What changed in this filing

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Item 1. Business

2024-04-19 compared with 2023-04-17 · 106 added, 137 removed, 122 unchanged (67% of the section changed)

Xcel Brands, Inc.

(the “Company,” “Xcel,” or “We”) is a media and consumer products company engaged in the design, production, marketing, live streaming, wholesale distribution, 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.

Currently, the Company’s brand portfolio consists of the LOGO by Lori Goldstein brand (the “Lori Goldstein Brand”), the Halston brands (the "Halston Brand"), the Judith Ripka brands (the "Ripka Brand"), the C Wonder brands (the "C Wonder Brand"), the Longaberger brand (the “Longaberger Brand”), the Isaac Mizrahi brands (the "Isaac Mizrahi Brand"), and other proprietary brands.

● The Lori Goldstein Brand, Halston Brand, Ripka Brand, and C Wonder Brand are wholly owned by the Company.

● We manage the Longaberger Brand through our 50% ownership interest in Longaberger Licensing, LLC.

● We manage the Q Optix business through our 50% ownership interest in Q Optix, LLC.

● The Company wholly owned and managed the Isaac Mizrahi Brand through May 31, 2022.

On May 31, 2022, we sold a majority interest in the brand to a third party, but retained a 30% noncontrolling interest in the brand

and continue to participate in the operations of the business.

Xcel is 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 its customers shop.

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

(the “Company,” “Xcel,” “We,” “Us,” or “Our”) is a media and consumer products company engaged in the design, licensing, marketing, live streaming, and social commerce 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 social commerce.

Currently, our brand portfolio consists of the LOGO by Lori Goldstein brand (the “Lori Goldstein Brand”), the Halston brands (the "Halston Brand"), the Judith Ripka brands (the "Ripka Brand"), the C Wonder brands (the "C Wonder Brand"), the Longaberger brand (the “Longaberger Brand”), the Isaac Mizrahi brands (the "Isaac Mizrahi Brand"), the TowerHill by Christie Brinkley brand (the “CB Brand”), and other proprietary brands, including:

● the Lori Goldstein Brand, Halston Brand, Ripka Brand, and C Wonder Brand, which are wholly owned by the Company;

● the Longaberger Brand, which we manage through our 50% ownership interest in Longaberger Licensing, LLC, and the CB Brand, which is a co-owned brand between Xcel and Christie Brinkley;

● the Isaac Mizrahi Brand, which we wholly owned and managed through May 31, 2022.

On May 31, 2022, we sold a majority interest in the brand to a third party, but retained a 30% noncontrolling interest in the brand and continue to contribute to the operations of the brand through a service agreement.

We also own a 30% interest in ORME Live Inc.

(“ORME”), a short-form video and social commerce marketplace that launched in the first quarter of 2024.

Xcel continues to pioneer a true omni-channel and social commerce sales strategy which includes the promotion and sale of products under its brands through interactive television, digital live-stream shopping, social commerce, traditional brick-and-mortar retailers, and e-commerce channels, to be everywhere its customers shop.

Our brands have generated over $5 billion in retail sales via live streaming in interactive television and digital channels alone, and our brands collectively reach over 5 million social media followers through Facebook, Instagram, and TikTok.

All of the followers may not be unique followers, as many followers may follow multiple brands and follow our brands on multiple platforms.

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:

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

● wholesale distribution through joint ventures or licensing of our brands to retailers that sell to the end consumer;

● distribution and/or licensing our brands for sale through interactive television (e.g., QVC, HSN, The Shopping Channel, JTV, etc.);

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

● 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;

● licensing our brands to manufacturers and retailers for promotion and distribution through e-commerce, social commerce, and traditional brick-and-mortar retail channels;

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

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

● our deep knowledge, expertise, and proprietary technology 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;

● our significant media and internet presence and distribution.

Our design, production and supply chain platform was developed to shorten the supply chain cycle by utilizing state-of-the-art supply chain management technology, trend analytics, and data science to actively monitor fashion trends and read and react to customer demands.

Recent Highlights and Developments

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 brand into new products and categories.

In May 2022, we sold a majority interest in the Isaac Mizrahi Brand to a third party, but retained a 30% noncontrolling interest in the brand and continue to participate in the operations of the business.

This sale was a transformative moment in Xcel’s history and represents the first time we have monetized one of our brands since Xcel was founded in 2011.

We used the proceeds from the sale to repay all of our outstanding debt and position us to fund various strategic initiatives as we concentrate our resources on growing our brands, new brand launches, and investing in live streaming technology and new business partnerships.

In the third quarter of 2022, we launched Q Optix, a multi-branded optical business on HSN and QVC.

The business is conducted through a joint venture whereby we leverage inventory and systems of our partner without any material working capital investments.

In the first quarter of 2023, we began to restructure our business operations by entering into new licensing agreements and joint venture arrangements with best-in-class business partners.

We entered into a new interactive television licensing agreement with America’s Collectibles Network, Inc.

d/b/a JTV (“JTV”) for the Ripka Brand, and a separate license with JTV for the Ripka Brand’s e-commerce business.

For apparel, similar transactions have recently been executed.

In conjunction with the launch of the C Wonder Brand on HSN, we licensed the wholesale production operations related to the brand to One Jeanswear Group, LLC (“OJG”);

this new license with OJG also includes other new celebrity brands that we plan to launch in 2023 and beyond.

For the Halston Brand, we plan on entering into a joint venture related to the brand’s wholesale apparel business with another leading manufacturer (the “Halston JV”).

The Halston JV will develop an apparel business under the H Halston brand through department stores, e-commerce, and other retailers.

We expect the transition of these operating businesses to be completed by the second quarter of 2023.

We believe that this evolution of our operating model will provide us with significant cost savings and allow us to reduce and better manage our exposure to operating risks.

We expect that our new partnerships will result in excess of $10 million of cost savings on an annualized basis, with the majority of these savings beginning in the beginning of the second quarter of 2023.

Based on these new operating structures, including cost savings and significantly reducing the Company’s exposure to operating risk, the Company expects to generate sufficient cash flow to fund its obligations and operating needs.

● our deep knowledge, expertise, and proprietary technology in live streaming and social commerce;

● our design, sales, marketing, and technology platform that enables us to design trend-right product;

● our significant media and digital presence.

Recent Developments

Prior to 2023, the Company engaged in certain wholesale and direct-to-consumer sales of products under its brands.

In 2023, we signed master license agreements for our Halston Brand and Judith Ripka Brand, and license agreements for the supply of products under certain on our brands to HSN, that enabled us to outsource a majority of our wholesale and direct-to-consumer operations and revert to a working capital light business model.

In addition to licensing out the brands described above, we outsourced the operations of Longaberger through a license agreement with a third party to operate and manage the Longaberger e-commerce website in the fourth quarter of 2023, and have recently launched Longaberger on ORME in early 2024.

Company History and Corporate Information

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On September 29, 2011, we changed our name to Xcel Brands, Inc.

Our principal office is located at 1333 Broadway, New York, NY 10018.

Our principal office is currently located at 550 Seventh Avenue, 11th Floor, New York, NY 10018.

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.halston.com, www.cwonder.com, www.longaberger.com, www.lorigoldstein.com, and www.judithripka.com.

Our corporate website is www.xcelbrands.com.

Additionally, we maintain websites for our respective brands at www.lorigoldstein.com, www.halston.com, www.judithripka.com, www.cwonder.com, www.longaberger.com, and www.isaacmizrahi.com.

None of the content on our websites is incorporated by reference into this Annual Report on Form 10-K.

Our Brand Portfolio

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

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

Lori Goldstein

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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 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.

We acquired the

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

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.

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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.

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

The brand is available across various distribution channels – including premium and better department stores, e-commerce, interactive television, and national specialty retailers – through our long-term master license agreement with G-III Apparel Group.

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

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The Judith Ripka Fine Jewelry collection consists of pieces in 18 karat gold and sterling silver with precious colored jewels and diamonds, and is currently available in fine jewelry stores, luxury retailers, and via e-commerce.

Ripka launched an innovative collection of fine jewelry on QVC under the Judith Ripka Brand in 1996, where the brand offers customers fine jewelry, watches, and accessories at more accessible price points, including precious and semi-precious stones.

We acquired the Ripka brand in April 2014.

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.

In 2021, we opened a retail store for Judith Ripka Fine Jewelry in Westchester, New York;

we subsequently closed the store in 2022.

In 2017 and 2018, we launched our Judith Ripka Fine Jewelry e-commerce operations and wholesale operations;

these businesses were subsequently licensed to JTV in the first quarter of 2023.

In 2021, we opened a retail store for Judith Ripka Fine Jewelry in Westchester, New York, which was subsequently closed in 2022.

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.

Christopher Burch in 2011.

This brand is built upon a foundation of bold, vibrant colors and exceptional, eye-catching prints that celebrate the art of everyday dressing.

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.

We acquired the C Wonder Brand in July 2015.

The brand is currently available through HSN.

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.

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

Q Optix is a multi-branded optical business on HSN and QVC.

The business is conducted through a joint venture, which was formed in June 2022 and in which we hold a 50% ownership interest, whereby we leverage inventory and systems of our partner without any material working capital investments.

We launched sales of Q Optix products in June 2022.

In the fourth quarter of 2023, we outsourced the operations and management of the brand’s e-commerce business to a third party.

TowerHill by Christie Brinkley

TowerHill by Christie Brinkley is a new brand announced December 2023 as a co-branded collaboration between Xcel Brands, Inc.

and Christie Lee Brinkley, an iconic American supermodel with over one million followers on social media.

The brand is scheduled to launch in May 2024 on HSN, with plans to license and launch products outside of HSN starting in 2025.

Isaac Mizrahi

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

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

The brand is available across various distribution channels to reach customers wherever they shop:

better department stores, such as Saks and

Hudson’s Bay;

interactive television, including QVC and The Shopping Channel;

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Growth Strategy

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

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:

● Acquire, Develop or Partner with Brands.

We plan to continue to pursue the acquisition and/or development of additional brands or the rights to brands which we believe are synergistic and complementary to our overall strategy.

Our brand acquisition and development strategy are focused on dynamic brands that we believe are synergistic to our existing portfolio of brands, strategic to our growth in a channel of distribution, and expected to be accretive to our earnings.

● Expand and Leverage our Live-Streaming Platform.

In 2020, we 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.

● Continue to Develop our Integrated Technologies Platform.

We continue to develop our 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 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.

We have entered into promotional collaborations and/or marketing agreements with large global companies such as Sesame Street, Crayola, Hewlett Packard, Revlon, Johnson & Johnson, and Kleenex, and have developed exclusive programs through certain licensees for specialty retailers such as Best Buy and Bed Bath & Beyond.

We plan to continue to develop strategic relationships under our brands that can leverage our media reach through interactive television and social media to drive traffic and sales for our brands and retail partners and enhance the visibility of our brands.

● Expand Wholesale License Relationships.

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

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.

● Deliver Quality Product Offerings.

We employ a professional team to provide best in class design, production and distribution to ensure that our products adhere to stringent quality standards and design specifications that we have developed.

We intend to continue to invest in our design and marketing capabilities in order to differentiate our services to our customers and licensees and our brands in the marketplace.

Licensing, Design, Production and Marketing

Interactive TV

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

We plan to continue to grow our brands and business through three primary strategies:

● organic growth in our existing brands;

● developing new brands that are well positioned in social commerce;

● the acquisition of brands and businesses that fit our long-term strategy.

With respect to organic growth in our existing brands, we have recently entered into master license agreements for our Halston Brand and Judith Ripka Brand.

The Halston master license agreement is with G-III Apparel Group (“G-III”), which is a publicly traded company and one of the largest designers and suppliers of wholesale apparel and accessories in the world, with annual revenues of over $3 billion.

While the license provides for guaranteed minimum royalties to us during the term (which extends for 25 years, including an initial term of five years plus renewal options), G-III is expected to launch the brand through its existing distribution channels in Fall 2024, and we expect that the business and corresponding royalty revenues to Xcel will ramp up beginning with the launch.

Additionally, we entered into an interactive television license and an e-commerce license in 2023 with America’s Collectible Network, Inc., d/b/a JTV, for our Judith Ripka Brand, which officially launched on JTV’s television channel in October 2023 and which we expect to continue to ramp up in 2024 and beyond, as JTV has expressed plans to make Judith Ripka one of the core brands on its network.

Finally, the C Wonder Brand launched on HSN in mid-2023, and performed extremely well in its launch year.

HSN has advised us that it has planned increases in the business in 2024, which we expect will result in increased revenues from the brand in 2024 and beyond.

We are also working on licensing other categories under the C Wonder Brand for distribution both on HSN and outside of the network.

TowerHill by Christie Brinkley is a brand that we are scheduled to launch in May 2024 on HSN, and with plans to license and launch products outside of HSN starting in 2025.

While this is a new brand for Xcel, it is an example of a brand that we developed with low up-front costs and that we were able to leverage our unique experience, relationships, and social commerce knowledge to launch.

We are excited about launching this brand with Christie Brinkley, and expect to launch at least one other similarly-developed brand later in 2024.

We have a proven track record of acquiring brands and/or businesses that are strategically important to and synergistic with our business, and are consistently reviewing potential acquisition targets.

Potential acquisitions may include established or newer brands that do or would perform well in live streaming or social commerce, direct-to-consumer brands or platforms with significant consumer following, or established media companies which could benefit from our expertise in direct-response television, live streaming, and social commerce.

While our strategy is not dependent on such acquisitions, we carefully consider potential acquisitions as a means to leverage our infrastructure and expertise and accelerate our growth.

Finally, in December 2023, Xcel acquired a 30% interest in ORME, which is a brand new short-form video social commerce marketplace that launched in the first quarter of 2024.

While we will not consolidate ORME’s financial results of operations with our own (given our minority noncontrolling position in the company) and do not anticipate receiving regular dividends or other distributions from ORME in the near future, we believe that ORME has significant growth potential and would add significant value to Xcel, both through our equity interest in ORME as well as our ability to leverage ORME in order to grow additional direct-to-consumer brands that would perform well in social commerce pursuant to our aforementioned brand development and acquisition strategies.

ORME licenses the technology utilized by its marketplace from KonnectBio Inc., of which Robert D’Loren, our Chairman of the Board, Chief Executive Officer, and President, owns an approximate 20% noncontrolling interest.

Our working-capital-light “licensing plus” business model allows us to focus on our core competencies of design, marketing, and brand management without the investment requirements in inventory associated with traditional consumer product companies.

Qurate Agreements

Qurate Retail Group (“Qurate”) is an important strategic partner in our interactive television business, and is the largest licensee for the Lori Goldstein, C Wonder, and Isaac Mizrahi 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.

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Qurate’s programming currently reaches over 200 million homes worldwide.

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.

Our agreements with Qurate allow our on-air spokespersons to promote our non-Qurate product lines and certain strategic partnerships through QVC’s and HSN’s programs, subject to certain parameters including, in certain cases, 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.

Our brands licensed to Qurate are licensed through our various wholly owned subsidiaries.

Qurate Agreements

Through our wholly owned subsidiaries, we have entered into direct-to-retail license agreements with Qurate, pursuant to which we design, and Qurate sources and sells, various products under our LOGO by Lori Goldstein brand, the Longaberger brand, and the Judith Ripka brand.

These agreements include, respectively, the Qurate Agreement for the LOGO by Lori Goldstein Brand (the “LOGO Qurate Agreement”) and the Qurate Agreement for the Longaberger Brand (the “Longaberger Qurate Agreement”).

We were also previously party to similar agreements with Qurate related to the IsaacMizrahiLIVE brand (the “IM Qurate Agreement”) and the H Halston brand (the “H Qurate Agreement.

Qurate owns the rights to all designs produced under these agreements (collectively, the “Qurate 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 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.

Through our wholly owned subsidiaries, we have entered into direct-to-retail license agreements with Qurate, collectively referred to as the Qurate Agreements (individually, each a “Qurate Agreement”), pursuant to which we design, and Qurate sources and sells, various products under our LOGO by Lori Goldstein brand, the Longaberger brand, and the C Wonder brand.

We were also previously party to similar agreements with Qurate related to the IsaacMizrahiLIVE brand and the Judith Ripka brand.

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.

In connection with the Qurate Agreements 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.

Xcel Commenced

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Automatic Renewal

Brand with QVC

QVC Product Launch

LOGO Qurate Agreement

Brand with Qurate

Product Launch

LOGO Qurate Agreement (QVC)

November 1, 2024

one-year period

Longaberger Qurate Agreement

Longaberger Qurate Agreement (QVC)

October 31, 2025

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November 2019

IM Qurate Agreement

not applicable

September 2011

H Qurate Agreement

not applicable

* On May 31, 2022, in connection with the sale of a majority interest in the Isaac Mizrahi brand to a third party, this agreement was assigned to IM Topco, LLC, in which Xcel retains a noncontrolling interest.

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

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

In addition to the foregoing agreements, on August 30, 2022, Qurate and Xcel amended its licensing agreement for the Judith Ripka brand to terminate the license period effective December 31, 2021.

Effective January 1, 2022, the agreement is effective with respect to a sell-off period, under which Qurate may continue to license the Ripka brand on a non-exclusive basis for as long as necessary to sell off any of its remaining inventory.

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.

C Wonder Qurate Agreement (HSN)

December 31, 2024

two-year period

● On May 31, 2022, in connection with our sale of a majority interest in the Isaac Mizrahi brand to a third party, the agreement with Qurate related to the IsaacMizrahiLIVE brand was assigned to IM Topco, LLC.

● On August 30, 2022, Qurate and Xcel amended the licensing agreement for the Judith Ripka brand to terminate the license period effective December 31, 2021.

Effective January 1, 2022, the agreement entered a sell-off period, under which Qurate was allowed to continue to license the Ripka brand on a non-exclusive basis for as long as necessary to sell off any of its remaining inventory.

The sell-off period ended in 2023.

Under the Qurate 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 Qurate Agreements, net of customer returns, and excluding freight, shipping and handling charges, 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 Qurate Agreements, except for the Longaberger Qurate Agreement, we are required for a period of time to 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.

Such royalty participation fees are recorded as a reduction to net licensing revenue.

Under the Qurate 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 Qurate 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 term of the Ripka Qurate Agreement, and for one year thereafter, we 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 Qurate Agreement, and for one year thereafter, we 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, 2022 and 2021, net licensing revenue from Qurate collectively accounted for 44% and 50%, respectively, of the total net revenue of the Company.

The Qurate Agreements generally prohibit us from selling products under the specified respective brands to a direct competitor of Qurate without Qurate’s consent.

Under certain of the Qurate Agreements, we may, with the permission of

Qurate, sell the respective branded products via certain specified sales channels in exchange for making reverse royalty payments to Qurate based on the net retail sales of such products through such channels.

However, we are generally restricted from selling products under the specified respective brands or trademarks to certain mass merchants.

Also, under certain of the Qurate Agreements, we may be required for a period of time to 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.

For the years ended December 31, 2023 and 2022, net licensing revenue from Qurate collectively accounted for approximately 34% and 44%, respectively, of the total net revenue of the Company.

Halston Master License

On May 15, 2023, the Company, through our wholly owned subsidiaries, H Halston, LLC and H Heritage Licensing, LLC (collectively, the “Licensor”), entered into a master license agreement relating to the Halston Brand (the “Halston Master License”) with G-III (as licensee) for men’s and women’s apparel, men’s and women’s fashion accessories, children’s apparel and accessories, home, airline amenity and amenity kits, and such other product categories as mutually agreed upon.

The Halston Master License provides for an upfront cash payment and royalties payable to the Company (including certain guaranteed minimum royalties), includes significant annual minimum net sales requirements, and has a twenty-five-year term (consisting of an initial five-year period, followed by a twenty-year period), subject to G-III’s right to terminate with at least 120 days’ notice prior to the end of each five-year period during the term.

G-III has an option to purchase the Halston Brand for $5.0 million at the end of the twenty-five-year term, which right may be accelerated under certain conditions associated with an uncured material breach of the Halston Master License in accordance with the terms of the Halston Master License.

The Licensor granted G-III a security interest in the Halston trademarks to secure the Licensor’s obligations under the Halston Master License, including to honor the obligations under the purchase option.

As a result of the upfront cash payment and guaranteed minimum royalties discussed above, the Company has recognized $4.44 million of deferred revenue contract liabilities on its consolidated balance sheet as of December 31, 2023 related to this contract, of which $0.89 million was classified as a current liability and $3.55 million was classified as a long-term liability.

The balance of the deferred revenue contract liabilities will be recognized ratably as revenue through December 31, 2028.

For the year ended December 31, 2023, net licensing revenue from the Halston Master License accounted for approximately 9% of the total net revenue of the Company.

Other Licensing Agreements

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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.

our licensing business.

We will endeavor, where possible, to require licensees to provide guaranteed minimum royalties under their license agreements.

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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 2022, we added our Q Optix business to our wholesale operations.

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

Collaborations

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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.

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

We also market the Lori Goldstein brand through www.lorigoldstein.com, the Halston Brand through www.halston.com, the Judith Ripka 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 e-commerce businesses’ growth is dependent on live-streaming and other marketing to drive traffic to our websites and converting our visitors into customers.

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.

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

● our operating strategies of wholesale 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.

● our operating strategies of licensing brands with significant media presence and driving sales through our true omni-channel retail sales strategy across interactive television, 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.

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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.

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.

The Company, through its wholly owned subsidiaries, owns and exploits the Lori Goldstein brands, which include the trademarks and brands LOGO by Lori Goldstein, LOGO, LOGO Links, LOGO Lounge, LOGO Layers, and LOGO Luna;

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

We have a 50% ownership interest in the brands and trademarks of the Q Optix brand through our business venture with Vita Frame LLC.

We also have a 30% ownership interest in the Mizrahi brands, which include the trademarks and brands Isaac Mizrahi, Isaac Mizrahi New York, IMNYC Isaac Mizrahi, and IsaacMizrahiLIVE, through our business venture with WHP Global.

We also have a 30% ownership interest in IM Topco, which owns the Mizrahi brands, including the trademarks and brands Isaac Mizrahi, Isaac Mizrahi New York, IMNYC Isaac Mizrahi, and IsaacMizrahiLIVE.

Where laws limit our ability to record in our name trademarks that we have purchased, we have obtained by way of license all necessary rights to operate our business.

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The Company and its licensees do not presently earn a material amount of revenue from either the licensing of our trademarks internationally or the sale of products under our trademarks internationally.

However, the Company has registered its trademarks in certain territories where it expects that it may do business in the foreseeable future.

However, the Company has

registered its trademarks in certain territories where it expects that it may do business in the foreseeable future.

If the Company or a licensee intends to make use of the trademarks in international territories, the Company will seek to register its trademarks in such international territories as it deems appropriate based upon factors including the revenue potential, prospective market, and trademark laws in such territory or territories.

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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