Related Party Transactions

6 Months Ended

Aug. 03, 2024

Related Party Transactions [Abstract]

Related Party Transactions

Note 14. Related Party Transactions

Operating Agreement

On May 25, 2023, V Opco, LLC (formerly, Vince, LLC) ("V Opco") and ABG Vince entered into the Operating Agreement, which, among other things, provides for the management of the business and the affairs of ABG Vince, the allocation of profits and losses, the distribution of cash of ABG Vince among its members and the rights, obligations and interests of the members to each other and to V Opco. See Note 2 "Recent Transactions" for further information.

During the three and six months ended August 3, 2024, the Company received distributions of cash of $640 and $1,247, respectively, under the Operating Agreement.

License Agreement

On May 25, 2023, V Opco and ABG Vince entered into the License Agreement, whereby V Opco is required to pay ABG Vince a royalty on net sales of Licensed Products and committed to an annual guaranteed minimum royalty of $11,000. See Note 2 "Recent Transactions" for further information.

During the three and six months ended August 3, 2024, the Company paid $2,750 and $7,511 under the License Agreement. At August 3, 2024, $749 was included within Prepaid expenses and other current assets on the Condensed Consolidated Balance Sheets.

Third Lien Credit Agreement

On December 11, 2020, V Opco entered into the $20,000 Third Lien Credit Facility pursuant to the Third Lien Credit Agreement, by and among V Opco as the borrower, SK Financial, as agent and lender, and other lenders from time-to-time party thereto. SK Financial is an affiliate of Sun Capital, whose affiliates own, as of August 3, 2024, approximately 67% of the Company's common stock. The Third Lien Credit Facility was reviewed and approved by the Special Committee of the Company's Board of Directors, consisting solely of directors not affiliated with Sun Capital, which committee was represented by independent legal advisors.

See Note 5 "Long-Term Debt and Financing Arrangements" for additional information.

Tax Receivable Agreement

VHC entered into a Tax Receivable Agreement with the Pre-IPO Stockholders on November 27, 2013, which expired in November of 2023 with no outstanding obligations due from the Company. The Company and its former subsidiaries generated certain tax benefits (including net operating losses 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 provided 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 Tax Receivable Agreement terminated per its terms on February 3, 2024, and the Company has no obligations under this agreement.

Sun Capital Consulting 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 August 3, 2024 and July 29, 2023, the Company incurred expenses of $1 and $1, respectively, under the Sun Capital Consulting Agreement. During the six months ended August 3, 2024 and July 29, 2023, the Company incurred expenses of $10 and $4, respectively, under the Sun Capital Consulting Agreement.