Xcel Brands Inc., which has been ramping up investments to support its fast-fashion model, reported fourth-quarter results Tuesday.
For the three months ended Dec. 31, Xcel said net income was $2.8 million, or 14 cents a diluted share, compared with net income of $768,000, or 4 cents, a year ago. On an adjusted basis, non-GAAP net income was $300,000, or 1 cent a diluted share, compared with $2.1 million, or 10 cents, in the year-ago period. Total revenues slipped 7.5 percent to $6.9 million from $7.5 million, which was comprised of a 6.4 percent decline in net licensing revenue to $6.9 million from $7.3 million and a net e-commerce sales drop to $60,000 from $150,000.
Xcel attributed the revenue decline to “strong headwinds experienced by our interactive television partner QVC in the latter part of 2016.”
The company has also been making investments in its infrastructure to help it scale operations, particularly with its fast fashion business model.
Robert D’Loren, chairman and chief executive officer, said, “Despite a retail environment challenged by an unprecedented cycle of change, we continue to believe our business model has us well-positioned to deliver solutions for today’s challenges.”
D’Loren said the company is beginning to see the return on its investment from its Quick Time Response apparel program. The company last month said the program has been expanded to Dillard’s for its H Halston brand. Before that, the fast-fashion model was launched as an exclusive partnership with Hudson’s Bay and Lord & Taylor, covering IMNYC, designed by Isaac Mizrahi; H Halston; C. Wonder Ltd. and Highline Collective, an in-house brand for Hudson’s Bay targeting Millennial consumers.
Xcel also said earlier today that Ariel Foxman has become a consultant to the Xcel management team to help the company develop its digital and media strategy.