Xcel Brands Reports $1.33 Million Revenue in Q1 2025, Down 61% Year-Over-Year

Xcel Brands, Inc. reported a net revenue of $1.33 million for the first quarter of 2025, a decrease of 61.0% from $2.18 million in the same period last year. This decline was primarily attributed to the divestiture of the Lori Goldstein brand in June 2024, which resulted in the loss of associated licensing revenues. However, the company noted an increase in licensing revenues from other brands, particularly the C Wonder and TowerHill by Christie Brinkley brands. The company’s operating loss improved to $2.19 million from a loss of $6.20 million in the prior year, reflecting a significant reduction in direct operating costs, which fell to $2.28 million from $3.96 million.

In terms of strategic developments, Xcel Brands has undergone a restructuring of its business model, transitioning to a "licensing plus" approach that emphasizes cost efficiency. The company has implemented measures to reduce its direct operating expenses to an expected run rate of less than $10 million annually, down from approximately $40 million in 2022. This restructuring has resulted in a reduction of direct operating costs by approximately $22 million on an annualized basis. Additionally, Xcel has launched new co-branded collaborations, with plans for further product launches in 2026.

Operationally, Xcel Brands reported a decrease in cash and cash equivalents to $0.30 million as of March 31, 2025, down from $1.25 million at the end of 2024. The company’s total assets also decreased to $52.49 million from $53.76 million, while total liabilities increased to $26.78 million from $25.36 million. The company’s accumulated deficit grew to $79.04 million, up from $76.24 million. The headcount remained stable, with no significant changes reported in employee numbers.

Looking ahead, Xcel Brands faces challenges related to liquidity and market conditions. The company has expressed substantial doubt about its ability to meet financial obligations without additional funding, as it has incurred recurring losses and has a working capital deficit of approximately $0.6 million. Management is actively pursuing an equity offering to secure additional capital, although there is no assurance that these efforts will be successful. The company continues to explore strategic financing alternatives and operational efficiencies to improve liquidity and sustain its business operations.