Tommy Bahama designs, sources, markets and distributes men'smen’s and women'swomen’s sportswear and related products. The target consumersTommy Bahama’s typical consumer is older than 45 years old, has a household annual income in excess of Tommy Bahama are primarily affluent men$100,000, lives in or travels to warm weather and women age 35resort locations and older who embraceembraces a relaxed and casual approach to daily living. Tommy Bahama products can be found in our Tommy Bahama stores and on our Tommy Bahama e-commerce website, tommybahama.com, as well as inat better department stores, and independent specialty stores throughout the United States.and multi-branded e-commerce retailers. We also operate Tommy Bahama restaurants and license the Tommy Bahama name for various product categories. During Fiscal 2016,2019, 95% of Tommy Bahama'sBahama’s sales were to customers within the United States, with the remaining sales in Canada, Australia and Asia.

We believe that the attraction to our consumers of the Tommy Bahama brand, to our consumerswhich was founded in 1992, is a reflection of our efforts over many years of maintainingto maintain appropriate quality and design of our Tommy Bahama apparel, accessories and licensed products, limitinglimit the distribution of Tommy Bahama products to a select tier of retailers, and effectively communicatingcommunicate the relaxed and casual Tommy Bahama lifestyle to consumers.lifestyle. We expect to continue to follow this approach for the brand in the future. We believe that the retail sales value of all Tommy Bahama branded products sold during Fiscal 2016,2019, including our estimate of retail sales by our wholesale customers and other third party retailers, was approximatelyexceeded $1.2 billion.

We believe there isare ample opportunityopportunities to expand the direct to consumer reach of the Tommy Bahama brand in the future, while at the same time maintaining theits historically select distribution that Tommy Bahama has historically maintained. We believe that indistribution. In order to take advantage of opportunities for long-term growth, we must continue to invest in the Tommy Bahama brand. These investments include amounts associated with capital expenditures and ongoing expenses to enhance e-commerce and other technology capabilities; capital expenditures and pre-opening expenses ofopen new stores and restaurants; the remodeling and relocation ofremodel and/or relocate existing stores and restaurants; maintain and capital expenditures related toupgrade our distribution and other facilities.

In recent years, an important focusinitiative for us in Fiscal 2017 is advancing various initiativeshas been to increase the profitability of the Tommy Bahama business. These initiativesWhile we have made progress in recent years on improving the profitability of our Tommy Bahama operating group, this initiative remains a focus area for the long-term prospects of the business and has generally focus on:

Tommy Bahama products are designed by product specific teams who focus on the target consumer. The design process includes feedback from buyers, consumers and sales agents, along with market trend research. Our Tommy Bahama apparel products generally incorporate fabrics made of cotton, silk, linen, nylon, leather, tencel and other natural and man-made fibers, or blends of two or more of these materials.

Advertising and marketing are an integral part of the long-term strategy for the Tommy Bahama brand, and we therefore devote significant resources to these efforts. Tommy Bahama’s advertising, and marketing. Whilewhich emphasizes the advertising for Tommy Bahama promotes our products, the primary emphasis is on brandbrand’s image and brand lifestyle. Tommy Bahama's advertisinglifestyle, attempts to engage individuals within the brand'starget consumer demographic and guide them on a regular basis to our retail stores, e-commerce websites or wholesale customers'customers’ stores and websites in search of our products. The marketing of the Tommy Bahama brand includes email, internet and social media advertising and traditional media such as catalogs, print and other correspondence with customers,communications, as well as moving media and trade show initiatives. As a lifestyle brand, we believe that it is very important that Tommy Bahama communicate regularly with consumers via the use of email, internet and social media about product offerings or other brand events in order to maintain and strengthen Tommy Bahama's connections with its consumers.

We also believe that highly visible full-price retail store locations with creative design, broad merchandise selection and brand appropriate visual presentation are key enticements for customers to visitcustomers. We intend for our full-price retail stores and buy merchandise. We intend thatto enhance our full-price retail stores enhance theguests’ shopping experience, of our customers, which we believe will increase consumer brand loyalty. Marketing initiatives at our full-price retail stores may include special event promotions and a variety of public relations activities designed to create awareness of our products.

In addition, we utilizeuse loyalty award cards, Flip-SideFlip Side events and Friends & Family events to drive traffic to our stores and websites. These initiatives are effective in increasing traffic as the proportion of our sales that occur during our marketing initiatives have increased in recent years.years, which puts some downward pressure on our direct to consumer gross margins. We believe our traditional and electronicdigital media communications increase the sales of our own full-price retail stores and e-commerce operations, as well as the sales of our products for our wholesale customers.

For certain of our wholesale customers, we also provide point-of-sale materials and signage to enhance the presentation of our products at their retail locations and/or participate in cooperative advertising programs.

We operate a Tommy Bahama distribution center in Auburn, Washington, which serves our North America direct to consumer and wholesale operations. Activities at the distribution center include receiving finished goods from suppliers,

A key component of our Tommy Bahama growth strategy is to operate our own stores, restaurants and e-commerce websites, which we believe permits us to develop and build brand awareness by presenting our products in a setting specifically designed to showcase the aspirational lifestyle on which the products are based. Our Tommy Bahama direct to consumer channels, which consist of retail store, e-commerce and restaurant operations, in the aggregate, represented 77%80% of Tommy Bahama'sBahama’s net sales in Fiscal 2016. We expect the percentage of our Tommy Bahama sales which are direct to consumer sales will increase slightly in future years as we anticipate that the direct to consumer distribution channel will grow at a faster pace than the wholesale distribution channel.2019. Retail store, e-commerce and restaurant net sales accounted for 50%48%, 16%20% and 11%12%, respectively, of Tommy Bahama'sBahama’s net sales in Fiscal 2016.

Our direct to consumer strategy for the Tommy Bahama brand includes locating and operating full-price retail stores in upscale malls, lifestyle shopping centers, resort destinations and brand-appropriate street locations. Generally, we seek to locate our full-price retail stores in shopping areas and malls withthat have high-profile or upscale consumer brands for our full-price retail stores.brand adjacencies. As of January 28, 2017,February 1, 2020, the majority of our Tommy Bahama full-price retail stores were in street-front locations or lifestyle centers with the remainder primarily in regional indoor malls.malls, with a number of those regional indoor locations in resort travel destinations. Our full-price retail stores allow us the opportunity to carry a full line of current season merchandise, including apparel, home products and accessories, all presented in an aspirational, island-inspired atmosphere designed to be relaxed, comfortable and unique. We believe that the Tommy Bahama full-price

Disposal of discontinued or end of season inventory is an ongoing part of any apparel business and historically Tommy Bahama has utilizeduses its outlet stores, supplemented by e-commerce flash clearance sales and sales to off-price retailers and selected initial markdowns in our full-price retail stores and on our e-commerce websites to sell anyits end of season or excess inventory. Our Tommy Bahama outlet stores, which generated 10%9% of our total Tommy Bahama net sales in Fiscal 2016,2019, are generally located in outlet shopping centers that include upscale retailers and serve an important role in overall inventory management by often allowing us to sell discontinued and out-of-season products at better prices than are otherwise available from outside parties. We believe that this approach has helped us protect the integrity of the Tommy Bahama brand by allowing our full-price retail stores to limit promotional activity andwhile controlling the distribution of discontinued and out-of-season product. To supplement the clearance items sold in Tommy Bahama outlets, approximately 20%some of the product sold in our Tommy Bahama outlets wasare made specifically for our outlets. At this time and based on our anticipated proportion of clearance versus made-for items in our outlet stores, weWe anticipate that we would generally operate one outlet for approximately every three full-price retail stores.

For Tommy Bahama'sBahama’s domestic full-price retail stores and retail-restaurant locations operating for the full Fiscal 20162019 year, sales per gross square foot, excluding restaurant sales and restaurant space, were approximately $605$615 during Fiscal 2016, compared to $655 for stores operating for the full Fiscal 2015 year. The decrease in sales per square foot was primarily due to the negative comparable full-price retail store sales during Fiscal 2016.2019. In Fiscal 2016,2019, our domestic outlet stores generated approximately $355$335 of sales per square foot for outlets open for the entire 20162019 fiscal year.

As of January 28, 2017February 1, 2020, we operated 1716 Tommy Bahama restaurants orincluding Marlin Bar locations, generally adjacent to a Tommy Bahama full-price retail store location, which together we often refer to as islands.location. These retail-restaurant locations, which generate approximately 25% of Tommy Bahama’s net sales, provide us with the opportunity to immerse customers in the ultimate Tommy Bahama experience. We do not anticipate that manythe majority of our retail locations will have an adjacent restaurant; however, in select high-profile brand appropriate locations such as Naples, Florida, Waikiki, Hawaii, and New York City, we have determined that an adjacent restaurant can further enhance the image or exposure of the

As of January 28, 2017,February 1, 2020, the total square feet of space utilizedused for our Tommy Bahama full-price retail store and outlet store operations was 0.6 million with another 0.1 million of total square feet utilizedused in our Tommy Bahama restaurant operations. The table below provides certain information regarding Tommy Bahama retail stores and restaurants operated by us as of January 28, 2017.February 1, 2020.

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We anticipate that our store count at the numberend of storesFiscal 2020 will remainbe comparable to our store count at the end of Fiscal 2016. Although we expect2019. Our initial Fiscal 2020 plan included opening six Marlin Bars, of which two are relocations and expansions of existing retail store locations, one is a conversion of a retail-restaurant location to open a handfulMarlin Bar and three are entirely new locations, and a very limited number of openings of full-price retail stores duringlocations. As of March 30, 2020, we have completed two of these Marlin Bars, while the other locations are scheduled for later in the year including full-price retail stores in Delray Beach, Florida and Napa, California as well as a retail-restaurant location at Legacy West in Dallas, Texas, we also expectbeing reassessed due to opportunistically close certain under-performing locations through lease expirations during the year. In future years, we do not

The operation of full-price retail stores, outlet stores and retail-restaurant locations requiresrequire a greater amount of initial capital investment than wholesale operations, as well as greater ongoing operating costs. We estimate that we will spend approximately $1.3$1 million on average in connection with the build-out of a domestic full-price retail store. However, individual locations, particularly those in urban locations, may require investments greater than these amounts depending on a variety of factors, including the location and size of the full-price retail store. The cost of a traditional Tommy Bahama retail-restaurant location and a Marlin Bar is significantly more than the cost of a full-price retail store and can vary significantly depending on a variety of factors. Historically, the cost of our retail-restaurant locations has been approximately $5 million; however, we have spent significantly more than that amount for certain locations including New York City and Waikiki.significantly less than this amount for our two Marlin Bar locations. For most of our retail stores and restaurants, the landlord provides certain incentives to fund a portion of our capital expenditures.

In addition to our full-price retail stores and outlet stores, our direct to consumer approach includes various e-commerce websites, including the tommybahama.com website. During Fiscal 2016,2019, e-commerce sales represented 16%20% of Tommy Bahama'sBahama’s net sales.sales, compared to 18% in Fiscal 2018. Our Tommy Bahama websites allow consumers to buy Tommy Bahama products directly from us via the internet. These websites also enable us to increase our database of consumer contacts, which allows us to communicate directly and frequently with consenting consumers. As we reach more customers in the future, we anticipate that our e-commerce distribution channel for Tommy Bahama will continue to grow at a faster pace than our domestic full-price retail store operations or wholesale operations. In Fiscal 2016, we held a select number of e-commerce flash clearance sales as a means of complementing our outlets in liquidating discontinued or out-of-season inventory. These sales represented 10% of Tommy Bahama e-commerce sales in Fiscal 2016.

To complement our direct to consumer operations and have access to a larger group of consumers, we continue to maintain our profitable wholesale operations for Tommy Bahama. Tommy Bahama'sBahama’s wholesale customers consist of sales toinclude better department stores, and specialty stores and multi-brand e-commerce retailers that generally follow a retail model approach with limited discounting. We value our long-standing relationships with our wholesale customers and are committed to working with them to enhance the success of the Tommy Bahama brand within their stores.

Wholesale sales for Tommy Bahama accounted for 23%20% of Tommy Bahama'sBahama’s net sales in Fiscal 2016.2019. Approximately two-thirds55% of Tommy Bahama'sBahama’s wholesale business reflects sales to major department stores with the remaining wholesale sales primarily sales to specialty stores. Tommy Bahama men'smen’s products are available in more than 2,0001,800 retail locations in North America, retail locations, while Tommy Bahama women'swomen’s products are available in more than 1,0001,100 retail locations in North America retail locations.America. During Fiscal 2016, 18%2019, 15% of Tommy Bahama'sBahama’s net sales were to Tommy Bahama's tenBahama’s 10 largest wholesale customers, with its largest customer representing 6%5% of Tommy Bahama'sBahama’s net sales.

We believe that the integrity and continued success of the Tommy Bahama brand, including its direct to consumer operations, is dependent, in part, upon controlled wholesale distribution, with careful selection of the retailers through which Tommy Bahama products are sold. As a result of our approach to limiting our wholesale customers,distribution, we believe that sales growth in our men'smen’s apparel wholesale business, which represented approximately 88%86% of Tommy Bahama'sBahama’s domestic wholesale sales in Fiscal 2016,2019, may be somewhat limited. However, we believe that we may have opportunities for wholesale sales increases for our Tommy Bahama women'swomen’s business in the future, with its appeal evidenced by women'swomen’s product representing 28%31% of sales in our full-price retail stores and e-commerce websites. Overall, we anticipate that the Tommy Bahama wholesale business will grow at a slower rate than the direct to consumer distribution channel.

We maintain Tommy Bahama apparel sales offices and showrooms in New York and Seattle, as well as other locations, to facilitate sales to our wholesale customers. Our Tommy Bahama wholesale operations utilizeuse a sales force consisting of a combination of Tommy Bahama employees and independent commissioned sales representatives and Tommy Bahama employees.

We believe licensing is an attractive business opportunity for the Tommy Bahama brand. For an established lifestyle brand, licensing typically requires modest additional investment but can yield high-margin income. It also affords the opportunity to enhance overall brand awareness and exposure. In evaluating a licensee for Tommy Bahama, we typically consider the candidate'scandidate’s experience, financial stability, sourcing expertise and marketing ability. We also evaluate the marketability and compatibility of the proposed licensed products with other Tommy Bahama products.

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In addition to our licenseslicense arrangements for the specific product categories listed above, we may enter into certain international distributor agreements which allow those parties to distribute Tommy Bahama apparel and other products on a wholesale and/or retail basis within certain countries or regions. As of January 28, 2017,February 1, 2020, we have agreements for distribution of Tommy Bahama products in the Middle East, Greater China and parts of Central and SouthLatin America. Substantially all of theThe products sold by the distributors generally are identical to the products sold in our own Tommy Bahama stores. In addition to selling Tommy Bahama goods to wholesale accounts, the distributors may, in some cases, operate their own retail stores. As of February 1, 2020, we have licensed Tommy Bahama stores located in the Middle East, Greater China and Central America. None of these agreements are expected to generate growth that would materially impact the operating results of Tommy Bahama in the near term in a meaningful manner.

Tommy Bahama'sBahama’s operating results are impacted by seasonality as the demand by specific product or style, as well as by distribution channel, may vary significantly depending on the time of year. Typically, the demand in the direct to consumer operations, including sales at our own stores and e-commerce sites, for Tommy Bahama products in our principal markets is generally higher in the spring, summer and holiday seasons and lower in the fall season. However, wholesale product shipments are generally shipped prior to each of the retail selling seasons. As the timing of certain unusual or non-recurring items, economic conditions, wholesale product shipments or other factors affecting the business may vary from one year to the next, we do not believe that net sales or operating income (loss) for any particular quarter or the distribution of net sales and operating income (loss) for Fiscal 20162019 are necessarily indicative of anticipated results for the full fiscal year or expected distribution in future years. The timing of Tommy Bahama's sales in the direct to consumer and wholesale distribution channels generally varies. Typically, the demand in the direct to consumer operations, including sales at our own stores and e-commerce site, for Tommy Bahama products in our principal markets is generally higher in the spring, summer and holiday seasons and lower in the fall season. However, wholesale product shipments are generally shipped prior to each of the retail selling seasons. The following table presents the percentage of net sales and operating income (loss) for Tommy Bahama by quarter for Fiscal 2016:

Lilly Pulitzer designs, sources, markets and distributes upscale collections of women'swomen’s and girl'sgirl’s dresses, sportswear and related products. The Lilly Pulitzer brand was originally created in the late 1950s by Lilly Pulitzer and is an affluent brand with a heritage and aesthetic based on the Palm Beach resort lifestyle. The brand is somewhat unique among women'swomen’s brands in that it has demonstrated multi-generational appeal, including among young women in college or recently graduated from college; young mothers with their daughters; and women who are not tied to the academic calendar. Lilly Pulitzer products can be found in our owned Lilly Pulitzer stores, in Lilly Pulitzer Signature Stores, which are described below, and on our Lilly Pulitzer website, lillypulitzer.com, as well as in better department and independent specialty stores. During Fiscal 2016, 46%2019, 50% and 38%35% of Lilly Pulitzer'sPulitzer’s net sales were for women'swomen’s sportswear and dresses, respectively, with the remaining sales consisting of Lilly Pulitzer accessories, including scarves, bags, jewelry and belts; children's apparel; footwear;belts, children’s apparel, footwear and licensed products.

We believe the attraction of the Lilly Pulitzer brand to our consumers is a reflection of years of maintaining appropriate quality and design of the Lilly Pulitzer apparel, accessories and licensed products, restricting the distribution of the Lilly Pulitzer products to a select tier of retailers and effectively communicating the message of Lilly Pulitzer'sPulitzer’s optimistic Palm Beach resort chic lifestyle. We believe this approach to quality, design, distribution and communication has been critical in allowing us to achieve the current retail price points for Lilly Pulitzer products. We believe that the retail sales value of all Lilly Pulitzer branded products sold during Fiscal 2016,2019, including our estimate of retail sales by our wholesale customers and other third party retailers, exceeded $300$325 million.

Lilly Pulitzer'sPulitzer’s products are developed by our dedicated design teams located at the Lilly Pulitzer headquarters in King of Prussia, Pennsylvania as well as in Palm Beach, Florida. Our Lilly Pulitzer design teams focus on the target consumer, and the design process combines feedback from buyers, consumers and our sales force, along with market trend research. Lilly Pulitzer apparel products are designed to incorporate various fiber types, including cotton, silk, linen and other natural and man-made fibers, or blends of two or more of these materials.

Lilly Pulitzer uses a combination of in-house employees in our King of Prussia and Hong Kong offices and third party buying agents primarily based in Asia to manage the production and sourcing of the Lilly Pulitzerits apparel products. Through its buying agents and direct sourcing, Lilly Pulitzer used approximately 5060 vendors, with the largestno individual supplier providing more than 10%, and the largest 10 suppliers providing 59%55%, of the Lilly Pulitzer products acquired during Fiscal 2016.2019. In Fiscal 2016, 56%2019, 45% of Lilly Pulitzer'sPulitzer’s product purchases were from manufacturers located in China.

Advertising and marketing are an integral part of the long-term strategy of the Lilly Pulitzer brand, and we therefore devote significant resources to advertising and marketing. Lilly Pulitzer'sPulitzer’s advertising attempts to engage individuals within the brand'sbrand’s consumer demographic and guide them on a regular basis to our full-price retail stores, e-commerce websites and wholesale customers'customers’ stores and websites in search of our products. The marketing of the Lilly Pulitzer brand includes email, internet, and social media and influencer advertising, as well as traditional media such as catalogs, print and other correspondence with customerscommunications and moving media and trade show initiatives. We believe that it is very important that a lifestyle brand effectively communicate with consumers on a regular basis via the use of electronic media and print correspondence about product offerings or other brand events in order to maintain and strengthen the brand'sbrand’s connections with consumers.

We believe that highly visible full-price retail store locations with creative design, broad merchandise selection and brand appropriate visual presentation are key enticements for customers to visit our full-price retail stores and buy merchandise. We believe that our full-price retail stores enhance the shopping experience of our customers, which will increase consumer brand loyalty. Marketing initiatives at certain of our full-price retail stores may include special event promotions and a variety of public relations activities designed to create awareness of our stores and products.products and in some cases including "shop and share" events benefiting local charities. At certain times during the year, an integral part of the direct to consumer marketing plan for Lilly Pulitzer includes certain gift with purchase programs where the consumer earns the right to a Lilly Pulitzer gift product if certain spending thresholds are achieved. We believe that our full-price retail store

For certain of our wholesale customers, we also provide point-of-sale materials and signage to enhance the presentation of our branded products at their retail locations and/or participate in cooperative advertising programs.

Lilly Pulitzer operates a distribution center in King of Prussia, Pennsylvania. Activities at the distribution center include receiving finished goods from suppliers, inspecting the products and shipping the products to wholesale customers, Lilly Pulitzer full-price retail stores and our e-commerce customers. We seek to maintain sufficient levels of inventory at the

A key component of our Lilly Pulitzer growth strategy is to operate our own stores and e-commerce website, which we believe permits us to develop and build brand awareness by presenting products in a setting specifically designed to showcase the aspirational lifestyle on which they are based. The distribution channels included in Lilly Pulitzer'sPulitzer’s direct to consumer strategy consistdistribution channel, which consists of full-price retail store and e-commerce operations, and represented 68%79% of Lilly Pulitzer'sPulitzer’s net sales in both Fiscal 2016 and Fiscal 2015. We expect the percentage of our Lilly Pulitzer sales which are direct to consumer sales will increase in future years as we anticipate that the retail and e-commerce components of the Lilly Pulitzer business will grow at a faster rate than the wholesale distribution channel.

Our direct to consumer strategy for the Lilly Pulitzer brand includes operating full-price retail stores in higher-end malls, lifestyle shopping centers, resort destinations and brand-appropriate street locations. Sales at our full-price retail stores represented 36%41% of Lilly Pulitzer'sPulitzer’s net sales during Fiscal 2016.2019. As of January 28, 2017, less than one-halfFebruary 1, 2020, about 40% of the Lilly Pulitzer stores were located in indoor regional malls, slightly more than one-third of theour Lilly Pulitzer stores were located in outdoor regional lifestyle centers and approximately one-third of our Lilly Pulitzer stores were located in indoor regional malls, with the remaining locations were primarilyin resort or street locations. In certain resort locations such as Nantucket and Watch Hill, our stores are only open during the resort season. Additionally, we may open temporary pop-up stores in certain locations.

Each full-price retail store carries a wide range of merchandise, including apparel, footwear and accessories, all presented in a manner intended to enhance the Lilly Pulitzer image, brand awareness and acceptance. Our Lilly Pulitzer full-price retail stores allow us to present Lilly Pulitzer'sPulitzer’s full line of current season products. We believe our Lilly Pulitzer full-price retail stores provide high visibility for the brand and products and also enable us to stay close to the needs and preferences of consumers. We also believe that our presentation of products and our strategy to operate the full-price retail stores with limited promotional activities complement our business with our wholesale customers. Generally, we believe there are opportunities for full-price retail stores in both warmer and coldercooler climates, as we believe the more important consideration is whether the location attracts the affluent consumer that we are targeting.

The table below reflects the changes in store count for Lilly Pulitzer stores during Fiscal 2016.

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During Fiscal 2019, we opened Lilly Pulitzer stores in Newport Beach, California, and Wilmington, North Carolina, and closed three stores which were no longer deemed appropriate locations for the brand. In Fiscal 2017,2020, we expectanticipate that Lilly Pulitzer’s store opening pace will be comparable to open six full-price retail stores, including storesor less than the store opening pace in St. Louis, Missouri, Raleigh, North Carolina, Columbus, Ohio, and Watch Hill, Rhode Island. Subsequent to Fiscal 2017, we expect to open four to six full-price retail stores each year in the near future.2019. The operation of full-price retail stores requires a greater amount of initial capital investment than wholesale operations, as well as greater ongoing operating costs. We anticipate that most future full-price retail store openings will generally be less than 2,500 square feet on average; however, many stores will be larger or smaller than 2,500 square feet with the determination of actual size of the store dependingwill depend on a variety of criteria. To open a 2,500 square foot Lilly Pulitzer full-

In addition to new store openings, we also incur capital expenditure costs related to remodels, expansions or downsizing of existing stores, particularly when we renew or extend a lease beyond the original lease term, or otherwise determine that a remodel of a store is appropriate. We may also incur capital expenditures if we determine it is appropriate to relocate a store to a new location. The cost of store relocations, if any, will generally be comparable to the cost of opening a new store. Alternatively, when a lease expires we may decide to close the store rather than relocating the store to another location or renewing the lease. As an example, in Fiscal 2016, we closed our East Hampton, New York store at the expiration of the lease agreement.

In addition to operating Lilly Pulitzer full-price retail stores, another key element of our direct to consumer strategy is the lillypulitzer.com website, which represented 32%38% of Lilly Pulitzer'sPulitzer’s net sales in Fiscal 2016 compared to 30% in Fiscal 2015.2019. The Lilly Pulitzer e-commerce business has experienced significant growth in recent years, and we anticipate that the rate of growth of the e-commerce business will remain strong in the future.

To complement our direct to consumer operations and have access to a larger group of consumers, including those who may wish to shop at a specialty store or department store, we continue to maintain our profitable wholesale operations for Lilly Pulitzer. These wholesale operations are primarily with independent specialty stores, Signature Stores, better department stores and independent specialty storesmulti-branded e-commerce retailers that generally follow a retail model approach with limited discounting. During Fiscal 2016,2019, approximately 32%21% of Lilly Pulitzer'sPulitzer’s net sales were sales to wholesale customers. During Fiscal 2016, 40%2019, about one-third of Lilly Pulitzer'sPulitzer’s wholesale sales were to Lilly Pulitzer'sPulitzer’s Signature Stores, as described below, while approximately one-thirdone-fourth of Lilly Pulitzer'sPulitzer’s wholesale sales were to specialty stores and one-fourth of Lilly Pulitzer’s wholesale sales were to department stores. The remaining wholesale sales were primarily to national accounts, including on-line retailers, and off-price retailers. Lilly Pulitzer'sPulitzer’s net sales to its ten10 largest wholesale customers represented 17%12% of Lilly Pulitzer'sPulitzer’s net sales in Fiscal 20162019 with its largest customer representing less than 5% of Lilly Pulitzer'sPulitzer’s net sales.

An important part of Lilly Pulitzer'sPulitzer’s wholesale distribution is sales to Signature Stores. For these stores, we enter into agreements whereby we grant the other party the right to independently operate one or more stores as a Lilly Pulitzer Signature Store, subject to certain conditions, including designating substantially all the store specifically for Lilly Pulitzer products and adhering to certain trademark usage requirements. These agreements are generally for a two-year period. We sell products to these Lilly Pulitzer Signature Stores on a wholesale basis and do not receive royalty income associated with these sales. As of January 28, 2017,February 1, 2020, there were 6753 Lilly Pulitzer Signature Stores.

We believe that the integrity and continued success of the Lilly Pulitzer brand, including its direct to consumer operations, is dependent, in part, upon controlled wholesale distribution with careful selection of the retailers through which Lilly Pulitzer products are sold. We continue to value our long-standing relationships with our wholesale customers and are committed to working with them to enhance the success of the Lilly Pulitzer brand within their stores. Lilly Pulitzer apparel products are available in more than 250 locations of ourapproximately 300 wholesale customers.

We maintain Lilly Pulitzer apparel sales offices and showrooms in Palm Beach, Florida, King of Prussia, Pennsylvania and New York City. Our wholesale operations for Lilly Pulitzer utilizeuse a sales force consisting of salaried sales employees.

We license the Lilly Pulitzer trademark to licensees in categories beyond Lilly Pulitzer'sPulitzer’s core product categories. In the long term, we believe licensing may be an attractive business opportunity for the Lilly Pulitzer brand, particularly once our direct to consumer presence has expanded. Once a brand is established, licensing requires modest additional investment but can yield high-margin income. It also affords the opportunity to enhance overall brand awareness and exposure. In evaluating a potential Lilly Pulitzer licensee, we consider the candidate'scandidate’s experience, financial stability, manufacturing performance and marketing ability. We also evaluate the marketability and compatibility of the proposed products with other Lilly Pulitzer brandbranded products.

Our agreements with Lilly Pulitzer licensees are for specific geographic areas and expire at various dates in the future. Generally, the agreements require minimum royalty payments as well as royalty and advertising payments based on specified percentages of the licensee'slicensee’s net sales of the licensed products. Our license agreements generally provide us the right to approve all products, advertising and proposed channels of distribution.

Third party license arrangements for Lilly Pulitzer products include the following product categories: stationery and gift products; home furnishing fabrics;products; and eyewear.

Lilly Pulitzer'sPulitzer’s operating results are impacted by seasonality as the demand by specific product or style as well as demand by distribution channel may vary significantly depending on the time of year. Typically, the demand in the direct to consumer operations including sales for our own stores and e-commerce sites, for Lilly Pulitzer products in our principal markets is generally higher in the spring, summer and resort seasons and lower in the fall season. However, wholesale product shipments are generally shipped prior to each of the retail selling seasons. Further, in the third and fourth quarters of our fiscal year, which have not historically been strong full-price direct to consumer or wholesale quarters for Lilly Pulitzer, Lilly Pulitzer has held significant e-commerce flash clearance sales which partially offsets the impact of seasonality on Lilly Pulitzer's sales.Pulitzer’s sales, but to a lesser degree on operating income. As the timing of certain unusual or non-recurring items, economic conditions, wholesale product shipments, the magnitude of e-commerce flash clearance sales or other factors affecting the business may vary from one year to the next, we do not believe that net sales or operating income for any particular quarter or the distribution of net sales for Fiscal 20162019 are necessarily indicative of anticipated results for the full fiscal year or expected distribution in future years. The following table presents the percentage of net sales and operating income for Lilly Pulitzer by quarter for Fiscal 2016:

Lanier Apparel designs, sources and distributes branded and private label men'smen’s apparel, including tailored clothing, casual pants and sportswear, across a wide range of price points, but primarily at moderate price points. The majority of our Lanier Apparel products are sold under certain trademarks licensed to us by third parties. Lanier Apparel'sApparel’s licensed brands for certain product categories include Kenneth Cole®, Dockers®, Geoffrey Beene®,Cole Haan® and Nick Graham® and Andrew Fezza®. Additionally, we design and market products for our owned Billy London®, Oxford® (formerly Oxford Golf®), Duck Head® and Strong Suit^TMSuit® brands. Both Duck Head and Strong Suit were acquired during Fiscal 2016. Sales of branded products licensed to us or owned by us represented 75%65% and 15%, respectively, of Lanier Apparel'sApparel’s net sales during Fiscal 2016.

In addition to these branded businesses, Lanier Apparel designs and sources private label apparel products for certain customers, including tailored clothing and pants programs for large department stores, warehouse clubs, and other retailers. Sales of private label products represented 20% of Lanier Apparel’s net sales in Fiscal 2019. For our large retail customers, the private label programs offer the customer product exclusivity, generally at higher gross margins than they would achieve on branded products, while allowing us the opportunity to leverage our design, sourcing, production, logistics and distribution infrastructure. For other customers, we may perform any combination of design, sourcing, production, logistics or distribution services for a brand owner who will then distribute the product acquired from us through their wholesale or direct to consumer operations.owner. In these cases, the brand owner may have determined it is more efficient to outsource certain functions, may be a smaller company that lacks such functional expertise or may want to focus their energies on the other aspects of their brand. Lanier Apparel asis an efficient operator that excels in sourcing, production, logistics, distribution and design and can increaseleverage its profitabilityinfrastructure by providing valuable services and resources to these smaller companies which may also allow the third party to operate their business in a more cost-effective manner than if the third party performed all the functions in-house.

Our Lanier Apparel products are primarily sold through large retailers including department stores, discount and off-price retailers, warehouse clubs, national chains, specialty retailers, multi-branded e-commerce retailers and others throughout the United States.others. Lanier Apparel'sApparel’s products are sold in more than 5,000 retail locations. In Lanier Apparel, we have long-standing relationships with some of the United States'States’ largest retailers.retailers, including department stores which represented 30% of Lanier Apparel’s sales in Fiscal 2019. During Fiscal 2016,2019, Lanier Apparel's twoApparel’s four largest customers represented 24%, 18%, 14% and 16%,13% respectively, of Lanier Apparel'sApparel’s net sales. Sales to Lanier Apparel'sApparel’s 10 largest customers represented 73%more than 85% of Lanier Apparel'sApparel’s net sales during Fiscal 2016.2019. The amount and percentage of net sales attributable to an individual customer in future years may be different than Fiscal 20162019 as sales to wholesale customers are not tied to long-term contracts.

As muchcertain of Lanier Apparel'sApparel’s private label and branded sales are program based, where Lanier Apparel must bid for a program on a case-by-case and season-by-season basis, an individual customer could increase, decrease or

The moderate price point tailored clothing and sportswear markets are extremely competitive sectors, with significant retail competition as well as gross margin pressures due to retail sales price pressures and production cost increases. We believe that our Lanier Apparel business has historically excelled at bringing quality products to our large big box customers at competitive prices and managing inventory risk appropriately while requiring minimal capital expenditure investments.

We believe that superior customer service and supply chain management, as well as the design of quality products, are all integral components of our strategy in the branded and private label tailored clothing and sportswear markets in which Lanier Apparel operates. Our Lanier Apparel design teams, which are primarily located in New York City and Atlanta, focus on the target consumer for each brand and product. The design process combines feedback from buyers and sales agents along with market trend research and input from manufacturers. Our various Lanier Apparel products are manufactured from a variety of fibers, including wool, silk, linen, cotton and other natural fibers, as well as synthetics and blends of these materials.

Lanier Apparel manages production in Asia and Latin America through a combinationthe efforts of efforts from our Lanier Apparel offices in Atlanta and Hong Kong as well as with third party buying agents. Lanier Apparel'sApparel’s sourcing operations are also supplemented, as appropriate, by third party contractors who may provide certain sourcing functions or in-country quality assurance to further enhance Lanier Apparel'sApparel’s global sourcing operations. During Fiscal 2016, 77%2019, 70% of Lanier Apparel'sApparel’s product purchases were from manufacturers located in Vietnam. Lanier Apparel purchased goods from approximately 150125 suppliers in Fiscal 2016.2019. The 10 largest suppliers of Lanier Apparel provided 85%90% of the finished goods and raw materials Lanier Apparel acquired from third parties during Fiscal 2016,2019, with 31%30% of our product purchases acquired from Lanier Apparel'sApparel’s largest third party supplier. In addition to purchasing products from third parties, Lanier Apparel operates a manufacturing facility, located in Merida, Mexico, which produced 10% of our Lanier Apparel products during Fiscal 2016.

The advertising efforts of Lanier Apparel are much more product specific than the advertising for our owned lifestyle brands. For Lanier Apparel'sApparel’s licensed branded products, advertising primarily consists of cooperative advertising with our larger customers, contributions to the licensor based on a specified percentage of our net sales to fund the licensor'slicensor’s general brand advertising initiatives and attending brand appropriate trade shows. As a provider of private label apparel, we areLanier Apparel is generally not responsible for advertising for private label brands.

For Lanier Apparel, we utilizeuse a distribution center located in Toccoa, Georgia, a distribution center in Lyons, Georgia and certain third party distribution centers for our product shipments, where we receive goods from our suppliers, inspect those products and ship the goods to our customers. We seek to maintain sufficient levels of inventory to support programs for pre-booked orders and to meet customer demand for at-once ordering. For certain standard product styles, which represents about one-half of Lanier Apparel’s net sales, we maintain in-stock replenishment programs, providing shipment to customers and consumers within just a few days of receiving the order. These types of programs generally require higher inventory levels. Lanier Apparel utilizesuses various off-price retailers to sell excess prior-season inventory.

Lanier Apparel'sApparel’s operating results are impacted by seasonality as the demand by specific product or style may vary significantly depending on the time of year. As a wholesale apparel business, in which product shipments generally occur prior to the retail selling seasons, the seasonality of Lanier Apparel generallyoften reflects stronger spring and fall wholesale deliveries which typically occur in our first and third quarters; however, in some fiscal years this will not be the case due to muchcertain of Lanier Apparel'sApparel’s operations resulting from program-driven businesses. The timing of certain unusual or non-recurring items, economic conditions, wholesale product shipments, the introduction of new programs, the loss of programs or customers or other factors affecting the business may vary significantly from one year to the next. For example, in the Fourth Quarter of Fiscal 2019, Lanier Apparel incurred significant inventory markdown charges which along with lower net sales, resulted in an operating loss for the quarter. Therefore, we do not believe that net sales or operating income of Lanier Apparel for any particular quarter or the distribution of net sales and operating income for Fiscal 20162019 are necessarily indicative of anticipated results for the full fiscal year or expected distribution in future years. The following table presents the percentage of net sales and operating income for Lanier Apparel by quarter for Fiscal 2016:

We believe that there is significant opportunity to expand the reach of the Southern Tide brand by further increasing the specialty store, department store and Signature Storewholesale presence of the brand, as well as increasingand growing the direct to consumer business including e-commerce and retail sales. However, thisWe believe that the wholesale growth and expansion will be at a prudent pace as we believe that the integrity and success of the Southern Tide brand is dependent, in part, upon controlled wholesale distribution with careful selection of the retailers through which Southern Tide products are sold.

We believe that in order to take advantage of opportunities for long-term growth, we must continue to invest in the Southern Tide brand. In the near term, these investments will primarily consist of an increase in employment, advertising and other costs to support a growing wholesale business with specialty and department stores, increasing the number of Southern Tide Signature Stores and costs to enhance e-commerce and other technology capabilities. While we believe that these investments will generate long-term benefits, the investments may have a short-term negative impact on Southern Tide'sTide���s operating margin given the current size of the Southern Tide business. We believe that the retail sales value of all Southern Tide branded products sold during the period from the acquisition date through the end of Fiscal 2016,2019, including our estimate of retail sales by our wholesale customers and other third party retailers, exceeded $50$85 million.

Southern Tide'sTide’s products are developed by our dedicated design teams located at the Southern Tide headquarters in Greenville, South Carolina. Our Southern Tide design teams focus on the target consumer, and the design process combines feedback from buyers, consumers and our sales force, along with market trend research. Southern Tide apparel products are designed to incorporate various fiber types, including cotton and other natural and man-made fibers, or blends of two or more of these materials.

During the period from the acquisition date through the end of Fiscal 2016,2019, Southern Tide primarily used third party buying agents forour Hong Kong-based sourcing office to manage the production and sourcing of a majority of its apparel products. Through itsproduct purchases with the remaining product purchases via third party buying agents,agents. Southern Tide used approximately 5060 suppliers with the largest individual supplier providing 24% and three other suppliers each providing more than 10%20% of the Southern Tide products. Theproducts in Fiscal 2019. Also, the largest 10 suppliers of Southern Tide provided 81%70% of the Southern Tide products acquired, while 61%acquired. Approximately 35%, 25% and 18%25% of Southern Tide apparel products were sourced from China, Vietnam and Peru,Indonesia, respectively. Southern Tide currently is in the process of transitioning some of its product purchases from third party buying agents to our Hong Kong-based sourcing team. We believe that products can generally be sourced in a more cost effective manner through our existing internal sourcing operations than through third party buying agents.

Advertising and marketing are an integral part of the long-term strategy for the Southern Tide brand, and we therefore devote significant resources to advertising and marketing. Southern Tide'sTide’s advertising attempts to engage

Southern Tide used our owned distribution center in Lyons, Georgia for its warehouse and distribution center operations. Activities at the distribution center include receiving finished goods from suppliers, inspecting the products and shipping the products to wholesale customers and our e-commerce customers.customers as well as embroidery of certain collegiate, corporate and golf related products. We seek to maintain sufficient levels of inventory at the distribution center to support our direct to consumer operations, as well as pre-booked orders and some limited replenishment ordering for our wholesale customers.

At this time, Southern Tide'sTide’s business is predominantly a wholesale business with sales to independent specialty stores, department stores and Southern Tide Signature Stores. Southern Tide'sTide’s wholesale operations provide an opportunity to grow our business and have access to a large group of consumers. During the period from the acquisition date through the end of Fiscal 2016, less than 10%2019, approximately 19% of Southern Tide'sTide’s sales were to department stores and less than 5%10% of net sales were to Southern Tide Signature Stores. Southern Tide'sTide’s net sales to its five10 largest wholesale customers represented 20%38% of Southern Tide'sTide’s net sales in the period from the acquisition date through the end of Fiscal 2016,2019, with its largest customer representing 6%15% of Southern Tide'sTide’s net sales. Southern Tide products are available in more than 9501,000 retail locations.

A component of Southern Tide'sTide’s plans for growth in wholesale distribution is sales to Signature Stores. For these stores,Signature Stores, we enter into license agreements whereby we grant the other party the right to independently operate one or more stores as a Southern Tide Signature Store, subject to certain conditions, including designating substantially all the store specifically for Southern Tide products and adhering to certain trademark usage requirements. We sell products to these Southern Tide Signature Stores on a wholesale basis and do not receive royalty income associated with these sales. As of January 28, 2017,February 1, 2020, there were three15 Signature Stores locatedincluding stores in Kiawah Island, South Carolina, Greenville,Florida, Massachusetts, South Carolina and Naperville, Illinois.North Carolina. We anticipate entering intosome additional Signature Store arrangementsStores opening in the future.Fiscal 2020. In addition, we believe there is opportunity for wholesale growth for Southern Tide in women’s apparel, which represented 15% of Southern Tide’s net sales in Fiscal 2019.

A key component of our Southern Tide growth strategy is to expand our direct to consumer operations, which currently consists of the Southern Tide website. In the future, we may open ownedwebsite and retail stores; however, we do not expect to open any owned retail stores during Fiscal 2017.store operations. The Southern Tide website markets a full line of merchandise, including apparel and accessories, all presented in a manner intended to enhance the Southern Tide image, brand awareness and acceptance. We believe our Southern Tide website enables us to stay close to the needs and preferences of consumers.

We currently license the Southern Tide trademark to a licenseelicensees for certain bed, bath and bathtie product categories. The agreement requiresagreements require minimum royalty payments as well as royalty and advertising payments based on specified percentages of the licensee’s net sales of the licensed products and provides us the right to approve all products, advertising and proposed channels of distribution. In the long term, we believe licensing may be an attractive business opportunity for Southern Tide, but opportunities may be somewhat limited until the sales volume and distribution of the Southern Tide brand expands. Once the brand is more fully established, licensing requires modest additional investment but can yield high-margin income. It also affords the opportunity to enhance overall brand awareness and exposure.

Southern Tide'sTide’s operating results are impacted by seasonality as the demand by specific product or style as well as the demand by distribution channel may vary significantly depending on the time of year. AsSouthern Tide is primarily a wholesale apparel business and currently has a heavier concentration of Spring/Summer product category offerings. Thus, the seasonality of Southern Tide generally reflects stronger sales in the first half of the fiscal year. The timing of certain unusual or non-recurring items, economic conditions, wholesale product shipments or other factors affecting the business may vary from one year to the next,next. Therefore, we do not believe that net sales or operating income of Southern Tide for any particular quarter or the distribution of net sales

Corporate and Other is a reconciling category for reporting purposes and includes our corporate offices, substantially all financing activities, the elimination of inter-segment sales LIFO inventory accounting adjustments,and any other costsitems that are not allocated to the operating groups including LIFO accounting adjustments. Because our LIFO inventory pool does not correspond to our operating group definitions, LIFO inventory accounting adjustments are not allocated to the operating groups. Corporate and Other also includes the operations of other businesses which are not included in our operating groups, includinggroups. The operations of TBBC and our Lyons, Georgia distribution center operations (which performs warehouseare included in Corporate and distribution services for third parties,Other. TBBC, which we acquired in December 2017, designs, sources, markets and distributes premium childrenswear including bonnets, hats, apparel, swimwear and accessories through the TBBC e-commerce website, thebeaufortbonnetcompany.com, as well as our Southern Tide and Lanier Apparel businesses). Our LIFO inventory pool does not correspond to our operating group definitions; therefore, LIFO inventory accounting adjustments are not allocated to operating groups.

We own trademarks, severalmany of which are very important and valuable to our business including Tommy Bahama, Lilly Pulitzer and Southern Tide. Generally, our significant trademarks are subject to registrations and pending applications throughout the world for use on apparel and, in some cases, apparel-related products, accessories, home furnishings and beauty products, as well as in connection with retail services. We continue to evaluate our worldwide usage and registration of certain of our trademarks. In general, trademarks remain valid and enforceable as long as the trademarks are used in connection with our products and services in the relevant jurisdiction and the required registration renewals are filed. Important factors relating to risks associated with our trademarks include, but are not limited to, those described in Part I, Item 1A. Risk Factors.

We intend to maintain flexible, diversified, cost-effective sourcing operations that provide high-quality apparel and related products. Our operating groups, either internally or through the use of third party buying agents, source virtually all of our apparel and related products from non-exclusive, third party producers located in foreign countries, with a significant concentration in Asia, or from our licensees for licensed products sold in our direct to consumer distribution channels.Asia. During Fiscal 2016, we sourced2019, approximately 58%49% and 16%18% of our apparel and related products, excluding restaurant products, acquired directly by us or via buying agents, were from producers located in China and Vietnam, respectively, with no other country greaterrepresenting more than 10%. of such purchases. We expect that the percentage of our products sourced from producers located in China will decrease in Fiscal 2020 and possibly in future years. Although we place a high value on long-term relationships with our suppliers of apparel and related products and have used many of our suppliers for a number of years, generally we do not have long-term contracts with our suppliers. Instead, we conduct business on an order-by-order basis. Thus, we compete with other companies for the production capacity of independent manufacturers. We believe that this approach provides us with the greatest flexibility in identifying the appropriate manufacturers while considering quality, cost, timing of product delivery and other criteria and also utilizing the expertise of the manufacturers.criteria. We generally acquire products sold in our restaurant operations from various third party domestic suppliers. During Fiscal 2016,2019, no individual third party manufacturer, suppliedlicensee or other supplier provided more than 10% of our product purchases.

We purchase virtually all of our apparel and related products from third party producers as package purchases of finished goods, which are manufactured with oversight by us or our third party buying agents and to our design and fabric specifications. The use of contract manufacturers reduces the amount of capital investment required by us, as operating manufacturing facilities can require a significant amount of capital investment. We depend uponon the ability of third party producers to secure a sufficient supply of specified raw materials, specified by us, adequately finance the production of goods ordered and maintain sufficient manufacturing and shipping capacity rather than us providing or financing the costs of these items.capacity. We believe that purchasing substantially all of our products as package purchases allows us to reduce our working capital requirements as we are not required to purchase, or finance the purchase of, the raw materials or other production costs related to our apparel and related product purchases until we take ownership of the finished goods, which typically occurs when the goods are shipped by the third party producers. In addition to purchasing products from third parties, our Lanier Apparel operating group operates our onlyan owned manufacturing facility which is located in Merida, Mexico, andwhich produced 2% of our total company or 10% of our total Lanier Apparel, products during Fiscal 2016.2019.

As part of our commitment to source our products in a lawful, ethical and socially responsible manner, each of our operating groups has implemented a code of conduct program applicable to vendors from whom we purchase goods,apparel and related products, which includes provisions related to abiding by applicable laws as well as compliance with other business or ethical standards, including related human rights, health, safety, working conditions, environmental and other requirements. We require that each of our vendors and licensees comply with the applicable code of conduct or substantially similar compliance standards. All of our vendors from whom we purchase goods are also required by us to adhere to the United States Customs and Border Protection’s Customs-Trade Partnership Against Terrorism program, including standards relating to facility, procedural, personnel and cargo security. On an ongoing basis we assess vendors'vendors’ compliance with the applicable code of conduct and applicable laws and regulations through audits performed by either our employees or our designated agents. ThisThe assessment of compliance by vendors is directed by our corporate leadership team. In the event we determine that a vendor is not abiding by our required standards, we work with the vendor to remediate the violation. If the violation is not satisfactorily remediated, we will discontinue use of the vendor.

We are exposed to certain risks as a result of our international operations as substantially all of our merchandise, as well as the products purchased by our licensing partners, is manufactured by foreign suppliers. During Fiscal 2016, we sourced2019, approximately 58%49% and 18% of our apparel and related products, excluding restaurant products, acquired directly by us or via buying agents, were from producers located in China. OurChina and Vietnam, respectively, with no other country representing more than 10% of such purchases. Products imported productsby us, or imported by others and ultimately sold to us, are subject to customs, trade and other laws and regulations governing their entry into the United States and other countries where we sell our products.

Substantially all of the merchandise we acquire is subject to certain duties which are assessed on the value of the imported product andproduct. These amounts represent a component of the inventories we sell and are included in cost of goods sold in our consolidated statements of operations. We paid total duties of more than $45 million on products imported into the goods we sell.United States directly by us in Fiscal 2019, with the average duty rate on those products of approximately 16% of the value of the imported product. Duty rates vary depending on the type of garment, and its fiber content and country of origin and are subject to change in future periods. In addition, while the World Trade Organization'sOrganization’s member nations have eliminated quotas on apparel and textiles, the United States and other countries into which we import our products are still allowed in certain circumstances to unilaterally impose "anti-dumping" or "countervailing" duties in response to threats to their comparable domestic industries.

We believe that sophisticated information systems and functionality are important components of maintaining our competitive position and supporting continued growth of our businesses, particularly in the ever changingever-changing consumer shopping environment. Our information systems are designed to provide effective retail store, e-commerce, restaurant and wholesale operations while emphasizing efficient point-of-sale, distribution center, design, sourcing, order processing, marketing, customer relationship management, accounting and other functions. We regularly evaluate the adequacy of our information technologies and upgrade or enhance our systems to gain operating efficiencies, to provide additional consumer access and to support our anticipated growth as well as other changes in our business. We believe that continuous upgrading and enhancements to our information systems with newer technology that offers greater efficiency, functionality and reporting capabilities is critical to our operations and financial condition.

Each of our operating groups is impacted by seasonality as the demand by specific product or style, as well as by distribution channel, may vary significantly depending on the time of year. For details of the impact of seasonality on each of our operating groups, see the business discussion of each operating group above.

As the timing of certain unusual or non-recurring items, economic conditions, wholesale product shipments, weather or other factors affecting the retail businessour operations may vary from one year to the next, we do not believe that net sales or operating income for any particular quarter or the distribution of net sales and operating income for Fiscal 20162019 are necessarily indicative of anticipated results for the full fiscal year or expected distribution in future years. Our third quarter has historically been our smallest net sales and operating income quarter based on the appeal and that result is expected to continue as we continue the expansionassortment of our retail store operations in the future.brands’ product collections. The following table presents our percentage of net sales and operating results by quarter for Fiscal 2016:

As 66%two-thirds of our sales are direct to consumer sales, which are not reflected in an order backlog, and the order backlog for wholesale sales may be impacted by a variety of factors, we do not believe that order backlog information is necessarily indicative of sales to be expected for future periods. Therefore, we believe the order backlog is not material for an understanding of our business taken as a whole. Further, as our sales continue to shift towards direct to consumer rather than wholesale sales, the order backlog will continue to be less meaningful as a measure of our future sales and results of operations.