Company that uses Vince.com doesn’t actually own the domain name.
Last week Apparel Holding filed its S-1 to go public.
The clothing company hopes to raise up to $200 million in its IPO, so it’s no small fry. Which is why I find it amazing that it doesn’t actually own the key domain name it uses, Vince.com. The company will rename itself to Vince Holding Corp. upon going public, as this is the brand consumers actually know it by.
It has used Vince.com since it launched the site in 2008. But it isn’t the domain registrant. Instead, it licenses the domain name. From its S-1:
…We license the domain name for our website, www.vince.com, pursuant to the License Agreement. Under the License Agreement, we have an exclusive, irrevocable license to use the www.vince.com domain name without restriction at a nominal annual cost. While we may terminate the License Agreement at our discretion, the agreement does not provide for termination by the licensor. We also own unregistered copyright rights in our design marks.
It appears the other party in this license agreement is a guy in California named Vince, who was the registrant of record in 2008 before the new Vince.com site launched.
That the company’s main online presence is at a domain name it doesn’t actually own is a risk factor. Here’s how the company describes it in the risk factors section of its the S-1.
We license our website domain name from a third-party. Pursuant to the license agreement (the “License Agreement”), our license to use www.vince.com will expire in 2018 and will automatically renew for successive one year periods, subject to our right to terminate the arrangement with or without cause; provided, that we must pay the applicable early termination fee and provide 30 days prior notice in connection with a termination without cause. The licensor has no termination rights under the License Agreement. Any failure by the licensor to perform its obligations under the License Agreement could adversely affect our brand and make it more difficult for users to find our website.
If the company pays just a “nominal” amount for the domain license, and only it has the option to terminate the license, I’m surprised it hasn’t been able to negotiate a deal to buy the domain name outright.