Xcel Brands Inc. now can be counted as a part of Team Halston, figuratively speaking.

This story first appeared in the December 23, 2014 issue of WWD. Subscribe Today.

Xcel has acquired the H Halston and H by Halston brands for $27.7 million in a combination of cash, shares of Xcel Brands stock and warrants. The assets were held in a Halston intellectual property holding company that in turn is owned by a group of investors that include Hilco Consumer Capital and Ben Malka, who operate the business under the name House of Halston, LLC. Halston will retain ownership of its Halston and Halston Heritage brands. Halston Heritage is the core contemporary line.

Robert D’Loren, chairman and chief executive officer of Xcel, said, “Halston was an American icon, and these brands, inspired by his legacy, are an excellent acquisition for our growing omnichannel company.”

While D’Loren has hired his own design and marketing teams to work on the Halston diffusion lines, Xcel and House of Halston will work together to ensure alignment of brand aesthetics for each label and the consumer distribution channels each targets.

Hilco acquired the Halston brand in 2007 for $25 million. Malka, Halston’s ceo, reportedly invested $20 million in Halston when he joined the company as chairman and ceo. Malka also is on Xcel’s board.

“I’m looking forward to working with Bob and his team on this exciting new project,” Malka said.

The deal represents the second acquisition for Xcel this year — it bought the Judith Ripka brand in April for $20 million — and the third one since September 2011, when it made its first acquisition, which was the Isaac Mizrahi brand for $31.5 million.

D’Loren is on the lookout for more brands to add to Xcel’s portfolio. “Acquisitions are a little easier for us now that we have the platform. I don’t think we will move as fast as some of our competitors. We are much more design driven, and it’s more challenging for us to integrate design teams,” he said.

That infrastructure took a few years to build, and the company learned much from its initial steps in planning out the licensing program for the Mizrahi brand. It also took its learnings from the first Mizrahi store in Southampton, N.Y., in terms of inventory and the mix of stockkeeping units, in evaluating retail store opportunities when considering that component of a brand’s acquisition potential.

“We had a goal three years ago, when we did $50 million in sales, to grow that to $500 million by the end of three years. Now we want to take that to $1 billion, which we can do organically or through an acquisition,” D’Loren said.

He didn’t have a timetable for when Xcel could reach $1 billion in aggregate sales volume for its brands, but added: “We are growing very fast. One or two acquisitions can get us there.”

D’Loren declined to disclose potential plans for the Halston subbrands. However, category extensions via licensing and selling product offerings across different channels are strategies he’s put in place for the Mizrahi and Ripka business models.

The Ripka brand, now fully integrated at Xcel, will be back at Neiman Marcus in spring 2015, according to D’Loren, and Mizrahi will soon have a store presence, under a licensing arrangement, in the Philippines.

Separately, both brands will be available on QVC in the U.K., Germany and France in 2015, Ripka on QVC in Japan in 2015 and Mizrahi on QVC in China and Japan in 2016.

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