Fiscal 2013.
options or the vesting of previously restricted shares. We did not repurchase any of our common shares pursuant to these plans during the fourth quarter of fiscal 2011.
During fiscal 2011,Fiscal 2013.
had been repurchased pursuant to this authorization.
•
Comparison of Cumulative Total Return
| INDEXED RETURNS | ||||||||||||||||||||||||||||
| | | INDEXED RETURNS Years Ended | Base | Years Ending | ||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | Base Period 6/2/06 | Period | ||||||||||||||||||||||||||
Company / Index | 6/1/07 | 2/2/08 | 1/31/09 | 1/30/10 | 1/29/11 | 1/28/12 | 1/31/09 | 1/30/10 | 1/29/11 | 1/28/12 | 2/02/13 | 2/01/14 | ||||||||||||||||
Oxford Industries, Inc. | 100 | 111.67 | 57.03 | 17.35 | 47.81 | 65.15 | 136.35 | |||||||||||||||||||||
| Oxford Industries, Inc. | 100 | 275.54 | 375.47 | 785.80 | 801.73 | 1232.91 | ||||||||||||||||||||||
S&P SmallCap 600 Index | 100 | 115.79 | 101.13 | 62.41 | 86.74 | 112.82 | 122.90 | 100 | 138.97 | 180.75 | 196.91 | 228.46 | 290.21 | |||||||||||||||
S&P 500 Apparel, Accessories & Luxury Goods | 100 | 143.61 | 97.36 | 49.98 | 94.44 | 129.76 | 185.29 | 100 | 188.96 | 259.62 | 370.73 | 344.55 | 399.86 | |||||||||||||||
| | Fiscal 2011 | Fiscal 2010 | Fiscal 2009 | Fiscal 2008 | Eight-month Transition Period Ended February 2, 2008 | Fiscal 2007 | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | (In millions, except per share amounts) | ||||||||||||||||||
Net sales | $ | 758.9 | $ | 603.9 | $ | 585.3 | $ | 699.1 | $ | 501.5 | $ | 799.5 | |||||||
Cost of goods sold | 345.9 | 276.5 | 294.5 | 363.5 | 263.8 | 422.2 | |||||||||||||
Gross profit | 413.0 | 327.4 | 290.8 | 335.6 | 237.7 | 377.4 | |||||||||||||
SG&A | 358.6 | 302.0 | 283.7 | 328.1 | 221.6 | 316.9 | |||||||||||||
Change in fair value of contingent consideration | 2.4 | 0.2 | — | — | — | — | |||||||||||||
Impairment of goodwill and intangible assets | — | — | — | 307.5 | — | — | |||||||||||||
Royalties and other operating income | 16.8 | 15.4 | 11.8 | 15.7 | 11.3 | 12.8 | |||||||||||||
Operating income (loss) | 68.8 | 40.7 | 18.9 | (284.4 | ) | 27.4 | 73.2 | ||||||||||||
(Loss) gain on repurchase of senior notes | (9.0 | ) | — | (1.8 | ) | 7.8 | — | — | |||||||||||
Interest expense, net | 16.3 | 19.9 | 18.7 | 21.3 | 13.8 | 20.9 | |||||||||||||
Earnings (loss) from continuing operations before income taxes | 43.5 | 20.8 | (1.6 | ) | (298.0 | ) | 13.6 | 52.3 | |||||||||||
Income taxes (benefit) | 14.3 | 4.5 | (2.9 | ) | (19.8 | ) | 1.9 | 16.3 | |||||||||||
Net earnings (loss) from continuing operations | 29.2 | 16.2 | 1.4 | (278.1 | ) | 11.7 | 36.0 | ||||||||||||
Net earnings from discontinued operations, net of taxes | 0.1 | 62.4 | 13.2 | 6.6 | 8.5 | 15.5 | |||||||||||||
Net earnings (loss) | $ | 29.4 | $ | 78.7 | $ | 14.6 | (271.5 | ) | 20.2 | $ | 51.6 | ||||||||
Diluted net earnings (loss) from continuing operations per common share | $ | 1.77 | $ | 0.98 | $ | 0.09 | $ | (17.42 | ) | $ | 0.67 | $ | 2.01 | ||||||
Diluted net earnings from discontinued operations per common share | $ | 0.01 | $ | 3.77 | $ | 0.81 | $ | 0.42 | $ | 0.49 | $ | 0.87 | |||||||
Diluted net earnings (loss) per common share | $ | 1.78 | $ | 4.75 | $ | 0.90 | $ | (17.00 | ) | $ | 1.16 | $ | 2.88 | ||||||
Diluted weighted average shares outstanding | 16.5 | 16.6 | 16.3 | 16.0 | 17.4 | 17.9 | |||||||||||||
Dividends declared | $ | 8.6 | $ | 7.3 | $ | 5.9 | $ | 11.5 | $ | 9.3 | $ | 11.7 | |||||||
Dividends declared per common share | $ | 0.52 | $ | 0.44 | $ | 0.36 | $ | 0.72 | $ | 0.54 | $ | 0.66 | |||||||
Total assets, at period-end | $ | 509.2 | $ | 558.5 | $ | 425.2 | $ | 467.7 | $ | 910.1 | $ | 907.6 | |||||||
Long-term debt, less current maturities, at period-end | $ | 103.4 | $ | 147.1 | $ | 146.4 | $ | 194.2 | $ | 234.4 | $ | 199.3 | |||||||
Shareholders' equity, at period-end | $ | 204.1 | $ | 180.0 | $ | 104.4 | $ | 87.3 | $ | 407.4 | $ | 452.9 | |||||||
Capital expenditures | $ | 35.3 | $ | 13.3 | $ | 11.3 | $ | 20.0 | $ | 21.1 | $ | 31.3 | |||||||
Depreciation and amortization | $ | 27.2 | $ | 19.2 | $ | 22.6 | $ | 23.8 | $ | 16.0 | $ | 23.1 | |||||||
Amortization of deferred financing costs | $ | 1.7 | $ | 2.0 | $ | 1.6 | $ | 2.9 | $ | 1.7 | $ | 2.5 | |||||||
Book value per share at period-end | $ | 12.35 | $ | 10.90 | $ | 6.34 | $ | 5.50 | $ | 25.38 | $ | 25.38 | |||||||
Fiscal 2013 Fiscal 2012 Fiscal 2011 Fiscal 2010 Fiscal 2009 (In millions, except per share amounts) Net sales $ 917.1 $ 855.5 $ 758.9 $ 603.9 $ 585.3 Cost of goods sold 403.5 386.0 345.9 276.5 294.5 Gross profit 513.6 469.5 413.0 327.4 290.8 SG&A 447.6 410.7 358.6 302.0 283.7 Change in fair value of contingent consideration 0.3 6.3 2.4 0.2 — Royalties and other operating income 19.0 16.4 16.8 15.4 11.8 Operating income 84.7 69.0 68.8 40.7 18.9 Loss on repurchase of senior notes — (9.1 ) (9.0 ) — (1.8 ) Interest expense, net 4.2 8.9 16.3 19.9 18.7 Earnings (loss) from continuing operations before income taxes 80.5 50.9 43.5 20.8 (1.6 ) Income taxes (benefit) 35.2 19.6 14.3 4.5 (2.9 ) Earnings from continuing operations 45.3 31.3 29.2 16.2 1.4 Earnings, including gain on sale, from discontinued operations, net of taxes — — 0.1 62.4 13.2 Net earnings $ 45.3 $ 31.3 $ 29.4 $ 78.7 $ 14.6 Diluted earnings from continuing operations per share $ 2.75 $ 1.89 $ 1.77 $ 0.98 $ 0.09 Diluted earnings from discontinued operations per share, including the gain on sale in Fiscal 2010 $ — $ — $ 0.01 $ 3.77 $ 0.81 Diluted net earnings per share $ 2.75 $ 1.89 $ 1.78 $ 4.75 $ 0.90 Diluted weighted average shares outstanding 16.5 16.6 16.5 16.6 16.3 Dividends declared and paid $ 11.9 $ 9.9 $ 8.6 $ 7.3 $ 5.9 Dividends declared and paid per share $ 0.72 $ 0.60 $ 0.52 $ 0.44 $ 0.36 Total assets, at period-end $ 627.3 $ 556.1 $ 509.2 $ 558.5 $ 425.2 Long-term debt at period-end $ 137.6 $ 108.6 $ 103.4 $ 147.1 $ 146.4 Shareholders' equity, at period-end $ 260.2 $ 229.8 $ 204.1 $ 180.0 $ 104.4 Net cash provided by operating activities $ 52.7 $ 67.1 $ 44.2 $ 35.7 $ 61.0 Capital expenditures $ 43.4 $ 60.7 $ 35.3 $ 13.3 $ 11.3 Depreciation and amortization included in earnings from continuing operations $ 33.9 $ 26.3 $ 27.2 $ 19.2 $ 22.6 Stock compensation expense included in earnings from continuing operations $ 1.7 $ 2.8 $ 2.2 $ 4.5 $ 4.0 LIFO accounting charges included in earnings from continuing operations $ — $ 4.0 $ 5.8 $ 3.8 $ 4.9 Book value per share at period-end $ 15.85 $ 13.85 $ 12.35 $ 10.90 $ 6.34
market compelling lifestyle brands and products that evoke a strong emotional response from our target consumers. We strive to exploit the potential of our existing brands and products and, as suitable opportunities arise, we may acquire additional lifestyle brands that we believe fit within our business model. We believe that lifestyle branded products that create an emotional connection with consumers can command greater customer loyalty and higher price points at retail, resulting in higher earnings. We also believe a successful lifestyle brand opens up greater opportunities for direct to consumer operations as well as licensing opportunities in product categories beyond our core business.
The
While we We anticipate that sales of our products may continue to be negatively impacted as long as there is an elevated level of economic uncertainty in geographies in which we believe that our operating groupsoperate. Additionally, we have significant opportunities for long-term growth. We believe that each of our lifestyle brands has opportunities for growthbeen impacted in its direct to consumer businesses through expansion of our retail store footprint as well as increases in same store sales. We also believe that our lifestyle brands provide an opportunity for moderate sales increases in our wholesale businesses primarily from our current customers adding to their existing door count and the selective addition of new wholesale customers.
Although the challenging economic conditions continue to have an impact on our business and the apparel industry as a whole, and we continue to focus on minimizing inventory markdown risk and promotional pressure, we were slightly more aggressive in our inventory purchases for fiscal 2011 and anticipate continuing to purchase inventory more aggressively in fiscal 2012 if the economic conditions continue to show improvement. The second half of fiscal 2011 was impactedrecent years by pricing pressures on raw materials, fuel, transportation, labor and other costs necessary for the production and sourcing of apparel products, particularlywhich continued in Fiscal 2013.
brands. Net sales Operating income Earnings from continuing operations Earnings from continuing operations per diluted common share Earnings from discontinued operations, net of taxes Earnings from discontinued operations, net of taxes, per diluted common share Net earnings Net earnings per diluted common share Canada in the second quarter of Fiscal 2013. Our operating group structure reflects a brand-focused 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 and on our Lilly Pulitzer website, operating groups. Net sales Cost of goods sold Gross profit SG&A Change in fair value of contingent consideration Royalties and other operating income Operating income Interest expense, net Loss on repurchase of senior secured notes Earnings (loss) from continuing operations before income taxes Income taxes (benefit) Earnings from continuing operations Net earnings from discontinued operations, net of taxes Net earnings Individual line items of our consolidated statements of earnings may not be directly comparable to those of our competitors, as classification of certain expenses may vary by company. Tommy Bahama Lilly Pulitzer Ben Sherman Lanier Clothes Corporate and Other Total net sales 28, 2012. January 28, 2012. business. Gross profit Gross margin (gross profit as a % of net sales) LIFO charges included in gross profit Charge related to write-up of acquired inventory included in gross profit SG&A SG&A (as % of net sales) Life insurance death benefit gain Restructuring and other charges Acquisition transaction costs Environmental reserve reduction Change in fair value of contingent consideration Change in fair value of contingent consideration things, (1) the Fiscal 2011 and Fiscal 2012 operating results of the Lilly Pulitzer operating group, (2) projected operating results for Lilly Pulitzer for Fiscal 2013 and Fiscal 2014, (3) the operating results criteria for the Fiscal 2013 and Fiscal 2014 amounts to be earned and (4) the shorter remaining term of the contingent consideration agreement. This increase in the change in the fair value of contingent consideration was recognized as a charge to our consolidated statements of operations. Royalties and other operating income Lilly Pulitzer. Tommy Bahama Lilly Pulitzer Ben Sherman Lanier Clothes Corporate and Other Total operating income LIFO charges included in operating income Charge related to write-up of acquired inventory included in operating income Charge for increase in fair value of contingent consideration included in operating income Life insurance death benefit gain Restructuring charges included in operating income Acquisition transaction costs included in operating income Environmental reserve reduction included in operating income Net sales Operating income Operating income as % of net sales Net sales Operating income (loss) Operating income (loss) as % of net sales Charge related to write-up of acquired inventory included in operating income (loss) Charge for increase in fair value of contingent consideration included in operating income (loss) Net sales Operating loss Operating loss as % of net sales Restructuring charges included in operating loss Net sales Operating income Operating income as % of net sales The decrease in operating income for Lanier Clothes business. Net sales Operating loss LIFO charges included in operating loss Life insurance death benefit gain included in operating loss Acquisition transaction costs included in operating loss Environmental reserve reduction included in operating loss Fiscal 2012. Interest expense, net July 2012, which was funded with borrowings under our U.S. Revolving Credit Agreement. Loss on repurchase of senior secured notes Income taxes Effective tax rate benefit for losses in foreign jurisdictions. Earnings from continuing operations Earnings from continuing operations per diluted common share Earnings from discontinued operations, net of taxes Earnings from discontinued operations, net of taxes, per diluted common share Net earnings Net earnings per diluted common share Weighted average common shares outstanding-diluted The increase in earnings from continuing operations for Fiscal 2012 compared to Fiscal 2011 was primarily due to Tommy Bahama Lilly Pulitzer Ben Sherman Lanier Clothes Corporate and Other Total net sales Gross profit Gross margin (gross profit as a % of net sales) LIFO charges included in gross profit Restructuring charges included in gross profit Charge related to write-up of acquired inventory included in gross profit SG&A SG&A (as % of net sales) Restructuring and other charges included in SG&A Acquisition transaction costs included in SG&A Environmental reserve reduction included in SG&A Amortization of intangible assets Change in fair value of contingent consideration Royalties and other operating income Tommy Bahama Lilly Pulitzer Ben Sherman Lanier Clothes Corporate and Other Total operating income LIFO charges included in operating income Charge related to write-up of acquired inventory included in operating income Charge for increase in fair value of contingent consideration included in operating income Acquisition transaction costs included in operating income Restructuring charges included in operating income Environmental reserve reduction included in operating income Net sales Operating income Operating income as % of net sales Restructuring charges included in operating income Net sales Operating income (loss) Operating income (loss) as % of net sales Charge related to write-up of acquired inventory included in operating income (loss) Charge for increase in fair value of contingent consideration included in operating income (loss) Net sales Operating income (loss) Operating income (loss) as % of net sales Restructuring charges included in operating income (loss) Net sales Operating income Operating income as % of net sales Net sales Operating loss LIFO charges included in operating loss Acquisition transaction costs included in operating loss Environmental reserve reduction included in operating loss Interest expense, net Loss on repurchase of senior secured notes Income taxes Effective tax rate Earnings from continuing operations Earnings from continuing operations per diluted common share Net earnings from discontinued operations Net earnings from discontinued operations per diluted common share Net earnings Net earnings per diluted common share Weighted average common shares outstanding—diluted periods. Current assets Current liabilities Working capital Working capital ratio Debt to total capital ratio Balance Sheet February 2, 2013. Cash and cash equivalents Receivables, net Inventories, net Prepaid expenses, net Deferred tax assets Total current assets related to continuing operations Assets related to discontinued operations Total current assets inventories. Property and equipment, net Intangible assets, net Goodwill Other non-current assets, net Total non-current assets, net The increase in property and equipment, net at obligations. Current liabilities related to continuing operations Long-term debt, less current maturities Non-current contingent consideration Other non-current liabilities Non-current deferred income taxes Total liabilities related to continuing operations Liabilities related to discontinued operations Total liabilities intangible asset book to tax differences. Net cash provided by operating activities Net cash used in investing activities Net cash used in financing activities Net cash provided by discontinued operations Net change in cash and cash equivalents Cash and cash equivalents on hand was $8.5 million, $7.5 million and $13.4 million at February 1, 2014, February 2, 2013 and operations of the Tommy Bahama business in Australia from our former licensee that operated that business. Fiscal 2011, respectively. Liquidity and Capital Resources $175 million U.S. Secured Revolving Credit Facility ("U.S. Revolving Credit Agreement"), which is limited to a borrowing base consisting of specified percentages of eligible categories of assets, accrues interest, unused line fees and letter of credit fees based upon a pricing grid which is tied to average unused availability, requires interest payments monthly with principal due at maturity (August 2013) and is secured by a first priority security interest in the accounts receivable (other than royalty payments in respect of trademark licenses), inventory, investment property (including the equity interests of certain subsidiaries), general intangibles (other than trademarks, trade names and related rights), deposit accounts, intercompany obligations, equipment, goods, documents, contracts, books and records and other personal property of Oxford Industries, Inc. and substantially all of its domestic subsidiaries and a second priority security interest in those assets in which the holders of the 113/8% Senior Secured Notes have a first priority security interest £7 million Senior Secured Revolving Credit Facility ("U.K. Revolving Credit Agreement"), which accrues interest at the bank's base rate plus 3.5%, requires interest payments monthly with principal payable on demand and is collateralized by substantially all of the United Kingdom assets of Ben Sherman 11.375% Senior Secured Notes ("113/8% Senior Secured Notes"), which accrue interest at an annual rate of 11.375% (effective interest rate of 12%) and require interest payments semi-annually in January and July of each year, require payment of principal at maturity (July 2015), are subject to certain prepayment penalties, are secured by a first priority interest in all U.S. registered trademarks and certain related rights and certain future acquired real property owned in fee simple of Oxford Industries, Inc. and substantially all of its consolidated domestic subsidiaries and a second priority security interest in those assets in which the lenders under the U.S. Revolving Credit Agreement have a first priority security interest, and are guaranteed by certain of our domestic subsidiaries Unamortized discount Total debt Short-term debt and current maturities of long-term debt Long-term debt, less current maturities 2012 2013 2014 and thereafter Contractual Obligations Contractual Obligations: 113/8% Senior Secured Notes(1) Interest on 113/8% Senior Secured Notes(1) U.S. Revolving Credit Agreement and U.K. Revolving Credit Agreement(2) Operating leases(3) Minimum royalty and advertising payments pursuant to royalty agreements Letters of credit Contingent purchase price consideration(4) Other(5)(6)(7) Total basis, we evaluate our estimates, including those related to receivables, inventories, goodwill, intangible assets, income taxes, contingencies and other accrued expenses. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. We believe that we have appropriately applied our critical accounting policies. However, in the event that inappropriate assumptions or methods were used relating to the critical accounting policies below, our consolidated statements of earnings could be misstated. which we retain risk of loss during shipment, revenue recognition does not occur until the goods have reached the specified customer. Fiscal 2013. reduce the net recognized receivable to the amount reasonably expected to be collected. Such amounts are written off at the time that the amounts are not considered collectible. For all other wholesale customers, we recognize estimated reserves for bad debts based on our historical collection experience, the financial condition of our customers, an evaluation of current economic conditions and anticipated trends, each of which is subjective and requires certain assumptions. Actual charges for uncollectible amounts have not differed materially from our estimates in prior periods. As of Fiscal 2013. Also, we provide an allowance for shrinkage, as appropriate, for the period between the last count and each balance sheet date. purposes. such a change may erode portions of our earlier base year layers for purposes of making our annual LIFO computation. Additionally, a change in the Producer Price Index as published by the United States Department of Labor as compared to the indexes as of Trademarks with indefinite lives are not amortized but instead evaluated, either qualitatively or quantitatively, for impairment annually or more frequently if events or circumstances indicate that the intangible asset might be impaired. The evaluation of the recoverability of trademarks with indefinite lives includes valuations based on a discounted cash flow analysis utilizing the relief from royalty method, among other considerations. This approach is dependent upon a number of uncertain factors, including those used in the initial valuation of the intangible assets listed above. Such estimates involve significant Fiscal 2014. using fair value techniques and market comparables which may include a discounted cash flow analysis or an independent appraisal. Significant estimates, some of which Valuation allowances are established when we determine that it is more-likely-than-not (greater than 50%) that some portion or all of a deferred tax asset will not be realized. Valuation allowances are analyzed periodically and adjusted as events occur, or circumstances change, that would indicate adjustments to the valuation allowances are appropriate. As certain of our foreign operations are in a loss position and future losses may not be deductible, a significant variance in losses in such jurisdictions from our expectations can have a very significant impact on our expected annual tax rate. Furthermore, the recognition of the benefit of losses expected to be realized may be limited in an interim period and may require adjustments to tax expense in the interim period that yield an effective tax rate for the interim period that is not representative of the expected tax rate for the year. As part of our acquisition of the Lilly Pulitzer brand and operations, we entered into a contingent consideration arrangement whereby we may be obligated to pay up to $20 million value using a discount rate which reflected the uncertainty regarding whether the earnings target may be met given the growth required to achieve the contingent consideration payments as well as other factors. expected to be exceeded. appropriate, those adjustments will be included in operating results. The allocation period will not exceed one year from the date of the acquisition. Item 7A. Quantitative and Qualitative Disclosures About Market Risk consolidated financial statements. To the extent that the amounts outstanding under our variable-rate lines of credit change, our exposure to changes in interest rates would also swap for those amounts. $5.0 million. We anticipate that as we expand Tommy ASSETS Current Assets: Cash and cash equivalents Receivables, net Inventories, net Prepaid expenses, net Deferred tax assets Assets related to discontinued operations, net Total current assets Property and equipment, net Intangible assets, net Goodwill Other non-current assets, net Total Assets LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Trade accounts payable and other accrued expenses Accrued compensation Contingent consideration earned and payable Short-term debt and current maturities of long-term debt Liabilities related to discontinued operations Total current liabilities Long-term debt, less current maturities Non-current contingent consideration Other non-current liabilities Non-current deferred income taxes Commitments and contingencies Shareholders' Equity: Common stock, $1.00 par value per common share Additional paid-in capital Retained earnings Accumulated other comprehensive loss Total shareholders' equity Total Liabilities and Shareholders' Equity Net sales Cost of goods sold Gross profit SG&A Change in fair value of contingent consideration Royalties and other operating income Operating income Interest expense, net Loss on repurchase of senior notes Earnings (loss) from continuing operations before income taxes Income taxes (benefit) Earnings from continuing operations Net earnings from discontinued operations, net of taxes Net earnings Earnings from continuing operations, net of taxes, per common share: Basic Diluted Net earnings from discontinued operations, net of taxes, per common share: Basic Diluted Net earnings per common share: Basic Diluted Weighted average common shares outstanding: Basic Dilution Diluted Dividends declared per common share Net earnings Other comprehensive income (loss), net of taxes Foreign currency translation gain (loss) Net unrealized gain (loss) on forward foreign currency exchange contracts Total other comprehensive income (loss), net of taxes Comprehensive income Balance, January 31, 2009 Net earnings and other comprehensive income Shares issued under stock plans, net of tax provision of $0.4 million Compensation expense for stock awards Cash dividends declared and paid Balance, January 30, 2010 Net earnings and other comprehensive income (loss) Shares issued under stock plans, net of tax benefit of $0.1 million Compensation expense for stock awards Cash dividends declared and paid Balance, January 29, 2011 Net earnings and other comprehensive income Shares issued under stock plans, net of tax benefit of $0.4 million Compensation expense for stock awards Repurchase of common stock Cash dividends declared and paid Balance, January 28, 2012 Cash Flows From Operating Activities: Earnings from continuing operations Adjustments to reconcile earnings from continuing operations to net cash provided by operating activities: Depreciation Amortization of intangible assets Change in fair value of contingent consideration Amortization of deferred financing costs and bond discount Loss on repurchase of senior notes Stock compensation expense Deferred income taxes Changes in working capital, net of acquisitions and dispositions: Receivables Inventories Prepaid expenses Current liabilities Other non-current assets Other non-current liabilities Net cash provided by operating activities Cash Flows From Investing Activities: Acquisitions, net of cash acquired Purchases of property and equipment Other Net cash used in investing activities Cash Flows From Financing Activities: Repayment of revolving credit arrangements Proceeds from revolving credit arrangements Repurchase of senior notes Proceeds from the issuance of senior notes Repayment of company owned life insurance policy loans Deferred financing costs paid Proceeds from issuance of common stock Repurchase of common stock Dividends on common stock Net cash used in financing activities Cash Flows from Discontinued Operations: Net operating cash flows provided by (used in) discontinued operations Net investing cash flows provided by (used in) discontinued operations Net cash provided by discontinued operations Net change in cash and cash equivalents Effect of foreign currency translation on cash and cash equivalents Cash and cash equivalents at the beginning of year Cash and cash equivalents at the end of year Supplemental disclosure of cash flow information: Cash paid for interest, net, including interest paid for discontinued operations Cash paid for income taxes, including income taxes paid for discontinued operations operations. Principles of Consolidation Business Combinations 6. In the normal course of business we offer certain discounts or allowances to our wholesale customers. Wholesale operations' sales are recorded net of such discounts and allowances, as well as advertising support not specifically relating to the reimbursement for actual advertising expenses by our customers, operational chargebacks and provisions for estimated returns. As certain allowances and other deductions are not finalized until the end of a season, program or other event which may not have occurred yet, we estimate such discounts and allowances on an ongoing basis. Significant considerations in determining our estimates for discounts, purchasing costs, internal transfer costs, direct labor, manufacturing overhead, insurance, duties, brokers' fees, consolidators' fees and Cash and Cash Equivalents discussed in more detail in Note 6. Also, we provide an allowance for shrinkage, as appropriate, for the period between the last count and each balance sheet date. of accounting for inventories on the LIFO method is reflected in Corporate and Other for operating group reporting purposes included in Note 10. Leasehold improvements Furniture, fixtures, equipment and technology Buildings and improvements some cases. Such valuations, which are dependent upon a number of uncertain factors, may include a discounted cash flow analysis of anticipated revenues and expenses or cost savings resulting from the acquired intangible asset using an estimate of a risk-adjusted market-based cost of capital as the discount rate. As of Officers' life insurance policies that are owned by us, which are included in other non-current assets, net, are recorded at their cash surrender value, less any outstanding loans associated with the life insurance policies that are payable to the life insurance company with which the policy is outstanding. As of of the related debt. Amortization expense for deferred financing costs, which is included in interest expense in our consolidated statements of earnings, was Liabilities of outstanding or pending matters, individually and in the aggregate, will not have a material 6. rates of exchange prevailing during the relevant period. The impact of any such remeasurement is recognized in our consolidated statements of earnings in the respective period. Net gains (losses) related to foreign currency transactions recognized in material to our consolidated financial statements. Risk Management Due to the magnitude of our other international operations, we have not historically entered into forward foreign currency exchange contracts for our other international operations, including the Tommy Bahama operations in the Asia-Pacific region and Canada. February 1, 2014 which is ultimately realized will impact net earnings during the period from February 1, 2014 through March 2015. The following table summarizes financial assets and financial liabilities (in thousands) measured and recorded at fair value on a recurring basis, January 28, 2012 Financial Assets: Forward foreign currency exchange contracts Financial Liabilities: Fair value of contingent consideration, including contingent consideration earned and payable January 29, 2011 Financial Liabilities: Fair value of contingent consideration, including contingent consideration earned and payable Forward foreign currency exchange contracts the table above, refer to the accounting policy description for the respective financial instrument included above. Additionally, we have determined that our property and equipment, intangible assets and goodwill, for which the book values are disclosed in Notes 3 and 4, are non-financial assets measured at fair value on a non-recurring basis. We have determined that our approaches for determining fair values for each of these assets generally are based on Level 3 inputs. The fair value of restricted shares and restricted share units are determined based on the fair value of our common stock on the grant date, regardless of whether the awards are performance or service based awards. Foreign currency translation loss Net unrealized gain (loss) on forward foreign currency exchange contracts Accumulated other comprehensive loss Tommy Bahama Lilly Pulitzer Ben Sherman Lanier Clothes are "in the money," and that we use the proceeds received to repurchase shares at the average market value of our shares for the respective period. For purposes of the treasury stock method, proceeds consist of cash to be paid, future compensation expense to be recognized and the amount of tax benefits, if any, which will be credited to additional paid-in capital assuming the conversion of the share-based awards. Net sales Operating income The preparation of our consolidated financial statements in conformity with Finished goods Work in process Fabric, trim and supplies LIFO reserve Total inventory Land Buildings Furniture, fixtures, equipment and technology Leasehold improvements Subtotal Less accumulated depreciation and amortization Total property and equipment, net Intangible assets with finite lives, which primarily consist of customer relationships: Gross carrying amount Accumulated amortization Total intangible assets with finite lives, net Intangible assets with indefinite lives: Trademarks Total intangible assets, net $175 million U.S. Secured Revolving Credit Facility ("U.S. Revolving Credit Agreement"), which is limited to a borrowing base consisting of specified percentages of eligible categories of assets, accrues interest, unused line fees and letter of credit fees based upon a pricing grid which is tied to average unused availability, requires interest payments monthly with principal due at maturity (August 2013) and is secured by a first priority security interest in the accounts receivable (other than royalty payments in respect of trademark licenses), inventory, investment property (including the equity interests of certain subsidiaries), general intangibles (other than trademarks, trade names and related rights), deposit accounts, intercompany obligations, equipment, goods, documents, contracts, books and records and other personal property of Oxford Industries, Inc. and substantially all of its domestic subsidiaries and a second priority interest in those assets in which the holders of the 113/8% Senior Secured Notes have a first priority interest £7 million Senior Secured Revolving Credit Facility ("U.K. Revolving Credit Agreement"), which accrues interest at the bank's base rate plus as much as 3.5%, requires interest payments monthly with principal payable on demand and is collateralized by substantially all of the United Kingdom assets of Ben Sherman 11.375% Senior Secured Notes ("113/8% Senior Secured Notes"), which accrue interest at an annual rate of 11.375% (effective interest rate of 12%) and require interest payments semi-annually in January and July of each year, require payment of principal at maturity (July 2015), are subject to certain prepayment penalties, are secured by a first priority interest in all U.S. registered trademarks and certain related rights and certain future acquired real property owned in fee simple of Oxford Industries, Inc. and substantially all of its consolidated domestic subsidiaries and a second priority interest in those assets in which the lenders under the U.S. Revolving Credit Agreement have a first priority interest(1)(2) Unamortized discount(1)(2) Total debt Short-term debt and current maturities of long-term debt Long-term debt, less current maturities To the extent cash flow needs exceed cash flow provided by our operations we will have access, subject to their terms, to our lines of credit to provide funding for operating activities, capital expenditures and acquisitions, if any. Our credit facilities are also used to finance trade letters of credit for product purchases, which are drawn against our lines of credit at the time of shipment of the products and reduce the amounts available under our lines of credit and borrowing capacity under our credit facilities when issued. As of We believe that the affirmative covenants, negative covenants, financial covenants and other restrictions under our credit facilities are customary for those included in similar facilities 2012 2013 2014 and thereafter rent amounts upon the exit or decision to exit retail stores, under all leases was $72.3 million, $62.9 million and $49.5 million future periods. February 2, 2013, respectively. The table below summarizes the restricted Restricted stock outstanding at beginning of fiscal year Restricted stock granted Restricted stock vested, including restricted stock repurchased from employees for employees' tax liability Restricted stock forfeited Restricted stock outstanding at end of fiscal year Fiscal 2009 Restricted Stock Awards Fiscal 2010 Restricted Stock Awards Fiscal 2011 Restricted Stock Awards Prior to and including the December 2003 grants under our previous anniversary from the date of grant. The last stock options granted by us vested in Stock options outstanding and exercisable, beginning of fiscal year Stock options exercised Stock options forfeited Stock options outstanding and exercisable, end of fiscal year July 15, 2002 August 18, 2003 December 16, 2003 Employee Stock Purchase Plan Preferred Stock Earnings (loss) from continuing operations before income taxes: Domestic Foreign Earnings (loss) from continuing operations before income taxes Current: Federal State Foreign Deferred—Federal and State Deferred—Foreign Income Taxes (benefit) Statutory rate State income taxes—net of federal income tax benefit Impact of foreign earnings (loss)(1) Valuation allowance against foreign losses and other carryforwards(1) Change in contingency reserves related to unrecognized tax benefits Impact of permanent differences related to life insurance investments Impact of federal tax credits Permanent reduction of available carryforwards Other adjustment(2) Other, net Effective rate for continuing operations Deferred Tax Assets: Inventories Accrued compensation and benefits Allowance for doubtful accounts Depreciation and amortization Non-current liabilities Deferred rent and lease obligations Operating loss carryforwards Other, net Deferred tax assets Deferred Tax Liabilities: Acquired intangible assets Foreign(1) Deferred tax liabilities Valuation allowance Net deferred tax liability amounts of deferred income taxes included in the following line items in our consolidated balance sheets are as follows (in thousands): Assets: Deferred tax assets Liabilities: Deferred tax liabilities Net deferred tax liability Balance at beginning of year Additions for current year tax positions Expiration of the statute of limitation for the assessment of taxes Additions for tax positions of prior year Reductions for tax positions of prior year Settlements Balance at end of year our consolidated balance sheets. liabilities to participants resulting from changes in market values. Our aggregate expense under these defined contribution and non-qualified deferred compensation plans in Our operating group structure reflects a brand-focused management approach, emphasizing operational coordination and resource allocation across each brand's direct to consumer, wholesale and licensing operations. categories. and sources Net Sales Tommy Bahama Lilly Pulitzer Ben Sherman Lanier Clothes Corporate and Other Total Depreciation Tommy Bahama Lilly Pulitzer Ben Sherman Lanier Clothes Corporate and Other Total Amortization of Intangible Assets Tommy Bahama Lilly Pulitzer Ben Sherman Lanier Clothes Corporate and Other Total Operating Income (Loss) Tommy Bahama Lilly Pulitzer Ben Sherman Lanier Clothes Corporate and Other Total Operating Income (Loss) Interest expense, net Loss on repurchase of senior notes Earnings (Loss) From Continuing Operations Before Income Taxes Purchases of Property and Equipment Tommy Bahama Lilly Pulitzer Ben Sherman Lanier Clothes Corporate and Other Total Total Assets Tommy Bahama Lilly Pulitzer Ben Sherman Lanier Clothes Corporate and Other Assets related to Discontinued Operations Total Intangible Assets, net and Goodwill Tommy Bahama Lilly Pulitzer Ben Sherman Lanier Clothes Corporate and Other Total United States United Kingdom Other foreign Total United States and Canada United Kingdom and Europe Other Total Banks, Inc. Interest and agent fees for our credit facility Cash management and senior notes related services Book-running manager and dealer-manager fees Other directors of SunTrust from 2003 until his retirement from that position in April 2012. In connection with our acquisition of the Lilly Pulitzer brand and operations paid. Net sales Gross profit Operating income Earnings from continuing operations(1) Net earnings (loss) from discontinued operations, net of taxes Net earnings Earnings from continuing operations per common share: Basic Diluted Earnings (loss) from discontinued operations, net of taxes per common share: Basic Diluted Net earnings per common share: Basic Diluted Weighted average common shares outstanding: Basic Diluted Net sales Gross profit Operating income Earnings from continuing operations Net earnings from discontinued operations, net of taxes Net earnings Earnings from continuing operations per common share: Basic Diluted Earnings from discontinued operations, net of taxes per common share: Basic Diluted Net earnings per common share: Basic Diluted Weighted average common shares outstanding: Basic Diluted including a Cash Receivables Inventories(1) Prepaid expenses and other current assets Property and equipment Intangible assets Goodwill Other non-current assets Deferred income tax assets Trade accounts payable, accrued compensation and other accrued expenses assumed Deferred income tax liability Purchase price(2) Net sales Earnings from continuing operations before income taxes Earnings from continuing operations Earnings from continuing operations per common share: Basic Diluted Net sales Earnings from discontinued operations before income taxes Earnings from discontinued operations, net of taxes Gain (loss) on sale of discontinued operations, net of taxes Net earnings from discontinued operations, net of taxes ASSETS Cash and cash equivalents Receivables, net Inventories, net Prepaid expenses and deferred tax assets, net Total current assets Property and equipment, net Goodwill and intangible assets, net Other non-current assets, net Total Assets LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities related to continuing operations Long-term debt, less current maturities Other non-current liabilities, including non-current contingent consideration Non-current deferred income taxes Total shareholders'/invested equity Total Liabilities and Shareholders' Equity ASSETS Cash and cash equivalents Receivables, net Inventories, net Prepaid expenses and deferred tax assets, net Assets related to discontinued operations, net Total current assets Property and equipment, net Goodwill and intangible assets, net Other non-current assets, net Total Assets LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities related to continuing operations Current liabilities related to discontinued operations Long-term debt, less current maturities Other non-current liabilities, including non-current contingent consideration Non-current deferred income taxes Total shareholders'/invested equity Total Liabilities and Shareholders' Equity Net sales Cost of goods sold Gross profit SG&A including change in fair value of contingent consideration Royalties and other operating income Operating income Interest (income) expense, net Loss on repurchase of senior secured notes Income from equity investment Earnings from continuing operations before income taxes Income taxes (benefit) Earnings from continuing operations Earnings (loss) from discontinued operations, net of taxes Net earnings Net sales Cost of goods sold Gross profit SG&A including change in fair value of contingent consideration Royalties and other operating income Operating income Interest (income) expense, net Income from equity investment Earnings from continuing operations before income taxes Income taxes (benefit) Earnings (loss) from continuing operations Earnings from discontinued operations, net of taxes Net earnings (loss) Net sales Cost of goods sold Gross profit SG&A including amortization of intangible assets Royalties and other operating income Operating income (loss) Interest (income) expense, net, including loss on repurchase of senior notes Income from equity investment Earnings (loss) from continuing operations before income taxes Income taxes (benefit) Earnings (loss) from continuing operations Earnings from discontinued operations, net of taxes Net earnings (loss) Cash Flows From Operating Activities: Net cash provided by (used in) operating activities Cash Flows from Investing Activities: Net cash used in investing activities Cash Flows from Financing Activities: Change in debt Proceeds from issuance of common stock Repurchase of common stock Equity contribution received Change in intercompany payable Dividends on common stock Net cash provided by (used in) financing activities Cash Flows from Discontinued Operations: Net cash provided by (used in) discontinued operations Net change in Cash and Cash Equivalents Effect of foreign currency translation Cash and Cash Equivalents at the Beginning of Period Cash and Cash Equivalents at the End of Period Cash Flows From Operating Activities: Net cash provided by (used in) operating activities Cash Flows from Investing Activities: Net cash used in investing activities Cash Flows from Financing Activities: Repayments of company owned life insurance policy loans Proceeds from issuance of common stock Change in intercompany payable Dividends on common stock Net cash provided by (used in) financing activities Cash Flows from Discontinued Operations: Net cash provided by (used in) discontinued operations Net change in Cash and Cash Equivalents Effect of foreign currency translation Cash and Cash Equivalents at the Beginning of Period Cash and Cash Equivalents at the End of Period Cash Flows From Operating Activities: Net cash provided by (used in) operating activities Cash Flows from Investing Activities: Net cash used in investing activities Cash Flows from Financing Activities: Change in debt Repurchase of 87/8% Senior Unsecured Notes Proceeds from the issuance of 113/8% Senior Secured Notes Deferred financing costs paid Proceeds from issuance of common stock Equity contribution received Change in intercompany payable Dividends on common stock Net cash provided by (used in) financing activities Cash Flows from Discontinued Operations: Net cash provided by discontinued operations Net change in Cash and Cash Equivalents Effect of foreign currency translation Cash and Cash Equivalents at the Beginning of Period Cash and Cash Equivalents at the End of Period Fiscal 2011 Deducted from asset accounts: Accounts receivable reserves(1) Allowance for doubtful accounts(2) Fiscal 2010 Deducted from asset accounts: Accounts receivable reserves(1) Allowance for doubtful accounts(2) Fiscal 2009 Deducted from asset accounts: Accounts receivable reserves(1) Allowance for doubtful accounts(2) criteria Fiscal 2011. 31, 2014focus on maintainingmaintain a strong balance sheet and ample liquidity, and weliquidity. We believe that our strong balance sheet and liquidity coupled with positive cash flow from operations coupled with the strength of our balance sheet and liquidity will provide us with ample resources to fund future investments in our lifestyle brands. Further, we believe that we have a significant opportunity beginning on July 15, 2012 to improve our capital structure, when we can redeem our 113/8% Senior Secured Notes at 105.688% of the principal amount plus accrued and unpaid interest, which redemption price will decrease in subsequent years, which could result in substantial interest savings for us after that date if we can replace these notes with more attractive borrowing alternatives. In the future, we may add additional lifestyle brands to our portfolio, if welifestyle brandstargets which meet our investment criteria; however, we believe that we have significant opportunities to appropriately deploy our capital and resources in our existing lifestyle brands even absent any future acquisition.fiscal 2011the 52-week Fiscal 2013 compared to fiscal 2010:the 53-week Fiscal 2012 : Fiscal 2011 Fiscal 2010 $ 758,913 $ 603,947 $ 68,807 $ 40,662 $ 29,243 $ 16,235 $ 1.77 $ 0.98 $ 137 $ 62,423 $ 0.01 $ 3.77 $ 29,380 $ 78,658 $ 1.78 $ 4.75 Fiscal 2013 Fiscal 2012 Net sales $ 917,097 $ 855,542 Operating income $ 84,670 $ 68,971 Net earnings $ 45,291 $ 31,317 Net earnings per diluted share $ 2.75 $ 1.89 improvementhigher earnings in earnings from continuing operationsFiscal 2013 were:•An increasenet salesexcess of 10% in both the Tommy Bahama and Lilly Pulitzer operating income primarily driven by the $94.5groups; of net sales related to Lilly Pulitzer,a loss on the repurchase of senior notes, which we acquired on December 21, 2010 and was not included inresulted from our results of operations for a full year in fiscal 2010, and a sales increase in the direct to consumer channel of distribution at Tommy Bahama.•Improved gross margins resulting from a change in sales mix attributable to (1) the inclusionJuly 2012 redemption of the Lilly Pulitzer operations for a full year in fiscal 2011 and (2) the higher proportion of direct to consumer sales in Tommy Bahama in fiscal 2011. These items were partially offset by the negative impact on our gross profit of (1) the net impact of LIFO accounting charges which were $5.8 million in fiscal 2011 and $3.8 million in fiscal 2010 and (2) gross margin declines in Ben Sherman and Lanier Clothes in fiscal 2011.•Increased royalty income primarily due to the royalty income associated with the Lilly Pulitzer business, as well as increased royalty income in Ben Sherman and Tommy Bahama.•Lower interest expense in fiscal 2011 due to our reduction of debt as a result of our repurchase of $45.0remaining $105 million in aggregate principal amount of our 113/8%11.375% Senior Secured Notes in fiscal 2011, as described in more detail below in "113/8% ("Senior Secured Notes." These items were partially offset by:•The $9.0 million loss on repurchase of senior secured notes during fiscal 2011 resulting fromNotes") primarily using borrowings under our repurchase of $45.0 million in aggregate principal amount of our 113/8% Senior Secured Notes.•The increase in SG&A, which was primarily due to (1) the inclusion of $40.6 million of SG&A associatedU.S. Revolving Credit Agreement, with the Lilly Pulitzer operations during fiscal 2011, (2) the incremental SG&A associated with the costs of operating Tommy Bahama retail stores which opened during fiscal 2010 and fiscal 2011, (3) certain infrastructure and other costs related to the Tommy Bahamainternational expansion and (4) the net impact of certain retail store asset impairments offset by any associated write-offs of deferred rent credits associated with retail stores that were closed or anticipated to be closed. These increases were partially offset by the death benefit gain of a corporate owned life insurance policy of approximately $1.2 million in fiscal 2011. In fiscal 2010, SG&A was impacted by $3.2 million of restructuring charges in Ben Sherman, $0.8 million of transaction costs associated with the Lilly Pulitzer acquisition and a $2.2 million reduction of an environmental reserve liability.•A $2.4 million charge during fiscal 2011, compared to a $0.2 million charge in fiscal 2010, related to the change in fair value of contingent consideration associated with the acquisition of the Lilly Pulitzer brand and operations. Earnings from discontinued operations reflect the operations related to substantially all of our former Oxford Apparel operating group, which we sold in the fourth quarter of fiscal 2010. The operating results of the discontinued operations reflect substantially all of the normal operating activities of our former Oxford Apparel operating group in the first eleven months of fiscal 2010 as well as the gain on sale in fiscal 2010. However the fiscal 2011 earnings from discontinued operations reflect certain wind-down and transition activities and an adjustment to the gain on sale upon finalization of the working capital adjustment in fiscal 2011. We do not anticipate significant operating income (loss) or cash flows associated with discontinued operations subsequent to fiscal 2011.113/8% SENIOR SECURED NOTES In fiscal 2011, we repurchased, in privately negotiated transactions, $45.0 million in aggregate principal amount of our 113/8% Senior Secured Notes for $52.2 million, plus accrued interest, using cash on hand. The repurchase of the 113/8% Senior Secured Notes and related write-off of approximately $1.8 million of unamortized deferred financing costs and discount resulted in ano loss on repurchase of senior notes in Fiscal 2013;approximately $9.0contingent consideration in Fiscal 2013;fiscal 2011. After completioninterest expense in Fiscal 2013 to $4.2 million primarily due to our borrowing at lower interest rates for the first half of Fiscal 2013 compared to the transactions, $105.0 million aggregate principal amountfirst half of Fiscal 2012 as a result of our 113/8%July 2012 Senior Secured Notes remained outstandingredemption;January 28, 2012. Beginning July 15,property and equipment.are permittedwere not able to redeemrecognize an income tax benefit and the 113/8% Senior Secured Notes, atfavorable impact of a decrease in the enacted tax rate in the United Kingdom, Fiscal 2012 also benefited from certain other favorable discrete items which reduced the effective tax rate; andoption on not less than 30 nor more than 60 days' prior notice at 105.688%acquisition of the principal amount, plus accrued and unpaid interest, which redemption price will decreaseTommy Bahama operations in subsequent years.Sherman and Lanier Clothes.Sherman. We identify our operating groups based on the way our management organizes the components of our business for purposes of allocating resources and assessing performance.markets collections ofdistributes men's and women's sportswear and related products. The target consumers of Tommy Bahama are primarily affluent men and women age 35 and older who embrace a relaxed and casual approach to daily living. Tommy Bahama products can be found in our owned Tommy Bahama retail stores and on our Tommy Bahama e-commerce website, www.tommybahama.com,tommybahama.com, as well as in better department stores and independent specialty stores throughout the United States and licensed Tommy Bahama retail stores outside the United States. We also operate Tommy Bahama restaurants and license the Tommy Bahama name for various product categories.otherrelated products. Lilly Pulitzer was originally created in the late 1950's and is an affluent brand with a heritage and aesthetic based on the Palm Beach resort lifestyle. The brand is somewhat unique among women's brands in that it has demonstrated multi-generational appeal, including young women in college or recently graduated from college; young mothers with their daughters; and womenwww.lillypulitzer.com,lillypulitzer.com, as well as in certainbetter department stores and independent specialty stores. We also license the Lilly Pulitzer name for various product categories."Mod"-inspired shirt brand that was adopted by the "Mods" and has throughout its history been inspired by what is new and current in British art, music, culture and style. The brand has evolved into a British modernist lifestyle brand of apparel targeted at style conscious men ages 25 to 40 in multiple markets throughout the world. Ben Sherman products can be found in better department stores, a variety of independent specialty stores and our owned and licensed Ben Sherman retail stores, as well as on Ben Sherman e-commerce websites. We also license the Ben Sherman name for various product categories. Lanier Clothes designs, sources and markets branded and private label men's tailored clothing, including suits, sportcoats, suit separates and dress slacks across a wide range of price points, with the majority of the business at moderate price points. Our Lanier Clothes branded products are sold under certain trademarks licensed to us by third parties including Kenneth Cole, Dockers, Geoffrey Beene and Ike Behar. Additionally, we design and market products for our owned Billy London and Arnold Brant brands. Billy London is a modern, British-inspired fashion brand geared towards the value-oriented consumer, while Arnold Brant is an upscale tailored brand that is intended to blend modern elements of style with affordable luxury. In addition to the branded businesses, Lanier Clothes designs and sources certain private label tailored clothing products for certain customers. Significant private label brands for which we produce tailored clothing include Lands' End, Stafford, Alfani, Structure, and Kenneth Roberts. Our Lanier Clothes products are sold to national chains, department stores, specialty stores, specialty catalog retailers and discount retailers throughout the United States.groups. The operations that are included in Corporate and Other includegroups, including our Oxford Golf business and our Lyons, Georgia distribution center operations. LIFO inventory calculations are made on a legal entity basis which were previously included indoes not correspond to our former Oxford Apparel operating group priordefinitions; therefore, LIFO inventory accounting adjustments are not allocated to the disposal of substantially all of the operations and assets of Oxford Apparel on January 3, 2011. Individual line items of our consolidated statements of earnings may not be directly comparable to those of our competitors, asclassification of certain expenses may vary by company. For purposes of the tables below, "NM" means not meaningful. Fiscal 2011 Fiscal 2010 Fiscal 2009 Fiscal 2013 Fiscal 2012 Fiscal 2011 $ 758,913 100.0 % $ 603,947 100.0 % $ 585,306 100.0 % $ 917,097 100.0 % $ 855,542 100.0 % $ 758,913 100.0 % 345,944 45.6 % 276,540 45.8 % 294,493 50.3 % 403,523 44.0 % 385,985 45.1 % 345,944 45.6 % 412,969 54.4 % 327,407 54.2 % 290,813 49.7 % 513,574 56.0 % 469,557 54.9 % 412,969 54.4 % 358,582 47.2 % 301,975 50.0 % 283,706 48.5 % 447,645 48.8 % 410,737 48.0 % 358,582 47.2 % 2,400 0.3 % 200 0.0 % — — 275 — % 6,285 0.7 % 2,400 0.3 % 16,820 2.2 % 15,430 2.6 % 11,803 2.0 % 19,016 2.1 % 16,436 1.9 % 16,820 2.2 % 68,807 9.1 % 40,662 6.7 % 18,910 3.2 % 84,670 9.2 % 68,971 8.1 % 68,807 9.1 % 16,266 2.1 % 19,887 3.3 % 18,710 3.2 % 4,169 0.5 % 8,939 1.0 % 16,266 2.1 % 9,017 1.2 % — — 1,759 0.3 % 43,524 5.7 % 20,775 3.4 % (1,559 ) (0.3 )% 14,281 1.9 % 4,540 0.8 % (2,945 ) (0.5 )% Loss on repurchase of senior notes — — % 9,143 1.1 % 9,017 1.2 % Earnings from continuing operations before income taxes 80,501 8.8 % 50,889 5.9 % 43,524 5.7 % Income taxes 35,210 3.8 % 19,572 2.3 % 14,281 1.9 % 29,243 3.9 % 16,235 2.7 % 1,386 0.2 % $ 45,291 4.9 % $ 31,317 3.7 % $ 29,243 3.9 % 137 NM 62,423 NM 13,238 NM $ 29,380 NM $ 78,658 NM $ 14,624 NM 20112013 COMPARED TO FISCAL 20102012operationsearnings for fiscal 2011Fiscal 2013, which included 52 weeks, to fiscal 2010.Fiscal 2012, which included 53 weeks. Each dollar and percentage change provided reflects the change between these periods unless indicated otherwise. Each dollar and share amount included in the tables is in thousands except for per share amounts. Fiscal 2011 Fiscal 2010 $ Change % Change Fiscal 2013 Fiscal 2012 $ Change % Change $ 452,156 $ 398,510 $ 53,646 13.5 % $ 584,941 $ 528,639 $ 56,302 10.7 % 94,495 5,959 88,536 NM 137,943 122,592 15,351 12.5 % Lanier Clothes 109,530 107,272 2,258 2.1 % 91,435 86,920 4,515 5.2 % 67,218 81,922 (14,704 ) (17.9 )% 108,771 103,733 5,038 4.9 % 12,056 8,825 3,231 36.6 % 17,465 15,117 2,348 15.5 % $ 758,913 $ 603,947 $ 154,966 25.7 % Total $ 917,097 $ 855,542 $ 61,555 7.2 % $155.0$61.6 million, or 25.7%7.2%, in fiscal 2011Fiscal 2013 compared to fiscal 2010Fiscal 2012 primarily due to the net sales increases at Tommy Bahama and Lilly Pulitzer, which were partially offset by decreased net sales at Ben Sherman, each as discussed below. Further, as direct to consumer sales grew at a faster rate than wholesales sales, net sales in the direct to consumer channel of distribution represented a greater percentage of consolidated net sales in Fiscal 2013 as compared to Fiscal 2012, as presented below: Fiscal 2013 Fiscal 2012 Full price retail stores and outlets 40 % 37 % E-commerce 12 % 10 % Restaurant 7 % 7 % Wholesale 41 % 46 % Total 100 % 100 % Fiscal 2013 Fiscal 2012 Full price retail stores and outlets 51 % 48 % E-commerce 13 % 11 % Restaurant 10 % 10 % Wholesale 26 % 31 % Total 100 % 100 % Fiscal 2013 Fiscal 2012 Full price retail stores 32 % 30 % E-commerce 25 % 24 % Wholesale 43 % 46 % Total 100 % 100 % Fiscal 2013 Fiscal 2012 Direct to Consumer 46 % 38 % Wholesale 54 % 62 % Total 100 % 100 % Fiscal 2013 Fiscal 2012 $ Change % Change Tommy Bahama $ 358,930 $ 321,920 $ 37,010 11.5 % Lilly Pulitzer 84,845 76,842 8,003 10.4 % Lanier Clothes 30,552 30,264 288 1.0 % Ben Sherman 32,094 39,430 (7,336 ) (18.6 )% Corporate and Other 7,153 1,101 6,052 NM Total gross profit $ 513,574 $ 469,557 $ 44,017 9.4 % LIFO (credit) charge included in Corporate and Other $ (27 ) $ 4,043 Inventory step-up charge included in Tommy Bahama associated with Tommy Bahama Canada acquisition $ 707 $ — Fiscal 2013 Fiscal 2012 Tommy Bahama 61.4 % 60.9 % Lilly Pulitzer 61.5 % 62.7 % Lanier Clothes 27.9 % 28.2 % Ben Sherman 47.7 % 48.1 % Corporate and Other NM NM Consolidated gross margin 56.0 % 54.9 % Fiscal 2013 Fiscal 2012 $ Change % Change SG&A 447,645 410,737 $ 36,908 9.0 % SG&A (as a % of net sales) 48.8 % 48.0 % Amortization of intangible assets included in Tommy Bahama associated with Tommy Bahama Canada acquisition $ 1,377 $ — Fiscal 2013 Fiscal 2012 $ Change % Change Change in fair value of contingent consideration included in Lilly Pulitzer $ 275 $ 6,285 $ (6,010 ) (95.6 )% Fiscal 2013 Fiscal 2012 $ Change % Change Royalties and other operating income $ 19,016 $ 16,436 $ 2,580 15.7 % Gain on sale of real estate included in Corporate and Other $ 1,611 $ — Fiscal 2013 Fiscal 2012 $ Change % Change Tommy Bahama $ 72,207 $ 69,454 $ 2,753 4.0 % Lilly Pulitzer 25,951 20,267 5,684 28.0 % Lanier Clothes 10,828 10,840 (12 ) (0.1 )% Ben Sherman (13,131 ) (10,898 ) (2,233 ) (20.5 )% Corporate and Other (11,185 ) (20,692 ) 9,507 45.9 % Total operating income $ 84,670 $ 68,971 $ 15,699 22.8 % LIFO (credit) charge included in Corporate and Other $ (27 ) $ 4,043 Inventory step-up charge included in Tommy Bahama associated with Tommy Bahama Canada acquisition $ 707 $ — Amortization of intangible assets included in Tommy Bahama associated with Tommy Bahama Canada acquisition $ 1,377 $ — Change in fair value of contingent consideration included in Lilly Pulitzer $ 275 $ 6,285 Gain on sale of real estate included in Corporate and Other $ (1,611 ) $ — Fiscal 2013 Fiscal 2012 $ Change % Change Net sales $ 584,941 $ 528,639 $ 56,302 10.7 % Gross margin 61.4 % 60.9 % Operating income $ 72,207 $ 69,454 $ 2,753 4.0 % Operating income as % of net sales 12.3 % 13.1 % Inventory step-up charge included in Tommy Bahama associated with Tommy Bahama Canada acquisition $ 707 $ — Amortization of intangible assets included in Tommy Bahama associated with Tommy Bahama Canada acquisition $ 1,377 $ — Fiscal 2013 Fiscal 2012 $ Change % Change Net sales $ 137,943 $ 122,592 $ 15,351 12.5 % Gross margin 61.5 % 62.7 % Operating income $ 25,951 $ 20,267 $ 5,684 28.0 % Operating income as % of net sales 18.8 % 16.5 % Change in fair value of contingent consideration included in Lilly Pulitzer $ 275 $ 6,285 Fiscal 2013 Fiscal 2012 $ Change % Change Net sales $ 109,530 $ 107,272 $ 2,258 2.1 % Gross margin 27.9 % 28.2 % Operating income $ 10,828 $ 10,840 $ (12 ) (0.1 )% Operating income as % of net sales 9.9 % 10.1 % Fiscal 2013 Fiscal 2012 $ Change % Change Net sales $ 67,218 $ 81,922 $ (14,704 ) (17.9 )% Gross margin 47.7 % 48.1 % Operating loss $ (13,131 ) $ (10,898 ) $ (2,233 ) (20.5 )% Operating loss as % of net sales (19.5 )% (13.3 )% Fiscal 2013 Fiscal 2012 $ Change % Change Net sales $ 17,465 $ 15,117 $ 2,348 15.5 % Operating loss $ (11,185 ) $ (20,692 ) $ 9,507 45.9 % LIFO (credit) charge included in Corporate and Other $ (27 ) $ 4,043 Gain on sale of real estate included in Corporate and Other $ 1,611 $ — Fiscal 2013 Fiscal 2012 $ Change % Change Interest expense, net $ 4,169 $ 8,939 $ (4,770 ) (53.4 )% Fiscal 2013 Fiscal 2012 $ Change % Change Loss on repurchase of senior notes $ — $ 9,143 $ (9,143 ) (100.0 )% Fiscal 2013 Fiscal 2012 $ Change % Change Income taxes $ 35,210 $ 19,572 $ 15,638 79.9 % Effective tax rate 43.7 % 38.5 % Fiscal 2013 Fiscal 2012 Net earnings $ 45,291 $ 31,317 Net earnings per diluted share $ 2.75 $ 1.89 Weighted average shares outstanding - diluted 16,482 16,586 Fiscal 2012 Fiscal 2011 $ Change % Change Tommy Bahama $ 528,639 $ 452,156 $ 76,483 16.9 % Lilly Pulitzer 122,592 94,495 28,097 29.7 % Lanier Clothes 107,272 108,771 (1,499 ) (1.4 )% Ben Sherman 81,922 91,435 (9,513 ) (10.4 )% Corporate and Other 15,117 12,056 3,061 25.4 % Total net sales $ 855,542 $ 758,913 $ 96,629 12.7 % increase in net sales for Tommy Bahama sales increase of $76.5 million, or 16.9%, was primarily driven by increased direct to consumer sales resulting from a low double digit(1) an increase in comparable full-price retail store sales andof $33.5 million, to $236.7 million in the 53-week Fiscal 2012 compared to $203.2 million in the 52-week Fiscal 2011, (2) a net sales atincrease of $18.6 million associated with domestic retail stores and outlet stores opened during fiscal 2010in Fiscal 2011 and fiscal 2011 as well as an e-commerceFiscal 2012, (3) a wholesale sales increase exceeding 50%. Wholesaleof $14.7 million and restaurant sales also increased modestly during fiscal 2011. TommyBahama unit sales increased 6.8% due to the higher volume in each distribution channel, and the average selling price per unit increased 7.4%, primarily as(4) a result of the higher proportion of net sales from the directincrease associated with our Tommy Bahama international operations in Australia and Asia of $4.5 million. The remaining sales increase primarily related to consumer channelsales in our restaurants and our outlet stores opened for all of distributionFiscal 2011 and higher product sales prices generally as certain product cost increases were recovered from consumers.Fiscal 2012. As of January 28, 2012,February 2, 2013, Tommy Bahama operated 96113 retail stores compared to 8996 retail stores as of January 29, 2011. We acquired thebrand and operations on December 21, 2010. Therefore, our consolidated operating results for the first 101/2 monthssales increase of fiscal 2010 did not include any operating activities for Lilly Pulitzer. Net sales for Lilly Pulitzer for fiscal 2011 were $94.5 million. By way of comparison, the Lilly Pulitzer brand and operations generated $72.5$28.1 million, of net sales during fiscal 2010, of which only $6.0 millionor 29.7%, was included in our consolidated operating results. The $94.5 million of net sales in fiscal 2011 reflects significant increases in each of the wholesale, retail and e-commerce channels of distribution.Ben Sherman: Net sales for Ben Sherman in fiscal 2011 increasedprimarily driven by approximately 5.2% from fiscal 2010. The net sales for fiscal 2011 reflect(1) an increase in comparable store sales of $10.5 million, to $47.4 million in the average selling price per unit53-week Fiscal 2012 compared to $36.8 million in the 52-week Fiscal 2011, (2) a wholesale sales increase of 17.3%%, which was$6.5 million, (3) a net sales increase of $6.3 million associated with e-commerce flash sales in Fiscal 2012 and (4) a net sales increase of $5.3 million reflecting the net sales impact of the four retail stores opened in Fiscal 2012, net of the impact of the one store closure in Fiscal 2012. These sales increases were partially offset by a decrease in unit volumethe clearance warehouse sales in Fiscal 2012, as more end of 10.4%.season product was sold through the e-commerce flash sales. The increase in average selling price per unit was due to (1) our strategy to improve the wholesale distribution of the brand, (2) a greater proportion of Ben Sherman's totale-commerce flash sales being retail sales, which generally have higher selling prices, during fiscal 2011, (3) the favorable foreign currency translation impact of a 3.8% change in average exchange rates between the two periods and (4) the $2.0generated $9.4 million of net sales associated with the previously exited women's and footwear businesses, muchin Fiscal 2012 compared to $3.1 million of which was sold at close out prices in fiscal 2010 with no suchnet sales in fiscalFiscal 2011. The reduced unit volume was primarily the resultAs of our continuing strategyFebruary 2, 2013, Lilly Pulitzer operated 19 retail stores compared to improve the wholesale distribution16 retail stores as of the brand, as reduced unit sales to certain moderate department stores have not yet been replaced with sales to targeted upper tier retailers, as well as the lack of close out sales associated with our previously exited women's and footwear businesses in fiscal 2011.increasedecrease in net sales for Lanier Clothes of $1.5 million, or 1.4%, was primarily due to increased net salesthe decrease in branded tailored clothing products. The average selling price per unit increased 6.7% as a result of the change in sales mix as our branded tailored clothing products, which typically have a higher average selling price than our private label products, represented a greater percentage of net sales for Lanier Clothes in fiscal 2011. A decrease in unit sales of 1.7% was primarily driven by the decreased sales in the private label businesses, which was$8.7 million partially offset by an increase in unitbranded sales of $7.2 million. The decrease in private label sales was primarily due to Fiscal 2011 benefiting from initial shipments related to a new product launch, while Fiscal 2012 sales were negatively impacted by a slow-down of the inventory intake on a replenishment program by a key customer as well as the exit from certain underperforming private label programs. In addition to higher branded sales generally, Fiscal 2012 also benefited from certain spring merchandise shipping in the fourth quarter of Fiscal 2012, which would have typically shipped in the first quarter of Fiscal 2013. The sales for Lanier Clothes were also negatively impacted by the continuing competitive factors in tailored clothing products.fiscalFiscal 2012.Gross Profit Fiscal 2012 Fiscal 2011 $ Change % Change Tommy Bahama $ 321,920 $ 276,567 $ 45,353 16.4 % Lilly Pulitzer 76,842 56,376 $ 20,466 36.3 % Lanier Clothes 30,264 34,108 (3,844 ) (11.3 )% Ben Sherman 39,430 46,473 (7,043 ) (15.2 )% Corporate and Other 1,101 (555 ) 1,656 NM Total $ 469,557 $ 412,969 $ 56,588 13.7 % LIFO charges included in Corporate and Other $ 4,043 $ 5,772 Charge related to write-up of acquired inventory included in Lilly Pulitzer $ — $ 996 Gross Profit Fiscal 2011 Fiscal 2010 $ Change % Change $ 412,969 $ 327,407 $ 85,562 26.1% 54.4 % 54.2 % $ 5,772 $ 3,792 $ 996 $ 764 Gross Margin Fiscal 2012 Fiscal 2011 Tommy Bahama 60.9 % 61.2 % Lilly Pulitzer 62.7 % 59.7 % Lanier Clothes 28.2 % 31.4 % Ben Sherman 48.1 % 50.8 % Corporate and Other NM NM Total 54.9 % 54.4 % TheAdditionally, gross profit was also impacted by the changes in gross margin by operating group, as discussed below. On a consolidated basis, the increase in gross margins from Fiscal 2011 to Fiscal 2012 was primarily due to (1) a $1.7 million net favorable impact in Fiscal 2012 resulting from a lower LIFO charge in Fiscal 2012, (2) a $1.0 million charge resulting from purchase accounting negatively impacting the Lilly Pulitzer gross margins in Fiscal 2011 with no such charge in Fiscal 2012 and (3) changes in the sales mix in fiscal 2011 compared to fiscal 2010.mix. The changes in sales mix included (1) the inclusion of Lilly Pulitzer operating results for a full year in fiscal 2011, and (2) direct to consumer sales, which generally have higher gross margins than wholesale sales, making up a larger proportion of both the Tommy Bahama and Lilly Pulitzer sales during Fiscal 2012. The change in sales mix was also attributable to Tommy Bahama and Lilly Pulitzer, which typically have higher gross margins than our other operating groups, representing a greater proportion of our consolidated net sales. These items, which positively impacted gross margins, were partially offset by the negative impact on our gross profit and gross margin of (1) product cost pressures that impacted our operating groups and (2) gross margin pressures at Ben Sherman and Lanier Clothes.of charges in fiscal 2011 compared to $3.8 million of charges in fiscal 2010, and (2) gross margin declines in Ben Sherman and Lanier Clothes in fiscalFiscal 2011. The $1.0 million and $0.8 million in fiscal 2011 and fiscal 2010, respectively, of charges to cost of goods sold in Lilly Pulitzer resulted from the write-up of acquired inventory to fair value pursuant to the purchase method of accounting in connection with the sale of acquired inventory. We do not anticipate there will be any such charges to cost of goods sold in Lilly Pulitzer in future years. Fiscal 2011 Fiscal 2010 $ Change % Change Fiscal 2012 Fiscal 2011 $ Change % Change $ 358,582 $ 301,975 $ 56,607 18.7% $ 410,737 $ 358,582 $ 52,155 14.5 % 47.2 % 50.0 % 48.0 % 47.2 % $ (1,155 ) $ — $ (1,155 ) — $ 3,212 — $ 848 — $ (2,242 ) fiscal 2011(1) higher costs, consisting primarily of employment and advertising expenses, to support the growing Tommy Bahama and Lilly Pulitzer businesses, including (1) $40.6support functions for retail, e-commerce and wholesale operations, (2) $17.0 million of incremental SG&A in Fiscal 2012 associated with operating additional domestic Tommy Bahama and Lilly Pulitzer (2)stores, including $6.7 million in SG&A charges associated with our Tommy Bahama New York restaurant-retail location which opened in the fourth quarter of Fiscal 2012 but incurred pre-opening rent for the majority of the 2012 Fiscal year, (3) $9.7 million of incremental SG&A associated with the costs of operating Tommy Bahamacertain infrastructure, pre-opening retail stores which opened during fiscal 2010 and fiscal 2011, (3) certain infrastructurestore rent and other costs related to the Tommy Bahama international expansion, and (4) the netapproximately $7 million impact of certain retail store asset impairments offsethaving an extra week of expenses in the 53-week Fiscal 2012 compared to the 52-week Fiscal 2011 and (5) higher SG&A for Corporate and Other primarily due to Fiscal 2011 being positively impacted by any associated write-offs of deferred rent credits associated with the impaired assets that were closed or are anticipated to be closed. These increases were partially offset by the death benefit of a corporate owned life insurance policy of approximately $1.2 million in fiscal 2011. In fiscal 2010, SG&A was impacted by $3.2 million of restructuring charges in Ben Sherman, $0.8 million of transaction costs associated with the Lilly Pulitzer acquisition and a $2.2 million reduction of an environmental reserve liability.in SG&A as a percentageresult of net sales benefitted from leveraging, as our net sales increased at a greater rate than the increaselife insurance death benefit gain and $1.8 million of transition services fee income. The increases in SG&A as certain SG&A costs do not fluctuate with sales levels. Amortization of intangible assets, which is included in SG&A and totaled approximately $1.2 million and $1.0 million in fiscal 2011 and fiscal 2010, respectively, reflects the amortization of acquired intangible assets for Tommy Bahama, Lilly Pulitzer and Ben Sherman. We anticipate thatCorporate and Other were partially offset by SG&A reductions in Lanier Clothes from Fiscal 2011 to Fiscal 2012. SG&A for Fiscal 2012 and Fiscal 2011 included charges of $1.0 million and $1.2 million, respectively, related to the amortization of intangible assets for fiscal 2012 will be approximately $0.9 million. Fiscal 2011 Fiscal 2010 $ Change % Change $ 2,400 $ 200 $ 2,200 NM Fiscal 2012 Fiscal 2011 $ Change % Change Change in fair value of contingent consideration $ 6,285 $ 2,400 $ 3,885 161.9 % theour acquisition of the Lilly Pulitzer brand and operations in Fiscal 2010, we entered into a contingent consideration agreement with the sellers, wherebyunder which we will beare obligated to pay certain contingent consideration amounts based on the achievement of certain performance criteria by our Lilly Pulitzer operating group, which payments may be as much as $20 million in the aggregate over the four years subsequent to the acquisition. In accordance with U.S. GAAP, we have recognized a liability in our consolidated balance sheets for the fair value of this liability. Thisliability at each balance sheet date. Generally, this liability increases in fair value as we approach the date of anticipated payment, resulting in a charge to our consolidated statements of earnings during that period. Thus,Further, if we determine that the probability of the amounts reflectedbeing earned changes, it would impact our assessment of the fair value in our statementsconsolidated balance sheet, resulting in a charge or income in our consolidated statement of earnings reflect the change in fair value of the contingent consideration obligations. Prior to the acquisition of the Lilly Pulitzer brand and operations, we did not have any contingent consideration arrangements requiring adjustment to fair value. The increase inat that time. Thus, change in fair value of contingent consideration was due to fiscal 2011 including a full year, whereas, fiscal 2010 only included a six week period. We anticipate thatreflects the current period impact of the change in the fair value of any contingent consideration for fiscalobligations.will be approximately $2.4 million; however,we increased the fair value of the contingent consideration by $6.3 million to reflect not only the passage of time, but also our determination that amount could change significantly depending upon whether there are any changes to our assumptions about the probabilitycertainty of the payment of the contingent consideration appropriate discount rate orrelated to the Lilly Pulitzer acquisition is more probable than we had determined in prior years based on our consideration of, among other factors. Fiscal 2011 Fiscal 2010 $ Change % Change $ 16,820 $ 15,430 $ 1,390 9.0% Fiscal 2012 Fiscal 2011 $ Change % Change Royalties and other operating income $ 16,436 $ 16,820 $ (384 ) (2.3 )% The increase in royaltieswasin Fiscal 2012 primarily duereflect income received from third parties from the licensing of our Tommy Bahama, Ben Sherman and Lilly Pulitzer brands, which were comparable on a consolidated basis to the royalty income associatedrecognized in Fiscal 2011 with the recently acquired Lilly Pulitzer business as well asa decrease in Ben Sherman royalty income in Fiscal 2012 being offset by increased royalty income in Ben Shermanboth Tommy Bahama and Tommy Bahama. Fiscal 2011 Fiscal 2010 $ Change % Change $ 64,171 $ 51,081 $ 13,090 25.6 % 14,278 (372 ) 14,650 NM (2,535 ) (2,664 ) 129 (4.8 )% 12,862 14,316 (1,454 ) (10.2 )% (19,969 ) (21,699 ) 1,730 8.0 % $ 68,807 $ 40,662 $ 28,145 69.2 % $ 5,772 $ 3,792 $ 996 $ 764 $ 2,400 $ 200 $ (1,155 ) $ — — $ 3,212 — $ 848 — $ (2,242 ) Fiscal 2012 Fiscal 2011 $ Change % Change Tommy Bahama $ 69,454 $ 64,171 $ 5,283 8.2 % Lilly Pulitzer 20,267 14,278 5,989 41.9 % Lanier Clothes 10,840 12,862 (2,022 ) (15.7 )% Ben Sherman (10,898 ) (2,535 ) (8,363 ) (329.9 )% Corporate and Other (20,692 ) (19,969 ) (723 ) (3.6 )% Total operating income $ 68,971 $ 68,807 $ 164 0.2 % LIFO charges included in Corporate and Other $ 4,043 $ 5,772 Charge related to write-up of acquired inventory included in Lilly Pulitzer $ — $ 996 Charge for increase in fair value of contingent consideration included in Lilly Pulitzer $ 6,285 $ 2,400 Life insurance death benefit gain included in Corporate and Other $ — $ (1,155 ) increasedwas $69.0 million in Fiscal 2012 compared to $68.8 million in fiscal 2011 from $40.7 million in fiscal 2010.Fiscal 2011. The $28.1 million0.2% increase in operating income was primarily due to (1) the inclusion of a full year of operating income forhigher net sales in Tommy Bahama and Lilly Pulitzer, including chargespartially offset by lower operating results in Lanier Clothes and Ben Sherman, SG&A increases in Tommy Bahama and Lilly Pulitzer related to expansion of these brands and a higher charge for the write-up of acquired inventory and increasechange in the fair value of contingent consideration (2) higher net sales and improved operating results in Tommy Bahama, (3) the impact on Corporate and Other in fiscal 2011 of an approximately $1.2 million gain associated with a corporate owned life insurance death benefit and (4) fiscal 2010 including the net impact of $3.2 million of restructuring charges, $0.8 million of acquisition transaction costs and a $2.2 million reduction of an environmental reserve liability. These positive items were partially offset by (1) the net $2.0 million impact of LIFO accounting charges and (2) lower operating results in Ben Sherman and Lanier Clothes resulting from competitive factors and product cost increases.Fiscal 2012. Changes in operating income by operating group are discussed below. Fiscal 2011 Fiscal 2010 $ Change % Change Fiscal 2012 Fiscal 2011 $ Change % Change $ 452,156 $ 398,510 $ 53,646 13.5% $ 528,639 $ 452,156 $ 76,483 16.9 % $ 64,171 $ 51,081 $ 13,090 25.6% $ 69,454 $ 64,171 $ 5,283 8.2 % 14.2 % 12.8 % 13.1 % 14.2 % sales. The increased sales werein each distribution channel, as discussed above, which resulted in higher gross profit, partially offset by increased SG&A associated with (1) operating additional retail stores in Fiscal 2012 resulting in $14.5 million of additional SG&A, including $6.7 million in SG&A charges associated with our Tommy Bahama New York restaurant-retail location which opened in the fourth quarter of Fiscal 2012 but incurred pre-opening rent for the majority of the 2012 Fiscal year, (2) incremental infrastructure, pre-opening retail store rent and other costs totaling $9.7 associated with Tommy Bahama's international expansion, (3) higher SG&A, consisting primarily of employment costs and advertising costs, to support the growing Tommy Bahama business, including the retail, e-commerce and wholesale businesses and (4) the approximately $5 million SG&A impact of Fiscal 2012 being a 53-week year compared to Fiscal 2011 being a 52-week year. Fiscal 2012 Fiscal 2011 $ Change % Change Net sales $ 122,592 $ 94,495 $ 28,097 29.7 % Operating income $ 20,267 $ 14,278 $ 5,989 41.9 % Operating income as % of net sales 16.5 % 15.1 % Charge related to write-up of acquired inventory $ — $ 996 Charge for increase in fair value of contingent consideration $ 6,285 $ 2,400 fiscal 2011, certain costs associated with Tommy Bahama's international expansion, andFiscal 2012, (3) the netapproximately $1 million impact of certain retail store impairments offset by any associated write-offsFiscal 2012 being a 53-week year, but Fiscal 2012 being a 52-week year and (4) the higher charge related to the fair value of deferred rent credits associated with retail stores that were closed or anticipated to be closed.Lilly Pulitzer: Fiscal 2011 Fiscal 2010 $ 94,495 $ 5,959 $ 14,278 $ (372 ) 15.1 % (6.2 )% $ 996 $ 764 $ 2,400 $ 200 We acquired the Lilly Pulitzer brand and operations on December 21, 2010. Therefore, therecontingent consideration. Fiscal 2012 was less than two months of operating income for Lilly Pulitzer included in our consolidated operating results in fiscal 2010. The operating results for fiscal 2011 reflect a significant increase in operating income from the prior year comparable period, which were not included in our consolidated operating results, due to an increase in sales in all channels of distribution, as discussed above. The fiscal 2011 operating results were negatively impacted by approximately $1.0 million of charges in the first quarter to cost of goods sold resulting from the write-up of acquired inventory to fair value pursuant to the purchase method of accounting in connection with the sale of acquired inventory. U.S. GAAP requires that all assets acquired as part of an acquisition, including inventory, be recorded at fair value, rather than its original cost. This write-up was recognized as an increase to cost of goods sold as the inventory is sold in the ordinary course of business. We do not anticipate that there will be any such charges to cost of goods sold in future periods. Additionally, the Lilly Pulitzer operating results for fiscal 2011 included a $2.4$6.3 million charge related tofor the change in the fair value of contingent consideration while the Fiscal 2011 charge was $2.4 million, as discussed above.
Lanier Clothes:Ben Sherman: Fiscal 2011 Fiscal 2010 $ Change % Change $ 91,435 $ 86,920 $ 4,515 5.2% $ (2,535 ) $ (2,664 ) $ 129 4.8% (2.8 )% (3.1 )% — $ 3,212 The operating loss for Ben Sherman was comparable for fiscal 2011 and fiscal 2010. The impact of higher sales as discussed above as well as lower SG&A were offset by gross margin erosion. The gross margin erosion for Ben Sherman primarily reflects higher product costs, which in most cases were not passed on to Ben Sherman customers. The lower SG&A in fiscal 2011 was primarily due to fiscal 2010 including $3.2 million of restructuring charges.Lanier Clothes: Fiscal 2012 Fiscal 2011 $ Change % Change Net sales $ 107,272 $ 108,771 $ (1,499 ) (1.4 )% Operating income $ 10,840 $ 12,862 $ (2,022 ) (15.7 )% Operating income as % of net sales 10.1 % 11.8 % Fiscal 2011 Fiscal 2010 $ Change % Change $ 108,771 $ 103,733 $ 5,038 4.9 % $ 12,862 $ 14,316 $ (1,454 ) (10.2 )% 11.8 % 13.8 % despite higher sales levels, was primarily the result of the lower sales and gross margins, partially offset by decreased SG&A related to lower employment costs and advertising costs. The continuing gross margin pressures resulted from both competitive factors and increased SG&A, including higherproduct cost pressures. Fiscal 2012 Fiscal 2011 $ Change % Change Net sales $ 81,922 $ 91,435 $ (9,513 ) (10.4 )% Operating loss $ (10,898 ) $ (2,535 ) $ (8,363 ) (329.9 )% Operating loss as % of net sales (13.3 )% (2.8 )% and advertising expensesincome, each as a result ofdiscussed above as well as certain severance costs associated with the higher branded sales, during fiscal 2011. Fiscal 2011 Fiscal 2010 $ Change % Change $ 12,056 $ 8,825 $ 3,231 36.6% $ (19,969 ) $ (21,699 ) $ 1,730 8.0% $ 5,772 $ 3,792 $ (1,155 ) $ — — $ 848 — $ (2,242 ) Fiscal 2012 Fiscal 2011 $ Change % Change Net sales $ 15,117 $ 12,056 $ 3,061 25.4 % Operating loss $ (20,692 ) $ (19,969 ) $ (723 ) (3.6 )% LIFO charges $ 4,043 $ 5,772 Life insurance death benefit gain $ — $ (1,155 ) improveddeclined by $1.7$0.7 million from a loss of $21.7 million in fiscal 2010 to a loss of $20.0 million in fiscal 2011.Fiscal 2011 to a loss of $20.7 million in Fiscal 2012. The improved operating results for fiscalFiscal 2012 reflect the net impact of LIFO accounting, with charges of $4.0 million and $5.8 million in Fiscal 2012 and Fiscal 2011, were primarily due to (1) lower employee compensation costs, (2)respectively. Fiscal 2011 operating income was also positively impacted by a $1.2 million death benefit gain from a corporate owned life insurance policy and inclusion of $1.8 million of transition services fee income related to our former Oxford Apparel operating group, which was sold in the fourth quarter of fiscal 2010, and (3) the death benefit from a corporate owned life insurance policy. These improved operating results were partially offset by the net $2.0 million impact of LIFO accounting charges between the two years. Fiscal 2010, Corporate and Other operating losswith no such fees being included the net impact of the $2.2 million reduction in an environmental reserve liability and $0.8 million of transaction costs associated with the Lilly Pulitzer acquisition. Fiscal 2011 Fiscal 2010 $ Change % Change $ 16,266 $ 19,887 $ (3,621 ) (18.2 )% Fiscal 2012 Fiscal 2011 $ Change % Change Interest expense, net $ 8,939 $ 16,266 $ (7,327 ) (45.0 )% fiscal 2011Fiscal 2012 decreased due to (1) our borrowing at lower interest rates in the second half of Fiscal 2012 compared to the second half of Fiscal 2011 and (2) our reduction in our average debt levels in the first half of Fiscal 2012 compared to the first half of Fiscal 2011 as a result of our repurchase of $45.0 million in aggregate principal amount of our 113/8% Senior Secured Notes duringTable the second and third quarters of ContentsfiscalFiscal 2011. Interest expense for both periods primarily reflects (1) interest incurred with respect toDuring the second half of Fiscal 2012, substantially all of our outstanding 113/8% Senior Secured Notes, (2) amortization of deferred financing costs associated with our outstanding 113/8% Senior Secured Notes andborrowings were under our U.S. Revolving Credit Agreement, and (3) interest associated with our U.K. Revolving Credit Agreement. Amortization of deferred financing costs, which is included in interest expense, net was $1.7 million and $2.0 million in fiscal 2011 and fiscal 2010, respectively, with the decrease in amortization of deferred financing costs also primarily being related to the repurchase of $45.0 millionwhereas substantially all of our 113/8%borrowings in the second half of Fiscal 2011 were from our Senior Secured Notes. As we repurchased $45.0 millionNotes, which had a coupon rate of 113/8%. The change in aggregate principal amount the source113/8%borrowings resulted from our redemption of the remaining outstanding Senior Secured Notes in fiscal 2011, interest expense for fiscal 2011 may not indicative of interest expense in future periods.secured notes Fiscal 2011 Fiscal 2010 $ Change % Change $ 9,017 $ — $ 9,017 NM Fiscal 2012 Fiscal 2011 $ Change % Change Loss on repurchase of senior notes $ 9,143 $ 9,017 $ 126 1.4 % fiscalthe second and third quarters of Fiscal 2011, we repurchased, in privately negotiated transactions, $45.0 million in aggregate principal amount of our 113/8% Senior Secured Notes for $52.2 million, plus accrued interest, using cash on hand.interest. The repurchase of the 113/8% Senior Secured Notes and related write-off of approximately $1.8 million of unamortized deferred financing costs and discount resulted in a loss on repurchase of senior secured notes$9.0 million in Fiscal 2011.approximately $9.0our Senior Secured Notes for $111.0 million, plus accrued interest, using borrowings under our U.S. Revolving Credit Agreement. The redemption of the Senior Secured Notes and related write-off of $3.1 million of unamortized deferred financing costs and discount resulted in a loss of $9.1 million. Fiscal 2011 Fiscal 2010 $ Change % Change Fiscal 2012 Fiscal 2011 $ Change % Change $ 14,281 $ 4,540 $ 9,741 214.6% $ 19,572 $ 14,281 $ 5,291 37.0 % 32.8 % 21.9 % 38.5 % 32.8 % fiscal 2011Fiscal 2012 increased compared to fiscal 2010,Fiscal 2011, primarily due to higher earnings in fiscal 2011Fiscal 2012 as well as an increase in the effective tax rate. Income taxes for both periodsFiscal 2012 were impacted by losses in foreign jurisdictions for which we were not able to recognize an income tax benefit and a greater proportion of our earnings being in jurisdictions with higher tax rates, which was offset by favorable discrete items during the period, including the reduction in income tax contingency reserves by $2.2 million related to the expiration of the corresponding statute of limitations, the impact of a change in our assertion of permanent reinvestment of foreign earnings, and a reduction in enacted tax rates in certain jurisdictions. Income taxes for Fiscal 2011 were impacted by certain favorable discrete items, including a decrease inthe reduction of income tax contingency reserves upon the expiration of the corresponding statute of limitations, favorable permanent differences and tax credits which do not necessarily fluctuate with earnings and net changes in the value of deferred tax assets and liabilities due to changesa reduction in enacted tax rates. The impact of these discrete items on the effective tax rate was much more significantrates in fiscal 2010 due to the lower earnings level in fiscal 2010 and their magnitude. We anticipate that the effective tax rate, before the impact of any discrete items, for future periods will be higher than the effective tax rate for fiscal 2011 or fiscal 2010 if our earnings levels increasecertain jurisdictions, as well as the incremental earnings will be taxed at rates more closely aligned with statutoryrecognition of an income tax rates. Fiscal 2011 Fiscal 2010 $ 29,243 $ 16,235 $ 1.77 $ 0.98 $ 137 $ 62,423 $ 0.01 $ 3.77 $ 29,380 $ 78,658 $ 1.78 $ 4.75 16,529 16,551 Fiscal 2012 Fiscal 2011 Earnings from continuing operations $ 31,317 $ 29,243 Earnings from continuing operations per diluted share $ 1.89 $ 1.77 Weighted average common shares outstanding-diluted 16,586 16,529 the inclusion of the(1) higher sales in Tommy Bahama and Lilly Pulitzer, operating results, higher operating income in our Tommy Bahama operating group(2) lower interest expense due to lower borrowings and lower interest expense, partially offset by the $9.0 million loss on repurchase of $45.0 million of our 113/8% Senior Secured Notes,rates in Fiscal 2012 and (3) no purchase accounting adjustments in Fiscal 2012, each as discussed above. Earnings from discontinued operations reflect the operations related to substantially all of our former Oxford Apparel operating group, which we sold in the fourth quarter of fiscal 2010. The operating results of the discontinued operations reflect substantially all of the normal operating activities of our former Oxford Apparel operating group in the first eleven months of fiscal 2010 as well as the gain on sale in fiscal 2010. However, the fiscal 2011 earnings from discontinued operations reflect certain wind-down and transition activities and an adjustment to the gain on sale upon finalization of the working capital adjustment in fiscal 2011. We do not anticipate significant operating income (loss) or cash flows associated with discontinued operations subsequent to fiscal 2011.FISCAL 2010 COMPARED TO FISCAL 2009 The discussion and tables below compares certain line items included in our statements of earnings for fiscal 2010 to fiscal 2009. Each dollar and percentage change provided reflects the change between these periods unless indicated otherwise. Each dollar and share amount included in the tables is in thousands except for per share amounts.Net Sales Fiscal 2010 Fiscal 2009 $ Change % Change $ 398,510 $ 363,084 $ 35,426 9.8 % 5,959 — 5,959 NM 86,920 102,309 (15,389 ) (15.0 )% 103,733 114,542 (10,809 ) (9.4 )% 8,825 5,371 3,454 64.3 % $ 603,947 $ 585,306 $ 18,641 3.2 % Consolidated net sales increased $18.6 million, or 3.2%, in fiscal 2010 compared to fiscal 2009. The increase in net sales was primarily a result of the changes in each operating group discussed below as well as the inclusion of sales for Lilly Pulitzer in fiscal 2010 subsequent to our acquisition on December 21, 2010. Fiscal 2010 included $2.5 million of sales related to businesses that we have exited in Ben Sherman and Lanier Clothes compared to $20.8 million of such sales in fiscal 2009.Tommy Bahama: The increase in net sales for Tommy Bahama was primarily due to improved comparable retail store sales, sales at retail stores opened during fiscal 2009 and fiscal 2010, higher e-commerce sales and higher wholesale sales. Tommy Bahama apparel unit sales increased 14.1%, which was a result of the improvement in all channels of distribution. The average selling price per unit decreased by 3.2% due to Tommy Bahama offering more items at entry level price points below $100 and women's, home and gift items, which carry a lower average unit price than men's, making up a higher proportion of Tommy Bahama's sales mix.Lilly Pulitzer: We acquired Lilly Pulitzer on December 21, 2010. Therefore, fiscal 2010 reflects approximately six weeks of net sales that totaled $6.0 million for Lilly Pulitzer while the prior year includes no net sales for Lilly Pulitzer.Ben Sherman: The decrease in net sales for Ben Sherman was primarily due to a 17.8% reduction in unit sales largely resulting from our exit from and subsequent licensing of our footwear and kids' businesses and our exit from our women's operations during fiscal 2009. Net sales related to the footwear, kids' and women's businesses totaled approximately $2.1 million in fiscal 2010 compared to $17.2 million in fiscal 2009. Net sales were also negatively impacted by a 2.1% decrease in the average exchange rate of the British pound sterling versus the United States dollar during fiscal 2010 compared to the average exchange rate for fiscal 2009. The impact of the exited businesses and the exchange rate were partially offset by an increase in retail sales in fiscal 2010. The average selling price per unit for Ben Sherman increased 3.4% as retail sales represented a greater proportion of total Ben Sherman sales during fiscal 2010 and there were fewer off-price sales in fiscal 2010. Fiscal 2009 included more off-price sales associated with the exited businesses.Lanier Clothes: The decrease in net sales for Lanier Clothes was primarily due to a reduction in unit sales of 10.8%, which was driven by lower sales in our private label businesses and the inclusion of approximately $3.6 million of net sales in fiscal 2009 related to businesses that we have exited. These decreases in net sales were partially offset by higher sales in our branded tailored clothing business. The average selling price per unit increased 1.5% as a result of the change in sales mix as private label products typically have a lower selling price than branded products and many of the sales of the products for businesses that we exited were off-price, close out sales.Corporate and Other: Corporate and Other primarily consists of the net sales of our Oxford Golf business and our Lyons, Georgia distribution center. The increase in the net sales for Corporate and Other are primarily driven by the higher net sales in our Oxford Golf business during fiscal 2010.Gross Profit Fiscal 2010 Fiscal 2009 $ Change % Change $ 327,407 $ 290,813 $ 36,594 12.6% 54.2 % 49.7 % $ 3,792 $ 4,943 — $ 355 $ 764 — The increase in gross profit was primarily due to higher net sales and increased gross margins. The increase in gross margins was primarily due to changes in the sales mix for fiscal 2010 compared to fiscal 2009. The changes in sales mix included (1) direct to consumer sales, which generally have higher gross margins than wholesale sales, making up a larger proportion of Tommy Bahama sales, (2) Tommy Bahama sales representing a larger proportion of our consolidated net sales, (3) fewer close out sales in Ben Sherman as fiscal 2009 included sales associated with footwear, kids' and women's operations, which we exited, (4) the inclusion of $0.4 million of restructuring charges in Ben Sherman in 2009 associated with our exit from the Ben Sherman footwear, kids' and women's operations, (5) a sales mix change in Lanier Clothes towards branded products and (6) the impact of LIFO accounting charges which totaled $3.8 million and $4.9 million in fiscal 2010 and fiscal 2009, respectively. These positive items were partially offset by the negative impact on our gross profit of approximately $0.8 million of charges to cost of goods sold(1) lower sales and operating results at Lanier Clothes and Ben Sherman, (2) higher SG&A in Tommy Bahama and Lilly Pulitzer resulting fromto support the write-upcontinued growth and expansion of acquired inventory fromcost to fair value pursuant to the purchase method of accounting in connection with the sale of acquired inventory. Our gross profit may not be directly comparable to those of our competitors, as statement of earnings classification of certain expenses may vary by company.SG&A Fiscal 2010 Fiscal 2009 $ Change % Change $ 301,975 $ 283,706 $ 18,269 6.4% 50.0 % 48.5 % $ 3,212 $ 2,201 $ 848 — $ (2,242 ) — $ 973 $ 1,217 The increase in SG&A was primarily due to fiscal 2010 including (1) costs associated with the resumption of our incentive compensation program, which was suspended in fiscal 2009 and is tied to our financial performance, which impacted SG&Athese brands, (3) a more significant charge for each of our operating groups, (2) the incremental SG&A associated with the costs of operating retail stores which opened during fiscal 2009 and fiscal 2010, (3) SG&A costs associated with Lilly Pulitzer subsequent to our acquisition and (4) transaction costs associated with the Lilly Pulitzer acquisition totaling $0.8 million. Additionally, SG&A was impacted by the impact of restructuring charges which totaled $3.2 million in fiscal 2010 and $2.2 million in fiscal 2009. The fiscal 2010 restructuring costs primarily related to lease termination charges related to two Ben Sherman retail stores in the United Kingdom and certain fixed asset impairment charges in Ben Sherman. The fiscal 2009 restructuring charges included $2.0 million related to charges associated with our exit from the Ben Sherman women's, footwear and kids' operations, as well as other streamlining initiatives, and $0.5 million related to the impairment of certain leasehold improvements associated with a Tommy Bahama New York office lease. These increased charges to SG&A were partially offset by the $2.2 million of decrease in SG&A in fiscal 2010 resulting from a reduction in our estimate of expected remediation costs associated with an existing environmental reserve.Changechange in fair value of contingent consideration Fiscal 2010 Fiscal 2009 $ Change % Change $ 200 $ — $ 200 100.0% In connection with the acquisition of the Lilly Pulitzer brand and operations, we entered into a contingent consideration agreement with the sellers, whereby we will be obligated to pay certain contingent consideration amounts based on the achievement of certain performance criteria by our Lilly Pulitzer operating group, which may be as much as $20 million in the aggregate over the four years subsequent to the acquisition. In accordance with U.S. GAAP, we have recognized a liability in our consolidated balance sheets for the fair value of this liability. This liability increases in fair value as we approach the date of anticipated payment, resulting in a charge to our consolidated statements of earnings. Additionally, the fair value of the contingent consideration may change in future periods to the extent that our assumptions regarding the probability of the payment of the contingent consideration, discount rates and other factors change as part of our periodic assessment of the fair value of the liability.Royalties and other operating income Fiscal 2010 Fiscal 2009 $ Change % Change $ 15,430 $ 11,803 $ 3,627 30.7% The increase in royalties and other operating income was primarily due to increased royalty income in Tommy Bahama, as sales reported by certain licensees increased and new licensees were added as well as the impact of a payment received related to the termination of the license for Tommy Bahama rum in fiscal 2010.Operating income (loss) Fiscal 2010 Fiscal 2009 $ Change % Change $ 51,081 $ 37,515 $ 13,566 36.2% (372 ) — (372 ) NM (2,664 ) (8,616 ) 5,952 69.1% 14,316 12,389 1,927 15.6% (21,699 ) (22,378 ) 679 3.0% $ 40,662 $ 18,910 $ 21,752 115.0% $ 3,792 $ 4,943 $ 764 — $ 200 — $ 848 — $ 3,212 $ 2,556 $ (2,242 ) — Operating income, on a consolidated basis, increased to $40.7 million in fiscal 2010 from $18.9 million in fiscal 2009. The $21.8 million increase in operating income was primarily due to (1) increased net sales, (2) improved gross margins and (3) higher royalty income, which were partially offset by (1) increased SG&A, (2) the impact of restructuring charges of $3.2 million for fiscal 2010 and $2.6 million for fiscal 2009, (3) inventory mark-up charges associated with purchase accounting of $0.8 millionFiscal 2012, and (4) transaction costs associated with the Lilly Pulitzer acquisition of $0.8 million. Additionally, operating income included charges for LIFO accounting of $3.8 million in fiscal 2010 and $4.9 million in fiscal 2009. Fiscal 2010 also included a $2.2 million of decrease in SG&A resulting from a reduction in our estimate of remediation costs associated with an existing environmental reserve. Changes in operating income by operating group are discussed below.Tommy Bahama: Fiscal 2010 Fiscal 2009 $ Change % Change $ 398,510 $ 363,084 $ 35,426 9.8% $ 51,081 $ 37,515 $ 13,566 36.2% 12.8 % 10.3 % $ — $ 534 The increase in operating income for Tommy Bahama was primarily due to the increased net sales, improved gross margins due to a greater proportion of direct to consumer sales as a percentage of total Tommy Bahama sales and higher royalty income, which were partially offset by increased SG&Aassociated with higher incentive compensation expense, the costs of operating additional retail stores during fiscal 2010 and other overhead cost increases.Lilly Pulitzer: Fiscal 2010 Fiscal 2009 $ 5,959 $ — $ (372 ) $ — (6.2 )% — $ 764 $ — $ 200 $ — We acquired Lilly Pulitzer on December 21, 2010. Therefore, fiscal 2010 reflects approximately six weeks of operating income for Lilly Pulitzer while the prior year includes no operating income for Lilly Pulitzer. The six weeks of fiscal 2010 operating results were negatively impacted by approximately $0.8 million of charges to cost of goods sold in Lilly Pulitzer resulting from the write-up of acquired inventory from cost to fair value pursuant to the purchase method of accounting in connection with the sale of acquired inventory. U.S. GAAP requires that all assets acquired as part of an acquisition, including inventory, be recorded at fair value, rather than cost. This write-up was recognized as an increase to cost of goods sold as the inventory is sold in the ordinary course of business. Additionally, the Lilly Pulitzer operating results included a $0.2 million charge related to the change in the fair value of the contingent consideration. U.S. GAAP requires that we estimate the fair value of the contingent consideration periodically, with any change in the fair value being included in the statement of earnings during that period.Ben Sherman: Fiscal 2010 Fiscal 2009 $ Change % Change $ 86,920 $ 102,309 $ (15,389 ) (15.0 )% $ (2,664 ) $ (8,616 ) $ 5,952 69.1 % (3.1 )% (8.4 )% $ 3,212 $ 2,022 The improved operating results for Ben Sherman were primarily due to increased gross margins and reduced SG&A, driven by our exit from and subsequent licensing of the footwear and kids' businesses, our exit from the women's operations and other streamlining initiatives. Fiscal 2010 included $3.2 million of charges associated with our termination of two retail store leases in the United Kingdom and fixed asset impairment charges, while 2009 SG&A included $2.0 million of restructuring charges primarily related to our exit from and subsequent licensing of the footwear and kids' businesses and other streamlining initiatives.Lanier Clothes: Fiscal 2010 Fiscal 2009 $ Change % Change $ 103,733 $ 114,542 $ (10,809 ) (9.4 )% $ 14,316 $ 12,389 $ 1,927 15.6 % 13.8 % 10.8 % The increase in operating income for Lanier Clothes was primarily a result of improved gross margins due to sales mix, with branded sales representing a greater proportion of Lanier Clothes' sales in fiscal 2010, and close out sales associated with exited businesses being included in net sales fiscal 2009. The improved gross margins were partially offset by increased SG&A, resulting from higher incentive compensation expense and the higher cost structure generally associated with branded businesses.Corporate and Other: Fiscal 2010 Fiscal 2009 $ Change % Change $ 8,825 $ 5,371 $ 3,454 64.3% $ (21,699 ) (22,378 ) 679 3.0% $ 3,792 $ 4,943 $ 848 — $ (2,242 ) — The Corporate and Other operating results improved by $0.7 million from a loss of $22.4 million in fiscal 2009 to a loss of $21.7 million in fiscal 2010. Fiscal 2010 and fiscal 2009 included LIFO accounting charges of $3.8 million and $4.9 million, respectively. Fiscal 2010 also included $0.8 million of transaction costs associated with the acquisition of Lilly Pulitzer, which were expensed as incurred, and a $2.2 million reduction in our estimate of expected remediation costs associated with an existing environmental reserve. Aside from the impact of LIFO accounting charges, the transaction costs associated with the Lilly Pulitzer acquisition and the reduction in the environmental reserve, the reduced operating results were primarily due to higher incentive compensation costs resulting from the resumption of our incentive compensation program, which was suspended in fiscal 2009 and is tied to our financial performance.Interest expense, net Fiscal 2010 Fiscal 2009 $ Change % Change $ 19,887 $ 18,710 $ 1,177 6.3% Interest expense for fiscal 2010 increased compared to fiscal 2009, after reclassifying all interest related to our U.S. Revolving Credit Agreement to discontinued operations. The increase in interest expense was primarily due to higher interest rates in fiscal 2010, which resulted from the June 2009 replacement of our 87/8% senior unsecured notes due 2011 with our 113/8% Senior Secured Notes.Loss on repurchase of senior notes Fiscal 2010 Fiscal 2009 $ Change % Change $ — $ 1,759 $ (1,759 ) (100.0 )% Fiscal 2009 included a $1.8 million write-off of unamortized deferred financing costs and discount related to our 87/8% senior unsecured notes due 2011, which were satisfied and discharged in June 2009. No loss on repurchase of senior notes was incurred in fiscal 2010.Income taxes Fiscal 2010 Fiscal 2009 $ Change % Change $ 4,540 $ (2,945 ) $ 7,485 NM 21.9 % NM Income taxes for both periods were impacted by certain discrete items, including a decrease in income tax contingency reserves upon the expiration of the corresponding statute of limitations, favorable permanent differences and tax credits which do not necessarily fluctuate with earnings.Net earnings Fiscal 2010 Fiscal 2009 Change $ 16,235 $ 1,386 $ 14,849 $ 0.98 $ 0.09 $ 0.89 $ 62,423 $ 13,238 $ 49,185 $ 3.77 $ 0.81 $ 2.96 $ 78,658 $ 14,624 $ 64,034 $ 4.75 $ 0.90 $ 3.85 16,551 16,304 247 The increase in earnings from continuing operations was primarily due to higher net sales with a higher gross margin resulting from a change in sales mix and higher royalty income, but partially offset by higher SG&A,effective tax rate during Fiscal 2012, each as discussed above. The increased results of the discontinued operations reflects the $49.5 million after-tax gain on the sale of substantially all the operations and assets of our former Oxford Apparel operating group, partially offset by the impact of fiscal 2010 including 11 months of activity prior to the sale (compared with 12 months of activity in fiscal 2009).distribution in the United States and, to a lesser extent, the United Kingdom.distribution. Our primary uses of cash flow include the acquisition of apparel products in the operation of our business, as well as operating expenses including employee compensation and benefits, occupancy related costs, funding of capital expenditures for new and remodeled retail stores, marketing and advertising costs, other general and administrative operating expenses and the payment of periodic interest payments related to our financing arrangements,arrangements. Additionally we use cash for the funding of capital expenditures, payment of our quarterly indebtedness.customers in both our direct to consumer and wholesale operations, in the ordinary course of business, we maintain certain levels of inventory and we also extend credit to our wholesale customers, resulting in a certain amount of required working capital to operate our business. If cash inflows are less than cash outflows, we have access to amounts under our U.S. Revolving Credit Agreement and U.K. Revolving Credit Agreement, subject to their terms, each of which is described below. We may seek to finance future capital investment programs through various methods, including, but not limited to, cash on hand, cash flow from operations, borrowings under our current or futureadditional credit arrangementsfacilities and sales of debt or equity securities. Although our net sales, operating income and operating cash flows were impacted by the uncertain economic conditions that began in fiscal 2008, we have maintained positive operating cash flows for each fiscal year during these uncertain economic conditions, and we anticipate net sales and operating cash flows will increase as economic conditions continue to improve. Also, we believe we have maintained a strong balance sheet and liquidity through various actions taken in recent years including (1) purchasing inventory at levels which mitigated inventory markdown risk and promotional pressure, as appropriate, (2) reducing working capital levels, (3) reducing our corporate overhead costs, (4) exiting certain underperforming businesses in Ben Sherman and Lanier Clothes, (4) reducing our capital expenditures related to new store openings during the economic downturn and (5) divesting substantially allthe operations and assets of our former Oxford Apparel operating group in January 2011. As a result of these actions in the preceding years and positive operating cash flows, we were able to (1) purchase the Lilly Pulitzer brand and operations on December 21, 2010 for $60 million plus up to $20 million of contingent consideration dependent upon the acquired business meeting certain earnings thresholds, (2) repurchase $45 million in aggregate principal of our 113/8% Senior SecuredNotes for approximately $52.2 million, plus accrued interest, in fiscal 2011 and (3) invest approximately $35.3 million in capital expenditures in fiscal 2011. After all of these events,February 1, 2014 we had approximately $13.4$8.5 million of cash on hand aswith $141.6 million of January 28, 2012 with no borrowings outstanding and $148.1$96.5 million of availability under our $175 million U.S. Revolving Credit agreement.revolving credit agreements. We believe our balance sheet and anticipated positive cash flows from operating activities in the future provides us with ample opportunity to continue to invest in our brands and our direct to consumer initiatives in future periods and potentially replace our 113/8% Senior Secured Notes with lower cost borrowings in July 2012. January 28, 2012 January 29, 2011 $ Change % Change February 1, 2014 February 2, 2013 $ Change % Change $ 215,273 $ 268,913 $ 53,640 19.9 % 117,554 147,091 (29,537 ) (20.1 )% Total current assets $ 271,032 $ 222,390 $ 48,642 21.9 % Total current liabilities 133,046 124,266 8,780 7.1 % $ 97,719 $ 121,822 $ (24,103 ) (19.8 )% $ 137,986 $ 98,124 $ 39,862 40.6 % 1.83 1.83 2.04 1.79 34 % 45 % 35 % 34 % liabilities, including assets and liabilities related to discontinued operations. Bothliabilities. Our current assets increased significantly at February 1, 2014 as compared to February 2, 2013 resulting in a significantly higher working capital and current liabilities decreased significantly from January 29, 2011 to January 28, 2012, primarily as a result of the conversion of the $57.7 million of assets related to discontinued operations,working capital ratio as of January 29, 2011, to cash and the payment of the $40.7 million of liabilities related to discontinued operations, as of January 29, 2011, as well as the impactFebruary 1, 2014. Changes in each of our repurchase of $45.0 million in aggregate principal amount of 113/8% Senior Secured Notes for approximately $52.2 million, plus accrued interest, during fiscal 2011. The other changes in our current assets and liabilitiesworking capital accounts are discussed below.$106.0$141.6 million at January 28, 2012February 1, 2014 and $147.1$116.5 million at January 29, 2011,February 2, 2013, while shareholders' equity was $204.1$260.2 million at January 28, 2012February 1, 2014 and $180.0$229.8 million at January 29, 2011.February 2, 2013. The change in thecomparable debt to total capital ratio from January 29, 2011 to January 28, 2012 was primarily a result of our repurchase of $45.0 millionat February 1, 2014 and February 2, 2013 reflects an increase in aggregate principal amount of our 113/8% Senior Secured Notes in fiscal 2011 and earnings from continuing operations during fiscal 2011, which resulted indebt, but also an increase in shareholders' equity. The increase in debt was primarily due to (1) $43.4 million of capital expenditures incurred in Fiscal 2013, (2) the $17.9 million payment related to the acquisition of our former licensee's Tommy Bahama operations in Canada, (3) $11.9 million of dividends paid on our common stock in Fiscal 2013, and (4) $5.6 million of net cash used in financing activities related to stock transactions with employees associated with stock-based awards, which in the aggregate exceeded the $52.7 million of cash flows from operations during Fiscal 2013. Shareholders' equity during the year.increased from February 2, 2013, primarily as a result of net earnings less dividends paid in Fiscal 2013. Our debt levels and ratio of debt to total capital in future periods may not be comparable to historical amounts as we continue to assess, and possibly make changes to, our capital structure. Changes in our capital structure in the future, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. The amounts involved may be material.January 28, 2012February 1, 2014 compared to January 29, 2011. January 28, 2012 January 29, 2011 $ Change % Change February 1, 2014 February 2, 2013 $ Change % Change $ 13,373 $ 44,094 $ (30,721 ) (69.7 )% $ 8,483 $ 7,517 $ 966 12.9 % 59,706 50,177 9,529 19.0 % 75,277 62,805 12,472 19.9 % 103,420 85,338 18,082 21.2 % 143,712 109,605 34,107 31.1 % 19,041 12,554 6,487 51.7 % 23,095 19,511 3,584 18.4 % 19,733 19,005 728 3.8 % 20,465 22,952 (2,487 ) (10.8 )% 215,273 211,168 4,105 1.9 % — 57,745 (57,745 ) NM $ 215,273 $ 268,913 $ (53,640 ) NM $ 271,032 $ 222,390 $ 48,642 21.9 % January 28, 2012 decreased comparedFebruary 1, 2014 reflects a typical cash amount maintained on an ongoing basis in our operations, which generally ranges from $5 million to $10 million. Any excess cash and cash equivalents as of January 29, 2011 duegenerally is used to the net impact in fiscal 2011 of cash flow used by us to (1) repurchase $45.0 million in aggregate principal amount ofrepay amounts outstanding under our 113/8% Senior Secured Notes for approximately $52.2 million, plus accrued interest, (2) our $35.3 million of capital expenditures during fiscal 2011, (3) increases in working capital requirements as our business continues to grow, and (4) the payment of $8.6 million of dividends, which in the aggregate were partially offset by (1) positive cash flows generated from our continuing operations and (2) the conversion of the net assets related to our discontinued operations into cash.revolving credit agreements, if any. Receivables, net as of January 28, 2012February 1, 2014 increased compared to January 29, 2011February 2, 2013 primarily due to the increasedsignificantly higher wholesale sales in our Lanier Clothes operating groupsgroup in the last two months of fiscal 2011Fiscal 2013 compared to the last two months of fiscal 2010. Fiscal 2012 and higher credit card receivables as of February 1, 2014 due to higher credit card transactions near year-end that had not yet been remitted to us at year-end.January 28, 2012February 1, 2014 increased from January 29, 2011February 2, 2013 in each of our operating groups. These increases were primarily due to an increasethe earlier shipment of product from our suppliers, in part due to the timing of the Chinese New Year holiday, and to support anticipated sales and growth as well as the timing of spring 2012 shipments, which were received earlier in fiscal 2011 compared to fiscal 2010, and the increased product cost of inventories at January 28, 2012.growth. The increase in prepaid expenses, net from January 29, 2011February 2, 2013 to January 28, 2012February 1, 2014 was primarily due to the increasetiming of payments and recognition of the related expense for certain prepaid items, including rent, product samples, certain operating expense contracts, retail packaging supplies, advertising and other operating expenses, which were partially offset by a reduction in prepaid taxes and otheras we were in an income tax payable position at February 1, 2014 compared to a prepaid expenses.position at February 2, 2013. Deferred tax assets have increaseddecreased from January 29, 2011February 2, 2013 primarily as a result of the changereductions in timing differencesdeferred tax assets associated with inventory,accrued compensation, which were partially offset by changes related to accruals for compensation and other liabilities. The decrease in deferred tax assets related to discontinued operations was the result of the conversion of the assets related to discontinued operations into cash during fiscal 2011. January 28, 2012 January 29, 2011 $ Change % Change February 1, 2014 February 2, 2013 $ Change % Change $ 93,206 $ 83,895 $ 9,311 11.1 % $ 141,519 $ 128,882 $ 12,637 9.8 % 165,193 166,680 (1,487 ) (0.9 )% 173,023 164,317 8,706 5.3 % 16,495 16,866 (371 ) (2.2 )% 17,399 17,275 124 0.7 % 19,040 22,117 (3,077 ) (13.9 )% 24,332 23,206 1,126 4.9 % $ 293,934 $ 289,558 $ 4,376 1.5 % $ 356,273 $ 333,680 $ 22,593 6.8 % January 28, 2012February 1, 2014 was primarily due to the fiscal 2011 capital expenditures during Fiscal 2013, which were partially offset by fiscal 2011 depreciation expense including any fixed asset impairment charges.in Fiscal 2013. The decreaseincrease in intangible assets, net was primarily due to fiscal 2011the intangible assets associated with Tommy Bahama Canada, which was acquired in Fiscal 2013, partially offset by the amortization of intangible assets associated with Tommy Bahama, Lilly Pulitzer and Ben Sherman.Sherman in Fiscal 2013. The decreaseincrease in goodwill from February 2, 2013 was primarily related to certain adjustments to the opening balance sheetgoodwill associated with our acquisition of Lilly Pulitzer which were recognizedthe Tommy Bahama business in fiscal 2011.Canada from our former licensee that operated that business. The decreaseincrease in other non-current assets was primarily due to the amortization and write-off of deferred financing costs and a decrease inhigher asset balances set aside for potential deferred compensation assets during fiscal 2011. January 28, 2012 January 29, 2011 $ Change % Change $ 117,554 $ 106,306 $ 11,248 10.6 % 103,405 147,065 (43,660 ) (29.7 )% February 1, 2014 February 2, 2013 $ Change % Change Total current liabilities $ 133,046 $ 124,266 $ 8,780 7.1 % Long-term debt 137,592 108,552 29,040 26.8 % 10,645 10,745 (100 ) (0.9 )% 12,225 14,450 (2,225 ) (15.4 )% 38,652 44,696 (6,044 ) (13.5 )% 51,520 44,572 6,948 15.6 % 34,882 28,846 6,036 20.9 % 32,759 34,385 (1,626 ) (4.7 )% $ 305,138 $ 337,658 (32,520 ) (9.6 )% $ — $ 40,785 (40,785 ) NM $ 305,138 $ 378,443 $ (73,305 ) NM $ 367,142 $ 326,225 40,917 12.5 % current liabilitieslong-term debt was primarily due to the increase in accounts payable and accrued expenses due to higher inventory purchases near year end in fiscal 2011 to support higher anticipated sales for spring 2012 as well as the $2.5(1) $43.4 million of contingent consideration earnedcapital expenditures incurred in Fiscal 2013, (2) the $17.9 million payment related to the acquisition of our former licensee's Tommy Bahama operations in Canada, (3) $11.9 million of dividends paid on our common stock in Fiscal 2013 and payable as(4) $5.6 million of January 28, 2012.net cash used in financing activities related to stock transactions with employees associated with stock-based awards, which in the aggregate exceeded the $52.7 million of cash flows from operations during Fiscal 2013. The changedecrease in non-current contingent consideration from January 29, 2011 to January 28, 2012 reflectsat February 1, 2014 was primarily the increase in the fair valueresult of $2.5 million of the contingent consideration offset byobligationreclassificationamount is expected to be paid in the first quarter of $2.5 million of contingent consideration to contingent consideration earned and payable, which is included in current liabilities. The decrease in otherFiscal 2014. Other non-current liabilities increased as of February 1, 2014 compared to the prior year primarily resulted from the decreasesdue to increases in the deferred rent and deferred compensation balances during fiscal 2011.liabilities. Non-current deferred income taxes have increased from January 29, 2011decreased at February 1, 2014 primarily as a result of thea change in timingthe book to tax differences associated with depreciable assets. The decrease in liabilities related to discontinued operations was a resultdeferred rent and accrued compensation balances partially offset by the impact of the payment of the remaining liabilities associated with the discontinued operations during fiscal 2011. Fiscal 2011 Fiscal 2010 Fiscal 2009 Fiscal 2013 Fiscal 2012 Fiscal 2011 $ 44,645 $ 35,691 $ 60,975 $ 52,734 $ 67,098 $ 44,247 (35,708 ) (71,553 ) (11,297 ) (59,130 ) (62,515 ) (35,708 ) (57,216 ) (11,223 ) (65,026 ) Net cash provided by (used in) financing activities 6,938 (10,594 ) (56,818 ) 17,479 82,860 20,579 — — 17,479 $ (30,800 ) $ 35,775 $ 5,231 $ 542 $ (6,011 ) $ (30,800 ) Fiscal 2011 Compared to Fiscal 2010 $44.1 million at January 28, 2012, and January 29, 2011, respectively. Changes in cash flows in fiscalFiscal 2013, Fiscal 2012 and Fiscal 2011 and fiscal 2010 related to operating activities, investing activities, financing activities and discontinued operations are discussed below. TheFiscal 2013 and Fiscal 2012, operating cash flows for fiscal 2011 and fiscal 2010 of $44.6activities provided $52.7 million and $35.7$67.1 million of cash, respectively. The cash flow from operating activities was primarily the result of net earnings for the relevant period adjusted, as applicable, for non-cash activities such as depreciation, amortization, stock compensation expense, change in fair value of contingent consideration, loss on repurchase of senior notes and the net impact of changes in our working capital accounts, as applicable. The lower cash flow from operating activities, despite the higher earnings, for Fiscal 2013 was primarily due to Fiscal 2012 earnings including a $9.1 million loss on repurchase of senior notes and Fiscal 2013 having less favorable changes in working capital accounts, as compared to the same period in the prior year. In Fiscal 2013, the more significant changes in working capital were increases in inventories and receivables, each of which reduced cash flow from operations, which was partially offset by an increase in current liabilities and non-current liabilities. In Fiscal 2012, the more significant changes in working capital were an increase in inventories and receivables and other non-current assets, each of which reduced cash flow from operations, which was partially offset by an increase in other non-current liabilities.andas well as the loss on repurchase of senior secured notes as well asand the net impact of changes in our working capital accounts. TheIn Fiscal 2012, the more significant changes in working capital were an increase in inventories and receivables and other non-current assets, each of which reduced cash flow from operations, between the two periodswhich was primarily due to the higher earningspartially offset by an increase in fiscal 2011, despite the $9.0 million loss on repurchase of $45.0 million of our senior secured notes.other non-current liabilities. In fiscalFiscal 2011, the more significant changes in working capital were increasesan increase in inventories, receivables, and prepaid expenses and a decrease in other non-current liabilities, each of which decreased cash and were partially offset by an increase in current liabilities during fiscal 2011. In fiscal 2010, the more significant changes in working capital were increases in inventoriesliabilities.accounts payable as we increased our inventory in anticipation of higher sales for spring 2011.Investing Activities: During fiscalFiscal 2011, and fiscal 2010, investing activities used $35.7$62.5 million and $71.6$35.7 million, respectively, of cash. In fiscal 2010, we used approximately $58.3During Fiscal 2012 and Fiscal 2011, $60.7 million and $35.3 million, respectively, of cash to acquire the Lilly Pulitzer brand and operations. Capitalwas used for capital expenditures of $35.3 million in fiscal 2011 primarily related to costs associated with new retail stores, information technology initiatives, distribution center enhancements and retail store and restaurant remodeling while the $13.3and distribution center enhancements. During Fiscal 2012, we also paid $1.8 million in fiscal 2010 primarily related to costs associated with new retail storesour acquisition of the assets and information technology initiatives.fiscal 2011 and fiscal 2010,Fiscal 2012, financing activities used $57.2$10.6 million and $11.2of cash, while in Fiscal 2011 financing activities used $56.8 million respectively, of cash.cash with changes in debt being the most significant changes in financing activities during each period. In fiscal 2011,Fiscal 2012, we paid $52.2increased debt by $10.5 million, plus accrued interest, for the repurchase of $45.0 million aggregate principal amount ofwhile replacing our 113/8%borrowings under our Senior Secured Notes with borrowings under our U.S. Revolving Credit Agreement. During Fiscal 2012, we paid $5.0 million for the payment of the Fiscal 2011 and paidFiscal 2012 contingent consideration payments related to the Lilly Pulitzer acquisition. During Fiscal 2011, we reduced debt by $49.6 million by using cash on hand to repurchase a portion of our Senior Secured Notes. We used $9.9 million and $8.6 million of dividends. These cash outlays exceeded the proceeds of $2.7 million from the exercise of stock options in fiscal 2011. In fiscal 2010, we used cash generated from operating activities to pay $7.3 million of dividends during Fiscal 2012 and repay $4.1 million of company owned life insurance policy loans, while also accumulating cash on hand at January 29, 2011.fiscalFiscal 2011 primarily reflects the conversion of assets related to the discontinued operations into cash, net of the use of cash to pay liabilities, including income taxes, associated with the sold business during fiscal 2011 as well as the receipt of $3.7 million of cash related to the sale of our former Oxford Apparel operating group which was received in fiscalFiscal 2011. The cash flows provided by discontinued operations in fiscal 2010 reflect the $102.8 million of proceeds from the sale of the discontinued operations during fiscal 2010, as well as the cash flow generated by the normal operations discontinued operations during fiscal 2010 prior to the January 2011 sale, which consisted of earnings from the discontinued operations less increased working capital requirements during the year.Fiscal 2010 Compared to Fiscal 2009 Cash and cash equivalents on hand was $44.1 million and $8.3 million at January 29, 2011 and January 30, 2010, respectively. The change in cash was primarily due to the cash flow activities discussed below.Operating Activities: The operating cash flows for fiscal 2010 and fiscal 2009 of $35.7 million and $61.0 million, respectively,There were primarily the result of net earnings for the relevant period, adjusted for non-cash activities such as depreciation, amortization and stock compensation expense as well as changes in our working capital accounts. In fiscal 2010, the more significant changes in working capital were increases in inventories and accounts payable as we increased our inventory in anticipation of higher sales in spring 2011, whereas fiscal 2009 reflected a $35.7 million reduction in inventories during fiscal 2009 as we reduced our inventory levels in all operating groups due to the economic uncertainty and our exit from certain businesses.Investing Activities: During fiscal 2010 and fiscal 2009, investing activities used $71.6 million and $11.3 million, respectively, of cash. In fiscal 2010, we used approximately $58.3 million of cash to acquire the Lilly Pulitzer brand and operations. Additionally, we used cash totaling $13.3 million and $11.3 million of capital expenditures in fiscal 2010 and fiscal 2009, respectively, which were primarily related to new retail stores and costs associated with investments in certain technology initiatives.Financing Activities: During fiscal 2010 and fiscal 2009, financing activities used $11.2 million and $65.0 million, respectively, of cash. In fiscal 2010, the primary use of cash for financing activities was the payment of dividends and the repayment of loans related to certain company owned life insurance policies. In fiscal 2009, cash flow from operations, borrowings under our U.S. Revolving Credit Agreement and the proceeds from the issuance of $150.0 million aggregate principal amount of our 113/8% Senior Secured Notes were used to repurchase $166.8 million aggregate principal amount of our 87/8% Senior Unsecured Notes, to pay $5.9 million of dividends and to pay $5.0 million of financing costs associated with the issuance of our 113/8% Senior Secured Notes in June 2009.Discontinued Operations: Theno cash flows from discontinued operations reflect cash flow provided by or used in the activities of our discontinued operations. The change in cash flow from discontinued operations primarily reflects the $102.8 million of proceeds from the sale of the discontinued operations during fiscal 2010, but also reflects that the discontinued operations were reducing working capital requirements in fiscal 2009 and increasing working capital requirements in fiscal 2010.provides a description of our significant financing arrangements andsets forth the amounts outstanding under theseour financing arrangements (in thousands) as of January 28, 2012:February 1, 2014: Outstanding $ —
2,571
105,000 (1,595 ) $ 105,976 2,571 $ 103,405 $235 million U.S. Secured Revolving Credit Facility ("U.S. Revolving Credit Agreement") $ 137,592 £7 million Senior Secured Revolving Credit Facility ("U.K. Revolving Credit Agreement") 3,993 Total debt 141,585 Short-term debt (3,993 ) Long-term debt $ 137,592 are drawn against our lines of credit at the time of shipment of the products and reduce the amounts available under our lines of credit and borrowing capacity under our credit facilities when issued. As of January 28, 2012, approximately $9.3February 1, 2014, $8.5 million of trade letters of credit and other limitations on availability in the aggregate were outstanding against the U.S. Revolving Credit Agreement and the U.K. Revolving Credit Agreement.our credit facilities. After considering these limitations and the amount of eligible assets in our borrowing base, as applicable, as of January 28, 2012,February 1, 2014, we had approximately $148.1$92.6 million and $3.9 million in unused availability under the U.S. Revolving Credit Agreement and approximately $3.2 million in unused availability under the U.K. Revolving Credit Agreement, respectively, subject to the respective limitations on borrowings set forth in the U.S. Revolving Credit Agreement and the U.K. Revolving Credit Agreement.the indenture for the 113/8% Senior Secured Notes.Covenants, Other Restrictions and Prepayment Penalties: Our credit facilities and 113/8% Senior Secured Notesour U.K. Revolving Credit Agreement, are subject to a number of affirmative covenants regarding the delivery of financial information, compliance with law, maintenance of property, insurance and conduct of business. Also, our credit facilities and 113/8% Senior Secured Notes are subject to certain negative covenants or other restrictions including, among other things, limitations on our ability to (i) incur debt, (ii) guaranty certain obligations, (iii) incur liens, (iv) pay dividends to shareholders, (v) repurchase shares of our common stock, (vi) make investments, (vii) sell assets or stock of subsidiaries, (viii) acquire assets or businesses, (ix) merge or consolidate with other companies, or (x) prepay, retire, repurchase or redeem debt.$26.25$23.5 million or (ii) 15%10% of the total revolving commitments. In such case, our fixed charge coverage ratio as defined in the U.S. Revolving Credit Agreement must not be less than 1.0 to 1.0 for the immediately preceding 12 fiscal months for which financial statements have been delivered. This financial covenant continues to apply until we have maintained unused availability under the U.S. Revolving Credit Agreement of more than the greater of (i) $26.25$23.5 million or (ii) 15%10% of the total revolving commitments for 30 consecutive days. Additionally, pursuant to the indenture governing our 113/8% Senior Secured Notes, our ability to incur certain indebtedness or to make certain restricted payments, as defined in the indenture, is subject to our meeting certain conditions, including in each case the condition that our fixed charge coverage ratio, as defined in the indenture, not be less than 2.0 to 1.0 for the preceding four fiscal quarters on a pro forma basis after giving effect to the proposed indebtedness or restricted payment and, in the case of a restricted payment, the condition that the aggregate total of all restricted payments not exceed a certain allowable amount calculated pursuant to a formula set forth in the indenture. Restricted payments under the indenture include, without limitation, cash dividends to shareholders, repurchases of our capital stock, and certain investments. and notes entered into at the time we entered into our agreements. During fiscal 2011Fiscal 2013 and as of January 28, 2012,February 1, 2014, no financial covenant testing was required pursuant to our U.S. Revolving Credit Agreement as the minimum availability threshold was met at all times. As of January 28, 2012,February 1, 2014, we were compliant with all covenants related to our credit facilitiesfacilities.113/8%Repurchase of Senior Secured Notes. At any time prior to July 15, 2012,Notes:may redeem all or a portionrepurchased, in privately negotiated transactions, $45.0 million in aggregate principal amount of the 113/8%our Senior Secured Notes on not less than 30 nor more than 60 days' prior notice, in amounts of $2,000 or an integral multiple of $1,000 in excess thereof, at a price equal to the greater of (i) 100%for $52.2 million, plus accrued interest. The repurchase of the Senior Secured Notes and related write-off of $1.0 million of unamortized deferred financing costs and $0.8 million of unamortized bond discount resulted in a loss on repurchase of senior notes of $9.0 million in Fiscal 2011.113/8% Senior Secured Notes, which were scheduled to be redeemed, together with accrued and unpaid interest, if any, to the date ofmature in July 2015. The redemption or (ii) as determined by an independent investment banker (as prescribed under the indenture), the sum of the present values of 105.688% of the principal amount of the 113/8% Senior Secured Notes, being redeemedincluding a premium of $6.0 million, for $111.0 million, plus scheduled paymentsaccrued interest, and the related write-off of interest (not including any portion$1.7 million of such paymentsunamortized deferred financing costs and $1.4 million of interest accrued asunamortized bond discount resulted in a loss on repurchase of the datesenior notes of redemption) from the date of$9.1 million in Fiscal 2012. The redemption to July 15, 2012 discounted to the redemption date on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at the Adjusted Treasury Rate (as defined in the indenture) plus 50 basis points, together with accrued and unpaid interest, if any, to the date of redemption. On or after July 15, 2012, we may redeem all or a portion of the 113/8% Senior Secured Notes on not less than 30 nor more than 60 days' prior notice, in amountssatisfied and discharged all of $2,000 or an integral multiple of $1,000 in excess thereof at the following redemption prices (expressed as percentages of the principalamount), togetherour obligations with accrued and unpaid interest, if any,respect to the redemption date, if redeemed during the 12-month period beginning July 15 of the years indicated below: 105.688 % 102.844 % 100.000 % Although we have not entered into any arrangements as of the date of this report, we currently intend to seek to redeem on or after July 15, 2012 the 113/8% Senior Secured Notes outstanding at that time with other borrowings, which may include additionaland the related indenture and was funded primarily through borrowings under our U.S. Revolving Credit Agreement, borrowings under another variable rate revolving credit agreement, a fixed interest rate term loan, senior notes or a combinationAgreement. during fiscal 2012 and dividends, if any, primarily from positive cash flow from operations supplemented by cash on hand and borrowings under our lines of credit, if necessary. Our need for working capital is typically seasonal with the greatest requirements generally existing in the fall and spring of each year. Our capital needs will depend on many factors including our growth rate, the need to finance inventory levels and the success of our various products. AtWe anticipate that at the maturity of the U.S. Revolving Credit Agreement and the 113/8% Senior Secured Notesany of our financing arrangements or if the U.K. Revolving Credit Agreement was required to be paid, we anticipate thatas otherwise deemed appropriate, we will be able to refinance the facilities and debt with terms available in the market at that time, which may or may not be as favorable as the terms of the current agreements.agreements or current market terms.January 28, 2012,February 1, 2014, by future period (in thousands): Payments Due by Period 1-3 Years 3-5 Years Total Contractual Obligations: U.S. Revolving Credit Agreement and U.K. Revolving Credit Agreement(1) $ — $ — $ — $ — $ — Operating leases(2) 59,991 105,456 84,131 190,633 440,211 Minimum royalty and advertising payments pursuant to royalty agreements 5,482 3,061 — — 8,543 Letters of credit 8,458 — — — 8,458 Contingent purchase price consideration(3) 2,500 12,500 — — 15,000 Other(4)(5)(6) — — — — — Total $ 76,431 $ 121,017 $ 84,131 $ 190,633 $ 472,212 Payments Due by Period Less Than
1 year 1-3
Years 3-5
Years More Than
5 Years Total (In thousands) $ — $ — $ 105,000 $ — $ 105,000 11,944 23,888 5,972 — 41,804 — — — — — 42,299 80,418 59,195 104,924 286,836 4,766 9,027 3,222 — 17,015 9,325 — — — 9,325 2,500 5,000 12,500 — 20,000 — — — — — $ 70,834 $ 118,333 $ 185,889 $ 104,924 $ 479,980 (1)The $105 million of 113/8% Senior Secured Notes reflect our fiscal 2011 repurchase of $45 million of our 113/8% Senior Secured Notes, but do not assume any other redemption or repurchase in or after fiscal 2012.(2)Principal and interest amounts payable in future periods on our U.S. Revolving Credit Agreement and U.K. Revolving Credit Agreement have been excluded from the table above, as the amount that will be outstanding and interest rate during any fiscal year will be dependent upon future events which are not known at this time. As of January 28, 2012, no amounts were outstanding under our U.S. Revolving Credit Agreement and $2.6 million was outstanding under our U.K. Revolving Credit Agreement.(3)Amounts to be paid in future periods for real estate taxes, insurance, other operating expenses and contingent rent applicable to the properties pursuant to the respective operating leases have been excluded from the table above, as the amounts payable in future periods are generally not quantified in the lease agreements and are dependent on factors which are not known at this time. Such amounts incurred in fiscal 2011 totaled approximately $12.5 million.(4)Amounts reflected in the table reflect the maximum amount payable pursuant to a contingent consideration arrangement associated with the Lilly Pulitzer acquisition, which totaled $20 million as of January 28, 2012. Amounts are payable if certain performance criteria related to the acquired business are met during the four years subsequent to acquisition. As of January 28, 2012, our balance sheet reflects a liability of $13.1 million associated with this arrangement, of which $10.6 million is included in non-current contingent consideration in our consolidated balance sheets, which reflects the fair value of the non-current anticipated payments as of that date and $2.5 million is included in contingent consideration earned and payable in our consolidated balance sheets, which is expected to be paid during fiscal 2012 as the amounts were earned in fiscal 2011.(5)Amounts totaling $8.8 million of deferred compensation obligations and obligations related to the postretirement benefit portions of endorsement-type split dollar life insurance policies, which are included in other non-current liabilities in our consolidated balance sheet as of January 28, 2012, have been excluded from the table above, due to the uncertainty of the timing of the payment of(1) Principal and interest amounts payable in future periods on our U.S. Revolving Credit Agreement and U.K. Revolving Credit Agreement have been excluded from the table above, as the amount that will be outstanding and interest rate during any fiscal year will be dependent upon future events which are not known at this time. As of February 1, 2014, $137.6 million was outstanding under our U.S. Revolving Credit Agreement, which matures in November 2018, and $4.0 million was outstanding under our U.K. Revolving Credit Agreement, which is payable on demand. During Fiscal 2013, interest paid on these revolving credit arrangements was $3.8 million. (2) Amounts to be paid in future periods for real estate taxes, insurance, other operating expenses and contingent rent applicable to the properties pursuant to the respective operating leases have been excluded from the table above, as the amounts payable in future periods are, in some cases, not quantified in the lease agreements and are dependent on factors which are not known at this time. Such amounts incurred in Fiscal 2013 totaled $18.8 million. (3) Amounts reflected in the table reflect the maximum amount payable pursuant to a contingent consideration arrangement associated with the Lilly Pulitzer acquisition, which totaled $15.0 million as of February 1, 2014. Amounts are payable if certain performance criteria related to the acquired business are met during Fiscal 2014. As of February 1, 2014, our consolidated balance sheet reflects a liability of $14.7 million associated with this arrangement, of which $12.2 million is included in non-current contingent consideration with the remainder classified as a current liability in our consolidated balance sheet, and in the aggregate reflects the fair value of the anticipated payments as of that date. As of February 1, 2014, we anticipate that the maximum amount of the obligation will be paid. (4) (5) An environmental reserve liability of $1.6 million, which is included in other non-current liabilities in our consolidated balance sheet as of February 1, 2014 and discussed in Note 6 to our consolidated financial statements these obligations, which are generally at the discretion of the individual employees or upon the death of the individual, respectively.(6)An environmental reserve liability of $1.9 million, which is included in other non-current liabilities in our consolidated balance sheet as of January 28, 2012 and discussed in Note 6 to our consolidated financial statements included in this report, has been excluded from the above table, as we were not contractually obligated to incur these costs as of January 28, 2012February 1, 2014 and the timing of payment is uncertain.(7)Non-current deferred tax liabilities of $34.9 million included in our consolidated balance sheet as of January 28, 2012 and discussed in Note 8 to our consolidated financial statements included in this report have been excluded from the above table, as deferred income tax liabilities are calculated based on temporary differences between the tax basis and book basis of assets and liabilities, which will result in taxable amounts in future years when the liabilities are settled at their reported financial statement amounts. As the results of these calculations do not have a direct connection with the amount of cash taxes to be paid in any future periods, scheduling deferred income tax liabilities by period could be misleading.(6) Non-current deferred tax liabilities of $32.8 million included in our consolidated balance sheet as of February 1, 2014 and discussed in Note 8 to our consolidated financial statements included in this report have been excluded from the above table, as deferred income tax liabilities are calculated based on temporary differences between the tax basis and book basis of assets and liabilities, which will result in taxable amounts in future years when the liabilities are settled at their reported financial statement amounts. As the results of these calculations do not have a direct connection with the amount of cash taxes to be paid in any future periods, scheduling deferred income tax liabilities by period could be misleading. fiscal 2012,Fiscal 2014, which are excluded from the table above as we are generally not contractually obligated to pay these amounts as of January 28, 2012,February 1, 2014, are expected to be approximately $60$55 million. These expenditures are expected to consist primarily of costs associated with opening new retail stores and restaurants, remodeling retail stores and restaurants, information technology initiatives, retail store remodeling,including e-commerce capabilities, and distribution centerfacility enhancements.26, 2012,25, 2014, our Board of Directors approved a cash dividend of $0.15$0.21 per share payable on April 27, 2012May 2, 2014 to shareholders of record as of the close of business on April 13, 2012.17, 2014. Although we have paid dividends in each quarter since we became a public company in July 1960, we may discontinue or modify dividend payments at any time if we determine that other uses of our capital, including but not limited to, payment of outstanding debt, repurchases of outstanding shares, funding of acquisitions or funding of capital expenditures, may be in our best interest; if our expectations of future cash flows and future cash needs outweigh the ability to pay a dividend; or if the terms of our credit facilities, the indenture for the 113/8% Senior Secured Notes, other debt instruments, contingent consideration arrangements or applicable law limit our ability to pay dividends. We may borrow to fund dividends in the short-term based on our expectation of operating cash flows in future periods subject to the terms and conditions of our credit facilities the indenture for the 113/8% Senior Secured Notes or other debt instruments and applicable law. All cash flow from operations will not necessarily be paid out as dividends in all periods. For details about limitations on our ability to pay dividends, see Note 5 of our consolidated financial statements contained in this report and the discussion of our credit facilities and 113/8% Senior Secured Notes above. U.S. GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosures. On an ongoing primarily consists of direct to consumer sales, which includes retail store, e-commerce, restaurant and concession sales, andas well as wholesale sales. We consider revenue realized or realizable and earned when the following criteria are met: (1) persuasive evidence of an agreement exists, (2) delivery has occurred, (3) our price to the buyer is fixed or determinable and (4) collectibility is reasonably assured.as we believe the criteria for revenue recognition are met atwhich is considered the time of sale.shipment for e-commerce sales. Retail store, e-commerce, restaurant and concession revenues are recorded net of estimated returns and discounts, as appropriate, and net of applicable sales taxes in our consolidated statements of earnings. As direct to consumer products may be returned in future periods after the date of original purchase by the consumer, we must make estimates of reserves for products which were sold prior to the balance sheet date but that we anticipate may be returned by the consumer subsequent to that date. The determination of direct to consumer return reserve amounts requires judgment and consideration of historical and current trends, evaluation of current economic trends and other factors. Our historical estimates of direct to consumer return reserves have not differed materially from actual results. As of January 28, 2012February 1, 2014, our direct to consumer return reserve was approximately $2.3$2.1 million. A 10% change in the direct to consumer return reserve as of January 28, 2012February 1, 2014 would have had a $0.2 million pre-tax impact on earnings in Fiscal 2013.continuing operationsthe customer requesting shipment of the goods to be persuasive evidence of an agreement and the products are generally considered sold and delivered at the time that the products are shipped, as substantially all products are sold based on FOB shipping point terms. This generally coincides with the time that title passes and the risks and rewards of ownership have passed to the customer. In certain cases in fiscal 2011.returns, allowances, and operational chargebacks and returns for wholesale customers may include historical and current trends, agreements with customers, projected seasonal results, an evaluation of current economic conditions, specific program or product expectations and retailer performance. Actual discounts and allowances to our wholesale customers have not differed materially from our estimates in prior periods. As of January 28, 2012,February 1, 2014, our total reserves for discounts, returns and allowances for our wholesale businesses were approximately $8.4$9.7 million and, therefore, if the allowances changed by 10% it would have had a pre-tax impact of $0.8$1.0 million on earnings from continuing operations in fiscal 2011.January 28, 2012,February 1, 2014, our allowance for doubtful accounts was approximately $2.0approximately $0.2$0.1 million on earnings from continuing operations in fiscal 2011.cost and shrinkage.cost. For wholesale inventory, we estimate the amount of goods that we will not be able to sell in the normal course of business and write down the value of these goods as necessary. As the amount to be ultimately realized for the goods is not necessarily known at period end, we must utilize certain assumptions that take into considerationconsidering historical experience, the age of the inventory, inventory quantity, quality, age and mix, historical sales trends, future sales projections, consumer and retailer preferences, market trends and general economic conditions.approximately $88.5$120.5 million of our inventories are valued at the lower of last-in, first-out (LIFO) method cost or market after deducting the $52.4$56.7 million LIFO reserve as of January 28, 2012.February 1, 2014. The remaining $14.9$23.2 million of our inventories are valued at the lower of FIFO cost or market as of January 28, 2012.February 1, 2014. As of January 28, 2012 and January 29, 2011, approximately 86% and 87%, respectively,February 1, 2014, 84% of our inventories were accounted for using the LIFO method. Generally, our inventories related to our domestic operations are valued at the lower of LIFO cost or market and our inventories related to our international operations are valued at the lower of FIFO cost or market. LIFO inventory accounting adjustments are not allocated to our operating groups as LIFO inventory pools do not correspond to our operating group definitions. LIFO reserves are based on the Producer Price Index as published by the United States Department of Labor. We write down inventories valued at the lower of LIFO cost or market when LIFO exceeds market value. We considerdeem LIFO accounting adjustments to not only include changes in the LIFO reserve, but also changes in markdown reserves which areForAs our LIFO inventory pool does not correspond to our operating group definitions, LIFO inventory accounting adjustments are not allocated to the respective operating groups. Thus, the impact of accounting for inventories on the LIFO method is reflected in Corporate and Other for operating group reporting purposes included in Note 10 to our consolidated financial statements and in the results of operations in our Management's Discussion and Analysis of Financial Condition and Results of Operations included in this report, the impact of LIFO accounting is included in Corporate and Other.January 28, 2012,February 1, 2014, we had recorded a reserve of approximately $1.0$2.2 million related to inventory on the lower of FIFO cost or market method and for inventory on the lower of LIFO cost or market method with markdowns in excess of our LIFO reserve. A 10% change in the amount of markdowns for inventory valued on the lower of FIFO cost or market method and markdowns in excess of the LIFO reserve as of January 28, 2012February 1, 2014 would have a pre-tax impact of approximately $0.1$0.2 million on earnings from continuing operations in fiscal 2011.Fiscal 2013. A change in the markdowns of our inventory valued at the lower of LIFO cost or market method typically would not be expected to have a material impact on our consolidated financial statements after consideration of the existence of our significant LIFO reserve of $52.4$56.7 million, or 38%28% of the FIFO cost of the inventory, as of January 28, 2012,February 1, 2014, as well as the high gross margins historically achieved for the sale of our lifestyle branded products. A change in inventory levels at the end of future fiscal years compared to inventory balances as of January 28, 2012February 1, 2014 could result in a material impact on our consolidated financial statements asJanuary 28, 2012February 1, 2014 could result in a material impact on our consolidated financial statements as inflation or deflation would change the amount of our LIFO reserve. U.S. GAAP, the definition of fair value of inventories acquired generally will equal the expected sales price less certain costs associated with selling the inventory, which may exceed the actual cost of producing the acquired inventories. U.S. GAAP, in connection with our December 2010 acquisition of the Lilly Pulitzer brand and operations,recent acquisitions, we recognized a write-up of inventories of approximately $1.8 million above the cost of acquired inventories to fair value, which we included in our allocation of purchase price. Based on the inventory turn of the acquired inventories, approximately $0.8 million of the write-up wasamounts were recognized as additional cost of goods sold in fiscal 2010, and the remaining $1.0 million ofperiods subsequent to the write-up, which was included in inventories, net in our consolidated balance sheet as of January 29, 2011, was recognized as cost of goods sold during fiscal 2011acquisition as the acquired inventory was sold in the ordinary course of business. In determining the fair value of the acquired inventory, as well as the appropriate period to recognize the charge in our consolidated statements of earnings as the acquired inventory is sold, we must make certain assumptions regarding costs incurred prior to acquisition for the acquired inventory, an appropriate profit allowance, estimates of the costs to sell the inventory and the timing of the sale of the acquired inventory. Such estimates involve significant uncertainty, and if we had made different assumptions, the impact on our consolidated financial statements could be significant.January 28, 2012February 1, 2014 totaled approximately $165.2$173.0 million, which includes approximately $4.8$11.6 million of customer relationshipsintangible assets with finite lives, including reacquired license rights and $160.4customer relationships, and $161.5 million of trademarks with indefinite lives. At acquisition, we estimate and record the fair value of purchased intangible assets, which primarily consist of trademarks, reacquired rights and customer relationships. The fair values and useful lives of these intangible assets are estimated based on management'sour assessment as well as independent third party appraisals in some cases. Such valuationvaluations, which are dependent upon a number of uncertain factors, may include a discounted cash flow analysis of anticipated revenues and expenses or cost savings resulting from the acquired intangible asset using an estimate of a risk-adjusted market-based cost of capital as the discount rate. The valuation of intangible assets requires significant judgment due to the variety of uncertain factors, including planned use of the intangible assets as well as estimates of future net sales, royalty income, operating income, growth rates, royalty rates for the trademarks, discount rates and discount rates.income tax rates, among other factors. The use of different assumptions related to these uncertain factors at acquisition could result in a material change to the amounts of intangible assets initially recorded at acquisition, which could result in a material impact on our consolidated financial statements. As a result of our December 2010 acquisition of the Lilly Pulitzer brand and operations, we recognized $30.5 million of intangible assets including trademarks and customer relationships in our consolidated balance sheet at acquisition using the methodology outlined above. These acquiredintangible assets consist of $27.5 million of indefinite lived trademarks and $3.0 million of definite lived customer relationships.control.control, including customer attrition. Intangible assets with finite lives are reviewed for impairment periodically if events or changes in circumstances indicate that the carrying amount may not be recoverable. If expected future undiscounteddiscounted cash flows from operations are less than their carrying amounts, an asset is determined to be impaired and a loss is recorded for the amount by which the carrying value of the asset exceeds its fair value. Amortization related to intangible assets with finite lives totaled $1.2$2.2 million during fiscal 2011Fiscal 2013 and is anticipated to be approximately $0.9$2.5 million in fiscal 2012.fiscalFiscal 2013, Fiscal 2012 and Fiscal 2011, fiscal 2010 and fiscal 2009, no impairment charges related to intangible assets were recognized. Additionally, we do not believe that a 10% change in any of the significant assumptions utilized in testing our intangible assets for impairment would have resulted in an impairment charge during any of those periods.As a result of our December 2010 acquisition of the Lilly Pulitzer brand and operations, we allocated approximately $16.9 million of goodwill to the Lilly Pulitzer business. Goodwill is not amortized but instead is evaluated for impairment annually or more frequently if events or circumstances indicate that the goodwill might be impaired. In September 2011,FASB issued an update to their accounting guidance regarding goodwill impairment testing. This update, which we adopted infirst day of the fourth quarter of our fiscal 2011 and resulted in no material impact on our consolidated financial statements, allows us to assessyear. The qualitative factors that we use to determine the likelihood of goodwill impairment, and whether itas well as to consider if an interim test is necessary to perform the two-step evaluation of the recoverability of goodwill. The qualitative factors to determine the likelihood of goodwill impairmentappropriate, include: (a) macroeconomic conditions, (b) industry and market considerations, (c) cost factors, (d) overall financial performance, (e) other relevant entity-specific events, (f) events affecting a reporting unit, (g) a sustained decrease in share price, or (h) other factors as appropriate. As performed in prior years and as may be determined necessary in future periods,In the two-step evaluation ofevent we determine that we will bypass the recoverability of goodwillqualitative impairment option or if we determine that a quantitative test is appropriate, the quantitative test includes valuations of each applicable underlying businessrequiremay be very subjective, judgment, includedconsidered in such a valuation includediscounted cash flow analysis are future cash flow projections of the business, which are based on our future expectations for the business. Additionally, the discount rate, used in this analysis is an estimate ofwhich estimates the risk-adjusted market-basedmarket based cost of capital.capital, and other assumptions. The estimates and assumptions included in the two-step evaluation of the recoverability of goodwill involve significant uncertainty, and if our plans or anticipated results change, the impact on our financial statements could be significant. We test, either qualitatively or as a two-step evaluation, goodwill for impairment as of the first day of the fourth quarter of our fiscal year, which coincides with the timing of our annual budgeting process that is used in estimating future cash flows for the assessment. In addition to the annual impairment test, if an event occurs or circumstances change that would indicate impairment between the annual tests, we would perform an impairment test at that time. In performing this interim assessment, we consider the factors and circumstances used in performing the qualitative assessment to evaluate whether it is more likely than not that the carrying value of goodwill may not be recoverable. If an annual or interim analysis indicates an impairment of goodwill balances, the impairment is recognized in the consolidated financial statements.fiscal 2011, fiscal 2010Fiscal 2013, Fiscal 2012 or fiscal 2009.Fiscal 2011. Additionally, we do not believe that a 10% change in any of the assumptions utilized in testing our goodwill for impairment would have resulted in an impairment charge during any of those periods.areis dependent upon future taxable income in specific jurisdictions, changes in tax laws and rates and shifts in the amount of taxable income among state and foreign jurisdictions may have a significant impact on the amount of benefit ultimately realized for deferred tax assets and liabilities. We account for the effect of changes in tax laws or rates in the period of enactment.certainsubstantially all of our foreign subsidiaries to be permanently reinvested. For each of these entities, the tax basis equals or exceeds the financial basis as of January 28, 2012. Also,reinvested, and accordingly have not recognized a deferred tax liability for any foreign subsidiary due to a difference in financial and tax basis. Deferred tax liabilities are also not required to be recognized for undistributed earnings of foreign subsidiaries when management considers those earnings to be permanently reinvested outside the United States. The company does notWe consider the undistributed earnings of itssubstantially all of our foreign subsidiaries to be permanently reinvested outside the U.S.,United States as of February 1, 2014 and therefore records thehave not recorded a deferred tax liability on suchthese earnings in the year they are included in theour consolidated financial statements.to the timing differences of income for financial statement reporting and tax return reporting, but also the application of complex tax laws and regulations, which are subject to interpretation and management judgment. The use of different assumptions or a change in our assumptions related to book to tax timing differences, our determination of whether foreign investments or earnings are permanently reinvested, the realizability of uncertain tax positions, the appropriateness of valuation allowances or other considerations, and the jurisdictions or significance of earnings in future periods each could have a significant impact on our income tax rate. Additionally, factors impacting income taxes that are outside of our control including changes in tax laws or interpretations, court case decisions, statute of limitation expirations or audit settlements could also have a significant impact on our income tax rate. An increase in our consolidated income tax rate from 32.8%43.7% to 33.8%44.7% during fiscal 2011Fiscal 2013 would have reduced net earnings from continuing operations by approximately $0.4$0.8 million.if certain performance criteria are metin cash in the aggregate, over the four year period subsequent toyears following the December 2010 acquisition. Pursuant to the guidance related to the purchase method of accounting, we recognized the fair valueclosing of the contingent consideration asacquisition, based on Lilly Pulitzer's achievement of certain earnings targets. The terms of the datecontingentrequiresrequired assumptions regarding anticipated cash flows, probabilities of cash flows, discount rates and other factors, which each involve a significant amount of uncertainty. Although there was uncertainty about whether the performance criteria in the contingent consideration arrangement will be achieved, we anticipated paying all of the full $20 million of contingent consideration. Thus, the fair value of the contingent consideration at acquisition reflected the $20 million of anticipated payments discounted to fair value.As of January 28, 2012, we still anticipate thatGenerally, the performance criteria will be met based on the operating results of the Lilly Pulitzer business exceeding the performance criteria in fiscal 2011. Additionally, we evaluated the discount rate as of January 28, 2012. As of January 28, 2012, we determined that the fair value of the contingent consideration was approximately $13.1 million, with $2.5 million of the $13.1 million of contingent consideration being classified as a current liability in contingent consideration earned and payable in our consolidated balance sheet as the $2.5 million was earned in fiscal 2011 and is expected to be paid in the first half of fiscal 2012. The remaining $10.6 million of the contingent consideration is included in non-current contingent consideration in our consolidated balance sheet as of January 28, 2012. If the discount rate used in the valuation of the contingent consideration as of January 28, 2012 was decreased by 100 basis points, the fair value of the contingent consideration as of January 28, 2012 would have increased to $13.4 million from $13.1 million with the difference in value being reflected as an increase in operating income in our consolidated statement of earnings for fiscal 2011. The fair value of the contingent consideration liability is expected to increase each period with the recognition of the change in fair value of contingent consideration resulting from the passage of time at the applicable discount rate as we approach the payment dates of the contingent consideration absent any significant changes in assumptions related to the valuation or the probability of payment of the contingent consideration earned during the prior year. During fiscalFiscal 2013, Fiscal 2012 and Fiscal 2011, we recognized change in fair value of contingent consideration of $0.3 million, $6.3 million and $2.4 million, respectively, in our consolidated statements of earnings. The amounts recognized in fiscal 2011 primarilyFiscal 2012 reflect the passage of time rather thanas well a significant change in the discount rate at February 2, 2013 as discussed below, while Fiscal 2013 and Fiscal 2011 primarily reflected the passage of time using a discount rate deemed appropriate at that time, with no significant changes in our assumptions used in determining fair value during fiscal 2011. We estimatethe year.relatedcharge to the passageour consolidated statement of timeearnings for Fiscal 2013 by $0.1 million, while we believe a change in fiscal 2012 will be approximately $2.4 million; howeverprojected earnings for Fiscal 2014 of 10% would not impact the total change in fair value of contingent consideration expense recognized in fiscal 2012 could be significantly different if we change certain of our assumptions related to the contingent consideration during fiscal 2012. The change in fair value of contingent consideration in fiscal 2013 and fiscal 2014 couldas the earnings targets for those years would still be significantly different than the amounts recognized in fiscal 2011 or currently anticipated for fiscal 2012. The FASB has issued certain changes towhich may impactissued by the FASB that we have not yet adopted that are expected to have a material effect on our financial statements in future periods upon adoption. For details on these accounting pronouncements, see Note 1position, results of operations or cash flows.consolidated financial statementsoperating 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 information regarding the seasonality impact on individual operating groups and for our total company, see Part I, Item1, Business, included in this report.SEASONALITY Our operating groups are impacted by seasonality. For details of the impact of seasonality on our operating groups and consolidated operating results, see Note 1 of our consolidated financial statements included in this report.periods. Our objective isperiods and intend to limit the impact of interest rate changes on earnings and cash flow, primarily through a mix of fixed-rate and variable-rate debt. Although we have not historically entered into such contracts, weflow. This may also enterbe achieved, in part, by entering into interest rate swap arrangements related to certain of our variable-rate debtborrowings in order to fix the interest rate on variable rate debtvariable-rate borrowings if we determine that our exposure to interest rate changes is higher than optimal. Our assessment of appropriate risk also considers our need for flexibility in our borrowing arrangements resulting from the seasonality of our business, among other factors. We continuously monitor interest rates to consider the sources and terms of our borrowing facilities in order to determine whether we have achieved our interest rate management objectives. None of our debt was entered into for speculative purposes. Also, although we are not precluded from doing so, we have not historically engaged in hedging activities with respect to our interest rate risk, but we may consider such alternatives in the future. We do not enter into debt agreements or interest rate hedging transactions on a speculative basis.January 28, 2012,February 1, 2014, we had $2.6$141.6 million of debt outstanding which was subject to variable interest rates. Our lines of credit, which include our U.S. Revolving Credit Agreement and our U.K. Revolving Credit Agreement, accrue interest based on variable interest rates while providing the necessary borrowing flexibility we require due to the seasonality of our business and our need to fund certain product purchases with trade letters of credit. During fiscal 2011,averageinterest rate on certain of our borrowings, ranging from $25 million to $45 million, during the period from August 2013 until March 2015, which essentially results in a portion of our anticipated debt outstandinglevels during those periods being fixed rate borrowings at a rate equal to 0.42% plus the applicable margin, as specified in our U.S. Revolving Credit Agreement.was approximately $3.7 million; we therefore did not incur a substantial amount ofanticipate that interest expense related to our variable rate debtwill be approximately $4.5 million during Fiscal 2014 assuming no significant changes in fiscal 2011 andinterest rates. We estimate that a 100 basis point change in interest rates would not have had a material impact on our fiscal 2011 operating results. We do not believe that borrowings and interest rates, and therefore interest expense, for fiscal 2011 are necessarily indicative of borrowings in future periods.change. We dochange to the extent we have not anticipate the need to have a significant amount of borrowings outstanding under our variable-rate lines of credits to fund ourongoing operations during fiscal 2012; however, we may have amounts outstanding under our variable-rate lines of credits at certain times during fiscal 2012 based on our seasonal working capital requirements or if anticipated cash requirements exceed our current expectations. Additionally, if we repurchase all or a portion of our 113/8% Senior Secured Notes outstanding in the future with borrowings under our variable-rate lines of credit, make other changes to our capital structure or acquire additional businesses in the future, such transactions could significantly increase our borrowing levels under variable-rate lines of credit. Thus, interest expense as well as our exposure to changes in variable interest rates would increase materially if borrowings under our variable-rate lines of credit increase in future periods. As of January 28, 2012, we had $105 million aggregate principal amount of fixed-rate debt outstanding, consisting of our 113/8% Senior Secured Notes, which haveentered into an effective interest rate of 12.0% and mature in July 2015. Such fixed-rate debt may result in higher interest expense than could be obtained under variable interest rate arrangements in certain periods, including fiscal 2011, but is primarily intended to provide long-term financing of our capital structure and minimize our exposure to increases in interest rates. A change in the market interest rate impacts the fair value of our fixed-rate debt but has no impact on interest incurred or cash flows. Our ability to reduce the amount of our 113/8% Senior Secured Notes outstanding without a significant premium may be limited under the terms of the indenture governing our 113/8% Senior Secured Notes.We receive United States dollars for most of our product sales. However, approximatelyLess than 10% of our net sales in fiscal 2011Fiscal 2013 were denominated in currencies other than the United States dollar. These salesAs of February 1, 2014, our foreign currency exchange risk exposure primarily relateresults from our businesses operating outside of the United States, which is primarily related to Ben Sherman sales(1) our businesses operating outside of the United States selling goods in thecurrencies other than its functional currency; (2) our United Kingdom and Europe. European Ben Sherman operations and our Asia-Pacific and Canadian Tommy Bahama operations purchasing goods in United States dollars or other currencies which are not the functional currency of the business; and (3) certain other transactions, including intercompany transactions.fiscal 2011Fiscal 2013 denominated in foreign currencies,pound sterling, if the United States dollar had been 10% stronger against the British pound we would have experienced a decrease in consolidated net sales of approximately $6.5 million, but we believe the impact on operating income would not have been material.rates.rates and the amounts outstanding at any time during the year may vary. As of January 28, 2012,February 1, 2014, we were a party to approximately $26.5$27.7 million of such contracts that were unsettled, which had an unrealized fair value resulting in a liability of approximately $0.5$0.3 million. These contracts primarily consist of $17$20 million of agreements to purchase U.S.United States dollars with British pound sterling and $9$8 million of agreements to sell Euro for British pound sterling. During fiscal 2011, foreign currency forward exchange contracts outstanding did not exceed $43.4 million at any time. When such contracts are outstanding, the contracts are marked to market with the offset being recognized in other comprehensive income or our consolidated statement of earnings if the transaction does or does not, respectively, qualify as a hedge in accordance with U.S. GAAP.Bahama intoBahama's international marketsmarket presence in the future, our exposure to foreign currency changes will increase.increase and it may be appropriate to enter into hedging arrangements for these operations. We also anticipate that we will have exposure to foreign currency changes for currencies that we currently do not have any exposure to, including various currencies in Asia. Initially, that exposure will be a result of the net investment in those currencies as we expand international operations. The extent of our exposure will be dependent upon the timing of when and to what magnitude we expand into international markets. Therefore, we do not believe it is possible to provide a meaningful estimate of the potential impact of our future exposure to foreign currencies related to our Tommy Bahama international operations at this time. Based on purchases and negotiations for inventory purchases thus far in fiscal 2012, it appears that certain of the product costing pressures, including the price of cotton, that were experienced during the second half of fiscal 2011 have eased as we purchase products for the second half of fiscal 2012. However, it appears that certain other product costing pressures, including transportation and labor, may not decline much, if at all, from the cost levels of fiscal 2011.OXFORD INDUSTRIES, INC.CONSOLIDATED BALANCE SHEETS(in thousands, except par amounts) January 28,
2012 January 29,
2011 February 1, 2014 February 2, 2013 $ 13,373 $ 44,094 $ 8,483 $ 7,517 59,706 50,177 75,277 62,805 103,420 85,338 143,712 109,605 19,041 12,554 23,095 19,511 19,733 19,005 20,465 22,952 — 57,745 215,273 268,913 271,032 222,390 93,206 83,895 141,519 128,882 165,193 166,680 173,023 164,317 16,495 16,866 17,399 17,275 19,040 22,117 24,332 23,206 $ 509,207 $ 558,471 $ 627,305 $ 556,070 $ 89,149 $ 83,211 Accounts payable $ 75,527 $ 66,004 23,334 23,095 18,412 25,472 2,500 — 2,571 — — 40,785 Income tax payable 6,584 — Other accrued expenses and liabilities 26,030 24,846 Contingent consideration 2,500 — Short-term debt 3,993 7,944 117,554 147,091 133,046 124,266 103,405 147,065 Long-term debt 137,592 108,552 10,645 10,745 12,225 14,450 38,652 44,696 51,520 44,572 34,882 28,846 32,759 34,385 16,522 16,511 Common stock, $1.00 par value per share 16,416 16,595 99,670 96,597 114,021 104,891 111,551 90,739 153,344 132,944 (23,674 ) (23,819 ) (23,618 ) (24,585 ) 204,069 180,028 260,163 229,845 $ 509,207 $ 558,471 $ 627,305 $ 556,070 notes.notes.-+OXFORD INDUSTRIES, INC.CONSOLIDATED STATEMENTS OF EARNINGS(in thousands, except per share amounts) Fiscal 2011 Fiscal 2010 Fiscal 2009 Fiscal
2013Fiscal
2012Fiscal
2011 $ 758,913 $ 603,947 $ 585,306 $ 917,097 $ 855,542 $ 758,913 345,944 276,540 294,493 403,523 385,985 345,944 412,969 327,407 290,813 513,574 469,557 412,969 358,582 301,975 283,706 447,645 410,737 358,582 2,400 200 — 275 6,285 2,400 16,820 15,430 11,803 19,016 16,436 16,820 68,807 40,662 18,910 84,670 68,971 68,807 16,266 19,887 18,710 4,169 8,939 16,266 9,017 — 1,759 — 9,143 9,017 43,524 20,775 (1,559 ) 14,281 4,540 (2,945 ) Earnings from continuing operations before income taxes 80,501 50,889 43,524 Income taxes 35,210 19,572 14,281 29,243 16,235 1,386 45,291 31,317 29,243 137 62,423 13,238 Earnings from discontinued operations, net of taxes — — 137 $ 29,380 $ 78,658 $ 14,624 $ 45,291 $ 31,317 $ 29,380 Earnings from continuing operations per share: $ 1.77 $ 0.98 $ 0.09 $ 2.75 $ 1.89 $ 1.77 $ 1.77 $ 0.98 $ 0.09 $ 2.75 $ 1.89 $ 1.77 Earnings from discontinued operations, net of taxes, per share: $ 0.01 $ 3.77 $ 0.81 $ — $ — $ 0.01 $ 0.01 $ 3.77 $ 0.81 $ — $ — $ 0.01 Net earnings per share: $ 1.78 $ 4.76 $ 0.90 $ 2.75 $ 1.89 $ 1.78 $ 1.78 $ 4.75 $ 0.90 $ 2.75 $ 1.89 $ 1.78 Weighted average shares outstanding: 16,510 16,537 16,297 16,450 16,563 16,510 19 14 7 32 23 19 16,529 16,551 16,304 16,482 16,586 16,529 $ 0.52 $ 0.44 $ 0.36 Dividends declared per share $ 0.72 $ 0.60 $ 0.52 OXFORD INDUSTRIES, INC.CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME(in thousands) Fiscal 2011 Fiscal 2010 Fiscal 2009 Fiscal
2013Fiscal
2012Fiscal
2011 $ 29,380 $ 78,658 $ 14,624 $ 45,291 $ 31,317 $ 29,380 (381 ) (536 ) 4,365 703 171 (381 ) 526 (43 ) — Net unrealized gain (loss) on cash flow hedges 264 (1,082 ) 526 145 (579 ) 4,365 967 (911 ) 145 $ 29,525 $ 78,079 $ 18,989 $ 46,258 $ 30,406 $ 29,525 OXFORD INDUSTRIES, INC.CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY(in thousands) Common
Stock Additional
Paid-In
Capital Retained
Earnings Accumulated
Other
Comprehensive
Income (Loss) Total Total 15,866 $ 88,425 $ 10,621 $ (27,605 ) $ 87,307 January 29, 2011 16,511 96,597 90,739 (23,819 ) $ 180,028 — — 14,624 4,365 18,989 — — 29,380 145 29,525 595 (950 ) — — (355 ) — 4,365 — — 4,365 — — (5,889 ) — (5,889 ) 16,461 91,840 19,356 (23,240 ) 104,417 — — 78,658 (579 ) 78,079 50 224 — — 274 — 4,533 — — 4,533 — — (7,275 ) — (7,275 ) 16,511 96,597 90,739 (23,819 ) 180,028 — — 29,380 145 29,525 85 2,646 — — 2,731 Shares issued under stock plans, including excess tax benefits of $0.4 million 85 2,646 — — 2,731 — 2,180 — — 2,180 — 2,180 — — 2,180 (74 ) (1,753 ) — — (1,827 ) (74 ) (1,753 ) — — (1,827 ) — — (8,568 ) — (8,568 ) — — (8,568 ) — (8,568 ) $ 16,522 $ 99,670 $ 111,551 $ (23,674 ) $ 204,069 January 28, 2012 16,522 99,670 111,551 (23,674 ) 204,069 Net earnings and other comprehensive loss — — 31,317 (911 ) 30,406 Shares issued under stock plans, including excess tax benefits of $0.4 million 73 2,465 — — 2,538 Compensation expense for stock awards — 2,756 — — 2,756 Cash dividends declared and paid — — (9,924 ) — (9,924 ) February 2, 2013 16,595 104,891 132,944 (24,585 ) 229,845 Net earnings and other comprehensive income — — 45,291 967 46,258 Shares issued under stock plans, including excess tax benefits of $6.1 million 44 7,471 — — 7,515 Compensation expense for stock awards — 1,659 — — 1,659 Repurchase of common stock (223 ) — (12,976 ) — (13,199 ) Cash dividends declared and paid — — (11,915 ) — (11,915 ) February 1, 2014 $ 16,416 $ 114,021 $ 153,344 $ (23,618 ) $ 260,163 OXFORD INDUSTRIES, INC.CONSOLIDATED STATEMENTS OF CASH FLOWS(in thousands) Fiscal 2011 Fiscal 2010 Fiscal 2009 Fiscal 2013 Fiscal 2012 Fiscal 2011 $ 29,243 $ 16,235 $ 1,386 $ 45,291 $ 31,317 $ 29,243 25,959 18,216 21,354 31,677 25,310 25,959 1,195 973 1,217 2,225 1,025 1,195 2,400 200 — 275 6,285 2,400 1,662 1,952 1,611 443 962 1,662 9,017 — 1,759 — 9,143 9,017 Gain on sale of property and equipment (1,611 ) — — 2,180 4,549 4,003 1,659 2,756 2,180 5,375 (4,620 ) (8,114 ) 674 (3,753 ) 5,375 Excess tax benefits related to stock-based compensation (6,086 ) (354 ) (398 ) (9,740 ) 162 1,250 (11,917 ) (3,026 ) (9,740 ) (18,332 ) (17,920 ) 35,669 (29,488 ) (5,408 ) (18,332 ) (6,030 ) (369 ) 79 (3,068 ) (1,640 ) (6,030 ) 6,074 22,340 (1,220 ) 16,821 2,429 6,074 1,684 (1,260 ) (1,390 ) (1,031 ) (3,886 ) 1,684 (6,042 ) (4,767 ) 3,371 6,870 5,938 (6,042 ) 44,645 35,691 60,975 52,734 67,098 44,247 (398 ) (58,303 ) — (17,888 ) (1,813 ) (398 ) (35,310 ) (13,328 ) (11,308 ) (43,372 ) (60,702 ) (35,310 ) — 78 11 Proceeds from sale of property and equipment 2,130 — — (35,708 ) (71,553 ) (11,297 ) (59,130 ) (62,515 ) (35,708 ) (112,212 ) (172,082 ) (252,764 ) (329,695 ) (193,328 ) (112,212 ) 114,835 172,082 219,444 354,649 307,270 114,835 (52,175 ) — (166,805 ) — (111,000 ) (52,175 ) — — 146,029 — (4,125 ) — — — (5,049 ) (401 ) (1,524 ) — 2,731 177 8 (1,827 ) — — (8,568 ) (7,275 ) (5,889 ) (57,216 ) (11,223 ) (65,026 ) Payment of contingent consideration amounts earned — (4,980 ) — Proceeds from issuance of common stock, including excess tax benefits 7,499 2,892 3,129 Repurchase of stock awards for employee tax withholding liabilities (13,199 ) — (1,827 ) Cash dividends declared and paid (11,915 ) (9,924 ) (8,568 ) Net cash provided by (used in) financing activities 6,938 (10,594 ) (56,818 ) 13,735 (19,930 ) 20,594 3,744 102,790 (15 ) 17,479 82,860 20,579 — — 17,479
(30,800
)
35,775
5,231 79 31 (233 ) 44,094 8,288 3,290 $ 13,373 $ 44,094 $ 8,288 $ 15,033 $ 18,560 $ 20,051 $ 40,839 $ 20,859 $ 9,741 See accompanying notes. Fiscal 2013 Fiscal 2012 Fiscal 2011 Net change in cash and cash equivalents 542 (6,011 ) (30,800 ) Effect of foreign currency translation on cash and cash equivalents 424 155 79 Cash and cash equivalents at the beginning of year 7,517 13,373 44,094 Cash and cash equivalents at the end of year $ 8,483 $ 7,517 $ 13,373 Supplemental disclosure of cash flow information: Cash paid for interest, net $ 3,826 $ 8,348 $ 15,033 Cash paid for income taxes $ 18,158 $ 25,442 $ 40,839 January 28, 2012whichthat designs, sources, markets and distributes products bearing the trademarks of our company-owned lifestyle brands as well as certain licensed and private label apparel products. Our portfolio of brands includes Tommy Bahama®, Lilly Pulitzer® and Ben Sherman®, as well as owned and licensed brands for tailored clothing and golf apparel. We distribute our company-owned lifestyle branded products through our direct to consumer channel, consisting of owned retail stores and e-commerce sites, and our wholesale distribution channel, which includes better department stores and specialty stores. Additionally, we operate 13 Tommy Bahama restaurants, generally adjacent to aselected Tommy Bahama retail store.stores. Our branded and private label tailored clothing products are distributed through department stores, specialty stores, national chains, specialty catalogs, mass merchants and Internet retailers. Originally founded in 1942, we have undergoneunderwent a transformation as we migrated from our historical domestic manufacturing roots towards a focus on designing, sourcing, distributingmarketing and marketingdistributing branded apparel products bearing prominent trademarks owned by us.the discontinued operations of our former Oxford Apparel Group, as discussed in Note 15.listed below (or words of similar import)Fiscal 2011; Fiscal 2012; Fiscal 2013 and Fiscal 2014 reflect the respective period noted:Fiscal 201253 weeks ending February 2, 2013Fiscal 201152 weeks ended January 28, 2012Fiscal 201052 weeks ended January 29, 2011Fiscal 200952 weeks ended January 30, 2010beneficiary.beneficiary, if any. In determining whether a controlling financial interest exists, we consider ownership of voting interests, as well as other rights of the investors. The results of operations of acquired businesses are included in our consolidated statements of earnings from the respective dates of the acquisitions. All significant intercompany accounts and transactions are eliminated in consolidation. We account for investments in which we exercise significant influence, but do not control and have not been determined to be the primary beneficiary, using the equity method of accounting. Significant influence is generally presumed to exist when we own between 20% and 50% of the entity. However, if we own a greater than 50% ownership interest in an entity and the minority shareholders hold certainOXFORD INDUSTRIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)January 28, 2012Note 1. Summary of Significant Accounting Policies (Continued)rights that allow them to approve or veto certain major decisions of the business, we would use the equity method of accounting. Under the equity method of accounting, original investments are recorded at cost, and are subsequently adjusted for our contributions to, distributions from and share of income or losses of the entity. Allocations of income and loss and distributions by the entity are made in accordance with the terms of the ownership agreement and reflected in royalties and other income in our consolidated statements of earnings. We did not own any material investments in an unconsolidated entity accounted for under the equity method as part of our continuing operations in any period presented.To the extent information to revise the allocation becomes available during the allocation period the allocation of the purchase price will be adjusted. Should information become available after the allocation period indicating that an adjustment to the purchase price allocation is appropriate, that adjustment will be included in our consolidated statementstatements of earnings. The allocation period will not exceed one year from the date of the acquisition. During fiscal 2011,finalized our valuation of the assets and liabilities acquired for the December 2010 acquisition of the Lilly Pulitzer brand and operations, which we operate as our Lilly Pulitzer operating group subsequent to acquisition. We initially paid $60 million in cash, adjusted for net working capital as of the closing date for the acquisition. Additionally, in connection with the acquisition, we entered into a contingent consideration arrangement whereby we would be obligated to pay up to $20 million in cash in the aggregate over the four years following the closing of the acquisition based on Lilly Pulitzer's achievement of certain earnings targets, as discussed in Note 14.as we believe the criteria for revenue recognition are met atwhich is considered the time of sale.shipment for e-commerce sales. Retail store, e-commerce, restaurant and concession revenues are recorded net of estimated returns and discounts, as appropriate, and net of applicable sales taxes in our consolidated statements of earnings. InOXFORD INDUSTRIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)January 28, 2012Note 1. Summary of Significant Accounting Policies (Continued)certain cases in which we retain the risk of loss during shipment, revenue recognition does not occur until the goods have reached the specified customer.returns, allowances, and operational chargebacks and returns for wholesale customers may include historical and current trends, agreements with customers, projected seasonal results, an evaluation of current economic conditions, specific program or product expectations and retailer performance. We record the discounts, returns and allowances as a reduction to net sales in our consolidated statements of earnings. As of January 28, 2012February 1, 2014 and January 29, 2011,February 2, 2013, reserve balances related to these items were $8.4$9.2$11.1 million, respectively.January 28, 2012February 1, 2014 and January 29, 2011,February 2, 2013, bad debt reserve balances were $2.0$0.6 million and $2.6$1.0 million, respectively.card balancescards and merchandise credits are unlikely to be redeemed once they have been outstanding for fourthree years and therefore may be recognized as income, subject to applicable laws in certain states.states, at that time. Deferred revenue for gift cards purchased by consumers and merchandise credits received by customers but not yet redeemed, less any breakage income recognized, is included in other accrued expenses and liabilities in our consolidated balance sheets and totaled $6.0 million and $4.9 million as of February 1, 2014 and February 2, 2013, respectively. Gift card breakage, which was not material in any period presented, is included in net sales in our consolidated statements of earnings. Deferred revenue for gift cards purchased by consumers but not yet redeemed, less any breakage income recognized, is included in trade accounts payable and other accrued expenses in our consolidated balance sheets.$16.8$16.9 million $15.3, $16.4 million and $11.6$16.8 million during fiscalFiscal 2013, Fiscal 2012 and Fiscal 2011, fiscal 2010 and fiscal 2009, respectively and is included in royalties and other operating income in our consolidated statements of earnings. and inventories all manufacturing, sourcing and procurement costs and expenses incurred prior to or in association with the receipt of finished goods at our distribution facilities, as well as in-bound freight from our warehouse to our own retail stores. The costs prior to receipt at our distribution facilities include product cost, inbound freight charges, import costs,OXFORD INDUSTRIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)January 28, 2012Note 1. Summary of Significant Accounting Policies (Continued)consolidators' fees.depreciation and amortization expense associated with our manufacturing, sourcing and procurement operations. Our gross margins may not be directly comparable to those of our competitors, as statement of earnings classifications of certain expenses may vary by company.fiscalFiscal 2013, Fiscal 2012 and Fiscal 2011, fiscal 2010 and fiscal 2009, distribution network costs, including shipping and handling, included in SG&A totaled approximately $23.2$22.6 million $21.6, $24.4 million and $21.4$23.2 million, respectively. We generally classify amounts billed to customers for shipping and handling fees as revenuesin net sales and classify costs related to shipping in SG&A in our consolidated statements of earnings.fiscalFiscal 2013, Fiscal 2012 and Fiscal 2011 fiscal 2010were $32.3 million, $27.6 million and fiscal 2009 were $23.7$23.7 million $15.2 million and $15.0 million,, respectively. Prepaid advertising, promotions and marketing expenses included in prepaid expenses in our consolidated balance sheets as of January 28, 2012February 1, 2014 and January 29, 2011February 2, 2013 were $1.2$1.9 million and $0.8$1.6 million, respectively. Operating costs (including store set-up, rent and training expenses) incurred prior to the opening of new retail stores are expensed as incurred and are included in SG&A.fiscalFiscal 2013, Fiscal 2012 and Fiscal 2011 fiscal 2010were $5.0 million, $4.8 million and fiscal 2009 were $4.2$4.2 million $3.4 million and $2.7 million,, respectively. Such amounts may be dependent upon sales of our products which we sell pursuant to the terms of a license agreement with another party.OXFORD INDUSTRIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)January 28, 2012Note 1. Summary of Significant Accounting Policies (Continued)fiscalFiscal 2010, in connection with our acquisition of the Lilly Pulitzer brand and operations, we accrued the fair value of contingent consideration totaling $10.5$10.5 million as a non-cash investingfinancing activity. We also accrued an additional$0.3 million, $6.3 million and $2.4 million of change in fair value of contingent consideration in our consolidated statements of earnings during fiscal 2011. The amount to ultimately be paidFiscal 2013, Fiscal 2012 and timing of payments of the contingent consideration is uncertain at this time as the payment is dependent upon the acquired Lilly Pulitzer business meeting certain earnings thresholds in the four years subsequent to the December 21, 2010 acquisition.Fiscal 2011, respectively. The maximum amount payable pursuant to the contingent consideration agreement is $20$20 million in the aggregate,aggregate. Amounts paid pursuant to this contingent consideration arrangement are reflected in payment of which $2.5 million wascontingent consideration earned in fiscal 2011our consolidated statements of cash flows and is expected to be paid during the first half of fiscal 2012.fiscalFiscal 2010, in connection with our sale of substantially all of the operations and assets of our former Oxford Apparel Group, we accrued $5.4$5.4 million, which was placed in escrow and payable to us upon completion of the related working capital calculation, less the working capital shortfall. This amount represents a non-cash investing activity. In fiscalFiscal 2011, we received $3.7$3.7 million of the escrow, with the remaining amount being returned to the purchaser as a result of the working capital and other adjustments. Also, we provide an allowance for shrinkage, as appropriate. As the amount to be ultimately realized for the goods is not necessarily known at period end, we must utilize certain assumptions considering historical experience, inventory quantity, quality, age and mix, historical sales trends, future sales projections, consumer and retailer preferences, market trends and general economic conditions.January 28, 2012February 1, 2014 and January 29, 2011, approximately $88.5February 2, 2013, $120.5 million, or 86%84%, and $74.1$92.5 million, or 87%84%, of our inventories arewere valued at the lower of LIFO cost or market after deducting our LIFO reserve. The remaining $14.9$23.2 million and $11.3$17.1 million of our inventories arewere valued at the lower of FIFO cost or market as of January 28, 2012February 1, 2014 and January 29, 2011,February 2, 2013, respectively. Generally, inventories of our domestic operations are valued at the lower of LIFO cost or market, and our inventories of our international operations are valued at the lower of FIFO cost or market. LIFO reserves are based on the Producer Price Index as published by the United States Department of Labor. We write down inventories valued at the lower of LIFO cost or market when LIFO cost exceeds market value. We considerdeem LIFO accounting adjustments to not only include changes in the LIFO reserve, but also changes in markdown reserves which are considered in LIFO accounting. As our LIFO inventory pool does not correspond to our operating group definitions, LIFO inventory accounting adjustments are not allocated to the respective operating groups. Thus, the impactOXFORD INDUSTRIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)January 28, 2012Note 1. Summary of Significant Accounting Policies (Continued) U.S. GAAP, the definition of fair value of inventories acquired generally will equal the expected sales price less certain costs associated with selling the inventory, which may exceed the actual cost of the acquired inventories. In accordance with U.S. GAAP, we recognized a write-up of inventories in connection with our December 2010 acquisition of the Lilly Pulitzer brand and operations of approximately $1.8 million above the cost of the acquired inventories to fair value, which was included in our allocation of purchase price. Based on the inventory turn of the acquired inventories, approximately $0.8 million of the write-up was recognized as additional cost of goods sold in fiscal 2010, with the remaining $1.0 million of the write-up recognized as additional cost of goods sold in fiscal 2011.the statementour consolidated statements of earnings as incurred. Depreciation is calculated using both straight-line and accelerated methods generally over the estimated useful lives of the assets as follows: Lesser of remaining life of the asset or lease term 2 – 15 years 7 – 40 years fiscalFiscal 2013, Fiscal 2012 and Fiscal 2011 fiscal 2010included $0.0 million, $0.3 million, and fiscal 2009 included approximately $4.6$4.6 million $0.4 million and $2.3 million,, respectively, of impairment charges for property and equipment.equipment, which generally relate to leasehold impairments at retail stores. Depreciation by operating group in Note 10 and in our consolidated statements of cash flows includes these impairment charges. Approximately $3.7In Fiscal 2011, $3.7 million of the $4.6 million of impairment charges in fiscal 2011 reflect impairment of retail store and restaurant assets in the Tommy Bahama operating group. Substantially all of the impairment charges were recorded in SG&A in our consolidated statements of earnings.OXFORD INDUSTRIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)January 28, 2012Note 1. Summary of Significant Accounting Policies (Continued)thisan annual or interim analysis indicates an impairment of a trademark with an indefinite useful life, the amount of the impairment is recognized in our consolidated financial statements based on the amount that the carrying value exceeds the estimated fair value of the asset.which coincides with the timingor at an interim date if indicators of our annual budgeting processimpairment exist at that is used in estimating future cash flows for the analysis. date. No impairment of intangible assets with indefinite lives was recognized during any period presented.is based onconsiders the remaining contractual period of the required right, as applicable, our plans for the intangible asset as well asassets and factors outside of our control, including expected customer attrition. Amortization of intangible assets is included in SG&A in our consolidated statements of earnings. Intangible assets with finite lives are reviewed for impairment periodically if events or changes in circumstances indicate that the carrying amount may not be recoverable. If expected future discounted cash flows resulting from operationsthe intangible assets are less than their carrying amounts, an asset is determined to be impaired and a loss is recorded for the amount by which the carrying value of the asset exceeds its fair value. No impairment of intangible assets with finite lives was recognized during any period presented. In September 2011,FASB issued an update to their accounting guidance regarding goodwill impairment testing. This update, which we adopted infirst day of the fourth quarter of our fiscal 2011 resulted in no material impact on our consolidated financial statements, and allows us to assessyear. The qualitative factors toOXFORD INDUSTRIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)January 28, 2012Note 1. Summary of Significant Accounting Policies (Continued)determine the likelihood of goodwill impairment and whether it is necessary to perform the two-step evaluation of the recoverability of goodwill. The qualitative factorsthat we use to determine the likelihood of goodwill impairment, as well as to determine if an interim test is appropriate, include: (a) macroeconomic conditions, (b) industry and market considerations, (c) cost factors, (d) overall financial performance, (e) other relevant entity-specific events, (f) events affecting a reporting unit, (g) a sustained decrease in share price, or (h) other factors as appropriate. As performed in prior years and as may be determined necessary in future periods,In the two-step evaluation ofevent we determine that we will bypass the recoverability of goodwillqualitative impairment option or if we determine that a quantitative test is appropriate, the quantitative test includes valuations of each applicable underlying business using fair value techniques and market comparables which may include a discounted cash flow analysis or an independent appraisal. Significant estimates, some of which mymay be very subjective, considered in such a discounted cash flow analysis are future cash flow projections of the business, the discount rate, which estimates the risk-adjusted market based cost of capital, and other assumptions. The estimates and assumptions included in the two-step evaluation of the recoverability of goodwill involve significant uncertainty, and if our plans or anticipated results change, the impact on our financial statements could be significant. We test, either qualitatively or as a two-step evaluation, goodwill for impairment as of the first day of the fourth quarter of our fiscal year, which coincides with the timing of our annual budgeting process that is used in estimating future cash flows for the assessment. In addition to the annual impairment test, if an event occurs or circumstances change that would indicate impairment between the annual tests, we would perform an impairment test at that time. In performing this interim assessment, we consider the factors and circumstances used in performing the qualitative assessment to evaluate whether it is more likely than not that the carrying value of goodwill may not be recoverable. theour consolidated financial statements. No impairment of goodwill was recognized during any periods presented.January 28, 2012,February 1, 2014, all the goodwill included in our consolidated balance sheet is deductible for tax purposes.royaltiesadvertising and advertising.royalties. Other non-current assets primarily consist of investmentsassets set aside for potential deferred compensation liabilities related to our deferred compensation plan deferred financing costs andas discussed below, assets related to certain investments in officers' life insurance policies. Deferred financing costs, which are included in other non-current assets, net, are amortized on a straight-line basis, which approximates the effective interest method over the life of the related debt. Amortization expense forpolicies, security deposits and deferred financing costs, which is included in interest expense in the consolidated statements of earnings, was $1.1 million, $1.3 million and $1.2 million during fiscal 2011, fiscal 2010 and fiscal 2009, respectively. Additionally, approximately $1.1 million, $0.0 million and $1.5 million of deferred financing costs were written off as a loss on repurchase of senior notes in fiscal 2011, fiscal 2010 and fiscal 2009, respectively, in conjunction with our repurchase, satisfaction and discharge of senior notes in the respective period. Unamortized deferred financing costs totaled approximately $2.7 million and $4.9 million at January 28, 2012 and January 29, 2011, respectively.OXFORD INDUSTRIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)January 28, 2012Note 1. Summary of Significant Accounting Policies (Continued)January 28, 2012February 1, 2014 and January 29, 2011,February 2, 2013, the officers' life insurance policies, net, recorded in our consolidated balance sheets totaled approximately $5.3$5.1$5.5 million, respectively. During fiscal 2010, we repaid $4.1 million of loans associated withinsurance policies.
$0.4 million, $0.8 million and $1.1 million during Fiscal 2013, Fiscal 2012 and Fiscal 2011, respectively. Unamortized deferred financing costs totaled $1.9 million and $1.9 million at February 1, 2014 and February 2, 2013, respectively.investments,liabilities, which are included in other non-current assets, net, as of January 28, 2012February 1, 2014 and January 29, 2011February 2, 2013 was $9.0$11.4 million and $9.9$10.3 million, respectively, substantially all of which are held in a rabbi trust. The liabilities associated with the non-qualified deferred compensation plan are included in other non-current liabilities in our consolidated balance sheets and totaled approximately $8.8$11.1 million and $9.8$10.0 million at January 28, 2012February 1, 2014 and January 29, 2011,February 2, 2013, respectively.Trade Accrued Compensation trade accounts payable, accrued compensation and other accrued expenses and liabilities are carried at cost, which reflects the fair value of the consideration expected to be paid in the future for goods and services received, whether or not billed to us. Accruals for employee insurance and workers' compensation, which are included in accounts payable and other accrued expenses and liabilities in our consolidated balance sheets, include estimated settlements for known claims, as well as accruals for estimates of incurred but not reported claims based on our claims experience and statistical trends.theother accrued expenses and liabilities in our consolidated financial statements for the estimated loss and related legal fees. In other instances, because of the uncertainties related to both the probable outcome and amount or range of loss, we are unable to make a reasonable estimate of a liability, if any, and therefore have not recorded a reserve. As additional information becomes available or as circumstances change, we adjust our assessment and estimates of such liabilities accordingly. We believe the outcomeOXFORD INDUSTRIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)January 28, 2012Note 1. Summary of Significant Accounting Policies (Continued)adverse impact on our consolidated financial statements, based on information currently available.Non-current and Contingent Consideration Earned and PayableAAdditionally, a change in assumptions related to the contingent consideration in future periods could have a material impact on our consolidated balance sheets or our consolidated statements of earnings.financial statements. Any change in the fair value of the contingent consideration is recognized as change in fair value of contingent consideration in our consolidated statements of earnings.maywould be obligated to pay up to $20$20 million if certain performance criteria are met in cash in the aggregate, over the four year period subsequent toyears following the December 2010 acquisition.closing of the acquisition, based on Lilly Pulitzer's achievement of certain earnings targets. The terms of the contingent consideration arrangement and amounts earned and paid are discussed in further detail in Note 6. As of the date of acquisition we determined that the fair value of the contingent consideration was $10.5$10.5 million, which reflected the discounted fair value of the expected payments. Although there was uncertainty about whether the performance criteria in the contingent consideration full $20 million of contingent consideration. Thus, the fair value of the contingent consideration at acquisition reflected the $20$20 million of anticipated payments discounted to fair value.value using a discount rate which reflected the uncertainty regarding whether the earnings target may not be met given the growth required to achieve the contingent consideration payments as well as other factors. As of January 28, 2012, we still anticipateanticipated that the performance criteria willwould be met based on the operating results of the Lilly Pulitzer business exceeding the performance criteria in fiscal 2011. Additionally,Fiscal 2011, and we evaluatedreevaluated the discount rate as of January 28, 2012. at that time.January 28,February 2, 2013, we reevaluated the discount rate and determined that the use of a lower discount rate than used in prior periods would be appropriate. This lower discount rate reflected our assessment that we believed the likelihood of the contingent consideration being earned is greater than in prior years based on our consideration of, among other factors, (1) the historical earnings achieved by the Lilly Pulitzer operating group through Fiscal 2012, including a significant amount of earnings from Fiscal 2011 and January 29, 2011,Fiscal 2012 in excess of the targets for those periods which carries over as a reduction to the targets in future years, (2) the Fiscal 2012 earnings significantly exceeded both the Fiscal 2013 and Fiscal 2014 targets, (3) our operating income projections for the Lilly Pulitzer operating group for future periods which exceeded the Fiscal 2012 operating results and (4) the shorter remaining term of the contingent consideration arrangement, which provides greater visibility through the term of the agreement. Our assessment of these factors resulted in a reduction of the discount rate for the contingent consideration to a rate which reflects the reduced uncertainty of the amounts to be paid pursuant to the arrangement.determinedstill anticipate that the performance criteria will be met based on our consideration of (1) the operating results of the Lilly Pulitzer business exceeding the performance criteria through Fiscal 2013, resulting in a significant amount of earnings from Fiscal 2013 and earlier which carries over as a reduction to the Fiscal 2014 target and counts towards the cumulative target and (2) Fiscal 2013 operating results exceeding the Fiscal 2014 target. Our discount rate at February 1, 2014 reflects these assumptions about the minimal uncertainty about these amounts being earned.was approximately $13.1 millionliability, including non-current and $10.7 million, respectively. As of January 28, 2012, $2.5 million of the $13.1 million of contingent consideration was classifiedcurrent amounts, is as a current liability in contingent consideration earned and payable in our consolidated balance sheet as the $2.5 million was earned in fiscal 2011 and is expected to be paid in the first half of fiscal 2012. The remaining $10.6 million of the contingent consideration is included in non-current contingent consideration in our consolidated balance sheet as of January 28, 2012. As of January 29, 2011, the entire amount of the $10.7 million fair value of contingent consideration was included in non-current contingent consideration in our consolidated balance sheets as no amount had been earned and payable as of January 29, 2011. During fiscal 2011 and fiscal 2010, we recognized change in fair value of contingent consideration of $2.4 million and $0.2 million, respectively, in our statements of earnings with no such amounts recorded in fiscal 2009. The amounts recognized in fiscal 2011 and fiscal 2010 primarily reflect the passage of time rather than significant changes in our assumptions during those periods.OXFORD INDUSTRIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)January 28, 2012Note 1. Summary of Significant Accounting Policies (Continued) Fiscal 2013 Fiscal 2012 Fiscal 2011 Balance at beginning of year $ 14,450 $ 13,145 $ 10,745 Change in fair value of contingent consideration 275 6,285 2,400 Contingent consideration payments made to sellers during the year — (4,980 ) — Balance at end of year $ 14,725 $ 14,450 $ 13,145 Maximum contingent consideration amounts payable in future years $ 15,000 $ 15,000 $ 17,500 income tax uncertaintiesan environmental remediation reserve as discussed in Note 8.January 28, 2012February 1, 2014 and January 29, 2011February 2, 2013 was approximately $24.5$37.8 million and $28.8$31.6 million, respectively. Contingent rents, including those based on a percentage of retail sales over stated levels, and rental payment increases based on a contingent future event are recognized as the expense is incurred.fiscal 2011, fiscal 2010 and fiscal 2009, we recognized $0.1 million, $2.8 million and $0.2 million, respectively, of charges related to lease termination losses and vacated leased office space that we exited or otherwise do not intend to utilize in the future. During fiscalFiscal 2011, we recognized a reduction in deferred rent of approximately $3.6$3.6 million resulting from our decision to exit certain leases by negotiating a lease termination or by deciding that we will exercise an early termination option for certain existing lease agreements. These amounts are reflected as a reduction to SG&A in our consolidated statements of operations.purchasegenerate net sales or sell goodsincur expenses in foreign currencies.currencies other than the functional currency of the business. We have determined that the functional currency for substantially all of our operations is the respective local currency. The resulting assets and liabilities denominated in amounts other than the functional currency of the subsidiary are remeasured into the functional currency of the subsidiary at the rate of exchange in effect on the balance sheet date, and income and expenses are remeasured at the averageOXFORD INDUSTRIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)January 28, 2012Note 1. Summary of Significant Accounting Policies (Continued)fiscalFiscal 2013, Fiscal 2012 and Fiscal 2011 fiscal 2010 and fiscal 2009 were not material.Exchange ContractsJanuary 28, 2012,February 1, 2014, our foreign currency exchange risk exposure primarily results from our U.K. businessbusinesses operating outside of the United States, which is primarily related to (1) our United Kingdom and European Ben Sherman operations and our Asia-Pacific and Canadian Tommy Bahama operations purchasing goods in U.S.United States dollars Euro or other currencies which are not the functional currency of the business; (2) our U.K. businessbusinesses operating outside of the United States selling goods in Euro orcurrencies other currenciesthan the applicable functional currency; and (3) certain other transactions, including intercompany transactions. We may enter into short-term forward foreign currency exchange contracts in the ordinary course of business to mitigate a portion of the risk associated with foreign currency exchange rate fluctuations related to purchases of inventory or selling goods in currencies other than their functional currencies by certain of our foreign subsidiaries. Historically, we have entered into forward foreign currency exchange contracts for our U.K.Ben Sherman United Kingdom business using pound sterling for the purchase of U.S.United States dollars, which are used for inventory purchases, and for the sale of Euro, which are generated from retail and wholesaleBen Sherman operations in Europe, for pound sterling.value and book valuevalues of the forward foreign exchange contracts which is included in prepaid expenses or accounts payable and accrued expenses in our consolidated balance sheets, isare determined by us based on dealer quotes of market forward rates and reflectsreflect the amountamounts that we would receive or pay at the short-term maturity dates for contracts involving the same currencies and maturity dates. No such contracts have been entered into for speculative purposes. All forward foreign currency exchange contracts that had not been settled as of January 28, 2012February 1, 2014 have contractual settlement dates during fiscal 2012. Wethe next 18 months. Thus, we anticipate that substantially all the gain (loss)substantial majority of gains (losses) included in accumulated other comprehensive income as of January 28, 2012February 1, 2014 that are ultimately realized will impact net earnings in fiscal 2012the next year as the contracts are settled. The accounting for changes in the fair value of such forward foreign currency exchange contracts depends on whether the contract has been designated and qualifies as part of a hedging relationship and on the type of hedging relationship. For any forward foreign currency exchange contracts that are designated and qualify as cash flow hedges for accounting purposes and have not been settled as of period-end, the unrealized gains (losses) on outstanding forward foreign currency exchange contracts are recognized, to the extent the hedge relationship has been effective, as a component of accumulated other comprehensive income (loss) in our consolidated balance sheets. We measure effectiveness of our forward foreign currency exchange contracts that qualify as cash flow hedges, both at inception and on an ongoing basis. Any ineffectiveness of these instruments is immediately recognized in our consolidated statements of earnings as a component of SG&A similar to the policy for such contracts not designated as hedges forOXFORD INDUSTRIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)January 28, 2012Note 1. Summary of Significant Accounting Policies (Continued)accounting purposes as discussed below. No significant ineffectiveness was recorded on qualifying hedges during fiscal 2011, fiscal 2010 and fiscal 2009. The notional amount of forward foreign currency exchange contracts which had not been settled that qualify as hedges for accounting purposes totaled approximately $26.5$16.5$33.4 million as of January 28, 2012February 1, 2014 and January 29, 2011,February 2, 2013, respectively. For any forward foreign currency exchange contracts thatnot designated asexposed to market risk from changes in interest rates on our variable-rate indebtedness, which includes our U.S. Revolving Credit Agreement and our U.K. Revolving Credit Agreement. We generally intend to limit the impact of interest rate changes on earnings and cash flow, hedgesprimarily through a mix of variable-rate and fixed-rate debt, although at times we may not have any variable-rate or fixed-rate debt. Additionally, we may enter into interest rate swap arrangements related to certain of our variable-rate debt in order to fix the interest rate on variable rate debt if we determine that our exposure to interest rate changes is higher than optimal. Our assessment also considers our need for accounting purposes,flexibility in our borrowing arrangements resulting from the unrealized gains (losses)seasonality of our business, among other factors. We continuously monitor interest rates to consider the sources and terms of our borrowing facilities in order to determine whether we have achieved our interest rate management objectives.outstandingcertain of our variable-rate borrowings ranging from $25 million to $45foreign currency exchange contracts arecurves and volatility levels using observable market inputs when available. We anticipate that any gain (loss) included in earnings (losses) from continuing operations as a component of SG&A in our consolidated statements of earnings. There were no forward foreign currency exchange contracts which had not been settled that were not designated as cash flow hedges for accounting purposesaccumulated other comprehensive income as of January 28, 2012 and January 29, 2011. U.S. GAAP, is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. Valuation techniques include the market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost). These valuation techniques may be based upon observable and unobservable inputs. The three levels of inputs used to measure fair value pursuant to the guidance are as follows:••• long-term debt. Given their short-term nature, the carrying amounts of cash and cash equivalents, receivables, accounts payable and accrued expenses generally approximate their fair values. Additionally, we believe the carrying amounts of our variable-rate borrowings if any, approximate fair value.OXFORD INDUSTRIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)January 28, 2012Note 1. Summary of Significant Accounting Policies (Continued)(in thousands): Total Fair Value Quoted Prices in
Active Markets for
Identical Assets
(Level 1) Significant Other
Observable Inputs
(Level 2) Significant
Unobservable
Inputs
(Level 3) $ 483 $ — $ 483 $ — $ 13,145 $ — $ — $ 13,145 $ 10,745 $ — $ — $ 10,745 $ 43 $ — $ 43 $ — We have determined that forward foreign currency exchange contractseach of which are discussed in U.S. dollars and Euro with a notional amount of $26.5 million and $16.5 million as of January 28, 2012 and January 29, 2011, respectively, are financial assets or financial liabilities measured at fair value on a recurring basis included in our consolidated balance sheets. Such amounts which were included in prepaid expenses or accounts payable and accrued liabilities and accumulated other comprehensive income in our consolidated balance sheets were determined by us based on dealer quotes of market forward rates and reflects the amount that we would receive or pay at the short-term maturity dates for contracts involving the same currencies and maturity dates. As we utilize dealer quotes in valuing the forward foreign currency exchange contracts, we believe that these forward foreign currency exchange contracts are most appropriately included within level 2 of the fair value hierarchy. We have determined that the $13.1 million and $10.7 million as of January 28, 2012 and January 29, 2011, respectively, of contingent consideration related to our acquisition of the Lilly Pulitzer brand and operations, as discussed above, is a financial liability measured at fair value on a recurring basis included in our consolidated financial statements. We recognized a change in fair value of contingent consideration in our statement of earnings of $2.4 million during fiscal 2011, primarily due to the passage of time. Our estimate of fair value for the contingent consideration at each balance sheet date is based on our assumptions, which reflect our expectation to pay in full the aggregate $20 million of contingent consideration, discounted to present value at each balance sheet date. As many of the inputs in valuing the contingent consideration are unobservable, we believe that this liability is most appropriately classified within level 3 of the fair value hierarchy. We anticipate the $2.5 million of the contingent consideration that has been earned as a result of the fiscal 2011January 28, 2012performance, and is included in contingent consideration earned and payable in our consolidated balance sheet as Total Fair Value February 1, 2014 Financial Liabilities: Forward foreign currency exchange contracts $ 285 $ — $ 285 $ — Interest rate swap agreements $ 50 $ — $ 50 $ — Fair value of contingent consideration, (current and non-current) $ 14,725 $ — $ — $ 14,725 February 2, 2013 Financial Liabilities: Forward foreign currency exchange contracts $ 576 $ — $ 576 $ — Interest rate swap agreements $ 23 $ — $ 23 $ — Fair value of contingent consideration (current and non-current) $ 14,450 $ — $ — $ 14,450 January 28, 2012, will be paid during the first half of fiscal 2012. The net book value of our 113/8% Senior Secured Notes as of January 28, 2012 is approximately $103.4 million. We have estimated thatmethods used for determining the fair value of our 113/8% Senior Secured Notes is approximately $113 million as of January 28, 2012. The significant terms of our debt arrangements are disclosedthe financial instruments included in Note 5.Stock-Basedstock-based employeeequity compensation plans as described in Note 7, which provide for the ability to grant restricted stock,shares, restricted stockshare units, stock options and other stock-basedequity awards to our employees and non-employee directors. We recognize share-basedequity awards to employees and non-employee directors in our consolidated statements of earnings based on their fair values on the grant date.share-basedequity awards. The share-basedFor awards which are unvested aswith specified service requirements, the fair value of January 28, 2012 are dependent upon the employee remaining employed by us for a specified time subsequentequity awards granted to employees is recognized over the grant date; however, some prior grants were also dependent upon us meeting certain performance measures in one year and the employee remaining employed by us for a specified time subsequent torespective service period. For performance-based awards, during the performance period if applicable,we assess expected performance versus the predetermined performance goals and it is possible that future awards may have certain performance based requirements. The amount of share-basedadjust the cumulative equity compensation expense recognized overto reflect the relative expected performance period, if any, and vesting period is calculated based upon the market value of the share-based awards on the grant date.achievement. The share-basedequity compensation expense less an estimated forfeiture rate, if material,earned by the employees is recognized on a straight-line basis over the aggregate performance period ifand any andadditional required service period. TheEquity compensation is recognized less an estimated forfeiture rate, if material, and the estimated forfeiture rate is assessed and adjusted periodically, as appropriate.U.S. GAAP, such as foreign currency translation adjustments and the net unrealized gain (loss) associated with cash flow hedges which qualify for hedge accounting, including forward foreign currency exchange contracts which qualify for hedge accounting.and interest rate swap agreements. These amounts of other comprehensive income (loss) are deferred in accumulated other comprehensive income (loss), which is included in shareholders' equity in our consolidated balance sheets. Upon settlement of the agreement, amounts related to foreign currency contracts are recognized as a part of the cost of inventory being hedged in our consolidated balance sheet and recognized in our consolidated statements of operations when the related inventory is sold, while amounts related to interest rate swap agreements are recognized in our statements of operations as an adjustment to interest expense on the individualJanuary 28, 2012in our consolidated balance sheets. The components(loss), net of related income taxes, are as follows (in thousands): January 28,
2012 January 29,
2011 $ (24,157 ) $ (23,776 ) 483 (43 ) $ (23,674 ) $ (23,819 ) In June 2011, the FASB issued an update to their guidance regarding other comprehensive income which requires that all non-owner changes in shareholders' equity be presented in either a single continuous statement of comprehensive income or in two separate but consecutive statements of income and comprehensive income. We adopted this guidance in fiscal 2011, with no material impact upon adoption other than changes in disclosure requirements, including the requirement to provide statements of comprehensive income for each period thatour consolidated statements of earnings arewere not material in any period presented. Our financial instruments thatconsist primarilyas a result of our accounts receivable balances, for which the total exposure is limited to the amount recognized in our consolidated balance sheets. We sell our merchandise to customers operating in a number of retail distribution channels in the United States as well as in some retail distribution channels inand other countries. We extend credit and continuously monitor credit risk based on an evaluation of the customer's financial condition and credit history and generally require no collateral. Credit risk is impacted by conditions or occurrences within the economy and the retail industry and is principally dependent on each customer's financial condition. Additionally, a decision by the controlling owner of a group of stores or any significant customer to decrease the amount of merchandise purchased from us or to cease carrying our products could have an adverse effect on our results of operations in future periods. NordstromTwo customers represented 13%11% and 10% of our consolidated accounts receivable, net, as of January 28, 2012February 1, 2014 with no other customers representing 10% or more of our consolidated accounts receivable at that date.fiscalFiscal 2013, Fiscal 2012 or Fiscal 2011. Additionally, during Fiscal 2013, Fiscal 2012 and Fiscal 2011 fiscal 2010 or fiscal 2009.Table of ContentsnoOXFORD INDUSTRIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)January 28, 2012Note 1. Summary of Significant Accounting Policies (Continued) The table below presents the percentages of net sales by any individual customer that represents represented more than 10% or more of the operating group's net sales including direct to consumerof Tommy Bahama, Lilly Pulitzer or Ben Sherman. During each of Fiscal 2013, Fiscal 2012 and wholesale sales duringFiscal 2011, the periods presented. Fiscal 2011 Fiscal 2010 Fiscal 2009 (1) 10% 10%, 10% (1) (2) (2) (1) 11% 15% 18%, 14%, 13%, 12%, 11% 22%, 14%, 11%, 10%, 10% 28%, 16%, 13%, 11%
of Lanier Clothes.(1)Notop five customers of Lanier Clothes, represented 67%, 73% and 68%, respectively, of Lanier Clothes net sales. In Fiscal 2013, Fiscal 2012 and Fiscal 2011, the largest individual customer in Lanier Clothes represented greater than 10%17%, 19% and 18%, respectively, of the operating group's net sales during the fiscal year.(2)Not provided as periods were prior to acquisition and not included in our consolidated financial statements.certain of our foreign subsidiaries to be permanently reinvested. For each of these entities, the tax basis equals or exceeds the financial basis as of January 28, 2012. Also,reinvested, and accordingly have not recognized a deferred tax liability for these foreign subsidiaries due to a difference in financial and tax basis. Deferred tax liabilities are also not required to be recognized for undistributed earnings of foreign subsidiaries when management considers those earnings to be permanently reinvested outside the United States. We do not consider the undistributed earnings of itssubstantially all of our foreign subsidiaries to be permanently reinvested outside the U.S.,United States as of February 1, 2014 and therefore records thehave not recorded a deferred tax liability on suchthese earnings in the year they are included in theour consolidated financial statements.January 28, 2012our employee stock options and the vesting of stock granted to employees. The benefit is equal to the difference, multiplied by the appropriate tax rate, between (1) the fair market value of the stockshare at the time of vesting of a restricted share or restricted share unit or at the time of the exercise andof the option price,and (2) the amount required to be paid by the employee, if any, times the appropriate tax rate.any. We have recorded the benefit associated with the exercise of employee stock options and the vesting of stockshares and share units granted to employees and the exercise of options as a reduction to income taxes payable. To the extent compensation expense has been recorded, income tax expense is reduced. Any additional benefit is recorded directly to shareholders' equity in our consolidated balance sheets. If a tax benefit is realized on compensation of an amount less than the amount recorded for financial statement purposes, the decrease in benefit is also recorded directly to shareholders' equity.SatesStates and various state, local and foreign jurisdictions. Our federal, state, local and foreign income tax returns filed for the years ended on or before February 2, 2008,January 30, 2010, with limited exceptions, are no longer subject to examination by tax authorities.common share are calculated by dividing the respective amount by the weighted average number of common shares outstanding during the period, including any unvested commonrestricted shares with nonforfeitable rights to dividends.dividends, if any. Shares repurchased are removed from the weighted average number of common shares outstanding upon repurchase and delivery. common share are calculated similarly to the amounts above, except that the weighted average shares outstanding in the diluted calculations also includeincludes the potential dilution using the treasury stock method that could occur if dilutive securities, including stockrestricted share units, options restricted stock units or other dilutive awards, if any, were converted to common shares. The treasury stock method assumes that shares are issued for any stockrestricted share units, options restricted stock units or other dilutive awards thatOXFORD INDUSTRIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)January 28, 2012Note 1. Summary of Significant Accounting Policies (Continued) During fiscal 2010 and fiscal 2009, approximately 0.1 million of stock options were excluded from our computation of diluted earnings from continuing operations, diluted earnings from discontinued operations, net of taxes and diluted net earnings per common share as the options were anti-dilutive. No stock options were excluded from these calculations in fiscal 2011 as all stock options outstanding were "in the money" during fiscal 2011. As discussed in Note 15, onbalance sheets, consolidatedfinancial statements of earnings and consolidated statements of cash flows for all periods presented includereflect the operations of our former Oxford Apparel operating group, as reported historically, except that (1) the operations of our Oxford Golf business and the operations of our Lyons, Georgia distribution center are reported within Corporate and Other as those operations were not sold and (2) certain corporate service costs which were previously allocated to Oxford Apparel are reported as corporate service costs included in Corporate and Other as there iswas uncertainty in whether there willwould be a reduction in those costs as a result of the Oxford Apparel sale. With respect to interest expense, for fiscal 2010 and fiscal 2009 we allocated all interest expense related to our U.S. Revolving Credit Agreement which was incurred prior to the transaction to earnings from discontinued operations as the net proceeds from the transaction and the proceeds from the settlementthe retained assets and liabilities related to the discontinued operations exceeded the amounts outstanding under our U.S. Revolving Credit Agreement during those periods. We did not allocate any interest related to our 113/8% Senior Secured Notes to discontinued operations. The income taxes for discontinued operations reflect the residual income tax expense after calculating the income taxes for continuing operations, excluding the discontinued operations.Seasonality Although our various product lines are sold on a year-round basis, the demand for specific products or styles may be very seasonal. For example, the demand in direct to consumer operations, including our own retail 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. Similarly, the demand in our direct to consumer operations for our Lilly Pulitzer products in our principal markets is generally higher in the spring and summer seasons and lower in the holiday and fall seasons. Also, wholesale product shipments are shipped prior to each of the retail selling seasons; thus the Tommy Bahama and Lilly Pulitzer wholesale businesses will typically be stronger just prior to the stronger retail seasons of each brand. The sales and operating results of Ben Sherman are more consistent with a typical wholesale and retail apparel company whereby the fall and holiday seasons are typically stronger quarters than the first half of the fiscal year. As a wholesale tailored clothingJanuary 28, 2012business, the seasonality of Lanier Clothes reflects stronger spring and fall wholesale deliveries, which occur in our first and third fiscal quarters. We anticipate that as our retail store footprint increases in the future, the third quarter will continue to be our weakest net sales and operating income quarter and the percentage of the full year net sales and operating income generated in the third quarter will continue to decrease. As the timing of certain unusual or non-recurring items, economic conditions, wholesale product shipments or other factors affecting the retail 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 and operating income for fiscal 2011 are necessarily indicative of anticipated results for the full fiscal year or expected distribution in future years. In the information below, the fourth quarter of fiscal 2011 operating income includes a $5.8 million LIFO accounting charge. The following table presents the percentage of net sales and operating income by quarter (unaudited) for fiscal 2011: First Quarter Second Quarter Third Quarter Fourth Quarter 27% 24% 23% 26% 44% 26% 10% 20% Use of Estimates U.S. GAAP requires us to make certain estimates and assumptions that affect the amounts reported as assets, liabilities, revenues and expenses in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates.fiscal 2011Fiscal 2013 presentation. In our consolidated statements of earnings, amortization of intangible assets was previously disclosed as its own line item, but is now included in SG&A. Also, for fiscal 2009, $1.8 million related to the write-off of deferred financing costs that was previously included in interest expense, net has now been included in loss on repurchase of senior notes. Also, in our consolidated balance sheets, non-current fair value of contingent consideration was previously disclosed in other non-current liabilities, but is now disclosed as a separate line item.Recent Accounting Pronouncements In May 2011, the FASB amended ASC 820 "Fair Value Measurements and Disclosures" in order to clarify existing guidance in U.S. GAAP, better align ASC 820 with International Accounting Standards and require additional fair value disclosures. The amendments to ASC 820 become effective in fiscal 2012, with all amendments applied prospectively with any changes in measurements recognized in earnings in the period of adoption. We are currently assessing the impact of adopting the amendments to ASC 820, but do not anticipate a material impact on our consolidated financial statements. In November 2011, the FASB amended ASC 220 "Comprehensive Income." The amendments to ASC 220 become effective in fiscal 2012 and require that we present on the face of the financialOXFORD INDUSTRIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)January 28, 2012Note 1. Summary of Significant Accounting Policies (Continued)statements reclassification adjustments for items that are reclassified from other comprehensive income to net earnings in the statement where the components of net income and the components of other comprehensive income are presented or in the notes to the financial statements. Comparative financial statements of prior periods will be presented to conform to the new guidance. We are currently assessing the impact of adopting the amendments to ASC 220, but do not anticipate a material impact on our consolidated financial statements. January 28,
2012 January 29,
2011 February 1, 2014 February 2, 2013 $ 143,482 $ 122,159 $ 187,689 $ 154,593 6,244 5,744 9,606 6,028 6,070 3,389 3,082 5,431 (52,376 ) (45,954 ) (56,665 ) (56,447 ) $ 103,420 $ 85,338 $ 143,712 $ 109,605 fiscal 2011Fiscal 2013, Fiscal 2012 or fiscal 2010. During fiscal 2009, inventories valued on the LIFO basis declined, which resulted in a liquidation of LIFO inventory carried at the lower costs prevailing in prior years resulting in a $3.5 million decrease to cost of goods sold as compared to the cost of current year purchases.Fiscal 2011. LIFO accounting charges, which we consider to include changes in the LIFO reserve as well as the impact of changes in inventory reserves related to lower of cost or market adjustments that do not exceed the LIFO reserve, were approximately $5.8$0.0 million $3.8, $4.0 million and $4.9$5.8 million in fiscalFiscal 2013, Fiscal 2012 and Fiscal 2011, fiscal 2010 and fiscal 2009, respectively. January 28,
2012 January 29,
2011 February 1, 2014 February 2, 2013 $ 1,870 $ 1,870 $ 1,594 $ 1,870 28,964 28,827 Buildings and improvements 28,727 29,717 101,010 79,632 140,616 124,138 121,449 113,065 168,950 152,778 253,293 223,394 339,887 308,503 (160,087 ) (139,499 ) (198,368 ) (179,621 ) $ 93,206 $ 83,895 $ 141,519 $ 128,882 OXFORD INDUSTRIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)January 28, 2012 January 28,
2012 January 29,
2011 $ 45,706 $ 45,877 February 1, 2014 February 2, 2013 Intangible assets with finite lives, which primarily consist of reacquired license rights and customer relationships: $ 55,050 $ 45,793 (40,889 ) (39,856 ) (43,488 ) (41,994 ) 4,817 6,021 11,562 3,799 160,376 160,659 161,461 160,518 $ 165,193 $ 166,680 $ 173,023 $ 164,317 Tommy Bahama Lilly Pulitzer Ben Sherman Total Balance, January 29, 2011 $ 112,480 $ 30,488 $ 23,712 $ 166,680 Amortization (516 ) (460 ) (219 ) (1,195 ) Other, including foreign currency changes — — (292 ) (292 ) Balance, January 28, 2012 111,964 30,028 23,201 165,193 Amortization (384 ) (389 ) (252 ) (1,025 ) Other, including foreign currency changes — — 149 149 Balance, February 2, 2013 111,580 29,639 23,098 164,317 Acquisition of reacquired license rights 11,041 — — 11,041 Amortization (1,687 ) (329 ) (209 ) (2,225 ) Other, including foreign currency changes (1,076 ) — 966 (110 ) Balance, February 1, 2014 $ 119,858 $ 29,310 23,855 $ 173,023 fiscal 2012, fiscal 2013, fiscalFiscal 2014, fiscalFiscal 2015, Fiscal 2016, Fiscal 2017 and fiscal 2016Fiscal 2018 is expected to be $0.9$2.5 million, $0.8$2.4 million, $0.6$2.2 million, $0.5$2.0 million and $0.4$1.8 million, respectively. All of$16.5 million and $16.9 millioncarrying amount of goodwill includedby operating group and in our consolidated balance sheets as of January 28,total, for Fiscal 2013, Fiscal 2012 and January 29,Fiscal 2011 respectively, relates to our fiscal 2010 acquisition of the Lilly Pulitzer brand and operations. The $0.4 million decrease in goodwill from January 29, 2011 was primarily due to the finalization of the valuation of fair value for the acquisition of the Lilly Pulitzer brand and operations during fiscal 2011.are as follows (in thousands): Tommy Bahama Lilly Pulitzer Total Balance, January 29, 2011 $ — $ 16,866 $ 16,866 Purchase accounting adjustments — (371 ) (371 ) Balance, January 28, 2012 — 16,495 16,495 Acquisition 780 — 780 Balance, February 2, 2013 780 16,495 17,275 Acquisition 247 — 247 Other, including foreign currency changes (123 ) — (123 ) Balance, February 1, 2014 $ 904 $ 16,495 $ 17,399 OXFORD INDUSTRIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)January 28, 2012 January 28,
2012 January 29,
2011 $ — $ —
2,571
—
105,000
150,000 (1,595 ) (2,935 ) 105,976 147,065 (2,571 ) — $ 103,405 $ 147,065 (1)In June 2009, we issued the 113/8% Senior Secured Notes at 97.353% of the $150 million principal amount, resulting in gross proceeds of $146.0 million. The net proceeds from our issuance of the 113/8% Senior Secured Notes and cash on hand were used to fund the satisfaction and discharge of the $166.8 million of our previous senior notes outstanding at that time, resulting in a loss onJanuary 28, 2012 February 1, 2014 February 2, 2013 $235 million U.S. Secured Revolving Credit Facility ("U.S. Revolving Credit Agreement")(1)(2) $ 137,592 $ 108,552 £7 million Senior Secured Revolving Credit Facility ("U.K. Revolving Credit Agreement")(3) 3,993 7,944 Total debt 141,585 116,496 Short-term debt (3,993 ) (7,944 ) Long-term debt $ 137,592 $ 108,552 repurchase of senior notes of $1.8 million, consisting of a non-cash write-off of deferred financing costs and unamortized bond discount in fiscal 2009.(2)(1) The U.S. Revolving Credit Agreement, entered into in June 2012 and amended in November 2013, amended and restated our prior $175 million U.S. revolving credit facility. The U.S. Revolving Credit Agreement generally (i) is limited to a borrowing base consisting of specified percentages of eligible categories of assets; (ii) accrues variable-rate interest, unused line fees and letter of credit fees based upon a pricing grid which is tied to average unused availability and/or utilization; (iii) requires periodic interest payments with principal due at maturity (November 2018); and (iv) is generally secured by a first priority security interest in the accounts receivable, inventory, general intangibles and eligible trademarks, investment property (including the equity interests of certain subsidiaries), deposit accounts, intercompany obligations, equipment, goods, documents, contracts, books and records and other personal property of Oxford Industries, Inc. and substantially all of its domestic subsidiaries. (2) The U.S. Revolving Credit Agreement was amended in November 2013 primarily to (1) extend the maturity date of the facility from June 2017 to November 2018, (2) reduce the applicable margin (by 25 to 50 basis points, depending on excess availability under the facility at the time of determination) used to determine the applicable interest rate(s); and (3) modify certain other provisions and restrictions under the U.S. Revolving Credit Agreement. (3) The U.K. Revolving Credit Agreement generally (i) accrues interest at the bank's base rate plus an applicable margin; (ii) requires interest payments monthly with principal payable on demand; and (iii) is collateralized by substantially all of the assets of our United Kingdom Ben Sherman subsidiaries. In fiscal 2011, we repurchased, in privately negotiated transactions, $45.0 million in aggregate principal amount of our 113/8% Senior Secured Notes for approximately $52.2 million, plus accrued interest. The repurchase of the 113/8% Senior Secured Notes and related non-cash write-off of approximately $1.0 million of unamortized deferred financing costs and $0.8 million of unamortized bond discount resulted in a loss on repurchase of senior notes of approximately $9.0 million in fiscal 2011.January 28, 2012, approximately $9.3February 1, 2014, $8.5 million of trade letters of credit and other limitations on availability in the aggregate were outstanding against the U.S. Revolving Credit Agreement and the U.K. Revolving Credit Agreement.our credit facilities. After considering these limitations and the amount of eligible assets in our borrowing base, as applicable, as of January 28, 2012,February 1, 2014, we had approximately $148.1$92.6 million and $3.2$3.9 million in unused availability under the U.S. Revolving Credit Agreement and the U.K. Revolving Credit Agreement, respectively, subject to the respective limitations on borrowings set forth in the U.S. Revolving Credit Agreement and the U.K. Revolving Credit Agreement and the indenture for the 113/8% Senior Secured Notes.Agreement.113/8% Senior Secured Notesour U.K. Revolving Credit Agreement, are subject to a number of affirmative covenants regarding the delivery of financial information, compliance with law, maintenance of property, insurance and conduct of business. Also, our credit facilities and 113/8% Senior Secured Notes are subject to certain negative covenants or other restrictions including, among other things, limitations on our ability to (i) incur debt, (ii) guaranty certain obligations, (iii) incur liens, (iv) pay dividends to shareholders, (v) repurchase shares of our common stock, (vi) make investments, (vii) sell assets or stock of subsidiaries, (viii) acquire assets or businesses, (ix) merge or consolidate with other companies, or (x) prepay, retire, repurchase or redeem debt.only if unused availability under the U.S. Revolving Credit Agreement for three consecutive days is less than the greater of (i) $26.25$23.5 million or (ii) 15%10% of the total revolving commitments for three consecutive business days.commitments. In such case, our fixed charge coverage ratio as defined in the U.S. Revolving Credit Agreement must$26.25$23.5 million or (ii) 15%10% of the total revolving commitments for thirty30 consecutive days. Additionally, pursuant to the indenture governing our 113/8% Senior Secured Notes, our ability to incur certain indebtedness or to make certain restricted payments, as defined in the indenture, isOXFORD INDUSTRIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)January 28, 2012Note 5. Debt (Continued)subject to our meeting certain conditions, including in each case the condition that our fixed charge coverage ratio, as defined in the indenture, not be less than 2.0 to 1.0 for the preceding four fiscal quarters on a pro forma basis after giving effect to the proposed indebtedness or restricted payment and, in the case of a restricted payment, the condition that the aggregate total of all restricted payments not exceed a certain allowable amount calculated pursuant to a formula set forth in the indenture. Restricted payments under the indenture include, without limitation, cash dividends to shareholders, repurchases of our capital stock, and certain investments.and notes entered into at the time we entered into theseour agreements. AsDuring Fiscal 2013 and as of January 28, 2012,February 1, 2014, no financial covenant testing was required pursuant to our U.S. Revolving Credit Agreement as the minimum availability threshold was met.met at all times. As of January 28, 2012,February 1, 2014, we were compliant with all covenants related to our credit facilities and 113/8% facilities.Notes. At any time prior to July 15, 2012,Notesmay redeem all or a portionrepurchased, in privately negotiated transactions, $45.0 million in aggregate principal amount of the 113/8%our 11.375% Senior Secured Notes on not less than 30 nor more than 60 days' prior notice, in amounts of $2,000 or an integral multiple of $1,000 in excess thereof, at a price equal to the greater of (i) 100%("Senior Secured Notes") for $52.2 million, plus accrued interest. The repurchase of the Senior Secured Notes and related write-off of $1.0 million of unamortized deferred financing costs and $0.8 million of unamortized bond discount resulted in a loss on repurchase of senior notes of $9.0 million in Fiscal 2011.113/8% Senior Secured Notes, which were scheduled to be redeemed, together with accrued and unpaid interest, if any, to the date ofmature in July 2015. The redemption or (ii) as determined by an independent investment banker (as prescribed under the indenture), the sum of the present values of 105.688% of the principal amount of the 113/8% Senior Secured Notes being redeemedfor $111.0 million, plus scheduled paymentsaccrued interest, and the related write-off of interest (not including any portion$1.7 million of such paymentsunamortized deferred financing costs and$1.4 million of interest accrued asunamortized bond discount resulted in a loss on repurchase of the datesenior notes of redemption) from the date of$9.1 million in Fiscal 2012. The redemption to July 15, 2012 discounted to the redemption date on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at the Adjusted Treasury Rate (as defined in the indenture) plus 50 basis points, together with accrued and unpaid interest, if any, to the date of redemption. On or after July 15, 2012, we may redeem all or a portion of the 113/8% Senior Secured Notes on not less than 30 nor more than 60 days' prior notice, in amountssatisfied and discharged all of $2,000 or an integral multiple of $1,000 in excess thereof at the following redemption prices (expressed as percentages of the principal amount), togetherour obligations with accrued and unpaid interest, if any,respect to the redemption date, if redeemed duringSenior Secured Notes and the 12-month period beginning July 15 of the years indicated below: 105.688 % 102.844 % 100.000 % As of January 28, 2012, the aggregate minimum base rental commitments for all non-cancelable operating real property leases with original terms in excess of one year are $42.3 million, $41.6 million, $38.8 million, $33.2 million, $26.0 million and $104.9 million for fiscal 2012, fiscal 2013, fiscal 2014, fiscal 2015, fiscal 2016 and thereafter, respectively. Total rent expense, excludingwhich includes minimum and contingent rent expense incurred, but excludes the reduction in rent expense associated with the write-off of deferredOXFORD INDUSTRIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)January 28, 2012Note 6. Commitments and Contingencies (Continued)$43.3 millionin Fiscal 2013, Fiscal 2012 and $42.0 million in fiscalFiscal 2011, fiscal 2010 and fiscal 2009, respectively. Most leases provide for payments of real estate taxes, insurance and other operating expenses applicable to the property and many retail leases provide for contingent rent based on retail sales, which are included in total rent expense above. These payments for real estate taxes, insurance, other operating expenses and contingent percentage rent are included in rent expense above, but are not included in the aggregate minimum rental commitments above,below, as, in some cases, the amounts payable in future periods are generally not specifiedquantified in the lease agreement and are dependent on future events. The total amount of such charges included in total rent expense above were $18.8 million, $16.1 million and $12.5 million $11.3 millionin Fiscal 2013, Fiscal 2012 and $10.3 million in fiscalFiscal 2011, fiscal 2010 and fiscal 2009, respectively, which includes $0.6 million, $0.7 million and $1.2 million $0.9 million and $0.6 million, of contingent percentage rent during fiscalFiscal 2013, Fiscal 2012 and Fiscal 2011, fiscal 2010respectively.fiscal 2009,$190.6 million for Fiscal 2014, Fiscal 2015, Fiscal 2016, Fiscal 2017, Fiscal 2018 and thereafter, respectively. We currently obligated under certain apparel license and design agreements to make future minimum royalty and advertising payments of $4.8$5.5 million, $4.6 million, $4.4$2.9 million and $3.2$0.1 million for fiscal 2012, fiscal 2013, fiscalFiscal 2014, Fiscal 2015 and fiscal 2015,Fiscal 2016, respectively, and none thereafter. These amounts do not include amounts, if any, that exceed the minimums required pursuant to the agreements.on December 21,during Fiscal 2010, as discussed in Note 14, we entered into a contingent consideration agreement pursuant to which we willwould be obligated to pay cash payments of up to $2.5an additional $20 million subsequent to each ofin cash, in the aggregate, over the four years following the closing of the acquisition and an additional $10 million subsequent to the end of the fourth year, each contingent uponbased on Lilly Pulitzer's achievement of certain financialearnings targets. The potential contingent consideration is comprised of: (1) four individual performance periods, consisting of the period from the date of our acquisition through the end of Fiscal 2011, Fiscal 2012, Fiscal 2013 and Fiscal 2014, in respect of which the prior owners of the Lilly Pulitzer brand and operations may be entitled to receive up to $2.5 million for eachtotaling $13.1 million and $10.7 million as of January 28, 2012 and January 29, 2011, respectively,February 1, 2014 is included in non-current contingent consideration and contingent consideration earned and payablecurrent liability in our consolidated balance sheets. Thissheet in the amounts of $12.2 million and $2.5 million, respectively. These amounts in the aggregate reflect the fair value determination assumes that the $20 million contingent consideration is earned and paid in full, but discounted to fair value as of the balance sheet date. The $2.5$15.0 million contingent on fiscal 2011 Lilly Pulitzer operating results, which is included inof contingent consideration earned and payable, was earned in full and is expected to be paid in the first half of fiscal 2012, with the excess earnings from fiscal 2011 reducing the earnings thresholds for fiscal 2012.January 28, 2012February 1, 2014 and January 29, 2011,February 2, 2013, the reserve for the remediation of this site was approximately $1.9$1.6 million and $1.8 million, respectively, which is included in other non-current liabilities in our consolidated balance sheets. The amount recorded represents our estimate of the costs, on an undiscounted basis, to clean up this site, based on currently available information. This estimate may change in future periods as more information on the remediation activities required and timing of those activities become known. During fiscal 2010, the reserve for the remediation of this site decreased by $2.2 million primarily due to a reduction in our estimate of the costs required to remediate the property. The change in estimate was included as a reduction of SG&A in our consolidated statement of earnings for fiscal 2010. No other significant amounts related to this reserve were recorded in the statements of earnings in fiscal 2011, fiscal 2010Fiscal 2013, Fiscal 2012 or fiscal 2009.
Fiscal 2011.OXFORD INDUSTRIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)January 28, 2012ShareholdersShareholders' Equity$1.00$1.00 par value per share common stock authorized for issuance as of January 28, 2012February 1, 2014 and January 29, 2011.February 2, 2013. We had 16.516.4 million and 16.6 million shares of common stock issued and outstanding as of each of January 28, 2012February 1, 2014 and January 29, 2011.January 28, 2012 approximately 1.1February 1, 2014, 1.3 million share awards shares were available for issuance under our Long-Term Stock Incentive Plan (the "Long-Term Stock Incentive Plan"). The planLong-Term Stock Incentive Plan allows us to grant stock-based awards to employees and non-employee directors in the form of stock options, stock appreciation rights, restricted shares and/or restricted share units. Shares granted or that may be granted pursuant to outstanding options under our previous stock incentive plans, our 1992 Stock Option Plan and our 1997 Stock Option Plan, continue to be governed under those plans and the individual agreements with respect to provisions relating to exercise, termination and forfeiture. No additional grants are available under the previousany predecessor plans. SinceSubsequent to December 2003, and through fiscal 2011, performance- and service-based restricted stock awardsshares and restricted share units have been the primary vehicle in our stock-based compensation strategy, although we are not prohibited from granting other types of share-based compensation awards.sharesshare awards and restricted share unit awards recently granted in recent yearsto officers and other key employees generally vest three or four years from the date of grant if (1) the performance threshold, if any, was met and (2) the employee is still employed by us on thatthe vesting date. At the time that therestricted shares are issued, the shareholder ismay, subject to the terms of the respective agreement, be entitled to the same dividend and voting rights as other holders of our common stock unless the shares are subsequently forfeited. At the time that restricted share units are issued, the recipient may, subject to the terms of the respective agreement, earn non-forfeitable dividend equivalents equal to the dividend paid per share to holders of our common stock, but does not obtain voting rights associated with the restricted share units. The employee generally is restricted from transferring or selling theany restricted shares or restricted share units, and generally forfeits the sharesawards upon the termination of employment, prior to the end of the vesting period. The specific provisions of the awards, including exercisability and term of the award, are evidenced by agreements with the employee as determined by our compensation committee or Board of Directors, as applicable.OXFORD INDUSTRIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)January 28, 2012Note 7. Shareholders Equity (Continued)stockshare activity for officers and other key employees (in shares) during Fiscal 2013, Fiscal 2012, and Fiscal 2011: Fiscal 2013 Fiscal 2012 Fiscal 2011 Restricted shares outstanding at beginning of fiscal year 487,500 $ 12 497,500 $ 12 780,500 $ 16 Restricted shares granted — — — — 40,000 $ 23 Restricted shares vested, including restricted shares repurchased from employees for employees' tax liability (487,500 ) $ 12 — — (273,000 ) $ 22 Restricted shares forfeited — — (10,000 ) $ 23 (50,000 ) $ 17 Restricted shares outstanding at end of fiscal year — $ — 487,500 $ 12 497,500 $ 12 during fiscal 2011, fiscal 2010 and fiscal 2009:for Fiscal 2013: Fiscal 2011 Fiscal 2010 Fiscal 2009 Number of
Shares Weighted-average
grant date
fair value Number of
Shares Weighted-average
grant date
fair value Number of
Shares Weighted-average
grant date
fair value 780,500 $16 810,500 $15 353,657 $24 40,000 $23 90,000 $22 597,870 $11 (273,000 ) $22 (50,000 ) $22 (88,692 ) $25 (50,000 ) $17 (70,000 ) $18 (52,335 ) $19 497,500 $12 780,500 $16 810,500 $15 Fiscal 2013 Restricted share units outstanding at beginning of fiscal year — $ — Restricted share units issued 59,129 $ 47 Restricted share units vested, including restricted share units repurchased from employees for employees' tax liability — — Restricted share units forfeited (2,608 ) $ 43 Restricted share units outstanding at end of fiscal year 56,521 $ 47 Grant Fiscal 2012 Restricted Share Unit Awards 56,521 $ 47 March 2016 stockshare or restricted share unit awards to our non-employee directors for a portion of each non-employee director's compensation. The non-employee directors must complete certain service requirements; otherwise, the restricted shares are subject to forfeiture. On the date of issuance, the non-employee directors are entitled to the same dividend and voting rights as other holders of our common stock. The non-employee directors are restricted from transferring or selling the restricted shares prior to the end of the vesting period. As of January 28, 2012,February 1, 2014, less than 0.1 million of such awards were outstanding and unvested. As of January 28, 2012, there was approximately $2.3 million of unrecognized compensation expense related to the 0.5 million unvested share-based restricted stock awards which have been granted, but have not vested. That expense is expected to be recognized through April 2013. The following table summarizes information about the unvested shares as of January 28, 2012. Number
of
Shares Average Market
Price on
Date of Grant Vesting
Date 437,500 $11 April 2013 20,000 $22 April 2013 40,000 $23 April 2013 497,500 stockshare incentive plans, we typically granted stock options to employees at certain times as determined by our Board of Directors or our compensation committee. These stock options were governed under previous plans and the individual agreements with respect to provisions relating to exercise, termination and forfeiture. Stock options were typically granted with an exercise price equal to the stock'sshare's fair market value on the date of grant. The previously granted stock options including those still outstanding, had ten-yearten-year terms and vested and became exercisable in increments of 20% on eachOXFORD INDUSTRIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)January 28, 2012Note 7. Shareholders Equity (Continued)fiscalFiscal 2008 and expired in Fiscal 2013, if not previously exercised, resulting in allno remaining stock options outstanding also being exercisable subsequent to that date. The total intrinsic value for stock options exercised during fiscal 2011, fiscal 2010 and fiscal 2009 was $0.7 million and $0.2 million and $0.1 million, respectively, while the aggregate intrinsic value for options outstanding and exercisable as of January 28, 2012February 1, 2014. There was approximately $1.8 million. A summary of theno material stock option activity during fiscal 2011, fiscal 2010 and fiscal 2009 is presented below: Fiscal 2011 Fiscal 2010 Fiscal 2009 Shares Weighted
Average
Exercise
Price Shares Weighted
Average
Exercise
Price Shares Weighted
Average
Exercise
Price 151,120 $26 191,105 $25 203,245 $25 (68,620 ) $25 (16,005 ) $12 (1,800 ) $11 (4,000 ) $26 (23,980 ) $27 (10,340 ) $21 78,500 $27 151,120 $26 191,105 $25 The following table summarizes information about ouror financial statement impact related to stock options outstanding, all of which are exercisable, as of January 28, 2012. Number of
Options Outstanding and
Exercisable Exercise
Price Grant-Date
Fair Value Expiration Date 12,200 $11.73 $ 3.25 July 15, 2012 36,750 $26.44 $11.57 Aug. 18, 2013 29,550 $32.75 $14.17 Dec. 16, 2013 78,500 approximately 0.5 million shares of our common stock authorized for issuance under our Employee Stock Purchase Plan ("ESPP") as of January 28, 2012.February 1, 2014. The ESPP allows qualified employees to purchase shares of our common stock on a quarterly basis, based on certain limitations, through payroll deductions. The shares purchased pursuant to the ESPP are not subject to any vesting or other restrictions. On the last day of each calendar quarter, the accumulated payroll deductions are applied toward the purchase of our common stock at a price equal to 85% of the closing market price on that date. Stock compensation expense related to the employee stock purchase plan recognized was approximately $0.1$0.1 million in each of fiscal 2011, fiscal 2010Fiscal 2013, Fiscal 2012 and fiscal 2009.Fiscal 2011.OXFORD INDUSTRIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)January 28, 2012Note 7. Shareholders Equity (Continued)$1.00$1.00 par value preferred stock authorized for issuance as of January 28, 2012. February 1, 2014 and February 2, 2013. No preferred shares were issued or outstanding as of January 28,February 1, 2014 or February 2, 2013.or January 29,and Fiscal 2011. Foreign
currency
translation
gain (loss)Net unrealized
gain (loss) on
cash flow
hedgesAccumulated
other
comprehensive
income (loss)Balance, January 29, 2011 $ (23,776 ) $ (43 ) $ (23,819 ) Other comprehensive income before reclassifications (381 ) (30 ) (411 ) Amounts reclassified from accumulated other comprehensive income (loss) for loss realized — 556 556 Total other comprehensive income, net of taxes (381 ) 526 145 Balance, January 28, 2012 (24,157 ) 483 (23,674 ) Other comprehensive income before reclassifications 171 (1,976 ) (1,805 ) Amounts reclassified from accumulated other comprehensive income (loss) for loss realized — 894 894 Total other comprehensive income, net of taxes 171 (1,082 ) (911 ) Balance, February 2, 2013 (23,986 ) (599 ) (24,585 ) Other comprehensive income before reclassifications 703 357 1,060 Amounts reclassified from accumulated other comprehensive income (loss) for gain realized — (93 ) (93 ) Total other comprehensive income, net of taxes 703 264 967 Balance, February 1, 2014 $ (23,283 ) $ (335 ) $ (23,618 ) Fiscal
2011 Fiscal
2010 Fiscal
2009 $ 39,880 $ 16,733 $ (3,864 ) 3,644 4,042 2,305 $ 43,524 $ 20,775 $ (1,559 ) $ 8,306 $ 5,649 $ 3,050 652 2,162 1,107 285 1,698 1,106 9,243 9,509 5,263 5,385 (4,637 ) (8,030 ) (347 ) (332 ) (178 ) $ 14,281 $ 4,540 $ (2,945 ) January 28, 2012 Fiscal
2013Fiscal
2012Fiscal
2011Earnings before income taxes: Domestic $ 98,476 $ 63,429 $ 39,880 Foreign (17,975 ) (12,540 ) 3,644 Earnings before income taxes $ 80,501 $ 50,889 $ 43,524 Current: Federal $ 30,190 $ 21,682 $ 8,306 State 3,911 2,365 652 Foreign 423 (724 ) 285 34,524 23,323 9,243 Deferred—primarily Federal 1,343 (3,271 ) 5,385 Deferred—Foreign (657 ) (480 ) (347 ) Income taxes $ 35,210 $ 19,572 $ 14,281 Fiscal
2011 Fiscal
2010 Fiscal
2009 35.0 % 35.0 % 35.0 % 2.3 % 0.5 % 26.8 % (1.9 )% (0.8 )% 145.1 % (0.1 )% (3.0 )% (85.4 )% (1.2 )% (6.6 )% 4.5 % (0.9 )% (2.2 )% 9.1 % (1.1 )% (2.1 )% 28.1 % — 2.0 % — (0.6 )% (2.5 )% 25.6 % 1.3 % 1.6 % 0.1 % 32.8 % 21.9 % 188.9 % (1)The percentage in fiscal 2009 reflects the benefit of foreign losses, including the reversal of deferred taxes recorded on undistributed earnings in prior years. A portion of this benefit is estimated to have a less than 50% probability of being realized and is therefore reduced by a valuation allowance.(2)The other adjustment in fiscal 2011, fiscal 2010 and fiscal 2009 reflects the change in the expected tax impact to be realized upon reversal of deferred tax assets and liabilities, caused by changes in enacted foreign and state tax rates and apportionment of total taxable income among jurisdictions. Fiscal
2013Fiscal
2012Fiscal
2011Statutory tax rate 35.0 % 35.0 % 35.0 % State income taxes—net of federal income tax benefit 3.1 % 3.0 % 2.3 % Impact of foreign operations 2.6 % 3.3 % (1.9 )% Valuation allowance against foreign losses and other carryforwards 4.5 % 4.1 % (0.1 )% Change in contingency reserves related to unrecognized tax benefits — % (3.7 )% (1.2 )% Change in assertion on permanent reinvestment of foreign earnings — % (1.9 )% — % Other, net (1.5 )% (1.3 )% (1.3 )% Effective tax rate for continuing operations 43.7 % 38.5 % 32.8 % OXFORD INDUSTRIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)January 28, 2012Note 8. Income Taxes (Continued) January 28,
2012 January 29,
2011 $ 11,180 $ 7,555 8,143 10,630 303 373 6,003 9,924 732 743 303 1,766 1,565 1,385 4,198 5,412 32,427 37,788 (44,806 ) (45,175 ) (884 ) (597 ) (45,690 ) (45,772 )
(1,886
)
(1,857
) $ (15,149 ) $ (9,841 ) (1) February 1,
2014February 2,
2013Deferred Tax Assets: Inventories $ 14,674 $ 13,592 Accrued compensation and benefits 7,993 9,868 Receivable allowances and reserves 2,187 2,727 Depreciation and amortization 951 1,328 Non-current liabilities 609 706 Deferred rent and lease obligations 3,315 2,093 Operating loss and other carryforwards 6,730 3,934 Other, net 1,442 787 Deferred tax assets 37,901 35,035 Deferred Tax Liabilities: Acquired intangible assets (43,364 ) (42,827 ) Deferred tax liabilities (43,364 ) (42,827 ) Valuation allowance (6,831 ) (3,641 ) Net deferred tax liability $ (12,294 ) $ (11,433 ) January 28, 2012February 1, 2014 and January 29, 2011,February 2, 2013, we had undistributed earnings of foreign subsidiaries of approximately $9.6$6.0 million and $8.7$6.1 million, respectively, for which arespectively. No deferred tax liability has beenrelated to these foreign earnings, if any, was recorded at either balance sheet date, as the earnings of our foreign subsidiaries are not considered permanently reinvested outside of the United States. IfThe amount of deferred tax liability not recognized on permanently reinvested earnings that would be payable if the earnings were repatriated to the United States is $0.5 million. We also consider the earnings wouldoriginal investment in our foreign subsidiaries to be subject to United States taxation at that time. The amount of deferred tax liability recognized associated with the undistributed earnings represents the approximate excess ofpermanently reinvested outside the United States as of February 1, 2014. Because the financial basis in each entity does not exceed the tax liability overbasis by an amount exceeding undistributed earnings, no additional United States tax would be due if the creditable foreign taxes paid that would result from a full remittance of undistributed earnings.original investment were to be repatriated.OXFORD INDUSTRIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)January 28, 2012Note 8. Income Taxes (Continued) January 28,
2012 January 29,
2011 February 1,
2014February 2,
2013 $ 19,733 $ 19,005 $ 20,465 $ 22,952 (34,882 ) (28,846 ) (32,759 ) (34,385 ) $ (15,149 ) $ (9,841 ) $ (12,294 ) $ (11,433 ) reconciliationsummary of unrecognized tax benefits atfor the beginning and end of the yearmost recent three years is as follows (in thousands): Fiscal
2011 Fiscal
2010 Fiscal
2009 Fiscal
2013Fiscal
2012Fiscal
2011 $ 2,921 $ 4,402 $ 4,558 $ 351 $ 2,461 $ 2,921 13 15 32 17 245 13 (604 ) (1,402 ) (670 ) (23 ) (2,195 ) (604 ) 133 153 691 6 5 133 (2 ) (24 ) (64 ) — (138 ) (2 ) — (223 ) (145 ) — (27 ) — $ 2,461 $ 2,921 $ 4,402 $ 351 $ 351 $ 2,461 a benefit of $0.2 millionnot material in fiscal 2011, benefit of $0.5 million in fiscal 2010 and expense of less than $0.1 million in fiscal 2009.Fiscal 2013, Fiscal 2012 or Fiscal 2011. As of January 28, 2012February 1, 2014 and January 29, 2011, we have recognized in our consolidated balance sheets, totalFebruary 2, 2013, no material amounts of liabilities for potential penalties and interest in the aggregate, of $0.3 million and $0.5 million, respectively. We anticipate that the amount of unrecognized benefit with respectrelated to our unrecognizeduncertain tax positions as of January 28, 2012 will decrease within the next twelve months as we believe the substantial majority of the unrecognized benefit will behave been recognized in fiscal 2012 due to settlement of issues with taxing authorities or expiration of statutes of limitations.OXFORD INDUSTRIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)January 28, 2012Note 9. Defined Contribution Plans (Continued)fiscalFiscal 2013, Fiscal 2012 and Fiscal 2011 fiscal 2010was $2.9 million, $3.0 million and fiscal 2009 were $2.5 million, $1.1 million and $1.2 million, respectively.Sherman and Lanier Clothes.Sherman. We identify our operating groups based on the way our management organizes the components of our business for purposes of allocating resources and assessing performance.markets collections ofdistributes men's and women's sportswear and related products. The target consumers of Tommy Bahama are primarily affluent men and women age 35 and older who embrace a relaxed and casual approach to daily living. Tommy Bahama products can be found in our company-owned and licensed Tommy Bahama retail stores and on our Tommy Bahama e-commerce website, www.tommybahama.com,tommybahama.com, as well as in better department stores and independent specialty stores throughout the United States. We also operate Tommy Bahama restaurants and license the Tommy Bahama name for various product categories and operate Tommy Bahama restaurants.otherrelated products. Lilly Pulitzer was originally created in the late 1950's and is an affluent brand with a heritage and aesthetic based on the Palm Beach resort lifestyle. The brand is somewhat unique among women's brands in that it has demonstrated multi-generational appeal, including 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 as described below, and on our Lilly Pulitzer website, www.lillypulitzer.com,lillypulitzer.com, as well as in better department stores and independent specialty stores. We also license the Lilly Pulitzer name for various product categories. Ben Sherman is a London-based designer, marketer and distributor of men's branded sportswear and related products. Ben Sherman was established in 1963 as an edgy, "Mod"-inspired shirt brand and has throughout its history been inspired by what is new and current in British art, music, culture and style. The brand has evolved into a British modernist lifestyle brand of apparel targeted at style conscious men ages 25 to 40 in multiple markets throughout the world. Ben Sherman products can be found in certain department stores, a variety of independent specialty stores and our owned and licensed Ben Sherman retail stores, as well as on Ben Sherman e-commerce websites. We also license the Ben Sherman name for various product categories.OurThe majority of our Lanier Clothes branded products are sold under certain trademarks licensed to us by third parties includingparties. Licensed brands include Kenneth Cole, Dockers, Geoffrey Beene and Ike Behar. Additionally, we design and market products for ourand Arnold Brant and Oxford Republic brands. Billy London is a modern, British-inspired fashion brand geared towards the value-oriented consumer, while Arnold Brant is an upscale tailored brand that is intended to blend modern elements of style with affordable luxury. In addition to the branded businesses, Lanier Clothes designsOXFORD INDUSTRIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)January 28, 2012Note 10. Operating Groups (Continued) certain private label tailored clothing products for certain customers. Significant private label brands for which we produce tailored clothing include Lands' End, Stafford, Alfani, Structure, and Kenneth Roberts. Our Lanier Clothes products are sold to national chains, department stores, specialty stores, specialty catalog retailers, warehouse clubs and discount retailers throughout the United States.groups. The operations of businesses that are included in Corporate and Other includegroups, including our Oxford Golf business and our Lyons, Georgia distribution center operations, which were previously included in our former Oxford Apparel operating group, prior to the disposal of substantially all of the operations and assets of Oxford Apparel on January 3, 2011.operations. LIFO inventory calculations are made on a legal entity basis which does not correspond to our operating group definitions; therefore, LIFO inventory accounting adjustments are not allocated to our operating groups.presentspresent certain information about our operating groups included in continuing operations (in thousands): Fiscal
2011 Fiscal
2010 Fiscal
2009 $ 452,156 $ 398,510 $ 363,084 94,495 5,959 — 91,435 86,920 102,309 108,771 103,733 114,542 12,056 8,825 5,371 $ 758,913 $ 603,947 $ 585,306 $ 18,944 $ 13,427 $ 16,662 1,542 150 — 2,419 2,562 3,050 427 462 539 2,627 1,615 1,103 $ 25,959 $ 18,216 $ 21,354 $ 516 $ 693 $ 888 460 13 — 219 267 329 — — — — — — $ 1,195 $ 973 $ 1,217 January 28, 2012 Fiscal
2011 Fiscal
2010 Fiscal
2009 Fiscal 2013 Fiscal 2012 Fiscal 2011 Net sales Tommy Bahama $ 584,941 $ 528,639 $ 452,156 Lilly Pulitzer 137,943 122,592 94,495 Lanier Clothes 109,530 107,272 108,771 Ben Sherman 67,218 81,922 91,435 Corporate and Other 17,465 15,117 12,056 Total $ 917,097 $ 855,542 $ 758,913 Depreciation and Amortization of Intangible Assets Tommy Bahama $ 24,806 $ 18,551 $ 19,460 Lilly Pulitzer 3,215 2,402 2,002 Lanier Clothes 347 421 427 Ben Sherman 3,154 2,889 2,638 Corporate and Other 2,380 2,072 2,627 Total $ 33,902 $ 26,335 $ 27,154 $ 64,171 $ 51,081 $ 37,515 $ 72,207 $ 69,454 $ 64,171 14,278 (372 ) — 25,951 20,267 14,278 Lanier Clothes 10,828 10,840 12,862 (2,535 ) (2,664 ) (8,616 ) (13,131 ) (10,898 ) (2,535 ) 12,862 14,316 12,389 (19,969 ) (21,699 ) (22,378 ) (11,185 ) (20,692 ) (19,969 ) 68,807 40,662 18,910 Total operating income 84,670 68,971 68,807 16,266 19,887 18,710 4,169 8,939 16,266 9,017 — 1,759 — 9,143 9,017 $ 43,524 $ 20,775 $ (1,559 ) $ 24,686 $ 11,225 $ 5,618 3,228 277 — 4,220 963 3,442 85 30 21 3,091 833 2,227 $ 35,310 $ 13,328 $ 11,308 Earnings from Continuing Operations Before Income Taxes $ 80,501 $ 50,889 $ 43,524 January 28,
2012 January 29,
2011 Fiscal 2013 Fiscal 2012 Fiscal 2011 Purchases of Property and Equipment $ 306,772 $ 274,140 $ 30,810 $ 46,392 $ 24,686 82,417 79,476 10,343 4,576 3,228 Lanier Clothes 30 593 85 78,040 64,591 1,137 3,997 4,220 30,755 35,530 11,223 46,989 1,052 5,144 3,091 — 57,745 $ 509,207 $ 558,471 $ 43,372 $ 60,702 $ 35,310 $ 111,964 $ 112,480 46,524 47,354 23,200 23,712 — — — — $ 181,688 $ 183,546 January 28, 2012 Information for the net February 1, 2014 February 2, 2013 Total Assets Tommy Bahama $ 408,599 $ 359,462 Lilly Pulitzer 101,704 90,873 Lanier Clothes 39,989 28,455 Ben Sherman 79,299 74,055 Corporate and Other (2,286 ) 3,225 Total $ 627,305 $ 556,070 long-lived assets, including property and equipment, goodwill and intangible assets, by geographic area is presented below (in thousands): January 28,
2012 January 29,
2011 February 1, 2014 February 2, 2013 $ 244,803 $ 239,041 $ 124,894 $ 115,022 28,411 26,687 United Kingdom and Europe 7,086 8,140 1,680 1,713 9,539 5,720 $ 274,894 $ 267,441 $ 141,519 $ 128,882 Information for the net Fiscal
2011 Fiscal
2010 Fiscal
2009 $ 693,969 $ 541,750 $ 508,917 Fiscal 2013 Fiscal 2012 Fiscal 2011 United States $ 843,620 $ 793,289 $ 691,945 62,671 58,465 71,806 45,488 51,536 62,671 2,273 3,732 4,583 Other foreign 27,989 10,717 4,297 $ 758,913 $ 603,947 $ 585,306 $ 917,097 $ 855,542 $ 758,913 J. Hicks Lanier, our Chief Executive Officer, is on the board of directors of SunTrust and is a member of its Audit and Governace & Nominating Committees. Mr. E. Jenner Wood, III, a board memberone of Oxford Industries, Inc., has beenour directors, is Chairman, President and CEO of SunTrust Bank, Atlanta/Georgia Division since April 2010 and was previously Chairman,Corporate Executive Vice President and Chief Executive Officer of SunTrust Bank, Central Group, prior to April 2010.a joint book-running managerlead arranger and bookrunner in connection with our fiscal 2009 offeringFiscal 2012 and Fiscal 2013 refinancings of the 113/8% Senior Secured Notes and as a dealer-manager in connection with the accompanying tender offer for our 87/8% senior unsecured notes due 2011.credit facility. The services provided and fees paid to SunTrust in connection with such services for each period are set forth below (in thousands): Fiscal
2011 Fiscal
2010 Fiscal
2009 Fiscal 2013 Fiscal 2012 Fiscal 2011 $ 234 $ 303 $ 353 $ 696 $ 569 $ 234 $ 151 $ 66 $ 85 $ — $ — $ 750 Cash management services $ 92 $ 106 $ 151 Lead arranger, bookrunner and upfront fees $ 254 $ 616 $ — $ 7 $ 8 $ 8 $ 6 $ 9 $ 7 2011,2013, December 31, 20102012 and December 31, 2009.2011.OXFORD INDUSTRIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)January 28, 2012Note 11. Related Party Transactions (Continued)on December 21,during Fiscal 2010, we entered into a contingent consideration agreement pursuant to which the beneficial owners of the capital stock of SugartownLilly Pulitzer brand and operations prior to the acquisition will beare entitled to earn up to an additional $20$20 million in cash, in the aggregate, over the four years following the closing of the acquisition based on our Lilly Pulitzer Group'sPulitzer's achievement of certain financialearnings targets. The beneficialpotential contingent consideration is comprised of: (1) four individual performance periods, consisting of the period from the date of our acquisition through the end of Fiscal 2011, Fiscal 2012, Fiscal 2013 and Fiscal 2014, in respect of which the prior owners of the capital stockLilly Pulitzer brand and operations may be entitled to receive up to $2.5 million for each performance period; and (2) a cumulative performance period consisting of Sugartownthe period from the date of our acquisition through the end of Fiscal 2014, in respect of which the prior owners of the Lilly Pulitzer brand and operations may be entitled to receive up to $10 million.operations subsequent tooperations.acquisition. Asmaximum $2.5 million in contingent consideration in respect of January 28,Lilly Pulitzer's earnings from the date of our acquisition through the end of Fiscal 2011. During Fiscal 2012, no amounts have been paid pursuantwe entered into an amendment to the contingent consideration agreement; however,agreement. Under this amendment, after consideration of Lilly Pulitzer's earnings through the date of the amendment and the substantial likelihood that the $2.5 million in contingent consideration in respect of Lilly Pulitzer's operating results for Fiscal 2012 would become payable, we paid the $2.5 million Fiscal 2012 contingent consideration amount, less a discount, during Fiscal 2012. No changes to earnings targets or other terms of the agreement resulted from this amendment.has beenwill be earned and is payable based on the fiscal 2011 operating results of the Lilly Pulitzer operating group. The $2.5 million amount is expected to be paid during the first half of fiscal 2012.quarter.quarter, except that the fourth quarter in a year with 53 weeks (such as Fiscal 2012) includes 14 weeks. Following is a summary of our fiscal 2011Fiscal 2013 and fiscal 2010Fiscal 2012 quarterly results (in thousands, except per share amounts): First
Quarter Second
Quarter Third
Quarter Fourth
Quarter Total $ 208,308 $ 180,646 $ 170,280 $ 199,679 $ 758,913 $ 117,660 $ 102,937 $ 88,740 $ 103,632 $ 412,969 $ 30,713 $ 17,711 $ 6,816 $ 13,567 $ 68,807 $ 17,060 $ 3,520 $ 1,611 $ 7,052 $ 29,243 $ 1,040 $ (916 ) $ 13 $ — $ 137 $ 18,100 $ 2,604 $ 1,624 $ 7,052 $ 29,380 $ 1.03 $ 0.21 $ 0.10 $ 0.43 $ 1.77 $ 1.03 $ 0.21 $ 0.10 $ 0.43 $ 1.77 $ 0.06 $ (0.06 ) $ 0.00 $ 0.00 $ 0.01 $ 0.06 $ (0.06 ) $ 0.00 $ 0.00 $ 0.01 $ 1.10 $ 0.16 $ 0.10 $ 0.43 $ 1.78 $ 1.10 $ 0.16 $ 0.10 $ 0.43 $ 1.78 16,515 16,514 16,502 16,509 16,510 16,525 16,531 16,517 16,528 16,529 January 28, 2012 First
Quarter Second
Quarter Third
Quarter Fourth
Quarter Total Total Fiscal 2013 $ 163,625 $ 142,981 $ 139,627 $ 157,714 $ 603,947 $ 234,203 $ 235,024 $ 197,506 $ 250,364 $ 917,097 $ 89,707 $ 79,018 $ 73,685 $ 84,997 $ 327,407 $ 134,075 $ 136,849 $ 104,785 $ 137,865 $ 513,574 $ 14,971 $ 11,179 $ 6,431 $ 8,081 $ 40,662 $ 26,061 $ 27,712 $ 4,551 $ 26,346 $ 84,670 $ 8,524 $ 4,679 $ 1,319 $ 1,713 $ 16,235 $ 3,973 $ 2,540 $ 4,231 $ 51,679 $ 62,423 $ 12,497 $ 7,219 $ 5,550 $ 53,392 $ 78,658 $ 13,623 $ 15,806 $ 889 $ 14,973 $ 45,291 Net earnings per share: Basic and diluted $ 0.82 $ 0.96 $ 0.05 $ 0.91 $ 2.75 Weighted average shares outstanding: $ 0.52 $ 0.28 $ 0.08 $ 0.10 $ 0.98 16,586 16,394 16,406 16,414 16,450 $ 0.52 $ 0.28 $ 0.08 $ 0.10 $ 0.98 16,611 16,423 16,435 16,444 16,482 Fiscal 2012 Net sales $ 230,953 $ 206,929 $ 181,414 $ 236,246 $ 855,542 Gross profit $ 129,214 $ 118,280 $ 96,822 $ 125,241 $ 469,557 Operating income $ 32,788 $ 20,318 $ 5,920 $ 9,945 $ 68,971 Net earnings $ 18,002 $ 5,028 $ 3,010 $ 5,277 $ 31,317 Net earnings per share: Basic and diluted $ 1.09 $ 0.30 $ 0.18 $ 0.32 $ 1.89 Weighted average shares outstanding: $ 0.24 $ 0.15 $ 0.26 $ 3.12 $ 3.77 16,531 16,554 16,580 16,585 16,563 $ 0.24 $ 0.15 $ 0.26 $ 3.12 $ 3.77 16,552 16,570 16,591 16,608 16,586 $ 0.76 $ 0.44 $ 0.34 $ 3.23 $ 4.76 $ 0.76 $ 0.44 $ 0.33 $ 3.22 $ 4.75 16,491 16,540 16,564 16,552 16,537 16,503 16,552 16,576 16,562 16,551 earnings from continuing operations per common share, earnings from discontinued operations per common share and net earnings per common share amounts may not equal the amounts for the full year due to rounding. Additionally,Fiscal 2012 includes 53 weeks, with the sum of earnings from continuing operations per common share and earnings from discontinued operations per common share may not equal net earnings per common share for eachfourth quarter due to rounding.firstfourth quarter of fiscal 2011Fiscal 2013 included $1.0 milliona gain on sale of charges resulting from the write-upproperty of acquired inventory from cost to fair value pursuant to the purchase method of accounting. Additionally$1.6 million. During the second quarter and third quarter of fiscal 2011 included an $8.2Fiscal 2013, we recognized charges of $0.3 million loss and $0.8$0.4 million, loss, respectively, onresulting from the repurchase of senior secured notes. Theinventory step-up related to the Tommy Bahama Canada acquisition. During the second, third and fourth quarter of fiscal 2011Fiscal 2013, we recognized charges of $0.3 million, $0.3 million and $0.7 million, respectively, related to amortization of intangible assets resulting from the purchase accounting impact of the Tommy Bahama Canada acquisition.from continuing operations for the quarter: (1) a LIFO accounting charge of $5.8$4.5 million; and (2) life insurance death benefit proceeds of $1.2 million. The fourth quarter of fiscal 2010 included the following significant items which impacted earnings from continuing operations for the quarter: (1) the acquisition of Lilly Pulitzer as discussed in Note 14, including the $0.8a $4.5 million of transaction costs associated with the transaction and the $0.8 million of additional cost of goods over cost resulting from the write-up of acquired inventory from cost to fair value pursuant charge due to the purchase method of accounting, (2) $3.2 million of charges in Ben Sherman, primarily related to the termination of certain lease agreements and the impairment of certain fixed assets, (3) the $2.2 million reduction of an environmental reserve liability and (4) the $2.4 million LIFO accounting charge. Additionally, the fourth quarter of fiscal 2010 included the sale ofOXFORD INDUSTRIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)January 28, 2012Note 12. Summarized Quarterly Data (unaudited) (Continued)substantially all of the operations and assets of our former Oxford Apparel Group, as discussed in Note 15.Note 13. Restructuring Charges and Other Unusual Items During fiscal 2010, we incurred approximately $3.2 million of charges primarily consisting of retail store lease terminations in the United Kingdom of $2.8 million, which were paid in the first quarter of fiscal 2011, and fixed asset impairment charges of $0.4 million, all which were included in SG&A in our consolidated statements of earnings. Additionally, fiscal 2010 also included the acquisition of Lilly Pulitzer as discussed in Note 14, the disposal of substantially all of the operations and assets of our former Oxford Apparel Group as discussed in Note 15 and the change in estimate for an environmental reserve discussed in Note 6. During fiscal 2009, we incurred approximately $2.0 million of charges related to certain restructuring initiatives in our Ben Sherman operating group, $1.7 million of which were included in SG&A in our consolidated statements of earnings with the remaining amounts included in cost of goods sold. The restructuring charges primarily related to our exit from the Ben Sherman footwear, kids' and women's operations as well as other streamlining initiatives. These charges primarily consist of employee termination costs and certain contract termination costs. Substantially all such costs were paid during fiscal 2009.Note 14. Business Combinations On December 21, 2010, we acquired all of the outstanding capital stock of Sugartown from SWI Holdings, Inc., pursuant to a stock purchase agreement. Sugartown owns the Lilly Pulitzer trademark and designs, sources and distributes upscale collections of women's dresses, sportswear and other products to specialty and department stores, as well as through direct to consumer channels, including retail stores and an e-commerce site. Subsequent to the date of acquisition, we reported the acquired operations of Sugartown as our Lilly Pulitzer operating group. We anticipate that this acquisition will assist us in pursuing our strategic goal of owning a portfolio of lifestyle brands. The acquisition will provide strategic benefits through growth opportunities and further diversification of our business over distribution channels, product categories and target consumers. We paid $60 million in cash, subject to adjustment based on net working capital as of the closing date for the acquisition. After giving effect to a preliminary working capital adjustment, the purchase price paid was approximately $58.3 million, net of acquired cash of $0.9 million. In connection with the acquisition, we entered into a contingent consideration agreement dated as of December 21, 2010, pursuant to which we will be obligated to pay cash payments of up to $2.5 million in each of the four years following the closing of the transaction and an additional $10 million subsequent to the end of the fourth year, contingent upon Lilly Pulitzer's achievement of certain financial targets. Transaction costs related to this transaction totaled approximately $0.8 million and are included in SG&A in our consolidated statement of earnings in fiscal 2010.OXFORD INDUSTRIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)January 28, 2012Note 14. Business Combinations (Continued) Our allocation of purchase price to the fair value of the acquired assets and liabilities assumed, as reported at January 29, 2011, was preliminary and was revised through the one year allocation period, which ended in the fourth quarter of fiscal 2011, as we obtained new information about the fair values of these assets and liabilities and as we revised our estimates of the fair values of the assets and liabilities based on any new information. The most significant changes from the preliminary allocation were adjustments to receivables reserves and other accrued expenses, which resulted in a net impact of reducing goodwill by approximately $0.4 million from the initial allocation. The following table summarizes our final allocation of purchase price to the fair value of the acquired assets and liabilities assumed for the December 2010 Lilly Pulitzer acquisition (in thousands): December 2010
Lilly Pulitzer
acquisition $ 936 7,022 9,439 1,082 10,153 30,500 16,866 645 688 (6,462 ) (688 ) $ 70,181 (1)Included a write-up of acquired inventory from cost to fair value of $1.8 million pursuant to the purchase method of accounting, which was recognized during fiscal 2010 and fiscal 2011 as the acquired inventory was sold.(2)The purchase price included $10.5 million of estimated fair value of contingent consideration, associated with the acquisition which may be payablecompared to a $0.6 million charge in future periods if certain financial targets are met. The contingent consideration is discussed in Note 1 to our consolidated financial statements.Pro Forma Information (unaudited) The pro forma information presented below (in thousands, except per share data) gives effect to the December 21, 2010 acquisition of Lilly Pulitzer as if the acquisition had occurred aseach of the beginning of fiscal 2009. The information presented below is for illustrative purposes onlyfirst three quarters in Fiscal 2012 and is not indicative of results that would have been achieved if the acquisition had occurred as of the beginning of fiscal 2009, nor does it intend to be a projection of future results of operations. The pro forma statements of operations have been prepared from our and Lilly Pulitzer's historical audited consolidated statements of operations for the period presented, including without limitation, purchaseOXFORD INDUSTRIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)January 28, 2012Note 14. Business Combinations (Continued)accounting adjustments, but does not include any synergies or operating cost reductions that may be achieved from the combined operations. The fiscal 2009 pro forma information includes the following items which negatively impacted earnings from continuing operations: (1) transaction costs of approximately $0.8 million related to the acquisition, (2) $1.8 million of additional cost of goods sold resulting from the application of purchase accounting to inventory acquired at acquisition(3) approximately $0.5 million of amortization of acquired intangible assets.Qualifying Accounts Fiscal
2010 Fiscal
2009 $ 669,621 $ 650,494 $ 25,785 $ (5,064 ) $ 19,624 $ (4,277 ) $ 1.19 $ (0.05 ) $ 1.19 $ (0.05 ) Column A Column B Column C Column D Column E Description (In thousands) Fiscal 2013 Deducted from asset accounts: Accounts receivable reserves(1) $ 11,094 $ 11,245 — $ (12,655 ) (3) $ 9,684 Allowance for doubtful accounts(2) 1,005 (406 ) — 42 (4) 641 Fiscal 2012 Deducted from asset accounts: Accounts receivable reserves(1) $ 8,429 $ 11,238 — $ (8,573 ) (3) $ 11,094 Allowance for doubtful accounts(2) 1,980 132 — (1,107 ) (4) 1,005 Fiscal 2011 Deducted from asset accounts: Accounts receivable reserves(1) $ 9,178 $ 8,612 — $ (9,361 ) (3) $ 8,429 Allowance for doubtful accounts(2) 2,559 — — (579 ) (4) 1,980 Note 15. Discontinued Operations On January 3, 2011, we sold to LF USA Inc. ("LF") substantially all of the operations and assets of our former Oxford Apparel operating group (other than accounts receivable associated with the businesses that were sold and the assets and operations relating to our Oxford Golf business and our distribution center in Lyons, Georgia). The purchase price paid by LF was equal to approximately $121.7 million, less an adjustment based on net working capital on the closing date of the transaction. After giving effect to a preliminary net working capital adjustment, the purchase price paid by LF at the closing of the transaction was approximately $108.2 million, of which $5.4 million was held in escrow pending completion of the final working capital adjustment and other requirements. The net working capital deficit resulted from our retention of accounts receivable and goods in transit as of the closing date, partially offset by our retention of certain accounts payable, as of the closing date, associated with Oxford Apparel. During the second quarter of fiscal 2011, we finalized the net working capital adjustment, which resulted in a change in estimate to the gain on sale as recognized in the fourth quarter of fiscal 2010, whereby we received $3.7 million of the $5.4 million of cash held in escrow. The impact of this change in estimate was a reduction to the gain on sale of approximately $1.0 million, net of income taxes, which was recognized in fiscal 2011. This change in estimate, which was recorded in fiscal 2011, resulted in a revised after-tax gain on the sale of the Oxford Apparel operations of approximately $48.5 million compared to $49.5 million, as previously recognized in fiscal 2010. In connection with the consummation of the transaction described above, we, among other things, entered into (1) license agreements with LF to grant licenses (subject to the limitations set forth in the applicable license agreements) to LF to use the trade name "Oxford Apparel" perpetually in connection with its business, as well as to use certain other trademarks in connection with the manufacture, sale and distribution of men's dress shirts for certain periods of time in the applicable territory; (2) a services agreement with LF pursuant to which, in exchange for various fees, we will provide certain transitional support services to LF in its operation of the transferred assets; and (3) a limited non-competition agreement with LF pursuant to which we agreed (subject to the exceptions set(1) Accounts receivable reserves include estimated reserves for allowances, returns and discounts related to our wholesale operations as discussed in our significant accounting policy disclosure for Revenue Recognition and Accounts Receivable in Note 1 of our consolidated financial statements. (2) Allowance for doubtful accounts consists of amounts reserved for our estimate of a customer's inability to meet its financial obligations as discussed in our significant accounting policy disclosure for Revenue Recognition and Accounts Receivable in Note 1 of our consolidated financial statements. (3) Principally amounts written off related to customer allowances, returns and discounts. (4) Principally accounts written off as uncollectible. OXFORD INDUSTRIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)January 28, 2012Note 15. Discontinued Operations (Continued)forth in the non-competition agreement) not to engage in certain activities for a period of three years following the completion of the transaction. As of January 29, 2011, we owned approximately $57.7 million of assets, which primarily consisted of receivables, including the escrow receivable, and inventories, associated with the discontinued operations and were obligated to pay approximately $40.8 million of liabilities, including trade accounts payable, other accrued expenses, accrued compensation and income taxes payable associated with the discontinued operations and gain on sale. The assets and liabilities related to discontinued operations were converted to cash and paid, respectively, during fiscal 2012 with no remaining assets or liabilities associated with the discontinued operations remaining as of January 28, 2012. Operating results of the discontinued operations are shown below (in thousands) Fiscal
2011 Fiscal
2010 Fiscal
2009 $ 2,414 $ 200,636 $ 215,352 $ 1,764 $ 20,610 $ 21,352 $ 1,154 $ 12,877 $ 13,238 $ (1,017 ) $ 49,546 $ — $ 137 $ 62,423 $ 13,238 Note 16. Condensed Consolidating Financial Statements Our 113/8% Senior Secured Notes are guaranteed by substantially all of our wholly-owned domestic subsidiaries ("Subsidiary Guarantors"). All guarantees are full and unconditional. For consolidated financial reporting purposes, non-guarantors consist of our subsidiaries which are organized outside the United States and certain domestic subsidiaries. We use the equity method of accounting with respect to investment in subsidiaries included in other non-current assets in our condensed consolidating financial statements. Set forth below are our condensed consolidating balance sheets as of January 28, 2012 and January 29, 2011 (in thousands) as well as our condensed consolidating statements of earnings and statements of cash flows for fiscal 2011, fiscal 2010 and fiscal 2009 (in thousands).OXFORD INDUSTRIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)January 28, 2012Note 16. Condensed Consolidating Financial Statements (Continued)OXFORD INDUSTRIES, INC.CONDENSED CONSOLIDATING BALANCE SHEETSJanuary 28, 2012 Oxford
Industries
(Parent) Subsidiary
Guarantors Subsidiary
Non-
Guarantors Consolidating
Adjustments Consolidated
Total
$
8,416
$
1,818
$
3,139
$
—
$
13,373 16,082 1,569 68,194 (26,139 ) 59,706 (15,653 ) 104,239 16,247 (1,413 ) 103,420 19,522 14,431 5,887 (1,066 ) 38,774 28,367 122,057 93,467 (28,618 ) 215,273 8,094 78,402 6,710 — 93,206 — 158,163 23,525 — 181,688 613,720 149,268 5,237 (749,185 ) 19,040 $ 650,181 $ 507,890 $ 128,939 $ (777,803 ) $ 509,207
$
25,821
$
55,100
$
56,418
$
(19,785
)
$
117,554 103,405 — — — 103,405 319,882 (308,380 ) 149,991 (112,196 ) 49,297 (2,996 ) 32,128 5,750 — 34,882 204,069 729,042 (83,220 ) (645,822 ) 204,069 $ 650,181 $ 507,890 $ 128,939 $ (777,803 ) $ 509,207 OXFORD INDUSTRIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)January 28, 2012Note 16. Condensed Consolidating Financial Statements (Continued)OXFORD INDUSTRIES, INC.CONDENSED CONSOLIDATING BALANCE SHEETSJanuary 29, 2011 Oxford
Industries
(Parent) Subsidiary
Guarantors Subsidiary
Non-
Guarantors Consolidating
Adjustments Consolidated
Total
$
41,130
$
809
$
2,155
$
—
$
44,094 10,969 3,431 44,897 (9,120 ) 50,177 (13,234 ) 86,747 11,889 (64 ) 85,338 19,756 12,671 3,018 (3,886 ) 31,559 46,418 324 11,003 — 57,745 105,039 103,982 72,962 (13,070 ) 268,913 7,182 72,323 4,390 — 83,895 — 159,543 24,003 — 183,546 579,130 143,459 4,101 (704,573 ) 22,117 $ 691,351 $ 479,307 $ 105,456 $ (717,643 ) $ 558,471
$
13,978
$
59,255
$
41,170
$
(8,097
)
$
106,306 32,379 — 8,406 — 40,785 147,065 — — — 147,065 322,237 (301,271 ) 143,113 (108,638 ) 55,441 (4,336 ) 26,944 6,332 (94 ) 28,846 180,028 694,379 (93,565 ) (600,814 ) 180,028 $ 691,351 $ 479,307 $ 105,456 $ (717,643 ) $ 558,471 OXFORD INDUSTRIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)January 28, 2012Note 16. Condensed Consolidating Financial Statements (Continued)OXFORD INDUSTRIES, INC.CONDENSED CONSOLIDATING STATEMENTS OF EARNINGSFiscal 2011 Oxford
Industries
(Parent) Subsidiary
Guarantors Subsidiary
Non-
Guarantors Consolidating
Adjustments Consolidated
Total $ 119,088 $ 575,517 $ 98,084 $ (33,776 ) $ 758,913 84,546 239,531 42,928 (21,061 ) 345,944 34,542 335,986 55,156 (12,715 ) 412,969 24,732 292,607 55,883 (12,240 ) 360,982 345 9,458 7,246 (229 ) 16,820 10,155 52,837 6,519 (704 ) 68,807 17,947 (4,843 ) 3,162 — 16,266 9,017 — — — 9,017 37,322 — — (37,322 ) — 20,513 57,680 3,357 (38,026 ) 43,524 (9,332 ) 23,557 303 (247 ) 14,281 29,845 34,123 3,054 (37,779 ) 29,243 (7 ) 144 — — 137 $ 29,838 $ 34,267 $ 3,054 $ (37,779 ) $ 29,380 OXFORD INDUSTRIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)January 28, 2012Note 16. Condensed Consolidating Financial Statements (Continued)OXFORD INDUSTRIES, INC.CONDENSED CONSOLIDATING STATEMENTS OF EARNINGSFiscal 2010 Oxford
Industries
(Parent) Subsidiary
Guarantors Subsidiary
Non-
Guarantors Consolidating
Adjustments Consolidated
Total $ 112,270 $ 435,599 $ 85,308 $ (29,230 ) $ 603,947 77,481 178,776 35,780 (15,497 ) 276,540 34,789 256,823 49,528 (13,733 ) 327,407 33,982 231,246 52,813 (15,866 ) 302,175 1,118 8,830 7,343 (1,861 ) 15,430 1,925 34,407 4,058 272 40,662 21,492 (4,548 ) 2,949 (6 ) 19,887 25,863 — — (25,863 ) — 6,296 38,955 1,109 (25,585 ) 20,775 (12,115 ) 15,212 1,346 97 4,540 18,411 23,743 (237 ) (25,682 ) 16,235 60,068 1,409 946 — 62,423 $ 78,479 $ 25,152 $ 709 $ (25,682 ) $ 78,658 OXFORD INDUSTRIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)January 28, 2012Note 16. Condensed Consolidating Financial Statements (Continued)OXFORD INDUSTRIES, INC.CONDENSED CONSOLIDATING STATEMENTS OF EARNINGSFiscal 2009 Oxford
Industries
(Parent) Subsidiary
Guarantors Subsidiary
Non-
Guarantors Consolidating
Adjustments Consolidated
Total $ 120,148 $ 395,982 $ 98,394 $ (29,218 ) $ 585,306 95,183 166,381 49,224 (16,295 ) 294,493 24,965 229,601 49,170 (12,923 ) 290,813 27,663 215,834 54,081 (13,872 ) 283,706 18 5,812 6,373 (400 ) 11,803 (2,680 ) 19,579 1,462 549 18,910 22,323 (4,930 ) 3,453 (377 ) 20,469 13,539 — — (13,539 ) — (11,464 ) 24,509 (1,991 ) (12,613 ) (1,559 ) (12,249 ) 8,376 603 325 (2,945 ) 785 16,133 (2,594 ) (12,938 ) 1,386 9,825 1,769 1,644 — 13,238 $ 10,610 $ 17,902 $ (950 ) $ (12,938 ) $ 14,624 OXFORD INDUSTRIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)January 28, 2012Note 16. Condensed Consolidating Financial Statements (Continued)OXFORD INDUSTRIES, INC.CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWSFiscal 2011 Oxford
Industries
(Parent) Subsidiary
Guarantors Subsidiary
Non-
Guarantors Consolidating
Adjustments Consolidated
Total $ 16,399 $ 37,608 $ (13,655 ) $ 4,293 $ 44,645 (3,644 ) (34,467 ) (3,877 ) 6,280 (35,708 ) (52,177 ) — 2,625 — (49,552 ) 2,731 — — — 2,731 (1,827 ) — — — (1,827 ) — 398 6,279 (6,677 ) — (186 ) (2,854 ) 6,936 (3,896 ) — (8,568 ) — — — (8,568 ) (60,027 ) (2,456 ) 15,840 (10,573 ) (57,216 ) 14,558 324 2,597 — 17,479 (32,714 ) 1,009 905 — (30,800 ) — — 79 — 79 41,130 809 2,155 — 44,094 $ 8,416 $ 1,818 $ 3,139 $ — $ 13,373 OXFORD INDUSTRIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)January 28, 2012Note 16. Condensed Consolidating Financial Statements (Continued)OXFORD INDUSTRIES, INC.CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWSFiscal 2010 Oxford
Industries
(Parent) Subsidiary
Guarantors Subsidiary
Non-
Guarantors Consolidating
Adjustments Consolidated
Total $ (18,158 ) $ 47,879 $ 6,203 $ (233 ) $ 35,691 (60,026 ) (10,884 ) (643 ) — (71,553 ) (4,125 ) — — — (4,125 ) 177 — — — 177 44,288 (42,491 ) (2,030 ) 233 — (7,275 ) — — — (7,275 ) 33,065 (42,491 ) (2,030 ) 233 (11,223 ) 80,316 5,802 (3,258 ) — 82,860 35,197 306 272 — 35,775 — — 31 — 31 5,933 503 1,852 — 8,288 $ 41,130 $ 809 $ 2,155 $ — $ 44,094 OXFORD INDUSTRIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)January 28, 2012Note 16. Condensed Consolidating Financial Statements (Continued)OXFORD INDUSTRIES, INC.CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWSFiscal 2009 Oxford
Industries
(Parent) Subsidiary
Guarantors Subsidiary
Non-
Guarantors Consolidating
Adjustments Consolidated
Total $ 8,953 $ 51,203 $ 593 $ 226 $ 60,975 (5,851 ) (6,927 ) (2,132 ) 3,613 (11,297 ) (27,722 ) — (5,598 ) — (33,320 ) (166,805 ) — — — (166,805 ) 146,029 — — — 146,029 (5,049 ) — — — (5,049 ) 8 — — — 8 — — 3,613 (3,613 ) — 44,507 (44,177 ) (104 ) (226 ) — (5,889 ) — — — (5,889 ) (14,921 ) (44,177 ) (2,089 ) (3,839 ) (65,026 ) 16,225 300 4,054 — 20,579 4,406 399 426 — 5,231 — — (233 ) — (233 ) 1,527 104 1,659 — 3,290 $ 5,933 $ 503 $ 1,852 $ — $ 8,288 SCHEDULE IIOxford Industries, Inc.Valuation and Qualifying AccountsColumn A Column B Column C Column D Column E Balance at
Beginning
of Period Additions
Charged to
Costs and
Expenses Charged
to Other
Accounts–
Describe Deductions–
Describe Balance at
End of
Period (In thousands) $ 9,178 $ 8,612 — $ (9,361 )(3) $ 8,429 2,559 — — (579 )(4) 1,980 $ 8,817 $ 10,068 $ 1,341 (5) $ (11,048 )(3) $ 9,178 1,571 (89 ) 1,355 (5) (278 )(4) 2,559 $ 9,417 $ 10,218 — $ (10,818 )(3) $ 8,817 1,857 1,466 — (1,752 )(4) 1,571 (1)Accounts receivable reserves include estimated reserves for allowances, returns and discounts related to our wholesale operations as discussed in our significant accounting policy disclosure for Revenue Recognition and Accounts Receivable in Note 1 of our consolidated financial statements.(2)Allowance for doubtful accounts consists of amounts reserved for our estimate of a customer's inability to meet its financial obligations as discussed in our significant accounting policy disclosure for Revenue Recognition and Accounts Receivable in Note 1 of our consolidated financial statements.(3)Principally amounts written off related to customer allowances, returns and discounts.(4)Principally accounts written off as uncollectible.(5)Addition due to the acquisition of Lilly Pulitzer in fiscal 2010.January 28, 2012February 1, 2014 and January 29, 2011,February 2, 2013, and the related consolidated statements of earnings, comprehensive income, shareholders' equity, and cash flows for each of the three years in the period ended January 28, 2012.February 1, 2014. Our audits also included the financial statement schedule listed in the Index at Item 15(a). These financial statements and schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits.January 28, 2012February 1, 2014 and January 29, 2011,February 2, 2013, and the consolidated results of its operations and its cash flows for each of the three years in the period ended January 28, 2012,February 1, 2014, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.January 28, 2012,February 1, 2014, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (1992 framework) and our report dated March 29, 201231, 2014 expressed an unqualified opinion thereon.29, 201231, 2014fiscal 2011Fiscal 2013 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.January 28, 2012.February 1, 2014. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in theInternal Control—Integrated Framework (1992). Based on this assessment, we believe that our internal control over financial reporting was effective as of January 28, 2012.February 1, 2014.January 28, 2012,February 1, 2014, and its report thereon is included herein./s/ J. HICKS LANIERJ. Hicks LanierChairman and Chief Executive Officer(Principal Executive Officer)THOMAS C. CHUBB III /s/ K. SCOTT GRASSMYER President,President—Finance, Chief Financial Officer and Controller
March 29, 201231, 2014
March 29, 201231, 2014's’s (the Company's)Company’s) internal control over financial reporting as of January 28, 2012,February 1, 2014, based on criteria established in Internal Control—IntegratedControl-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (1992 framework) (the COSO criteria). Oxford Industries, Inc.'s’s management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Report of Management on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company'sCompany’s internal control over financial reporting based on our audit.company'scompany’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company'scompany’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company'scompany’s assets that could have a material effect on the financial statements.January 28, 2012,February 1, 2014, based onthe COSO criteria.20112013 consolidated financial statements of Oxford Industries, Inc., and our report dated March 29, 201231, 2014 expressed an unqualified opinion thereon./s/ Ernst & Young LLP29, 201231, 2014January 28, 2012:February 1, 2014:Name Principal Occupation Thomas C. Chubb III Mr. Chubb is our Chief Executive Officer and President. Thomas C. Gallagher Mr. Gallagher is Chairman and Chief Executive Officer of Genuine Parts Company, a distributor of automotive replacement parts, industrial replacement parts, office products and electrical/electronic materials. George C. Guynn Mr. Guynn is the retiredwas President and CEO of the Federal Reserve Bank of Atlanta.Atlanta until his retirement in 2006.John R. Holder Mr. Holder is Chairman and Chief Executive Officer of Holder Properties, a commercial and residential real estate development, leasing and management company. J. Hicks Lanier Mr. Lanier is our Chairman and was our Chief Executive Officer.Officer until his retirement on December 31, 2012.J. Reese Lanier Mr. Lanier was self-employed in farming and related businesses until his retirement in 2009. Dennis M. Love Mr. Love is PresidentChairman and Chief Executive Officer of Printpack Inc., a manufacturer of flexible and specialty rigid packaging.Clarence H. Smith Mr. Smith is Chairman of the Board, President and Chief Executive Officer of Haverty Furniture Companies, Inc., a home furnishings retailer. Clyde C. Tuggle Mr. Tuggle is Senior Vice President Globaland Chief Public Affairs and Communications Officer of The Coca-Cola Company.Helen B. Weeks Ms. Weeks founded Ballard Designs, Inc., a home furnishing catalog business, in 1983 and served aswas its Chief Executive Officer until she retiredher retirement in 2002.E. Jenner Wood III Mr. Wood is Chairman, President and CEO of SunTrust Bank, Atlanta / Georgia Division.Division and Corporate Executive Vice President of SunTrust Banks, Inc.January 28, 2012:February 1, 2014:Name Position Held J. Hicks LanierThomas C. Chubb IIIChairman and Chief Executive Officer and PresidentScott A. Beaumont CEO, Lilly Pulitzer Group Thomas E. Campbell Senior Vice President—President - Law and Administration, General Counsel and SecretaryThomas C. Chubb IIIPresidentJ. Wesley HowardPresident, Lanier ClothesK. Scott Grassmyer Senior Vice President—President - Finance, Chief Financial Officer and ControllerPanayiotis P. PhilippouJ. Wesley Howard, Jr. CEO, Ben Sherman GroupPresident, Lanier ClothesTerry R. Pillow CEO, Tommy Bahama Group Policies,Website Information," "Additional Information—Submission of Director Candidates by Shareholders," and "Corporate•fiscal 2011, fiscal 2010Fiscal 2013, Fiscal 2012 and fiscal 2009.Fiscal 2011.•fiscal 2011, fiscal 2010 and fiscal 2009.•Consolidated Balance Sheets as of January 28,Fiscal 2013, Fiscal 2012 and January 29,Fiscal 2011.•fiscal 2011, fiscal 2010Fiscal 2013, Fiscal 2012 and fiscal 2009.Fiscal 2011.•fiscal 2011, fiscal 2010Fiscal 2013, Fiscal 2012 and fiscal 2009.Fiscal 2011.•fiscal 2011, fiscal 2010Fiscal 2013, Fiscal 2012 and fiscal 2009.• (b) Exhibits2.1 Purchase Agreement, dated as of November 22, 2010, among LF USA Inc., Oxford Industries, Inc., Piedmont Apparel Corporation, Tommy Bahama International, Pte. Ltd. and Oxford Product (International) Limited. Incorporated by reference to Exhibit 2.1 to the Company's Form 8-K filed on November 22, 2010. 2.2 Stock Purchase Agreement, dated as of December 21, 2010, by and among Oxford Industries, Inc., Sugartown Worldwide, Inc., SWI Holdings, Inc. and the other sellers party thereto. Incorporated by reference to Exhibit 2.1 to the Company's Form 8-K filed on December 21, 2010. 3.1 Restated Articles of Incorporation of Oxford Industries, Inc. Incorporated by reference to Exhibit 3.1 to the Company's Form 10-Q for the fiscal quarter ended August 29, 2003. 3.2 Bylaws of Oxford Industries, Inc., as amended. Incorporated by reference to Exhibit 3.1 to the Company's Form 8-K filed on June 17, 2009.*4.1Indenture, dated June 30, 2009, among Oxford Industries, Inc., the Guarantors party thereto and U.S. Bank National Association, as trustee. Incorporated by reference to Exhibit 4.1 to the Company's Form 8-K filed on July 2, 2009.4.2Form of 11.375% Senior Secured Note due 2015. Incorporated by reference to Exhibit 4.2 to the Company's Form 8-K filed on July 2, 2009.10.1 1997 Stock Option Plan, as amended. Incorporated by reference to Exhibit 10(a) to the Company's Form 10-K for the fiscal year ended May 31, 2002.†10.2Second Amendment to the 1997 Stock OptionExecutive Medical Plan. Incorporated by reference to Exhibit 10(s)10(d) to the Company's Form 10-K for the fiscal year ended June 2, 2006.3, 2005.†10.2 10.3Amended and Restated Long-Term Stock Incentive Plan, effective as of March 26, 2009. Incorporated by reference to Appendix A to the Company's Proxy Statement for its Annual Meeting of Shareholders held June 15, 2009, filed on May 11, 2009.† 10.3 10.4Form of Restricted Stock Agreement. Incorporated by reference to Exhibit 10(y) toTerms and Conditions of the Company's Form 10-KT for the eight month transition period ended February 2, 2008.†10.5Form of Oxford Industries, Inc. 2009 Restricted Stock Agreement.Performance Share Unit Award Program for Fiscal 2012. Incorporated by reference to Exhibit 10.1 to the Company's Form 8-K filed on June 17, 2009.March 23, 2012.†10.4 10.6Form of Terms and Conditions of the Oxford Industries, Inc. Executive Performance Incentive Plan (as amended and restated, effective March 27, 2008). Incorporated by reference to Appendix A to the Company's Proxy StatementShare Unit Award Program for its Annual Meeting of Shareholders held June 16, 2008, filed on May 13, 2008.†10.7Executive Medical Plan.Fiscal 2013. Incorporated by reference to Exhibit 10(d)10.1 to the Company's Form 8-K filed on April 11, 2013.†10.5 Earnout Agreement, dated as of December 21, 2010, by and among Oxford Industries, Inc., Sugartown Worldwide, Inc., SWI Holdings, Inc. and the other parties thereto. Incorporated by reference to Exhibit 10.20 to the Company's Form 10-K for the fiscal year ended June 3, 2005.January 29, 2011.10.6 First Amendment to Earnout Agreement, dated as of December 19, 2012, by and among Oxford Industries, Inc., Sugartown Worldwide LLC, and SWI Holdings, Inc., on behalf of itself and on behalf of the Sellers. Incorporated by reference to Exhibit 10.9 to the Company's Form 10-K for the fiscal year ended February 2, 2013. 10.7 Employment Agreement, dated as of December 21, 2010, by and between Sugartown Worldwide, Inc. and Scott A. Beaumont. Incorporated by reference to Exhibit 10.21 to the Company's Form 10-K for the fiscal year ended January 29, 2011.† 10.8 SecondThird Amended and Restated Credit Agreement, dated as of August 15, 2008,June 14, 2012, by and among Oxford Industries, Inc., Tommy Bahama Group, Inc., the Persons party thereto from time to time as Guarantors, the financial institutions party thereto from time to time as lenders, the financial institutions party thereto from time to time as Issuing Banks and SunTrust Bank, as administrative agent. Incorporated by reference to Exhibit 10.1010.1 to the Company's Form 10-K/A for the fiscal year ended January 29, 2011./*\8-K filed on June 15, 2012.10.9 Third Amended and Restated Pledge and Security Agreement, dated as of August 15, 2008,June 14, 2012, among Oxford Industries, Inc., the other Grantors party thereto and SunTrust Bank, as administrative agent. Incorporated by reference to Exhibit 10.1110.2 to the Company's Form 10-K for the fiscal year ended January 29, 2011.8-K filed on June 15, 2012.10.10 SecondFirst Amendment, dated November 21, 2013, to Third Amended and Restated PledgeCredit Agreement, by and Security Agreement, dated June 30, 2009, among Oxford Industries, Inc., Tommy Bahama Group, Inc., the other GrantorsPersons party thereto from time to time as Guarantors, the financial institutions party thereto from time to time as lenders, the financial institutions party thereto from time to time as Issuing Banks and SunTrust Bank, as administrative agent. Incorporated by reference to Exhibit 10.12 to the Company's Form 10-K for the fiscal year ended January 29, 2011.10.11Intercreditor Agreement, dated June 30, 2009, between U.S. Bank National Association, as trustee and as collateral agent under the Indenture, and SunTrust Bank, as agent under the ABL Credit Agreement, as acknowledged by the Company and the subsidiaries party thereto. Incorporated by reference to Exhibit 10.1 to the Company's Form 8-K filed on July 2, 2009.November 25, 2013.10.11 10.12Registration Rights Agreement, dated June 30, 2009, among Oxford Industries, Inc., the guarantors party thereto, Banc of America Securities LLC, SunTrust Robinson Humphrey, Inc., Credit Suisse Securities (USA) LLC, BB&T Capital Markets, a Division of Scott & Stringfellow, LLC, Morgan Keegan & Company, Inc, Barclays Capital Inc. and PNC Capital Markets LLC. Incorporated by reference to Exhibit 10.2 to the Company's Form 8-K filed on July 2, 2009.10.13Security Agreement, dated June 30, 2009, among Oxford Industries, Inc., the other Grantors party thereto, U.S. Bank National Association, as collateral agent and as trustee, and each Additional Pari Passu Agent from time to time party thereto. Incorporated by reference to Exhibit 10.15 to the Company's Form 10-K for the fiscal year ended January 29, 2011.10.14Oxford Industries, Inc. Deferred Compensation Plan as(as amended and restated effective September 1, 2010.June 13, 2012). Incorporated by reference to Exhibit 10.1 to the Company's Form 10-Q for the fiscal quarter ended October 30, 2010.27, 2012.†10.12 10.15First Amendment to the Oxford Industries, Inc. Deferred Compensation Plan, as amendedCompromise Agreement, dated November 12, 2012, by and restated effective September 1, 2010.between Ben Sherman Group Limited and Panayiotis Philippou. Incorporated by reference to Exhibit 10.1910.14 to the Company's Form 10-K for the fiscal year ended January 29, 2011.February 2, 2013.†10.13 10.16EarnoutExecutive Post-Retirement Benefits Agreement, dated as of December 21, 2010,31, 2012, by and amongbetween Oxford Industries, Inc., Sugartown Worldwide, Inc., SWI Holdings, Inc. and the other parties thereto.J. Hicks Lanier. Incorporated by reference to Exhibit 10.2010.15 to the Company's Form 10-K for the fiscal year ended January 29, 2011.February 2, 2013.†10.14 10.21Employment Agreement, dated as of December 21, 2010, byOxford Industries, Inc. Executive Performance Incentive Plan (as amended and between Sugartown Worldwide, Inc. and Scott A. Beaumont.restated, effective March 27, 2013). Incorporated by reference to Exhibit 10.21Appendix A to the Company's Form 10-KProxy Statement for the fiscal year ended January 29, 2011.its Annual Meeting of Shareholders held June 19, 2013, filed on May 17, 2013.†21 List of Subsidiaries.* 23 Consent of Independent Registered Public Accounting Firm.* 24 Powers of Attorney.* 31.1 Certification by Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.* 31.2 Certification by Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.* 32 Certification by Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-OxleySarbanes- Oxley Act of 2002.*101INS XBRL Instance Document 101SCH XBRL Taxonomy Extension Schema Document 101CAL XBRL Taxonomy Extension Calculation Linkbase Document 101DEF XBRL Taxonomy Extension Definition Linkbase Document 101LAB XBRL Taxonomy Extension Label Linkbase Document 101PRE XBRL Taxonomy Extension Presentation Linkbase Document *Filed herewith†Management contract or compensation plan or arrangement required to be filed as an exhibit to this form pursuant to Item 15(b) of this report./*\Confidential treatment has been granted for certain provisions of this exhibit pursuant to a request filed with the SEC. Omitted material for which confidential treatment has been granted has been filed separately with the SEC.* Filed herewith †† Management contract or compensation plan or arrangement required to be filed as an exhibit to this form pursuant to Item 15(b) of this report. 222 Piedmont Avenue,999 Peachtree Street, N.E., Ste. 688, Atlanta, Georgia 30308.30309. OXFORD INDUSTRIES, INC.Oxford Industries, Inc.
By:By:
/s/ J. HICKS LANIER
THOMAS C. CHUBB IIIJ. Hicks LanierChairman and Chief Executive Officer and President29, 2012Signature CapacityDate
Capacity
Date/s/ J. HICKS LANIERJ. Hicks Lanier Chairman of the Board of Directorsand /s/ THOMAS C. CHUBB III (Principal
and President Thomas C. Chubb III March 29, 201231, 2014
/s/ K. SCOTT GRASSMYERK. Scott Grassmyer FinancialOfficer and Controller (Principal
Financial Officer andMarch 29, 2012
K. Scott GrassmyerMarch 31, 2014 * Thomas C. Gallagher Director March 31, 2014 * George C. Guynn
DirectorDirector
March 29, 201231, 2014
*John R. Holder
DirectorDirector
March 29, 201231, 2014
*J. Hicks Lanier Director March 31, 2014 * J. Reese Lanier
DirectorDirector
March 29, 201231, 2014
*Dennis M. Love
DirectorDirector
March 29, 201231, 2014
*Clarence H. Smith
DirectorDirector
March 29, 201231, 2014
*Clyde C. Tuggle
DirectorDirector
March 29, 201231, 2014*Helen B. Weeks
DirectorDirectorMarch 29, 2012
*E. Jenner Wood III
DirectorDirector
March 29, 201231, 2014*By
/s/ THOMAS E. CAMPBELL