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Item 1. Business

2021-04-23 compared with 2020-04-14 · 125 added, 120 removed, 120 unchanged (67% of the section changed)

Xcel Brands, Inc.

is a media and consumer products company engaged in the design, production, marketing, wholesale distribution, and direct-to-consumer sales of branded apparel, footwear, accessories, jewelry, home goods and other consumer products, and the acquisition of dynamic consumer lifestyle brands.

We have developed a design, production, and supply chain capability driven by our proprietary integrated technology platform.

Currently, our brand portfolio consists of the Isaac Mizrahi brand (the "Isaac Mizrahi Brand"), the Judith Ripka brand (the "Ripka Brand"), the Halston brand (the "Halston Brand"), and the C Wonder brand (the "C Wonder Brand").

We also own and manage the Longaberger brand (the “Longaberger Brand”) through our controlling interest in Longaberger Licensing, LLC.

Our vision is intended to reimagine shopping, entertainment, and social media as one.

We design, produce, market, and distribute products and, in certain cases, license our brands to third parties, and generate licensing fees.

We and our licensees distribute through a ubiquitous-channel retail sales strategy, which includes distribution through interactive television, the Internet, and traditional brick-and-mortar retail channels.

By leveraging digital and social media content across all distribution channels, we seek to drive consumer engagement and generate retail sales across our brands.

Our strong relationships with leading retailers and interactive television companies and cable network TV enable us to reach consumers in approximately 380 million homes worldwide and hundreds of millions of social media followers.

(the “Company,” “Xcel,” or “We”) is a media and consumer products company engaged in the design, production, marketing, wholesale and direct-to-consumer sales of branded apparel, footwear, accessories, fine jewelry, home goods and other consumer products, and the acquisition of dynamic consumer lifestyle brands.

Xcel was founded in 2011 with a vision to reimagine shopping, entertainment, and social media as one thing.

Xcel owns the Isaac Mizrahi brand (the “Isaac Mirzrahi Brand”), the Halston brand (the “Halston Brand”), the Judith Ripka brand (the “Ripka Brand”), the C Wonder brand (the “C Wonder Brand”), the LOGO by Lori Goldstein brand (the “Logo Lori Goldstein Brand”), and the Longaberger brand (the “Longaberger Brand”), pioneering a true omni-channel sales strategy which includes the promotion and sale of products under its brands through interactive television, digital live-stream shopping, brick-and-mortar retail, wholesale and e-commerce channels to be everywhere their customers shop.

The Company’s brands have generated over $3 billion in retail sales via live streaming in interactive television and digital channels alone.

Our objective is to build a diversified portfolio of lifestyle consumer products brands through organic growth and the strategic acquisition of new brands.

To grow our brands, we are focused on the following primary strategies:

distribute and/or license our brands for sale through interactive television (i.e.

QVC, The Shopping Channel) whereby we design, manage production, merchandise the shows, and manage the on-air talent;

licensing our brands to manufacturers and retailers for promotion and distribution through e-commerce, social commerce, and traditional brick-and-mortar retail channels whereby we provide certain design services and, in certain cases, manage supply and merchandising;

● Distribution and/or licensing of our brands for sale through interactive television (i.e., QVC, HSN, The Shopping Channel, TVSN, CJO, etc.);

● wholesale distribution of our brands to retailers that sell to the end consumer;

distribution of our brands through our e-commerce sites directly to the end consumer;

quickly integrate additional consumer brands into our operating platform and leverage our design, production, and marketing capabilities, and distribution relationships.

● direct-to-consumer distribution of our brands through e-commerce and live streaming;

● licensing our brands to manufacturers and retailers for promotion and distribution through e-commerce, social commerce, and traditional brick-and-mortar retail channels whereby we provide certain design services;

● acquiring additional consumer brands and integrating them into our operating platform and leveraging our operating infrastructure and distribution relationships.

We believe that Xcel offers a unique value proposition to our retail and direct-to-consumer customers, and our licensees for the following reasons:

our management team, including our officers’

and directors’

experience in, and relationships within the industry;

● our management team, including our officers’ and directors’ experience in, and relationships within the industry;

● our deep knowledge and expertise in live streaming;

● our design, production, sales, marketing, and supply chain and integrated technology platform that enables us to design and distribute trend-right product;

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Recent Highlights

In January 2018 we launched our Judith Ripka Fine Jewelry wholesale operations, and in November 2018, we launched our apparel wholesale operations.

In February 2019, we acquired the Halston brand, the Halston Heritage brand and Roy Frowick brand (collectively the "Halston Heritage Brands").

The acquisition of the Halston Heritage Brands gives us an opportunity to focus on the entirety of the Halston Brand, the various labels and their design nuances, while continuing to preserve the iconic American brand’s legacy.

In November 2019, we acquired a controlling interest in the Longaberger Brand, and through that venture we are actively managing this home goods and lifestyle brand to build on its history and bring the brand into the future.

In November 2019, we acquired a controlling interest in the Longaberger Brand, an authentic American heritage home products brand that began making artisan baskets in 1896, and we are re-imagining it in 2021 as a digital live-streaming shopping marketplace built to bring women together to support local communities.

In April 2021, we acquired the Lori Goldstein brands, including LOGO by Lori Goldstein, a sophisticated lifestyle brand designed to bring style to the masses and that speaks to everyday women.

The acquisition focuses on growing the popular brand through our omni-channel approach including live streaming, e-commerce, and interactive television, and expanding the business into new products and categories.

Company History and Corporate Information

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Our telephone number is (347) 727-2474.

Additionally, we maintain websites for our respective brands and an e-commerce site for our Judith Ripka brand at www.isaacmizrahi.com, www.judithripka.com, and www.cwonder.com.

Additionally, we maintain websites for our respective brands and an e-commerce site for our Judith Ripka brand at www.isaacmizrahi.com, www.judithripka.com, www.cwonder.com, and www.lorigoldstein.com.

Our corporate website is www.xcelbrands.com.

Our Brand Portfolio

Currently, our brand portfolio consists of the Isaac Mizrahi Brand, the Judith Ripka Brand, the H Halston Brand, the Halston Heritage Brands, the C Wonder Brand, the Longaberger brand and the various labels under these brands.

Currently, our brand portfolio consists of the Isaac Mizrahi, Judith Ripka, Halston, C Wonder, Logo Lori Goldstein, and Longaberger Brands, and the various labels under these brands.

We acquired the Logo Lori Goldstein Brand, and the various labels under the brand, in April 2021.

Isaac Mizrahi

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Since then, this brand has become known and beloved around the world for its colorful and stylish designs.

As a true lifestyle brand, under Xcel’s ownership it has expanded into over 150 different product categories including sportswear, footwear, handbags, watches, eyewear, tech accessories, home, and other merchandise.

Under our ubiquitous-channel retail sales strategy, the brand is available across various distribution channels to reach customers wherever they shop:

better department stores, such as Lord & Taylor and Hudson’s Bay;

better department stores, such as Saks and Hudson’s Bay;

interactive television, including QVC and The Shopping Channel;

and national specialty retailers.

The brand is also sold in various global locations, including Canada and the United Kingdom.

We acquired the IsaacMizrahi brand in September 2011.

The brand is also sold in various global locations, including Canada, Italy, the United Kingdom, and Japan.

We acquired the Isaac Mizrahi brand in September 2011.

Judith Ripka is a luxury jewelry brand founded by Judith Ripka in 1977.

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We acquired the Ripka brand in April 2014.

A line of luxury watches was introduced in 2015.

In December 2017, we launched our Judith Ripka Fine Jewelry e-commerce operations and in January 2018, we launched the Judith Ripka Fine Jewelry wholesale operations.

The Halston brand was founded by Roy Halston Frowick in the 1960s, and quickly became one of the most important American fashion brands in the world, becoming synonymous with glamour, sophistication, and femininity.

Halston’s groundbreaking designs and visionary style still influence designers around the world today.

We acquired the H Halston brands in December 2014, and since our acquisition of the Halston Heritage brands in February 2019, we own all Halston labels under our brands.

We launched the H by Halston brand on QVC in September 2015, which is available exclusively through interactive television channels.

In April 2016 we launched the H Halston brand lifestyle collection in certain better department stores.

The Halston and Halston Heritage brands are distributed in premium retailers such as Saks, Neiman Marcus, and Bloomingdale’s.

The brand is available across various distribution channels including premium and better department stores, e-commerce, interactive television, and national specialty retailers.

The C Wonder brand was founded by J.

Christopher Burch in 2011 to offer a wide-ranging assortment of beautiful, versatile, and spirited products that are designed to transport its customers to a place they have never been.

C Wonder offers women’s clothing, footwear, jewelry and accessories, and delightful surprises at every turn.

We acquired the C Wonder Brand in July 2015, and launched the brand on QVC in March 2016.

During the first quarter of 2017, we reached an agreement with QVC to enable us to transition the brand to a broader base of retailers, including department stores and mass merchant retailers.

Longaberger is an iconic American heritage home and collectibles brand that was founded in 1973 by the Longaberger family.

C Wonder offers women’s clothing, footwear, jewelry and accessories, and delightful surprises at every turn.

We acquired the C Wonder Brand in July 2015, and the brand is available at mass merchant retailers, clubs, and certain off-price retailers.

Longaberger is an iconic American heritage home and collectibles brand that began making baskets in 1896 and launched a direct sales company in 1973 by the Longaberger family.

The brand is best known for its distinctive handwoven baskets.

We acquired a 50% ownership interest in this brand through a joint venture with Hilco Global in November 2019, and are actively managing this brand to build on its history and bring it into the future.

We launched the brand on QVC in November 2019.

We launched our Longaberger e-commerce and live-streaming operations in February 2020.

Lori Goldstein

Lori Goldstein helped the fashion industry recognize the value and influence of a visionary stylist by telling powerful, transformative, and authentic stories through the static image.

After 35 years behind the camera, Lori ventured in front of it in 2009 when she launched LOGO by Lori Goldstein, an exclusive collection for QVC.

LOGO was born from Lori's lifelong passion for layering clothes and her "anything goes with everything"

approach to fashion, and is a sophisticated lifestyle brand that embraces Lori's aesthetic and speaks to everyday women.

LOGO draws inspiration from the beauty of women of all ages and sizes and gives them the tools and fashion pieces to be their most fabulous selves.

We acquired the Lori Goldstein brands, including LOGO by Lori Goldstein, in April 2021, and the brand is currently available through the QVC channel.

Growth Strategy

Our vision is intended to reimagine shopping, entertainment, and social media as one.

To fulfill this vision, we plan to continue to grow the reach of our brand portfolio by leveraging our own internal design, production, integrated technology platforms and marketing expertise, and our relationships with our retail and direct-to-consumer customers, key licensees, manufacturers and retailers.

We also continue to market our brands through our innovative ubiquitous-channel retail sales strategy.

Our strategy includes distribution through interactive television, e-commerce, and traditional brick-and-mortar retail channels.

To fulfill this vision, we plan to continue to grow the reach of our brand portfolio by leveraging our technology and live-streaming platforms, design expertise, our integrated design, production and supply chain technology platforms, marketing expertise, and our relationships with our retail and direct-to-consumer customers, key licensees, manufacturers, and retailers.

We also continue to market our brands through our innovative true omni-channel retail sales strategy.

Our strategy includes distribution through interactive television, e-commerce, live streaming, and traditional brick-and-mortar retail channels.

By leveraging the reach and consumer engagement of our media partners, and by developing rich online video and social media content under our brands, our strategy is to drive increased customer engagement and generate sales across our channels of distribution.

Key elements of our strategy include:

● Expand and Leverage our Live-Streaming Platform.

We recently launched our live-streaming platform through our Longaberger brand social commerce technology platform with the goal to build the world’s largest digital marketplace powered by live-streaming and micro-influencers for home and other related products designed to create a better lifestyle.

We plan to leverage this technology across our other brands.

● Expand and Leverage Design, Production and Supply Chain Platform.

In 2015, we developed a design, production and supply chain platform designed to deliver short lead production capabilities to our retail customers, helping drive traffic and enable retailers to respond quickly to customer demand - a read-and-react model.

Our design, production and supply chain platform shortens the supply chain cycle by utilizing state-of-the-art product lifecycle management (“PLM”) systems, proprietary merchandising strategies, 3D design, trend analytics, data science and consumer insight testing to actively monitor fashion trends, while leveraging our experience and know-how to quickly design, test, market, produce, and source high-quality goods.

We launched women’s sportswear collections under several of our brands in the department store channel in 2016 and 2017 through a license, and in November 2018 we transitioned the license to a wholesale business model.

Our design, production and supply chain platform shortens the supply chain cycle by utilizing state-of-the-art product lifecycle management (“PLM”) and Enterprise Resource Planning (“ERP”) systems, proprietary merchandising strategies, 3D design, trend analytics, data science and consumer insight testing to actively monitor fashion trends, while leveraging our experience and know-how to quickly design, test, market, produce, and source high-quality goods.

Given some of the challenges facing the department store industry today, including declining customer traffic, aggressive mark-down cadence, and inability to respond quickly to customer demands, we developed this design, production and supply chain platform to address these challenges and deliver a 360-degree solution to our retail partners, including design, marketing, production, and sourcing services.

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● Continue to Develop our Integrated Technologies Platform.

We are developing and investing in integrated technologies including PLM and ERP systems, 3D design, trend analytics, data science, and consumer insight testing as a refinement of our design, production and supply chain platform in order to design and plan our apparel collections more efficiently and intelligently.

Driven by short-lead marketing, such as social media and new direct-to-consumer business models, consumers now expect more from apparel brands and retailers, and we believe that the solution is to deliver to the customer what they want, when they want it, at a price that they can confirm is fair.

Advances in 3D design technologies and software allow us to design more efficiently, seamlessly communicate technical aspects of designs with our manufacturing partners, and produce better fitting, more consistent products.

We are developing and investing in integrated technologies including live-streaming and direct sales, e-commerce, customer relationship management, 3D design, trend analytics, data science, and consumer insight testing as a refinement of our marketing, design, production and supply chain capabilities in order to market, design, plan, and distribute our products more efficiently and intelligently.

Driven by short-lead marketing, such as live streaming, social media, and new direct-to-consumer business models, consumers now expect more from brands and retailers, and we believe that the solution is to deliver to the customer what they want, when they want it, at a price that is fair.

Advances in 3D design technologies and software allow us

to design more efficiently, seamlessly communicate technical aspects of designs with our manufacturing partners, and produce better, more consistent products.

Additionally, photo-realistic images generated by the current generation of 3D design software can be used to perform consumer insight testing on products, to determine demand and plan quantities for production even before a sample is made.

Trend analytics including advanced algorithms focused on internet searches, social media, and inventory trends provide a forward-looking view of consumer design preferences and allow us to design into trends early-on, while data analytics will allow us to review performance and respond quickly in our read-and-react design, production and supply chain model.

Live streaming and customer relationship management systems enable us to better demonstrate our products and foster high engagement with our customers.

We will also seek to utilize machine learning and artificial intelligence to automate at least a portion of these functions.

We believe that our investment into these technologies position us to provide unique and advanced solutions to retailers in the current and rapidly changing environment.

More importantly, we believe that it will help us continue to grow our business across our brands and in private label production, and the integrated technologies platform itself should develop more significant value as we continue to build and develop it.

We believe that our investment into these technologies position us to provide unique solutions to a rapidly changing environment.

More importantly, we believe that it will help us continue to grow our business across our brands, and the integrated technologies platform itself should develop more significant value as we continue to build and develop it.

● Expand Other Retail Partnerships.

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We have entered into numerous license agreements for various product categories under our brands.

With the launch of our design, production and supply chain platform in 2016, we have expanded the presence of our brands at department stores and subsequently launched additional categories in the department store channel, including footwear, handbags, dresses, costume jewelry, and sunglasses.

We have expanded the presence of our brands at department stores and have launched additional categories in the department store channel, including footwear, handbags, dresses, costume jewelry, and sunglasses.

We continue to seek opportunities to expand the businesses of our licensees, as well as entering into licenses for new categories under each of our brands where the category is authentic to the brand, for both our existing brands as well as brands that we may acquire and/or develop in the future.

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Our brand acquisition and development strategy are focused on dynamic brands that we believe:

are synergistic to our existing portfolio of brands;

are strategic to our growth in a channel of distribution;

are expected to be accretive to our earnings.

o are synergistic to our existing portfolio of brands;

o are strategic to our growth in a channel of distribution;

o are expected to be accretive to our earnings.

Licensing Design, Production and Marketing

Interactive TV

QVC is an important strategic partner in our interactive television business and is our largest licensee for each of our Mizrahi, Ripka, and Halston brands.

QVC’s business model is to promote and sell products through its interactive television programs and related e-commerce and mobile platforms.

We employ and manage on-air spokespersons under each of these brands in order to promote products under our brands on QVC.

According to QVC, QVC (including HSN) had global revenues of approximately $13.5 billion in 2019, of which e-commerce sales represented approximately $5.8 billion, and QVC’s programming currently reaches approximately 380 million homes worldwide.

QVC is ranked as one of the Top 10 e-commerce retailers in North America according to Internet Retailer.

Our agreements with QVC allow our on-air spokespersons to promote our non-QVC product lines and strategic partnerships under the Mizrahi, Ripka, and Halston Brands through QVC’s programs, subject to certain parameters including the payment of a portion of our non-QVC revenues to QVC.

We believe that our ability to continue to leverage QVC’s media platform, reach, and attractive customer base to cross-promote products in and drive traffic to our other channels of distribution provides us a unique advantage.

In addition to full design services and marketing support, we also provide production to QVC.

This business model allows us to focus on our core competencies of design, production, marketing, and brand management without much of the risk and investment requirements in inventory associated with traditional consumer product companies.

The Isaac Mizrahi Brand is licensed through our wholly owned subsidiary, IM Brands, LLC (“IM Brands”), the Ripka Brand is licensed through our wholly owned subsidiary, JR Licensing, LLC (“JR Licensing”) and the Halston Brand is licensed through our wholly owned subsidiaries, H Licensing, LLC (“H Licensing”) and H Heritage Licensing, LLC ("H Heritage Licensing") and the Longaberger brand is licensed through our joint venture Longaberger Licensing, LLC (“Longaberger Licensing”).

QVC Agreements

Through our wholly owned subsidiaries, we have entered into direct-to-retail license agreements with QVC, pursuant to which we design, and QVC sources and sells, various products under our IsaacMizrahiLIVE brand, the Judith Ripka brands and the H by Halston brand.

These agreements include, respectively, the QVC Agreement for the Mizrahi Brand (the "IM QVC Agreement"), the QVC Agreement for the Ripka Brand (the "Ripka QVC Agreement"), and the QVC Agreement for the H Halston Brand (the “H QVC Agreement"), (collectively, the “QVC Agreements”).

QVC owns the rights to all designs produced under the QVC Agreements, and the QVC Agreements include the sale of products across various categories through QVC’s television media and related internet sites.

Pursuant to these agreements, we have granted to QVC and its affiliates the exclusive, worldwide right to promote our branded products, and the right to use and publish the related trademarks, service marks, copyrights, designs, logos, and other intellectual property rights owned, used, licensed and/or developed by us, for varying terms as set forth below.

Qurate Retail Group (“Qurate”) is an important strategic partner in our interactive television business, is our largest licensee for our Mizrahi, Ripka, Halston, and Longaberger brands.

Qurate’s business model is to promote and sell products through its interactive television programs featured on QVC and HSN and related e-commerce and mobile platforms.

We employ and manage on-air spokespersons under each of these brands in order to promote products under our brands on QVC and HSN.

According to Qurate, Qurate had global revenues of approximately $14.2 billion in 2020, of which e-commerce sales represented approximately $8.9 billion, and Qurate’s programming currently reaches approximately 380

million homes worldwide.

Qurate is ranked as one of the Top 10 e-commerce retailers in North America according to Digital Commerce 360.

Our agreements with Qurate allow our on-air spokespersons to promote our non-Qurate product lines and strategic partnerships under the Mizrahi, Ripka, and Halston brands through QVC’s and HSN’s programs, subject to certain parameters including the payment of a portion of our non-Qurate revenues to Qurate.

We believe that our ability to continue to leverage Qurate’s media platform, reach, and attractive customer base to cross-promote products in and drive traffic to our other channels of distribution provides us a unique advantage.

The licensing business model allows us to focus on our core competencies of design, production, marketing, and brand management without much of the investment requirements in inventory associated with traditional consumer product companies.

Qurate Agreements

Through our wholly owned subsidiaries, we have entered into direct-to-retail license agreements with Qurate Retail Group (“Qurate”), pursuant to which we design, and Qurate sources and sells, various products under our IsaacMizrahiLIVE brand, the Judith Ripka brands, the H by Halston brand, and the Longaberger brand.

These agreements include, respectively, the Qurate Agreement for the Mizrahi Brand (the "IM QVC Agreement"), the Qurate Agreement for the Ripka Brand (the "Ripka QVC Agreement"), the Qurate Agreement for the H Halston Brand (the “H QVC Agreement"), and the Qurate Agreement for the Longaberger Brand (the “Longaberger QVC Agreement”) (collectively, the “QVC Agreements”).

Qurate owns the rights to all designs produced under these agreements, and the agreements include the sale of products across various categories through Qurate’s television media and related internet sites.

Pursuant to these agreements, we have granted to Qurate and its affiliates the exclusive, worldwide right to promote our branded products, and the right to use and publish the related trademarks, service marks, copyrights, designs, logos, and other intellectual property rights owned, used, licensed and/or developed by us, for varying terms as set forth below.

The agreements include automatic renewal periods as detailed below unless terminated by either party.

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three-year period

In connection with the foregoing and during the same periods, QVC and its subsidiaries have the exclusive, worldwide right to use the names, likenesses, images, voices, and performances of our spokespersons to promote the respective products.

Under the IM QVC Agreement, IM Brands has also granted to QVC and its affiliates, during the same period, exclusive, worldwide rights to promote third party vendor co-branded products that, in addition to bearing and being marketed in connection with the trademarks and logos of such third-party vendors, also bear or are marketed in connection with the IsaacMizrahiLIVE trademark and related logo.

Under the QVC Agreements, QVC is obligated to make payments to us on a quarterly basis, based upon the net retail sales of the specified branded products.

Net retail sales are defined as the aggregate amount of all revenue generated through the sale of the specified branded products by QVC and its subsidiaries under the QVC Agreements, excluding freight, shipping and handling charges, customer returns, and sales, use, or other taxes.

Notwithstanding our grant of worldwide promotion rights to QVC, we may, with the permission of QVC, sell the respective branded products (i) to better or prestige retailers, but excluding discount divisions of such companies and mass merchants, (ii) via specifically branded brick-and-mortar retail stores, and (iii) via company websites, in exchange for making reverse royalty payments to QVC based on the net retail sales of such products through such channels.

Also, under the QVC Agreements, we will pay a royalty participation fee to QVC on revenue earned from the sale, license, consignment, or any other form of distribution of any products, bearing, marketed in connection with or otherwise associated with the specified trademarks and brands.

Under the QVC Agreements, we are restricted from selling products under the specified respective brands or trademarks (including the trademarks, copyrights, designs, logos, and related intellectual property themselves) to certain mass merchants.

The QVC Agreements generally prohibit us from selling products under the specified respective brands or any of our other trademarks and brands to a direct competitor of QVC (generally defined as any entity other than QVC whose primary means of deriving revenue is the transmission of interactive television programs) without QVC’s consent.

In addition, during the terms of the IM QVC Agreement and the Ripka QVC Agreement, and for one year thereafter, the respective subsidiary may not, without QVC’s consent, promote, advertise, endorse, or sell (i) the specified branded products through any means or (ii) any products through interactive television.

During the term of the H QVC Agreement, and for one year thereafter, H Licensing may not, without QVC’s consent, promote, advertise, endorse, or sell any products, including the H by Halston Brands, through interactive television.

In addition to the foregoing, certain of the QVC Agreements permit us to promote brick-and-mortar collections on QVC’s television program subject to certain terms and restrictions.

For the years ended December 31, 2019 and 2018, net revenue from the QVC Agreements collectively accounted for 53% and 72%, respectively, of the total revenues of the Company.

Longaberger QVC Agreement

October 31, 2021

two-year period

November 2019

In connection with the foregoing and during the same periods, Qurate and its subsidiaries have the exclusive, worldwide right to use the names, likenesses, images, voices, and performances of our spokespersons to promote the respective products.

Under the IM QVC Agreement, IM Brands has also granted to Qurate and its affiliates, during the same period, exclusive, worldwide rights to promote third party vendor co-branded products that, in addition to bearing and being marketed in connection with the trademarks and logos of such third-party vendors, also bear or are marketed in connection with the IsaacMizrahiLIVE trademark and related logo.

Under the QVC Agreements, Qurate is obligated to make payments to us on a quarterly basis, based upon the net retail sales of the specified branded products.

Net retail sales are defined as the aggregate amount of all revenue generated through the sale of the specified branded products by Qurate and its subsidiaries under the QVC Agreements, excluding freight, shipping and handling charges, customer returns, and sales, use, or other taxes.

Notwithstanding our grant of worldwide promotion rights to Qurate, we may, with the permission of Qurate, sell the respective branded products (i) to better or prestige retailers, but excluding discount divisions of such companies and mass merchants, (ii) via specifically branded brick-and-mortar retail stores, and (iii) via company websites, in exchange for making reverse royalty payments to Qurate based on the net retail sales of such products through such channels – with the

exception of the Longaberger Brand, for which no reverse royalty payments are required to be made to Qurate under the terms of the applicable agreement.

Also, under the QVC Agreements, except for the Longaberger QVC Agreement, we will pay a royalty participation fee to Qurate on revenue earned from the sale, license, consignment, or any other form of distribution of any products, bearing, marketed in connection with or otherwise associated with the specified trademarks and brands.

Under the QVC Agreements, we are generally restricted from selling products under the specified respective brands or trademarks (including the trademarks, copyrights, designs, logos, and related intellectual property themselves) to certain mass merchants.

The QVC Agreements generally prohibit us from selling products under the specified respective brands or any of our other trademarks and brands to a direct competitor of Qurate (generally defined as any entity other than Qurate whose primary means of deriving revenue is the transmission of interactive television programs) without Qurate’s consent.

In addition, during the terms of the IM QVC Agreement and the Ripka QVC Agreement, and for one year thereafter, the respective subsidiary may not, without Qurate’s consent, promote, advertise, endorse, or sell (i) the specified branded products through any means or (ii) any products through interactive television.

During the term of the H QVC Agreement, and for one year thereafter, H Licensing may not, without Qurate’s consent, promote, advertise, endorse, or sell any products, including the H by Halston brands, through interactive television.

In addition to the foregoing, certain of the agreements permit us to promote brick-and-mortar collections on Qurate’s television programs subject to certain terms and restrictions.

For the years ended December 31, 2020 and 2019, net revenue from Qurate collectively accounted for 60% and 53%, respectively, of the total revenues of the Company.

In the fourth quarter of 2020, the Company transitioned and discontinued licensing of the H Halston brand to QVC.

The Company began wholesale supply sales of the H Halston products under arrangements with HSN and certain QVC global affiliates and other unrelated interactive television networks.

Other Licensing Agreements

We have entered into numerous other licensing agreements for sales and distribution through e-commerce and traditional brick-and-mortar retailers.

Authorized distribution channels include department stores such as Lord & Taylor, Macy’s, Neiman Marcus, Nordstrom’s, and Saks Fifth Avenue, off-price retailers such as Neiman’s Last Call, Nordstrom Rack, Saks Off Fifth, and TJX (including TJ Maxx, Marshall’s and Home Goods), and national specialty retailers such as Best Buy and Bed Bath & Beyond.

Authorized distribution channels include department stores, mass merchant retailers, clubs, and national specialty retailers such as Best Buy and Bed Bath & Beyond.

Under our other licenses, a supplier is granted rights, typically on an exclusive basis, to a single or small group of related product categories for sale to multiple accounts within an approved channel of distribution and territory.

Our other license agreements typically provide the licensee with the exclusive rights for a certain product category in a specified territory and/or distribution channel under a specific brand or brands.

Our other license agreements cover various categories, including but not limited to women’s apparel, footwear, and accessories;

bath and body;

home products;

men’s apparel and accessories;

children’s and infant apparel, footwear, and accessories;

men’s apparel and accessories;

children’s and infant apparel, footwear, and accessories;

and electronics cases and accessories.

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We are in discussions with other potential licensees and strategic partners to license and/or co-brand the Mizrahi brand, Ripka brand, Halston brand, C Wonder brand and Longaberger brand for additional categories.

In certain cases, we have engaged licensing agents to assist in the procurement of such licenses for which we or our licensees pay such agents’

fees based upon a percentage of the net sales of licensed products by such licensees, or a percentage of the royalty payments that we receive from such licensees.

In certain cases, we have engaged licensing agents to assist in the procurement of such licenses for which we or our licensees pay such agents’ fees based upon a percentage of the net sales of licensed products by such licensees, or a percentage of the royalty payments that we receive from such licensees.

While many of the new and proposed licensing agreements will likely require us to provide seasonal design services, most of our new and prospective licensing partners have their own design staff, and we therefore expect low incremental overhead costs related to expanding our licensing business.

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Our licensees currently sell our branded licensed products through brick-and-mortar retailers, e-commerce, and in certain cases supply products to interactive television companies for sale through their television programs and/or through their internet websites.

We generally recognize revenues from our other licenses based on a percentage of the sales of products under our brands, but excluding (i) sales of products to interactive television networks, where we receive a retail royalty directly from the interactive television licensee, and (ii) sales of products to e-commerce sites operated by us.

directly from the interactive television licensee, and (ii) sales of products to e-commerce sites operated by us.

Additionally, based upon guaranteed minimum royalty provisions required under many of the license agreements, we are able to recognize revenue related to certain other licenses based on the greater of the sales-based royalty or the guaranteed minimum royalty.

Wholesale and e-Commerce

In December 2017, we launched our Judith Ripka Fine Jewelry e-commerce business and in January 2018 we launched Judith Ripka Fine Jewelry wholesale operations.

In November 2018 we launched our apparel wholesale business.

Our strategy is to complement our interactive television and licensing business with a wholesale and direct-to-consumer business model by leveraging our design, merchandising, sourcing, and production capabilities.

Our goal is to grow our brands organically in multiple distribution channels and provide a platform that could enable us to acquire brands or develop private label brands for our retail partners.

Promotional Services

In certain cases, the Company provides promotional services and collaborations with other brands or companies, which may include the use of our brands for the promotion of such company or brands through the internet, television, or other digital content, print media, or other marketing campaigns featuring in-person appearances by our celebrity spokespersons, the development of limited collections of products (which may include co-branded products) for such company, or other

services as determined on a case-by-case basis.

These include promotions with Sesame Street, Hewlett Packard, Revlon, Johnson & Johnson, and Kleenex.

In February 2020, we added our Longaberger brand to our e-commerce and live-streaming operations.

We continue to expand our wholesale business by adding new domestic accounts, expanding in international markets, and pursuing independent retailers for our jewelry business.

Our strategy is to continue to grow our direct-to-consumer and live-streaming businesses into a significant portion of our overall business.

Collaborations

In certain cases, the Company collaborates with and provides promotional services to other brands or companies, which arrangements may include the use of our brands for the promotion of such company or brands through the internet, television, or other digital content, print media, or other marketing campaigns featuring in-person appearances by our celebrity spokespersons, the development of limited collections of products (which may include co-branded products) for such company, or other services as determined on a case-by-case basis.

These have included promotions with Sesame Street, Hewlett Packard, Revlon, Johnson & Johnson, and Kleenex.

We also provide certain technology services to our retail partners and certain of our licensees under our proprietary integrated technology platform.

Marketing is a critical element to maximize brand value to our licensees and our Company.

Therefore, we provide social media marketing and other marketing and public relations support for our brands.

Given our ubiquitous-channel retail sales strategy focusing on the sale of branded products through various distribution channels (including e-commerce, interactive television, and traditional brick-and-mortar sales channels), our marketing efforts currently focus on PR and fashion editorial, social media campaigns, personal appearances, and digital content in order to drive retail sales of product and consumer awareness across our various sales distribution channels.

We seek to create the intersection where shopping, entertainment, and social meet.

As such, our marketing is currently conducted primarily through social media, blogs, videos, images, and other digital content that are all updated regularly.

Our efforts also include promoting namesakes of our brands and our personalities through various media including television (such as Project Runway All-Stars ), design for performances, and other events.

Therefore, we employ live streaming, social media, and other marketing and public relations support for our brands.

Given our true omni-channel retail sales strategy focusing on the sale of branded products through various distribution channels (including live-streaming, e-commerce, interactive television, and traditional brick-and-mortar sales channels), our marketing efforts currently focus on leveraging micro and mega-influencers, entertainment tie-ins, PR and editorial, social media campaigns, personal appearances, and digital content in order to drive retail sales of product and consumer awareness across our various sales distribution channels.

We seek to create the intersection where shopping, entertainment, and social media meet.

As such, our marketing is currently conducted primarily through live-streaming and social media, videos, images, and other digital content that are all updated regularly and are amplified by micro and mega-influencers and entertainment tie-ins.

Our efforts also include promoting namesakes of our brands and our personalities through various media including live-streaming, television, design for performances, and other events.

We also work with our retail partners to leverage their marketing resources, including e-commerce platforms and related digital marketing campaigns, social media platforms, direct mail pieces, and public relations efforts.

Our agreements with QVC allow our brand spokespersons to promote our non-QVC product lines and strategic partnerships under our brands through QVC’s programs, subject to certain parameters including the payment of a portion of our non-QVC revenues to QVC.

We believe that this provides us with the ability to leverage QVC’s media platform (including television, e-commerce, and social media) and QVC’s customer base of approximately 380 million households worldwide to cross-promote products in and drive traffic to our other channels of distribution.

Our agreements with Qurate allow our brand spokespersons to promote our non-Qurate product lines and strategic partnerships under our brands through Qurate’s programs, subject to certain parameters including the payment of a portion of our non-Qurate revenues to Qurate.

We believe that this provides us with the ability to leverage Qurate’s media platform (including television, e-commerce, and social media) and Qurate’s customer base of approximately 380 million households worldwide to cross-promote products in and drive traffic to our other channels of distribution.

Many of our licensees make advertising and marketing contributions to the Company under their license agreements which are used to fund marketing-related expenses and further promote our brands as we deem appropriate.

Certain of the wholesale licenses contain requirements to provide advertising or marketing for our brands under their respective license agreements.

We also market the Mizrahi brand through www.isaacmizrahi.com, Halston Brand through www.halston.com, the Judith Ripka Fine Jewelry brand through www.judithripka.com, the C Wonder brand through www.cwonder.com and the Longaberger brand through www.longaberger.com.

Through our websites, we are able to present the products under our brands to customers with branding that reflects each brand’s heritage and unique point-of-view.

Our Judith Ripka Fine Jewelry brand e-commerce business growth is dependent on driving traffic to our website and converting our visitors into customers.

Our strategy to focus on new customer acquisition has started to show results in 2019.

Each of our current brands has and any future acquired brand will likely have many competitors within each of its specific distribution channels that span a broad variety of product categories, including the apparel, footwear, accessories, jewelry, home furnishings and décor, food products, and sporting goods industries.

We also market the Mizrahi brand through www.isaacmizrahi.com, Halston Brand through www.halston.com, the Judith Ripka Fine Jewelry brand through www.judithripka.com, the C Wonder brand through www.cwonder.com, the Logo Lori Goldstein brand through www.lorigoldstein.com, and the Longaberger brand through www.longaberger.com.

websites, we are able to present the products under our brands to customers with branding that reflects each brand’s heritage and unique point-of-view.

Our e-commerce businesses’ growth is dependent on live-streaming and other marketing to drive traffic to our websites and converting our visitors into customers.

These competitors have the ability to compete with the Company and our licensees in terms of fashion, quality, price, products, and/or marketing, and ultimately retail floor space and consumer spending.

Because many of our competitors have significantly greater cash, revenues, and resources than we do, we must work to differentiate ourselves from our direct and indirect competitors to successfully compete for market share with the brands

we own and for future acquisitions.

We believe that the following factors help differentiate our Company in an increasingly crowded competitive landscape:

our management team, including our officers’

and directors’

historical track records and relationships within the industry;

our brand management platform, which has a strong focus on design, product and marketing;

our operating strategies of wholesales and direct-to consumer sales and licensing brands with significant media presence and driving sales through our ubiquitous-channel retail sales strategy across interactive television, brick-and-mortar, and e-commerce distribution channels.

● our management team, including our officers’ and directors’ historical track records and relationships within the industry;

● our brand management platform, which has a strong focus on design, product, marketing, and technology;

● our operating strategies of wholesales and direct-to consumer sales and licensing brands with significant media presence and driving sales through our true omni-channel retail sales strategy across interactive television, brick-and-mortar, live streaming, and e-commerce distribution channels.

We expect our existing and future licenses to relate to products in the apparel, footwear, accessories, jewelry, home goods, and other consumer products industries, in which our licensees face intense competition, including from our other brands and licensees.

In general, competitive factors include quality, price, style, name recognition, and service.

In addition, various fashion trends and the limited availability of shelf space could affect competition for our licensees’

Many of our licensees’

competitors have greater financial, distribution, marketing, and other resources than our licensees and have achieved significant name recognition for their brand names.

In addition, various fashion trends and the limited availability of shelf space could affect competition for our licensees’ products.

Many of our licensees’ competitors have greater financial, distribution, marketing, and other resources than our licensees and have achieved significant name recognition for their brand names.

Our licensees may be unable to successfully compete in the markets for their products, and we may not be able to continue to compete successfully with respect to our licensing arrangements.

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the C Wonder brands, which include the trademarks and brands C Wonder and C Wonder Limited;

and the Highline Collective brand.

and the Logo Lori Goldstein brands, which include the trademarks and brands LOGO by Lori Goldstein, LOGO, LOGO Links, LOGO Lounge, LOGO Layers, and LOGO Luna.

We also manage and have a 50% ownership interest in the brands and trademarks of the Longaberger brand through our joint venture with Hilco Global.

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Patent and Trademark Office in block letter and/or logo formats, as well as in combination with a variety of ancillary designs for use in connection with a variety of product categories, such as apparel, footwear and various other goods and services including, in some cases, home furnishings and decor.

The Company intends to renew and maintain registrations as appropriate prior to expiration and it makes efforts to diligently prosecute all pending applications consistent with the Company’s business goals.

The Company intends to renew and maintain registrations as appropriate prior to expiration and it makes efforts to diligently prosecute all pending

applications consistent with the Company’s business goals.

In addition, the Company registers its trademarks in certain other countries and regions around the world as it deems appropriate.

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The Company seeks to require its licensing partners to advise the Company of any violations of its trademark rights of which its licensing partners become aware and relies primarily upon a combination of federal, state, and local laws, as well as contractual restrictions to protect its intellectual property rights both domestically and internationally.

As of December 31, 2019, we had 78 full-time employees and 6 part-time employees.

Human Capital

Our employees’ knowledge, social, and personality attributes enable our company to achieve its goals, develop our business, and remain innovative.

As of December 31, 2020, we had 60 full-time employees and nine part-time employees.

We value our employees and are committed to providing a healthy and safe work environment.

For certain key employees, including our brand ambassadors and spokespersons, we typically enter into multi-year employment agreements.

Overall, we believe that our relationship with our employees is good.

None of our employees are represented by a labor union.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business