbered paragraph in the Staff’s letter and is followed by the Company’s responses. Except for page references appearing in the headings and Staff comments below (which are references to the Registration Statement), all page references herein correspond to the page of Exhibit 99.1 to the Registration Statement filed on October 6, 2021.
Registration Statement on Form 10-12G Filed October 6, 2021
Exhibit 99.1 Information Statement
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Impact of COVID-19, page 53
October 19, 2021
Page 2
1. | On pages 53 and 77, you disclose that you have experienced a significant increase in DTC demand due to changes to consumer behaviors resulting from COVID-19-related restrictions placed on consumers, and that management believes this reflects "a permanent shift in consumer behavior." You also disclose on page 54 that the significant increases in your DTC channel net revenues was fueled by the COVID-19 pandemic and social and governmental responses to it and that you believe growth in your DTC channel will slow going forward as COVID-19 restrictions are eased or lifted. Please reconcile or provide greater context to explain these two statements. |
Response: The Company respectfully submits to the Staff that the Company believes the current disclosures in the Registration Statement accurately summarize the impact of COVID-19 on the Company’s DTC channel and its expectations as COVID-19 restrictions are eased or lifted. The Company currently discloses in its Registration Statement on page 54:
“For our DTC channel, we believe the significant growth between 2019 and 2020 was fueled by the COVID-19 pandemic and social and governmental responses to it. …While we believe that a broad shift in consumer interest in DTC offerings is not transient, we do believe growth in our DTC channel will slow going forward as COVID-19 restrictions are eased or lifted.”
The Company does not believe these ideas to be in conflict. Both the Company and other third parties believe the growth experienced in 2020 is not an aberration (and the Company cites a 2021 Sovos report on page 53 of the Registration Statement to support this idea), but the Company expects that the rate of growth will slow. The Company also respectfully submits that it has witnessed these industry trends in its own results of operations. From 2019 to 2020, the Company experienced 85.1% growth in its DTC net revenues, which the Company attributes on page 60 of the Registration Statement to increased order volumes “starting in March 2020 as states and localities imposed shelter-in-place orders in connection with the COVID-19 pandemic.” In contrast, the Company’s DTC net revenues grew in the six months ended June 30, 2021 compared to the six months ended June 30, 2020, but at a rate of 7.5%.
* * *
October 19, 2021
Page 3
We thank you in advance for your consideration of the foregoing. Please do not hesitate to contact me by telephone at (714) 755-8008 with any questions or comments regarding this correspondence.
Very truly yours, | |
/s/ Drew Capurro | |
Drew Capurro of LATHAM & WATKINS LLP |
cc: | Geoffrey MacFarlane, Winc, Inc. Carol Brault, Winc, Inc. |
Matthew Thelen, Winc, Inc. Brian Cuneo, Latham & Watkins LLP |