High-end department store clothing maker Vince Holding  (VNCE) - Get Report's shares fell off a cliff April 28 after it wrapped up its earnings in a going concern statement bow.

Vince shares closed down nearly 30% at 95 cents after news of the going concern warning emerged.

Moody's Investors Service had already downgraded the company's corporate family rating and first lien debt a week earlier.

The downgrade affected most of the company's $50.7 million in debt, which includes a $45 million senior secured term loan maturing in 2019 and $7.8 million drawn on an $80 million asset backed senior secured revolving credit facility.

Vince could become a contestant in the pageant of pain many clothing and other retailers have entered. While Vince is a manufacturer, it makes men's and women's clothing for its own 40 stores and retailers such as Saks Fifth Avenue, Neiman Marcus, Nordstrom and Harrods.

Vince CEO Brendan Hoffman was optimistic, saying in a news statement on January quarter earnings that the company plans to move forward with its expansion plans.

But when it came down to dollars and cents, the news was not good. Net sales were down 21.9% to $63.9 million for the January quarter. Nearly $53 million in operating losses included $53.1 million in goodwill charges.

"Results for the fourth quarter came in below our expectations, due primarily to challenges related to our systems conversion, which led to delayed shipments of spring product and off-price shipments, as well as lower than expected performance in our pre-spring collection," Hoffman said.

He also said the company is suspending earnings guidance.

"This decision to suspend guidance was further driven by the difficult retail environment in which we continue to operate."

Moody's announced on April 20 that it was moving Vince's Corporate Family Rating (CFR) to Caa1 from B3 and Probability of Default Rating to Caa1-PD from B3-PD. It also downgraded the senior secured first lien term loan to Caa2 from Caa1 and the Speculative Grade Liquidity Rating to SGL-4 from SGL-3.

The ratings agency maintains its outlook at stable.

"Vince's Caa1 CFR reflects the company's weak liquidity profile and credit metrics, Moody's said.

"The rating also reflects Vince's limited scale and high product concentration in premium priced women's apparel, a segment that appeals to a limited number of consumers and that is subject to very high fashion risk and fluctuating consumer tastes which are factors that have led to ongoing weak operating performance."

Moody's also put its Caa2 rating of the first lien term loan in context with the ABL.

"The term loan is secured by a second lien position on the more liquid assets (accounts receivable and inventory) behind the ABL facility, and a first lien on essentially all other domestic assets. Consequently, Moody's treats the ABL as having a priority position in the capital structure."

The company would need to sustain revenue and Ebitda growth to impress Moody's, which would like to see a general increase in liquidity, leverage below 6x and interest coverage (EBITA/Interest Expense) above 1x.

Vince also amended a 2013 side letter with administrative agent Bank of America NA to provide for covenant loosening from April 13 through July 13. The revised letter modifies definitions of covenant compliance event and trigger event.