margin. Design, Sourcing, Marketing and Distribution Fiscal 2014. In Fiscal 2014, 66% of Lilly Pulitzer's product purchases were from manufacturers located in China. channel. the calculation above, the square feet of the relocated store based on the weighted average month-end square feet for the relocated store. The increase in sales per gross square foot from the prior year was primarily due to higher comparable store sales in stores open prior to Fiscal 2013 as well as the favorable impact of the inclusion of the stores opened in Fiscal 2013 in the Fiscal 2014 calculation. Florida Total Total square feet at year-end Open as of beginning of fiscal year Opened during fiscal year Open as of end of fiscal year Fiscal 2015. All but one of these stores is expected to open in the first half of the year. comparable to the cost of opening a new store. During Fiscal 2014, approximately 36% of Lilly Pulitzer's e-commerce sales were e-commerce flash clearance sales. customers, with Lilly Pulitzer products available in more than 600 retail locations. Pulitzer's net sales. Third party license arrangements for Lilly Pulitzer products include the following product categories: bedding and home eyewear. Net sales Operating income Full-price retail stores E-commerce Wholesale Total Fiscal 2014. manufacturers. Our various Lanier Clothes products are manufactured from a variety of fibers, including wool, silk, linen, cotton and other natural fibers, as well as synthetics and blends of these materials. generally not responsible for advertising for private label brands. We maintain apparel sales offices and showrooms for our Lanier Clothes products in several locations, including New York City and Net sales Operating income shareholders. Fiscal 2014. Disposal of excess prior-season inventory is an ongoing part of our business and Ben Sherman utilizes a combination of sales in its own outlet stores and sales to off-price retailers to sell such inventory. Direct to Consumer Operations Outlet store sales comprised 11% of Ben Sherman sales in Fiscal 2014. do not include sales or square feet amounts for outlets and concessions. United States full-price retail stores United Kingdom full-price retail stores Germany full-price retail stores Outlet stores(1) Total Total gross square feet at year end The table below reflects the changes in store count for Ben Sherman stores during Open as of beginning of fiscal year Opened during fiscal year Open as of end of fiscal year amount of initial capital investment than wholesale operations as well as greater ongoing operating costs. We also incur capital expenditures when a lease expires and we determine it is appropriate to relocate a store to a new location in the same vicinity as the previous store. Fiscal 2014. Third party license arrangements for Ben Sherman products include the following product categories: Russia, as well as four stores in Singapore and the Philippines, which are anticipated to close in Fiscal 2015. Net sales Wholesale Direct to consumer Total Corporate and Other Fiscal 2014. regulations. regulatory changes and the existing regulatory environment, including any impact on our operations or on our ability to import products. Net sales Operating income believe that order backlog information is necessarily indicative of sales to be expected for future periods. Therefore, we believe the order backlog is not material for an understanding of our business taken as a whole. Further, as our sales continue to shift towards direct to consumer rather than wholesale sales, the order backlog will continue to be less meaningful as a measure of our future sales and results of operations. During actions or failures by us or such parties may result in negative public perception of our brands or products, as well as disrupt our supply chain, which may adversely and financial condition. Our business depends on our senior management and other key personnel, and the unsuccessful transition of key management responsibilities, the unexpected loss of individuals integral to our business, our inability to attract and retain qualified personnel in the future or our failure to successfully plan for and implement succession of our senior Our success Prussia, Pennsylvania for our Lilly Pulitzer products; a distribution center in Toccoa, Georgia for our Lanier Clothes products; and a distribution center in Lyons, Georgia for our Ben Sherman products sold in the United States and for our Oxford Golf products. In addition, in the United Kingdom, we utilize a third party distribution center that manages substantially all of the distribution activities for our Ben Sherman products sold in the United Kingdom and continental Europe. Each of these distribution centers relies on computer-controlled and automated equipment, which may be subject to a number of risks. Our ability to support our direct to consumer operations, meet customer expectations, manage inventory and achieve objectives for operating efficiencies depends on the proper operation of these brand-focused distribution facilities, each of which manages the receipt, storage, sorting, packing and distribution of finished goods for one of our operating groups. business or result in adverse publicity. Regardless of whether any allegations Although we attempt to mitigate the effect of increases in our cost of goods sold through sourcing initiatives and by selectively increasing the prices of our products, these product costing pressures, as well as other variable cost pressures, may materially increase our costs, and we may be unable to fully pass on these costs to our customers. restaurants and/or office locations. tenants, generally large department stores, and other area attractions and businesses, to generate sufficient levels of consumer traffic in the vicinity of our stores and restaurants. the overall ability of the continue to be negatively impacted. costs, and the products are sold in another currency, but the additional cost cannot be passed on to our customers, our gross margins will be negatively impacted. from operations towards interest, even if the amount of borrowings outstanding remains the same. As a result, we may have to revise or delay our business plans, reduce or delay capital expenditures or otherwise adjust our plans for operations. As of Seattle, Washington Tommy Bahama Auburn, Washington Tommy Bahama King of Prussia, Pennsylvania Lilly Pulitzer King of Prussia, Pennsylvania Lilly Pulitzer London, England Ben Sherman Lurgan, Northern Ireland Ben Sherman Toccoa, Georgia Lanier Clothes Merida, Mexico Lanier Clothes Atlanta, Georgia Corporate and Other and Lanier Clothes Lyons, Georgia Corporate and Other and Ben Sherman Lyons, Georgia Corporate and Other and Ben Sherman New York, New York Various Hong Kong Various Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Fiscal 2012 Fourth Quarter Third Quarter Second Quarter First Quarter Fiscal 2011 Fourth Quarter Third Quarter Second Quarter First Quarter Fiscal 2014. Purchasers In Oxford Industries, Inc. S&P SmallCap 600 Index S&P 500 Apparel, Accessories & Luxury Goods Net sales Cost of goods sold Gross profit SG&A Change in fair value of contingent consideration Impairment of goodwill and intangible assets Royalties and other operating income Operating income (loss) (Loss) gain on repurchase of senior notes Interest expense, net 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) Diluted earnings (loss) from continuing operations per share Diluted earnings from discontinued operations per share Diluted net earnings (loss) per share Diluted weighted average shares outstanding Dividends declared Dividends declared per share Total assets, at period-end Long-term debt at period-end Shareholders' equity, at period-end Net cash provided by operating activities Capital expenditures Depreciation and amortization included in earnings from continuing operations Stock compensation expense included in earnings from continuing operations LIFO accounting charges included in earnings from continuing operations Book value per share at period-end Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations States. products and, as suitable opportunities arise, we may acquire additional lifestyle brands that we believe fit within our business model. products, most of which appear to be permanent cost increases. retail store operations, as we add additional retail store locations and brands in order to take advantage of their long-term growth opportunities. Investments include capital expenditures primarily related to the direct to consumer operations such as retail store build-out and remodels, technology enhancements and distribution center and administrative office expansion initiatives, as well as increased employment, advertising and other costs in key functions to support the ongoing business operations and fuel future net sales growth. We expect that the investments may continue to put downward pressure on our operating margins in the near future until we have sufficient sales to leverage the operating costs. shareholders. brands, in the future, we may also add additional lifestyle brands to our portfolio if we identify appropriate targets which meet our investment criteria. Net sales Operating income Earnings from continuing operations Earnings from continuing operations per diluted share Net earnings Net earnings per diluted share from continuing operations handling revenues, if any, associated with product sales. 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 from continuing operations before income taxes Income taxes Earnings from continuing operations Individual line items of our consolidated statements of operations may not be directly comparable to those of our competitors, as classification of certain expenses may vary by company. Tommy Bahama Lilly Pulitzer Lanier Clothes Ben Sherman Corporate and Other Total net sales February 1, 2014. The British pound sterling and the United States dollar reflecting a 4% stronger pound sterling in Fiscal 2014 and (4) an $0.8 million increase in e-commerce sales. As of January 31, 2015, we operated 21 Ben Sherman retail stores, consisting of 12 full-price retail stores and nine outlet stores. As of February 1, 2014 we operated 17 Ben Sherman retail stores, consisting of 11 full-price stores and six outlets. The following table presents the proportion of net sales by distribution channel for Ben Sherman for each period presented: branded program in Fiscal 2013 that did not anniversary in Fiscal 2014 and (3) a larger unfavorable impact of the elimination of inter-company sales of Lanier Clothes to Ben Sherman in Fiscal 2014. Tommy Bahama Lilly Pulitzer Lanier Clothes Ben Sherman Corporate and Other Total LIFO charges included in Corporate and Other Charge related to write-up of acquired inventory included in Lilly Pulitzer Tommy Bahama Lilly Pulitzer Lanier Clothes Ben Sherman Corporate and Other Total SG&A SG&A (as % of net sales) Life insurance death benefit gain assets for Fiscal 2015 will be approximately $2.1 million, with approximately $1.6 million of the amortization related to amortization of the intangible assets acquired as part of the Tommy Bahama Canada acquisition. Change in fair value of contingent consideration Thus, change in fair value of contingent consideration reflects the current period impact of the change in the fair value of any contingent consideration obligations. Royalties and other operating income brands. Tommy Bahama Lilly Pulitzer Lanier Clothes Ben Sherman Corporate and Other Total operating income LIFO charges included in Corporate and Other Charge related to write-up of acquired inventory included in Lilly Pulitzer Charge for increase in fair value of contingent consideration included in Lilly Pulitzer Life insurance death benefit gain included in Corporate and Other Net sales Operating income Operating income as % of net sales Fiscal Fiscal 2012. Net sales Operating income Operating income as % of net sales Charge related to write-up of acquired inventory Charge for increase in fair value of contingent consideration Net sales Operating income Operating income as % of net sales higher incentive compensation earned in Fiscal 2013. Net sales Operating loss Operating loss as % of net sales second half of Fiscal 2013. Net sales Operating loss LIFO charges Life insurance death benefit gain real estate of $1.6 million. Interest expense, net remaining outstanding Agreement. Loss on repurchase of senior secured notes million Income taxes Effective tax rate Earnings from continuing operations Earnings from continuing operations per diluted common share Weighted average common shares outstanding-diluted Tommy Bahama Lilly Pulitzer Lanier Clothes Ben Sherman Corporate and Other Total net sales Tommy Bahama Lilly Pulitzer Lanier Clothes Ben Sherman Corporate and Other Total LIFO charges included in Corporate and Other Charge related to write-up of acquired inventory included in Lilly Pulitzer Tommy Bahama Lilly Pulitzer Lanier Clothes Ben Sherman Corporate and Other Total 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 Royalties and other operating income Tommy Bahama Lilly Pulitzer Lanier Clothes Ben Sherman Corporate and Other Total operating income LIFO charges included in Corporate and Other Charge related to write-up of acquired inventory included in Lilly Pulitzer Charge for increase in fair value of contingent consideration included in Lilly Pulitzer Life insurance death benefit gain included in Corporate and Other Restructuring charges included in Ben Sherman Acquisition transaction costs included in Corporate and Other Environmental reserve reduction included in Corporate and Other 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 Charge for increase in fair value of contingent consideration Net sales Operating income Operating income as % of net sales Net sales Operating loss Operating loss as % of net sales Restructuring charges Net sales Operating loss LIFO charges Life insurance death benefit gain Acquisition transaction costs Environmental reserve reduction Interest expense, net Loss on repurchase of senior secured notes Income taxes Effective tax rate this report. 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 Canada. As of Current assets Current liabilities Working capital Working capital ratio Debt to total capital ratio accounts are discussed below. February 1, 2014. Cash and cash equivalents Receivables, net Inventories, net Prepaid expenses, net Deferred tax assets Total current assets Cash and cash equivalents as of January 31, 2015 and February Fiscal 2014. part to the significant LIFO accounting charge in the Fourth Quarter of Fiscal 2014. Property and equipment, net Intangible assets, net Goodwill Other non-current assets, net Total non-current assets, net Current liabilities Long-term debt Non-current contingent consideration Other non-current liabilities Non-current deferred income taxes Total liabilities accrued compensation balances and intangible assets. 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 capital expenditures in Fiscal 2015 will be significantly higher than capital expenditures in recent years. See a discussion of Fiscal 2015 expected capital expenditures in Contractual Obligations below. be used in financing activities as a repayment of debt may be limited. Fiscal 2013 and Fiscal 2012, respectively. 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. borrowings. Other Liquidity Items: Contractual Obligations: U.S. Revolving Credit Agreement and U.K. Revolving Credit Agreement(1) Operating leases(2) Minimum royalty and advertising payments pursuant to royalty agreements Letters of credit Contingent purchase price consideration(3) Other(4)(5)(6) Total Off Balance Sheet Arrangements use or the amounts most sensitive to change from outside factors. 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, future periods. conditions and our plans to sell the inventory. Also, we provide an allowance for shrinkage, as appropriate, for the period between the last count and each balance sheet date. Historically, our estimates of inventory markdowns and inventory shrinkage have not varied significantly from actual results. As of statements. 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 net sales, royalty income, operating income, growth rates, royalty rates for the trademarks, discount rates and 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. Fiscal 2015. the goodwill included in our consolidated balance sheet as of January 31, 2015 relates to Lilly Pulitzer. fair value of contingent consideration obligations, and assessing recognized assets for impairment, including intangible assets, goodwill and property and equipment. significant changes in assumptions related to the valuation or the probability of payment of the contingent consideration January 31, 2015. report for a discussion of recent accounting pronouncements issued by the FASB that we have not yet adopted that are expected to possibly have a material effect on our financial position, results of operations or cash flows. rate changes is higher than optimal. Our assessment also considers our need for flexibility in our borrowing arrangements resulting from the seasonality of our business, anticipated future cash flows and expectations about the risk of future interest rate changes, 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. We do not enter into debt agreements or interest rate hedging transactions on a speculative basis. change. applicable functional currency; and (3) certain other transactions, including intercompany transactions. significantly, particularly if we are not able to increase sales prices to our customers. We believe that the substantial majority of any change in foreign currency exchange rates in our Ben Sherman operations in the United Kingdom and continental Europe would be offset by a change in the fair value of the related foreign currency forward exchange contracts. with a functional currency other than the United States dollar into United States dollars for financial reporting purposes, which we have not historically hedged. A strengthening United States dollar could result in lower levels of sales and earnings in our consolidated statements of operations in future periods although the sales and earnings in foreign currencies could be equal to or greater than amounts as previously reported. Alternatively, if foreign operations have operating losses, then a strengthening United States dollar could result in lower losses although the losses in foreign currencies could be equal to or greater than amounts as previously reported. Based on our net sales during Fiscal 2014 denominated in 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 $5.7 million and a reduction in net operating loss of $0.6 million resulting from the translation into United States dollars. ASSETS Current Assets: Cash and cash equivalents Receivables, net Inventories, net Prepaid expenses, net Deferred tax assets Total current assets Property and equipment, net Intangible assets, net Goodwill Other non-current assets, net Total Assets LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Accounts payable and other accrued expenses Accrued compensation Contingent consideration current liability Short-term debt Total current liabilities Long-term debt 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 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 from continuing operations before income taxes Income taxes Earnings from continuing operations Earnings from discontinued operations, net of taxes Net earnings Earnings from continuing operations per share: Basic Diluted Earnings from discontinued operations, net of taxes, per share: Basic Diluted Net earnings per share: Basic Diluted Weighted average shares outstanding: Basic Dilution Diluted Dividends declared per share Net earnings Other comprehensive income (loss), net of taxes Foreign currency translation gain (loss) Net unrealized gain (loss) on cash flow hedges Total other comprehensive income (loss), net of taxes Comprehensive income 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 Net earnings and other comprehensive income Shares issued under stock plans, net of tax benefit of $0.4 million Compensation expense for stock awards Cash dividends declared and paid Balance, February 2, 2013 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 Repayment of company owned life insurance policy loans Deferred financing costs paid Payment of contingent consideration amounts earned 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 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 Business Combinations operations. consolidated statements of operations. operations. operations. Inventories, net conditions and our plans to sell the inventory. Also, we provide an allowance for shrinkage, as appropriate, for the period between the last inventory count and each balance sheet date. 2. Leasehold improvements Furniture, fixtures, equipment and technology Buildings and improvements Property and equipment is reviewed periodically for impairment if events or changes in circumstances indicate that the carrying amount may not be recoverable. Events that would typically result in such an assessment would include a change in the estimated useful life of the assets, including a change in our plans of the anticipated period of operating a leased retail store or restaurant location, the discontinued use of an asset and other factors. If expected future discounted 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. any period and proceed directly to performing the quantitative impairment 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. consolidated financial statements. These securities approximate the participant-directed investment selections underlying the deferred compensation liabilities. Liabilities operations. time using an appropriate discount rate at that time rather than significant changes in our assumptions related to the probability of the amounts being earned or discount rate assumptions. Balance at beginning of year Recognition of fair value at acquisition Change in fair value of contingent consideration Contingent consideration payments made to sellers during the year(1) Balance at end of year Maximum contingent consideration amounts eligible to be earned in future years 6. If we vacate leased space and determine that we do not plan to use the space in the future, we recognize a loss for any future rent payments, less any anticipated future sublease income and adjusted for any deferred rent amounts included in our consolidated balance sheet on that date. Additionally, for any lease that we terminate and agree to a lease termination payment, we recognize in SG&A in our consolidated statements of operations a loss for the lease termination payment at the time of the agreement. any period presented. our derivative financial instruments that qualify for hedge accounting treatment are designated as cash flow hedges. Fiscal 2014, Fiscal 2013 or Fiscal 2012. The fair 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: February 2, 2013 Financial Liabilities: Forward foreign currency exchange contracts Interest rate swap agreements Fair value of contingent consideration, (current and non-current) January 28, 2012 Financial Assets: Forward foreign currency exchange contracts Financial Liabilities: Fair value of contingent consideration, (current and non-current) 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 values 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. Accumulated Other Comprehensive Loss Foreign currency translation loss Net unrealized gain (loss) on cash flow hedges Accumulated other comprehensive loss quarter. Income Taxes Significant Accounting Policies (Continued) cumulative probability basis that is more-likely-than-not to be realized upon ultimate settlement. Those tax positions failing to qualify for initial recognition are recognized in the first subsequent interim period they meet the more-likely-than-not operations. Use of Estimates Finished goods Work in process Fabric, trim and supplies LIFO reserve Total inventory equipment, by geographic area is presented below (in thousands): Land Buildings and improvements 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 Balance, January 30, 2010 Acquisition Amortization Other, including foreign currency changes Balance, January 29, 2011 Amortization Other, including foreign currency changes Balance, January 28, 2012 Amortization Other, including foreign currency changes Balance, February 2, 2013 $0.2 million. Balance, January 30, 2010 Acquisition Balance, January 29, 2011 Purchase accounting adjustments Balance, January 28, 2012 Acquisition Balance, February 2, 2013 $235 million U.S. Secured Revolving Credit Facility ("U.S. Revolving Credit Agreement")(1) $175 million U.S. Secured Revolving Credit Facility ("Prior Revolving Credit Agreement")(1) £7 million Senior Secured Revolving Credit Facility ("U.K. Revolving Credit Agreement")(2) 11.375% Senior Secured Notes ("Senior Secured Notes")(3)(4) Unamortized discount Total debt Short-term debt Long-term debt borrowings. greater of (i) During the 1990s, we discovered the presence of hazardous waste on one of our properties. We believe that remedial action will be required, including continued investigation, monitoring and treatment of groundwater and soil, although the timing of such remedial action is uncertain. As of January 31, 2015 and February Fiscal 2012. Restricted shares outstanding at beginning of fiscal year Restricted shares granted Restricted shares vested, including restricted shares repurchased from employees for employees' tax liability Restricted shares forfeited Restricted shares outstanding at end of fiscal year Fiscal 2009 Restricted Share Awards Fiscal 2010 Restricted Share Awards Fiscal 2011 Restricted Share Awards Fiscal 2012 Restricted Share Unit Awards Total Unvested Restricted Share and Share Unit Awards 2017, when the Fiscal 2014 awards vest. Stock options outstanding and exercisable, beginning of fiscal year Stock options exercised Stock options forfeited Stock options outstanding and exercisable, end of fiscal year Employee Stock Purchase Plan respectively. Earnings (loss) before income taxes: Domestic Foreign Earnings before income taxes Current: Federal State Foreign Deferred—primarily Federal Deferred—Foreign Income Taxes Statutory tax rate State income taxes—net of federal income tax benefit Impact of foreign operations Valuation allowance against foreign losses and other carryforwards 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 Change in enacted tax rates and apportionment of income among jurisdictions Change in assertion on permanent reinvestment of foreign earnings Other, net Effective tax rate for continuing operations Deferred Tax Assets: Inventories Accrued compensation and benefits Receivable allowances and reserves 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 Fiscal 2012 $2.2 million reduction in uncertain tax positions reflecting the expiration of the statute of limitations for the assessment of taxes. The unrecognized tax benefits, if recognized, would reduce our annual effective rate. The net impact on our consolidated financial statements not material. Net Sales Tommy Bahama Lilly Pulitzer Lanier Clothes Ben Sherman Corporate and Other Total Depreciation and Amortization of Intangible Assets Tommy Bahama Lilly Pulitzer Lanier Clothes Ben Sherman Corporate and Other Total Operating Income (Loss) Tommy Bahama Lilly Pulitzer Lanier Clothes Ben Sherman Corporate and Other Total Operating Income Interest expense, net Loss on repurchase of senior notes Earnings From Continuing Operations Before Income Taxes Purchases of Property and Equipment Tommy Bahama Lilly Pulitzer Lanier Clothes Ben Sherman Corporate and Other Total Total Assets Tommy Bahama Lilly Pulitzer Lanier Clothes Ben Sherman Corporate and Other Total North America United Kingdom and Europe Other foreign Total North America United Kingdom and Europe Other foreign Total SunTrust Banks, Inc. and its subsidiaries ("SunTrust") is one of our principal shareholders, with the ability to direct the voting of approximately 5% of our outstanding common stock at December 31, and Corporate Executive Vice President of SunTrust Banks, Inc. Interest and agent fees for our credit facility Cash management services Lead arranger, bookrunner and upfront fees Other 2012. Lilly Pulitzer brand and operations prior to the acquisition. The principals who owned the Lilly Pulitzer brand and operations prior to the acquisition continue to manage the Lilly Pulitzer operations. Fiscal 2015. 14 weeks. Following is a summary of our Fiscal 2012 Net sales Gross profit Operating income Earnings from continuing operations Net earnings Earnings from continuing operations per share: Basic and diluted Net earnings per share: Basic and diluted Weighted average shares outstanding: Basic Diluted Fiscal 2011 Net sales Gross profit Operating income Earnings from continuing operations Net earnings (loss) from discontinued operations, net of taxes Net earnings Earnings from continuing operations per share: Basic and diluted Earnings (loss) from discontinued operations, net of taxes per share: Basic and diluted Net earnings per share: Basic and diluted Weighted average shares outstanding: Basic Diluted weeks. The gain on sale of 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 Fiscal 2012 Deducted from asset accounts: Accounts receivable reserves(1) Allowance for doubtful accounts(2) 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) Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure criteria Information," "Additional Information—Submission of Director Candidates by Shareholders," and "Corporate Governance and Board Matters—Board Meetings and Committees of our Board of Directors," and is incorporated herein by reference. Fiscal 2012. (b) Exhibits March 30, 2015fiscal 2012, 39%Fiscal 2014, 42% and 37%38% of Lilly Pulitzer's net sales were for dresseswomen's sportswear and women's sportswear,dresses, respectively, with the remaining sales consisting of Lilly Pulitzer accessories, including scarves, bags, jewelry and belts; children's apparel, footwearapparel; footwear; and licensed products. Sportswear represented a greater proportion of Lilly Pulitzer sales in fiscal 2012 than fiscal 2011 as the breadth of our sportswear offerings has expanded and the growth of sales in sportswear has outpaced sales growth for dresses. We also license the Lilly Pulitzer name for various product categories.Fiscal 2012These investments in Lilly Pulitzer included costsinclude amounts associated with the opening of new stores, as well ascosts to enhance e-commerce and other technology capabilities, an expansion and other enhancements of Lilly Pulitzer's facilities in King of Prussia, Pennsylvania and an increase in SG&A as weemployment costs to continue to build the infrastructure to support a growing business. We anticipate that such investments will continue in fiscal 2013. While we believe that these investments will generate long-term benefits, the investments may have a short-term negative impact on ourLilly Pulitzer's operating results.effort to ensure that themaintaining appropriate quality and design of the Lilly Pulitzer apparel, accessories and licensed products, is maintained, while also restricting the distribution of the Lilly Pulitzer products to a select tier of retailers.retailers and effectively communicating the message of Lilly's optimistic Palm Beach resort chic lifestyle. We believe this approach to quality, design, distribution and distributioncommunication has been critical in allowing the brandus to achieve the current retail price points for Lilly Pulitzer products. We believe that the retail sales value of all Lilly Pulitzer branded products sold during fiscal 2012,Fiscal 2014, including our estimate of retail sales by our wholesale customers and other third party retailers, exceeded $200$225 million.4045 suppliers, located primarily in China to manufacture Lilly Pulitzer products during fiscal 2012. Thewith the largest 10 suppliers provided 70%providing 63% of the Lilly Pulitzer products acquired during fiscal 2012.54%62% of Lilly Pulitzer's net sales in fiscal 2012,Fiscal 2014, compared to 47%57% in fiscal 2011.Fiscal 2013. We expect the percentage of our Lilly Pulitzer sales which are direct to consumer sales towill increase in future years as we anticipate that the full-price retail and e-commerce components of the Lilly Pulitzer business will continue to grow at a faster rate than the wholesale distribution channel in the future. Lilly Pulitzer's full-price retail store sales per gross square foot for fiscal 2012 were approximately $580 for the 15 full-price retail stores which were open the entire 53-week fiscal 2012 year compared to approximately $480 for the 16 Lilly Pulitzer stores open for the full 52-week fiscal 2011 year. For relocated stores, for which the square feet changed during the year, we included, for the purposes of the calculation above, the square feet of the relocated store based on the weighted average month-end square feet for the relocated store. The increase from the prior year was primarily due to higher comparable store sales in fiscal 2012, as well as the closure of one larger underperforming full-price retail store in fiscal 2012. full-price retail store carries a wide range of merchandise, including apparel, footwear and accessories, all presented in a manner intended to enhance the Lilly Pulitzer image, brand awareness and acceptance. Our Lilly Pulitzer retail stores allow the opportunityus to present Lilly Pulitzer's full line of current season products. We believe our Lilly Pulitzer full-price retail stores provide high visibility for the brand and products and also enable us to stay close to the needs and preferences of consumers. Also, we believe that our presentation of products and our strategy to operate the retail stores as full-price stores with limited promotional activities in our own retail stores complement our business with our wholesale customers. Generally, we believe there are opportunities for retail stores in warmer and colder climates, as we believe the more important consideration is whether the location attracts the affluent consumer that we are targeting.full-price retail stores as of February 2, 2013.January 31, 2015.Number ofFull-PriceRetail StoresFlorida 59 New York 3 PennsylvaniaMaryland 2 TexasNorth Carolina 2 Other2 7Pennsylvania 2 Total2 19Other 6 28 Average square feet per store 2,800 3,10079,000 58,400fiscal 2012.Fiscal 2014.23 165 4Closed during fiscal year(1)28 19fiscal 2012,Fiscal 2014, the average total gross square feet, calculated as the average of the total gross square feet at the beginning and end of each quarter during the year, of full-price retail space was approximately 56,00075,000 square feet. We anticipate that the average total gross square feet of full-price retail space for Lilly Pulitzer will increase by approximately 14% in fiscal 2013 as compared to fiscal 2012 average total gross square feet amounts, if we open four new stores in fiscal 2013. In fiscal 2013,Fiscal 2015, we expect to open four or five full-pricesix retail stores, and we expect that thisto maintain a pace of domestic store openings will continue and possibly accelerate beyond fiscal 2013.four to six stores a year after Fiscal 2015. Although the specific locations and timing of all of our store openings have not been finalized, we anticipate opening full-price retail store locations in Cincinnati, Ohio; Durham, NorthKiawah Island, South Carolina; Nashville, Tennessee; Chicago, Illinois; and Hackensack, New JerseyOrlando, Coral Gables and Coconut Point, Florida in fiscal 2013.newmost future full-price retail store openings will generally be in the 2,500 square foot range as we believe thatfeet on average; however, many stores will be larger or smaller than 2,500 square feet with the determination of size of the store depending on a storevariety of this size will generally provide a better return on investment than a larger store.criteria. To open a 2,500 square foot Lilly Pulitzer full-price retail store, we anticipate$0.8$0.7 million on average. For certainmost of our retail stores, the landlord often provides certain incentives to fund a portion of our capital expenditures. We may also incur capital expenditures if a lease expires and we determine it is appropriate to relocate a store to a new location in the same vicinity as the previous store. The cost of store relocations, if any, will generally be comparable to the costs of opening a new store. and relocations, we also incur capital expenditure costs related to remodels of existing stores, particularly when we renew or extend a lease beyond the original lease term, or otherwise determine that a remodel of a store is appropriate. We may also incur capital expenditures if a lease expires, or otherwise, and we determine it is appropriate to relocate a store to a new location in the same vicinity as the previous store. The costs associated with some remodels maycost of store relocations, if any, will generally be significant.23%28% of Lilly Pulitzer's net sales infiscal 2012 Fiscal 2014 compared to 16%25% in fiscal 2011. We believe our ability to effectively communicate the Lilly Pulitzer brand message to targeted consumers through social media and other methods of digital marketing is a significant factor in the success of the Lilly Pulitzer brand.Fiscal 2013. The Lilly Pulitzer e-commerce business has experienced significant growth in recent years and we anticipate that the rate of growth of the e-commerce business will exceedremain strong in the rate of growth in our full-price retail and wholesale businesses. future.manner, by having a select number ofmanner. Usually, we have two e-commerce flash clearance sales duringper year, both of which are in typical industry end of season promotional periods. These sales are brand appropriate events that create a significant amount of excitement with loyal Lilly Pulitzer consumers, who are looking for an opportunity to purchase Lilly Pulitzer products at a discounted price. Each of these two e-commerce flash clearance sales are for a very limited number of days, allowing the Lilly Pulitzer website to essentially remain full-price for the remainder of the year.fiscal 2012, 46%Fiscal 2014, 38% of Lilly Pulitzer's net sales were sales to wholesale customers.fiscal 2012,Fiscal 2014, almost half of Lilly Pulitzer's wholesale sales were to certain wholesale customers, which we refer to as Lilly Pulitzer Signature Stores. For these stores, we enter into agreements whereby we grant the other party the right to independently operate a storeone or more stores as a Lilly Pulitzer Signature Store, within a specified geographic area, subject to certain conditions, including designating the majority ofsubstantially all the store specifically for Lilly Pulitzer products and adhering to certain trademark usage requirements. These agreements are generally for a one- or two-year period. We sell products to these Lilly Pulitzer Signature Stores on a wholesale basis and do not receive royalty income associated with these sales. As of February 2, 2013,January 31, 2015, there were approximately 6571 Lilly Pulitzer Signature Stores.specialtybetter department stores and better departmentspecialty stores. Lilly Pulitzer's net sales to its five largest wholesale customers represented 16% of Lilly Pulitzer's net sales in fiscal 2012Fiscal 2014 with no individualits largest customer representing greater than 10%.6% of Lilly Pulitzer typically utilizes a combination of e-commerce flash clearance sales, select promotions within the owned Lilly Pulitzer full-price retail stores, off-price retailers and warehouse sales to dispose of any discontinued or out-of-season inventory.several locations, includingboth King of Prussia, Pennsylvania and New York.York City. Our wholesale operations for Lilly Pulitzer utilize a sales force consisting of salaried sales employees.brand.brand, particularly once our direct to consumer presence has expanded. Once a brand is established, licensing requires modest additional investment for us but can yield high-margin income. It also affords the opportunity to enhance overall brand awareness and exposure. In evaluating a potential Lilly Pulitzer licensee, we typically consider the candidate's experience, financial stability, manufacturing performance and marketing ability. We also evaluate the marketability and compatibility of the proposed products with other Lilly Pulitzer brand products.fashions,fashions; home furnishing fabrics,fabrics; stationery and gift products, eyewearproducts; and mobile device accessories.fiscal 2012:Fiscal 2014: First Quarter Second Quarter Third Quarter Fourth Quarter First Quarter Second Quarter Third Quarter Fourth Quarter 29 % 25 % 22 % 24 % 30 % 28 % 21 % 21 % 54 % 37 % 17 % (8 )% 46 % 35 % 13 % 6 % fiscal 2012Fiscal 2014 are necessarily indicative of anticipated results for the full fiscal year or expected distribution in future years. We believe that the impact of a $4.5 million charge for the change in fair value of contingent consideration in the fourth quarter of fiscal 2012, which resulted in an operating loss in the fourth quarter of fiscal 2012, compared to a $0.6 million charge for the change in fair value of the contingent consideration in each of the first three quarters of fiscal 2012, causes the percentage of operating income by quarter for fiscal 2012 to not be indicative of the operating income distribution by quarter in future years.fiscal 2012,Fiscal 2014, which may not be indicative of the allocation of sales by distribution channel in future periods: First
Quarter Second
Quarter Third
Quarter Fourth
Quarter Full
Year 24 % 44 % 26 % 28 % 30 % Full price retail stores 31 % 45 % 26 % 33 % 34 % 16 % 17 % 36 % 27 % 24 % 18 % 23 % 44 % 32 % 28 % 60 % 39 % 38 % 45 % 46 % 51 % 32 % 30 % 35 % 38 % 100 % 100 % 100 % 100 % 100 % 100 % 100 % 100 % 100 % 100 % marketsdistributes branded and private label men's apparel, with a focus on tailored clothing, including suits, sportcoats, suit separates and dress slacks, as well as casual pants and other dress apparel, across a wide range of price points, with the majority of the business at moderate price points. Substantially allThe majority of our Lanier Clothes branded products are sold under certain trademarks licensed to us by third parties. Licensed brands includedinclude Kenneth Cole®, Dockers®, and Geoffrey Beene® and Ike Behar®. Additionally, we design and market products for our owned Billy London®, 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 affordableluxury. brand. In addition to thethese branded businesses, Lanier Clothes designs and sources private label tailored clothingapparel products for certain customers. Significantcustomers, including a large private label brandspants program for which we produce tailored clothing include Lands' End®, Stafford®a warehouse club. The private label programs offer the retailer product exclusivity at generally higher gross margins than they would achieve on branded products, while allowing us the opportunity to leverage our design, sourcing and Alfani®, among others.distribution infrastructure. Sales of branded products represented 73%approximately 67% of Lanier Clothes' net sales during fiscal 2012, compared to 66% in fiscal 2011.department stores,warehouse clubs, discount retailers, specialty stores, specialty catalog retailers and discount retailersothers throughout the United States. Lanier Clothes' products are sold in more than 5,000 retail locations. In Lanier Clothes, we have long-standing relationships with some of the United States' largest retailers, with Men's Wearhouse, Macy's, Sears (which includes Lands' End)retailers. During Fiscal 2014, Lanier Clothes' four largest customers represented 20%, 16%, 15% and Burlington Coat Factory representing 19%, 19%, 14% and 13%, respectively,11% of Lanier Clothes' net sales, during fiscal 2012. Saleswhile sales to Lanier Clothes' 10 largest customers represented 91%86% of Lanier Clothes' net sales in fiscal 2012.sales. The amount and percentage of net sales attributable to an individual customer in future years may be different than fiscal 2012Fiscal 2014 amounts as sales are typically on an order by order or specific program basis and not tied to long-term contracts.that is experiencing increasedwith significant competition at retail and gross margin pressures due to retail sales price pressures and sourcing cost increases. We continue to believe that the opportunities for branded tailored clothing are generally better than private label tailored clothing, although the challenges in branded tailored clothing are also significant.increases as fewer low cost sourcing alternatives exist. We believe that our Lanier Clothes business has historically excelled at bringing quality products to our customers at competitive prices and managing inventory risk appropriately while requiring minimal capital expenditure investments.research. Lanier Clothes manages production in Asia, Latin Americaresearch and Italy through a combination of effortsinput from our Lanier Clothes offices in Atlanta, Georgia and third party buying agents. During fiscal 2012, 31% of Lanier Clothes product purchases were from manufacturers located in China, compared to 45% in fiscal 2011 and 68% in fiscal 2010, as certain production continued to shift away from factories in China to Vietnam and India. Lanier Clothes purchased goods from approximately 150 suppliers in fiscal 2012. The 10 largest suppliers of Lanier Clothes provided 70% of the finished goods and raw materials Lanier Clothes acquired from third parties during fiscal 2012. In addition to purchasing products from third parties, Lanier Clothes operates a manufacturing facility, located in Merida, Mexico, which produced 22% of our Lanier Clothes products during fiscal 2012.majority10 largest suppliers of Lanier Clothes provided 88% of the finished goods and raw materials usedLanier Clothes acquired from third parties during Fiscal 2014, with 35% of our product purchases being from our largest third party supplier. In addition to purchasing products from third parties in Vietnam, India and other countries, Lanier Clothes operates a manufacturing facility, located in Merida, Mexico, which produced 13% of our Lanier Clothes products during Fiscal 2014.manufacturing operationsbranded products, advertising primarily consists of co-operative advertising with our larger customers, contributions to the licensor based on a specified percentage of our net sales to fund the licensor's general brand advertising initiatives and attending brand appropriate trade shows. As a provider of private label apparel, we are purchased in the form of woven finished fabrics directly from various offshore fabric mills.ordering.ordering, including when consumers purchase products from our customers' websites and we ship directly to the consumer. For certain standard tailored clothing product styles, we maintain in-stock replenishment programs, providing shipment to customers within just a few days of receiving the order. These types of programs generally require higher inventory levels. Disposal of excess prior- seasonprior-season inventory is an ongoing part of our business and Lanier Clothes utilizes various off-price retailers to sell such products.Atlanta. WeAtlanta and employ a sales force for Lanier Clothes primarily consisting of salaried employees. Lanier Clothes also operates the billylondonuk.com and menstailoreddirect.com websites, where certain Lanier Clothes'Clothes products may be purchased onlineon-line directly by consumers. In addition, Lanier Clothes also ships certain products directly to consumers who purchase products from the websites of certain of our wholesale customers.tailored clothingapparel business, in which product shipments generally occur prior to the retail selling seasons, the seasonality of Lanier Clothes generally reflects stronger spring and fall wholesale deliveries which typically occur in our first and third quarters.quarters; however, in some fiscal years this will not be the case due to much offiscal 2012:Fiscal 2014: First Quarter Second Quarter Third Quarter Fourth Quarter First Quarter Second Quarter Third Quarter Fourth Quarter 31 % 23 % 25 % 21 % 25 % 19 % 32 % 24 % 37 % 22 % 22 % 19 % 25 % 14 % 32 % 29 % lossincome for any particular quarter or the distribution of net sales and operating lossincome for fiscal 2012Fiscal 2014 are necessarily indicative of anticipated results for the full fiscal year or expected distribution in future years. The first quarter of fiscal 2012 operating results were unusually strong compared to the other quarters of fiscal 2012 primarily due to the shift in timing of shipments into that quarter, as well as the negative gross margin impact on operating margins, as discussed in Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations, included in this report, which was more significant subsequent to the first quarter of fiscal 2012.modernist lifestyle brand of apparel targeted at style conscious men ages 25 to 40 in multiple markets throughout the world. During fiscal 2012, 39%Fiscal 2014, approximately 40%, 25% and 31%25% of Ben Sherman's net sales occurred in the United Kingdom, continental Europe and the United States, respectively, with the remainder of the sales predominantly in Europe.respectively. 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 the Ben Sherman e-commerce websites. We also license the Ben Sherman name for various product categories.will allow us to achieve higher retail price pointsincreases consumer desire for our Ben Sherman products than we have historically achieved.products. We believe that the retail sales value of all Ben Sherman branded products sold during fiscal 2012,Fiscal 2014, including our estimate of retail sales by our wholesale customers and other third party retailers, exceeded $275was approximately $225 million. InBen Sherman has faced challenges in recent years,years. At the same time, we have implemented certain initiatives to elevate ourelevated the wholesale distribution in order to attain higher price points for ourof the Ben Sherman men's products, reduce our infrastructure and license certain of our non-core businesses to third parties to allow us to focus our resources on our core business—men's sportswear.brand. Although we have made significant strides in elevating our wholesale distribution, we believehave not realized enough sales at higher distribution levels to date to replace the sales from accounts that we still have additional stepsexited. On March 24, 2015, our Board of Directors authorized our management to take in order to achieve our ideal wholesale distribution, which may result inpursue a further decline of wholesale sales in the short-term. Additionally, in the fourth quarter of fiscal 2012 and first quarter of fiscal 2013 we have taken additional actions to further reduce the infrastructure and operating costs of Ben Sherman given the smaller sales base in recent years and, at the same time, ensure that the direction of the brand is focused. We believe that the initiatives taken thus far and expected in the short-term are critical steps towards improving the operating resultssale of the Ben Sherman brand.business. We believe thathave engaged Financo, Ltd. as our financial advisor to assist in the long-term,transaction process. We plan to continue to operate the Ben Sherman withbusiness during the process, and although we expect to complete a smaller infrastructure,sale within Fiscal 2015 no specific timetable has been set for consummation of a transaction. There can be no assurance that a transaction will have growth opportunities iftake place, and our Board of Directors may consider other alternatives for the elevationBen Sherman business that it believes are in the best interest of the brand is successful and the economic conditions improve.products;products, supplemented by our sourcing office in India. During Fiscal 2014 we used approximately 66%50 suppliers primarily located in Asia to manufacture our Ben Sherman products. During Fiscal 2014, 38% and 33% of our Ben Sherman apparel products arewere sourced from China and India. Through this buying agent and a sourcing office we operate in India, during fiscal 2012 we used approximately 100 suppliers primarily located in China, India and Thailand to manufacture our Ben Sherman products. Therespectively, while the largest 10 suppliers provided 55%67% of the Ben Sherman products acquired during fiscal 2012.anticipated sales volumesome limited replenishment ordering for our wholesale customers as well as sales for our direct to consumer operations.fiscal 2012, 62%Fiscal 2014, 55% of Ben Sherman's net sales were sales to wholesale customers, andincluding international distributors.distributors, with Ben Sherman products available in more than 1,200 retail locations. During fiscal 2012, 21%Fiscal 2014, 27% of Ben Sherman's net sales were to its five largest customers, of which no individualwith its largest customer accounted for greater than 10%representing 7% of Ben Sherman's net sales. As discussed above, in recent years, we have implemented certain initiatives to elevate our wholesale distribution in order to attain higher price points for our Ben Sherman men's products which, if effective, will provide growth opportunities for the brand in the future. We maintain Ben Sherman apparel sales offices and showrooms in several locations, including London, New York City, Amsterdam and Dusseldorf, among others.Dusseldorf. Our wholesale operations for Ben Sherman utilize a sales force consisting of salaried sales employees and independent commissioned sales representatives.full-price retail stores in brand-appropriate street locations and malls. Each full-price retail store carries a wide range of merchandise, including apparel, footwear and accessories, all presented in a manner intended to enhance the Ben Sherman image. Our Ben Sherman full-price retail stores allow the opportunityus to present Ben Sherman's full line of current season products, including licensees' products. We believe our Ben Sherman retail stores provide high visibility of the brand and products and also enable us to stay close to the needs and preferences of consumers. We believe the presentation of these products in our Ben Sherman full-price retail stores helps build brand awareness and acceptance and thus enhances business with our wholesale customers. Our the overall inventory management by allowing us to sell discontinued and out-of-season products at better prices than are generally otherwise available from outside parties, while helpingallowing us protect the Ben Sherman brand by controllingto better control the distribution of such products, although at times we also utilize off-price retailers to sell these products.38%45% of Ben Sherman's net sales in fiscal 2012,Fiscal 2014, compared to 33%46% in fiscal 2011.Fiscal 2013. Retail store sales per gross square foot were approximately $665$730 for our Ben Sherman full-price retail stores which excludes outlets, which were open throughout the 53-week fiscal 2012Fiscal 2014 compared to approximately $750$655 for Ben Sherman full-price retail stores open throughout the 52-week fiscal 2011.Fiscal 2013. The decreaseincrease from fiscal 2011Fiscal 2013 was primarily due to lower full-pricehigher comparable retail store sales and the negative impact of lowersales. The above amounts for sales per square foot from two full-price stores located in the United Kingdom which opened in fiscal 2011.February 2, 2013.January 31, 2015. United Kingdom retail stores (1) 7 2,300 Continental Europe retail stores 2 1,900 United States retail stores 3 4,000 Outlet stores (2)(3) 9 1,800 Total 21 2,200 Total gross square feet at year end 46,000 Number
of Stores Average
Square Feet 4 3,700 6 2,000 2 2,100 7 1,700 19 2,300 43,100 (1) One United Kingdom retail store was closed subsequent to January 31, 2015. (2) Includes four outlet stores in the United Kingdom and five outlet stores in continental Europe. (3) Excludes two temporary outlet stores operated in the United Kingdom, which were opened in late Fiscal 2014 and are expected to close in the first half of Fiscal 2015. (1)Includes four, two and one outlet stores in the United Kingdom, Europe and the United States, respectively.fiscal 2012. Full-Price
Retail Stores Outlet Stores Total Retail Stores Outlet Stores Total 11 5 16 11 6 17 1 2 3 1 4 5 Closed during fiscal year — (1 ) (1 ) 12 7 19 12 9 21 do not anticipate a significant increase in the retail store square feet from fiscal 2012 to fiscal 2013 as we do not currently have any plans to open any new Ben Sherman stores in fiscal 2013. However, we continue to evaluate potential locations and may open retail stores or outlets in the future if we identify locations which meet our investment criteria.Fiscal 2015. The operation of our retail stores requires a greaterBased on recent store openings,Also, we have spent approximately $0.6 million of capital expenditures on average to build out a Ben Sherman full-price retail store and less than that to build out an outlet store. However, individual locations will vary. In some cases, the landlord has provided certain incentives to fund a portion of these capital expenditures. We also incur capital expenditures when a lease expires and we determine it is appropriate to relocate a store to a new location in the same vicinity as the previous store. The cost of store relocations will generally be comparable to the costs of opening a new store. In addition to our new store openings and relocations, we also incur capital expenditure costs related to remodels of existing stores, particularly when we renew or extend a lease beyond the original lease term, or otherwise determine that a remodel of a store is appropriate. The costs associated with some remodels may be significant.February 2, 2013,January 31, 2015, we operated nine12 concession locations in the United Kingdom. During fiscal 2011,re-launched the Bensherman.com website in the United Kingdom and Europe, and during fiscal 2012 we re-launched the Bensherman.com website in the United States. Theseoperate various Ben Sherman websites which provide consumers the opportunity to purchase Ben Sherman products directly on-line. Although the netNet sales of Ben Sherman's e-commerce operations were less than 5% of net sales for Ben Sherman in fiscal 2012, we believe that the Ben Sherman customer base will embrace a high-quality, brand appropriate e-commerce site and that e-commerce is an important growth opportunity for the Ben Sherman brand. for us but can yield high-margin income. It also affords the opportunity to enhance overall brand awareness and exposure. In evaluating a potential Ben Sherman licensee, we typically consider the candidate's experience, financial stability, manufacturing performance and marketing ability. We also evaluate the marketability and compatibility of the proposed products with other Ben Sherman brand products.Footwear Kid's apparel Men's watches and jewelry Men's tailored clothes and dress shirts Men's hats, caps, scarves and gloves Men's neckwear and pocket squares Men's fragrances and toiletries Men's and boys' underwear, socks and sleepwear Men's gift products in the United Kingdom and United States.by us. In mostmany markets, our licensees/distributors are required to open retail stores in their respective geographic regions. As of February 2, 2013,January 31, 2015, our licensees/distributors operated 1916 Ben Sherman retail stores located in Australia, Asia, South Africa, EuropeMalaysia, Canada and Canada.fiscal 2012:Fiscal 2014: First Quarter Second Quarter Third Quarter Fourth Quarter 21 % 25 % 24 % 30 % First Quarter Second Quarter Third Quarter Fourth Quarter Net sales 19 % 24 % 24 % 33 % Operating Loss 43 % 29 % 20 % 8 % fiscal 2012Fiscal 2014 are necessarily indicative of anticipated results for the full fiscal year or expected distribution in future years. Specifically, we believe that as a result of the significant impact of the merchandising mix miss in the second half of fiscal 2012 and our expectation of improved operating results in future years, presenting the percentages of operating loss by quarter for Ben Sherman in fiscal 2012 would not be meaningful in assessing the seasonal aspects of the Ben Sherman business for future periods. Therefore, we have not included operating loss by quarter in the table above. including sales for our own stores and e-commerce sites, for Ben Sherman products in our principal markets is generally higher in the fall and holiday seasons and lower in the spring and summer seasons. Wholesale product shipments are generally shipped prior to each of the retail selling seasons. As the allocation of sales within a quarter is impacted by the seasonality of direct to consumer and wholesale sales, we have presented in the following table the proportion of net sales for each quarter represented by each distribution channel for fiscal 2012,Fiscal 2014, which may not necessarily be indicative of the allocation of sales in future periods: First
Quarter Second
Quarter Third
Quarter Fourth
Quarter Full Year Full Year 66 % 61 % 65 % 57 % 62 % 58 % 49 % 59 % 55 % 55 % 34 % 39 % 35 % 43 % 38 % Direct to Consumer 42 % 51 % 41 % 45 % 45 % 100 % 100 % 100 % 100 % 100 % 100 % 100 % 100 % 100 % 100 % groups. The operations that are included in Corporate and Other includegroups, including our Oxford Golf business and our Lyons, Georgia distribution center. center 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 operating groups.customers.small apparel companies. Our Oxford Golf products are primarily acquired on a package purchase, finished goods basis from third party producers outside of the United States. Oxford Golf seeks to maintain sufficient levels of inventory to support programs for pre-booked orders and at-once ordering. Oxford Golf employs a sales force consisting primarily ofDiscontinued Operations References to results of operations, assets or liabilities related to discontinued operations within this report refer to the operations, assets or liabilities associated with our former Oxford Apparel operating group, which were sold on January 3, 2011. Our former Oxford Apparel operating group sold certain private label and branded apparel to a variety of customers. Additionally, unless otherwise indicated, all references to assets, liabilities, revenues and expenses included in this report reflect continuing operations and do not include any amounts related to the discontinued operations. We believe that advertising and marketing are an integral part of the long-term strategy of our brands, and we therefore devote significant resources to advertising and marketing our brands. During fiscal 2012, we spent $27.6 million on advertising, marketing and promoting our products. For each of our lifestyle brands, we incurred advertising, marketing and promotions expenses of 3% to 6% of net sales of the lifestyle brand during fiscal 2012. Each of our operating groups manages the advertising, marketing and promotion of its brands. While the advertising of our lifestyle brands promotes our products, the primary emphasis is on brand image and brand lifestyle. We intend that the advertising will engage individuals within the brand's distinct consumer demographic and guide them on a regular basis to our retail stores, e-commerce websites or wholesale customers' stores in search of our products. The marketing of our lifestyle brands continues to include traditional media such as print, catalogs and other correspondence with customers, as well as moving media and trade show initiatives. However, an increasing amount of our marketing focus involves email, Internet and social media advertising. We believe that it is very important that we communicate regularly with our consumers via the use of email, Internet and social media about product offerings or other brand events in order to maintain and strengthen our brands' connections with our consumers. We also believe that highly visible retail store locations with creative design, broad merchandise selection and brand appropriate visual presentation are key enticements for customers to visit our retail stores and buy merchandise. We intend that our retail stores enhance the retail experience of our customers, which we believe will increase consumer brand loyalty. Marketing initiatives at certain of our retail stores may include special event promotions and a variety of public relations activities designed to create awareness of our stores and products. We believe that our retail store operations as well as our
TRADEMARKStraditional media and electronic media communications increase the sales of our own retail stores and e-commerce operations, as well as the sales of our products for our wholesale customers. For certain of our wholesale customers we also provide point-of-sale materials and signage to enhance the presentation of our branded products at their retail locations and/or participate in cooperative advertising programs.expandevaluate our worldwide usage and registration of certain of our trademarks. In general, trademarks remain valid and enforceable as long as the trademarks are used in connection with our products and services in the relevant jurisdiction and the required registration renewals are filed. Our significant trademarks are discussed within each operating group description. Important factors relating to risks associated with our trademarks include, but are not limited to, those described in Part I, Item 1A. Risk Factors.a flexible, diversified, cost-effective manufacturing basesourcing operations that providesprovide high-quality branded products. Our operating groups, either internally or through the use of third-party buying agents, source substantially all of our products from non-exclusive, third-party producers located in foreign countries or from our licensees for licensed products sold in our direct to consumer distribution channels. The use of contract manufacturers reduces the amount of capital investment required by us as operating manufacturing facilities can require a significant amount of capital investment. During fiscal 2012,Fiscal 2014, we sourced approximately 65%60% of our products from producers located in China.China and 12% of our products from producers in Vietnam, with less than 10% of our products sourced from each other single country. Although we place a high value on long-term relationships with our suppliers and have used many of our suppliers for a number of years, generally we do not have long-term contracts with our suppliers. Instead, we conduct business on an order-by-order basis. Thus, we compete with other companies for the production capacity of independent manufacturers. We believe that this approach provides us with the greatest flexibility in identifying the appropriate manufacturers while considering quality, cost, timing of product delivery and other criteria while also utilizing the expertise of the manufacturers. During fiscal 2012,Fiscal 2014, no individual third-party manufacturer supplied more than 10% of our product purchases. Tommy Bahama, Lilly Pulitzer and Ben Sherman products from third-party producers as package purchases of finished goods, which are manufactured with our oversight and to our design and fabric specifications. For package purchases, we regularlyWe depend upon the ability of third-party producers to secure a sufficient supply of raw materials specified by us, adequately finance the production of goods ordered and maintain sufficient manufacturing and shipping capacity rather than us providing or financing the costs of these items. We believe that purchasing substantially all of our focus on acquiringproducts as package purchases allows us to reduce our working capital requirements as we generally are not required to purchase, or finance the purchase of, the raw materials or other production costs related to our product purchases until we take ownership of the finished goods, which typically occurs when the goods are shipped by the third-party producers. For our Lanier Clothes operating group, we acquired the majority of our Lanier Clothes products during fiscal 2012 on a package purchase basis from third-party producers. The remainder of the inventory purchases from third parties were primarily on a CMT basis, which we consider to be purchases whereby we supply the fabric and purchase cut, sew and finish labor (or "cut, make, trim") from our third-party producers. As the ability and willingness of third-party tailored clothing apparelmanufacturers to finance raw materials purchases continues to increase along with other changes in manufacturing and sourcing practices for tailored clothing, we anticipate that Lanier Clothes will continue to increase the percentage of goods acquired as package purchases of finished goods rather than CMT purchases. In addition to purchasing products from third parties, Lanier Clothes also operates our only owned manufacturing facility, which is located in Merida, Mexico and produced 22%13% of our Lanier Clothes products during fiscal 2012.need. We are committedultimately desire.sourcingsource our products in a lawful and responsible manner. As part of this commitment,manner, each of our operating groups has implemented a code of conduct program applicable to vendors that we purchase goods from, which includes provisions related to abiding by applicable laws as well as compliance with other business ethics, including related human rights, health, safety, working conditions, environmental and other requirements. We require that each of our vendors and licensees comply with the applicable code of conduct.conduct or substantially similar compliance standards. On an ongoing basis we assess vendors' compliance with the applicable code of conduct and applicable laws and regulations through assessmentsaudits performed by either our employees or our designated agents. This assessment of compliance by vendors is directed by our corporate leadership team. In the event we determine that a vendor is not abiding by the applicable code of conduct,our required standards, we work with the vendor to remediate the violation. If the violation is not satisfactorily remediated, we generally will discontinue use of the vendor.fiscal 2012,Fiscal 2014, we sourced approximately 65%60% of our products from producers located in China. Our imported products are subject to customs, trade and other laws and regulations governing their entry into the United States and other countries where we sell our products.regulations, and we are not aware of any violations which could reasonably be expected to have a material effect on our business or results of operations.an important componentcomponents of maintaining our competitive position and supporting continued growth of our businesses.businesses, particularly in the ever changing consumer shopping environment. Our management information systems wereare designed to provide effective retail store, e-commerce and wholesale operations while emphasizing efficient point-of-sale, distribution center, design, sourcing, order processing, marketing, accounting and other functions. We use point-of-sale registers that capture sales data, track inventories and monitor traffic and other information in our retail stores. We regularly evaluate the adequacy of our information technologies and upgrade or enhance our systems to gain operating efficiencies, to provide additional consumer access and to support our anticipated growth as well as other changes in our business. We believe that continuous upgrading and enhancements to our management information systems with newer technology that offers greater efficiency, functionality and reporting capabilities is important to our operations and financial condition.fiscal 2012: First
Quarter Second
Quarter Third
Quarter Fourth
Quarter(1) 27 % 24 % 21 % 28 % 48 % 29 % 9 % 14 %
Fiscal 2014:(1)The fourth quarter of fiscal 2012 operating income included a $4.5 million LIFO accounting charge. Additionally, the fourth quarter of fiscal 2012 included a charge of $4.5 million for the change in fair value of contingent consideration whereas the first three quarters of fiscal 2012 included a $0.6 million charge for the change in fair value of contingent consideration. These items resulted in the percentage of operating income in the fourth quarter being lower and the first three quarters being higher than if these charges did not occur in the fourth quarter. Net sales 26 % 25 % 22 % 27 % Operating income 34 % 32 % 3 % 31 % weakestsmallest 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.decrease, absent any other factors that might impact seasonality. As the timing of certain unusual or non-recurring items, economic conditions, wholesale product shipments, weather 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 2012Fiscal 2014 are necessarily indicative of anticipated results for the full fiscal year or expected distribution in future years.more than 50%61% of our sales are direct to consumer sales, which are not reflected in an order backlog, and the order backlog for wholesale sales may be impacted by a variety of factors, we do notFebruary 2, 2013,January 31, 2015, we employed approximately 4,8005,400 persons, of whom approximately 75%80% were employed in the United States. Approximately 60%69% of our employees were retail store and restaurant employees. We believe our employee relations are good.including marketing partners, who have interestsan interest in the brands, including by failing to respond to emerging fashion trends, orby selling products bearing our brands through distribution channels that are inconsistent with the retail channels in which our customers expect to find those brands, by becoming overly promotional.promotional or setting up consumer expectations for promotional activity for our products. We are becoming more reliant on social media as one of our marketing strategies and the value of our brands could be adversely affected if we do not effectively communicate our brand message through social media vehicles that interface with our consumers on a regular basis. In addition, we cannot always control the marketing and promotion of our products by our wholesale customers or other third parties and actions by such parties that are inconsistent with our own marketing efforts or that otherwise adversely affect the appeal of our products could diminish the value or reputation of one or more of our brands and have an adverse effect on our sales and business operations.fiscal 2012,Fiscal 2014, Tommy Bahama'sBahama’s net sales represented 62%63% of our consolidated net sales, while Lilly Pulitzer'sPulitzer’s and Ben Sherman'sSherman’s net sales represented 14%17% and 10%8%, respectively, of our consolidated net sales. The limited diversification in our portfolio may heighten the risks we face if one of our brands fails to meet our expectations and/or is adversely impacted by any actions we or third parties take with respect to that brand or by competitive conditions in the apparel industry. For example, Ben Sherman's missteps in merchandise mix in the second half of fiscal 2012, coupled with the sluggish economic conditions in the United Kingdom and Europe during fiscal 2012, resulted in a fiscal 2012 operating loss of $10.9 million for Ben Sherman, which not only affected Ben Sherman's operating results but materially impacted our consolidated operating results and the amount of time required by our management to focus on the Ben Sherman operations.consumers'consumer preferences fashion trends and changes in consumer demographics. The introduction or repositioning of newproduct lines and productscategories and the entry of our products into new geographic territories often requires substantial costs in design, marketing and advertising, which may not be recovered if the productsthese initiatives are not successful. Any failure on our part to develop and market appealing products could result in lower sales and operating lossesweakened financial performance and/or harm the reputation and desirability of our brands. Additionally, since we generally make decisions regarding product designs several months in advance of the time when consumer acceptance can be measured, such a failure could result in a substantial amount of unsold inventory or other conditions, which could have a material adverse effect on our results of operations and financial condition. For example, the merchandise mix missteps in Ben Sherman during the second half of fiscal 2012 resulted in higher promotions in our direct to consumer operations, more off-price sales and more significant inventory markdowns during the second half of fiscal 2012, as we sought to liquidate excess Ben Sherman inventory.resultshas resulted, and may continue to result, in moresignificant pricing pressure to reduce prices orwithin the risk that our products may not be as desirable asapparel industry. This has been exacerbated by structural headwinds in the specialty retail sector, where the growth of fast fashion and value fashion retailers and expansion of off-price retailers has shifted consumer expectations to lower priced products.products from traditional, well-known brands. Competitive factors within the apparel industry may result in reduced sales, increased costs, lower prices for our products and/or decreased margins. these third parties covering product design, product quality, sourcing, distribution, manufacturing and marketing requirements and approvals, there can be no guarantee our brands will not be negatively impacted through our association with products outside of our core apparel products, by the market perception of the third parties with whom we associate and/or due to the actions of a licensee. The improper or detrimental actions of a licensee could significantly impact the perception of our brands.ourappropriate product safety, product quality and social compliance standards, including the terms of our applicable codes of conduct and vendor compliance standards. We cannot assure that our manufacturers and vendors will at all times conduct their operations in accordance with ethical practices or that the products we purchase will always meet our safety and quality control standards. Any violation of our applicable codes of conduct or local laws relating to labor conditions by our manufacturers or vendors or otheraffectingaffect our business operations.condition. Consumers may generally consider our products discretionary items. condition, including as a result of adverse business conditions for third parties with whom we do business.ismay be significantly impacted by trends in consumer confidence and discretionary consumer spending, which may be influenced by employment levels, recessions, fuel and energy costs, availability of personal credit, interest rates, tax rates and changes in tax laws, the European debt crisis, declining purchasing power due to foreign currency fluctuations, personal debt levels, housing prices, stock market volatility, general political conditions and other factors. The factors impacting consumer confidence and discretionary consumer spending are outside of our control and difficult to predict, and, often, the apparel industry experiences longer periods of recession and greater declines than the general economy. Starting in 2008, the global economic environment began to deteriorate. This has been characterized by a dramatic decline in consumer discretionary spending disproportionately affecting our industry. While we have seen intermittent signs of stabilization in the United States since fiscal 2010, there is continued volatility in the European markets. There are no assurances that the United States, European or global economy will recover in the near future or that recessionary conditions will not return to or worsen in these markets. In addition, the European sovereign debt crisis or unstable political conditions, or potential or actual international conflicts, in the Middle East or other parts of the world, could result in disruptions to sourcing of our products from foreign markets. Any deterioration or worsening of consumer confidence or discretionary consumer spending, or disruptions to our supply chain from macroeconomic conditions,which has been negatively impacted in the past few years, could reduce our sales increaseand/or adversely affect our costs of goods sold or require us to significantly modify our current business practices.or the unavailability of suitable producers at reasonable prices and/or changes in international trade regulation may negatively impact our ability to deliver quality products to our customers on a timely basis, disrupt our supply chain or result in higher costs or reduced net sales.65%60% of our product purchases from China during fiscal 2012.Fiscal 2014. Although we place a high value on long-term relationships with our suppliers, generally we do not have long-term supply contracts but, instead, conduct business on an order-by-order basis. Therefore, we compete with other companies for the production capacity of independent manufacturers. We regularly depend uponon the ability of third party producers to secure a sufficient supply of raw materials, adequately finance the production of goods ordered and maintain sufficient manufacturing and shipping capacity. Although we monitor production in third party manufacturing locations, we cannot be certain that we will not experience operational difficulties with our manufacturers, such as the reduction of availability of production capacity, errors in complying with product specifications, insufficient quality control, failures to meet production deadlines or increases in manufacturing costs. Such difficulties may negatively impact our ability to deliver quality products to our customers on a timely basis, which may, in turn, have a negative impact on our customer relationships and result in lower net sales.Changes in international trade regulation and risks relatingIn addition, due to the importation of our products may cause our products to become less competitive, disrupt our supply chain and/or adversely affect our operations. We source substantially all of our products from foreign countries, most significantly China. As a result,sourcing activities, we are exposed to risks associated with changes in the laws and regulations governing the importing and exporting of apparel products into and from the countries in which we operate. Some of theThese risks associated with importing our products from foreign countries include changes in social, political, labor and economic conditions or terrorist acts that could result in the disruption of trade from the countries in which our manufacturers are located; the imposition of additional or new duties, tariffs, taxes, quota restrictions or other changes and shifts in sourcing patterns as a result of such changes; significant delays in the delivery of our products, due to security or other considerations; fluctuations in sourcing costs; the imposition of antidumping or countervailing duties; fluctuations in the value of the dollar against foreign currencies; changes in customs procedures for importing apparel products; and restrictions on the transfer of funds to or from foreign countries. We may not be able to offset any disruption to our supply chain as a result of any of these factors by shifting production to suitable manufacturers in other jurisdictions in a timely manner or at acceptable prices, and any of these factors could harm our business, result in a loss of sales and/or increase the costs of our goods. In addition, our, or any of our suppliers', failure to comply with customs or similar laws or any other applicable regulations could restrict our ability to import products or lead to fines, penalties or adverse publicity, and future regulatory actions or changes in international trade agreementsregulation may provide our competitors with a material advantage over us or materially increase our costs.Loss of one or more of our key wholesale customers, or a significant adverse change in a customer's financial performance or financial position could negatively impact our net sales and profitability. We generate a significant percentage of our wholesale sales from a few major customers. During fiscal 2012, sales to our five largest customers accounted for 42% of our consolidated wholesale sales and sales to our largest wholesale customer represented 16% of our consolidated wholesale sales. Over the last several years, there has been a trend towards greater consolidation in the retail industry, as well as more centralized purchasing decisions within consolidated customer groups, and direct sourcing of products by large retailers. A decrease in the number of stores that carry our products, restructuring of our customers' operations, more centralized purchasing decisions, direct sourcing and greater leverage by customers, as a result of further consolidation in the retail industry or otherwise, could result in lower prices, realignment of customer affiliations or other factors which could negatively impact our net sales and profitability. We generally do not have long-term contracts with any of our customers. Instead, we rely on long-standing relationships with these customers and our position within the marketplace. As a result, purchases generally occur on an order-by-order basis, and each relationship can generally be terminated by either party at any time. A decision by one or more of our major customers to terminate its relationship with us or to reduce its purchases from us, whether motivated by competitive considerations, quality or style issues, financial difficulties, economic conditions or otherwise, could adversely affect our net sales and profitability, as it would be difficult to immediately, if at all, replace this business with new customers or increase sales volumes with other existing customers. In addition, due to long product lead times, our product lines are typically designed and manufactured in anticipation of orders for sale. We make commitments for production in connection with these lines. These commitments can be made up to several months prior to the receipt of firm orders from customers, and if orders do not materialize or are canceled, we may incur expenses to terminate our production commitments or to dispose of excess inventories. We also extend credit to several of our key customers without requiring collateral, which results in a large amount of receivables from just a few customers. At February 2, 2013, our five largestoutstanding customer balances represented 37% of our consolidated receivables balance. Companies in the apparel industry, including some of our customers, may experience financial difficulties, including bankruptcies, restructurings and reorganizations, tightened credit markets and/or declining sales and profitability on a comparable store basis. A significant adverse change in a customer's financial position could cause us to limit or discontinue business with that customer, require us to assume greater credit risk relating to that customer's receivables or limit our ability to collect amounts related to previous shipments to that customer.We rely on the proper operation of our primary distribution facilities in order to support our direct to consumer operations, meet customer expectations, manage inventory, complete sales and achieve operating efficiencies, and any disruption or failure in these facilities may materially adversely affect our business or operations. Our ability to support our direct to consumer operations, meet customer expectations, manage inventory and achieve objectives for operating efficiencies depends on the proper operation of our primary brand-focused distribution facilities, each of which manages the receipt, storage, sorting, packing and distribution of finished goods for one of our operating groups. The primary distribution facilities that we operate are: a distribution center in Auburn, Washington for our Tommy Bahama products; a distribution center in King of Prussia, Pennsylvania for our Lilly Pulitzer products; a distribution center in Toccoa, Georgia for our Lanier Clothes products; and a distribution center in Lyons, Georgia for our Ben Sherman products sold in the United States. In addition, in the United Kingdom, we utilize a third party distribution center that manages substantially all of the distribution activities for our Ben Sherman products sold in the United Kingdom and Europe. During fiscal 2013, we expect to transition the Ben Sherman distribution center activities in the United Kingdom to another third party facility. If any of our primary distribution facilities were to shut down or otherwise become inoperable or inaccessible for any reason, including as a result of natural or man-made disasters, cybersecurity attacks, computer viruses or otherwise, if our distribution facilities fail to upgrade their technological systems to ensure efficient operations, if the goods in a distribution center were otherwise unavailable for shipment, as a result of a technology failure or otherwise, or if we experience any difficulty in transitioning our distribution activities for Ben Sherman in the United Kingdom, we could experience a reduction in sales, a substantial loss of inventory or higher costs, insufficient inventory at our retail stores to meet consumer expectations and longer lead times associated with the distribution of our products. In addition, for the distribution facilities that we operate, there are substantial fixed costs associated with these large, highly automated distribution centers. We could experience reduced operating and cost efficiencies during periods of economic weakness. Any disruption to our distribution facilities or in their efficient operation could negatively affect our operating results and our customer relationships.Our operations are reliant on information technology and any interruption or other failure may impair our ability to provide products to our customers and meet the needs of management. The efficient operation of our business is dependent on information technology. Information systems are used in all stages of our operations from design to distribution and as a method of communication with our customers and suppliers. Additionally, certain of our operating groups utilize e-commerce websites to sell goods directly to consumers. Our management also relies on information systems to provide relevant and accurate information in order to allocate resources and forecast and report our operating results. Service interruptions may occur as a result of a number of factors, including power outages, computer viruses, hacking or other unlawful activities by third parties, disasters, or failures to properly install, upgrade, integrate, protect, repair or maintain our systems and e-commerce websites. We regularly evaluate upgrades or enhancements to our information systems to more efficiently and competitively operate our business, including an ongoing transition towards more integrated systems for our businesses. We may experience difficulties during the implementation of this financial system and/or not be equipped to address system problems. Any material disruption in our information technology systems, or any failure to timely, efficiently and effectively integrate new systems, could have an adverse affect on our business or results of operations. Over the last two years, we have announced various changes to our senior management, including the retirement of our long-time Chief Executive Officer Mr. J. Hicks Lanier from that position on December 31, 2012. newly elected Chief Executive Officer Mr. Thomas C. Chubb III having worked with our company for almostmore than 25 years, including in various executive management capacities. Changes in key management positions, including within our operating groups, have inherent risks, and there are no assurances that any of our recent changes in management will not disrupt our business or operations, distract employees and/or affect our strategic relationships. also depends upon disciplined execution at all levels of our organization, including our senior management. Competition for qualified personnel in the apparel industry is intense, and we compete to attract and retain these individuals with other companies that may have greater financial resources than us. While we believe that we have depth within our management team, if we lose any key executives, especially if one or more of these individuals join a competitor, our business and financial performance could be harmed. will need to plan for the succession of our senior management and successfully integrate new members of management within our organization. The unexpected loss of any of our senior management, or the unsuccessful integration of new leadership, could negatively affect our operations, business relationships and ability to execute our strategies.damageddamaged. The costs to eliminate or alleviate cyber or other security problems and wevulnerabilities, including to comply with security or other measures under state, federal and international laws governing the unauthorized disclosure of confidential information or to resolve any litigation, and to enhance cybersecurity protection through organizational changes, deploying additional personnel and protection technologies, training employees, and engaging third party experts and consultants could experiencebe significant and result in significant financial losses and expenses, as well as lost sales.Contentsfiscal 2012, 88%Fiscal 2014, 90% of our consolidated net sales were attributable to branded products for which we own the trademark. Therefore, our success depends to a significant degree uponon our ability to protect and preserve our intellectual property. We rely on laws in the United States and other countries to protect our proprietary rights. However, we may not be able to sufficiently prevent third parties from using our intellectual property without our authorization, particularly in those countries where the laws do not protect our proprietary rights as fully as in the United States. The use of our intellectual property or similar intellectual property by others could reduce or eliminate any competitive advantage we have developed, causing us to lose sales or otherwise harm the reputation of our brands.sales away from our company,sales, and association of our brands with inferior counterfeit reproductions could adversely affect the integrity and reputation of our brands.variesvary widely by jurisdiction, making it difficult for us to ensure that we are currently or will be in the future compliant with all applicable laws and regulations. We may be required to make significant expenditures or modify our business practices to comply with existing or future laws or regulations, and unfavorable resolution to litigation or a violation of applicable laws and regulations by us, or any of our suppliers or licensees, may restrict our ability to import and/or materially limit our ability to operate our business. is highly competitive and requires compliance with a variety of federal, state and local regulations. In particular, all of our Tommy Bahama restaurants serve alcohol and, therefore, maintain liquor licenses. Our ability to maintain our liquor licenses depends on our compliance with applicable laws and regulations. The loss of a liquor license would adversely affect the profitability of a restaurant. Additionally, as a participant in the restaurant industry, we face risks related to food quality, food-borne illness, injury, health inspection scores and labor relations.related to these mattersof violations of the laws and regulations governing our business are valid or whether we ultimately become liable, we may be materially affected by negative publicity associated with these issues. TheFor example, the negative impact of adverse publicity relating to allegations of violations at one restaurantof our restaurants may extend beyond the restaurant involved to affect some or all of the other restaurants, as well as the image of the Tommy Bahama brand as a whole.years,years; changes in tax laws and regulations and/or international tax treaties; the outcome of income tax audits in various jurisdictions,jurisdictions; and the resolution of uncertain tax positions, any of which could adversely affect our effective income tax rate and profitability.During fiscal 2011 and fiscal 2012,In recent years, we saw an increasehave from time to time seen increases in the costs of certain raw materials, particularly cotton, as a result of rising demand from the economic recovery, weather-related supply disruptions, significant declines in U.S. inventory and a sharp rise in the futures market for cotton. We historically have not entered into any futures contracts to hedge commodity prices. recently seen increases in the cost of labor at many of our suppliers, particularly with the growth of the middle class in certain developing countries, as well as in freight costs. In China, for example, apparel manufacturers have been experiencing increased costs resulting fromdue to labor shortages and the fluctuation of the Chinese Yuan in relation to the U.S. dollar, and these increased oil prices. costs are often passed on to us.customers, particularly in our Lanier Clothes and Ben Sherman operating groups. selling our products in new markets, including international markets; increasing sales in our direct to consumer channels; and increasing the product offerings within our various operating groups. Successful growth of our business through organic growth and/oracquisitions is subject to, among other things, theour ability of our management to implement plans for expanding our existing businesses at satisfactory levels and our ability to find suitable acquisition candidates at reasonable prices in the future.future, particularly in the current acquisition climate where desirable acquisition candidates are garnering higher acquisition multiples than in prior years; there are multiple competitive bidders; there are competing bidders who may have more financial resources than us; and the competitive acquisition climate is further enhanced by the relatively low cost of available capital. We may not be successful in this regard,achieving suitable organic growth and/or growth through acquisitions, and our inability to grow our business may have a material adverse effect on our business, financial condition, liquidity and results of operations.Continued challenges with implementing our long-term strategic plans at Ben Sherman could have a material adverse effect on our business and results of operations. The Ben Sherman brand continues to face challenges due to our ongoing elevation of the distribution of the brand, the sluggish economic conditions in the United Kingdom and Europe and missteps in the merchandise mix in our own retail stores in the second half of fiscal 2012. Ben Sherman's recent results have been exacerbated by a number of related factors, including operational and product assortment issues relating to inventory management, control of expenses, buying and merchandising decisions, pricing decisions and underperformance of retail stores. While we believe that Ben Sherman will have growth opportunities in the long-term if the elevation of the brand is successful and the economic conditions in the United Kingdom and Europe improve, there can be no assurances that our actions will be successful. Continued operational or product issues could have a material adverse effect on our business and results of operations.The acquisition of new businesses has certain inherent risks, including, for example, strains on our management team and unexpected acquisition costs. From time to time, we acquire new businesses or product lines when we believe appropriate investment opportunities are available. As a result of acquisitions, we may become responsible for unexpected liabilities that we failed or were unable to discover in the course of performing due diligence. Although we may be entitled to indemnification against undisclosed liabilities from the sellers of the acquired business, we cannot be certain that the indemnification, even if obtained, will be enforceable, collectible or sufficient in amount, scope or duration to fully offset the possible liabilities associated with the business or assets acquired. Any of these liabilities, individually or in the aggregate, could have a material adverse effect on our business, financial condition and results of operations. In addition, integrating acquired businesses is a complex, time-consuming and expensive process. The integration process for newly acquired businesses could create for us a number of challenges and adverse consequences associated with the integration of product lines, employees, sales teams and outsourced manufacturers; employee turnover, including key management and creative personnel of the acquired and existing businesses; disruption in product cycles for newly acquired product lines; maintenance of acceptable standards, controls, procedures and policies; and the impairment of relationships with customers of the acquired and existing businesses. Further, we may not be able to manage the combined operations and assets effectively or realize the anticipated benefits of the acquisition.restaurants.44%47% of our consolidated net sales during fiscal 2012. WeFiscal 2014, and we expect to increase the number of our retail stores during fiscal 2013Fiscal 2015 and in future years, including opening Tommy Bahamayears. Many of our retail stores and restaurants are located in geographic territories where we have not previously operated Tommy Bahamashopping malls and lifestyle centers that benefit from the ability of “anchor” retail stores.retail locations, retail location to attract a consumer base sufficient to make store sales volume profitable, and our ability to negotiate satisfactory lease terms and employ qualified personnel.personnel, and our ability to timely construct and complete any build-out and open the location in accordance with our plans. We compete with other retailersothers for these favorable store locations, lease terms and desired personnel. If we are unable to identify new locations with consumer traffic sufficient to support a profitable sales level or the local market reception to a new retail store opening is inconsistent with our expectations, retail growth may be limited. Further, if existingany decline in the volume of consumer traffic at our retail stores and restaurants, do not maintainwhether because of general economic conditions, changes in consumer shopping preferences or technology, a sufficient customer base that provides a reasonable sales volume, itdecline in the popularity of malls or lifestyle centers in general or at those in which we operate, the closing of anchor stores or other adjacent tenants, or otherwise, could have a negative impact on our sales, gross margin, and results of operations.which we also incur substantial fixed costs for each location'sa location’s design, leasehold improvements, fixtures and systems installation. From time to time, we seek to downsize or close some of our retail store or restaurant operations, which may require a modification or termination of an existing lease; such actions may require payment of exit fees and/or result in fixed asset impairment charges, the amounts of which could be material.The recentContinued consolidation within the commercial real estate development, operation and/or management industries, which has been prevalent in recent years, may further reduce our leverage with those parties, thereby materially adversely affecting the terms of future leases for our retail stores and restaurants or making entering into long-term commitments with such parties cost prohibitive.fiscal 2012,Fiscal 2015, we opened newexpect to relocate the current Tommy Bahama retail stores in various jurisdictions in Asiasales and also began operating stores in Australia,administration offices to another location within Seattle, Washington. The process of relocating our Tommy Bahama sales and administration offices is inherently complex, as it includes among other things consolidation of Tommy Bahama’s Women’s Design team from Pasadena, California into our other Seattle, Washington design functions and the transfer of our primary information technology systems to a third party co-located facility, and could cause significant disruption to our operations and cause the temporary diversion of management resources, which could have a material adverse effect on our business.fiscal 2013;the future; these efforts may not be successful.2012,years, we opened threehave expanded our Tommy Bahama retail storesoperations into international markets, specifically in Asiathe Asia-Pacific region and acquired the Tommy Bahama business in Australia, including five retail stores, from our former licensee.Canada. We continue to look for additional, brand-appropriate locations for retail stores in these markets, with particular focus on Australia, Japan and Canada in the Asia/Australia markets and expect to open two retail stores, including a Tommy Bahama island, in Tokyo and a new retail store in Sydney, Australia during fiscal 2013.near term. The continued development of our Tommy Bahama international infrastructure and related store openings has had, and will continue to have, a negative impact on our operating results until we are able to adequately scale our infrastructure costs and generate sufficient sales in those operations to offset the ongoing infrastructure costs. Expandinginternationallyinto these territories requires significant capital investment and long-term commitments, and there are risks associated with doing business in these markets, including lack of brand recognition in certain markets; understanding fashion trends and satisfying consumer tastes, includingtastes; understanding sizing and fitting in these markets; market acceptance of our products, which is difficult to assess immediately; establishing appropriate market-specific operational and logistics functions and operational infrastructure;functions; managing compliance with the various legal requirements; staffing and managing foreign operations; fluctuations in currency exchange rates; obtaining governmental approvals that may be required to operate; potentially adverse tax implications; local regulations relating to employment and retail and restaurant operations; and maintaining proper levels of inventory. If we are unable to properly manage these risks or if our international expansion efforts do not prove successful, our business, financial condition and results of operations could suffer.(42(52 out of 105133 domestic stores in these states as of February 2, 2013)January 31, 2015), Florida for our Lilly Pulitzer retail stores (five(nine out of 1928 stores asof February 2, 2013)January 31, 2015), and the United Kingdom for our Ben Sherman retail stores (10(11 out of 1921 stores as of February 2, 2013)January 31, 2015). Additionally, a significant portion of our wholesale sales for Tommy Bahama, Lilly Pulitzer and Ben Sherman products are concentrated in the same geographic areas as our own retail store locations for these brands. Due to this concentration, we have heightened exposure to factors that impact these regions, including general economic conditions, weather patterns, natural disasters, changing demographics and other factors.Our Internet operations subject us to risks that could adversely affect our results and operations. Certain of our brands, including Tommy Bahama, Lilly Pulitzer and Ben Sherman, distribute products through their e-commerce websites and communicate with consumers through social media and other methods of digital marketing. These operations subject us to numerous risks that could adversely affect our results and operations, including diversion of sales from our brick-and-mortar retail stores; failure to properly communicate our brand message or recreate the ambiance of our retail stores; reliance on third party service providers for software, processing and similar services; liability for website content; credit card fraud; and failure of computer systems, theft of personal consumer information and computer viruses. If we are unable to properly manage these risks, we may lose sales and/or our reputation and credibility may be damaged.prices.prices and through off-price channels. These events could significantly harm our operating results and impair the image of our brands. Conversely, we may not be in a position to order quality products from our manufacturers in a timely manner and/or we may experience inventory shortages as demand for our products increases, which might result in unfilled orders, negatively impact customer relationships, diminish brand loyalty and result in lost sales, any of which could harm our business.Substantially allThe substantial majority of our orders for the production of apparel in foreign countries areis denominated in U.S. dollars. If the value of the U.S. dollar decreases relative to certain foreign currencies in the future, then the prices that we negotiate formore thanapproximately 90% of our product sales during fiscal 2012. The sales denominated in foreign currencies primarily relate to Ben Sherman sales in the United Kingdom and Europe.Fiscal 2014. As we increasefocus on increasing our Tommy Bahama operations in foreign markets the volume ofand continue to source our growing sales denominatedproduction from foreign manufacturers, we will have greater exposure to fluctuations in foreign currencies would be expected to increase.currency exchange rates. An increase in the value of the U.S. dollar compared to these other currencies in which we have sales could result in lower levels of sales and earnings in our consolidated statements of operations, although the sales in foreign currencies could be equal to or greater than amounts in prior periods. In addition, to the extent that a stronger U.S. dollar increasesparties'parties’ brand names, and we cannot guarantee our continued use of such brand names or the quality or salability of such brand names. and Ike Behar, to market some of our products. During fiscal 2012,Fiscal 2014, sales of products bearing brands licensed to us accounted for 8%6% of our consolidated net sales and 60%54% of our Lanier Clothes net sales. When we enter into these license and design agreements, they generally provide for short contract durations (typically three to five years); these agreementsWeCompetitive conditions for the right to use popular trademarks means that we cannot guarantee that we will be able to renew these licenses on acceptable terms upon expiration, that the terms of any renewal will not result in operating margin pressures or reduced profitability, or that we will be able to acquire new licenses to use other populardesirable trademarks. The termination or expiration of a license agreement will cause us to lose the sales and any associated profits generated pursuant to such license and in certain cases could result in an impairment charge for related intangible assets.February 2, 2013,January 31, 2015, we had $108.6$104.8 million of borrowings outstanding under our U.S. Revolving Credit Agreement and $7.9$4.1 million in borrowings outstanding under our U.K. Revolving Credit Agreement. In the future, our debt levels may increase under our existing facilities or potentially under new facilities, or the terms or forms of our financing arrangements may change.working capital needsdebt levels and/or the terms of future financing arrangements. Although from time to time we enter into hedging arrangements to limit our exposure to interest rate risk, anAn increase in interest rates may require us to pay a greater amount of our fundsmanufacturing facilities and sales/administration office space and manufacturing facilities in various domestic and international locations. We believe that our existing properties are well maintained, are in good operating condition and will be adequate for our present level of operations.conditions, as negotiated.conditions. Assets leased under operating leases are not recognized as assets and liabilities in our consolidated balance sheets. Periodically, we assess the operating results of each of our retail stores and restaurants to assess whether the location provides, or is expected to provide, an appropriate long-term return on investment, whether the location remains brand appropriate and other factors. As a result of this assessment, we may determine that it is appropriate to close certain stores that do not continue to meet our investment criteria, not renew certain leases, exercise an early termination option, or otherwise negotiate an early termination. For existing leases in desirable locations, we anticipate that we will be able to extend our retail leases, to the extent that they expire in the near future, on terms that are satisfactory to us, or if necessary, locate substitute properties on acceptable terms. We also believe that there are abundantsufficient retail spaces available for the continued expansion of our retail store footprint in the near future.February 2, 2013,January 31, 2015, our retail and restaurant operations utilized approximately 0.70.9 million square feet of leased retail and restaurant space in the United States, the United Kingdom, Canada, Australia, Asia and continental Europe. Each of our retail stores and restaurants is less than 20,000 square feet, and we do not believe that we are dependent upon any individual retail store or restaurant location for our business operations. Our Tommy Bahama, Lilly Pulitzer and Ben Sherman retail stores are operated by the respective management of each operating group, and greater detail about the retail space used by each operating group is included in Part I, Item 1, Business included in this report.February 2, 2013,January 31, 2015, we also utilized approximately 1.01.1 million square feet of owned or leased distribution and manufacturing facilities in the United States and Mexico and approximately 0.4 million square feet of leased and owned administrative and sales space in various locations, including the United States, the United Kingdom, Hong Kong, Germany China and Hong Kong.China. In addition to our owned distribution facilities, we may utilize certain third party warehouse/distribution providers where we do not own or lease any space. Our distribution, manufacturing, administrative and sales facilities provide space for employees and functions used in support of our retail, wholesale and e-commerce operations. Details of the principal administrative, sales, distribution and manufacturing facilities utilizedused in our operations, including approximate square footage, are as follows: Primary Use Operating Group Square
Footage Lease
ExpirationPrimary Use Operating Group Sales/administration 80,000 2015 Sales/administration Tommy Bahama 80,000 2015 (1) Distribution center 260,000 2015 Distribution center Tommy Bahama 270,000 2025 Sales/administration 40,000 Owned Sales/administration Lilly Pulitzer 40,000 Owned Distribution center 65,000 Owned Distribution center Lilly Pulitzer 65,000 Owned Toccoa, Georgia Distribution center Lanier Clothes 310,000 Owned Merida, Mexico Manufacturing plant Lanier Clothes 80,000 Owned Sales/administration 20,000 2013 Sales/administration Ben Sherman 20,000 2024 Sales/administration 10,000 Owned Sales/administration Ben Sherman 10,000 Owned Distribution center 310,000 Owned Manufacturing plant 80,000 Owned Sales/administration 30,000 2023 Sales/administration Corporate and Other and Lanier Clothes 30,000 2023 Sales/administration 90,000 Owned Sales/administration Corporate and Other and Ben Sherman 90,000 Owned Distribution center 330,000 Owned Distribution center Corporate and Other and Ben Sherman 330,000 Owned Sales/administration 40,000 Various Sales/administration Various 35,000 Various Sales/administration 20,000 Various Sales/administration Various 20,000 Various Table of Contents15, 2013,18, 2015, there were 320300 record holders of our common stock. The following table sets forth the high and low sale prices and quarter-end closing prices of our common stock as reported on the New York Stock Exchange for the quarters indicated. Additionally, the table indicates the dividends per share declared on shares of our common stock by our Board of Directors for each quarter. High Low Close Dividends High Low Close Dividends Fiscal 2014 First Quarter $ 82.84 $ 64.17 $ 65.74 $ 0.21 Second Quarter $ 72.63 $ 58.53 $ 59.39 $ 0.21 Third Quarter $ 66.18 $ 58.11 $ 61.25 $ 0.21 $ 57.97 $ 43.69 $ 49.61 $ 0.15 $ 67.13 $ 50.13 $ 55.94 $ 0.21 Fiscal 2013 First Quarter $ 60.71 $ 42.19 $ 60.61 $ 0.18 Second Quarter $ 69.09 $ 57.86 $ 68.20 $ 0.18 $ 59.36 $ 41.09 $ 53.90 $ 0.15 $ 72.25 $ 61.10 $ 69.84 $ 0.18 $ 50.44 $ 39.12 $ 44.24 $ 0.15 $ 52.64 $ 43.87 $ 49.44 $ 0.15 $ 49.69 $ 33.61 $ 49.24 $ 0.13 $ 82.16 $ 69.62 $ 75.47 $ 0.18 $ 41.20 $ 29.81 $ 39.70 $ 0.13 $ 39.59 $ 30.05 $ 39.18 $ 0.13 $ 35.66 $ 22.48 $ 34.35 $ 0.13 On March 27, 2013, our Board of Directors approved a cash dividend of $0.18 per share payable on May 3, 2013 to shareholders of record as of the close of business on April 19, 2013. Although we1960,1960; however, we may discontinue or modify dividend payments at any time if we determine that other uses of our capital, including 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, 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 or other debt instruments and applicable law. All cash flow from operations will not necessarily be paid out as dividends in all periods.fiscal 2012.Purchasesexercise of stock 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 2012.Fiscal 2014.the third quarter of fiscalFiscal 2012, our Board of Directors authorized us to spend up to $50 million to repurchase shares of our common stock. This authorization superseded and replaced all previous authorizations to repurchase shares of our common stock and has no automatic expiration. As of February 2, 2013,January 31, 2015, no shares of our common stock had been repurchased pursuant to this authorization.February 2, 2008January 30, 2010 and ending February 2, 2013,January 31, 2015, of:••
INDEXED RETURNS INDEXED RETURNS
Years Ended Base Years Ending Base
Period
2/02/08 Period 1/31/09 1/30/10 1/29/11 1/28/12 2/02/13 1/30/2010 1/29/2011 1/28/2012 2/2/2013 2/1/2014 1/31/2015 100 30.43 83.84 114.25 239.10 243.95 Oxford Industries, Inc. 100 136.27 285.19 290.97 447.45 336.24 100 61.72 85.77 111.55 121.52 140.99 100 130.07 141.69 164.39 208.83 221.68 100 51.33 97.00 133.27 190.31 176.87 100 137.40 196.20 182.34 211.61 219.39 fiscalFiscal 2010, resulting in those operations being classified as discontinued operations for all periods presented. Unless otherwise indicated, all references to assets, liabilities, revenues and expenses included in this report reflect continuing operations and do not include any amounts related to the discontinued operations. Fiscal
2012 Fiscal
2011 Fiscal
2010 Fiscal
2009 Fiscal
2008 Fiscal 2014 Fiscal 2013 Fiscal 2012 Fiscal 2011 Fiscal 2010 (In millions, except per share amounts) (In millions, except per share amounts) $ 855.5 $ 758.9 $ 603.9 $ 585.3 $ 699.1 $ 997.8 $ 917.1 $ 855.5 $ 758.9 $ 603.9 386.0 345.9 276.5 294.5 363.5 443.1 403.5 386.0 345.9 276.5 469.6 413.0 327.4 290.8 335.6 554.7 513.6 469.5 413.0 327.4 410.7 358.6 302.0 283.7 328.1 488.9 447.6 410.7 358.6 302.0 6.3 2.4 0.2 — — 0.3 0.3 6.3 2.4 0.2 — — — — 307.5 16.4 16.8 15.4 11.8 15.7 18.1 19.0 16.4 16.8 15.4 69.0 68.8 40.7 18.9 (284.4 ) (9.1 ) (9.0 ) — (1.8 ) 7.8 Operating income 83.6 84.7 69.0 68.8 40.7 Loss on repurchase of senior notes — — (9.1 ) (9.0 ) — 8.9 16.3 19.9 18.7 21.3 3.5 4.2 8.9 16.3 19.9 50.9 43.5 20.8 (1.6 ) (298.0 ) 19.6 14.3 4.5 (2.9 ) (19.8 ) 31.3 29.2 16.2 1.4 (278.1 ) — 0.1 62.4 13.2 6.6 $ 31.3 $ 29.4 $ 78.7 $ 14.6 (271.5 ) $ 1.89 $ 1.77 $ 0.98 $ 0.09 $ (17.42 ) $ 0.00 $ 0.01 $ 3.77 $ 0.81 $ 0.42 $ 1.89 $ 1.78 $ 4.75 $ 0.90 $ (17.00 ) Earnings from continuing operations before income taxes 80.1 80.5 50.9 43.5 20.8 Income taxes 34.4 35.2 19.6 14.3 4.5 Earnings from continuing operations 45.8 45.3 31.3 29.2 16.2 Earnings, including gain on sale in Fiscal 2010, from discontinued operations, net of taxes — — — 0.1 62.4 Net earnings $ 45.8 $ 45.3 $ 31.3 $ 29.4 $ 78.7 Diluted earnings from continuing operations per share $ 2.78 $ 2.75 $ 1.89 $ 1.77 $ 0.98 Diluted earnings, including gain on sale in Fiscal 2010, from discontinued operations per share, including the gain on sale $ — $ — $ — $ 0.01 $ 3.77 Diluted net earnings per share $ 2.78 $ 2.75 $ 1.89 $ 1.78 $ 4.75 16.6 16.5 16.6 16.3 16.0 16.5 16.5 16.6 16.5 16.6 $ 9.9 $ 8.6 $ 7.3 $ 5.9 $ 11.5 $ 0.60 $ 0.52 $ 0.44 $ 0.36 $ 0.72 Dividends declared and paid $ 13.9 $ 11.9 $ 9.9 $ 8.6 $ 7.3 Dividends declared and paid per share $ 0.84 $ 0.72 $ 0.60 $ 0.52 $ 0.44 $ 556.1 $ 509.2 $ 558.5 $ 425.2 $ 467.7 $ 645.1 $ 627.3 $ 556.1 $ 509.2 $ 558.5 $ 108.6 $ 103.4 $ 147.1 $ 146.4 $ 194.2 $ 104.8 $ 137.6 $ 108.6 $ 103.4 $ 147.1 $ 229.8 $ 204.1 $ 180.0 $ 104.4 $ 87.3 $ 290.6 $ 260.2 $ 229.8 $ 204.1 $ 180.0 $ 67.5 $ 44.6 $ 35.7 $ 61.0 $ 51.8 $ 95.4 $ 52.7 $ 67.1 $ 44.2 $ 35.7 $ 60.7 $ 35.3 $ 13.3 $ 11.3 $ 20.0 $ 50.4 $ 43.4 $ 60.7 $ 35.3 $ 13.3 $ 26.3 $ 27.2 $ 19.2 $ 22.6 $ 23.8 $ 37.6 $ 33.9 $ 26.3 $ 27.2 $ 19.2 $ 2.8 $ 2.2 $ 4.5 $ 4.0 $ 3.4 $ 4.1 $ 1.7 $ 2.8 $ 2.2 $ 4.5 $ 4.0 $ 5.8 $ 3.8 $ 4.9 $ 0.5 $ 2.1 $ — $ 4.0 $ 5.8 $ 3.8 $ 13.85 $ 12.35 $ 10.90 $ 6.34 $ 5.50 $ 17.64 $ 15.85 $ 13.85 $ 12.35 $ 10.90 Table of ContentsOVERVIEWspecialty catalogs,warehouse clubs, mass merchants and Internet retailers. In fiscal 2012,Fiscal 2014, more than 90% of our consolidated net sales were to customers located in the United States, with the remaindersales outside the United States primarily being sales of our Ben Sherman products in the United Kingdom and Europe.continental Europe as well as sales of our Tommy Bahama products in Canada and the Asia-Pacific region. We source substantially all of our products through third party manufacturers located outside of the United States and United Kingdom.are "fashion right" and evoke a strong emotional response from our target consumers. We strive to exploit the potential of our existing brands and products domestically and internationally 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 our target 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 full-price direct to consumer operations as well as licensing opportunities in product categories beyond our core business. We strive to exploit the potential of our existing brands and licensing operations.dominatedominates the apparel industry and our direct competitors vary by operating group and distribution channel. We believe that the principal competitive factors in the apparel industry are the reputation, value and image of brand names; design; consumer preference; price; quality; marketing; and customer service. We believe that our ability to compete successfully in stylingdesign and marketing is directly related to our proficiency in foreseeing changes and trends in fashion and consumer preference, and presenting appealing products for consumers. In some instances, a retailer that is our customer may compete directly with us by offering certain of theirits own competingor other competitor's products some of which may be sourced directly by our customer, in their ownits retail stores. Additionally, the apparel industry is cyclical and dependent upon the overall level of discretionary consumer spending, which changes as regional, domestic and international economic conditions change. Often, negative economic conditions have a longer and more severe impact on the apparel and retail industry than thethese conditions have on other industries.hashave prevailed in recent years continue to impact each of our operating groups, and the apparel industry as a whole. Although some signs of economic improvements exist, in the United States, unemployment levels remain high, theapparel retail environment remains veryincreasingly promotional and economic uncertainty remains. Further, the economies of the United Kingdom and Europe, which are important to our Ben Sherman operating group, continue to struggle more than the economy in the United States. We anticipate that sales of our products may continue to be impacted negatively impacted as long as the retail apparel environment remains promotional and there is an elevated level of economic uncertainty.uncertainty in the geographies in which we operate. Additionally, fiscal 2011 and fiscal 2012 werewe have been impacted in recent years by pricing pressures on raw materials, fuel, transportation, labor and other costs necessary for the production and sourcing of apparel products.BahamaBahama® and Lilly PulitzerPulitzer® lifestyle brands have significant opportunities for long-term growth in their direct to consumer businesses through expansion of ourwith increasesincrease comparable store sales, and higher sales in same store andour e-commerce sales, with e-commerceoperations, which are likely to grow at a faster rate than comparable brick and mortar retail store operations.sales. We also believe that these lifestyle brands provide an opportunity for moderate sales increases in their wholesale businesses in the long-term primarily from our current customers adding to their existing door count and the selective addition of new wholesale customers.customers who generally follow a full-price retail model. We believe that in order to take advantage of opportunities for long-term growth for the brands, we must continue to invest in our Tommy Bahama and Lilly Pulitzer lifestyle brands.with competition and costing pressureswhich we believe will negatively impactingimpact net sales, operating income in Lanier Clothesand operating margin, particularly in the near term. TheOn March 24, 2015, our Board of Directors authorized our management to pursue a sale of the Ben Sherman lifestyle brand currently faces challenges duebusiness. We have engaged Financo, Ltd. as our financial advisor to our ongoing elevation of the distribution of the brand, the sluggish economic conditionsassist in the United Kingdomtransaction process. We plan to continue to operate the Ben Sherman business during the process, and Europealthough we expect to complete a sale within Fiscal 2015 no specific timetable has been set for consummation of a transaction. There can be no assurance that a transaction will take place, and misstepsour Board of Directors may consider other alternatives for the Ben Sherman business that it believes are in the merchandise mix in our own retail stores in the second halfbest interest of fiscal 2012. We believe that in the long-term Ben Sherman will have opportunities to improve its operating results if the elevation of the brand is successful and the economic conditions in the United Kingdom and Europe improve.ample liquidity. We believe that our positive cash flow from operations in the future coupled with the strength of our balance sheet and liquidity will provide us amplewith sufficient resources to fund future investments in our lifestyle brands. In the future, we may add additional lifestyle brands to our portfolio, if we identify appropriate targets which meet our investment criteria; however,While we believe that we have significant opportunities to appropriately deploy our capital and resources in our existing lifestyle brands.the 53-week fiscal 2012Fiscal 2014 compared to the 52-week fiscal 2011:Fiscal 2013 : Fiscal 2012 Fiscal 2011 Fiscal 2014 Fiscal 2013 $ 855,542 $ 758,913 $ 997,806 $ 917,097 $ 68,971 $ 68,807 $ 83,603 $ 84,670 $ 31,317 $ 29,243 $ 1.89 $ 1.77 $ 31,317 $ 29,380 $ 45,758 $ 45,291 $ 1.89 $ 1.78 Net earnings per diluted share $ 2.78 $ 2.75 improvementhigher net earnings in earningsFiscal 2014 were:continuing operations were:•An increase inhigher net sales and gross margins partially offset by higher SG&A associated with expanding operations;both the Tommy Bahama and Lilly Pulitzer operating groups as well as the impact of fiscal 2012 being a 53-week year;•A reduction in interest expense in fiscal 2012 to $8.9 millionBen Sherman primarily due to (1) our borrowing atincreased net sales partially offset by lower gross margin and lower royalty income;rates in the second half of fiscal 2012 compared to the second half of fiscal 2011 due to our July 2012 redemption of the remaining $105.0 million in aggregate principal amount of our 113/8% senior secured notes due in 2015 ("Senior Secured Notes") and (2) the reduction in our average debt levels during the first half of fiscal 2012 compared to the first half of fiscal 2011 primarily as a result of our repurchase of $45.0 million in aggregate principal amount of our Senior Secured Notes during the second and third quarters of fiscal 2011; andexpense.•Fiscal 2012 not having purchase accounting charges while fiscal 2011 included purchase accounting charges of $1.0 million.•A decrease in sales and operating results at both Ben Sherman and Lanier Clothes;TableContents•An increasea property and the benefit of certain favorable changes in SG&A, which was primarily due to (1) theaccruals; andpre-opening expenses of retail stores and the operation of retail stores opened in fiscal 2011 and fiscal 2012, including our Tommy Bahama New York location, (2) certain infrastructure, pre-opening retail store rent and other costs related to the Tommy Bahama international expansion, (3) higher SG&A to support the growing Tommy Bahama and Lilly Pulitzer businesses and (4) higher SG&A due to fiscal 2012 being a 53-week year while fiscal 2011 was a 52-week year;•A $6.3 million charge in fiscal 2012 related to the change in fair value of contingent consideration compared to a $2.4 million charge in fiscal 2011 with the increase resulting from our determination of a higher fair value of the obligation due to our assessment that the certainty of the payment of the contingent consideration related to the Lilly Pulitzer acquisition is more probable than we had determined in prior years; and•A higher effective tax rate in fiscal 2012 primarily due to our inability to recognize the income tax benefit of certain losses in foreign jurisdictions and having a greater proportion of our earnings in higher tax jurisdictions, whichexpanding operations, partially offset by the impact of certain favorable discrete items in that period. In fiscal 2011, we were able to recognize the income tax benefit of foreign jurisdiction losses as well as the impact of certain favorable discrete items. 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. We do not anticipate significant operating income (loss) or cash flows associated with discontinued operations subsequent to fiscal 2011.Amendmenthigher net sales and Restatement of the U.S. Revolving Credit Agreement On June 14, 2012, we entered into the U.S. Revolving Credit Agreement, which provides for a revolving credit facility of up to $235 million which may be used to refinance existing debt, to redeem our previously outstanding Senior Secured Notes, to fund working capital, to fund future acquisitions and for general corporate purposes. The U.S. Revolving Credit Agreement amended and restated the Prior Revolving Credit Agreement, as defined in Note 5 of our consolidated financial statements included in this report and which was entered into on August 15, 2008 and was scheduled to mature in August 2013. We believe that the covenants in the U.S. Revolving Credit Agreement are generally less restrictive and provide greater flexibility than those contained in the Prior Revolving Credit Agreement. In addition, the U.S. Revolving Credit Agreement allows us to include in our borrowing base certain amounts attributable to "eligible trademarks," which amounts would not have been available for inclusion in the borrowing base under the Prior Revolving Credit Agreement. The material terms of the U.S. Revolving Credit Agreement are described in Note 5 in our consolidated financial statements and the Financial Condition, Liquidity and Capital Resources section of this Management's Discussion and Analysis of Financial Condition and Results of Operations, both contained in this report.Senior Secured Notes Redemption and Repurchase On July 16, 2012, we redeemed all of the outstanding $105 million in principal amount of the Senior Secured Notes, which were scheduled to mature in July 2015. The redemption of the Senior Secured Notes at a premium of $6.0 million and the write-off of $3.1 million of unamortized deferred financing costs and unamortized bond discount resulted in a loss on repurchase of senior notes of $9.1 million. The redemption of the Senior Secured Notes satisfied and discharged all of our obligations with respect to the Senior Secured Notes and the related indenture and was funded through borrowings under our U.S. Revolving Credit Agreement and cash on hand. During the second quarter and third quarters of fiscal 2011, we repurchased, in privately negotiated transactions, $45.0 million in aggregate principal amount of our Senior Secured Notes for $52.2 million, plus accrued interest, using cash on hand. The repurchase of the Senior Secured Notes and related write-off of $1.8 million of unamortized deferred financing costs and discount resulted in a loss on repurchase of senior notes of $9.0 million in fiscal 2011.is primarily operatedoperates through our four operating groups: Tommy Bahama, Lilly Pulitzer, Lanier Clothes and Ben 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. Our operating group structure reflects a brand-focused management approach, emphasizing operational coordination and resource allocation across theeach brand's direct to consumer, wholesale and licensing operations. Tommy Bahama designs, sources, markets and distributes men's and women's sportswear and related products. The target consumers For a description 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 stores within and outside the United States and on our Tommy Bahama e-commerce website, tommybahama.com, as well as in better department stores and independent specialty stores throughout the United States and licensed Tommy Bahama stores in Canada and the United Arab Emirates. We also operate Tommy Bahama restaurants and license the Tommy Bahama name for various product categories. Lilly Pulitzer designs, sources and distributes upscale collectionseach of women's and girl's dresses, sportswear and related 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 and on our Lilly Pulitzer website, lillypulitzer.com, as well as in better department and independent specialty stores. We also license the Lilly Pulitzer 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. Substantially all of our Lanier Clothes branded products are sold under certain trademarks licensed to us by third parties. Licensed brands included Kenneth Cole, Dockers, Geoffrey Beene and Ike Behar. Additionally, we design and market products for our owned Billy London, Arnold Brant and Oxford Republic brands. In addition to the branded businesses, which represented 73% of Lanier Clothes net sales in fiscal 2012, Lanier Clothes designs and sources private label tailored clothing products for certain customers. Our Lanier Clothes products are sold to national chains, department stores, specialty stores, specialty catalog retailers and discount retailers throughout the United States. 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 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. Corporate and Other is a reconciling category for reporting purposes and includes our corporate offices, substantially all financing activities, elimination of inter-segment sales, LIFO inventory accounting adjustments, other costs that are not allocated to the operating groups and operations of our other businesses which are not included in our four operating groups. 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 operating groups. The operations that are included in Corporate and Other include our Oxford Golf business and our Lyons, Georgia distribution center. For further information regarding our operating groups, see Part I, Item 1. Business and Note 102 to our consolidated financial statements, and Part I, Item 1, Business, both included in this report.Historically, ourOur disclosures of comparable store sales have only includedinclude net sales at our full-price retail stores; however, beginning with the full 2012 fiscal year our disclosures include sales from our full-price stores and our e-commerce sites, excluding sales associated with e-commerce flash clearance sales. We believe that given the similar nature and process of inventory planning, allocation and return policy, as well as our cross-channel marketing and other initiatives, for the direct to consumer channel, the inclusion of both our full-price stores and e-commerce sites in the comparable store sales disclosures is a more meaningful way of reporting our comparable store sales results. Further, we believe that this change better alignsresults, given similar inventory planning, allocation and return policies, as well as our disclosures withcross-channel marketing and other companies within our industry. Additionally,initiatives for the direct to consumer channel. For our comparable store sales disclosures, we exclude (1) outlet store sales, warehouse sales and amounts related to e-commerce flash clearance sales, as those sales are used primarily to liquidate end of season inventory, which may vary significantly depending on the level of end of season inventory on hand and generally occursoccur at lower gross margins than our full-price direct to consumer sales. Also, our comparable store sales, metrics excludeand (2) restaurant sales, as we do not currently believe that the inclusion of restaurant sales would beis meaningful in assessing our consolidated results of operations. Thus, the comparableComparable store metrics disclosed by us reflect comparable full-price retail storessales information reflects net sales, including shipping and e-commerce sites, excluding e-commerce flash clearance sales, in total, unless specified otherwise.reduction or relocation to a new retail space orreduction, (3) a relocation to a new space that was significantly different from the prior retail space.space, or (4) a closing or opening of a Tommy Bahama restaurant adjacent to the retail store. For those stores which are excluded from comparable stores based on the preceding sentence, we treat thosethe stores ascontinue to be excluded from comparable store sales until the criteria for a new store openings.is met subsequent to the remodel, relocation or restaurant closing or opening. Generally, a store that is remodeled will continue to be included in our comparable store metrics as a store is not typically closed for a two week period during a remodel. However, a store that is relocated generally will not be included in our comparable store metrics until that store has been open in the relocated space for the entirety of the prior fiscal year as the size or other characteristics of the store typically change significantly from the prior location. Additionally, any stores that were closed during the prior fiscal year or current fiscal year, or which we plan to close or vacate in the current fiscal year, are excluded from the definition of comparable stores.companies in the retail industry,companies, and therefore comparable store metrics disclosed by us may not be comparable to the metrics disclosed by other companies.earningsoperations both in dollars (in thousands) and as a percentage of net sales. We have calculated all percentages based on actual data, but percentage columns may not add due to rounding. 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. For purposes of the tables below, "NM" means not meaningful. Fiscal 2012 Fiscal 2011 Fiscal 2010 Fiscal 2014 Fiscal 2013 Fiscal 2012 $ 855,542 100.0 % $ 758,913 100.0 % $ 603,947 100.0 % $ 997,806 100.0 % $ 917,097 100.0 % $ 855,542 100.0 % 385,985 45.1 % 345,944 45.6 % 276,540 45.8 % 443,127 44.4 % 403,523 44.0 % 385,985 45.1 % 469,557 54.9 % 412,969 54.4 % 327,407 54.2 % 554,679 55.6 % 513,574 56.0 % 469,557 54.9 % 410,737 48.0 % 358,582 47.2 % 301,975 50.0 % 488,924 49.0 % 447,645 48.8 % 410,737 48.0 % 6,285 0.7 % 2,400 0.3 % 200 0.0 % 275 — % 275 — % 6,285 0.7 % 16,436 1.9 % 16,820 2.2 % 15,430 2.6 % 18,123 1.8 % 19,016 2.1 % 16,436 1.9 % 68,971 8.1 % 68,807 9.1 % 40,662 6.7 % 83,603 8.4 % 84,670 9.2 % 68,971 8.1 % 8,939 1.0 % 16,266 2.1 % 19,887 3.3 % 3,483 0.3 % 4,169 0.5 % 8,939 1.0 % 9,143 1.1 % 9,017 1.2 % — — 50,889 5.9 % 43,524 5.7 % 20,775 3.4 % Loss on repurchase of senior notes — — % — — % 9,143 1.1 % Earnings before income taxes 80,120 8.0 % 80,501 8.8 % 50,889 5.9 % 19,572 2.3 % 14,281 1.9 % 4,540 0.8 % 34,362 3.4 % 35,210 3.8 % 19,572 2.3 % $ 31,317 3.7 % $ 29,243 3.9 % $ 16,235 2.7 % Net earnings $ 45,758 4.6 % $ 45,291 4.9 % $ 31,317 3.7 % 20122014 COMPARED TO FISCAL 20112013fiscal 2012Fiscal 2014 to fiscal 2011.Fiscal 2013, each of which included 52 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 2012 Fiscal 2011 $ Change % Change Fiscal 2014 Fiscal 2013 $ Change % Change $ 528,639 $ 452,156 $ 76,483 16.9 % $ 627,498 $ 584,941 $ 42,557 7.3 % 122,592 94,495 28,097 29.7 % 167,736 137,943 29,793 21.6 % 107,272 108,771 (1,499 ) (1.4 )% 112,934 109,530 3,404 3.1 % 81,922 91,435 (9,513 ) (10.4 )% 77,481 67,218 10,263 15.3 % 15,117 12,056 3,061 25.4 % 12,157 17,465 (5,308 ) (30.4 )% $ 855,542 $ 758,913 $ 96,629 12.7 % Total $ 997,806 $ 917,097 $ 80,709 8.8 % $96.6 million, or 12.7%, in fiscal 2012, which included 53 weeks, compared to fiscal 2011, which included 52 weeks, primarily due to8.8% reflecting the increase in net sales at Tommy Bahama and Lilly Pulitzer, which wereincreases in all operating groups partially offset by decreased netlower sales at Lanier Clothesin Corporate and Ben Sherman,Other, each as discussed below.Tommy Bahama: The Tommy Bahama Further, as direct to consumer sales increase of $76.5 million, or 16.9%, was primarily driven by (1) an increase in comparable store sales of $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)grew at a net sales increase of $18.6 million associated with domestic retail stores and outlet stores opened in fiscal 2011 and fiscal 2012, (3) afaster rate than wholesale sales, increase of $14.7 million and (4) a net sales increase associated with our Tommy Bahama international operations in Australia and Asia of $4.5 million. The remaining sales increase primarily related to sales in our restaurants and our outlet stores opened for all of fiscal 2011 and fiscal 2012. Tommy Bahama apparel unit sales increased by 15.2% due to the higher volume in each distribution channel, and the average selling price per unit increased by 2.7% as sales in the direct to consumer channel of distribution which generally have a higher sales price per unit than wholesale sales, represented a greater proportionpercentage of consolidated net sales during Fiscal 2014 as presented below: Fiscal 2014 Fiscal 2013 Full price retail stores and outlets 40 % 40 % E-commerce 14 % 12 % Restaurant 7 % 7 % Wholesale 39 % 41 % Total 100 % 100 % sales in fiscal 2012. As of February 2, 2013, Tommy Bahama operated 113 retail stores compared to 96 retail stores as of January 28, 2012.Lilly Pulitzer: The Lilly Pulitzernet sales increase of $28.1 million, or 29.7%,7.3% was primarily driven by (1) an incremental net sales increase of $21.8 million associated with the operation of additional retail stores, including the Canadian retail stores acquired in the Second Quarter of Fiscal 2013, (2) a $9.9 million, or 4%, increase in comparable store sales, of $10.5 million,which includes full-price retail stores and full-price e-commerce sales, to $47.4$288.6 million in the 53-week fiscal 2012 compared to $36.8Fiscal 2014 from $278.7 million in the 52-week fiscal 2011, (2)Fiscal 2013, (3) a $6.4 million increase in wholesale sales reflecting higher levels of off-price wholesale sales in Fiscal 2014 and the inclusion of the wholesale sales of Tommy Bahama Canada for the full year in Fiscal 2014, (4) $4.6 million of additional e-commerce flash clearance sales resulting in $8.1 million for the fiscal year, and (5) a $3.4 million increase of $6.5 million, (3) ain restaurant sales primarily resulting from higher sales in existing restaurants. These increases in 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 $3.3 million decrease in the clearance warehousenet sales in fiscal 2012, as more endoutlet stores which were operated during all of season product was sold throughFiscal 2013 and Fiscal 2014.e-commerce flash sales. The e-commerce flash sales generated $9.4 millionproportion of net sales by distribution channel for Tommy Bahama for each period presented: Fiscal 2014 Fiscal 2013 Full price retail stores and outlets 50 % 51 % E-commerce 14 % 13 % Restaurant 10 % 10 % Wholesale 26 % 26 % Total 100 % 100 % fiscal 2012each channel of distribution including (1) an $11.1 million, or 19%, increase in comparable store sales, to $70.1 million in Fiscal 2014 compared to $3.1$59.0 million ofin Fiscal 2013, (2) an incremental net sales increase of $8.9 million associated with retail stores opened in fiscal 2011.Fiscal 2013 or Fiscal 2014, (3) an increase in e-commerce flash clearance sales of $5.2 million to $16.7 million and (4) a $4.5 million increase in wholesale sales. As of January 31, 2015, we operated 28 Lilly Pulitzer apparel unit sales increased by 39.0% due to the higher volume in each distribution channel, while the average selling price per unit decreased by 6.7%. The decreased selling price per unit primarily resulted from a change in product mix as sportswear and knit dresses, both of which generally sell at lower price points than woven dresses, represented a greater proportion of the Lilly Pulitzer business during fiscal 2012. As of February 2, 2013, Lilly Pulitzer operated 19 retail stores compared to 1623 retail stores as of January 28, 2012.Lanier Clothes:decrease infollowing table presents the proportion of net sales by distribution channel for Lilly Pulitzer for each period presented: Fiscal 2014 Fiscal 2013 Full price retail stores 34 % 32 % E-commerce 28 % 25 % Wholesale 38 % 43 % Total 100 % 100 % of $1.5 million, or 1.4%, was primarily due to the decrease in private label sales of $8.7 million partially offset by an increase in branded sales of $7.2 million. The decrease in private label sales was primarily due to fiscal 2011 benefitting 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 benefitted from certain spring merchandise shipping in the fourth quarter of fiscal 2012, which would have typically shipped in the first quarter of fiscal 2013. Overall, the decrease in net sales resulted from a 2.8% decrease in unit sales partially offset by a 1.4% increase in average selling price per unit. The increase in average selling price per unitof 3.1% was primarily due to a change in sales mix with more branded sales, which typically sell at higher prices per unit than private label sales, in fiscal 2012. The sales for Lanier Clothes were also negatively impacted by the continuing competitive factors in tailored clothing business.Ben Sherman: Net sales for Ben Sherman decreased by $9.5$3.5 million or 10.4%, in fiscal 2012 compared to fiscal 2011, primarily due to a $10.5 million decline in wholesale sales, which was predominantly in UnitedKingdom, with direct to consumer net sales being comparable in fiscal 2012 and fiscal 2011, which was primarily due to higher e-commerce sales as well as the impact of additional stores. The decreaseincrease in net sales for Ben Sherman was primarily driven by a reduction in unit volume of 16.2% primarily attributable to (1) our exit from certain wholesale accounts with moderate-priced stores in the United Kingdomprivate label business, with branded sales generally being comparable between Fiscal 2014 and (2) the difficult economic conditions that persistFiscal 2013. The increase in the United Kingdom and Europe. Further, the direct to consumer operations of Ben Sherman were negatively impacted by missteps in Ben Sherman's merchandise assortment planning in the second half of fiscal 2012, which, particularly in the current economic environment, resulted in too much of the product offering in styles at the higher end of the price range and resulted in more promotions in our retail stores in order to sell inventory on hand. The reduction in units soldprivate label business was partially offsetdriven by an increase in the average selling price per unitpants program for a warehouse club customer, which began in the Fourth Quarter of 7.0%.Fiscal 2013 and more than offset decreases in other private label programs. The increasedecreases in average selling price per unitthe other private label programs was primarily due to lower volume and the exit from some seasonal and replenishment programs.greater proportion$3.1 million increase in retail store sales reflecting comparable store sales increases and the net impact of Ben Sherman'sstore openings and closures since the start of Fiscal 2013, (3) $2.2 million of higher sales being direct to consumer sales, which generally have higher selling prices than wholesale sales. These items that positively impacted average selling price per unit were partially offset byresulting from the translation impact of a less than 1.0% unfavorable foreign currency translation change in the average exchange ratesrate between the two periods. Fiscal 2014 Fiscal 2013 Direct to Consumer 45 % 46 % Wholesale 55 % 54 % Total 100 % 100 % consistedconsist of the net sales of our Oxford Golf business and our Lyons, Georgia distribution center.center as well as the impact of the elimination of inter-company sales between our operating groups. The increasedecrease in the net sales for Corporate and Otherof 30.4% was primarily driven by the higher netdue to (1) a reduction in Oxford Golf's private label sales, in our(2) a significant initial shipment of an Oxford Golf business during fiscal 2012. first table below presents gross profit by operating group and in total for fiscal 2012Fiscal 2014 and fiscal 2011Fiscal 2013 as well as the change between those two periods. The second table presentsOur gross profit and gross margin, which is calculated as gross profit divided by net sales, by operating group and in total for fiscal 2012 and fiscal 2011. Fiscal 2012 Fiscal 2011 $ Change % Change $ 321,920 $ 276,567 $ 45,353 16.4 % 76,842 56,376 20,466 36.3 % 30,264 34,108 (3,844 ) (11.3 )% 39,430 46,473 (7,043 ) (15.2 )% 1,101 (555 ) 1,656 NM $ 469,557 $ 412,969 $ 56,588 13.7 % $ 4,043 $ 5,772 $ — $ 996 Fiscal 2012 Fiscal 2011 60.9 % 61.2 % 62.7 % 59.7 % 28.2 % 31.4 % 48.1 % 50.8 % NM NM 54.9 % 54.4 % The increase in consolidated gross profit was primarily due to higher net sales in Tommy Bahama and Lilly Pulitzer partially offset by the lower sales in Ben Sherman and Lanier Clothes, each asdiscussed above. Additionally, 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. The changes in sales mix included 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. The gross margin at Tommy Bahama for fiscal 2012 and fiscal 2011 reflects a decrease in gross margins in the first half of fiscal 2012 compared to the prior year and improved gross margins in the second half of fiscal 2012 compared to the prior year. Tommy Bahama increased prices in the first half of fiscal 2011 in anticipation of increased product costs, which began to impact our results in the second half of fiscal 2011 and continued into fiscal 2012. This negative gross margin pressure for fiscal 2012 was partially offset by a change in the proportion of sales in each distribution channel as sales in the direct to consumer distribution channel, which typically have higher gross margins than the wholesale distribution channel, increased from 67% of net sales in fiscal 2011 to 69% of net sales in fiscal 2012. As we expect to continue to expand our direct to consumer operations at a faster pace than our wholesale operations, we anticipate that gross margins for Tommy Bahama will increase slightly in the future with the change in sales mix. The increase in gross margin for Lilly Pulitzer from fiscal 2011 to fiscal 2012 was primarily due to (1) the proportion of sales in each distribution channel as sales in the direct to consumer channel, which typically have higher gross margins than the wholesale distribution channel, increased from 47% of net sales in fiscal 2011 to 54% of net sales in fiscal 2012 and (2) fiscal 2011 including a $1.0 million purchase accounting charge, with no such charge in fiscal 2012. As we expect to continue to expand our direct to consumer operations at a faster pace than our wholesale operations, we anticipate that gross margins for Lilly Pulitzer will increase in the future with the change in sales mix. The decrease in gross margin at Lanier Clothes was primarily the result of gross margin pressures, including both competitive factors and higher product costs that continue to impact the tailored clothing business. The decrease in gross margin at Ben Sherman reflects (1) higher product costs during fiscal 2012, (2) the competitive factors resulting from the difficult economic conditions that persist in the United Kingdom and Europe, (3) heavier promotions in the direct to consumer business, (4) a greater amount off-price sales and (5) more significant inventory markdowns. The heavier promotions and the higher off-price sales and inventory markdowns, which were necessary measures to appropriately manage inventory levels in the economic environment, were more significant in the second half of fiscal 2012, in part due to the merchandising mix miss in the second half of fiscal 2012. The gross profit in Corporate and Other in each period primarily reflects the impact on gross profit of our Oxford Golf and Lyons, Georgia distribution center operations offset by the impact of LIFO accounting adjustments, which included significant charges in both fiscal 2012 and fiscal 2011. The LIFO accounting charge was $4.0 million in fiscal 2012 compared to $5.8 million in fiscal 2011. Our gross profit and gross margin may not be directly comparable to those of our competitors, as statement of operations classification of certain expenses may vary by company. Fiscal 2012 Fiscal 2011 $ Change % Change $ 410,737 $ 358,582 $ 52,155 14.5 % 48.0 % 47.2 % $ — $ (1,155 ) Fiscal 2014 Fiscal 2013 $ Change % Change Tommy Bahama $ 377,415 $ 358,930 $ 18,485 5.2 % Lilly Pulitzer 106,317 84,845 21,472 25.3 % Lanier Clothes 30,704 30,552 152 0.5 % Ben Sherman 36,730 32,094 4,636 14.4 % Corporate and Other 3,513 7,153 (3,640 ) NM Total gross profit $ 554,679 $ 513,574 $ 41,105 8.0 % LIFO charge (credit) included in Corporate and Other $ 2,131 $ (27 ) Inventory step-up charge included in Tommy Bahama associated with Tommy Bahama Canada acquisition $ — $ 707 Fiscal 2014 Fiscal 2013 Tommy Bahama 60.1 % 61.4 % Lilly Pulitzer 63.4 % 61.5 % Lanier Clothes 27.2 % 27.9 % Ben Sherman 47.4 % 47.7 % Corporate and Other NM NM Consolidated gross margin 55.6 % 56.0 % Fiscal 2014 Fiscal 2013 $ Change % Change SG&A 488,924 447,645 $ 41,279 9.2 % SG&A (as a % of net sales) 49.0 % 48.8 % Amortization of intangible assets included in Tommy Bahama associated with Tommy Bahama Canada acquisition $ 1,764 $ 1,377 consisting primarily of employment and advertising expenses, to support the growing Tommy Bahama and Lilly Pulitzer businesses, including support functions for retail, e-commerceincreased employment expense, infrastructure costs and wholesale operations,advertising expense, (2) $17.0$13.7 million of incremental SG&A in fiscal 2012costs associated with operating additional domestic Tommy Bahama retail stores and restaurants and Lilly Pulitzer stores, including $6.7(3) $7.5 million of increased incentive compensation, primarily reflecting increases in Lilly Pulitzer, Corporate and Other and Tommy Bahama, (4) $2.4 million of additional equity-based compensation primarily resulting from equity awards granted in Fiscal 2014 and (5) a $1.8 million unfavorable SG&A impact resulting from currency translation at Ben Sherman as a result of the stronger pound sterling.SG&A charges associatedFiscal 2013, 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 certain infrastructure, pre-opening retail store rent and other costs relatedincrease primarily due to the Tommy Bahama international expansion, (4) the approximately $7 million impact of having an extra week of expensesCanada acquisition 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 a $1.2 million reduction in SG&A as a resultSecond Quarter of a life insurance death benefit gain and $1.8 million of transition services fee income. The increases in SG&A for Tommy Bahama, Lilly Pulitzer and Corporate 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 theFiscal 2013. We anticipate that amortization of intangible assets. Fiscal 2012 Fiscal 2011 $ Change % Change $ 6,285 $ 2,400 $ 3,885 161.9 % Fiscal 2014 Fiscal 2013 $ Change % Change Change in fair value of contingent consideration included in Lilly Pulitzer $ 275 $ 275 $ — — % fiscalFiscal 2010, we entered into a contingent consideration agreement with the sellers, under whichwhereby we arewould be obligated to pay certain contingent consideration amounts based on theLilly Pulitzer's 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 acquisition.earnings targets. In accordance with GAAP, we have recognized a liability in our consolidated balance sheets for the fair value of this liability at each balance sheet date. Generally, thissuch a liability increases in fair value as we approach the date of anticipated payment, resulting in a charge to our consolidated statements of earningsoperations during that period. Further, if we determine that the probability of the amounts being earned changes, it would impact our assessment of the fair value in our consolidated balance sheet, resulting in a charge or income in our consolidated statement of earningsoperations at that time. Fiscal 2014 Fiscal 2013 $ Change % Change Royalties and other operating income $ 18,123 $ 19,016 $ (893 ) (4.7 )% Gain on sale of real estate included in Corporate and Other $ — $ 1,611 Fiscal 2014 Fiscal 2013 $ Change % Change Tommy Bahama $ 71,132 $ 72,207 $ (1,075 ) (1.5 )% Lilly Pulitzer 32,190 25,951 6,239 24.0 % Lanier Clothes 10,849 10,828 21 0.2 % Ben Sherman (10,832 ) (13,131 ) 2,299 17.5 % Corporate and Other (19,736 ) (11,185 ) (8,551 ) (76.5 )% Total operating income $ 83,603 $ 84,670 $ (1,067 ) (1.3 )% LIFO charge (credit) included in Corporate and Other $ 2,131 $ (27 ) 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 $ 1,764 $ 1,377 Change in fair value of contingent consideration included in Lilly Pulitzer $ 275 $ 275 Gain on sale of real estate included in Corporate and Other $ — $ 1,611 Fiscal 2014 Fiscal 2013 $ Change % Change Net sales $ 627,498 $ 584,941 $ 42,557 7.3 % Gross margin 60.1 % 61.4 % Operating income $ 71,132 $ 72,207 $ (1,075 ) (1.5 )% Operating income as % of net sales 11.3 % 12.3 % 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 $ 1,764 $ 1,377 Fiscal 2014 Fiscal 2013 $ Change % Change Net sales $ 167,736 $ 137,943 $ 29,793 21.6 % Gross margin 63.4 % 61.5 % Operating income $ 32,190 $ 25,951 $ 6,239 24.0 % Operating income as % of net sales 19.2 % 18.8 % Change in fair value of contingent consideration included in Lilly Pulitzer $ 275 $ 275 Fiscal 2014 Fiscal 2013 $ Change % Change Net sales $ 112,934 $ 109,530 $ 3,404 3.1 % Gross margin 27.2 % 27.9 % Operating income $ 10,849 $ 10,828 $ 21 0.2 % Operating income as % of net sales 9.6 % 9.9 % Fiscal 2014 Fiscal 2013 $ Change % Change Net sales $ 77,481 $ 67,218 $ 10,263 15.3 % Gross margin 47.4 % 47.7 % Operating loss $ (10,832 ) $ (13,131 ) $ 2,299 17.5 % Operating loss as % of net sales (14.0 )% (19.5 )% Fiscal 2014 Fiscal 2013 $ Change % Change Net sales $ 12,157 $ 17,465 $ (5,308 ) (30.4 )% Operating loss $ (19,736 ) $ (11,185 ) $ (8,551 ) (76.5 )% LIFO charge (credit) included in Corporate and Other $ 2,131 $ (27 ) Gain on sale of real estate included in Corporate and Other $ — $ 1,611 Fiscal 2014 Fiscal 2013 $ Change % Change Interest expense, net $ 3,483 $ 4,169 $ (686 ) (16.5 )% fiscalFiscal 2014, substantially all of our borrowings were under our U.S. Revolving Credit Agreement. Fiscal 2014 Fiscal 2013 $ Change % Change Income taxes $ 34,362 $ 35,210 $ (848 ) (2.4 )% Effective tax rate 42.9 % 43.7 % Fiscal 2014 Fiscal 2013 Net earnings $ 45,758 $ 45,291 Net earnings per diluted share $ 2.78 $ 2.75 Weighted average shares outstanding - diluted 16,471 16,482 Fiscal 2013 Fiscal 2012 $ Change % Change Tommy Bahama 584,941 528,639 56,302 10.7 % Lilly Pulitzer 137,943 122,592 15,351 12.5 % Lanier Clothes 109,530 107,272 2,258 2.1 % Ben Sherman 67,218 81,922 (14,704 ) (17.9 )% Corporate and Other 17,465 15,117 2,348 15.5 % Total $ 917,097 $ 855,542 $ 61,555 7.2 % 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 charge (credit) 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 )% iswas more probable than we had determined in prior years based on our consideration of, among other things, (1) the fiscalFiscal 2011 and fiscalFiscal 2012 operating results of the Lilly Pulitzer operating group, (2) projected operating results for Lilly Pulitzer for fiscalFiscal 2013 and fiscalFiscal 2014, (3) the operating results criteria for the fiscalFiscal 2013 and fiscalFiscal 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. We anticipate that the change in contingent consideration for the full year of each of fiscal 2013 and fiscal 2014 will be approximately $0.3 million per year. Fiscal 2012 Fiscal 2011 $ Change % Change $ 16,436 $ 16,820 $ (384 ) (2.3 )% 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 2012Fiscal 2013 increased by $2.6 million primarily reflectdue to (1) Fiscal 2013 including a gain on sale of real estate of $1.6 million, (2) higher royalty income for both Tommy Bahama and Lilly Pulitzer and (3) higher other income in Corporate and Other. These increases were partially offset by lower royalty income for Ben Sherman in Fiscal 2013. Royalty and other operating income primarily consists of royalty 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 recognized in fiscal 2011 with a decrease in Ben Sherman royalty income in fiscal 2012 being offset by increased royalty income in both Tommy Bahama and Lilly Pulitzer. Fiscal 2012 Fiscal 2011 $ Change % Change Fiscal 2013 Fiscal 2012 $ Change % Change $ 69,454 $ 64,171 $ 5,283 8.2 % $ 72,207 $ 69,454 $ 2,753 4.0 % 20,267 14,278 5,989 41.9 % 25,951 20,267 5,684 28.0 % 10,840 12,862 (2,022 ) (15.7 )% 10,828 10,840 (12 ) (0.1 )% (10,898 ) (2,535 ) (8,363 ) (329.9 )% (13,131 ) (10,898 ) (2,233 ) (20.5 )% (20,692 ) (19,969 ) (723 ) (3.6 )% (11,185 ) (20,692 ) 9,507 45.9 % $ 68,971 $ 68,807 $ 164 0.2 % $ 84,670 $ 68,971 $ 15,699 22.8 % $ 4,043 $ 5,772 $ — $ 996 $ 6,285 $ 2,400 $ — $ (1,155 ) LIFO charge (credit) 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 2012 compared to $68.8 million in fiscal 2011.Fiscal 2012. The 0.2%22.8% increase in operating income was primarily due to the higher net salesimproved operating income in Corporate and Other, Lilly Pulitzer and Tommy Bahama, and Lilly Pulitzer, partially offset by lowerthe higher operating resultsloss 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 change in fair value of contingent consideration in fiscal 2012.Sherman. Changes in operating income by operating group are discussed below. Fiscal 2012 Fiscal 2011 $ Change % Change Fiscal 2013 Fiscal 2012 $ Change % Change $ 528,639 $ 452,156 $ 76,483 16.9 % $ 584,941 $ 528,639 $ 56,302 10.7 % Gross margin 61.4 % 60.9 % $ 69,454 $ 64,171 $ 5,283 8.2 % $ 72,207 $ 69,454 $ 2,753 4.0 % 13.1 % 14.2 % 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 $ — increasedhigher net sales and gross margin in the Tommy Bahama business, each distribution channel, as discussed above, which resulted inabove. The impact of the higher sales and gross profit,margin were partially offset by higher SG&A as well as a $0.7 million charge related to an inventory step-up and $1.4 million of amortization of intangible assets, both of which resulted from the Tommy Bahama Canada acquisition, which we completed in the second quarter of Fiscal 2013. In addition to the higher SG&A resulting from the amortization of intangible assets, the increased SG&A was primarily associated with (1) operating additional North American and Asia-Pacific retail stores and restaurants in fiscal 2012 resultingFiscal 2013 which resulted in $14.5$27.7 million of additionalincremental 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,and (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(4)Canada. These increases in SG&A were partially offset by a $5.6 million reduction in incentive compensation for Tommy Bahama in Fiscal 2013 and the approximately $5 million impact of fiscal 2012 being a 53-week yearone less week in Fiscal 2013 as compared to fiscal 2011 being a 52-week year.20122012.lossesloss of $15.9$11.9 million related to theour Tommy Bahama internationalAsia-Pacific expansion and the Tommy Bahama New York store, compared to operating losses of $3.5 million for these items in fiscal 2011. The $15.9 millionan operating loss of $10.4 million in fiscal 2012 related to the Tommy Bahama international expansion and the Tommy Bahama New York store reflect $20.0 million of SG&A costs partially offset by $4.0 million of gross margin related to sales in our international stores and royalty income. Fiscal 2012 Fiscal 2011 $ Change % Change Fiscal 2013 Fiscal 2012 $ Change % Change $ 122,592 $ 94,495 $ 28,097 29.7 % $ 137,943 $ 122,592 $ 15,351 12.5 % Gross margin 61.5 % 62.7 % $ 20,267 $ 14,278 $ 5,989 41.9 % $ 25,951 $ 20,267 $ 5,684 28.0 % 16.5 % 15.1 % 18.8 % 16.5 % $ — $ 996 $ 6,285 $ 2,400 Change in fair value of contingent consideration included in Lilly Pulitzer $ 275 $ 6,285 improvedincrease in operating income for Lilly Pulitzer for Fiscal 2013 compared to Fiscal 2012 was primarily due to a lower charge for change in the fair value of contingent consideration in Fiscal 2013. The operating results for Lilly Pulitzer were primarily due to increasedFiscal 2013 also reflect higher net sales, in each distribution channel and increased gross margin, and fiscal 2012 not including the $1.0 million charge related to the write-up of inventory at the acquisition of Lilly Pulitzer, each ofas discussed above, which contributed to a higher gross profit. The increased gross profit was partiallywere offset by increased SG&A associated with (1) higher SG&A consisting primarily of employment costs and advertising, to support the growing Lilly Pulitzer business including our retail, e-commerce and wholesale businesses,lower gross margin, as discussed above. The increased SG&A was primarily associated with (1) higher costs, consisting primarily of employment expenses, to support the growing Lilly Pulitzer business and (2) $2.5$3.1 million of incremental SG&A associated with the cost of operating additional retail stores during fiscal 2012 and (3) the approximately $1 million impact of fiscal 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 contingent consideration. Fiscal 2012 was impacted by a $6.3 million charge for the change in the fair value of contingent consideration while the fiscal 2011 charge was $2.4 million, as discussed above.2013. Fiscal 2012 Fiscal 2011 $ Change % Change Fiscal 2013 Fiscal 2012 $ Change % Change $ 107,272 $ 108,771 $ (1,499 ) (1.4 )% $ 109,530 $ 107,272 $ 2,258 2.1 % Gross margin 27.9 % 28.2 % $ 10,840 $ 12,862 $ (2,022 ) (15.7 )% $ 10,828 $ 10,840 $ (12 ) (0.1 )% 10.1 % 11.8 % 9.9 % 10.1 % decrease in operating income for Lanier Clothes was primarilycomparable for Fiscal 2013 and Fiscal 2012 as the resultfavorable impact of the lowerhigher sales and gross margins, partiallywas offset by decreasedslightly lower gross margin and higher SG&A, relatedwhich was primarily attributable to lower employment costs and advertising costs. The continuing gross margin pressures resulted from both competitive factors and product cost pressures. Fiscal 2012 Fiscal 2011 $ Change % Change Fiscal 2013 Fiscal 2012 $ Change % Change $ 81,922 $ 91,435 $ (9,513 ) (10.4 )% $ 67,218 $ 81,922 $ (14,704 ) (17.9 )% Gross margin 47.7 % 48.1 % $ (10,898 ) $ (2,535 ) $ (8,363 ) (329.9 )% $ (13,131 ) $ (10,898 ) $ (2,233 ) (20.5 )% (13.3 )% (2.8 )% (19.5 )% (13.3 )% in fiscal 2012 was primarily due to the decreaseddecrease in sales and lower gross margin, and royalty income, each as discussed above, and lower royalty income. These factors that negatively impacted the operating results were partially offset by reduced SG&A in Ben Sherman in Fiscal 2013 as well asBen Sherman took certain severance costs associatedactions to reduce its ongoing SG&A structure with a significant amount of that SG&A reduction being recognized in the business. Fiscal 2012 Fiscal 2011 $ Change % Change Fiscal 2013 Fiscal 2012 $ Change % Change $ 15,117 $ 12,056 $ 3,061 25.4 % $ 17,465 $ 15,117 $ 2,348 15.5 % $ (20,692 ) $ (19,969 ) $ (723 ) (3.6 )% $ (11,185 ) $ (20,692 ) $ 9,507 45.9 % $ 4,043 $ 5,772 $ — $ (1,155 ) LIFO charge (credit) included in Corporate and Other $ (27 ) $ 4,043 Gain on sale of real estate included in Corporate and Other $ 1,611 $ — declined by $0.7improved in Fiscal 2013 primarily as a result of (1) Fiscal 2012 including a $4.0 million from a loss of $20.0 million in fiscal 2011 to a loss of $20.7 million in fiscal 2012. The operating results for fiscal 2012 reflect the net impact of LIFO accounting charge with charges of $4.0 millionno significant LIFO accounting impact in Fiscal 2013, (2) a reduction in Corporate and $5.8 million in fiscal 2012 and fiscal 2011, respectively. Fiscal 2011 operating income was also positively impactedOther SG&A primarily driven by a $1.2$2.1 million death benefit gain from a corporate owned life insurance policyreduction in incentive compensation in Fiscal 2013, as well as certain favorable changes in accruals, (3) higher sales and inclusion of $1.8 million of transition services fee income related to our former Oxford Apparel operating group, which was soldimproved gross margin in the fourth quarterOxford Golf and Lyons, Georgia distribution center businesses and (4) Fiscal 2013 including a gain on sale of fiscal 2010, with no such fees being included in fiscal 2012. Fiscal 2012 Fiscal 2011 $ Change % Change $ 8,939 $ 16,266 $ (7,327 ) (45.0 )% Fiscal 2013 Fiscal 2012 $ Change % Change Interest expense, net $ 4,169 $ 8,939 $ (4,770 ) (53.4 )% fiscal 2012Fiscal 2013 decreased primarily due to (1) our borrowing at lower interest rates in the second half of fiscal 2012Fiscal 2013 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 Senior Secured Notes during the second and third quarters of fiscal 2011.Fiscal 2012. During the second half of fiscal 2012,Fiscal 2013, substantially all of our borrowings were under our U.S. Revolving Credit Agreement, whereas substantially all of our borrowings in the secondfirst half of fiscal 2011Fiscal 2012 were from our Senior Secured Notes,previously outstanding senior secured notes, which had a coupon rate of 113/8% 3/8%. The change in the source of our borrowings resulted from our redemption of theSenior Secured Notesprincipal amount of the senior secured notes in July 2012, which was primarily funded with borrowings under our U.S. Revolving Credit Agreement and cash on hand. We anticipate that interest expense for fiscal 2013 will be approximately $4.5 million.secured notes Fiscal 2012 Fiscal 2011 $ Change % Change $ 9,143 $ 9,017 $ 126 1.4 % Fiscal 2013 Fiscal 2012 $ Change % Change Loss on repurchase of senior notes $ — $ 9,143 $ (9,143 ) (100.0 )% In the second and third quarters of fiscal 2011, we repurchased, in privately negotiated transactions, $45.0 million in aggregate principal amount of our Senior Secured Notes for $52.2 million, plus accrued interest. The repurchase of the Senior Secured Notes and related write-off of $1.8 million of unamortized deferred financing costs and discount resulted in a loss of $9.0 million in fiscal 2011. InAgreement and cash on hand.Agreement. The redemption of the Senior Secured Notes and related write-off of approximately $3.1 million of unamortized deferred financing costs and discount resulted in a loss of $9.1 million. Fiscal 2012 Fiscal 2011 $ Change % Change Fiscal 2013 Fiscal 2012 $ Change % Change $ 19,572 $ 14,281 $ 5,291 37.0 % 35,210 19,572 15,638 79.9 % 38.5 % 32.8 % 43.7 % 38.5 % fiscal 2012Fiscal 2013 increased compared to fiscal 2011, primarilyFiscal 2012 due to higher earnings in fiscal 2012 as well asand an increase in the effective tax rate. Income taxesThe effective tax rates for fiscal 2012 were impacted byboth periods reflect the unfavorable impact of foreign 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 bythe 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 changedecrease in our assertion of permanent reinvestment of foreign earnings, and a reduction inthe enacted tax ratesrate in certain jurisdictions. Income taxesthe United Kingdom. The effective tax rate for fiscal 2011 wereFiscal 2012 was also impacted by certain other favorable discrete items, including the 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 a reduction in enacted tax rates in certain jurisdictions, as well as the recognition of an income tax benefit for losses in foreign jurisdictions. We anticipate that our effective tax rate in future periods will be higher than the 38.5% effective tax rate in fiscal 2012 as our foreign losses in future periods will likely not provide a tax benefit in the near term, and we likely will not benefit from certain discrete items to the degree we did in fiscal 2012.Net earnings Fiscal 2012 Fiscal 2011 $ 31,317 $ 29,243 $ 1.89 $ 1.77 16,586 16,529 The increase in earnings from continuing operations for fiscal 2012 compared to fiscal 2011 was primarily due to (1) higher sales in Tommy Bahama and Lilly Pulitzer, (2) lower interest expense due to lower borrowings and lower interest rates in fiscal 2012 and (3) no purchase accounting adjustmentsin fiscal 2012, each as discussed above. These items were partially offset by (1) lower sales and operating results at Lanier Clothes and Ben Sherman, (2) higher SG&A in Tommy Bahama and Lilly Pulitzer to support the continued growth and expansion of these brands, (3) a more significant charge for change in fair value of contingent consideration in fiscal 2012, and (4) a higher effective tax rate during fiscal 2012, each as discussed above.FISCAL 2011 COMPARED TO FISCAL 2010 The discussion and tables below compare certain line items included in our statements of operations for fiscal 2011 to fiscal 2010. 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 2011 Fiscal 2010 $ Change % Change $ 452,156 $ 398,510 $ 53,646 13.5 % 94,495 5,959 88,536 NM 108,771 103,733 5,038 4.9 % 91,435 86,920 4,515 5.2 % 12,056 8,825 3,231 36.6 % $ 758,913 $ 603,947 $ 154,966 25.7 % Consolidated net sales increased $155.0 million, or 25.7%, in fiscal 2011 compared to fiscal 2010 primarily due to the net sales related to the Lilly Pulitzer business and the increase in net sales at Tommy Bahama, each as discussed below.Tommy Bahama: The $53.6 million increase in net sales for Tommy Bahama was primarily driven by increased (1) increased comparable store sales, which includes sales of our full-price retail stores and our e-commerce sites of $30.1 million to $202.7 million in fiscal 2011 compared to $172.6 million in fiscal 2010, (2) a net sales increase of $10.2 million for stores opened in fiscal 2010 and fiscal 2011 and (3) a net sales increase of $7.9 million in our wholesale business. Additionally, restaurant sales and sales at outlet stores opened for all of fiscal 2010 and fiscal 2011 also increased in fiscal 2011. Tommy Bahama 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 a result of the higher proportion of net sales from the direct to consumer channel of distribution and higher product sales prices generally as certain product cost increases were recovered from consumers. As of January 28, 2012, Tommy Bahama operated 96 retail stores compared to 89 retail stores as of January 29, 2011.Lilly Pulitzer: We acquired the Lilly Pulitzer brand and operations on December 21, 2010. Therefore, our consolidated operating results for the first 101/2 months 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 million of net sales during fiscal 2010, of which only $6.0 million was included in our consolidated operating results. The increase of $22.0 million in net sales from that generated by the Lilly Pulitzer brand in fiscal 2010 to Lilly Pulitzer's sales in fiscal 2011 reflects increases in each channel of distribution, consisting of a $9.6 million increase in wholesale sales, a $7.5 million increase in e-commerce sales and a $4.9 million increase in retail store sales. During fiscal 2011 we operated 16 Lilly Pulitzer retail stores, compared tothe operation of 19 Lilly Pulitzer retail stores in fiscal 2010 with three of the 19 retail stores being closed prior to the start of fiscal 2011.Lanier Clothes: The increase in net sales for Lanier Clothes was primarily due to $5.9 million in increased net sales in branded tailored clothing products, which was partially offset by a $0.9 million decline in private label sales. 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 partially offset by an increase in unit sales of branded tailored clothing products.Ben Sherman: Net sales for Ben Sherman in fiscal 2011 increased by $4.5 million, or 5.2%, from fiscal 2010 primarily due to a $4.0 million increase in retail sales, with the majority of the increase in retail sales resulting from higher comparable retail store sales and the remainder being increased sales at outlet stores and new retail stores. The net sales for fiscal 2011 reflect an increase in the average selling price per unit of 17.3%, which was partially offset by a decrease in unit volume of 10.4%. 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 total 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 $2.0 million of net sales associated with the previously exited women's and footwear businesses, much of which was sold at close out prices in fiscal 2010 with no such sales in fiscal 2011. The reduced unit volume was primarily the result of our continuing strategy to improve the wholesale distribution 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.Corporate and Other: Corporate and Other net sales primarily consisted 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 was primarily driven by the higher net sales in our Oxford Golf business during fiscal 2011.Gross Profit The first table below presents gross profit by operating group and in total for fiscal 2011 and fiscal 2010 as well as the change between those two periods. The second table presents gross margin, which iscalculated as gross profit divided by net sales by operating group, and in total for fiscal 2011 and fiscal 2010. Fiscal 2011 Fiscal 2010 $ Change % Change $ 276,567 $ 242,789 $ 33,778 13.9 % 56,376 2,821 53,555 NM 34,108 33,795 313 0.9 % 46,473 48,026 (1,553 ) (3.2 )% (555 ) (24 ) (531 ) NM $ 412,969 $ 327,407 $ 85,562 26.1 % $ 5,772 $ 3,792 $ 996 $ 764 Fiscal 2011 Fiscal 2010 61.2 % 60.9 % 59.7 % NM 31.4 % 32.6 % 50.8 % 55.3 % NM NM 54.4 % 54.2 % The increase in consolidated gross profit was primarily due to higher net sales in each operating group, as discussed above, as well as the impact of changes in gross margin by operating group, as discussed below. The increase in gross margin at Tommy Bahama was primarily due to a change in sales mix with direct to consumer sales, which generally have a higher gross margin, representing a greater proportion of Tommy Bahama's net sales in fiscal 2011 as compared to fiscal 2010. Fiscal 2010 operating results for Lilly Pulitzer only included six weeks of activity. Therefore, gross margins for Lilly Pulitzer have not been provided for fiscal 2010 as they would not be meaningful for purposes of a year-to-year comparison. The gross profit and gross margin for Lilly Pulitzer for fiscal 2011 and fiscal 2010 were negatively impacted by $1.0 million and $0.8 million, respectively, of charges 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 the acquired inventory. The decrease in gross margin at Lanier Clothes was primarily the result of the gross margin pressures, including competitive factors and higher product costs. The decrease in gross margin at Ben Sherman reflects gross margin erosion resulting from higher product costs, which in most cases were not passed on to Ben Sherman's customers. The gross profit in Corporate and Other in each period primarily reflects the impact on gross profit of our Oxford Golf and Lyons, Georgia distribution center offset by the impact of LIFO accounting, which included significant charges in both fiscal 2011 and fiscal 2010. On a consolidated basis, the increase in gross margins was primarily due to changes in the sales mix in fiscal 2011 compared to fiscal 2010. 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 making up a larger proportion of Tommy Bahama sales. These items, which positively impacted gross margins, were partially offset by the negative impact on our gross profit and gross margin of (1) the net impact of LIFO accounting, which included $5.8 million of charges in fiscal 2011 compared to $3.8 million of charges in fiscal 2010, and (2) gross margin declines in Lanier Clothes and Ben Sherman in fiscal 2011. Our gross profit and gross margin may not be directly comparable to those of our competitors, as statement of operations classification of certain expenses may vary by company.SG&A Fiscal 2011 Fiscal 2010 $ Change % Change $ 358,582 $ 301,975 $ 56,607 18.7 % 47.2 % 50.0 % $ (1,155 ) — — $ 3,212 — $ 848 — $ (2,242 ) The increase in SG&A was primarily due to fiscal 2011 including (1) $40.6 million of SG&A associated with Lilly Pulitzer, compared to $3.2 million in fiscal 2010, (2) the incremental SG&A of $4.7 million 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 Bahama international expansion totaling $3.6 million and (4) the net impact of certain retail store asset impairments offset by any associated write-offs of deferred rent credits associated with the impaired assets that were closed or are anticipated to be closed totaling $1.2 million. These increases were partially offset by the death benefit of a corporate owned life insurance policy of $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. SG&A as a percentage of net sales benefitted from leveraging, as our net sales increased at a greater rate than the increase 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 $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.Change in fair value of contingent consideration Fiscal 2011 Fiscal 2010 $ Change % Change $ 2,400 $ 200 $ 2,200 NM 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 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 during that period. Thus, the amounts reflected in our statements 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 in 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.Royalties and other operating income Fiscal 2011 Fiscal 2010 $ Change % Change $ 16,820 $ 15,430 $ 1,390 9.0 % The increase in royalties and other operating income was primarily due to the royalty income associated with the recently acquired Lilly Pulitzer business as well as increased royalty income in Ben Sherman and Tommy Bahama.Operating income (loss) Fiscal 2011 Fiscal 2010 $ Change % Change $ 64,171 $ 51,081 $ 13,090 25.6 % 14,278 (372 ) 14,650 NM 12,862 14,316 (1,454 ) (10.2 )% (2,535 ) (2,664 ) 129 4.8 % (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 ) Operating income, on a consolidated basis, increased to $68.8 million in fiscal 2011 from $40.7 million in fiscal 2010. The $28.1 million increase in operating income was primarily due to (1) the inclusion of a full year of operating income for Lilly Pulitzer including charges related to the write-up of acquired inventory and increase 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 a $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 Lanier Clothes and Ben Sherman resulting from competitive factors and product cost increases. Changes in operating income by operating group are discussed below.Tommy Bahama: Fiscal 2011 Fiscal 2010 $ Change % Change $ 452,156 $ 398,510 $ 53,646 13.5 % $ 64,171 $ 51,081 $ 13,090 25.6 % 14.2 % 12.8 % The increase in operating income for Tommy Bahama was primarily due to the increased net sales. The increased sales were partially offset by (1) increased SG&A of $4.7 million associated with the cost of operating additional retail stores during fiscal 2011, (2) $3.6 million of costs associated with Tommy Bahama's international expansion and (3) the $1.2 million net impact of certain retail store impairments offset by any associated write-offs 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, there 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 $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. 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 million charge related to the change in the fair value of contingent consideration, as discussed above.Lanier Clothes: 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 % The decrease in operating income for Lanier Clothes, despite higher sales levels, was primarily the result of gross margin pressures and increased SG&A, including higher royalty and advertising expenses as a result of the higher branded sales, during fiscal 2011.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 or restructuring charges.Corporate and Other: 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 ) The Corporate and Other operating results improved by $1.7 million from a loss of $21.7 million in fiscal 2010 to a loss of $20.0 million in fiscal 2011. The improved operating results for fiscal 2011 were primarily due to (1) $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, (2) $1.5 million lower employee compensation costs in fiscal 2011 and (3) the $1.2 million 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 loss 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.Interest expense, net Fiscal 2011 Fiscal 2010 $ Change % Change $ 16,266 $ 19,887 $ (3,621 ) (18.2 )% Interest expense for fiscal 2011 decreased due to the reduction in debt levels as a result of our repurchase of $45.0 million in aggregate principal amount of our Senior Secured Notes during fiscal 2011. Interest expense for both periods primarily reflects (1) interest incurred with respect to our outstanding Senior Secured Notes, (2) amortization of deferred financing costs associated with our outstanding Senior Secured Notes and 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 million of our Senior Secured Notes.Loss on repurchase of senior secured notes Fiscal 2011 Fiscal 2010 $ Change % Change $ 9,017 $ — $ 9,017 NM In fiscal 2011, we repurchased, in privately negotiated transactions, $45.0 million in aggregate principal amount of our Senior Secured Notes for $52.2 million, plus accrued interest, using cash on hand. The repurchase of the Senior Secured Notes and related write-off of $1.8 million of unamortized deferred financing costs and discount resulted in a loss on repurchase of senior secured notes of $9.0 million.Income taxes Fiscal 2011 Fiscal 2010 $ Change % Change $ 14,281 $ 4,540 $ 9,741 214.6 % 32.8 % 21.9 % Income tax expense for fiscal 2011 increased compared to fiscal 2010, primarily due to higher earnings in fiscal 2011 as well as an increase in the effective tax rate. 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 differencestotaling approximately $2.2 million and tax credits which do not necessarily fluctuate with earnings, and net changes in the value of deferred tax assets and liabilities due to changes in enacted tax rates. The impact of these discrete items on the effective tax rate was much more significanta change in fiscal 2010 dueour assertion of permanent reinvestment of foreign earnings. For further information regarding income taxes, see Note 8 to the lower earnings levelour consolidated financial statements included in fiscal 2010 and their magnitude. 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 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 increase inhigher net earnings from continuing operationsfor Fiscal 2013 compared to Fiscal 2012 was primarily due to the inclusion of the Lilly Pulitzer operating results, higher operating income(1) increased net sales in our Tommy Bahama operating group and lower interest expense, partially offset by the $9.0 millionFiscal 2013 resulting in increased gross profit, (2) Fiscal 2012 including a loss on repurchase of $45.0senior notes of $9.1 million with no such charge in Fiscal 2013, (3) a $6.0 million reduction in the charge for the change in the fair value of contingent consideration, (4) a $4.8 million reduction in interest expense, (5) Fiscal 2012 including a LIFO accounting charge of $4.0 million with no significant LIFO accounting impact in Fiscal 2013, (6) lower SG&A in Ben Sherman and Corporate and Other, and (7) higher royalty and other operating income. These factors were partially offset by (1) higher SG&A associated with the continued growth and expansion of the Tommy Bahama and Lilly Pulitzer brands, (2) a higher effective tax rate in Fiscal 2013 and (3) $2.1 million of our Senior Secured Notes, as discussed above. Earnings from discontinued operations reflectcharges in the operationsaggregate incurred in Fiscal 2013 related to substantially allan inventory step-up charge and amortization of intangible assets as a result of our former Oxford Apparel operating group, which we sold in the fourth quarter of fiscal 2010. The operating resultsacquisition of the discontinuedTommy Bahama operations reflect substantially all of the normal operating activities of our former Oxford Apparel operating group in the first 11 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.ourthe sale and distribution of apparel products through our direct to consumer and wholesale channels of distribution. Our primary uses of cash flow include the acquisitionpurchase of apparel products in the operation of our business, as well as operating expenses including employee compensation and benefits, occupancyoccupancy-related costs, marketing and advertising costs, other general and administrative operating expenses funding of capital expenditures for retail stores and information technology initiatives,the payment of quarterly dividends, periodic interest payments related to our financing arrangementsarrangements. Additionally, we use cash for the funding of capital expenditures and dividends and repayment of indebtedness. As we purchase products for sale prior to selling the products to our customers in both our direct to consumer and wholesale operations, inIn the ordinary course of business, we maintain certain levels of inventory and we also extend credit to our wholesale customers. These factors impact ourThus, we require a certain amount of working capital levels.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 additional credit facilities, and sales of debt or equity securities.securities and cash on hand.February 2, 2013,January 31, 2015 we had $7.5$5.3 million of cash and cash equivalents on hand, with $116.5$109.0 million of borrowings outstanding and $105.7$128.0 million of availability under our revolving credit agreements. We believe our balance sheet and anticipated positive cash flows from operating activities in the future providesprovide us with ample opportunity to continue to invest in our brands and our direct to consumer initiatives in future periods. February 2, 2013 January 28, 2012 $ Change % Change January 31, 2015 February 1, 2014 $ Change % Change $ 222,390 $ 214,070 $ 8,320 3.9 % 124,266 117,554 6,712 5.7 % Total current assets $ 281,322 $ 271,032 $ 10,290 3.8 % Total current liabilities 158,295 133,046 25,249 19.0 % $ 98,124 $ 96,516 $ 1,608 1.7 % $ 123,027 $ 137,986 $ (14,959 ) (10.8 )% 1.79 1.82 1.78 2.04 34 % 34 % 27 % 35 % Both currentCurrent assets increased from February 1, 2014 to January 31, 2015 primarily due to higher inventories and current liabilities increased slightly from January 28, 2012 to February 2, 2013,receivables, each as discussed below,below. Current liabilities increased primarily as a result of (1) the classification of $12.5 million of contingent consideration as a current liability as of January 31, 2015 compared to $2.5 million as of February 1, 2014, (2) $9.1 million higher accrued compensation as of January 31, 2015, primarily resulting from higher incentive compensation, and (3) increased accounts payables, accrued expenses and other liabilities as of January 31, 2015. Changes in a comparable working capital ratio at both period ends.shareholders'shareholders’ equity. Debt was $116.5$109.0 million at January 31, 2015 and $141.6 million at February 2, 2013 and $106.01, 2014, while shareholders’ equity was $290.6 million at January 28, 2012, while shareholders' equity was $229.831, 2015 and $260.2 million at February 2, 2013 and $204.1 million at January 28, 2012.1, 2014. The comparable debt to total capital ratio at February 2, 2013 and January 28, 2012 reflects an increasedecrease in debt but also an increaseprimarily reflects the following during Fiscal 2014: (1) $95.4 million of cash flows from operating activities, (2) a $3.2 million reduction in shareholders' equity. The increase in debt was primarily due tocash and cash equivalents and (3) $1.0 million of proceeds from the issuance of common stock partially offset by the following: (1) $60.7$50.4 million of capital expenditures, incurred in fiscal 2012, (2) $9.9$13.9 million of dividends paid on our common stock and (3) $6.0 million premium required to redeem our Senior Secured Notes in the second quarter of fiscal 2012 and (4) $5.0$2.5 million of payments related to the Lilly Pulitzer contingent consideration arrangement, which inarrangement. Shareholders' equity increased, primarily as a result of net earnings partially offset by dividends paid and the aggregate exceededunfavorable impact on foreign currency exchange rate changes reflecting the $67.5 millionstronger United States dollar as of cash flows from operations during fiscal 2012.January 31, 2015. 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, ourFebruary 2, 2013January 31, 2015 compared to January 28, 2012. February 2, 2013 January 28, 2012 $ Change % Change January 31, 2015 February 1, 2014 $ Change % Change $ 7,517 $ 13,373 $ (5,856 ) (43.8 )% $ 5,281 $ 8,483 $ (3,202 ) (37.7 )% 62,805 59,706 3,099 5.2 % 79,104 75,277 3,827 5.1 % 109,605 103,420 6,185 6.0 % 148,215 143,712 4,503 3.1 % 19,511 17,838 1,673 9.4 % 24,219 23,095 1,124 4.9 % 22,952 19,733 3,219 16.3 % 24,503 20,465 4,038 19.7 % 222,390 214,070 8,320 3.9 % $ 281,322 $ 271,032 $ 10,290 3.8 % 2, 2013 reflects a1, 2014 include typical cash amountamounts maintained on an ongoing basis in our operations, withwhich generally ranges from $5 million to $10 million at any given time. Any excess cash generally beingis used to repay amounts outstanding under our revolving credit agreements, if any. At January 28, 2012, we had excess cash as we had no amounts outstanding under our U.S. Revolving Credit Agreement.agreements. Receivables, net as of February 2, 2013January 31, 2015 increased compared to January 28, 2012 primarily due to the increasedhigher wholesale sales, particularly in our operating groupsTommy Bahama, in the last two months of fiscal 2012 compared to the last two months of fiscal 2011 which was a result of timing of shipments within the quarter as well as an increase in wholesale sales.February 2, 2013January 31, 2015 increased from January 28, 2012 primarily to supportin each of our operating groups, except for Lanier Clothes. The higher inventory levels generally reflect higher anticipated sales growthin the First Quarter of Fiscal 2015 as compared to the First Quarter of Fiscal 2014. Prepaid expenses, net were comparable as of January 31, 2015 and additional retail stores for Tommy Bahama and Lilly Pulitzer, while inventory levels at both Lanier Clothes and Ben Sherman decreased from January 28, 2012. TheFebruary 1, 2014 reflecting an increase in prepaid expenses, net from January 28, 2012 to February 2, 2013 was primarily due to the timing of payments and recognition of the relatedincome taxes partially offset by decreases in prepaid operating expense for certain prepaid items, including product samples and rent.amounts. Deferred tax assets increased from January 28, 2012February 1, 2014 primarily as a result of thehigher incentive compensation amounts and a change in timing differences associated with inventory, compensation accruals and sales reserves, which were partially offset by changesdue in other accruals. February 2, 2013 January 28, 2012 $ Change % Change January 31, 2015 February 1, 2014 $ Change % Change $ 128,882 $ 93,206 $ 35,676 38.3 % $ 155,076 $ 141,519 $ 13,557 9.6 % 164,317 165,193 (876 ) (0.5 )% 167,770 173,023 (5,253 ) (3.0 )% 17,275 16,495 780 4.7 % 17,295 17,399 (104 ) (0.6 )% 23,206 20,243 2,963 14.6 % 23,604 24,332 (728 ) (3.0 )% $ 333,680 $ 295,137 $ 38,543 13.1 % $ 363,745 $ 356,273 $ 7,472 2.1 % at February 2, 2013 was primarily due to capital expenditures during fiscal 2012,Fiscal 2014, which were partially offset by depreciation expense in fiscal 2012.Fiscal 2014. The decrease in intangible assets, net was primarily due to the impact of the stronger United States dollar on our foreign denominated intangible assets and amortization of intangible assets associated with Tommy Bahama, Lilly Pulitzer and Ben Sherman in fiscal 2012 as well as the impact of foreign currency exchange rates on the intangible assets.Fiscal 2014. The increase in goodwill from January 28, 2012 was primarily related to the goodwill associated with our acquisition of the Tommy Bahama business in Australia from our former licensee that operated that business. The increasedecrease in other non-current assets was primarily due to security deposit payments for certain international retail store lease agreementsa decrease in the value of corporate officers' life insurance policies and amortization of deferred financing costs partially offset by higher asset balances set aside for potential deferred compensation obligations,plan obligations. January 31, 2015 February 1, 2014 $ Change % Change Total current liabilities $ 158,295 $ 133,046 $ 25,249 19.0 % Long-term debt 104,842 137,592 (32,750 ) (23.8 )% Non-current contingent consideration — 12,225 (12,225 ) (100.0 )% Other non-current liabilities 58,113 51,520 6,593 12.8 % Non-current deferred income taxes 33,212 32,759 453 1.4 % Total liabilities $ 354,462 $ 367,142 (12,680 ) (3.5 )% decreaseslower income taxes payable as of January 31, 2015. The decrease in deferred financing costs.Liabilities: February 2, 2013 January 28, 2012 $ Change % Change $ 124,266 $ 117,554 $ 6,712 5.7 % 108,552 103,405 5,147 5.0 % 14,450 10,645 3,805 35.7 % 44,572 38,652 5,920 15.3 % 34,385 34,882 (497 ) (1.4 )% $ 326,225 $ 305,138 21,087 6.9 % The changedebt primarily reflects the following during Fiscal 2014: (1) $95.4 million of cash flows from operating activities, (2) a $3.2 million reduction in current liabilities at February 2, 2013 compared to January 28, 2012 was primarily due to higher amounts outstanding under our U.K. Revolving Credit Agreementcash and higher accrued compensationcash equivalents and (3) $1.0 million of proceeds from the issuance of common stock partially offset by a lower contingent consideration current liability and lower accountspayable and accrued expenses at February 2, 2013. The increase in debt at February 2, 2013 compared to January 28, 2012 was primarily a result of the significant cash flows in fiscal 2012 includingfollowing: (1) $60.7$50.4 million of capital expenditures, incurred in fiscal 2012, (2) $9.9$13.9 million of dividends paid on our common stock and (3) a $6.0 million premium required to redeem our Senior Secured Notes in the second quarter of fiscal 2012 and (4) $5.0$2.5 million of payments related to the Lilly Pulitzer contingent consideration arrangement, which in the aggregate exceeded the $67.5 million of cash flows from operations during fiscal 2012.arrangement. The increasedecrease in non-current contingent consideration fromat January 28, 201231, 2015 was primarily due to the fiscal 2012 adjustment to fair valueresult of $6.4 million recognized in our consolidated statement of earnings, which was partially offset byall the payment of the fiscal 2012 contingent consideration obligation being classified as a current liability as of $2.5 million.January 31, 2015 as the amount is expected to be paid in the first quarter of Fiscal 2015. Other non-current liabilities increased as of February 2, 2013January 31, 2015 compared to the prior year primarily due to increases in deferred rent and deferred compensation liabilities partially offset by a $2.2 million reduction in reserves for uncertain tax positions.liabilities. Non-current deferred income taxes which did not change significantly fromwas comparable as of January 31, 2015 and February 1, 2014, primarily reflecting the prior year in total, decreased from January 28, 2012 to February 2, 2013 primarily as a result of the change in timing differences associated with intangible assets, deferred rent liabilities, deferred tax on foreign earnings and thenet impact of changes in the effective tax rate at which certain timing differences are expected to reverse in the future, which offset the change in timing differencesdeferred taxes associated with depreciation. Fiscal 2012 Fiscal 2011 Fiscal 2010 $ 67,452 $ 44,645 $ 35,691 (62,515 ) (35,708 ) (71,553 ) (10,948 ) (57,216 ) (11,223 ) — 17,479 82,860 $ (6,011 ) $ (30,800 ) $ 35,775 Fiscal 2014 Fiscal 2013 Fiscal 2012 Cash provided by operating activities $ 95,409 $ 52,734 $ 67,098 Cash used in investing activities (50,355 ) (59,130 ) (62,515 ) Cash (used in) provided by financing activities (47,619 ) 6,938 (10,594 ) Net change in cash and cash equivalents $ (2,565 ) $ 542 $ (6,011 ) Fiscal 2012 Compared to Fiscal 2011 $13.4 million at February 2, 2013, and January 28, 2012, respectively. Changes in cash flows in fiscalFiscal 2014, Fiscal 2013 and Fiscal 2012 and fiscal 2011 related to operating activities, investing activities, and financing activities and discontinued operations are discussed below.fiscal 2012,Fiscal 2014 and Fiscal 2013, operating activities generated $67.5provided $95.4 million and $52.7 million of cash, while in fiscal 2011, operating activities generated $44.6 million of cash, with the increase in cash flow from operating activities for fiscal 2012 primarily being due to more favorable changes in working capital accounts and an increase in net earnings, both as compared to the prior year.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 asincluding depreciation, amortization, stockequity-based compensation expense and a change in fair value of contingent consideration as well as the loss on repurchase of senior secured notes and the net impact of changes in our working capital accounts.accounts, as applicable. The higher cash flow from operating activities, despite the comparable earnings, for Fiscal 2014 was primarily due to changes in working capital and Fiscal 2013 including a significant excess tax benefit related to equity-based compensation. In fiscal 2012,Fiscal 2014, the more significant changes in working capital were a decreaseincreases in current liabilities an increase in receivables and an increase in non-current assetsliabilities, each of which decreasedincreased cash and wasflow from operations, partially offset by the impactincreases in inventories and receivables, each of an increase in other non-current liabilities.which reduced cash flow from operations. In fiscal 2011,Fiscal 2013, the more significant changes in working capital were an increase in inventories receivables, prepaid expenses and a decrease in non-current liabilities,receivables, each of which decreasedreduced cash and wereflow from operations, partially offset by an increase in current liabilities and other non-current liabilities.fiscal 2012Fiscal 2014 and fiscal 2011,Fiscal 2013, investing activities used $62.5$50.4 million and $35.7$59.1 million respectively, of cash. During fiscal 2012 and fiscal 2011, $60.7cash, respectively. Of these cash flows used in investing activity amounts, $50.4 million and $35.3$43.4 million in Fiscal 2014 and Fiscal 2013, respectively, of cash was usedwere for the capital expenditures in each period primarily related to costs associated with new retail stores, information technology initiatives and retail store and restaurant remodeling and distribution center enhancements. During fiscal 2012, we also paid $1.8remodeling.The remaining cash used in investing activities in Fiscal 2013 included $17.9 million related to our acquisition of the assets and operations of the Tommy Bahama business in AustraliaCanada from our former licenseelicensee.operated that business.fiscal 2012,Fiscal 2014 and Fiscal 2013, financing activities used $10.9$47.6 million and provided $6.9 million of cash, while in fiscal 2011respectively. In Fiscal 2014, we decreased debt by $32.6 million based on our cash flow from operating activities exceeding our cash needs for investing activities and financing activities used $57.2 million of cash with changes in debt being the most significant changes in financing activities during each period.activities. In fiscal 2012,Fiscal 2013, we increased debt by $10.5$25.0 million based on cash needs for investing and financing activities exceeding our cash flow from operations, while replacing our borrowings under our Senior Secured Notessenior notes with borrowings under our U.S. Revolving Credit Agreement. During fiscal 2012,$5.0$2.5 million for the payment of the fiscal 2011 and fiscal 2012Fiscal 2013 contingent consideration paymentspayment 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. used $9.9 million and $8.6 million of cash to pay dividends during fiscal 2012 and fiscal 2011, respectively.Discontinued Operations: The cash flows provided by discontinued operations reflectanticipate that cash flow provided by or used in financing activities in the activities offuture will be dependent upon whether our discontinued operations, which include the operations related to substantially all of our former Oxford Apparel operating group. There were no cash flows from discontinued operations in fiscal 2012, while the cash flow from discontinued operationsoperating activities exceeds our capital expenditures, the remaining contingent consideration payment in fiscal 2011 primarily reflectsFiscal 2015 and dividend payments. Generally, we anticipate that excess cash, if any, is used to repay debt on our revolving credit agreements. Given the conversionsignificance of assets related tocapital expenditures and contingent consideration payment amounts in Fiscal 2015 as well as dividend payments, the discontinued operations into cash, net of the useamount of cash available to pay liabilities, including income taxes, associated with the sold business during fiscal 2011.20112013 Compared to Fiscal 2010 Cash2012cash equivalents on hand was $13.4Fiscal 2012, operating activities provided $52.7 million and $44.1$67.1 million at January 28, 2012 and January 29, 2011,of cash, respectively. Changes inThe cash flows in fiscal 2011 and fiscal 2010 related toflow from operating activities investing activities, financing activities and discontinued operations are discussed below.Operating Activities: The operating cash flows for fiscal 2011 and fiscal 2010 of $44.6 million and $35.7 million, respectively, werewas 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, and loss on repurchase of senior secured notes as well asand the net impact of changes in our working capital accounts.accounts, as applicable. The increase inlower cash flow from operations betweenoperating activities, despite the two periodshigher earnings, for Fiscal 2013 was primarily due to the higherFiscal 2012 earnings in fiscal 2011, despite the $9.0including a $9.1 million loss on repurchase of $45.0 million aggregate principal amount of our Senior Secured Notes. In fiscal 2011, the more significantsenior notes and Fiscal 2013 having less favorable changes in working capital were increasesaccounts, as compared to the same period 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.the prior year. In fiscal 2010,Fiscal 2013, the more significant changes in working capital were increases in inventories and accounts payable as we increased our inventoryreceivables, each of which reduced cash flow from operations, which was partially offset by an increase in anticipationcurrent 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 higher sales for spring 2011.fiscal 2011Fiscal 2013 and fiscal 2010,Fiscal 2012, investing activities used $35.7$59.1 million and $71.6 million, respectively, of cash. In fiscal 2010, we used $58.3$62.5 million of cash, respectively. The cash used in investing activities in Fiscal 2013 included $17.9 million related to acquireour acquisition of the Lilly Pulitzer brandTommy Bahama business in Canada from our former licensee, while Fiscal 2012 included $1.8 million related to our acquisition of the Tommy Bahama business in Australia from our former licensee. The remaining $43.4 million and operations. Capital$60.7 million of cash flow used in investing activities in Fiscal 2013 and Fiscal 2012, respectively, were for the capital expenditures of $35.3 million in fiscal 2011each period primarily related to costs associated with new retail stores, information technology initiatives distribution center enhancements and retail store and restaurant remodeling, while the $13.3 million in fiscal 2010 primarily related to costs associated with new retail storesremodeling.information technology initiatives.Financing Activities: During fiscal 2011 and fiscal 2010,Fiscal 2012, financing activities used $57.2provided $6.9 million and $11.2 million, respectively, of cash. In fiscal 2011, we paid $52.2 million, plus accrued interest, for the repurchase of $45.0 million aggregate principal amount of our Senior Secured Notes and paid $8.6used $10.6 million of dividends.cash, respectively. In fiscal 2010,Fiscal 2013, we usedincreased debt by $25.0 million based on our cash generated from operatingneeds for investing activities to pay $7.3 million of dividends and repay $4.1 million of company owned life insurance policy loans, while also accumulating cash on hand at January 29, 2011.Discontinued Operations: The cash flows provided by discontinued operations reflect cash flow provided by or used in thefinancing activities ofexceeding our discontinued operations, which include the operations related to substantially all of our former Oxford Apparel operating group. The cash flow from discontinuedoperating activities. In Fiscal 2012, we increased debt by $10.5 million based on cash need for investing and financing activities exceeding our cash flow from operations, while replacing our borrowings under our senior notes with borrowings under our U.S. Revolving Credit Agreement.fiscalFiscal 2013 primarily resulted from the vesting of restricted stock awards that were returned by employees to satisfy employee income tax obligations, while the proceeds from issuance of common stock primarily resulted from the excess tax benefit associated with the vesting of the restricted stock awards. In Fiscal 2012, we paid $5.0 million for the payment of the Fiscal 2012 and Fiscal 2011 primarily reflects the conversion of assetscontingent consideration payments related to the discontinued operations into cash, netLilly Pulitzer acquisition. We paid dividends of the use of cash to pay liabilities, including income taxes, associated with the sold business$11.9 million and $9.9 million 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 fiscal 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.provides a description of our significant financing arrangements andsets forth the amounts outstanding under theseour financing arrangements (in thousands) as of February 2, 2013:January 31, 2015:$235 million U.S. Secured Revolving Credit Facility ("U.S. Revolving Credit Agreement")$108,552£7 million Senior Secured Revolving Credit Facility ("U.K. Revolving Credit Agreement")7,944Total debt116,496Short-term debt(7,944)Long-term debt$108,552$235 million U.S. Secured Revolving Credit Facility ("U.S. Revolving Credit Agreement") $ 104,842 £7 million Senior Secured Revolving Credit Facility ("U.K. Revolving Credit Agreement") 4,126 Total debt 108,968 Short-term debt (4,126 ) Long-term debt $ 104,842 The U.S. Revolving Credit Agreement, entered into in June 2012, amended and restated our prior revolving credit agreement, which was scheduled to mature in August 2013. (June 2017)(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), depositmargin;margin (4.0% as of January 31, 2015); (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.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 February 2, 2013, $7.2January 31, 2015, $8.5 million of trade letters of credit and other limitations on availability in the aggregate were outstanding against our credit facilities. After considering these limitations and the amount of eligible assets in our borrowing base, as applicable, as of February 2, 2013,January 31, 2015, we had $105.1$125.8 million and $0.6$2.3 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.$23.5$23.5 million or (ii) 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.$23.5$23.5 million or (ii) 10% of the total revolving commitments for 30 consecutive days.fiscal 2012Fiscal 2014 and as of February 2, 2013,January 31, 2015, 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 February 2, 2013,January 31, 2015, we were compliant with all covenants related to our credit facilities.Redemption and Repurchase of Senior Notes: During the second quarter and third quarters of fiscal 2011, we repurchased, in privately negotiated transactions, $45.0 million in aggregate principal amount of our Senior Secured Notes for $52.2 million, plus accrued interest, using cash on hand. The repurchase of the Senior Secured Notes and related write-off of $1.8 million of unamortized deferred financing costs and discount resulted in a loss on repurchase of senior notes of $9.0 million in fiscal 2011. In the second quarter of 2012, weredeemed all of the remaining outstanding $105 million in aggregate principal amount of the Senior Secured Notes, which were scheduled to mature in July 2015. The redemption of the Senior Secured Notes at a premium of $6.0 million and the write-off of $3.1 million of unamortized deferred financing costs and unamortized bond discount resulted in a loss on repurchase of senior notes of $9.1 million. The redemption of the Senior Secured Notes was funded through borrowings under our U.S. Revolving Credit Agreement and cash on hand and satisfied and discharged all of our obligations with respect to the Senior Secured Notes. 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. We anticipate that at the maturity of any of our financing arrangements or as 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 or current market terms.Contractual Obligations The following table summarizes our contractual cash obligations, as of February 2, 2013, by future period (in thousands): Payments Due by Period Less Than 1 year 1-3 Years 3-5 Years More Than 5 Years Total $ — $ — $ — $ — $ — 54,786 98,611 69,401 133,907 356,705 5,082 8,201 — — 13,283 7,208 — — — 7,208 — 15,000 — — 15,000 — — — — — $ 67,076 $ 121,812 $ 69,401 $ 133,907 $ 392,196 (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 2, 2013, $108.6 million was outstanding under our U.S. Revolving Credit Agreement, which matures in June 2017, and $7.9 million was outstanding under our U.K. Revolving Credit Agreement, which is payable on demand.(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 generally not quantified in the lease agreements and are dependent on factors which are not known at this time. Such amounts incurred in fiscal 2012 totaled $16.1 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 2, 2013. Amounts are payable if certain performance criteria related to the acquired business are met during fiscal 2013 and fiscal 2014. As of February 2, 2013, our consolidated balance sheet reflects a liability of $14.5 million associated with this arrangement, which is included in non-current contingent consideration and reflects the fair value of the anticipated payments as of that date.(4)Amounts totaling $11.0 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 February 2, 2013, have been excluded from the table above, due to the uncertainty of the timing of the payment of these obligations, which are generally at the discretion of the individual employees or upon the death of the individual, respectively.(5)An environmental reserve liability of $1.8 million, which is included in other non-current liabilities in our consolidated balance sheet as of February 2, 2013 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 February 2, 2013 and the timing of payment is uncertain.(6)Non-current deferred tax liabilities of $34.4 million included in our consolidated balance sheet as of February 2, 2013 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. Our anticipated capital expenditures for fiscal 2013, which are excluded from the table above as we are not contractually obligated to pay these amounts as of February 2, 2013, are expected to be approximately $45 million. These expenditures are expected to consist primarily of costs associated with opening new retail stores, retail store and restaurant remodeling and information technology initiatives, including e-commerce enhancements.Dividend Declaration On March 27, 2013, our Board of Directors approved a cash dividend of $0.18 per share payable on May 3, 2013 to shareholders of record as of the close of business on April 19, 2013. Although weWe have paid dividends in each quarter since we became a public company in July 1960, however, we may discontinue or modify dividend payments at any time if we determine that other uses of our capital, including 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, 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 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 the discussion of our credit facilities above and Note 5 of our consolidated financial statements contained in this reportreport. 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) 65,802 121,854 102,465 222,143 512,264 Minimum royalty and advertising payments pursuant to royalty agreements 5,589 10,863 — — 16,452 Letters of credit 8,546 — — — 8,546 Contingent purchase price consideration (3) 12,500 — — — 12,500 Other (4)(5)(6) — — — — — Total $ 92,437 $ 132,717 $ 102,465 $ 222,143 $ 549,762 (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 January 31, 2015, $104.8 million was outstanding under our U.S. Revolving Credit Agreement, which matures in November 2018, and $4.1 million was outstanding under our U.K. Revolving Credit Agreement, which is payable on demand. During Fiscal 2014, interest paid on these revolving credit arrangements was $3.3 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 (3) Amounts included in the table reflect the remaining amount payable pursuant to a contingent consideration arrangement associated with the Lilly Pulitzer acquisition, which we anticipate paying in the First Quarter of Fiscal 2015. (4) (5) An environmental reserve liability of $1.3 million, which is included in other non-current liabilities in our consolidated balance sheet as of January 31, 2015 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 31, 2015 and the timing of payment, if any, is uncertain. (6) Non-current deferred tax liabilities of $33.2 million included in our consolidated balance sheet as of January 31, 2015 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. discussiontable above as we are generally not contractually obligated to pay these amounts as of January 31, 2015, are expected to be approximately $70 million. These expenditures are expected to consist primarily of costs associated with opening and relocating retail stores and restaurants, facility relocations and enhancements, remodeling retail stores and restaurants and information technology initiatives, including e-commerce capabilities. We anticipate that approximately $13 million of our credit facilities above.capital expenditures in Fiscal 2015 will be funded by landlords through tenant improvement allowance reimbursements.GAAP.GAAP in a consistent manner. The preparation of these financial statements requires the selection and application of accounting policies. Further, the application of GAAP requires us to make estimates and judgments about future events that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosures. On an ongoing basis, we evaluate our estimates, including those related to receivables, inventories, goodwill, intangible assets, income taxes, contingencies and other accrued expenses.discussed below. We base our estimates on historical experience, current trends and on various other assumptions that we believe 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.earningsoperations could be misstated.accounting policies, estimates, assumptions and methodsjudgments we use. Retail store, e-commerce, restaurantconcessionnet earnings involves estimating sales reserves, which represent a portion of revenues are recognized at the time of salenot expected to consumers, which is considered the time of shipment for e-commerce sales, as we believe the criteria for revenue recognition are met at the time of sale. Retail store, e-commerce, restaurant and concessionbe realized. In our direct to consumer operations, revenues are recorded net of estimated returns and discounts, as appropriate, while our wholesale revenue is reduced by estimates for discounts, allowances, advertising support, operational chargebacks and net of applicable sales taxes inprovisions for estimated returns. The significant assumptions related to our consolidated statements of earnings. direct to consumer and wholesale revenues are discussed below.February 2, 2013,January 31, 2015, our direct to consumer return reserve was $2.4$2.3 million. A 10% change in the direct to consumer return reserve as of February 2, 2013January 31, 2015 would have had a $0.2 million pre-tax impact on earnings from continuing operations in fiscal 2012. For sales within our wholesale operations, we consider a submitted purchase order or some form of electronic communication from the 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. In certain cases in which we retain 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. Actual discounts and allowances to our wholesale customers have not differed materially from our estimates in prior periods. As of February 2, 2013,January 31, 2015, our total reserves for discounts, returns and allowances for our wholesale businesses were $11.1$9.3 million and, therefore, if the allowances changed by 10% it would have had a pre-tax impact of $1.1$1.0 million on earnings from continuing operations in fiscal 2012. InFiscal 2014. The substantial majority of these reserves relate to our Lanier Clothes business as of January 31, 2015.February 2, 2013,January 31, 2015, our allowance for doubtful accounts was $1.0$0.8 million, and therefore, if the allowance for doubtful accounts changed by 10% it would have had a pre-tax impact of $0.1 million on earnings in Fiscal 2014. While the amounts deemed uncollectible have not been significant in recent years if, in the future, amounts due from continuingsignificant customer(s) were deemed to be uncollectible as a result of events that occur subsequent to January 31, 2015 this could result in a material charge to our consolidated statements of operations in fiscal 2012.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.$92.5$122.2 million, or 82%, of our inventories are valued at the lower of last-in, first-out (LIFO) method cost or market after deducting the $56.4$58.6 million LIFO reserve as of February 2, 2013.January 31, 2015. The remaining $17.1 $26.0February 2, 2013. AsJanuary 31, 2015. Generally, inventories of February 2, 2013 and January 28, 2012, 84% and 86%, respectively, 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 toof our international operations are valued at the lower of FIFO cost or market. LIFO reserves are based on the Producer Price Index (PPI) 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 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 ourthe respective operating groups asgroups. Thus, the impact of accounting for inventories on the LIFO inventory pools do not correspond to our operating group definitions. Formethod is reflected in Corporate and Other for operating group reporting purposes included in this report, the impact of LIFO accounting is included in Corporate and Other.purposes.February 2, 2013,January 31, 2015, we had recorded a reserve of $1.2$1.7 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 such markdowns for inventory valued on the lower of FIFO cost or market method and markdowns in excess of the LIFO reserve as of February 2, 2013 would have a pre-tax impact of $0.1$0.2 million on earnings from continuing operations in fiscal 2012.Fiscal 2014. 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 $56.4$58.6 million, or 34% 29%February 2, 2013,January 31, 2015, as well as the high gross margins historically achieved for the sale of our lifestyle branded products. A change in inventory levels, or the mix by inventory category, at the end of future fiscal years compared to inventory balances as of February 2, 2013January 31, 2015 could result in a material impact on our consolidated financial statements as 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 IndexPPI as published by the United States Department of Labor as compared to the indexes as of February 2, 2013January 31, 2015 could result in a material impact on our consolidated financial statements as inflation or deflation would change the amount of our LIFO reserve.Producer Price indexes,PPI, we typically do not adjust our LIFO reserve in the first three quarters of a fiscal year. This policy may result in significant LIFO accounting adjustments in the fourth quarter of the fiscal year resulting from the year over year changes in inventory levels, the Producer Price IndexPPI and markdown reserves. We do recognize on a quarterly basis during each of the first three quarters of the fiscal year changes in markdown reserves as those amounts can be estimated on a quarterly basis.December 2010 acquisition of the Lilly Pulitzer brand and operations,acquisitions, we recognizedrecognize a write-up or write-down of inventories of $1.8 million above the cost of acquired inventories to fair value, which we includedinclude in our allocation of purchase price. Based on the inventory turn of the acquired inventories, $0.8 million of the write-up wasamounts are recognized as additional cost of goods sold in fiscal 2010, and the remaining $1.0 million ofperiods subsequent to the write-up, which was recognized as cost of goods sold during fiscal 2011acquisition as the acquired inventory wasis 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 earningsoperations 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 madethe use of different assumptions thecould have a material impact on our consolidated financial statements could be significant.February 2, 2013January 31, 2015 totaled $164.3$167.8 million, which includes $3.8$8.3 million of customer relationships and other intangible assets with finite lives, including reacquired license rights and $160.5customer relationships, and $159.5 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 valuations, which are dependent upon a number of uncertain factors, may include a discounted cash flow analysis 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 acquired intangible 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 $1.0$2.5 million during fiscal 2012Fiscal 2014 and is anticipated to be approximately $0.9$2.1 million in fiscal 2013.fiscalFiscal 2014, Fiscal 2013 and Fiscal 2012, fiscal 2011 and fiscal 2010, 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 $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.Table Substantially all of Contentsfiscal 2012, fiscal 2011Fiscal 2014, Fiscal 2013 or fiscal 2010.Fiscal 2012. Additionally, we do not believe that a 10% change in any of the significant assumptions utilized in testing our goodwill for impairment would have resulted in an impairment charge during any of those periods.carryforwards,carry-forwards, each as determined under enacted tax laws and rates expected to apply in the period in which such amounts are expected to be realizedareis 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. There are certain exceptions to the requirement that deferred tax liabilities be recognized for the difference in the financialtax basesmeasurement of assets in the case of foreign subsidiaries. The excess of financial statement over tax basis of an investment in a foreign subsidiary in excess of undistributed earnings is not recognized if management considers the investment to be essentially permanent in duration. We consider our investments in our foreign subsidiaries to be permanently 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. We consider the undistributed earnings of our foreign subsidiaries to be permanently reinvested outside the U.S. as of February 2, 2013 and therefore have not recorded a deferred tax liability on these earnings. 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. We utilize a two-step approach for evaluating uncertain tax positions. Under the two-step method, recognition occurspositions occur when we conclude that a tax position, based solely on technical merits, is more-likely-than-not (greater than 50% likelihood) to be sustained upon examination. Measurement is only addressed if step one has been satisfied. The tax benefit recorded is measured as the largest amount of benefit determined on a cumulative probability basis that is more-likely-than-not to be realized upon ultimate settlement. Those tax positions failing to qualify for initial recognition are recognized in the first subsequent interim period they meet the more-likely-than-not standard, or are resolved through negotiation or litigation with the taxing authority or upon expiration of the statute of limitations. Derecognition of a tax position that was previously recognized occurs when we subsequently determine that a tax position no longer meets the more-likely-than-not threshold of being sustained. Interest and penalties associated with unrecognized tax positions are recorded within income tax expense in our consolidated statements of earnings.realizability ofability to realize uncertain tax positions, the appropriateness of valuation allowances, a reduction in valuation allowances or other considerations, transfer pricing practices, the impact of our tax planning strategies 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 including changes in tax laws or interpretations, court case decisions, statute of limitation expirations or audit settlements could have a significant impact on our income tax rate. An increase in our consolidated income tax rate from 38.5%42.9% to 39.5%43.9% during fiscal 2012Fiscal 2014 would have reduced net earnings from continuing operations by $0.5$0.8 million.which are updated and refined throughoutas of the year.balance sheet date, subject to certain limitations associated with separate foreign jurisdiction losses in interim periods. The tax rate ultimately realized for the year may increase or decrease due to actual operating results or book to tax differences varying from the amounts on which our expectations from earlier in the year.interim calculations were based. Any changes in assumptions related to the need for a valuation allowance, the realizability ofability to realize an uncertain tax position, changes in enacted tax rates, the expected operating results in total or by jurisdiction for the year, the jurisdictions generating operating income or loss, or other assumptions are accounted for in the period in which the change occurs so that the year to date tax provision reflects the expected annual rate.occurs. As certain of our foreign operations are in a loss position and realization of a future benefit for the losses may not be deductible,is uncertain, a significant variance in losses in such jurisdictions from our expectations can have a very significant impact on our expected annual tax rate. Furthermore, theThe 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 full year.maywould 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. The terms of the contingent consideration arrangement are discussed in further detail in Note 61 and Note 10 to our consolidated financial statements included in this report. As of the date of acquisition we determined that the fair value of the contingent consideration was $10.5 million, which reflected the discounted fair value of the expected payments. Such valuation requiresrequired 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 willwould be achieved, we anticipated paying all of the contingent consideration. Thus, the fair value of the contingent consideration at acquisition reflected the $20 million of anticipated payments discounted to fair value using a discount rate which reflected the uncertainty regarding whether the earnings target may notwould be met given the growth required to achieve the contingent consideration payments as well as other factors.As of January 28, 2012, we still anticipated thatGenerally, the performance criteria would be met based on the operating results of the Lilly Pulitzer business exceeding the performance criteria in fiscal 2011, and we reevaluated the discount rate at that time. As of February 2, 2013, we still anticipate that the performance criteria will be met based on the operating results of the Lilly Pulitzer business exceeding the performance criteria through fiscal 2012. Further, as of February 2, 2013, we determined that the use of a lower discount rate than used in prior periods would be appropriate. This lower discount rate reflects our assessment that we believe 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 fiscal 2012 in excess of the targets for those periods which carries over as a reduction to the targets in future years, (2) consideration that 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 exceed 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. Based on this assessment we determined that as of February 2, 2013, the fair value of the contingent consideration was $14.5 million, which reflects the expected remaining payment of $15.0 million discounted to fair value, after payment of $5.0 million in fiscal 2012. An increase in the discount rate of 100 basis points as of February 2, 2013 would decrease the fair value of the contingent consideration obligation included in our consolidated balance sheet and the change in fair value of contingent consideration charge to our statement of earnings for fiscal 2012 by $0.3 million, while a change in projected earnings for fiscal 2013 and fiscal 2014 of 10% would not impact the fair value of the contingent consideration as the earnings targets for those years would still be expected to be exceeded. 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 anyearned during the prior year.earned. During fiscalFiscal 2014, Fiscal 2013 and Fiscal 2012, and fiscal 2011, we recognized change in fair value of contingent consideration of $6.3$0.3 million, $0.3 million, and $2.4$6.3 million, respectively, in our consolidated statements of earnings.operations. The amounts recognized in fiscalFiscal 2012 reflect the passage of time as well theas a significant change in the discount rate at February 2, 2013 as discussed above,below, while fiscal 2011each of the other years primarily reflected the passage of time using a discount rate deemed appropriate at that time, with no significant changes in our other assumptions used in determining fair value during fiscal 2011. We estimatethe year.relatedrecognized in our historical consolidated financial statements. As of January 31, 2015, based on the historical operating results of Lilly Pulitzer, we have determined that the $20 million amount was earned in full, with the remaining $12.5 million of the obligation to be paid in the passageFirst Quarter of timeFiscal 2015. As the performance period has ended and the amounts were earned in fiscal 2013 and fiscal 2014 will be approximately $0.3 million in each year; howeverfull there is little judgment associated with determining the total change in fair value of contingent consideration expense recognized in future periods could be significantly different if we change certainthis liability as of our assumptions related to the contingent consideration during those periods or if the expected earnings of Lilly Pulitzer are significantly lower than earnings levels achieved in fiscal 2012. The FASB has issued certain changes accounting pronouncements which may impact our financial statements in future periods upon adoption. For details on these accounting pronouncements, see Note 1 ofin our consolidated financial statements included in this report.areis 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,Item 1, Business, included in this report.intendmay attempt to limit the impact of interest rate changes on earnings and cash flow, primarily through a mix of fixed-ratevariable-rate and variable-ratefixed-rate debt, although at times weall of our debt may not have anybe either variable-rate or fixed-rate debt. Additionally,Further at times, we may enter into interest rate swap arrangements related to certain of our variable-rate borrowingsdebt in order to fix the interest rate on variable-rate borrowingsthat debt if we determine that our exposure to interest During the second quarterfiscal 2012, we redeemed our Senior Secured Notes which remained outstanding at that time. This redemption was funded through borrowings under our U.S. Revolving Credit Agreement and cash on hand, resulting inJanuary 31, 2015, all of our borrowings being variable rate borrowings subsequent to this redemption. In order to mitigate our exposure to changes in interest rates in future periods, we entered into an interest rate swap agreement under which we fixed the interest 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 levels 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. As of February 2, 2013, we had $116.5$109.0 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. Considering the changes in borrowing arrangements in fiscal 2012, we do not believe that borrowings and interest rates, and therefore interest expense for fiscal 2012 are indicative of borrowings and interest expense in future periods.was $3.5 million. Based on our current borrowings and expected borrowings under our revolving credit agreements and expected borrowings in fiscal 2013,for Fiscal 2015, we anticipate that interest expense will be approximately $4.5 million during fiscal 2013comparable to interest expense in Fiscal 2014 assuming no significant changes in interest rates. We estimate thatrates in Fiscal 2015. Based the average amount of variable-rate debt outstanding in Fiscal 2014, a 100 basis point changeincrease in interest rates would not have increased interest rates by a material impact on our consolidated financial statements.amount in Fiscal 2014. To the extent that the amounts outstanding under our variable-rate lines of credit changeincrease or decrease, our exposure to changes in interest rates would also change to the extent we have not entered into an interest rate swap for those amounts.We receive United States dollars for most of our product sales. Less thanApproximately 10% of our net sales in fiscal 2012Fiscal 2014 were denominated in currencies other than the United States dollar. Thesedollar, with almost half of the foreign currency denominated net sales primarily relate tobeing net sales in our Ben Sherman salesoperations in the United Kingdom and continental Europe. A strengthening United States dollar could result in lower levelsAs of sales and earnings inJanuary 31, 2015, our consolidated statementsforeign currency exchange risk exposure primarily results from transactions of earnings in future periods, although the sales in foreign currencies could be equal to or greater than amounts as previously reported. Based on our net sales during fiscal 2012 denominated in foreign currencies, ifbusinesses operating outside of the United States, dollar had been 10% stronger againstwhich 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 United States dollars or other currencies which are not the British pound we would have experienced a decreasefunctional currency of the business; (2) our businesses operating outside of the United States selling goods in consolidated net sales of $5.7 million, but we believecurrencies other than the impact on operating income would not have been material.pound)pound, Canadian dollar, Australian dollar or Japanese Yen) changes, the gross margins of those businesses could be impacted significantly.purchaseenter into short-term foreign currency forward exchange contracts in the ordinary course of business to hedge against changes in foreign currency exchange rates and the amounts outstanding at any time during the year maywill vary. As of February 2, 2013,January 31, 2015, we were a party to $33.4$13.7 million of such contracts that were unsettled, which had an unrealized fair value resulting in a liabilityan asset of $0.6$0.7 million. As of January 31, 2015, all of these contracts related to our Ben Sherman operations in the United Kingdom and continental Europe. These contracts primarily consist of $17$10 million of agreements to purchase U.S.United States dollars with British pound sterling and $16$3.4 million of agreements to sell Euro for British pound sterling. 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 earningsoperations if the transaction does or does not, respectively, qualify as a hedge in accordance with GAAP.Bahama intoBahama's international markets in the future,market presence, our exposure to foreign currency changes in Tommy Bahama will increase.increase, and it may be appropriate to enter into hedging arrangements for these operations. We also anticipate that in the future we willmay have exposure to foreign currency changes for currencies thatto which 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.exposure. The extent of our exposure will be dependent upon the timing of when and to what magnitude we expand intoin international markets. Therefore,At this time, we do not believe it is possible to provide a meaningful estimate ofanticipate that the potential impact of foreign currency changes on Tommy Bahama's international operations would have a material impact on Tommy Bahama's operating income or our future exposureconsolidated net earnings in Fiscal 2015 given the proportion of Tommy Bahama's operations in international markets.currenciescurrency risks related to specific transactions listed above, we also have foreign currency exposure risk associated with translating the financial statements of our Tommy Bahama internationalforeign operations at this time.primarily through the purchase of raw materials andfull-package finished goods from contract manufacturers, who manufacture products consisting of various raw material components, and increased operating costs to the extent that any such fluctuations are not reflected by adjustmentscosts. To manage risks of commodity price changes we negotiate our full-package product prices in theadvance and increase selling prices of our products.products when possible. Inflation/deflation risks are managed by each operating group through, when possible, negotiating product prices in advance, selective price increases, when possible, productivity improvements and cost containment initiatives. We dohave not enterhistorically entered into significant long-term sales or purchase contracts and we do not engageor engaged in hedging activities with respect to suchour commodity risk. Based on purchases and negotiations for inventory purchases thus far in fiscal 2013, it appears that certain product costing pressures, including transportation and labor, will not decline much, if at all, and that such costs as well as other product costs likely could increase in the future, which could negatively impact our operating results in the future. January 31, 2015 February 1, 2014 ASSETS Current Assets: Cash and cash equivalents $ 5,281 $ 8,483 Receivables, net 79,104 75,277 Inventories, net 148,215 143,712 Prepaid expenses, net 24,219 23,095 Deferred tax assets 24,503 20,465 Total current assets 281,322 271,032 Property and equipment, net 155,076 141,519 Intangible assets, net 167,770 173,023 Goodwill 17,295 17,399 Other non-current assets, net 23,604 24,332 Total Assets $ 645,067 $ 627,305 LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Accounts payable $ 80,856 $ 75,527 Accrued compensation 27,519 18,412 Income tax payable 3,635 6,584 Other accrued expenses and liabilities 29,659 26,030 Contingent consideration 12,500 2,500 Short-term debt 4,126 3,993 Total current liabilities 158,295 133,046 Long-term debt 104,842 137,592 Non-current contingent consideration — 12,225 Other non-current liabilities 58,113 51,520 Non-current deferred income taxes 33,212 32,759 Commitments and contingencies Shareholders' Equity: Common stock, $1.00 par value per share 16,478 16,416 Additional paid-in capital 119,052 114,021 Retained earnings 185,229 153,344 Accumulated other comprehensive loss (30,154 ) (23,618 ) Total shareholders' equity 290,605 260,163 Total Liabilities and Shareholders' Equity $ 645,067 $ 627,305 Fiscal
2014Fiscal
2013Fiscal
2012Net sales $ 997,806 $ 917,097 $ 855,542 Cost of goods sold 443,127 403,523 385,985 Gross profit 554,679 513,574 469,557 SG&A 488,924 447,645 410,737 Change in fair value of contingent consideration 275 275 6,285 Royalties and other operating income 18,123 19,016 16,436 Operating income 83,603 84,670 68,971 Interest expense, net 3,483 4,169 8,939 Loss on repurchase of senior notes — — 9,143 Earnings before income taxes 80,120 80,501 50,889 Income taxes 34,362 35,210 19,572 Net earnings $ 45,758 $ 45,291 $ 31,317 Net earnings per share: Basic $ 2.79 $ 2.75 $ 1.89 Diluted $ 2.78 $ 2.75 $ 1.89 Weighted average shares outstanding: Basic 16,429 16,450 16,563 Dilution 42 32 23 Diluted 16,471 16,482 16,586 Dividends declared per share $ 0.84 $ 0.72 $ 0.60 Fiscal
2014Fiscal
2013Fiscal
2012Net earnings $ 45,758 $ 45,291 $ 31,317 Other comprehensive income (loss), net of taxes Foreign currency translation (loss) gain (7,617 ) 703 171 Net unrealized gain (loss) on cash flow hedges 1,081 264 (1,082 ) Total other comprehensive (loss) income, net of taxes (6,536 ) 967 (911 ) Comprehensive income $ 39,222 $ 46,258 $ 30,406 Total 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 Net earnings and other comprehensive loss — — 45,758 (6,536 ) 39,222 Shares issued under stock plans, including excess tax benefits of $0.1 million 62 928 — — 990 Compensation expense for stock awards — 4,103 — — 4,103 Cash dividends declared and paid — — (13,873 ) — (13,873 ) January 31, 2015 $ 16,478 $ 119,052 $ 185,229 $ (30,154 ) $ 290,605 Fiscal 2014 Fiscal 2013 Fiscal 2012 Cash Flows From Operating Activities: Net earnings $ 45,758 $ 45,291 $ 31,317 Adjustments to reconcile net earnings to cash provided by operating activities: Depreciation 35,165 31,677 25,310 Amortization of intangible assets 2,481 2,225 1,025 Change in fair value of contingent consideration 275 275 6,285 Amortization of deferred financing costs and bond discount 385 443 962 Loss on repurchase of senior notes — — 9,143 Gain on sale of property and equipment — (1,611 ) — Stock compensation expense 4,103 1,659 2,756 Deferred income taxes (3,217 ) 674 (3,753 ) Excess tax benefits related to stock-based compensation — (6,086 ) (354 ) Changes in working capital, net of acquisitions and dispositions: Receivables (5,672 ) (11,917 ) (3,026 ) Inventories (7,101 ) (29,488 ) (5,408 ) Prepaid expenses (1,646 ) (3,068 ) (1,640 ) Current liabilities 18,314 16,821 2,429 Other non-current assets 37 (1,031 ) (3,886 ) Other non-current liabilities 6,527 6,870 5,938 Cash provided by operating activities 95,409 52,734 67,098 Cash Flows From Investing Activities: Acquisitions, net of cash acquired — (17,888 ) (1,813 ) Purchases of property and equipment (50,355 ) (43,372 ) (60,702 ) Proceeds from sale of property and equipment — 2,130 — Cash used in investing activities (50,355 ) (59,130 ) (62,515 ) Cash Flows From Financing Activities: Repayment of revolving credit arrangements (352,784 ) (329,695 ) (193,328 ) Proceeds from revolving credit arrangements 320,548 354,649 307,270 Repurchase of senior notes — — (111,000 ) Deferred financing costs paid — (401 ) (1,524 ) Payment of contingent consideration amounts earned (2,500 ) — (4,980 ) Proceeds from issuance of common stock, including excess tax benefits 990 7,499 2,892 Repurchase of stock awards for employee tax withholding liabilities — (13,199 ) — Cash dividends declared and paid (13,873 ) (11,915 ) (9,924 ) Cash (used in) provided by financing activities (47,619 ) 6,938 (10,594 ) Net change in cash and cash equivalents (2,565 ) 542 (6,011 ) Effect of foreign currency translation on cash and cash equivalents (637 ) 424 155 Cash and cash equivalents at the beginning of year 8,483 7,517 13,373 Cash and cash equivalents at the end of year $ 5,281 $ 8,483 $ 7,517 Supplemental disclosure of cash flow information: Cash paid for interest, net $ 3,297 $ 3,826 $ 8,348 Cash paid for income taxes $ 41,806 $ 18,158 $ 25,442 CONSOLIDATED BALANCE SHEETS(in thousands, except par amounts) February 2,
2013 January 28,
2012 $ 7,517 $ 13,373 62,805 59,706 109,605 103,420 19,511 17,838 22,952 19,733 222,390 214,070 128,882 93,206 164,317 165,193 17,275 16,495 23,206 20,243 $ 556,070 $ 509,207 $ 90,850 $ 89,149 25,472 23,334 — 2,500 7,944 2,571 124,266 117,554 108,552 103,405 14,450 10,645 44,572 38,652 34,385 34,882 16,595 16,522 104,891 99,670 132,944 111,551 (24,585 ) (23,674 ) 229,845 204,069 $ 556,070 $ 509,207 See accompanying notes.OXFORD INDUSTRIES, INC.CONSOLIDATED STATEMENTS OF EARNINGS(in thousands, except per share amounts) Fiscal 2012 Fiscal 2011 Fiscal 2010 $ 855,542 $ 758,913 $ 603,947 385,985 345,944 276,540 469,557 412,969 327,407 410,737 358,582 301,975 6,285 2,400 200 16,436 16,820 15,430 68,971 68,807 40,662 8,939 16,266 19,887 9,143 9,017 — 50,889 43,524 20,775 19,572 14,281 4,540 31,317 29,243 16,235 — 137 62,423 $ 31,317 $ 29,380 $ 78,658 $ 1.89 $ 1.77 $ 0.98 $ 1.89 $ 1.77 $ 0.98 $ 0.00 $ 0.01 $ 3.77 $ 0.00 $ 0.01 $ 3.77 $ 1.89 $ 1.78 $ 4.76 $ 1.89 $ 1.78 $ 4.75 16,563 16,510 16,537 23 19 14 16,586 16,529 16,551 $ 0.60 $ 0.52 $ 0.44 See accompanying notes.OXFORD INDUSTRIES, INC.CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME(in thousands) Fiscal 2012 Fiscal 2011 Fiscal 2010 $ 31,317 $ 29,380 $ 78,658 171 (381 ) (536 ) (1,082 ) 526 (43 ) (911 ) 145 (579 ) $ 30,406 $ 29,525 $ 78,079 See accompanying notes.OXFORD INDUSTRIES, INC.CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY(in thousands) Common
Stock Additional
Paid-In
Capital Retained
Earnings Accumulated
Other
Comprehensive
Income (Loss) Total $ 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 — 2,180 — — 2,180 (74 ) (1,753 ) — — (1,827 ) — — (8,568 ) — (8,568 ) 16,522 99,670 111,551 (23,674 ) 204,069 — — 31,317 (911 ) 30,406 73 2,465 — — 2,538 — 2,756 — — 2,756 — — (9,924 ) — (9,924 ) $ 16,595 $ 104,891 $ 132,944 $ (24,585 ) $ 229,845 See accompanying notes.OXFORD INDUSTRIES, INC.CONSOLIDATED STATEMENTS OF CASH FLOWS(in thousands) Fiscal 2012 Fiscal 2011 Fiscal 2010 $ 31,317 $ 29,243 $ 16,235 25,310 25,959 18,216 1,025 1,195 973 6,285 2,400 200 962 1,662 1,952 9,143 9,017 — 2,756 2,180 4,549 (3,753 ) 5,375 (4,620 ) (3,026 ) (9,740 ) 162 (5,408 ) (18,332 ) (17,920 ) (1,640 ) (6,030 ) (369 ) 2,429 6,074 22,340 (3,886 ) 1,684 (1,260 ) 5,938 (6,042 ) (4,767 ) 67,452 44,645 35,691 (1,813 ) (398 ) (58,303 ) (60,702 ) (35,310 ) (13,328 ) — — 78 (62,515 ) (35,708 ) (71,553 ) (193,328 ) (112,212 ) (172,082 ) 307,270 114,835 172,082 (111,000 ) (52,175 ) — — — (4,125 ) (1,524 ) — — (4,980 ) — — 2,538 2,731 177 — (1,827 ) — (9,924 ) (8,568 ) (7,275 ) (10,948 ) (57,216 ) (11,223 ) — 13,735 (19,930 ) — 3,744 102,790 — 17,479 82,860 (6,011 ) (30,800 ) 35,775 155 79 31 13,373 44,094 8,288 $ 7,517 $ 13,373 $ 44,094 $ 8,348 $ 15,033 $ 18,560 $ 25,442 $ 40,839 $ 20,859 See accompanying notes.OXFORD INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSFebruary 2, 2013a certain number of 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, national chains, warehouse clubs, mass merchants, 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, marketing and distributing branded apparel products bearing prominent trademarks owned by us. Unless otherwise indicated, all references to assets, liabilities, revenues and expenses in our consolidated financial statements reflect continuing operations and exclude any amounts related to the discontinued operations of our former Oxford Apparel Group, as discussed in Note 14.fiscal 2010; fiscal 2011; fiscalFiscal 2012; fiscal 2013Fiscal 2013; Fiscal 2014 and fiscal 2014Fiscal 2015 reflect the 52 weeks ended January 29, 2011; 52 weeks ended January 28, 2012; 53 weeks ended February 2, 2013; 52 weeks endingended February 1, 2014;2014, 52 weeks ended January 31, 2015 and 52 weeks ending January 31, 2015,30, 2016, respectively.beneficiary.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 earningsoperations 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 certain 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 areOXFORD INDUSTRIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)February 2, 2013Note 1. Summary of Significant Accounting Policies (Continued)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 statements of earnings.operations. The allocation period will not exceed one year from the date of the acquisition. On December 21, 2010, we acquired 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, subject to adjustment based on net working capital as of the closing date for the acquisition. We finalized our allocation of the purchase price to the fair value of acquired assets and liabilities assumed in the fourth quarter of fiscal 2011. Additionally, in connection with the acquisition, we entered into a contingent consideration arrangement whereby we may 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 6. Transaction costs related to this transaction, which are not included in the amount paid to the sellers above, totaled $0.8 million and are included in SG&A in our consolidated statement of earnings for fiscal 2010. As part of our allocation of the purchase price of acquired assets and liabilities assumed, in accordance with GAAP, we recognized a write-up of inventories in connection with our acquisition of the Lilly Pulitzer brand and operations of $1.8 million above the cost of the acquired inventories to fair value. Based on the inventory turn of the acquired inventories, $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 second quarter of fiscalFiscal 2012, we acquired for $1.8$1.8 million, the assets and operations of the Tommy Bahama business in Australia from our former licensee that operated that business.OXFORD INDUSTRIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)February 2, 2013Note 1. Summarythe Tommy Bahama business in Canada from our former licensee that operated that business. For the Tommy Bahama Canada acquisition, allocation of Significant Accounting Policies (Continued)the purchase price to significant assets acquired based on their respective fair values was as follows: reacquired license rights of $11 million, inventory of $4.4 million and fixed assets of $1.7 million.consideredat the time of purchase for retail, restaurant and concession transactions and the time of shipment for e-commerce sales, as we believe the criteria for revenue recognition are metsales. Each of these types of transactions requires payment at the time of sale.the transaction, which is typically made via a credit card and collected by us upon settlement of the credit card transaction within a few days. 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.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.shipped. For certain transactions in which the goods do not pass through our owned or third party distribution centers and title and the risks and rewards of ownership pass at the time the goods leave the foreign port, revenue is recognized at that time. In 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.operations. As of January 31, 2015 and February 2, 2013 and January 28, 2012,1, 2014, reserve balances related to these items were $11.1$9.3 million and $8.4$9.7 million, respectively.OXFORD INDUSTRIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)February 2, 2013Note 1. Summary of Significant Accounting Policies (Continued)earnings.operations. As of January 31, 2015 and February 2, 2013 and January 28, 2012,1, 2014, bad debt reserve balances were $1.0$0.8 million and $2.0have determined that based on historical experiencerecognize breakage income for gift cards and merchandise credits, are unlikely to be redeemed once they have been outstanding for four years and therefore may be recognized as income, subject to applicable laws in certain states.states, when we determine that the likelihood of the gift cards and merchandise credits being redeemed is remote. Deferred revenue for gift cards purchased by consumers and merchandise credits received by customers but not yet redeemed, less any breakage income recognized to date, is included in accounts payable and other accrued expenses and liabilities in our consolidated balance sheets and totaled $4.9$7.4 million and $4.2$6.0 million as of January 31, 2015 and February 2, 2013 and January 28, 2012,1, 2014, respectively. Gift card breakage, which was not material in any period presented, is included in net sales in our consolidated statements of earnings.$16.4$17.9 million, $16.8$16.9 million and $15.3$16.4 million during fiscalFiscal 2014, Fiscal 2013 and Fiscal 2012, fiscal 2011 and fiscal 2010, 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.stores, wholesale customers and e-commerce consumers. The costs prior to receipt at our distribution facilities include product cost, inbound freight charges, import costs, purchasing costs, internal transfer costs, direct labor, manufacturing overhead, insurance, duties, brokers' fees, consolidators' fees and consolidators' fees.depreciation and amortization expense associated with our manufacturing, sourcingearningsoperations classifications of certain expenses may vary by company.shipping and handling of goods for delivery to customers as well as all costs associated with the operations of our retail stores, e-commerce sites, restaurants and concessions, such as labor, occupancy costs, store and restaurant pre-opening costs (including rent, marketing, store set-up costs and training expenses) and other fees. SG&A also includes product design costs, selling costs, royalty costs, advertising, promotion and marketing expenses, professional fees, other general and administrative expenses, our corporate overhead costs and amortization of intangible assets.OXFORD INDUSTRIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)February 2, Fiscal 2014, Fiscal 2013Note 1. Summary of Significant Accounting Policies (Continued)fiscal and Fiscal 2012, fiscal 2011 and fiscal 2010, distribution network costs, including shipping and handling, included in SG&A totaled $24.4 million, $23.2$21.6$24.4 million, respectively. We generally classify amounts billed to customers for shipping and handling fees as revenuesin net sales and classify costs related to direct to consumer customers in cost of goods sold and shipping related to wholesale customers in SG&A in our consolidated statements of earnings.fiscalFiscal 2014, Fiscal 2013 and Fiscal 2012 fiscal 2011were $34.8 million, $32.3 million and fiscal 2010 were $27.6$27.6 million $23.7 million and $15.2 million,, respectively. Prepaid advertising, promotions and marketing expenses included in prepaid expenses in our consolidated balance sheets as of January 31, 2015 and February 2, 2013 and January 28, 20121, 2014 were $1.6$2.0 million and $1.2$1.9 million, respectively.fiscalFiscal 2014, Fiscal 2013 and Fiscal 2012 fiscal 2011were $5.3 million, $5.0 million and fiscal 2010 were $4.8 million, $4.2 million and $3.4 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. During fiscal 2010, inthe fair value of contingent consideration totaling $10.5$0.3 million, as a non-cash financing activity. We also accrued an additional$0.3 million and $6.3 million and $2.4 million of change in fair value of contingent consideration in our consolidated statements of earningsoperations during fiscalFiscal 2014, Fiscal 2013 and Fiscal 2012, and fiscal 2011, respectively. The maximum amountDuring Fiscal 2015, the remaining $12.5 million of contingent consideration payable pursuant toassociated with the Lilly Pulitzer contingent consideration agreement is $20 millionwill be paid. Amounts paid pursuant to this contingent consideration arrangement are reflected in the aggregate,payment of which $2.5 million wascontingent consideration earned in fiscal 2011our consolidated statements of cash flows and paid during fiscal 2012 and another $2.5 million was earned and paid in fiscal 2012, as discussed in Note 6. During fiscal 2010, in connection with our sale of substantially all of the operations and assets of our former Oxford Apparel Group, we accrued $5.4 million, which was 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 fiscal 2011, we received $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.OXFORD INDUSTRIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)February 2, 2013Note 1. Summary of Significant Accounting Policies (Continued)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.2, 2013 and January 28, 2012 $92.51, 2014, $122.2 million, or 84%82%, and $88.5$120.5 million, or 86%84%, of our inventories were valued at the lower of LIFO cost or market after deducting our LIFO reserve. The remaining $17.1$26.0 million and $14.9$23.2 million of our inventories were valued at the lower of FIFO cost or market as of January 31, 2015 and February 2, 2013 and January 28, 2012,1, 2014, 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 deem 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 impact of accounting for inventories on the LIFO method is reflected in Corporate and Other for operating group reporting purposes included in Note 10.earningsoperations 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 OXFORD INDUSTRIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)February 2, 2013Note 1. Summary of Significant Accounting Policies (Continued) Depreciationfor fiscal 2012, fiscal 2011is included in SG&A in our consolidated statements of operations, with the only depreciation included elsewhere within our consolidated statements of operations being depreciation associated with our manufacturing, sourcing and fiscal 2010procurement processes, which is included $0.3 million, $4.6 million, and $0.4 million, respectively,in cost of goods sold. No material impairment charges for property and equipment, which generally relate to leasehold impairments at retail stores.of fixed assets was recognized in any period presented. Depreciation by operating group in Note 102 and in our consolidated statements of cash flows includes theseany fixed impairment charges. In fiscal 2011, $3.7 million of the $4.6 million of impairment charges 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. In July 2012, the FASB amended ASC 350 "Intangibles—Goodwill and Other." This amendment, which we adopted in the fourth quarter of fiscal 2012, resulted in no material impact on our consolidated financial statements. The amendment provides us with to assess qualitative factors to determine whether it is more likely than not that an indefinite-lived intangible asset is impaired as a basis for determining whether it is necessary to perform the quantitative impairment test in accordance with Subtopic 350-30, Intangibles—Goodwill and Other—General Intangibles Other than Goodwill.test. The more-likely-than-not threshold is defined as having a likelihood of more than 50 percent.percent. We also have the option to bypass the qualitative assessment for any indefinite-lived intangible asset inOXFORD INDUSTRIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)February 2, 2013Note 1. Summary of Significant Accounting Policies (Continued)test, and we will be able to resumetest. Bypassing the qualitative assessment in any period does not prohibit us from performing the qualitative assessment in any subsequent period. and trademarks, over the estimated useful lives of the intangible assets using a method of amortization that reflects the pattern in which the economic benefits of the intangible assets are consumed or otherwise realized. Certain of our intangible assets with finite lives may be amortized over periods of up to 15 years in some cases. The determination of an appropriate useful life for amortization is based onconsiders the remaining contractual period of the reacquired 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.operations. 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 the 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.OXFORD INDUSTRIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)February 2, 2013Note 1. Summary of Significant Accounting Policies (Continued)periodsperiod presented. As of February 2, 2013,January 31, 2015, all the goodwill included in our consolidated balance sheet is deductible for tax purposes.2, 2013 and January 28, 2012,1, 2014, the officers' life insurance policies, net, recorded in our consolidated balance sheets totaled $5.5$5.1 million and $5.3$5.8 million, respectively. During fiscal 2010, we repaid $4.1 million of loans associated with the life insurance policies.earnings,operations, was $0.8$0.4 million, $1.1$0.4 million and $1.3$0.8 million during fiscalFiscal 2014, Fiscal 2013 and Fiscal 2012, fiscal 2011 and fiscal 2010, respectively. Additionally, $1.7 million and $1.1 million of deferred financing costs were written off and included in loss on repurchase of senior notes in fiscal 2012 and fiscal 2011, respectively, in conjunction with our redemption or repurchase, satisfaction and discharge of senior notes in the respective period with no such write-off in fiscal 2010. Unamortized deferred financing costs totaled $1.9$1.5 million and $2.7$1.9 million at January 31, 2015 and February 2, 2013 and January 28, 2012,1, 2014, respectively.employees.employees and our non-employee directors. The plan provides participants with the opportunity to defer a portion of their cash compensation in a given plan year, of which a percentage may be matched by us in accordance with the terms of the plan. We make contributions to rabbi trusts or other investments to provide a source of funds for satisfying these deferred compensation liabilities. Investments held for our deferred compensation plan consist of insurance contracts and are recorded based on valuations which generally incorporate unobservable factors. A change in the value of the underlying assets would substantially be offset by a change in the liability to the employeeparticipant resulting in an immaterial net impact on ourOXFORD INDUSTRIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)February 2, 2013Note 1. Summary of Significant Accounting Policies (Continued)2, 20131, 2014 was $12.0 million and January 28, 2012 was $10.3$11.4 million and $9.0 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 $10.0totaled$11.3 million and $8.8$11.1 million at January 31, 2015 and February 2, 2013 and January 28, 2012,1, 2014, respectively.Accrued Compensationaccounts 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 andor 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 outcome of outstanding or pending matters, individually and in the aggregate, will not have a material impact on our consolidated financial statements, based on information currently available.willwould increase due to the passage of time as we approach the payment dates. Additionally, a change in assumptions related to the contingent consideration in future periods could have a material impact on our consolidated balance sheets or ourOXFORD INDUSTRIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)February 2, 2013Note 1. Summary of Significant Accounting Policies (Continued)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 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. The terms of the contingent consideration arrangement are discussed in further detail in Note 6. 10, while the amounts paid by year through January 31, 2015 are included in the table below.$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 arrangement willwould be achieved, we anticipated paying all of the contingent consideration. Thus, the fair value of the contingent consideration at acquisition reflected the $20$20 million of anticipated payments discounted to fair value using a discount rate which reflected the uncertainty regarding whether the earnings target may notwould be met given the growth required to achieve the contingent consideration payments as well as other factors. As of January 28, 2012, we still anticipated that the performance criteria would be met based on the operating results of the Lilly Pulitzer business exceeding the performance criteria in fiscal 2011, and we reevaluated the discount rate at that time.reflectsreflected our assessment that we believebelieved the likelihood of the contingent consideration being earned iswas 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 fiscalFiscal 2012, including a significant amount of earnings from fiscalFiscal 2011 and fiscalFiscal 2012 in excess of the targets for those periods which carriescarried over as a reduction to the targets in future years, (2) the fiscalFiscal 2012 earnings significantly exceededexceeding both the fiscalFiscal 2013 and fiscalFiscal 2014 targets, (3) our operating income projections for the Lilly Pulitzer operating group for future periods which exceedexceeding the fiscalFiscal 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 significant reduction of the discount rate for the contingent consideration to a rate which reflectsreflected the reduced uncertainty of the amounts to be paid pursuant to the arrangement.Table The change in fair value of ContentsOXFORD INDUSTRIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)February 2, 2013Note 1. Summarycontingent consideration charge in each other period presented primarily reflected the passage of Significant Accounting Policies (Continued)non-currentcurrent and currentnon-current amounts, is as follows (in thousands): Fiscal
2012 Fiscal
2011 Fiscal
2010 $ 13,145 $ 10,745 $ — — — 10,545 6,285 2,400 200 (4,980 ) — — $ 14,450 $ 13,145 $ 10,745 $ 15,000 $ 17,500 $ 20,000 (1)Reflects paymentOXFORD INDUSTRIES, INC.the $2.5 million fiscal 2011 contingent consideration payment and the $2.5 million fiscal 2012 contingent consideration payment, less a discount due to the payment of the contingent consideration amount for fiscal 2012 being made prior to the end of the year rather than subsequent to year-end.Significant Accounting Policies (Continued) Fiscal 2014 Fiscal 2013 Fiscal 2012 Balance at beginning of year $ 14,725 $ 14,450 $ 13,145 Change in fair value of contingent consideration 275 275 6,285 Contingent consideration payments made to sellers during the year (2,500 ) — (4,980 ) Balance at end of year $ 12,500 $ 14,725 $ 14,450 �� 6, and income tax uncertainties as discussed in Note 8.2, 2013 and January 28, 20121, 2014 was $31.6$44.5 million and $24.5$37.8 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.OXFORD INDUSTRIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)February 2, 2013Note 1. Summary of Significant Accounting Policies (Continued)During fiscal 2010, we recognized $2.8 million 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, which are included in SG&A in our consolidated statements of operations. fiscal 2012 and fiscal 2011. During fiscal 2011, we recognized a reduction in deferred rent of $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 respective operations. 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 respective functional currency of the subsidiary are remeasured into the respective 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 average rates of exchange prevailing during the relevant period. The impact of any such remeasurement is recognized in our consolidated statements of earningsoperations in the respectivethat period. Net gains (losses) related to foreign currency transactions recognized in fiscalFiscal 2014, Fiscal 2013 and Fiscal 2012 fiscal 2011 and fiscal 2010 were not material to our consolidated financial statements.subsidiariesoperations for which the functional currency is a currency other than the United States dollar are translated into United States dollars at the rate of exchange in effect on the balance sheet date for the balance sheet and at the average rates of exchange prevailing during the relevant period for the statements of earnings.operations. The impact of such translation is recognized in accumulated other comprehensive income (loss) in our consolidated balance sheets and included in other comprehensive income (loss) in our consolidated statements of comprehensive income resulting in no impact on net earnings for the relevant period.valuevalues in our consolidated balance sheets. Unrealized gains and losses are recognized as prepaid expenses or accounts payable and accrued expenses, respectively. The accounting for changes in the fair value of derivative instruments depends on whether the derivative has been designated and qualifies for hedge accounting. The criteria used to determine if a derivative financial instrument qualifies for hedge accounting treatment are whether an appropriate hedging instrument has been identified and designated to reduce a specific exposure and whether there is a high correlation between changes in the fair value of the hedging instrument and the identified exposure based on the nature of the hedging relationship. Based on the nature of the hedging relationship, a qualifying derivative is designated for accounting purposes as a fair value hedge, a cash flow hedge or a hedge of a net investment in a foreign business. As of February 2, 2013January 31, 2015, all ofOXFORD INDUSTRIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)February 2, 2013Note 1. Summary of Significant Accounting Policies (Continued)derivativeany financial instrument that is not designated as a hedge for accounting purposes, or for any ineffective portion of a hedge, the unrealized gains (losses) on the outstanding derivative financial instrument is included in net earnings (losses) as a component of SG&A in our consolidated statements of earnings. Cash flows related to hedging transactions are classified in our consolidated statements of cash flows and consolidated statements of operations in the same category as the items being hedged.WeOther than our interest rate swap agreement, noted below, we did not hold any derivative financial instruments, which had not been settled, that were not designated as a cash flow hedge for accounting purposes as of January 31, 2015 and February 2, 20131, 2014 and January 28, 2012 and no significant ineffectiveness was recorded on qualifying hedges during fiscal 2012, fiscal 2011 and fiscal 2010.CreditHistorically, credit risk has not had a significant effect on the fair value of our derivative contracts. We do not have any credit risk-related contingent features or collateral requirements with our derivative financial instruments.February 2, 2013,January 31, 2015, our foreign currency exchange risk exposure primarily results from our businesses operating outside of the United States, which isare primarily related to (1) our United Kingdom and 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 currencycurrencies of the business;businesses; (2) our businesses operating outside of the United States selling goods in currencies other than itsthe applicable functional currency;currencies; 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 theirthe functional currencies by certain of our foreign subsidiaries.operations. Historically, we have entered into forward foreign currency exchange contracts for our Ben Sherman United Kingdom business using pound sterling for the purchase of 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 continental Europe, for pound sterling. Due to the limited magnitude and the uncertainty about timing of our other internationalcash flows provided by or used in the Tommy Bahama operations in the Asia-Pacific region and Canada, we have not historically entered into forward foreign currency exchange contracts for our otherthese international operations, including operations in Asia and Australia.operations.OXFORD INDUSTRIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)February 2, 2013Note 1. Summary of Significant Accounting Policies (Continued)value and book valuevalues of the forward foreign currency exchange contracts 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 theFebruary 2, 2013January 31, 2015 have contractual settlement dates during fiscal 2013.the next 18 months. Thus, we anticipate that any gain (loss)the substantial majority of gains (losses) included in accumulated other comprehensive income (loss) as of February 2, 2013January 31, 2015 that isare ultimately realized will impact net earnings in fiscal 2013the next 18 months as the contracts are settled. The notional amount of forward foreign currency exchange contracts which had not been settled that qualify as hedges for accounting purposes totaled $33.4$13.7 million and $26.5$27.7 million as of January 31, 2015 and February 2, 2013 and January 28, 2012,1, 2014, respectively.February 2, 2013,January 31, 2015, we are exposed to market risk from changes in interest rates on our variable-rate indebtedness, which includesinclude our U.S. Revolving Credit Agreement and our U.K. Revolving Credit Agreement. We generally intendmay attempt to limit the impact of interest rate changes on earnings and cash flow, primarily through a mix of variable-rate and fixed-rate debt, although at times weall of our debt may not have anybe either variable-rate or fixed-rate debt. Additionally,fixed-rate. At times 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 flexibility in our borrowing arrangements resulting from the seasonality of our business, anticipated future cash flows and our expectations about the risk of future interest rate changes, 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. in future periods, we entered into an interest rate swap agreement under which we swap the interest rate on certain of our variable-rate borrowings ranging from $25$25 million to $45$45 million during the period from August 2013 until March 2015 for a fixed ratefixed-rate interest charge equal to 0.42% plus the applicable margin, as specified in our U.S. Revolving Credit Agreement. The As of January 31, 2015, we do not have any other interest rate swap agreements. During Fiscal 2013, this interest rate swap qualified for hedge accounting; however, as of January 31, 2015, the interest rate swap did not qualify for hedge accounting resulting in the fair value of the interest rate swap isbeing charged to our consolidated statements of operations. We anticipate that any gain (loss) included in accumulated other comprehensive income as of February 2, 2013 which is ultimately realized will impact net earnings during the next three years until maturity of the interest rate swap agreement in March 2015.OXFORD INDUSTRIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)February 2, 2013Note 1. Summary of Significant Accounting Policies (Continued)•••if any, approximate fair value.above, (in thousands):above: Total Fair Value Quoted Prices in
Active Markets for
Identical Assets
(Level 1) Significant Other
Observable Inputs
(Level 2) Significant
Unobservable
Inputs
(Level 3) Total Fair Value January 31, 2015 Financial Assets: Forward foreign currency exchange contracts $ 746 $ — $ 746 $ — Financial Liabilities: Interest rate swap agreements $ 4 $ — $ 4 $ — Fair value of contingent consideration $ 12,500 $ — $ — $ 12,500 February 1, 2014 $ 576 $ — $ 576 $ — $ 285 $ — $ 285 $ — $ 23 $ — $ 23 $ — $ 50 $ — $ 50 $ — $ 14,450 $ — $ — $ 14,450 $ 483 $ — $ 483 $ — $ 13,145 $ — $ — $ 13,145 Fair value of contingent consideration (current and non-current) $ 14,725 $ — $ — $ 14,725 valuevalues of the financial instruments included in 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, areOXFORD INDUSTRIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)February 2, 2013Note 1. Summary of Significant Accounting Policies (Continued) In May 2011, the FASB amended ASC 820 "Fair Value Measurements and Disclosures" in order to clarify existing guidance in GAAP, better align ASC 820 with International Accounting Standards and require additional fair value disclosures. The amendments to ASC 820 were adopted by us in fiscal 2012, with all amendments applied prospectively with changes in measurements, if any, recognized in earnings in fiscal 2012. The adoption of the amendments to ASC 820 in fiscal 2012 did not have a material impact on our consolidated financial statements. In December 2011, the FASB issued new, expanded disclosure requirements for financial instruments surrounding an entity's rights of offset and related counterparty arrangements. This guidance requires disclosure of both "gross" and "net" information for recognized financial instruments (including derivatives) that are (i) eligible for offset and presented "net" in the balance sheet or (ii) subject to enforceable master netting agreements, irrespective of whether an entity actually offsets and "net presents" such instruments in the balance sheet. The guidance also requires disclosure of any collateral received or posted in connection with master netting agreements or similar arrangements. We adopted the new guidance in the fourth quarter of fiscal 2012 with retrospective application. The new guidance did not have a material effect on our consolidated financial statements upon adoption as no material amounts are eligible for offset in our consolidated balance sheets or subject to an enforceable master netting agreement.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 SG&A in our consolidated statements of earningsoperations based on their fair values on the grant date.share-based awards. The share-basedequity awards which are unvested as of February 2, 2013 are dependent uponover the employee remaining employed by us for a specified time subsequent to the grant date. Some prior grants, including the fiscal 2012 grant, were dependent upon us meeting certain performance measures for a specifiedservice and performance period, andas applicable. For awards with specified service requirements, the employee remaining employed by us for a specified time subsequentfair value of the equity awards granted to employees is recognized over the respective 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, is recognized on a straight-line basis over the aggregate performance period ifand any andadditional required service period. The estimated forfeiture rate is assessedadjusted periodically as appropriate.OXFORD INDUSTRIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)February 2, 2013Note 1. Summary of Significant Accounting Policies (Continued)sheetsheets 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 consolidated statements of operations as an adjustment to interest expense on the individual payment dates of the agreement. The components ofagreements. Amounts reclassified from accumulated other comprehensive income (loss), netto our consolidated statements of related income taxes, are as follows (in thousands): February 2,
2013 January 28,
2012 $ (23,986 ) $ (24,157 ) (599 ) 483 $ (24,585 ) $ (23,674 ) Dividends that the dividend is declared by our Board of Directors and typically paid within the same fiscal quarter declared. Our exposureprimarily consistsas 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. WeIn our wholesale channel of distribution we often extend andcredit terms to our customers that satisfy defined credit criteria. We 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. Two customersNo individual customer represented 14% and greater than 10% of our consolidated accounts receivable, net as of February 2,sales in Fiscal 2014, Fiscal 2013 withor Fiscal 2012. Additionally, no other customers representingindividual customer represented 10% or more of our consolidated accounts receivable at that date. No individual customer represented greater than 10%as of our consolidated net sales in fiscal 2012, fiscal 2011 or fiscal 2010. Additionally, during fiscal 2012, fiscal 2011 and fiscal 2010 no individual customer represented more than 10% or more of the net sales of Tommy Bahama, Lilly Pulitzer or BenOXFORD INDUSTRIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)February 2, 2013Note 1. Summary of Significant Accounting Policies (Continued)Sherman, except that one customer represented 10% of Tommy Bahama's net sales in fiscal 2010 and another customer represented 11% of Ben Sherman's net sales in fiscal 2010. During each of fiscal 2012, fiscal 2011 and fiscal 2010, the top five customers of Lanier Clothes, represented 73%, 68% and 68%, respectively, of Lanier Clothes net sales. In fiscal 2012, fiscal 2011 and fiscal 2010, the largest individual customer in Lanier Clothes represented 19%, 18% and 22%, respectively, of the net sales in Lanier Clothes.carryforwards,carry-forwards, each as determined under enacted tax laws and rates expected to apply in the period in which such amounts are expected to be realized or settled. There are certain exceptions to the requirement that deferred tax liabilities be recognized for the difference in the financial and tax basesassets in the case of foreign subsidiaries. When the financial basis of the investment in a foreign subsidiary, excluding undistributed earnings, exceeds the tax basis in such investment, the deferred liability is not recognized if management considers the investment to be essentially permanent in duration. We consider our investments in certain of our foreign subsidiaries to be permanently 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. We consider the undistributed earnings of our foreign subsidiaries to be permanently reinvested outside the U.S. as of February 2, 2013 and therefore have not recorded a deferred tax liability on these earnings in our consolidated financial statements. Valuation allowances are established when we determine that it is more-likely-than-not (greater than 50% likelihood) 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.MeasurementThe second step, measurement, is only addressed if step one has been satisfied. The tax benefit recorded is measured as the largest amount of benefit determined on aOXFORD INDUSTRIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)February 2, 2013Note 1. Summary of Significant Accounting Policies (Continued)standard,threshold, or are resolved through negotiation or litigation with the relevant taxing authority or upon expiration of the statute of limitations. DerecognitionAlternatively, derecognition of a tax position that was previously recognized occurs when we subsequently determine that a tax position no longer meets the more-likely-than-not threshold of being sustained. Interest and penalties associated with unrecognized tax positions are recorded within income tax expense in our consolidated statements of earnings.exercise of our employee stock options and the vesting of stockshares 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 award and (2) the exercise andamount required to be paid by the option price,employee, if any, timesany. We record the appropriate tax rate. We have recorded the benefit associated with the exercise of employee stock options and the vesting of stockshare awards granted to employees as a reduction to income taxes payable. To the extent the tax benefit relates to the value of awards recognized as compensation expense has been recorded,in our financial statements, income tax expense is reduced. Any additional tax 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 January 31, 2009,29, 2011, with limited exceptions, are no longer subject to examination by tax authorities. earnings from continuing operations, earnings from discontinued operations, net of taxes and net earnings per share are calculated by dividing the respectivenet earnings amount by the weighted average number of common shares outstanding during the period, including any unvested common shares with nonforfeitable rights to dividends.period. Shares repurchased are removed from the weighted average number of shares outstanding upon repurchase and delivery. earnings from continuing operations, earnings from discontinued operations, net of taxes, and net earnings per 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 awards, 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 awards, options restricted stock units or other dilutive awards that 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.OXFORD INDUSTRIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)February 2, 2013Note 1. Summary of Significant Accounting Policies (Continued)Discontinued Operations As discussed in Note 14, on January 3, 2011, we disposed of substantially all of the operations and assets of our former Oxford Apparel operating group. The amounts classified as discontinued operations in our consolidated balance sheets, consolidated statements of earnings and consolidated statements of cash flows for all periods presented include 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 was uncertainty in whether there would be a reduction in those costs as a result of the Oxford Apparel sale. With respect to interest expense, for fiscal 2010 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 settlement of the 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 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.Reclassifications Certain prior year amounts have been reclassified to conform to the fiscal 2012 presentation including the reclassification of certain amountsthe January 28, 2012 balance sheet from prepaid expenses to other non-current assets.Recent Accounting Pronouncements In February 2013, the FASB issued new guidance requiring an entity to provide information about the amounts reclassified out of accumulated other comprehensive income by component. In addition, an entity is required to present, either on the face of the financial statements or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net earnings, but only if the amounts reclassified are required to be reclassified in their entirety in the same reporting period. For amounts that are not required to be reclassified in their entirety to net earnings, an entity is required to cross-reference to other disclosures that provide additional details about those amounts. The new guidance is effective prospectively for the first quarterFebruary 2, 2013fiscal 2013,the foreign entity. This guidance was adopted by us in the First Quarter of Fiscal 2014 and since it relates to disclosure only, it isdid not expected to have a material impact on our consolidated financial statements.Note 2. Inventories The components of inventoriesstatements as no change in our ownership interests in our foreign subsidiaries occurred in Fiscal 2014.summarized as follows (in thousands): February 2,
2013 January 28,
2012 $ 154,593 $ 143,482 6,028 6,244 5,431 6,070 (56,447 ) (52,376 ) $ 109,605 $ 103,420 There were no LIFO inventory liquidations in fiscal 2012, fiscal 2011 or fiscal 2010. LIFO accounting charges, which we considerreclassified to include changesdiscontinued operations in the LIFO reservestatement of operations. Under the new guidance, only asset sales that represent a strategic shift in operations would be reclassified to discontinued operations, while other asset sales would remain in continuing operations. This guidance was adopted by us in the Fourth Quarter of Fiscal 2014 and did not have a material impact on our consolidated financial statements as wellno dispositions occurred in Fiscal 2014 and no material amounts qualified as held for sale in Fiscal 2014.changesthe new guidance on our consolidated financial statements.reserves relatedcalculations are made on a legal entity basis which does not correspond to lowerour operating group definitions; therefore, LIFO inventory accounting adjustments are not allocated to our operating groups. Fiscal 2014 Fiscal 2013 Fiscal 2012 Net sales Tommy Bahama $ 627,498 $ 584,941 $ 528,639 Lilly Pulitzer 167,736 137,943 122,592 Lanier Clothes 112,934 109,530 107,272 Ben Sherman 77,481 67,218 81,922 Corporate and Other 12,157 17,465 15,117 Total $ 997,806 $ 917,097 $ 855,542 Depreciation and Amortization of Intangible Assets Tommy Bahama $ 27,412 $ 24,806 $ 18,551 Lilly Pulitzer 4,616 3,215 2,402 Lanier Clothes 350 347 421 Ben Sherman 3,082 3,154 2,889 Corporate and Other 2,186 2,380 2,072 Total $ 37,646 $ 33,902 $ 26,335 Operating Income (Loss) Tommy Bahama $ 71,132 $ 72,207 $ 69,454 Lilly Pulitzer 32,190 25,951 20,267 Lanier Clothes 10,849 10,828 10,840 Ben Sherman (10,832 ) (13,131 ) (10,898 ) Corporate and Other (19,736 ) (11,185 ) (20,692 ) Total operating income 83,603 84,670 68,971 Interest expense, net 3,483 4,169 8,939 Loss on repurchase of senior notes — — 9,143 Earnings Before Income Taxes $ 80,120 $ 80,501 $ 50,889 Fiscal 2014 Fiscal 2013 Fiscal 2012 Purchases of Property and Equipment Tommy Bahama $ 35,782 $ 30,810 $ 46,392 Lilly Pulitzer 7,335 10,343 4,576 Lanier Clothes 1,740 30 593 Ben Sherman 4,290 1,137 3,997 Corporate and Other 1,208 1,052 5,144 Total $ 50,355 $ 43,372 $ 60,702 January 31, 2015 February 1, 2014 Total Assets Tommy Bahama $ 428,835 $ 408,599 Lilly Pulitzer 108,969 101,704 Lanier Clothes 35,152 39,989 Ben Sherman 78,568 79,299 Corporate and Other (6,457 ) (2,286 ) Total $ 645,067 $ 627,305 cost or market adjustments that do not exceed the LIFO reserve, were $4.0 million, $5.8 millionour property and $3.8 million in fiscal 2012, fiscal 2011 and fiscal 2010, respectively. January 31, 2015 February 1, 2014 United States $ 140,104 $ 124,894 United Kingdom and Europe 7,764 7,086 Other foreign 7,208 9,539 Total $ 155,076 $ 141,519 Fiscal 2014 Fiscal 2013 Fiscal 2012 United States $ 904,647 $ 843,620 $ 793,289 United Kingdom and Europe 55,159 45,488 51,536 Other foreign 38,000 27,989 10,717 Total $ 997,806 $ 917,097 $ 855,542 February 2,
2013 January 28,
2012 January 31, 2015 February 1, 2014 $ 1,870 $ 1,870 $ 1,594 $ 1,594 29,717 28,964 29,301 28,727 124,138 101,010 161,130 140,616 152,778 121,449 189,417 168,950 308,503 253,293 381,442 339,887 (179,621 ) (160,087 ) (226,366 ) (198,368 ) $ 128,882 $ 93,206 $ 155,076 $ 141,519 OXFORD INDUSTRIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)February 2, 2013 February 2,
2013 January 28,
2012 $ 45,793 $ 45,706 January 31, 2015 February 1, 2014 Intangible assets with finite lives, which primarily consist of reacquired license rights and customer relationships: $ 52,668 $ 55,050 (41,994 ) (40,889 ) (44,375 ) (43,488 ) 3,799 4,817 8,293 11,562 160,518 160,376 159,477 161,461 $ 164,317 $ 165,193 $ 167,770 $ 173,023 fiscalFiscal 2014, Fiscal 2013 and Fiscal 2012 fiscal 2011 and fiscal 2010 are as follows (in thousands): Tommy Bahama Lilly Pulitzer Ben Sherman Total $ 113,173 $ — $ 24,289 $ 137,462 — 30,501 — 30,501 (693 ) (13 ) (267 ) (973 ) — — (310 ) (310 ) 112,480 30,488 23,712 166,680 (516 ) (460 ) (219 ) (1,195 ) — — (292 ) (292 ) Tommy Bahama Lilly Pulitzer Ben Sherman Total 111,964 30,028 23,201 165,193 $ 111,964 $ 30,028 $ 23,201 $ 165,193 (384 ) (389 ) (252 ) (1,025 ) (384 ) (389 ) (252 ) (1,025 ) — — 149 149 — — 149 149 $ 111,580 $ 29,639 23,098 $ 164,317 111,580 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 Amortization (2,004 ) (278 ) (199 ) (2,481 ) Other, including foreign currency changes (751 ) — (2,021 ) (2,772 ) Balance, January 31, 2015 $ 117,103 $ 29,032 $ 21,635 $ 167,770 subsequent to fiscal 2012 is expected to be $0.9$2.1 million, or less each year.OXFORD INDUSTRIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)February 2, 2013Note 4. Intangible Assets$1.9 million, $1.8 million, $1.6 million and Goodwill (Continued)fiscalFiscal 2014, Fiscal 2013 and Fiscal 2012 fiscal 2011 and fiscal 2010 are as follows (in thousands): Tommy Bahama Lilly Pulitzer Total $ — $ — $ — — 16,866 16,866 — 16,866 16,866 — (371 ) (371 ) Tommy Bahama Lilly Pulitzer Total — 16,495 16,495 $ — $ 16,495 $ 16,495 780 — 780 780 — 780 $ 780 $ 16,495 $ 17,275 780 16,495 17,275 Acquisition 247 — 247 Other, including foreign currency changes (123 ) — (123 ) Balance, February 1, 2014 904 16,495 17,399 Other, including foreign currency changes (104 ) — (104 ) Balance, January 31, 2015 $ 800 $ 16,495 $ 17,295 February 2,
2013 January 28,
2012 $ 108,552 N/A N/A $ — 7,944 2,571 N/A 105,000 — (1,595 ) 116,496 105,976 (7,944 ) (2,571 ) $ 108,552 $ 103,405 (1)The U.S. Revolving Credit Agreement, entered into in June 2012, amended and restated the Prior Revolving Credit Agreement, which was scheduled to mature in August 2013. 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 (June 2017); 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.February 2, 2013 January 31, 2015 February 1, 2014 $235 million U.S. Secured Revolving Credit Facility ("U.S. Revolving Credit Agreement")(1) $ 104,842 $ 137,592 £7 million Senior Secured Revolving Credit Facility ("U.K. Revolving Credit Agreement")(2) 4,126 3,993 Total debt 108,968 141,585 Short-term debt (4,126 ) (3,993 ) Long-term debt $ 104,842 $ 137,592 (2)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.(1) 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 (weighted average borrowing rate of 1.8% as of January 31, 2015), 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. (3)In the second quarter of fiscal 2012, we redeemed all of the remaining outstanding $105 million in aggregate principal amount of the Senior Secured Notes, which were scheduled to mature in July 2015. The redemption of the Senior Secured Notes for $111.0 million, plus accrued interest, and the related write-off of $1.7 million of unamortized deferred financing costs and $1.4 million of unamortized bond discount resulted in a loss on repurchase of senior notes of $9.1 million. The redemption of the Senior Secured Notes satisfied and discharged all of our obligations with respect to the Senior Secured Notes and the related indenture and was funded primarily through borrowings under our U.S. Revolving Credit Agreement.(2) The U.K. Revolving Credit Agreement generally (i) accrues interest at the bank's base rate plus an applicable margin (4.0% as of January 31, 2015); (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. (4)In the second and third quarters of fiscal 2011, we repurchased, in privately negotiated transactions, $45.0 million in aggregate principal amount of the 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.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.issues. As of February 2, 2013, $7.2January 31, 2015, $8.5 million of trade letters of credit and other limitations on availability in the aggregate were outstanding against our credit facilities. After considering these limitations and the amount of eligible assets in our borrowing base, as applicable, as of February 2, 2013,January 31, 2015, we had $105.1$125.8 million and $0.6$2.3 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.OXFORD INDUSTRIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)February 2, 2013Note 5. Debt (Continued)$23.5$23.5$23.5 million or (ii) 10% of the total revolving commitments for 30 consecutive days.fiscal 2012Fiscal 2014 and as of February 2, 2013,January 31, 2015, no financial covenant testing was required pursuant to our U.S. Revolving CreditFebruary 2, 2013,January 31, 2015, we were compliant with all covenants related to our credit facilities.$49.5 millionin Fiscal 2014, Fiscal 2013 and $43.3 million in fiscalFiscal 2012, fiscal 2011 and fiscal 2010, 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 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 $21.7 million, $18.8 million and $16.1 million $12.5 millionin Fiscal 2014, Fiscal 2013 and $11.3 million in fiscalFiscal 2012, fiscal 2011 and fiscal 2010, respectively, which includes $0.7$0.9 million, $1.2$0.6 million and $0.9$0.7 million of contingent percentage rent during fiscalFiscal 2014, Fiscal 2013 and Fiscal 2012, fiscal 2011 and fiscal 2010, respectively.28, 2012,31, 2015, the aggregate minimum base rental commitments for all non-cancelable operating real property leases with original terms in excess of one year are $54.8$65.8 million, $52.5$62.7 million, $46.1$59.2 million, $37.0$53.0 million, $32.4$49.5 million and $133.9$222.1 million for fiscal 2013, fiscal 2014, fiscaleach of the next five years and thereafter.fiscal 2016, fiscal 2017 and thereafter, respectively. Wewe are also currently obligated under certain apparel license and design agreements to make future minimum royalty and advertising payments of $5.1$5.6 million, $5.0$6.1 million and $3.2$4.7 million for fiscal 2013, fiscal 2014Fiscal 2015, Fiscal 2016 and fiscal 2015,Fiscal 2017, respectively, and none thereafter. These amounts do not include amounts, if any, that exceed the minimums required pursuant to the agreements. In connection with our acquisition of the Lilly Pulitzer brand and operations during the fourth quarter of fiscal 2010, we entered into a contingent consideration agreement pursuant to which we may be obligated to pay up to an additional $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.OXFORD INDUSTRIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)February 2, 2013Note 6. Commitments and Contingencies (Continued)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 each performance period; and (2) a cumulative performance period consisting of the period from the date of our acquisition through the end of the 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. During the second quarter of fiscal 2012, we paid the maximum $2.5 million in contingent consideration in respect of Lilly Pulitzer's earnings from the date of our acquisition through the end of fiscal 2011. Additionally, during the fourth quarter of fiscal 2012, we paid the $2.5 million fiscal 2012 contingent consideration amount. The fair value of the contingent consideration liability as of February 2, 2013 included in non-current contingent consideration in our consolidated balance sheet is $14.5 million and reflects the fair value of the $15.0 million of contingent consideration as of February 2, 2013 which may be earned in future periods..2, 2013 and January 28, 2012,1, 2014, the reserve for the remediation of this site was $1.8$1.3 million and $1.9$1.6 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 thisthe 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 significantmaterial amounts related to this reserve were recorded in the statements of earningsoperations in fiscal 2012, fiscal 2011Fiscal 2014, Fiscal 2013 or fiscal 2010.$1.00$1.00 par value per share common stock authorized for issuance as of January 31, 2015 and February 2, 2013 and January 28, 2012.1, 2014. We had 16.616.5 million and 16.516.4 million shares of common stock issued and outstanding as of January 31, 2015 and February 2, 2013 and January 28, 2012,1, 2014, respectively.February 2, 2013, 1.1January 31, 2015, 1.2 million share awardsshares were available for issuance under our Long-Term Stock Incentive Plan (the "Long-Term Stock Incentive Plan"). The Long-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 pursuant to outstanding options under our predecessor 1997 Stock Option Plan continue to be governed under that plan and the individual agreements with respect to provisions relating to exercise,Table of ContentsNoOXFORD INDUSTRIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)February 2, 2013Note 7. Shareholders' Equity (Continued)termination and forfeiture. No additional grants are available under any predecessor plans. Subsequent to December 2003, performance- and service-based restricted shares 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.the restricted 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 awards 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.fiscal 2012, fiscal 2011Fiscal 2014, Fiscal 2013, and fiscal 2010:Fiscal 2012: Fiscal 2012 Fiscal 2011 Fiscal 2010 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 497,500 $ 12 780,500 $ 16 810,500 $ 15 — — 40,000 $ 23 90,000 $ 22 — — (273,000 ) $ 22 (50,000 ) $ 22 (10,000 ) $ 23 (50,000 ) $ 17 (70,000 ) $ 18 487,500 $ 12 497,500 $ 12 780,500 $ 16 Fiscal 2014 Fiscal 2013 Fiscal 2012 Restricted share awards outstanding at beginning of fiscal year 56,521 $ 47 487,500 $ 12 497,500 $ 12 Service-based restricted share awards granted/issued 35,641 $ 78 — $ — — $ — Performance-based restricted share awards issued related to prior year performance awards — $ — 59,129 $ 47 — $ — Restricted share awards vested, including restricted shares repurchased from employees for employees' tax liability — $ — (487,500 ) $ 12 — $ — Restricted shares forfeited (990 ) 78 (2,608 ) $ 43 (10,000 ) $ 23 Restricted shares outstanding at end of fiscal year 91,172 $ 59 56,521 $ 47 487,500 $ 12 In addition to the restricted shares included in the table above, on March 19, performance restricted share unit awards,units, in the aggregate. Each performance share unit award provided the recipient with the opportunity to earn restricted share unitsawards contingent upon our achievement of certain performance objectives during the fiscalrespective Fiscal 2014, Fiscal 2013 and Fiscal 2012 performance periods. Each of the performance-based awards require that the employee remain employed by the company for a specified period after the respective performance period. The 0.1 millionwillrelated to the Fiscal 2012 performance period and were issued in March 2013. During Fiscal 2013, no restricted share units were earned as the performance objectives for Fiscal 2013 were not achieved. During Fiscal 2014, approximately 90,000 of restricted share awards were earned by recipients related to the Fiscal 2014 performance period and issued in Fiscal 2015, however these awards were not included inMarch 2016, subject toApril 2017.employee still being an employee on that date, andunvested restricted share awards as of January 31, 2015. The unvested restricted share units will be settled in shares of our common stock on the vesting date, subject to the employee still being an employee at that time. The awards generally will be forfeited if the recipient is not continuously employed by us through the vesting date. Additionally, the employee is not allowed to transfer or sell the restricted share units prior to the vesting date. Beginning with the dividend payment in the second quarter of fiscal 2013, through the earlier of the settlement in March 2016 or forfeiture of the restricted share units, recipients who are employed by us will be paid non-forfeitable dividend equivalents in cash in respect of the shares of our common stock represented by the individual's earned restricted share units.OXFORD INDUSTRIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)February 2, 2013Note 7. Shareholders' Equity (Continued) The following table summarizes information about the unvested restricted shares and restricted share units as of February 2, 2013. Number of
Shares Average Market
Price on
Date of Grant Vesting
Date 437,500 $ 11 April 2013 20,000 $ 22 April 2013 30,000 $ 23 April 2013 487,500 59,129 $ 47 March 2016 546,629 Grant Fiscal 2012 Performance-based Restricted Share Awards 56,521 $ 47 March 2016 Fiscal 2014 Service-based Restricted Share Awards 34,651 $ 78 April 2017 Total 91,172 February 2, 2013,January 31, 2015, there was $2.6$7.8 million, in the aggregate, of unrecognized compensation expense related to the unvested share-based restricted share awards, and the unvested restricted share units, which have been granted to employees but have not yet vested.vested, including the Fiscal 2014 performance-based awards issued in Fiscal 2015. This expense is expected to be recognized from February 3, 20131, 2015 through April 2016.February 2, 2013,January 31, 2015, less than 0.1 million of such awards were outstanding and unvested. Prior to and including the December 2003 grants under our previous stock incentive plans, we typically granted stock options to employees at certain times as determined by our Board of Directors or our compensation committee. Stock options were typically granted with an exercise price equal to the stock's fair market value on the date of grant. The previously granted stock options, including those still outstanding, had ten-year terms and vested and became exercisable in increments of 20% on each anniversary from the date of grant. The last stock options granted by us vested in fiscal 2008 resulting in all options outstanding also being exercisable subsequent to that date. The total intrinsic value for stock options exercised during fiscal 2012, fiscal 2011 and fiscal 2010 was $1.3 million, $0.7 million and $0.2 million, respectively.OXFORD INDUSTRIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)February 2, 2013Note 7. Shareholders' Equity (Continued) A summary of the stock option activity during fiscal 2012, 2011 and fiscal 2010 is presented below: Fiscal 2012 Fiscal 2011 Fiscal 2010 Shares Weighted
Average
Exercise
Price Shares Weighted
Average
Exercise
Price Shares Weighted
Average
Exercise
Price 78,500 $ 27 151,120 $ 26 191,105 $ 25 (54,900 ) $ 26 (68,620 ) $ 25 (16,005 ) $ 12 (2,500 ) $ 33 (4,000 ) $ 26 (23,980 ) $ 27 21,100 $ 28 78,500 $ 27 151,120 $ 26 The stock options outstanding and exercisable as of February 2, 2013 have exercise prices ranging from $26.44 to $32.75 and expire during fiscal 2013. The aggregate intrinsic value of the stock options outstanding and exercisable as of February 2, 2013 was $0.4 million.February 2, 2013.January 31, 2015. 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 $0.2 million, $0.1 million and $0.1 million in each of fiscalFiscal 2014, Fiscal 2013 and Fiscal 2012, fiscal 2011 and fiscal 2010.$1.00$1.00 par value preferred stock authorized for issuance as of January 31, 2015 and February 2, 2013 and January 28, 2012. 1, 2014. No preferred shares were issued or outstanding as of January 31, 2015 or February 2,1, 2014.or January 28,and Fiscal 2012.February 2, 2013 Foreign
currency
translation
gain (loss)Net unrealized
gain (loss) on
cash flow
hedgesAccumulated
other
comprehensive
income (loss)Balance, January 28, 2012 $ (24,157 ) $ 483 $ (23,674 ) Total other comprehensive income (loss), net of taxes 171 (1,082 ) (911 ) Balance, February 2, 2013 (23,986 ) (599 ) (24,585 ) Total other comprehensive income, net of taxes 703 264 967 Balance, February 1, 2014 (23,283 ) (335 ) (23,618 ) Total other comprehensive income, net of taxes (7,617 ) 1,081 (6,536 ) Balance, January 31, 2015 $ (30,900 ) $ 746 $ (30,154 ) from continuing operations before income taxes and the provision (benefit) for income taxes related to continuing operations (in thousands): Fiscal
2012 Fiscal
2011 Fiscal
2010 Fiscal
2014Fiscal
2013Fiscal
2012Earnings before income taxes: $ 63,429 $ 39,880 $ 16,733 $ 90,254 $ 98,476 $ 63,429 (12,540 ) 3,644 4,042 (10,134 ) (17,975 ) (12,540 ) $ 50,889 $ 43,524 $ 20,775 $ 80,120 $ 80,501 $ 50,889 Income taxes: $ 21,682 $ 8,306 $ 5,649 $ 32,298 $ 30,190 $ 21,682 2,365 652 2,162 4,601 3,911 2,365 (724 ) 285 1,698 652 423 (724 ) 37,551 34,524 23,323 23,323 9,243 9,509 (3,271 ) 5,385 (4,637 ) (3,114 ) 1,343 (3,271 ) (480 ) (347 ) (332 ) (75 ) (657 ) (480 ) $ 19,572 $ 14,281 $ 4,540 Income taxes $ 34,362 $ 35,210 $ 19,572 Fiscal
2012 Fiscal
2011 Fiscal
2010 35.0 % 35.0 % 35.0 % 3.0 % 2.3 % 0.5 % 3.3 % (1.9 )% (0.8 )% 4.1 % (0.1 )% (3.0 )% (3.7 )% (1.2 )% (6.6 )% (0.6 )% (0.9 )% (2.2 )% (1.0 )% (1.1 )% (2.1 )% — — 2.0 % (1.1 )% (0.6 )% (2.5 )% (1.9 )% — — 1.4 % 1.3 % 1.6 % 38.5 % 32.8 % 21.9 % February 2, 2013 Fiscal
2014Fiscal
2013Fiscal
2012Statutory tax rate 35.0 % 35.0 % 35.0 % State income taxes—net of federal income tax benefit 3.1 % 3.1 % 3.0 % Impact of foreign operations (1) 1.9 % 2.6 % 3.3 % Valuation allowance against foreign losses and other carryforwards (2) 2.8 % 4.5 % 4.1 % Reduction in contingency reserves related to unrecognized tax benefits (3) — % — % (3.7 )% Change in assertion on permanent reinvestment of foreign earnings — % — % (1.9 )% Other, net 0.1 % (1.5 )% (1.3 )% Effective tax rate for continuing operations 42.9 % 43.7 % 38.5 % February 2,
2013 January 28,
2012 $ 13,592 $ 11,180 9,868 8,143 2,727 2,406 1,328 6,003 706 732 2,093 303 3,934 1,565 787 2,095 35,035 32,427 (42,827 ) (44,806 ) — (884 ) (42,827 ) (45,690 ) (3,641 ) (1,886 ) $ (11,433 ) $ (15,149 ) (1) January 31,
2015February 1,
2014Deferred Tax Assets: Inventories $ 15,385 $ 14,674 Accrued compensation and benefits 11,727 7,993 Receivable allowances and reserves 2,439 2,187 Depreciation and amortization 2,038 1,988 Deferred rent and lease obligations 3,729 3,315 Operating loss and other carry-forwards 6,907 6,730 Other, net 1,408 1,014 Deferred tax assets 43,633 37,901 Deferred Tax Liabilities: Acquired intangible assets (43,885 ) (43,364 ) Deferred tax liabilities (43,885 ) (43,364 ) Valuation allowance (8,457 ) (6,831 ) Net deferred tax liability $ (8,709 ) $ (12,294 ) February 2, 2013January 31, 2015 our operating loss and January 28, 2012, we had undistributed earningsother carry-forwards primarily relate to our operations in the United Kingdom, Hong Kong and Canada, each of which provides for operating loss carry-forwards of at least 20 years. Substantially all of our valuation allowance of $8.5 million and $6.8 million relates to the foreign operating loss carry-forwards and deferred tax assets in those jurisdictions. The recent history of operating losses in these jurisdictions is considered significant negative evidence against realizability of these tax benefits. The amount of the valuation allowance considered necessary, however, could decrease in the future if our historical operating results or estimates of future taxable operating results increase, particularly if, in future years, objective negative evidence in the form of cumulative losses is no longer present.of $6.1 million and $9.6 million, respectively. At January 28, 2012, a deferred tax liability wasforeign earnings, if any, were recorded at either balance sheet date, as thesubstantially all our original investments and earnings were not considered permanently reinvested outside of the United States; however no deferred tax liability was recorded as of February 2, 2013 based on the determination that the earningsrelated to our foreign subsidiaries are considered permanently reinvested outside of the United States. The 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 $0.6 million. We also consider the original investment in our foreign subsidiaries to be permanently reinvested outside the United States as of February 2, 2013. BecauseFurther, because the financial basis in each foreign entity does not exceed the tax basis by an amount exceeding undistributed earnings, no additional United States tax would be due if the original investment were to be repatriated.repatriated in the future. As of January 31, 2015 and February 1, 2014, we had undistributed earnings of foreign subsidiaries of $5.4 million and $6.0 million, respectively, which were considered permanently reinvested. These undistributed earnings could become subject to United States taxes if they are remitted as dividends or as a result of certain other types of intercompany transactions. The amount of deferred tax liability not recognized on permanently reinvested foreign earnings that would be payable if the earnings were repatriated to the United States is $0.4 million as of January 31, 2015.individual tax-paying entitieswe offset all current deferred tax liabilities and assets within each particular tax jurisdiction and present them as a single amount in our consolidated balance sheets. A similar procedure is followed for all non-current deferred tax liabilities and assets. Amounts in different tax jurisdictions cannot be offset against each other. TheOXFORD INDUSTRIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)February 2, 2013Note 8. Income Taxes (Continued) February 2,
2013 January 28,
2012 January 31,
2015February 1,
2014 $ 22,952 $ 19,733 $ 24,503 $ 20,465 (34,385 ) (34,882 ) (33,212 ) (32,759 ) $ (11,433 ) $ (15,149 ) $ (8,709 ) $ (12,294 ) A summarybenefitsbenefit amounts or material changes in such amounts except for the most recent three years is as follows (in thousands): Fiscal
2012 Fiscal
2011 Fiscal
2010 $ 2,461 $ 2,921 $ 4,402 245 13 15 (2,195 ) (604 ) (1,402 ) 5 133 153 (138 ) (2 ) (24 ) (27 ) — (223 ) $ 351 $ 2,461 $ 2,921 of earningsfor Fiscal 2014, Fiscal 2013 and Fiscal 2012 for potential penalty and interest expense related to these unrecognized tax benefits was $0.5 million or less in each of fiscal 2012, fiscal 2011 and fiscal 2010. As of February 2, 2013 and January 28, 2012, we have recognized in our consolidated balance sheets, total liabilities for potential penalties and interest, in the aggregate, of less than $0.1 million and $0.3 million, respectively.earningsoperations and substantially offset the changes in deferred compensation liabilities to participants resulting from changes in market values. Our aggregate expense under these defined contribution and non-qualified deferred compensation plans in fiscalFiscal 2014, Fiscal 2013 and Fiscal 2012 fiscal 2011was $3.2 million, $2.9 million and fiscal 2010 were $3.0 million, $2.5 million and $1.1 million, respectively.OXFORD INDUSTRIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)February 2, 2013 Operating Groups Our business is primarily operated through our four operating groups: Tommy Bahama, Lilly Pulitzer, Lanier Clothes and Ben 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. Our operating group structure reflects a brand-focused management approach, emphasizing operational coordination and resource allocation across the brand's direct to consumer, wholesale and licensing operations. Tommy Bahama designs, sources, markets and distributes 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 stores within and outside the United States and on our Tommy Bahama e-commerce website, tommybahama.com, as well as in better department stores and independent specialty stores throughout the United States and licensed Tommy Bahama stores in Canada and the United Arab Emirates. We also operate Tommy Bahama restaurants and license the Tommy Bahama name for various product categories. Lilly Pulitzer designs, sources and distributes upscale collections of women's and girl's dresses, sportswear and related 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 and on our Lilly Pulitzer website, lillypulitzer.com, as well as in better department and independent specialty stores. We also license the Lilly Pulitzer 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. Substantially all of our Lanier Clothes branded products are sold under certain trademarks licensed to us by third parties. Licensed brands included Kenneth Cole, Dockers, Geoffrey Beene and Ike Behar. Additionally, we design and market products for our owned Billy London, Arnold Brant and Oxford Republic brands. In addition to the branded businesses, Lanier Clothes designs and sources private label tailored clothing products for certain customers. Our Lanier Clothes products are sold to national chains, department stores, specialty stores, specialty catalog retailers and discount retailers throughout the United States. 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 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.OXFORD INDUSTRIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)February 2, 2013Note 10. Operating Groups (Continued) Corporate and Other is a reconciling category for reporting purposes and includes our corporate offices, substantially all financing activities, elimination of inter-segment sales, LIFO inventory accounting adjustments, other costs that are not allocated to the operating groups and operations of our other businesses which are not included in our four operating groups. 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 operating groups. The operations that are included in Corporate and Other include our Oxford Golf business and our Lyons, Georgia distribution center. The tables below present certain information about our operating groups (in thousands): Fiscal
2012 Fiscal
2011 Fiscal
2010 $ 528,639 $ 452,156 $ 398,510 122,592 94,495 5,959 107,272 108,771 103,733 81,922 91,435 86,920 15,117 12,056 8,825 $ 855,542 $ 758,913 $ 603,947 $ 18,551 $ 19,460 $ 14,120 2,402 2,002 163 421 427 462 2,889 2,638 2,829 2,072 2,627 1,615 $ 26,335 $ 27,154 $ 19,189 $ 69,454 $ 64,171 $ 51,081 20,267 14,278 (372 ) 10,840 12,862 14,316 (10,898 ) (2,535 ) (2,664 ) (20,692 ) (19,969 ) (21,699 ) 68,971 68,807 40,662 8,939 16,266 19,887 9,143 9,017 — $ 50,889 $ 43,524 $ 20,775 OXFORD INDUSTRIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)February 2, 2013Note 10. Operating Groups (Continued) Fiscal
2012 Fiscal
2011 Fiscal
2010 $ 46,392 $ 24,686 $ 11,225 4,576 3,228 277 593 85 30 3,997 4,220 963 5,144 3,091 833 $ 60,702 $ 35,310 $ 13,328 February 2,
2013 January 28,
2012 $ 359,462 $ 306,772 90,873 82,417 28,455 30,755 74,055 78,040 3,225 11,223 $ 556,070 $ 509,207 Net book value of our property and equipment, by geographic area is presented below (in thousands): February 2,
2013 January 28,
2012 $ 115,022 $ 86,315 8,140 5,211 5,720 1,680 $ 128,882 $ 93,206 Net sales recognized by geographic area is presented below (in thousands): Fiscal
2012 Fiscal
2011 Fiscal
2010 $ 794,672 $ 693,969 $ 541,750 51,536 62,671 58,465 9,334 2,273 3,732 $ 855,542 $ 758,913 $ 603,947 OXFORD INDUSTRIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)February 2, 2013Note 11. Related Party TransactionsSunTrust2012.2014, which we believe SunTrust has advised us that it is holding these shares of our common stockholds in various fiduciary and agency capacities. Mr. E. Jenner Wood, III, one of our directors, has beenis Chairman, President and CEO of SunTrust Bank, Atlanta/Georgia Division since April 2010 and prior to that, served as Chairman, President and Chief Executive Officerthe Atlanta division of SunTrust Bank Central Group.fiscalFiscal 2012 refinancingand Fiscal 2013 refinancings of our 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
2012 Fiscal
2011 Fiscal
2010 Fiscal 2014 Fiscal 2013 Fiscal 2012 $ 569 $ 234 $ 303 $ 606 $ 696 $ 569 $ 106 $ 151 $ 66 $ 92 $ 92 $ 106 $ 616 $ — $ — $ — $ 254 $ 616 $ 9 $ 7 $ 8 $ 9 $ 6 $ 9 2012,2014, December 31, 20112013 and December 31, 2010.the fourth quarter of fiscalFiscal 2010, we entered into a contingent consideration agreement pursuant to which the beneficial owners of the Lilly Pulitzer brand and operations prior to the acquisition are entitled to earn up to an additional $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. The potential contingent consideration iswas comprised of: (1) four individual performance periods, consisting of the period from the date of our acquisition through the end of fiscalFiscal 2011, fiscalFiscal 2012, fiscalFiscal 2013 and fiscalFiscal 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 each performance period; and (2) a cumulative performance period consisting of the period from the date of our acquisition through the end of fiscalFiscal 2014, in respect of which the prior owners of the Lilly Pulitzer brand and operations may be entitled to receive up to $10 million.OXFORD INDUSTRIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)February 2, 2013Note 11. Related Party Transactions (Continued) Duringsecond quarter of fiscal 2012, we paidearnings targets specified in the contingent consideration agreement, the maximum $2.5$20 million amount was earned in full, including $7.5 million which was paid prior to January 31, 2015 and the $12.5 million remaining obligation related to this agreement included in contingent consideration in respectour consolidated balance sheet as of Lilly Pulitzer's earnings fromJanuary 31, 2015. We anticipate paying the dateremaining obligation of our acquisition through the end of fiscal 2011. During the fourth quarter of fiscal 2012, we entered into an amendment to the contingent consideration agreement. Under this agreement, after consideration of Lilly Pulitzer's earnings through the date of the amendment and the substantial likelihood that the $2.5$12.5 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 the fourth quarter of fiscal 2012. No changes to earnings targets or other terms of the agreement resulted from this amendment.12.11. Summarized Quarterly Data (unaudited)OXFORD INDUSTRIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)February 2, 2013Note 12. Summarized Quarterly Data (unaudited) (Continued)fiscal 2012Fiscal 2014 and fiscal 2011Fiscal 2013 quarterly results (in thousands, except per share amounts): First
Quarter Second
Quarter Third
Quarter Fourth
Quarter Total $ 230,953 $ 206,929 $ 181,414 $ 236,246 $ 855,542 $ 129,214 $ 118,280 $ 96,822 $ 125,241 $ 469,557 $ 32,788 $ 20,318 $ 5,920 $ 9,945 $ 68,971 $ 18,002 $ 5,028 $ 3,010 $ 5,277 $ 31,317 $ 18,002 $ 5,028 $ 3,010 $ 5,277 $ 31,317 $ 1.09 $ 0.30 $ 0.18 $ 0.32 $ 1.89 $ 1.09 $ 0.30 $ 0.18 $ 0.32 $ 1.89 16,531 16,554 16,580 16,585 16,563 16,552 16,570 16,591 16,608 16,586 $ 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 $ 0.06 $ (0.06 ) $ 0.00 $ 0.00 $ 0.01 $ 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 The sum of the quarterly earnings from continuing operations per common share, earnings from discontinued operations per common share and net earnings per common share amounts may not equalFebruary 2, 201312.11. Summarized Quarterly Data (unaudited) (Continued) Total Fiscal 2014 Net sales $ 257,649 $ 246,246 $ 219,457 $ 274,454 $ 997,806 Gross profit $ 147,328 $ 145,415 $ 112,946 $ 148,990 $ 554,679 Operating income $ 28,469 $ 26,825 $ 2,606 $ 25,703 $ 83,603 Net earnings (loss) $ 14,969 $ 15,069 $ (74 ) $ 15,794 $ 45,758 Net earnings (loss) per share: Basic and diluted $ 0.91 $ 0.92 $ — $ 0.96 $ 2.78 Weighted average shares outstanding: Basic 16,418 16,425 16,435 16,440 16,429 Diluted 16,450 16,460 16,435 16,501 16,471 Fiscal 2013 Net sales $ 234,203 $ 235,024 $ 197,506 $ 250,364 $ 917,097 Gross profit $ 134,075 $ 136,849 $ 104,785 $ 137,865 $ 513,574 Operating income $ 26,061 $ 27,712 $ 4,551 $ 26,346 $ 84,670 Net earnings $ 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: Basic 16,586 16,394 16,406 16,414 16,450 Diluted 16,611 16,423 16,435 16,444 16,482 Additionally, the sum of earnings from continuing operations per common shareBoth Fiscal 2014 and earnings from discontinued operations per common share may not equal net earnings per common share for each quarter due to rounding. Fiscal 2012 includes 53 weeks, with the fourth quarter including a 14 week period. Fiscal 2011 includes2013 included 52 weeks with the fourth quarter including a 13 week period. second quarter of fiscal 2012 included a $9.1 million loss on the redemption of our senior secured notes, while the fourth quarter of fiscal 2012Fiscal 2014 included the following significant items which impacted earnings from continuing operations for the quarter: (1) a LIFO accounting charge of $4.5 million; and (2) a $4.5$2.6 million charge due to the change in fair value of contingent consideration, compared to a $0.6 million charge in each of the first three quarters in fiscal 2012 and each quarter in fiscal 2011. The first quarter of fiscal 2011 included $1.0 million of charges resulting from the write-up of acquired inventory from cost to fair value pursuant to the purchase method of accounting and the second quarter and third quarter of fiscal 2011 included an $8.2 million loss and $0.8 million loss, respectively, on the repurchase of senior secured notes. Additionally, the fourth quarter of fiscal 2011 included the followingwith no significant items which impacted earnings from continuing operations for the quarter: (1) a LIFO accounting charge of $5.8 million; and (2) a life insurance death benefit proceeds of $1.2 million.Note 13. Restructuring Charges and Other Unusual Items During fiscal 2010, we incurred $3.2 million of charges 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 included the acquisition of Lilly Pulitzer as discussed in Note 1, the disposal of substantially all of the operations and assets of our former Oxford Apparel Group as discussed in Note 14 and the change in estimate for an environmental reserve discussed in Note 6.Note 14. 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 $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 $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 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 millionFiscal 2013. The fourth quarter of the $5.4 million of cash held in escrow. This change in estimate which resulted inFiscal 2013 included a reduction to theOXFORD INDUSTRIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)February 2, 2013Note 14. Discontinued Operations (Continued)$1.0 million, netproperty of income taxes and was recorded in fiscal 2011, resulted in$1.6 million. revised after-tax gain on the sale of the Oxford Apparel operations of $48.5 million comparedBen Sherman business. We have engaged Financo, Ltd. as our financial advisor to $49.5 million, as previously recognizedassist in fiscal 2010. In connection with the transaction process. We plan to continue to operate the Ben Sherman business during the process, and although we expect to complete a sale within Fiscal 2015 no specific timetable has been set for consummation of a transaction. There can be no assurance that a transaction will take place, and our Board of Directors may consider other alternatives for the transaction described above, we, among other things, entered into (1) license agreements with LF to grant licenses (subject to the limitations set forthBen Sherman business that it believes are 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 distributionbest interest 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 provided 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 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 $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 $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 2011 with no remaining assets or liabilities associated with the discontinued operations remaining as of January 28, 2012 or thereafter. Operating results of the discontinued operations are shown below (in thousands) Fiscal
2012 Fiscal
2011 Fiscal
2010 $ — $ 2,414 $ 200,636 $ — $ 1,764 $ 20,610 $ — $ 1,154 $ 12,877 $ — $ (1,017 ) $ 49,546 $ — $ 137 $ 62,423 Column A Column B Column C Column D Column E Description (In thousands) Fiscal 2014 Deducted from asset accounts: Accounts receivable reserves(1) $ 9,684 $ 10,500 — $ (10,844 ) (3) $ 9,340 Allowance for doubtful accounts(2) 641 319 — (210 ) (4) 750 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 Column 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) $ 8,429 $ 11,238 — $ (8,573 )(3) $ 11,094 1,980 132 — (1,107 )(4) 1,005 $ 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 (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.(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. 2, 2013 and January 28, 2012,1, 2014, and the related consolidated statements of earnings,operations, comprehensive income, shareholders' equity and cash flows for each of the three years in the period ended February 2, 2013.January 31, 2015. 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.2, 2013 and January 28, 2012,1, 2014, and the consolidated results of its operations and its cash flows for each of the three years in the period ended February 2, 2013,January 31, 2015, 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.February 2, 2013,January 31, 2015, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated April 4, 2013March 30, 2015 expressed an unqualified opinion thereon.April 4, 2013Table of Contentsfiscal 2012Fiscal 2014 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Report of Management on Internal Control over Financial ReportingFebruary 2, 2013.January 31, 2015. In making this assessment, management used the criteria set forthupdated framework issued in 2013 bythe Committee of Sponsoring Organizations of the Treadway Commission (COSO) in theInternal Control—Integrated Framework (2013). Based on this assessment, we believe that our internal control over financial reporting was effective as of February 2, 2013.January 31, 2015.February 2, 2013,January 31, 2015, and its report thereon is included herein./s/ THOMAS C. CHUBB III /s/ K. SCOTT GRASSMYER /s/ K. SCOTT GRASSMYERSeniorExecutive Vice President—Finance, Chief Financial Officer and ControllerApril 4, 2013March 30, 2015
April 4, 2013March 30, 2015's’s (the Company's)Company’s) internal control over financial reporting as of February 2, 2013,January 31, 2015, based on criteria established in Internal Control—IntegratedControl-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 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.February 2, 2013,January 31, 2015, based onthe COSO criteria.20122014 consolidated financial statements of Oxford Industries, Inc., and our report dated April 4, 2013March 30, 2015 expressed an unqualified opinion thereon./s/ Ernst & Young LLPApril 4, 2013 NoneFebruary 2, 2013:January 31, 2015: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 was President and CEO of the Federal Reserve Bank of 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 until his retirement on December 31,in 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 and 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, and was its Chief Executive Officer until her retirement in 2002. E. Jenner Wood III Mr. Wood is Chairman, President and CEOChief Executive Officer of the Atlanta Division of SunTrust Bank Atlanta / Georgia Division.and Corporate Executive Vice President of SunTrust Banks, Inc.February 2, 2013:January 31, 2015:Name Position Held Thomas C. Chubb III Chief Executive Officer and President Scott A. Beaumont CEO, Lilly Pulitzer Group Thomas E. Campbell SeniorExecutive Vice President—President - Law and Administration, General Counsel and SecretaryK. Scott Grassmyer SeniorExecutive Vice President—President - Finance, Chief Financial Officer and ControllerJ. Wesley Howard, Jr. President, Lanier Clothes Mark Maidment CEO, Ben Sherman Group Terry R. Pillow CEO, Tommy Bahama Group •2, 2013 and January 28, 2012.1, 2014.•EarningsOperations for fiscal 2012, fiscal 2011Fiscal 2014, Fiscal 2013 and fiscal 2010.Fiscal 2012.•fiscal 2012, fiscal 2011Fiscal 2014, Fiscal 2013 and fiscal 2010.Fiscal 2012.•fiscal 2012, fiscal 2011Fiscal 2014, Fiscal 2013 and fiscal 2010.Fiscal 2012.•fiscal 2012, fiscal 2011Fiscal 2014, Fiscal 2013 and fiscal 2010.Fiscal 2012.•fiscal 2012, fiscal 2011Fiscal 2014, Fiscal 2013 and fiscal 2010.•2.1 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, 2010.2.2Stock 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 April 1, 2013.10.11997 Stock Option Plan, as amended. Incorporated by reference to Exhibit 10(a)3.2 to the Company's Form 10-K for the fiscal year ended May 31, 2002.†February 1, 2014.10.1 10.2Second Amendment to the 1997 Stock Option Plan. Incorporated by reference to Exhibit 10(s) to the Company's Form 10-K for the fiscal year ended June 2, 2006.†10.3Executive Medical Plan. Incorporated by reference to Exhibit 10(d) to the Company's Form 10-K for the fiscal year ended June 3, 2005.† 10.2 10.4Oxford 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 Statement for its Annual Meeting of Shareholders held June 16, 2008, filed on May 13, 2008.†10.5Amended 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.†24, 2015.*10.3 10.6Form of Oxford Industries, Inc. 2009 Restricted Stock Agreement. Incorporated by reference to Exhibit 10.1 to the Company's Form 8-K filed on June 17, 2009.†10.7Form of Terms and Conditions of the Oxford Industries, Inc. Performance Share Unit Award Program for Fiscal 2012. Incorporated by reference to Exhibit 10.1 to the Company's Form 8-K filed on March 23, 2012.† 10.4 10.8Form of Oxford Industries, Inc. Performance Equity Award Agreement (Fiscal 2014 Performance-Based). Incorporated by reference to Exhibit 10.1 to the Company's Form 8-K filed on April 4, 2014.† 10.5 10.6 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 January 29, 2011. 10.7 10.9First 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. *10.10Employment Agreement, dated as of December 21, 2010, by and between Sugartown Worldwide, Inc. and Scott A. Beaumont. Incorporated by reference to Exhibit 10.2110.9 to the Company's Form 10-K for the fiscal year ended January 29, 2011.†February 2, 2013.10.8 10.11Third Amended and Restated Credit Agreement, dated as of 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 10.1 to the Company's Form 8-K filed on June 15, 2012. 10.9 10.12Third Amended and Restated Pledge and Security Agreement, dated as of June 14, 2012, among Oxford Industries, Inc., the other Grantors party thereto and SunTrust Bank, as administrative agent. Incorporated by reference to Exhibit 10.2 to the Company's Form 8-K filed on June 15, 2012. 10.10 10.13First Amendment, dated November 21, 2013, to Third Amended and Restated Credit Agreement, 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 10.1 to the Company's Form 8-K filed on November 25, 2013. 10.11 Oxford Industries, Inc. Deferred Compensation Plan (as amended and restated effective June 13, 2012). Incorporated by reference to Exhibit 10.1 to the Company's Form 10-Q for the fiscal quarter ended October 27, 2012.† 10.12 10.14Compromise Agreement, dated November 12, 2012, by and between Ben Sherman Group Limited and Panayiotis Philippou.†*10.15Executive Post-Retirement Benefits Agreement, dated December 31, 2012, by and between Oxford Industries, Inc. and J. Hicks Lanier. Incorporated by reference to Exhibit 10.15 to the Company's Form 10-K for the fiscal year ended February 2, 2013.† *10.13 Oxford Industries, Inc. Executive Performance Incentive Plan (as amended and restated, effective March 27, 2013). Incorporated by reference to Appendix A to the Company's Proxy Statement for 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- 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.* 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. of ours omitted from this report pursuant to Item 601(b)(4)(iii) of Regulation S-K. Oxford Industries, Inc.
By:By:
/s/ THOMAS C. CHUBB IIIApril 4, 2013Signature CapacityDate
Capacity
Date/s/ THOMAS C. CHUBB III Thomas C. Chubb III April 4, 2013Thomas C. Chubb IIIMarch 30, 2015
/s/ K. SCOTT GRASSMYERK. Scott GrassmyerSeniorPresident—President - Finance, ChiefApril 4, 2013
K. Scott GrassmyerMarch 30, 2015 * Thomas C. Gallagher Director March 30, 2015 * George C. Guynn
DirectorDirectorApril 4, 2013March 30, 2015
*John R. Holder
DirectorDirectorApril 4, 2013March 30, 2015
*J. Hicks Lanier
DirectorDirectorApril 4, 2013March 30, 2015
*J. Reese Lanier
DirectorDirector
March 30, 2015
*Dennis M. Love
DirectorDirectorApril 4, 2013March 30, 2015
*Clarence H. Smith
DirectorDirectorApril 4, 2013March 30, 2015
*Clyde C. Tuggle
DirectorDirectorApril 4, 2013March 30, 2015
*Helen B. Weeks
DirectorDirectorApril 4, 2013March 30, 2015
*E. Jenner Wood III
DirectorDirectorApril 4, 2013March 30, 2015*By
/s/ THOMAS E. CAMPBELL
