Brand builder Xcel soars 36% in two days after signing new influencers

Quotes on Xcel Brands, a small-cap company that specializes in creating influencer-driven brands and promoting them on social media, soared 36% over the last two sessions. These gains are attributable to announcements of new partnerships: one with Cesar Millan, the creator of the television series Dog Whisperer, and another with chef Gemma Stafford, whose YouTube channel boasts almost 3 million subscribers.

Yesterday, March 25, Xcel Brands advanced 13% on the Nasdaq to $4.35 per share, which, coupled with a 20% increase a day earlier, brings its two-day gain to 36%. In premarket trading today, however, the stock has dipped about 3% to $4.21 per share.

Yesterday, the company announced a partnership with baking influencer Gemma Stafford to launch a bakeware and home brand. Over the past 11 years, Stafford “has built a global community of passionate home bakers,” according to the press release. She is the author of several cookbooks, and her YouTube channel has almost 3 million subscribers.

For Stafford, this collaboration marks her first attempt at developing her own product line, as noted in the press release. It will allow her “to create products that are practical, delightful, and designed to spark creativity for bakers everywhere,” she said.

A day before the partnership with Stafford was announced, on March 24, Xcel Brands unveiled a new pet brand in collaboration with Cesar Millan, a New York Times best-selling author and the creator of the show Dog Whisperer.

“With over 21 million loyal followers across social media and a presence in more than 120+ countries through his hit TV series, Cesar Millan is uniquely positioned to lead the next wave of pet care innovation,” the company stated.

Xcel Brands’ business model revolves around creating and promoting celebrity-driven brands. According to the official website, the company currently owns six brands, each powered by influencers or popular bloggers, including fashion brands like Isaac Mizrahi (in collaboration with the designer) and C. Wonder (featuring Christian Siriano), as well as the Judith Ripka jewelry brand (with vice president of design and innovation Heidi Ripka).

In its most recent earnings report, for the first nine months of 2024, the company reported a 54% year-over-year decline in revenue to $7.1 million, which it attributed to the discontinuation of its wholesale businesses. Meanwhile, the adjusted net loss per share dropped 66% to $0.15.

For the year to date, Xcel Brands is off a little more than 15%. According to MarketWatch, the lone analyst covering the name has a “buy” recommendation, with a target price of $18.75 per share, implying 331% upside versus the last closing price.