Judith Ripka Sold to Xcel Brands

The acquisition price is $20 million, consisting of $14 million in cash and $6 million in interest-free promissory notes.

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Judith Ripka is Isaac Mizrahi’s new brand sibling under the Xcel Brands Inc. umbrella.

This story first appeared in the April 4, 2014 issue of WWD.  Subscribe Today.

Xcel, which also has an interest in Liz Claiborne New York that’s sold on home shopping channel QVC, has closed on its acquisition of the Judith Ripka brand and related intellectual property assets.

The acquisition price is $20 million, consisting of $14 million in cash and $6 million in interest-free promissory notes due five years from the date of issuance and payable in cash or company stock at Xcel’s election, plus 571,500 shares of Xcel common stock. In addition, Xcel will provide up to $5 million in contingent future payments, either in cash or company stock, upon the Judith Ripka brand achieving certain net royalty levels from October 2015 through September 2018.

Judith Ripka will continue as the brand’s chief designer. “This is an outstanding opportunity to cultivate our brand and reach our loyal followers in a new way,” she said.

Robert D’Loren, Xcel’s chairman and chief executive officer, said, “We see a tremendous potential for engaging Judith’s brand followers across new product categories, leveraging our omnichannel strategy. This acquisition satisfied all of our acquisition criteria; it’s strategic, synergistic and accretive.”

Ripka’s first collection was in 1977, and she opened her first freestanding store in Manhasset, N.Y., in 1993. There are currently six stores in operation. The company launched a sterling silver jewelry line on QVC in 1997.

D’Loren said it was through QVC that he first learned of the opportunity to acquire the brand. Both the Liz Claiborne and Isaac Mizrahi lines are sold on QVC.

Discussions began three months ago. By that time, Ripka’s president Chuck Jayson had already left the company. Xcel acquired the trademarks and related IP assets, and will be responsible for product sold on QVC. The operating business, which is responsible for the wholesale component of the Ripka brand, is still run by members of Ripka’s family under license from Xcel.

The Judith Ripka brand is offered at four different price points. The White label is the off-price collection at Century 21, TJ Maxx and Marshalls; Silver is the sterling silver group and is the interactive television option via QVC and Shop the Shopping Channel; Black is sterling silver with touches of 18-karat gold sold at department stores such as Nordstrom, Lord & Taylor and Macy’s, and Gold is the couture-bridge line featuring 18-karat gold jewelry options sold at Neiman Marcus and Saks Fifth Avenue.

According to the investment deck about the Judith Ripka brand that was sent to prospective buyers, the company posted sales in excess of $100 million in 2013, competes with Ippolita among the modern jewelry brands and ranks higher than Alexis Bittar and Eddie Borgo at the better retailer channel but below David Yurman, Stephen Dweck and David Webster, which are sold at bridge or luxury retailers.

D’Loren said one of Xcel’s goals is to move the brand to a best-better strategy so its placement is more upscale at the David Yurman or better level, with more department store doors at Saks, Neiman’s and Nordstrom at the better category. The QVC business will remain an integral component of the brand.

Using the Xcel design platform that’s already in place, the plan is to remain design driven by bringing Ripka’s expertise in jewelry and extending that into new categories such as handbags for day and evening, footwear, gift items and tabletop.

With the Ripka brand now under its umbrella, Xcel’s QVC business including Mizrahi and Liz Claiborne is expected to total $300 million this year.

When Xcel acquired the Mizrahi licensing business in September 2011 for $31.5 million, that deal structure also included a combination of cash, a seller note and the issuance of Xcel common stock, as well as an earn-out arrangement. Mizrahi stayed on as chief designer. Mizrahi remains the face of the brand, while a creative design team is responsible for executing on the designs and production of product offered on QVC.

At the time of the purchase, volume for the Mizrahi brand was at $50 million on QVC. It rose to $105 million last year and is forecasted at $150 million this year. Retail volume for the non-QVC products sold by the brand is forecasted at $90 million this year across 26 categories. There are licenses for nearly 150 categories, according to D’Loren.

In addition to the Southampton, N.Y., store that showcases the world of Isaac Mizrahi, a second location in Atlanta was opened last week.

In the case of the Liz Claiborne line on QVC, its volume was $10 million in 2011, and is now close to $48 million.

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