Tommy Bahama designs, sources, markets and distributes men'smen’s and women'swomen’s sportswear and related products. Tommy Bahama'sBahama’s typical consumer is older than 45 years old, has a household annual income in excess of $100,000, lives in or travels to warm weather and resort locations and embraces 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 at better department stores, independent specialty stores and multi-branded e-commerce retailers. We also operate Tommy Bahama restaurants and license the Tommy Bahama name for various product categories. During Fiscal 2017,2019, 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, which is celebrating its 25th anniversarywas founded in Fiscal 2018,1992, is a reflection of our efforts over many years to maintain appropriate quality and design of our Tommy Bahama apparel, accessories and licensed products, limit the distribution of Tommy Bahama products to a select tier of retailers, and effectively communicate the relaxed and casual Tommy Bahama 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 2017,2019, including our estimate of retail sales by our wholesale customers and other third party retailers, exceeded $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 maintaining theits historically select distribution that Tommy Bahama has historically maintained.distribution. In order to take advantage of opportunities for long-term growth, we must continue to invest in the Tommy Bahama brand. These investments include capital expenditures and ongoing expenses to enhance e-commerce and other technology capabilities; open new stores and restaurants; remodel and/or relocate existing stores and restaurants; maintain and upgrade our distribution and other facilities; and enhance our marketing efforts to communicate the lifestyle to existing and targeted new consumers.

In recent years, an important initiative for us in Fiscal 2017 washas 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 focused on increasing gross margin and operating margin through efforts such as:through: product cost reductions; selective price increases; reducing inventory purchases; redefining our approach to inventory clearance; effectively managing controllable and discretionary operating expenses; and taking a more conservative approach to retail store openings and lease renewals;renewals.

During Fiscal 2019 and continuing our effortsFiscal 2018, we incurred certain charges related to reduce Asia-Pacific operating losses. We made some progress with these initiatives in Fiscal 2017 and expect to make additional progress in Fiscal 2018.

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. WhileTommy Bahama’s advertising, for Tommy Bahama promotes our products,which emphasizes 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 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 about product offerings or other brand events in order to maintain and strengthen Tommy Bahama'sBahama’s guest connections. We anticipate increasing our investment in advertising expense in Fiscal 2018 to drive new consumer acquisition as well as consumer retention and engagement.

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. We intend for our full-price retail stores to enhance our guests'guests’ shopping experience, which we believe will increase 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, including those that support worthwhile causes in local communities.

In addition, we utilizeuse loyalty award cards, Flip 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, which puts some downward pressure on our direct to consumer gross margins. We believe our traditional and digital 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 wholesale customers, we also provide point-of-sale materials and signage to enhance the presentation of our products 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, inspecting the products and shipping the products to our Tommy Bahama stores, our wholesale customers and our e-commerce customers. We seek to maintain sufficient levels of Tommy Bahama 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. We use local third party distribution centers for our Asia-Pacific operations.

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 2017. We expect the percentage of our Tommy Bahama sales which are direct to consumer sales will increase in future years.2019. Retail store, e-commerce and restaurant net sales accounted for 49%48%, 16%20% and 12%, respectively, of Tommy Bahama'sBahama’s net sales in Fiscal 2017.

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 February 3, 2018,1, 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, 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 9% of our total Tommy Bahama net sales in Fiscal 2017,2019, 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. We anticipate that we would generally operate one outlet for approximately every three full-price retail stores; however, the ratio of full-price stores to outlets may continue to increase. We have not opened a new domestic outlet location since Fiscal 2014.

For Tommy Bahama'sBahama’s domestic full-price retail stores and retail-restaurant locations operating for the full Fiscal 20172019 year, sales per gross square foot, excluding restaurant sales and restaurant space, were approximately $610$615 during Fiscal 2017, compared to $605 for stores operating for the full Fiscal 2016 year.2019. In Fiscal 2017,2019, our domestic outlet stores generated approximately $350$335 of sales per square foot for outlets open for the entire 20172019 fiscal year.

As of February 3, 2018,1, 2020, we operated 1816 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 brand. The net sales per square foot in our domestic full-price retail stores whichthat are adjacent to a restaurant are on average twice the sales per square foot of our other domestic full-price retail stores. We believe that the experience ofcustomer immersing themselves into the Tommy Bahama lifestyle by having a meal or a drink in aat the Tommy Bahama restaurant and visiting the adjacent retail store may entice the customer to purchase additional Tommy Bahama

As of February 3, 2018,1, 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 February 3, 2018.1, 2020.

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We anticipate that our store count at the end of Fiscal 20182020 will be comparable to our store count at the end of Fiscal 2017.2019. Our initial Fiscal 2018 planned openings include a full-price2020 plan included opening six Marlin Bars, of which two are relocations and expansions of existing retail store in Napa, California andlocations, one near Melbourne, Australia, as well asis a conversion of a retail-restaurant location in Palm Springs, California. In Fiscal 2018 as well as in future years, we expect to opportunistically close certain marginala Marlin Bar and three are entirely new locations, and a very limited number of openings of full-price retail and outletlocations. As of March 30, 2020, we have completed two of these Marlin Bars, while the other locations at lease expiration unless the landlord provides an appealing offerare scheduled for us to continuelater in the location. We believe there continueyear and being reassessed due to be opportunities for Tommy Bahama to open additional full-price retail and retail-restaurant locations in the future, but we do not expect the number of stores to increase at the same pace as our historical store count growth rates.

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 Waikiki which opened in Fiscal 2015.and 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 2017,2019, 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, which represented approximately 10% of Tommy Bahama e-commerce sales in Fiscal 2016, however, in Fiscal 2017 Tommy Bahama did not hold any e-commerce flash clearance sales.

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 include better department stores, 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 2017.2019. Approximately 60%55% 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 1,800 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 2017, 17%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 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 distribution, we believe that sales growth in our men'smen’s apparel wholesale business, which represented approximately 87%86% of Tommy Bahama'sBahama’s domestic wholesale sales in Fiscal 2017,2019, 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 30%31% of sales in our full-price retail stores and e-commerce websites in Fiscal 2017. In Fiscal 2018, we anticipate that Tommy Bahama's wholesale business will decrease from Fiscal 2017 sales amounts as we continue to manage the wholesale distribution of Tommy Bahama, particularly in department stores.

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.

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 license 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 February 3, 2018,1, 2020, we have agreements for distribution of Tommy Bahama products in the Middle East, Greater China and parts of Latin 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 3, 2018,1, 2020, we have nine licensed Tommy Bahama stores located in the Middle East, Greater China and Central America. None of these agreements are expected to meaningfullygenerate growth that would materially impact the operating results of Tommy Bahama in the near term.

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 20172019 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 2017:

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 which is celebrating its 60th anniversary in Fiscal 2018, 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 2017, 45%2019, 50% and 39%35% of Lilly Pulitzer'sPulitzer’s net sales were for women'swomen’s sportswear and

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 2017,2019, including our estimate of retail sales by our wholesale customers and other third party retailers, exceeded $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 its apparel products. Through its buying agents and direct sourcing, Lilly Pulitzer used approximately 60 vendors, with the largestno individual supplier providing more than 10%, and the largest 10 suppliers providing 58%55%, of the products acquired during Fiscal 2017.2019. In Fiscal 2017, 50%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 communications 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 about product offerings or other brand events in order to maintain and strengthen the brand'sbrand’s connections with consumers. We anticipate increasing our advertising spend, including digital marketing and direct mail, in Fiscal 2018 with a continued focus on new consumer acquisition as well as consumer engagement.

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 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 distribution center to support our direct to consumer operations, as well as pre-booked orders and some limited replenishment ordering for our wholesale customers.

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. Lilly Pulitzer'sPulitzer’s direct to consumer distribution channel, which consists of full-price retail store and e-commerce operations, represented 72% and 68%79% of Lilly Pulitzer'sPulitzer’s net sales in Fiscal 2017 and Fiscal 2016, respectively. We expect the percentage of our Lilly Pulitzer sales which are direct to consumer sales will continue to increase in future years.

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 38%41% of Lilly Pulitzer'sPulitzer’s net sales during Fiscal 2017.2019. As of February 3, 2018,1, 2020, about one-third40% of our Lilly Pulitzer stores were located in outdoor regional lifestyle centers and anotherapproximately one-third of our Lilly Pulitzer stores were located in indoor regional malls, with the remaining locations in resort or street locations. In certain resort locations such as Nantucket Martha's Vineyard 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 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 2017.

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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 may open stores at a more modestanticipate that Lilly Pulitzer’s store opening pace will be comparable to or less than the six stores we openedstore opening pace in Fiscal 2017. In Fiscal 2018, our planned openings include a store on Worth Avenue in Palm Beach, Florida, the home of Lilly Pulitzer, as well as Lilly Pulitzer's first full-price retail store in Hawaii, at Whalers Village in Maui. Beyond Fiscal 2018, we expect to open four to six full-price retail stores each year.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, the determination of actual size of the store will depend on a variety of criteria. To open a 2,500 square foot Lilly Pulitzer full-price retail store, we anticipate capital expenditures of approximately $0.8$1 million on average. For most of our full-price retail stores, the landlord provides certain incentives to fund a portion of our capital expenditures.

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.

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 34%38% of Lilly Pulitzer'sPulitzer’s net sales in Fiscal 2017 compared to 32% in Fiscal 2016.2019. 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. We also utilizeuse the Lilly Pulitzer website as an effective means of liquidating discontinued or out-of-season inventory in a brand appropriate manner. Usually, we have twomanner and at gross margins in excess of 40% via e-commerce flash clearance sales per year, both of which are in typical industry end-of-season promotional periods.sales. These sales are brand appropriate events that create a significant amount of excitement with loyal Lilly Pulitzer consumers, who are looking for an opportunity to purchase Lilly Pulitzer products at a discounted price. Each of these twoThese e-commerce flash clearance sales aretypically run for a very limited numberthree days during the summer clearance period in September and for two days during the post-holiday clearance period in January,

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 Lilly Pulitzer. These wholesale operations are primarily with independent specialty stores, Signature Stores, better department stores and multi-branded e-commerce retailers that generally follow a retail model approach with limited discounting. During Fiscal 2017,2019, approximately 28%21% of Lilly Pulitzer'sPulitzer’s net sales were sales to wholesale customers compared to 32% in Fiscal 2016 with the decrease primarily due to Lilly Pulitzer's acquisition of 12 Signature Stores in Fiscal 2017 and reduced sales to department stores as Lilly Pulitzer continues to manage its distribution in wholesale accounts.customers. During Fiscal 2017,2019, about one-third of Lilly Pulitzer'sPulitzer’s wholesale sales were to Lilly Pulitzer'sPulitzer’s Signature Stores, while approximately one-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 15%12% of Lilly Pulitzer'sPulitzer’s net sales in Fiscal 20172019 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 February 3, 2018,1, 2020, there were 5453 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

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 for Lilly Pulitzer products 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 20172019 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 2017:

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 Cole Haan®, which is a new license for Lanier Apparel with initial product sales in Fiscal 2018.. 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 61%65% and 15%, respectively, of Lanier Apparel'sApparel’s net sales during Fiscal 2017.

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,

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, including department stores which represented approximately one-third30% of Lanier Apparel'sApparel’s sales in Fiscal 2017.2019. During Fiscal 2017,2019, Lanier Apparel's threeApparel’s four largest customers represented 19%24%, 16%18%, 14% and 13%, respectively, of Lanier Apparel'sApparel’s net sales. Sales to Lanier Apparel'sApparel’s 10 largest customers represented 77%more than 85% of Lanier Apparel'sApparel’s net sales during Fiscal 2017.2019. The amount and percentage of net sales attributable to an individual customer in future years may be different than Fiscal 20172019 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 2017, 75%2019, 70% of Lanier Apparel'sApparel’s product purchases were from manufacturers located in Vietnam. Lanier Apparel purchased goods from approximately 135125 suppliers in Fiscal 2017.2019. 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 2017,2019, with 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 2017.

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 its owned brands, Lanier Apparel engages in marketing activities to increase the recognition and appeal of the 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 20172019 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 2017:

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 Fiscal 2017,2019, including our estimate of retail sales by our wholesale customers and other third party retailers, exceeded $75$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 Fiscal 2017,2019, Southern Tide used third party buying agents forour Hong Kong-based sourcing office to manage the production and sourcing of thea majority of its apparel products.product purchases with the remaining product purchases via third party buying agents. Southern Tide used approximately 60 suppliers with the largest individual supplier providing 15%20% of the Southern Tide products in Fiscal 2017. The2019. Also, the largest 10 suppliers of Southern Tide provided 66%70% of the Southern Tide products acquired, while approximately 50%acquired. Approximately 35%, 25% and 20%25% of Southern Tide apparel products were sourced from China, Vietnam and Peru,Indonesia, respectively. Southern Tide continued to transition some of its product purchases from third party buying agents to our Hong Kong-based sourcing team during Fiscal 2017. We believe that Southern Tide 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 individuals within the brand'sbrand’s consumer demographic and guide them on a regular basis to our e-commerce website and wholesale customers'customers’ stores and websites in search of our products. The marketing of the Southern Tide brand includes email, internet and social media advertising as well as traditional media such as catalogs, print and other correspondence with customers 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 about product offerings or other brand events in order to maintain and strengthen the brand'sbrand’s connections with consumers. 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. Additionally, Southern Tide enters into certain sponsorship or co-branding arrangements, which may be for a particular cause or non-profit organization, that appeals to the Southern Tide team and that it believes will resonate with its target consumers.

Southern Tide utilizesused 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 Fiscal 2017,2019, approximately 15%19% of Southern Tide'sTide’s sales were to department stores and 5%10% of net sales were to Southern Tide Signature Stores. Southern Tide'sTide’s net sales to its ten10 largest wholesale customers represented about one-third38% of Southern Tide'sTide’s net sales in Fiscal 2017,2019, with its largest customer representing 8%15% of Southern Tide'sTide’s net sales. Southern Tide products are available in more than 1,000 retail locations.

A key component of Southern Tide'sTide’s plans for growth in wholesale distribution is sales to Signature Stores. For 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 February 3, 2018,1, 2020, there were seven15 Signature Stores including three stores in North Carolina, two stores inFlorida, Massachusetts, South Carolina one store in Florida and one store in Illinois.North Carolina. We anticipate approximately 10some additional Signature Stores opening in Fiscal 2018 in various locations along the east coast from Nantucket and Cape Cod in Massachusetts to Naples, Florida.2020. In addition, we believe there is opportunity for wholesale growth for Southern Tide in women'swomen’s apparel, which represented 13%15% of Southern Tide'sTide’s net sales in Fiscal 2017.2019.

A key component of our Southern Tide growth strategy is to expand our direct to consumer operations, which currently consistconsists 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 2018.store operations. The Southern Tide website markets a full line of merchandise, including apparel and

We currently license the Southern Tide trademark to licensees for certain bed, bath and tie product categories. The agreements require minimum royalty payments as well as royalty payments based on specified percentages of the licensee'slicensee’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 in whichand currently has a heavier concentration of Spring/Summer product shipments generally occur prior to the retail selling seasons,category offerings. Thus, the seasonality of Southern Tide generally reflects stronger spring and fall wholesale deliveries which typically occursales in ourthe first and third quarters.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. Therefore, we do not believe that net sales or operating income of Southern Tide for any particular quarter or the distribution of net sales and operating income for Fiscal 20172019 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 Southern Tide by quarter for Fiscal 2017:2019:

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