Grand Slam.Munsingwear introduced the world famous Grand Slam knit shirt in 1951. In 1954, an iconic logo was added to the left chest area—a groundbreaking design element that created a classic. Today, Grand Slam is a performance line that reflects the classic golf lifestyle - on and off the course.

Jack Nicklaus.Nicknamed the “Golden Bear,” Jack Nicklaus is widely regarded as a sports icon and one of the greatest champions in the history of golf, winning a record total of 18 professional major-championship titles and 73 PGA official PGA TOUR victories worldwide. There is no line of premium pro-performance clothing more deserving of his name thanThe men’s apparel collection includes knit shirts, shorts, pants, and layering pieces all designed with performance enhancing features. The Jack Nicklaus^®golf apparel. The current licensing agreement runs through December 2018 with an option to extend through 2023.

Laundry by Shelli Segal.From red carpet to runway, the Laundry by Shelli Segal collection is a reflection of the “L.A. Girl”- feminine and contemporary with an energetic and free-spirited attitude, always craving the next fashion statement. Every season, Laundry by Shelli Segal styles interpret the latest trends, while adding unique style to create a signature look. The line is sought after by fashionistas and Hollywood A-listers alike. Launched in 1988, Laundry by Shelli Segal dresses will take you from work to play—the label offers the perfect dress for the occasion. For more information visit laundrybyshellisegal.com.

Nike. Revolutionizing swim through constant innovation in competition and training, Nike Swim is defining the next generation of outfitting for sport. We are the official licensee in the United States, Canada and Mexico. Nike Swim products are sold through sporting goods, better specialty and department stores. The license agreement was extended to additional international territories and runs through 2021, with an option to extend to 2024.

Laundry by Shelli Segal. A leader in fashion, Laundry by Shelli Segal has been setting trends and inspiring women for more than 25 years offering a collection of day and evening dresses, accessories, swimwear, intimate apparel, bedding and eyewear. The Laundry by Shelli Segal brand is grounded with an LA influence, balancing just the right blend of Hollywood glamour and West Coast chic that is iconic and universal in its appeal to fit the lifestyle and sensibility of a modern woman who is smart, sexy, and not afraid to make an entrance.

Nike Swim.Nike Swim brings inspiration and innovation to athletes in the world of water. We hold the global license to design, manufacture, market and sell Nike swimwear products throughe-commerce partners, sporting goods, specialty, and major department stores around the world. The Nike Swim license agreement runs through May 2021, with an option to extend to 2023.

Original Penguin.The Original Penguin by Munsingwear. Original Penguin is an American heritage lifestyle brand is a cultural icon and represents a mix of iconicfor the modern guy. Since 1955 the brand has been made for originals by originals. By cleverly blending classic American sportswear andwith contemporary fashion, that appeals to a style-savvy consumer who’s into the details but doesn’t take fashion too seriously. Focused on the millennial consumer, the Original Penguin lifestyle re-defines the terms ‘geek-chic’creates products which are always fun, accessible, and ‘eccentric preppy’ with a strong focusauthentic. We license Original Penguin to third parties both for specific product categories and in certain geographic regions, and generally on Americana and vintage-inspired looks.an exclusive basis. The product line is sold worldwide at upscaleworld-wide in premium department and upper-tier specialty stores and includes apparel, shoesswimwear, footwear, accessories, sleepwear, underwear, tailored clothing, fragrance, luggage, eyewear, bedding and accessory items.bath, with many product categories offered across mens and kids consumer segments. The brand is also sold through stand-alone stores in the United States as well as the United Kingdom, Brazil, Argentina, ChileMexico, Colombia, Panama, Nicaragua, Guatemala, Bolivia, El Salvador and the Philippines. It is also sold online atoriginalpenguin.com (U.S.) and at originalpenguin.co.uk (Europe).

Perry Ellis.The Perry Ellis brand is faithfulcreates men’s clothing. We take a fresh, optimistic, effortless, and inclusive approach to a witty vision of American sportswear, updated to address current trends, and doesdo so with a strong focus on quality, value, comfortfashion and innovation. The Perry Ellis lifestyle appeals primarily to higher-income, fashion-conscious professional men.men who seek a stylish look that allows them to move from day to night to weekend and back with ease. We also license the Perry Ellis brand to third partiesacross men’s tailored clothing, footwear, accessories, fragrance, luggage, eyewear, bedding and bath, underwear with many product categories offered for a wide variety of apparel and non-apparel products.kids as well. Perry Ellis products are sold in upscalepremium and major department stores, both domestically and internationally, in stand-alone stores, and online atperryellis.com.online.

PGA TOUR.The PGA TOUR brand is synonymous with high performance and a commitment to excellence - qualities that have been incorporated into PGA TOUR apparel. The official PGA TOUR season is covered in virtually every major market in North America with hundreds of thousands ofon-site fans and millions of television viewers worldwide. Inspired by the excellence of the world’s most elite golfers, PGA TOUR apparel for men and women combines performance and style for golfers andnon-golfers alike. The brandproduct is sold to in-store and online throughmid-tier department stores and sporting goods stores. The line offers superior quality, performance and comfort for golfers and non-golfers alike. PGA TOUR apparel performs like a champion while remaining a fashion leader. The license was originally acquired in 2004 and has been extended through July 2017.2019.

6

Rafaella.Rafaella.Rafaella focuses on understanding the needs of the modernprovides affordable, ultra-flattering clothing for every woman who leads an on-the-go lifestyle. The brand’s continued successin sizes4-24. Rafaella is a result of combining luxury fabrics and great style with an impeccable fit. The line provides sophisticated style that transitions easily from day to night. Rafaella Sport launched in spring 2015 with a casual “athleisure” complement to the main collection. The brand is sold indesigned by women, for women. Available at better department stores and on e-commerce sites.

Savane.TheWith a heritage of craftsmanship, coupled with the latest in performance and comfort, Savane offers a collection offers an arraydesigned to help men succeed in the business of styles, silhouettes and fabrications for every wearing occasion. Innovative product launches include: Eco-Start^®products madelife with Repreve^®recycled fibers, and slim fit Travel Intelligence^®a collection that utilizes our signature CRUSHPROOF^®technology. Comfort, innovation and performance aretakes them from work to the key attributes of Savane.weekend. The line is available at national department and regional specialty stores. For further information visit savane.com.

Our Competitive Strengths

We believe that we have the following competitive strengths in our industry:

Portfolio of nationally and internationally recognized brands. We have built a broad and deep portfolio of global and licensed brands. We believe our brands are well-known and have a loyal following of both fashion-conscious consumers and retailers who desire high quality, well-designed fashion apparel and accessories.

Diversified business model. We market our products at multiple price points and across multiple channels of distribution, allowing us to provide products to a broad range of consumers, while reducing our reliance on any one demographic segment, merchandise preference or distribution channel. Specifically, we view our business as being well diversified:

By brandbrand..We maintain a global portfolio of over 30 highly recognized brands that appeal to fashion conscious consumers across various income levels. We design, source, market and license most of our products on abrand-by-brand basis targeting distinct consumer demographic and lifestyle profiles. For example, we market the Perry Ellis and Original Penguin brands to higher-income consumers, and market the Grand Slam and Savane brands to middle-income consumers. We also market brands that target women through our Rafaella and Laundry by Shelli Segal brands, as well as through our family of golf and swimwear brands which include Callaway, Jantzen and Nike. In addition, our brands such as Gotcha, Manhattan and Pro Player are distributed through direct license.licensees. This allows us to maintain strong brand integrity without a direct wholesale or retail commitment of resources.

By productproduct..We design and market apparel and accessories in a broad range of both men’s and women’s product categories, which we believe increases the stability of our business. Our menswear offerings include career and casual sportswear, golf apparel, sports apparel, swimwear, activewear and accessories. Our womenswear offerings include dresses, sportswear, swimwear, activewear and accessories. We believe that our product diversity decreases our dependence on a single product line or fashion trend and contributes substantially to our growth opportunities.

By distribution channelchannel..We market our products across multiple levels of retail distribution, allowing us to reach a broad range of consumers domestically and internationally. We distribute our products through luxury stores, department stores, national and regional chain stores, mass merchants, specialty stores, sporting goods stores, the corporate wear market,e-commerce, as well as clubs and independent retailers. Our products are distributed through approximately 25,00028,000 doors at some of the nation’s leading retailers, including Walmart, the Marmaxx Group, Macy’s, Dillard’s and Macy’s.Kohl’s. We also distribute our products through our own retail stores, which include 4136 Perry Ellis, 1215 Original Penguin and two multi-brand retail outlet stores located primarily in upscale retail outlet malls across the United States, United Kingdom and threePuerto Rico. As of March 1, 2018, we also operated two Perry Ellis, two Cubavera, and 16seven Original Penguin and onetwo multi-brand full-pricefull price retail stores.stores located in upscale demographic markets in the United States and United Kingdom. We also operatee-commerce sites for several of our brands. Finally, we have successfully expanded product and brand distribution in the United Kingdom, Canada, Latin America and Europe, and believe additional opportunities exist for further international expansion of our brand base.

7

The following table illustrates the current diversity of a cross section of our brands and products we produce and market and their respective distribution channels:

Leadership position in the Men’s Wholesalemen’s wholesale business. We believe that our established relationships with retailers allow us to maximize the selling space dedicated to our products, monitor our brand presentation and merchandising selection, and proactively introduce new brands and products. Because of our quality brands and products, dedication to customer service, design expertise and sourcing capabilities, we have developed and maintained long-standing relationships with our largest customers. In addition, we are engaged in wholesale growth initiatives that are designed to transform our respective brands’ displays at select department stores into branded “shop-in-shops.“shop-in-shops.” By installing customized freestanding fixtures, wall casings and components, decorative items and flooring, as well as deploying specially trained staff, we believe that ourshop-in-shops provide department store consumers with a more personalized shopping experience than traditional retail department store configurations. We also service the ecommerce distribution for many of our wholesale customers by fulfilling and mailing orders directly from our distribution facilities. This aspect of our business is becoming more important as more consumers shop on line. These capabilities further elevate our competencies to our retail partners.

Growing Licensinglicensing business. The strengths of our brands have been instrumental in helping us build our global licensing business. We collaborate with over 120 high-quality100 product licensees who produce and sell what we believe are products requiring specialized expertise that are enhanced by our brands’ respective strengths. We provide support to these business partners and ensure the integrity of our brand names by taking an active role in the design, quality control, advertising, marketing and distribution of licensed products. Our relationships with our product licensees have helped us leverage our success across demographics and categories by taking advantage of their unique expertise, resulting in total royalty revenue for licensed products increasing from $31.7 million in fiscal 2015 to $34.7 million in fiscal 2016.expertise. In addition, we have entered into agreements withnon-manufacturing third-party licensees who we believe have particular expertise in the distribution of fashion apparel and accessories in specific geographic territories, such as the Middle East, Eastern Europe, Latin America and the Caribbean, throughout Asia and Australia.

Manufacturing, Sourcingsourcing and Distributiondistribution. Product design and innovation, including fit, fabric, finish and quality, are important elements across our businesses. We have sourced our products globally for over 4550 years and employ sophisticated logistics and supply chain management systems to maintain maximum flexibility. Our network of worldwide company-owned sourcing offices and agents enables us to meet our customers’ needs in an efficient and high quality manner without relying on any one vendor, factory, or country. In fiscal 2016,2018, based on the total units, we sourced our products from Asia (77%)80%, the Middle East (16%)15% and the Americas (7%)5%. We maintain a staff of over 290260 experienced sourcing professionals in four offices in China (including Hong Kong),

as well as in the United States, Taiwan, Bangladesh, and Vietnam. Our sourcing offices closely monitor our suppliers and provide strict quality assurance analyses that allow us to consistently maintain our high quality standard for our customers. We have a compliance

8

department that works closely with our quality assurance staff to ensure that our sourcing partners comply with Company-mandated and country-specific labor and employment regulations. We believe that sourcing our products allows us to manage our inventories more effectively while avoiding capital investments in production facilities.

We have also focused on evolving our supply chain and building upon our operating platforms to enhance our efficiencies across the company. Speed is a focus area across our organization, as we have taken measures to reduce our lead times, enhance our operations and simplify our process to compete effectively and keep pace with rapidly changing markets. Because of our sourcing experience, capabilities and relationships, we believe that we are well positioned to take advantage of the changing textile and apparel quota environment. We limit our sourcing exposure through, among other measures: (i) shifting of production among countries and factories, (ii) sourcing production to merchandise categories where product expertise exists and (iii) sourcing from countries with tariff preference and free trade agreements.

Design expertise and advanced technology. We maintain a staff of designers, merchandisers and artists who are supported by a staff of design professionals, including assistant designers, technical designers, graphic artists and production assistants. Ourin-house design staff designs substantially all of our products using advanced three dimensional computer-aided design technology, like Optitex, that minimizes the time-intensive and costly production of sewn prototypes. In addition, this technology provides our customers with products that have been custom designed for their specific needs and meet current fashion trends. We design and employ advanced fabric and design technologies to ensure a proper fit and outstanding performance when creating our women’s and men’s golf and swimwear apparel. We seek to regularly upgrade and improve our products with the latest in innovative technology while broadening our product offerings. Our goal, to deliver superior performance in all our products, provides our developers and licensees with a clear, overarching direction for the brand and helps them identify new opportunities to create products that meet the changing needs of consumers. We regularly upgrade our computer technology, including our Product Lifecycle Management systems, to enhance our design capabilities, and facilitate communication with our global suppliers and customers on a real-time basis resulting in faster new product developments thereby meeting the ever-changing needs of our customers.

Our sales planners have an enhanced ability to manage and monitor our retail customers’ inventory at the stock keeping unit (“SKU”) level through utilization of our Oracle Retail Planning system.System. This system helps planners maximize the sales and margins of our products by identifying opportunities for our retailer customers to improve inventory turns, which reduces our product returns and markdowns and improves our profitability. We use PerrySolutionsin-house planning software and Oracle Retail during the assortment planning process to allocate the optimal size/color and quantity mix for the initial retail product rollout.

Our Data Warehouse, Geographical Information Systemsdata warehouse, geographical information systems and IBM SPSS, a forecasting model,modeling tool, are utilized to detect future trends and identify new business opportunities. Oure-commerce environment utilizes DemandwareSalesForce Commerce Cloud coupled with the best of the breede-commerce cloud and social media services to create an integrated leading edge environment. We recently completed implementation of a cloudOur loyalty system utilizingutilizes Salesforce Oracle-Eloqua,Service Cloud, Oracle as Email Service Provider, and Starmount’s mobile POS.Oracle POS to maximize customer value. These solutions improve our understanding of ourdirect-to-consumer market allowing us to engage the customer at the time of purchase resulting in significant increases in revenue per transaction.

Digital-first marketing orientation. We have evolved our marketing approach, in both business to business as well as business to consumer, to connect with our consumers digitally. Our consumer marketing targets our end consumer through both demographic and behavioral inputs so that we can engage with them on the sites, platforms, and devices where they spend their time, with relevant messaging. Social media, native content, website experience, advertising, and CRM activities are integrated to deliver brand and product messages to engage and drive purchase.

Proven and experienced management team. Our senior management team averages more than 30 years in the apparel industry and has extensive experience in growing and rejuvenating brands and building strong relationships with global suppliers, licensees and retailers. WithThis industry backdrop coupled with public company

9

experience, as well as an average of 25 years of experience in the retail industry, including at a number of public companies, and an average of 1522 years with Perry Ellis International, our Company, provide us with a deeply seasoned senior management team haswith strong creative and operational experience and a successful track record.experience. This extensive experience also extends beyond our senior management team and deep into our organization.

Our Business Strategy

Our goal isWe are focused on driving strategic initiatives designed to increase ourenhance both revenue and profitsprofitability with a portfolio of brands that we offer in multiple channels of retail distribution through the following strategies:

Continue to strengthen the competitive position and recognition of our lifestyle brands. We intend to continue growing brand awareness and customer loyalty in North America and internationally, in a number of ways including by:

We partner with leading wholesale customers in national and regional department, chain, mass market, specialty and independent stores in North America and Europe. These longstanding relationships enable us to access large numbers of our key consumers in a targeted manner. In addition, we are engaged in wholesale growth initiatives such as advertising support in the form ofpoint-of-sale fixtures and signage to enhance the presentation and brand image of our products. We also participate in opportunistically partner with retailers to openshop-in-shops, which are the primary component of our retail marketing strategy to increase and brand floor space dedicated to our products within our major retail accounts. The design and funding of our concept shops within our major retail accounts has been a key initiative for securing prime floor space, educating the consumer and creating an exciting environment for the consumer to experience our branded products. Our shops enhance our brand’s presentation within our major retail accounts with ashop-in-shop approach, using dedicated floor space exclusively for our products, including flooring, lighting, walls, displays and images. We participate in incentive programs with our retailer customers, including customer loyalty, discounts, allowances and cooperative advertising funds. We also offer sales incentive programs directly to consumers through our “Supreme Perks” Loyalty Programbranded loyalty programs, which targetstarget consumers in ourdirect-to-consumer channel. channel and reward them with benefits that can be redeemed across multiple brands. In November 2017, we expanded to Supreme Perks program across multiple brands, including Perry Ellis (“Perry Perks”), Original Penguin (“Original Rewards”), Cubavera (“Good Life Rewards”), and Laundry by Shelli Segal (“Laundry VIP”), to enhance consumer engagement and experience.

The strength and agility of our global brands has been instrumental in helping us expand our licensing business. We collaborate with a select number of product licensees who produce and sell products requiring specialized expertise that are enhanced by our brands’ strengths. In addition, we have entered into agreements withnon-manufacturing licensees who have particular expertise in the distribution of our products in countries and geographic territories such as South Korea, the Philippines, the Middle East, China, South Africa, Latin America and the Caribbean.

Expand our product offerings. We have been a leader in men’s apparel for over 40 years and believe we can continue to grow thisour business by leveraging our expertise and experience in design and manufacturing, in our relationships with leading retailers, and in our sourcing capabilities to expand to new product categories by capitalizing on our brands’ strong brand awareness and loyalty among consumers. We believe we can both optimize our strong business opportunities and attract new customers to our brands. For example, this yearwe expanded the performance attributes for our Perry Ellis collection line to offer casual “athleisure” components. These product offerings within Perry Ellis expandedprovide complementary additions under the brand that extended its reach beyond the traditional wear to include “athleisure” components under Perry Ellis 360°. The line incorporates performance fabrics, reflective tape and materials that provide function and versatility.work outfit.

10

Grow our Direct-to-Consumerdirect-to-consumer channel.We seek to expand and leverage the high gross margindirect-to-consumer channel, which includese-commerce, outlet stores and full-price stores, and where we control all aspects of the operation, thereby complementing our wholesale business. This business segment operates under a single operating group to ensure our omni-channel operations are interdependent. This has enabled our company to increase comparable store sales with a number of initiatives already under way to increase the size and frequency of purchases by our existing customers and to attract new customers. Such initiatives include, among others, maximizing productivity with existing stores, creating compelling store environments and offering new products, including menswear, small leather goods and active footwear.

E-commerce is our fastest growingdirect-to-consumer channel. As a complement to our wholesale business, we currently market Perry Ellis, Original Penguin, Farah, Rafaella, Cubavera, Laundry by Shelli Segal and Callaway Golf Apparel products online in the United States and internationally. We are continuingcontinue to enhance the online capabilities and functionality of oure-commerce sites to improve the shopping experience and increase sales. At the same time, these enhancements enable us to expand the number of countries to which we are able to ship. In addition, we plan to continue servicinghave increased our indirecte-commerce channel platforms for sales via our retail partnerscustomers by further investing in product presentation and selling capabilities to further strengthen the competitive position and image of our current brands on their respective websites.

In addition toe-commerce, our stores allow us to showcase a brand’s full line of current season products, with fixtures and imagery, which we believe reinforce our brand image and enables us to control the entire customer experience. We intend to expand our store base both domestically and internationally by selectively opening new retail locations for Perry Ellis, Original Penguin and other brands. We also continue to increase global comparable store sales with a number of initiatives already under way to increase the size and frequency of purchases by our existing customers and to attract new customers. Such initiatives include, among others, maximizing the merchandise assortment within existing stores, providing exceptional customer service, creating compelling store environments and offering new products, small leather goods, travel products and accessories.

In addition to ourdirect-to-consumer operations, our licensees, distributors and other independent parties own and operate over 90100 stores. These are primarily mono brand stores selling company-branded products with the same look and feel as our company-operated stores. The majority of these stores are located in Latin America and Asia.

Grow our Internationalinternational businesses. We believe that our strong brand portfolio and broad product offerings enable us to seek additional growth opportunities in geographic areas where we are underpenetrated, such as Europe and Asia. Our historic growth focused primarily on the wholesale channel within the United States, and accordingly, our revenues are concentrated in that distribution channel. We intend to strengthen our existing markets and successfully expand our business in relatively underdeveloped or under-optimized markets. Our immediate concentrationfocus is supporting our momentum in Europe, Canada and Latin America while expanding our penetration in Asia and the Middle East. For example, last year we significantly expanded our penetration in Europe, with development in France, Spain, Benelux and Italy. In addition, we plan to introduce Perry Ellis America,introduced Nike Swim into Latin America and Europe. We also brought Ben Hogan into the market in Europe this year.Europe. We also seek to expand revenue through licensing partnerships across the Asian, Middle Eastern, African and Indian markets. We executed new licensing relationships in IndiaLatin America and the Middle EastAsia for Perry Ellis, and in Europe for Original Penguin, this yearduring fiscal 2018 as well.

Adapt to our continually changing marketplace. We willintend to continue to make investments and implement strategies to meet the growing needs of our customers on a timely basis in the ever-changing apparel industry. We are currently focusing on expanding our business in the following areas:

11

Expand our licensing opportunities.We believe licensing to third parties is an attractive opportunity for our brands by providing increased customer exposure domestically and internationally, as well as opportunities for future product extensions. We intend to continue to expand the international distribution of our brands through licensing. This year, we entered into 2624 new licensing agreements to expand our product offerings under our well-known brands and broaden the markets that we serve. We have over 160 license agreements, covering over 100 territories150 countries outside of the United States, to use our brands in numerous product categories, including apparel, accessories, footwear, soft home goods and fragrances. We have an active pipeline of new agreements in development as we seek to expand product categories and markets.

We provide support to these business partners and ensure the integrity of our brand names by taking an active role in the design, quality control, advertising, marketing and distribution of licensed products. We are focusing resources on globalizing core brands and upgrading existing licensees. We intendare using our competency in both men’s and women’s to leverageadd additional categories and geographic regions to our current list of licenses in the 2016 introduction of Perry Ellis in Europe as a springboard for additional licensing revenue. For Original Penguin, we seek to continue to grow in key licensed categories including kid’s apparel and footwear, accessories, watches and eyewear.

years ahead. Licensing arrangements relate to a broad range of our brands.brands and product categories. In addition to the revenues and brand awareness that licensing provides us, we also believe that licensing our brands benefits us by providing significant high-margin operating income contribution.

Pursue strategic acquisitions and opportunities that leverage and enhance our global product offerings.We continually review acquisition opportunities and believe that our existing infrastructure and management depth will enable us to complete additional acquisitions in the apparel industry should there be an attractive prospect. While we believe we have a diverse portfolio of brands with growth potential, we will continue to explore trademarks and licensing opportunities that we believe are additive to our overall business. New license opportunities allow us to fill new product and brand portfolio needs. We take a disciplined approach to acquisitions, seeking business opportunities that we can grow profitably and expand by leveraging our infrastructure and core competencies and, where appropriate, by extending the brand through licensing.

On October 23, 2017, we entered into a licensing agreement with NMNY Group, LLC (“NMNY”) for the design, production and wholesale distribution of Laundry by Shelli Segal women’s day and social occasion dresses in the United States and Canada, which resulted in the discontinuation of our directly operated Laundry by Shelli Segal dress wholesale business in the fourth quarter of 2017.

12

Segment Information

See footnote 24 to the Consolidated Financial Statements in “Item 8. Financial Statements and Supplementary Data” for segment information.

Recent Developments

On AprilFebruary 6, 2015,2018, we elected to call for the partial redemption of $100 millionreceived anon-binding proposal from George Feldenkreis, a current member and former Executive Chairman of our $150 million outstanding 7.875% Senior Subordinated Notes due 2019 (the “Notes”)Board of Directors, and a notice of redemption was sentFortress Credit Advisors LLC to acquire all registered holders of the Notes. The redemption price for the Notes is equal to 103.938% of the principal amount of the Notes, plus accrued and unpaid interest to, but not including, the redemption date. On May 6, 2015, we completed the redemption of the $100 million of our senior subordinated notes.outstanding common shares not already beneficially owned by Mr. Feldenkreis. On February 13, 2018, our Board of Directors authorized a special committee of independent directors, comprised of Joe Arriola, Jane DeFlorio, Bruce J. Klatsky, Michael W. Rayden and J. David Scheiner to evaluate this proposal, with Mr. Scheiner serving as chair. The special committee has retained Paul, Weiss, Rifkind, Wharton & Garrison LLP and Akerman LLP as its legal counsel and PJ SOLOMON as its financial advisor to assist in its review. The special committee is evaluating the proposal and no decision has been made with respect to our response to the proposal. We incurred debt extinguishment costs of approximately $5.1 millioncannot assure you that the proposal will result in connection with the redemption, including the redemption premium as well as the write-off of note issuance costs.

In connection with the partial redemption of the Notes, on April 1, 2015, we entered into a commitment letter with Wells Fargo Bank, National Association, as agent under the Amended and Restated Loan and Security Agreement dated as of December 2, 2011, as amended (the “Loan Agreement”), pursuantdefinitive offer to which the maximum principal balance that may be outstanding under the Loan Agreement was increased by $75 million to a maximum of $200 million. The closing occurred during April 2015.

On March 31, 2015, we expanded our licensing agreement with Nike, Inc. to include additional territories globally with immediate expansion into certain countries within Europe, Central and South America.

On March 19, 2015, we entered into an agreement to sell the intellectual property of the C&C California brand to ACH C&C LLC.

During the fourth quarter of fiscal 2016, we entered into a sales agreement, in the amount of $8.2 million, for the salepurchase all of our sourcing office building located in Beijing, China. As a result of thisoutstanding capital stock or that any definitive agreement will be executed or that the proposal or any other transaction we recorded a gain in the amount of $4.5 million, net of expenses of $1.9 million.will be approved or consummated.

Products and Product Design

Perry Ellis International has assembled a world-class design team, positioned in critical locations around the world. The extensive team is seasoned and well-versed in many product categories. The company’s core competency continues to remain menswear, offering products ranging from casual to career sportswear, niche lifestyle apparel in the Latin-inspired markets, emerging Big and Tall markets, as well as technology-rich innovation in the market for authentic golf. Key sport extensions include swim, training and the corresponding accessories. Womenswear continues as a powerful opportunity for the company, with ever-expanding offerings in the sport separatessportswear and dress markets, as well as parallel extensions to the men’s product stable in swim and active.

We continue to make technology investment a priority in all areas of the Company. Thein-house design organization continues to benefit from the latest updates instate-of-the-art computer addedaided design (“CAD”) technology. Woven and knitted fabric patterns, print patterns and silhouette enhancements are mapped and confirmed with speed and accuracy, as well as with great cost-efficiency. With the expanded use of Optitex we reduce unnecessary creation of samples, waste and lead time. The latest evolutions in style and fashion quickly travel from concept to factory-ready reality.

Our creative mission is to offer and market fashion-right branded lifestyle products that appeal to a broad and diverse customer base. Extensive consumer and fashion trend research, along with the ever-vigilant monitoring of retail sales, enables us to deliver the right products at the right time to the right sector.

Licensing Operations

We license certain brands to third parties for various product categories in distribution channels and countries where we may not distribute our brands directly. Licensing enhances the images of our brands by widening the range, product offerings and distribution of products sold under our brands without requiring us to make capital investments or incur additional operating expenses. As a result of this strategy, we are experienced in identifying licensing opportunities and have established relationships with numerous licensees. Our licensing operation is also a significant contributor to our operating income.

As of January 30, 2016,February 3, 2018, we were the licensor of over 160 license and distribution agreements, for various products including footwear, men’s suits, sportswear, dress shirts, tailored clothing, underwear, loungewear, outerwear, activewear, neckwear, fragrances, eyewear, accessories and home, and for various international territories. Wholesale sales of licensed products by our licensees were approximately $697 million, $637 million and $596 million in fiscal 2016, 2015, and 2014, respectively. We received royalties from these salesagreements of approximately $34.7$34.6 million, $31.7$36.0 million, and $29.7$34.7 million in fiscal 2016, 2015,2018, 2017, and 2014,2016, respectively. We believe that our long-term licensing opportunities will continue to grow domestically and internationally. Although the Perry Ellis brand has international recognition, we still perceive the brand to be under-penetrated in international markets such as Europe, Latin America and Asia. We are actively working to optimize and expand

13

our base of licensees for the Perry Ellis brand in international markets. We believe that our brand and licensing experience will enable us to capitalize on these international opportunities and that our operations in Europe will assist us in this endeavor.

We have been successful with licensing our Original Penguin brand, both domestically and internationally, in categories such as footwear, fragrance, eyewear, dress shirts, tailored clothing, neckwear and kids apparel. We also believe thatrecently added accessory licenses to both Laundry by Shelli Segal and Rafaella provideand believe that there are additional licensing opportunities such as accessories and footwear.product categories which we are actively working on licensing. Other brands within our portfolio we license for certain product categories and territories include Farah, Jantzen, Gotcha, Manhattan, and Ben Hogan among others.

To maintain a brand’s image, we closelyexercise strict control over quality, monitor our licensees and approve all licensed products. In evaluating a prospective licensee, we consider the candidate’s experience in product design and manufacturing, financial stability, marketing ability and experience in wholesale and retail. We also evaluate the marketability and compatibility of the proposed products with our brands. We regularly monitor product design, development, merchandising and marketing of licensees, and schedule meetings at prescribed times throughout the year with licensees to ensure product quality and brand consistency. We expose our products and fashion collections to our licensees and share our expectations of product positioning in the marketplace. In addition to approving, in advance, all licensees’ products, we also approve their advertising, promotional and packaging materials.

As part of our licensing strategy, we work with our licensees to further enhance the development, image, and sales of their products. We offer licensees marketing support, and our relationships with retailers help the licensees generate higher revenues.

Our license agreements generally extend for a period of three to five years with options to renew prior to expiration for an additional multi-year period based upon a licensee meeting certain performance criteria. The typical agreement requires that the licensee pay us the greater of a royalty based on a percentage of the licensee’s net sales of the licensed products or a guaranteed minimum royalty that typically increases annually over the term of the agreement. Generally, licensees are required to contribute to us additional funds for advertising and promotion of the brand.

Marketing, Advertising and Promotions

Our strategy to marketdrive demand and promotesell through of our products begins with our portfolio of brands across the four business segments. We strive to be locally relevant with the marketing and visual merchandising of our products across an array of developed and emerging markets within the channels of distribution in which we operate.

Our marketing strategies vary byEach brand and local market. Our portfolio of brands employ different engagement models suited to each brand’s equity, distribution,has a defined positioning strategy, product focus, target consumer segment, geographic market focus, and understanding of the core consumer. This enables usdistribution channel approach.

We leverage data and consumer insights to elevate the consumer experience as we attract new customers,inform our strategies to build loyalty and drive advocacy. Our marketing planning approach leverages local insightsengagement with current consumers as well as attract and acquire new ones. By considering our end consumers’ purchasing journey from discovery to optimize allocation of resources across different media outletsconsideration to purchase and retail touch pointsretention, we develop initiatives and communications to resonatehelp our brands and products to be understood and desired.

We seek to build a relationship with our most discerningend consumers. Through direct marketing and targeted digital communications, we segment relevant messaging based on consumer preferences. Additionally, we reward end consumers most effectively. with special offers, advance product releases, and exclusive access with our branded loyalty programs for Perry Ellis, Original Penguin, Cubavera, and Laundry by Shelli Segal.

Most of our creative marketing work is done by through anin-house creative teams that design and produce theagency model. This team creates brand identity elements, packaging, advertising, sales materials advertisements and packaging for products in each brand.digital content. We connect with consumers to build brand equity and drive retail traffic through extensive use of digital media including social media, branded content, digital advertising, search marketing, and email. Our digital marketing strategies have continued to retail locationsevolve as mobile consumption of communications has become ubiquitous. We utilize relevant traditional media including fashion and to our websites throughlifestyle magazines and newspapers, digital and social media, television,geo-targeted billboards in cities and airports, and direct mail and email.based on the target consumer profile by brand. In addition, we seek editorial coverage for our brands and products not only in publications and otherthrough traditional media but increasingly in digital and social media, leveraging significant opportunities for growth.

We are increasing our brand awareness and sales by expanding our digital presence, encompassing e-commerce and mobile-commerce,outlets as well as digitalthe less traditional, and social media. We continue to innovate to better meet consumer online shopping preferences, support e-commerce and mobile-commerce businesses via digital and social marketing activities designed to build brand equity and consumer engagement, and support our authorized retailers to strengthen their e-commerce businesses and drive salesgrowing importance of our brands on their websites. We have opportunities to expand our brand portfolio online around the world, and we have developed omni-channel concepts to better serve consumers as they shop across channels. We have dedicated resources to implement coordinated, brand-enhancing strategies across all online activities to increase our direct access to consumers.influencers.

Promotional activities and in-store displays are designed to attract new consumers and introduce existing consumers to other product offerings from the respective brands.

14

Our marketing efforts also benefit from cooperative advertising programs with some retailers, some of whichwholesale partners are supported by coordinated promotions.strong and omni-channel in their orientation. Our marketing and sales executives spend considerable time in the field meeting with consumers and retailers at the points of sale. We have dedicated resources to enable the best brand and product representation on our retail partners’ websites in an effort to maximize this growing channel. Additionally, our reach towards targeted consumers is increased by cooperative advertising programs with some retailers. Ranging fromin-store displays, digital advertising, direct mail and email to promotional activities, we are committed to helping our retail partners drive demand and sales. We believe we have opportunities to expand our brand portfolio online around the world, and have developed omni-channel concepts to better serve consumers as they shop across channels.

Distribution and Customers

We operate 4136 Perry Ellis, 1215 Original Penguin and two multi-brand retail outlet stores and threestores. We also operate two Perry Ellis, two Cubavera, and 16seven Original Penguin, and onetwo multi-brand full-price retail stores. We also operate stores as well ase-commerce sites for several of our brands with goals to expand oure-commerce offerings.

We believe that customer service is a key factor in successfully marketing our products. We coordinate efforts with customers to develop products meeting their specific needs using our design expertise and CAD technology. Utilizing our sourcing capabilities, we strive to produce and deliver products to our customers on a timely basis.

We sell merchandise to a broad spectrum of retailers, including national and regional chains, department, mass merchant and specialty stores. Our largest customers include Walmart, The Marmaxx Group and Macy’s. We have developed and maintained long-standing relationships with these customers. Additionally, we sell merchandise to other retailers such as: Belk,Kohl’s, Dillard’s and Hudson Bay Company. We also sell merchandise to corporate wear distributors.

Net sales to our five largest customers accounted for approximately 47%, 49% and 43%46% of net sales in fiscal 2016, 20152018 and 2014, respectively.fiscal 2017 and 47% of net sales in fiscal 2016. For fiscal 2018, two customers accounted for over 10% of net sales; Walmart accounted for 15% and The Marmaxx Group accounted for 11%. For fiscal 2017, two customers accounted for over 10% of net sales; Walmart accounted for 13% and The Marmaxx Group accounted for 10%. For fiscal 2016, three customers accounted for over 10% of net sales; Walmart accounted for 12%, The Marmaxx Group accounted for 11% and Macy’s accounted for 10% of net sales, respectively. For fiscal 2015, four customers accounted for over 10% of net sales; Walmart accounted for 14% and Kohl’s, Macy’s and The Marmaxx Group each accounted for 10% of net sales, respectively. For fiscal 2014, two customers accounted for over 10% of net sales; Kohl’s and Macy’s accounted for approximately 11% and 10% of net sales, respectively.

Information Systems

Our information systems division deploys advanced technologies such ase-commerce, data warehousing, demographic analysis, sophisticated electronic data interchange (“EDI”), sourcing and demand solutions, and globally available product life cycle software, all focused on increasing efficiency and achieving exceptional customer satisfaction.

Ourin-house sales staff is responsible for customerfollow-up and support, including monitoring prompt order fulfillment and timely delivery. We utilize EDI and a self-hosted site for certain customers in order to provide

advance-shipping notices, process orders and conduct billing operations. In addition, certain customers use the EDI system to communicate their weekly inventory requirements per store to us. We then fill these orders either by shipping directly to the individual stores or by sending shipments, individually packaged and bar coded by store, to a centralized customer distribution center.

We use PerrySolutionsin-house planning software that enables our sales planners to manage our retail customers’ inventory at the SKU level. In addition, we use Oracle Retail during the assortment planning process to allocate the correct quantities for the initial rollout of product at retail.retail stores. These systems help us maximizeincrease sales and margins of our products by increasing inventory turns for the retailer, which in turn reduces our product returns and markdowns and increases our profitability. We also use demographic mapping data software that helps us develop specific micro-market plans for our customers and provide them with enhanced returns on our various product lines. Our Data Warehouse, Geographical Information Systemsdata warehouse, geographical information systems and IBM SPSS are utilized to detect future trends and identify new business opportunities. Oure-commerce environment utilizes DemandwareSalesforce Commerce Cloud coupled with the best of breede-commerce, Cloud and social media services creating an integrated leading edge environment.

15

We use the Oracle Retail suite of products with the goal of reducing markdowns, increasing inventory turns and increasing revenues while automating the process. TheThese different modules allow us to monitor our customers’ product by store and quickly react to changes in consumer behavior. The suite also includes best of breedadvanced store inventory and point of sales software, which allows us to keep just in time inventory at our retail stores. ThisWe believe this investment shows our commitment to understanding our consumer in order to strengthen our brands as well as our effort to support the continued expansion of our direct retail businesses. Additionally, we invested in Trade Management Oracle Financials software to quickly and positively resolve customer claims.

We began the implementation of a new JDA warehouse management system during fiscal 2018.

In addition, we use Google Apps for Work to provide real-time collaboration across our global offices, with face to face video conferencing available to every associate, for training and business meetings.

We continue to expand the use of Optitex to design, simulate fit and sell digitally in order to reduce unnecessary creation of samples and waste.

Seasonality and Backlog

Our products are geared towards lighter weight apparel generally worn during the spring and summer months. We believe that this seasonality has been reducedis balanced with our introduction of fall, winter and holiday merchandise. The swimwear business, however, is highly seasonal in nature, with the vast majority of our sales occurring in our first and fourth quarters. Additionally, our business activities could be negatively impacted by severe weather conditions, which could affect the sale of our products or disrupt our sourcing.

We generally receive orders from our retailers approximately five to seven months prior to shipment. For the majority of our sales, we have orders from our retailers before we place orders with our suppliers. A summary of the order and delivery cycle for our four primary selling seasons, excluding swimwear, is illustrated below:

Sales and receivables are recorded when inventory is shipped. Our backlog of orders includes confirmed and unconfirmed orders, which we believe, based on our past experience and industry practice, will be confirmed. As of March 24, 2016, the backlog for orders and shipments to dateThe dollar amount of our products was approximately $570 million, as compared to approximately $577 millionorder backlog as of March 25, 2015.any date may not be indicative of actual future shipments and, accordingly, is not material to an understanding of the business taken as a whole. The amount of unfilled orders at a point in time is affected by a number of factors, including the mix of product, the timing of the receipt and processing of customer orders and the scheduling of the sourcing and shipping of the product, which in most cases depends on the desires of the customer. Our backlog is also affected by anon-going trend among retailers to reduce the lead-time on their orders. In recent years, our customers have been more cautious of their inventory levels and have delayed placing orders andre-orders compared to our previous experience. Due to these factors, a comparison of unfilled orders from period to period is not necessarily meaningful and may not be indicative of eventual actual shipments.

Supply of Products and Quality Control

We currently use independent contract manufacturers to supply the substantial majority of the products we sell. Of the total units of sourced products in fiscal 2016, 77%2018, 80% was sourced from suppliers in Asia, 16%15% was sourced from suppliers in the Middle East and 7%5% was sourced from suppliers in the Americas, respectively.Americas. We believe that the use of numerous independent contract manufacturers allows us to maximize production flexibility, while avoiding significant capital expenditures,work-in-process inventorybuild-ups and the costs of maintaining and operating production facilities. We have had relationships with some suppliers for over 30 years, however, none of these relationships areis formal or requirerequires either party to purchase or supply any fixed quantity of product.

16

The vast majority of our products are purchased as “full packages,” where we place an order with the supplier and the supplier purchases all the raw materials, assembles the garments and ships them to our distribution facilities or third party facilities.

We maintain a staff of experienced sourcing professionals in four buying offices in China (including Hong Kong), as well as the United States, Taiwan, Bangladesh, and Vietnam. This staff sources our products worldwide, monitors our suppliers’ purchases of raw material, and monitors production at contract manufacturing facilities in order to ensure quality control and timely delivery. We also operate through independent agents in Asia and the Middle East. Our sourcing personnel based in our United States offices perform similar functions with respect to our suppliers worldwide. We conduct inspections of samples of product prior to cutting by contractors, during the manufacturing process and prior to shipment. We also have full-time quality assurance inspectors located globally.

Generally, the foreign contractors purchase the raw material in accordance with our specifications. Raw materials, which are in most instances made and/or colored especially for us, consist principally of piece goods and yarn and are specified by us to be purchased from a number of foreign and domestic textile mills and converters.

We are committed to ethical sourcing standards and require our independent contractors to comply with our code of conduct. We monitor compliance by our foreign contract manufacturers with applicable laws and regulations including labor and employment. As part of our compliance program, we maintain compliance departments in the United States and overseas and routinely perform audits of our contract manufacturers and require corrective action when necessary.

Import Operations and Import Restrictions

Our import operations are subject to constraints imposed by bilateral trade agreements between the United States and a number of foreign countries. TheseSome of these agreements impose quotas on the amount and type of goods that can be imported into the United States from some countries. Most of our imported products are also subject to United States customs duties.

We closely monitor developments in quotas, duties, and tariffs and continually seek to minimize our exposure to these risks through, among other things, geographical diversification of our contract manufacturers, allocating overseas production to product categories where more quotas are available, and shifting of production among countries and manufacturers.

Under the terms of the World Trade Organization (“WTO”) Agreement on Textiles and Clothing, WTO members removed all quotas effective January 1, 2005. Although the danger of quota embargoes has subsided since the removal of quotas for WTO member countries, threats to some apparel categories in China and Vietnam present themselves on occasion through proposed protectionist legislation in the U.S. Congress. We monitor these events closely and our board and executive level memberships in various apparel trade associations ensure early awareness of developments and timely communication of developments to our sourcing staff.

We believe that our extensive management and sourcing capability, our flexible sourcing model, and our experience and relationships throughout the world enable us to take advantage of the changing textile and apparel environment. Because of our sourcing experience, capabilities and relationships, we believe we are well positioned to take advantage of the changing textile and apparel quota environment.

Competition

The apparel industry is highly competitive and fragmented. Our competitors include numerous apparel designers, manufacturers, importers, licensors, ecommerce providers, and our own customers’ private label programs, many of which are larger and have greater financial and marketing resources than we have available to us. We believe that the principal competitive factors in the industry are: (1) brand name and brand identity, (2) timeliness, consistency, reliability and quality of services provided, (3) market share and visibility, (4) price, and (5) the ability to anticipate customer and consumer demands and maintain appeal of products to customers.

17

We strive to focus on these pointsfactors and have proven our ability to anticipate and respond quickly to customer demands with our brands, range of products and our ability to operate within the industry’s production and delivery constraints. We believe that our continued dedication to customer service, product assortment and quality control, as well as our aggressive pursuit of licensing opportunities, directly addresses the competitive factors in all market segments. Our established brands and relationships with retailers have resulted in a loyal following of customers.

We understand that theThe level of competition and the nature of our competitors vary by product segment. In particular, in the mass market channel, manufacturers constitute our main competitors in thisthe less expensive segment of the market, while high profile domestic and foreign designers and licensors account for our main competitors in the more upscale segment of the market. Although we have been able to compete successfully to date, there can be no assurance that significant new competitors will not develop in the future.

Trademarks

Trademarks, tradedomain names, copyrights and domain names, as well as related logos and designsderivative marks, including the Penguin logo, are valuable in the development, licensing and marketing of our products and are important to our continued success, including to the growth of our international licensed businesses. We have registered or applied for registration of our materialprimary trademarks in the United States and in more than 180150 countries where our products are manufactured or sold. We continue to expand our worldwide usage and registration of new and related trademarks. In general, trademarks remain valid and enforceable as long as the marks continue to be used in connection with the products and services with which they are identified and, as to registered tradenames, the required registration renewals are filed. We regard our trademarks and other proprietary rights as valuable assets that are critical in the marketing of our products, and, therefore, we vigorously protect our trademarks and other proprietary rights against infringements.

Environmental Matters

We are committed to minimizing the negative impact of our business activities on the environment and believe our operations are in compliance in all material respects with all applicable laws and regulations. Additionally, our business activities could be negatively impacted by severe weather conditions, which could affect the sale of our products or disrupt our sourcing.

Employees

As of March 20162018 and 2015,2017, we had approximately 2,7002,400 and 2,600,2,500, employees worldwide, respectively. None of our employees isare subject to a collective bargaining agreement. We consider our employee relations to be satisfactory.

Long-Lived Assets

See footnote 24 to the Consolidated Financial Statements in “Item 8. Financial Statements and Supplementary Data” for long-lived asset information.

Item 1A. Risk Factors

Our business faces certain risks. The risks described below may not be the only risks we face. Additional risks that we do not yet know of or that we currently think are immaterial may also impair our business. If any of the events or circumstances described as risks below or elsewhere in this report actually occurs, our business, results of operations or financial condition could be materially and adversely affected.

We rely on a few key customers, and a significant decrease in business from the loss of any one key customer or key program could substantially reduce our revenues and harm our business.

We derive a significant amount of our revenues from a few major customers. For example, net sales to our five largest customers accounted for approximately 47%, 49% and 43%46% of net sales in fiscal 2018 and fiscal 2017 and 47% of net sales in fiscal and 2016. For fiscal 2018,

18

two customers accounted for over 10% of net sales; Walmart accounted for 15% and The Marmaxx Group accounted for 11%. For fiscal 2016, 20152017, two customers accounted for over 10% of net sales; Walmart accounted for 13% and 2014, respectively.The Marmaxx Group accounted for 10%. For fiscal 2016, three customers accounted for over 10% of net sales; Walmart accounted for

12%, The Marmaxx Group accounted for 11% and Macy’s accounted for 10% of net sales, respectively. For fiscal 2015, four customers accounted for over 10% of net sales; Walmart accounted for 14% and Kohl’s, Macy’s and The Marmaxx Group each accounted for 10% of net sales, respectively. For fiscal 2014, two customers accounted for over 10% of net sales; Kohl’s and Macy’s accounted for approximately 11% and 10% of net sales, respectively.

A significant decrease in business from or loss of any of our major customers could harmadversely affect our financial conditionresults by causing a significant decline in our revenues. During the past several years, the retail industry has experienced a great deal of consolidation and other ownership changes, as well as management changes and store closing programs, and we expect such circumstances to continue and perhaps increase. In addition, store closings by our customers decrease the number of stores carrying our products, while the remaining stores may purchase a smaller amount of our products and may reduce the retail floor space designated for our brands. In the future, retailers may further consolidate, undergo restructurings or reorganizations, realign their affiliations or reposition their stores’ target markets or marketing strategies. Any of these types of actions could decrease the number of stores that carry our products or increase the concentration within the retail industry. These changes could decrease our opportunities in the market, increase our reliance on a smaller number of large customers and decrease our negotiating strength with our customers. These factors could have a material adverse effect on our financial condition and results of operations.

We do not have long-term contracts with any of our customers and purchases generally occur on anorder-by-order basis. We believe that purchasing decisions are generally made independently by individual department stores within a company-controlled group. There has been a trend, however, toward more centralized purchasing decisions. As such decisions become more centralized, the risk to us of suchcustomer concentration increases. Furthermore, our customers could curtail or cease their business with us because of changes in their strategic and operational initiatives, such as an increased focus on private label, consolidation with another retailer, changes in our customer’s buying patterns, financial instability and other reasons. If our customers curtail or cease business with us, our revenues could significantly decrease and our financial condition could be significantly harmed.

RecentOur business and financial results could be negatively affected as a result of the unsolicited go-private proposal received from George Feldenkreis.

On February 6, 2018, we received a non-binding proposal from George Feldenkreis, a current member and former Executive Chairman of our Board, and Fortress Credit Advisors LLC to acquire all of our outstanding common shares not already beneficially owned by Mr. Feldenkreis (the “Proposal”). On February 13, 2018, the Board authorized the formation of a special committee (the “Special Committee”) of our Board to evaluate the Proposal. The Special Committee has hired Paul, Weiss, Rifkind, Wharton & Garrison LLP and Akerman LLP as its legal counsel and PJ SOLOMON as its financial advisor to assist in its review of the Proposal and potential strategic alternatives thereto. No decision has been made with respect to our response to the Proposal. There is no assurance that the Proposal will result in a definitive Proposal to purchase our outstanding capital stock or that any definitive agreement will be executed. These circumstances may have an adverse impact on our business, operating results and/or financial condition because, among other things:

Deteriorating economic conditions, including turmoil in the financial and credit markets, may adversely affect our business.

RecentDeteriorating economic conditions may adversely affect our business, our customers, and our financing and other contractual arrangements. In addition, conditions may remainbecome depressed in the future or may be subject to further deterioration. Recent and future developments in the United States and global economies may lead to further reductions in consumer spending, which could have an adverse effect on the sales of our products. Such events could adversely affect the business of our wholesale and retail customers, which may among other things, result in financial difficulties leading to restructuring, bankruptcies, liquidations, and other unfavorable events of our customers, and may cause such customers to reduce or discontinue orders of our products. Financial difficulties of our customers may also affect the ability of our customers to access credit markets or lead to higher credit risk relating to receivables from customers. Recent or futureFuture turmoil in the financial and credit markets could make it more difficult for us to obtain financing or refinance existing debt when the need arises or on terms that would be acceptable to us.

Domestic and international political situations may also affect consumer confidence. The threat, outbreak or escalation of terrorism, military conflicts or other hostilities could lead to further decreases in consumer spending.

The worldwide apparel industry is highly cyclical and heavily influenced by general economic conditions, which could negatively impact our orders and our overall results of operations.

The apparel industry is highly cyclical and heavily dependent upon the overall level of consumer spending. Purchases of apparel and related goods tend to be highly correlated with cycles in the disposable income of consumers. Our wholesale customers may anticipate and respond to adverse changes in economic conditions and uncertainty by reducing inventories and canceling orders. Accordingly, a reduction in consumer spending in any of the regions in which we compete as a result of any substantial deterioration in general economic conditions (including as a result of uncertainty in world financial markets, weakness in the credit markets, changes in the price of fuel, international turmoil or terrorist attacks) or increases in interest rates could adversely affect the sales of our products.

We may not be able to anticipate consumer preferences and fashion trends, which could negatively affect acceptance of our products by retailers and consumers and result in a significant decrease in our net sales.

Our failure to anticipate, identify and respond effectively to changing consumer demands and fashion trends could adversely

19

affect acceptance of our products by retailers and consumers and may result in a significant decrease in net sales or leave us with a substantial amount of unsold inventory. We believe that our success depends on our ability to anticipate, identify and respond to changing fashion trends in a timely manner. Our products must appeal to a broad range of consumers whose preferences cannot be predicted with certainty and are subject to rapid change. We may not be able to continue to develop appealing styles or successfully meet constantly changing consumer demands in the future. In addition, any new products or brands that we introduce may not be successfully received by retailers and consumers. Due to the acquisitions of Laundry by Shelli Segal,

and Rafaella, we have increased our exposure to women’s apparel, thus making us subject to additional changes in fashion trends as women’s fashion trends have historically changed more rapidly than men’s.men’s fashion trends. If our products are not successfully received by retailers and consumers and we are left with a substantial amount of unsold inventory, we may be forced to rely on markdowns or promotional sales to dispose of excess, slow-moving inventory. If this occurs, our business, financial condition, results of operations and prospects may be harmed.materially adversely affected.

The failure of our suppliers to use acceptable ethical business practices could cause our business to suffer.

We require our suppliers to operate in compliance with applicable laws and regulations regarding working conditions, employment practices, conflict minerals and environmental compliance. Additionally, we or our customers’ operating guidelines may require additional obligations in those areas. We do not, however, control our suppliers or their labor and other business practices. If one of our suppliers violates labor or other laws or implements labor or other business practices that are generally regarded as unethical in the United States, the shipment of finished products to us could be interrupted, orders could be cancelled, relationships could be terminated and our reputation could be damaged. Any of these events could have a material adverse effect on our revenue and, consequently, our results of operations.

Increases in the prices of raw materials used to manufacture our products or increases in costs to transport our products could materially increase our costs and decrease our profitability.

The principal fabrics used in our business are made from cotton, wool, silk, synthetic and cotton-synthetic blends. The prices we pay for these fabrics are dependent on the market prices for the raw materials used to produce them, primarily cotton and chemical components of synthetic fabrics. These raw materials are subject to price volatility caused by weather, supply conditions, government regulations, energy costs, economic climate and other unpredictable factors. Fluctuations in petroleum prices may also influence the prices of related items such as chemicals, dyestuffs and polyester yarn as well as the costs we incur to transport products from our suppliers and costs we incur to distribute products to our customers. Any raw material price increase or increase in costs related to the transport of our products (primarily petroleum costs) could increase our cost of sales and decrease our profitability unless we are able to pass higher prices on to our customers. In addition, if one or more of our competitors is able to reduce its production costs by taking greater advantage of any reductions in raw material prices or favorable sourcing agreements, we may face pricing pressures from those competitors and may be forced to reduce our prices or face a decline in net sales, either of which could have an adverse effect on our business, results of operations or financial condition.

Fluctuations in the price, availability and quality of the fabrics or other raw materials used to manufacture our products, as well as the price for labor, marketing and transportation, could have a material adverse effect on our cost of sales or our ability to meet our customers’ demands. The prices for such fabrics depend largely on the market prices for the raw materials used to produce them. The price and availability of such raw materials may fluctuate significantly, depending on many factors. In the future, we may not be able to pass all or a portion of such higher prices on to our customers.

Problems with our distribution system, could impact our ability to deliver our products to the market.

We rely on owned or independently-operated distribution facilities to warehouse and ship product to our customers. These distribution systems include computer-controlled and automated equipment, which may be subject to a number of risks related to security or computer viruses, the proper operation of software and hardware, power interruptions or other system failures. Since all of

20

our products are distributed from a relatively small number of locations, the operations could also be interrupted by earthquakes, floods, fires or other natural disasters that impact our distribution centers. We maintain business interruption insurance, but it may not adequately protect us from the adverse effects that could be caused by significant disruptions in our distribution facilities. In addition, our distribution capacity is dependent on the timely performance of services by third parties, including the transportation of product to and from our distribution facilities. If we encounter problems with our distribution system, our ability to meet customer expectations, manage inventory, complete sales and achieve operating efficiencies could be materially adversely affected.

We are dependent upon the revenues generated by brands we license from third parties, and the loss or inability to renew certain of these licenses could reduce our net income.

The interruption of the business of third parties that license their brands to us could adversely affect our net income. We currently license the Nike, Jag, PGA TOUR, Jack Nicklaus, and Callaway Golf and Guy Harvey brands from third parties. These licenses vary in length of term, renewal conditions and royalty obligations. The average initial term of these licenses is three to five years with automatic renewalsoptions to renew depending upon whether we achieve certain targeted sales goals. We may not be able to renew or extend any of these licenses on favorable terms, if at all. If we are unable to renew or extend any of these licenses, we could experience a decrease in net income.

We are dependent upon the revenues generated by the licensing of our brands to third parties, and the loss or inability to renew certain of these licenses could reduce our royalty income and consequently reduce our net income.

The loss of several licensees of our brands at any one time could adversely affect our royalty income and net income. Royalty income from licensing our brands to third parties accounted for $34.7 million, or 4% of total

revenues, for fiscal 2016 and $31.7$34.6 million or 4% of total revenues for fiscal 2015.2018 and $36.0 million, or 4% of total revenues, for fiscal 2017. These licenses vary in length of term, renewal conditions and royalty obligations. The average term of these licenses is three to five years with automatic renewalsoptions to renew depending upon whether certain targeted performance goals are met. We may not be able to renew or extend any of these licenses on favorable terms, if at all. If we are unable to renew or extend any of these licenses, we could experience a decrease in royalty income and net income.

Our business could be harmed if we do not deliver quality products in a timely manner.

Our sourcing, logistics and technology functions operate within substantial production and delivery requirements and subjects us to the risks associated with suppliers, transportation, distribution facilities and other risks. Labor disruptions at independent factories where our goods are produced,the shipping ports we use, or our transportation carriers create significant risks for our business, particularly if these disputes result in work slowdowns, lockouts, strikes, or other disruptions. In fiscal 2015, we experienced the impact of the West Coast port slowdowns and work stoppages, which resulted in a significant backup of cargo containers at West Coast ports including the port through which we sourced a significant portion of our products. We experienced delays in the shipment of our products as a result of this disruption.

If we do not comply with customer product requirements or meet their delivery requirements, our customers could reduce our selling prices, require significant margin support, reduce the amount of business they do with us, or cease to do business with us, all of which could harm our business.

Our sales and operating results are influenced by seasonality, weather patterns and natural disasters.

Like other companies in the apparel industry, our sales volume may be adversely affected by unseasonable weather conditions or natural disasters, which may cause consumers to alter their purchasing habits or result in a disruption to our operations. Because of the seasonality of our business and the concentration of a significant proportion of our customers in certain geographic regions, the occurrence of such events could disproportionately impact our business, financial condition and operating results.

We are subject to United States federal and state laws and ifIf any of the laws or regulations to which we are subject are amended or if new laws or regulations are adopted, compliance could become more expensive and directly affect our income.

We are subject to U.S. federal, state and local laws and regulations affecting our business, including those promulgated under or by the Occupational Safety and Health Act, the Consumer Product Safety Act, the Flammable Fabrics Act, the Textile Fiber Product Identification Act, the rules and regulations of the Consumer Products Safety Commission, the Department of Homeland Security and various labor, workplace and related laws, as well as environmental laws and regulations. If any of these laws isare amended or new laws are adopted, our compliance could become more costly, and our failure to comply with such laws may expose us to potential liabilities, which could have an adverse impact on our results of operation.operation or financial condition.

21

Because we do business abroad, our business could be harmed by changes in foreign exchange rates.

Our business operations have several international components including sourcing of product, licensing and distribution arrangements and direct operations in Canada, Mexico and Europe, which expose us to foreign exchange risk and such risk may increase as we expand our international operations and licensing and distribution portfolio. Changes in exchange rates between the United States dollar and other currencies can impact our financial results in two ways; a translation impact and a transaction impact. The translation impact refers to the impact that changes in exchange rates can have on our published financial results, as our revenue and profit earned in local foreign currencies is translated into United States dollars using an average exchange rate over the representative period. Accordingly, during times of a strengthening United States dollar, particularly against the British Pound, the Canadian dollar, and the Mexican Peso, our results of operations will be negatively impacted, as was the case during fiscal 20162017 and fiscal 2015,2016, and during times of a weakening United States dollar, our results of operations will be favorably impacted.impacted as was the case in fiscal 2018.

“Transaction” impact refers to settlement of inventory payment or receivables collected in other than local currency that can have a favorable impact when the local currency is strong and an unfavorable impact when the foreign currency is stronger. In accordance with our operating practices, we hedge a portion of our foreign currency transaction exposures arising in the ordinary course of business to reduce risks in our cash flows and earnings. Our hedging strategy may not be effective in reducing all risks, and no hedging strategy can completely insulate us from foreign exchange risk. We do not hedge foreign currency translation rate changes. Further, our use of derivative financial instruments may expose us to counterparty risks. Although we only enter into hedging contracts with counterparties having investment grade credit ratings, it is possible that the credit quality of a counterparty could be downgraded or a counterparty could default on its obligations, which could have a material adverse impact on our financial condition, results of operations and cash flows.

Although we have not been affected in a material way by any of the foregoing factors, we cannot predict the likelihood or frequency of any such events occurring and any material disruption may have an adverse affecteffect on our business.

We may face challenges integrating the operations of our acquired brands or any businesses we may acquire, which may negatively impact our business.

As part of our strategy of making selective acquisitions, we acquire new brands and product categories, including our acquisitions of Rafaella and Ben Hogan.categories. Acquisitions have inherent risks, including the risk that the projected sales and net income from the acquisition may not be generated, the risk that the integration is more costly and takes longer than anticipated, risks of retaining key personnel, and risks associated with unanticipated events and unknown legal liabilities. Any of these and other risks may harm our business. We cannot assure you that any acquisition will not have a material adverse impact on our financial condition and results of operations.

With respect to previous acquisitions, we facedmay face challenges in consolidating functions and integrating management procedures, personnel and operations in an efficient and effective manner, which if not managed as projected, could have negatively impactedimpact our business. Some of these challenges included increased demands on management related to the significant increase in the size and diversity of our business after the acquisition, the dedication of management’s attention to implement our strategies for the business, the retention and integration of key employees, determining aspects of the acquired business that were to be kept separate and distinct from our other businesses, and difficulties in assimilating corporate culture and practices into ours.

We have outstanding debt, which could have important negative consequences to us, including making it difficult for us to satisfy all of our obligations in the event we experience financial difficulties.

As of January 30, 2016,February 3, 2018, we had approximately $134.3$94.6 million of debt outstanding as compared to approximately $172.9$106.6 million as of January 31, 201528, 2017 (excluding amounts outstanding under our letter of credit facility). Our indebtedness could have important consequences, including:

22

Our ability to pay interest on our indebtedness and to satisfy our other debt obligations will depend upon, among other things, our future operating performance and cash flow and possibly our ability to refinance indebtedness when necessary. Each of these factors is, to a large extent, dependent on general economic, financial, competitive, legislative, regulatory and other factors beyond our control. If, in the future, we cannot generate sufficient cash from operations to make scheduled payments on our indebtedness or to meet our liquidity needs or other obligations, we will need to refinance our existing debt, obtain additional financing or sell assets. If we are unable to do so, we cannot assure you that we will be able otherwise to renegotiate or refinance any of our debt, or obtain additional debt, on commercially reasonable terms or at all. We cannot assure you that our business will generate cash flow, or that we will be able to obtain funding sufficient to satisfy our debt service requirements.

Our profitability may decline as a result of increasing pressure on margins.our product prices.

The apparel industry is subject to significant pricing pressure caused by many factors, including intense competition, consolidation in the retail industry, pressure from retailers to reduce the costs of products and changes in consumer spending patterns. These factors may cause us to reduce our sales prices to retailers and consumers, which could cause our gross margin to decline if we are unable to appropriately manage inventory levels and/or reduce our operating costs.decline. If we fail to adequately manage our product costs or operating expenses, our profitability will decline. This could have a material adverse effect on our results of operations, liquidity and financial condition.

Our ability to conduct business in international markets may be affected by legal, regulatory, political and economic risks.

Our ability to capitalize on growth in new international markets and to maintain the current level of operations in our existing international markets is subject to risks associated with international operations. These include:

23

We cannot predict whether quotas, duties, taxes, or other similar restrictions will be imposed by the United States, the European Union, countries in Asia, or other countries upon the import or export of our products in the future, or what effect any of these actions would have on our business, financial condition or results of operations. Changes in regulatory, geopolitical, social or economic policies and other factors may have a material adverse effect on our business in the future or may require us to significantly modify our current business practices.

In addition, the new U.S. administration has publicly supported potential trade proposals, including import tariffs, tariffs (including the Trump administration’s recent introduction of tariffs on China and China’s retaliatory tariffs on certain products from the U.S.), modifications to international trade policy, and other changes that may affect U.S. trade relations with other countries, any of which may require us to significantly modify our current business practices or may otherwise materially impact our business.

We operate in a highly competitive and fragmented industry and our failure to successfully compete could result in a loss of one or more significant customers.

The apparel industry is highly competitive and fragmented. Our competitors include numerous apparel designers, manufacturers, importers and licensors, many of which have greater financial and marketing resources than us. We believe that the principal competitive factors in the apparel industry are:

The level of competition and the nature of our competitors variesvary by product segment withlow-margin, mass-market manufacturers being our main competitors in the less expensive segment of the market and U.S. and foreign designers and licensors competing with us in the more upscale segment of the market. If we do not maintain our brand names and identities and continue to provide high quality and reliable services on a timely basis at competitive prices, we may not be able to continue to successfully compete in our industry. If we are unable to compete successfully, we could lose one or more of our significant customers, which, if not replaced, could negatively impact our sales and financial performance.

Our ability to attract customers to our stores, the stores of our largest customers that are located in regional malls and other shopping centers depends heavily on the success of the malls and the centers in which these stores are located, and any decrease in customer traffic to these malls and centers could cause our sales to be less than expected, which could adversely affect our results of operations and cash flow.

The majority of our current stores and our largest customer’s stores are located in shopping malls and other retail centers. Sales at these stores are derived in considerable part from the volume of traffic generated in those malls or retail centers and surrounding areas. To take advantage of customer traffic and the shopping preferences of our customers, we and our largest customers need to maintain or acquire stores in desirable locations where competition for suitable store locations is strong. These stores benefit from the ability of

24

nearby tenants to generate consumer traffic near these stores, and the continuing popularity of the regional malls and outlet, lifestyle and power centers where these stores are located. Customer traffic and, in turn, our sales volume may be adversely affected by a wide variety of factors. A continued reduction in customer traffic could result in lower sales and leave us with excess inventory. In such circumstances, we may have to respond by increasing markdowns or initiating marketing promotions to reduce excess inventory, which could adversely impact our financial results and business.

If we are unable to compete effectively with the growinge-commerce sector, our business and results of operations may be materially adversely affected.

With the continued expansion of Internet use, as well as mobile computing devices and smart phones, competition from thee-commerce sector continues to grow. There can be no assurance we will be able to grow oure-commerce business in a profitable manner. Certain of our competitors, and a number ofe-commerce retailers, have establishede-commerce operations against which we compete for customers. The increasing competition from thee-commerce sector may reduce our market share, gross margin, and operating margin, and may materially adversely affect our business and results of operations in other ways.

Our balance sheet includes intangible assets. A decline in the estimated fair value of an intangible asset or of a reporting unit could result in an impairment charge recorded in our operating results, which could be material.

Indefinite-lived intangible assets are tested for impairment annually and between annual tests if an event occurs or circumstances change that would indicate the carrying amount may be impaired. Also, we review our amortizable intangible assets for impairment if an event occurs or circumstances change that would indicate the carrying amount may not be recoverable. If the carrying value of an intangible asset were to exceed its fair value, the asset would be written down to its fair value, with the impairment charge recognized as a noncash expense in our operating results. Adverse changes in future market conditions or weaker operating results compared to our expectations may impact our projected cash flows and estimates of weighted average cost of capital, which could result in a potentially material impairment charge if we are unable to recover the carrying value of our intangible assets.

Our success depends upon the continued protection of our trademarks and other intellectual property rights.

Our registered and common law trademarks, as well as certain of our licensed trademarks, have significant value and are instrumental to our ability to market our products. Our failure to successfully protect our intellectual property rights, or the substantial costs that we may incur in doing so, may have an adverse effect on our operations.

We may have additional tax liabilities.

We are subject to income taxes in the United States and many foreign jurisdictions. In addition to judgments associated with valuation accounts, our current tax provision can be affected by our mix of income and identification or resolution of uncertain tax positions. Because income from domestic and international sources may be taxed at different rates, the shift in mix during a year or over years can cause the effective tax rate to change. We regularly are under audit by tax authorities. Although we believe our tax estimates are reasonable, the final determination of our tax liabilities as a result of tax audits and any related litigation could be materially different from our historical income tax provisions and accruals. The results of an audit or litigation could have a material effect on our financial position, results of operations, or cash flows in the period or periods for which that determination is made. In addition, there have been proposals

The recently enacted Tax Cuts and Jobs Act (the “Tax Act”) has resulted in significant changes to reformthe U.S. corporate income tax system. These changes include, but are not limited to, requiring aone-time transition tax on certain unrepatriated earnings of foreign subsidiaries that is payable over eight years (the “Transition Tax”). The Tax Act also establishes new tax laws that would significantly impact howwill affect fiscal 2019 and later years, including, but not limited to, a reduction of the U.S. multinational corporations are taxedfederal corporate tax rate from 35% to 21%, a general elimination of U.S. federal income taxes on dividends from foreign earnings. We earnsubsidiaries, makes certain changes to the depreciation rules, and

25

additional limitations on executive compensation. Finally, while the Tax Act provides for a portionterritorial tax system, beginning in fiscal 2019, it includes two new U.S. tax base erosion provisions, the global intangiblelow-taxed income (“GILTI”) provisions and the base-erosion and anti-abuse tax (“BEAT”) provisions.

Our preliminary estimate of the Transition Toll Tax and the remeasurement of our incomedeferred tax assets and liabilities is subject to the finalization of management’s analysis related to certain matters, such as developing interpretations of the provisions of the Tax Act, changes to certain estimates and amounts related to the earnings and profits of certain subsidiaries and the filing of our tax returns. U.S. Treasury regulations, administrative interpretations or court decisions interpreting the Tax Act may require further adjustments and changes in foreign countries. Although we cannot predict whether or in what form this proposed legislation will pass, if enacted itour estimates, which could have a material adverse effect on our business, results of operations or financial conditions. Given the timing, scope, and magnitude of the changes enacted by the Tax Act, along withon-going implementation efforts, guidance, and other developments from U.S. regulatory and standard-setting bodies, the completion of the accounting for certain tax items of the Tax Act, that have been reported as provisional, or where no estimate of the impact was provided as a result of us not having the necessary information, may be subject to material change. Any significant changes to our future effective tax rate, including final resolution of provisional amounts relating to effects of the 2017 Tax Act, may result in a material adverse effect on our business, financial condition, results of operations, or cash flows.

Finally, because we are subject to taxation by the various taxing authorities at the federal, state and local levels where we do business, further legislation or regulation which could affect our tax burden could be enacted by any of these governmental authorities. We cannot predict the timing or extent of suchtax-related developments which could have a negative impact on our tax expense and cash flow.financial results.

We depend on certain key personnel the loss of which could negatively impact our ability to manage our business.

Our future success depends to a significant extent on retaining the services of certain executive officers and directors, in particular George Feldenkreis, our Chairman of the Board and Chief Executive Officer, and Oscar Feldenkreis, our Vice Chairman, President and Chief Operating Officer. We are currently discussing the terms of their new employment agreements.directors. The loss of the services of either George Feldenkreis or Oscar Feldenkreis, or any otherof our key membermembers of management could have a material adverse effect on our ability to

manage our business. Our continued success is dependent upon our ability to attract and retain qualified management and operational personnel to support our future growth. Our inability to do so may have a significant negative impact on our ability to manage our business.

We rely significantly on the use of information technology. Cybersecurity risks - any technology failures causing a material disruption to operational technology or cyber-attacks on our systems affecting our ability to protect the integrity and security of customer and employee information could harm our reputation and/or could disrupt our operations and negatively impact our business.

We increasingly rely on information technology systems to process, transmit and store electronic information. A significant portion of the communication between personnel, customers and suppliers depends on information technology. We use information technology systems and networks in our operations and supporting departments such as marketing, accounting, finance, and human resources. The future success and growth of our business depend on streamlined processes made available through information systems, global communications, internet activity and other network processes.

Like most companies, despite our current security measures, our information technology systems, and those of our third-party service providers, may be vulnerable to information security breaches, acts of vandalism, computer viruses and interruption or loss of valuable business data. Stored data might be improperly accessed due to a variety of events beyond our control, including, but not limited to, natural disasters, terrorist attacks, telecommunications failures, computer viruses, hackers and other security issues. We haveOur technology security initiatives and disaster recovery plans in place to mitigate our risk to these vulnerabilities, but these measures may not be adequate or implemented properly to ensure that our operations are not disrupted or that data security breaches do not occur. Any disruption to these systems or networks could result in product fulfillment delays, key personnel being unable to perform duties or communicate throughout the organization, loss of retail and internet sales, significant costs for data restoration and other adverse impacts on our business and reputation.

26

Hackers and data thieves are increasingly sophisticated and operate large-scale and complex automated attacks. Any breach of our network may result in the loss of valuable business data, misappropriation of our consumers’ or employees’ personal information, or a disruption of our business. Despite our existing security procedures and controls, ifIf our network was compromised, it could give rise to unwanted media attention, materially damage our customer relationships, harm our business, reputation, results of operations, cash flows and financial condition, result in fines or lawsuits, and may increase the costs we incur to protect against such information security breaches, such as increased investment in technology, the costs of compliance with consumer protection laws and costs resulting from consumer fraud.

Item 1B. Unresolved Staff Comments

None.

Item 2. Properties

Properties

The general location, use, ownership status, approximate size, and lease expiration dates of the principleprincipal properties which we currently occupy are set forth below:

In addition, we lease several lease:

We also lease 77

In addition, we lease

Our principal executive and administrative office, warehouse and distribution facility is encumbered by an $11.3a $21.1 million mortgage, which loan is due on August 1, 2020. TheNovember 22, 2026. Our facility in Tampa, Florida is encumbered by an $11.1a $12.8 million mortgage, which loan is due on January 23, 2019.November 22, 2026.

Item 3. Legal Proceedings

The Company is, fromFrom time to time, we are a party to litigation that arises in the normal course of its business operations. The Company isWe are not presently a party to any litigation that it believeswe believe might have a material adverse effect on itsour business operations.

We were a defendant in Joseph T. Cook v. Perry Ellis International, Inc. and Oscar Feldenkreis, Case No. 1:2015-cv-08290 (New York Southern District Court), involving claims of employment practices, including discrimination and retaliation, which was resolved in January 2016. We reached an amicable settlement and such amount was provided for in our results of operations for fiscal 2016.

Item 4. Mine Safety Disclosures

Not applicable.

27

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Our common stock is currently listed for trading on the NASDAQ Global Select Market under the symbol “PERY” and was previously listed for trading on the Nasdaq Global Market (formerly the Nasdaq National Market) under the symbol “PERY” since June 1999. Prior to that date, our trading symbol was “SUPI” based upon our former name, Supreme International Corporation.. The following table sets forth, for the periods indicated, the range of high and low per share bidssales prices of our common stock as reported by the NASDAQ Global Select Market. Such quotations represent inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions.

As of April 7, 2016,9, 2018, there were approximately 300 registered shareholders of record of our common stock. We believe the number of beneficial owners of our common stock is in excess of 5,000.

Not applicable.We did not pay any cash dividends during our two most recent fiscal years. We may pay cash dividends subject to certain restrictions set forth in the covenants of the Credit Facility (as defined below), including, but not limited to, meeting a minimum excess availability threshold and no occurrence of a default.

Equity Compensation Plan InformationSee Part III, Item 12 of this report for Fiscal 2016

The following table summarizes as of January 30, 2016, the shares of our common stock subject to outstanding awards or available for future awards undercertain information regarding our equity compensation plans.

The following graph compares the cumulative total shareholder return on our common stock with the cumulative total shareholder return on the Nasdaq Composite Index and the S&P Apparel, Accessories & Luxury Goods Index commencing on January 31, 2011February 3, 2013 and ending on January 30, 2016.February 3, 2018. The graph assumes that $100 was invested on January 31, 2011February 3, 2013 in our common stock or in the Nasdaq Composite Index and the S&P Apparel, Accessories & Luxury Goods Index, and that all dividends are reinvested. Past performance is not necessarily indicative of future performance.

28

Not Applicable.

Not Applicable.

Period		Total Number of Shares Purchased				Average Price Paid per Share				Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(1)				Maximum Approximate Dollar Value that May Yet Be Purchased under the Plans or Programs
November 1, 2015 to November 28, 2015			64,806			$	20.92				64,806			$	16,960,258
November 29, 2015 to January 2, 2016			152,498			$	18.93				152,498			$	14,073,471
January 3, 2016 to January 30, 2016			155,793			$	17.39				155,793			$	11,364,231
Total			373,097								373,097

29

Item 6.

Selected Financial Data

Item 6. Selected Financial Data

Summary Historical Financial Information

(Amounts in thousands, except for per share data)

The following selected financial data is qualified by reference to, and should be read in conjunction with, the Consolidated Financial Statements of Perry Ellisour consolidated financial statements and related Footnotesfootnotes thereto included in Item 8 of this report and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

30

31

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

We sell our products under our owned global brands, licensed brands and private retailer labels. Our owned brands include the global designer lifestylelegacy brands Perry EllisandOriginalEllis,Original Penguinby Munsingwear(“Original Penguin”) as well as Ben Hogan, , Cubavera, , Farah, , Grand Slam, , Jantzen, , Laundry by Shelli Segal, , Rafaella and Savane .Savane. We license the Callaway Golf brand, PGA TOURbrand, and the Jack Nicklausbrand for golf apparel, the Jag brand for swimwear and cover-ups and the Nikebrand for swimwear and accessories. In 2017, we announced that we will introduce Guy Harvey branded apparel and accessories, under license, beginning in 2019.

We have four reportable segments – Men’s Sportswear and Swim, Women’s Sportswear,Direct-to-Consumer, and Licensing – and we have a strategically diversified global distribution network focused on leading department stores, company-operated retail stores, specialty stores and select licensing partners. We distribute our products primarily to wholesale customers that represent all major levels of retail distribution including department stores, national and regional chain stores, mass merchants, specialty stores, sporting goods stores, the corporate wear market,e-commerce, as well as clubs and independent retailers, in North America and Europe. Our largest customers include Walmart Stores Inc., which includes Sam’s Wholesale Club, (“Sam’s”) together (“Walmart”), The Marmaxx Group, and Macy’s, Inc. (“Macy’s”)., Dillard’s, Inc. and Kohl’s Corporation.

We also distribute through our own retail stores. As of AprilMarch 1, 2016,2018, we operated 4136 Perry Ellis, 1215 Original Penguin and two multi-brand retail outlet stores located primarily in upscale retail outlet malls across the United

States, United Kingdom and Puerto Rico. As of AprilMarch 1, 20162018, we also operated threetwo Perry Ellis, two Cubavera, 16seven Original Penguin and onetwo multi-brand full price retail stores located in upscale demographic markets in the United States and United Kingdom. In addition, we leverage our design, sourcing and logistics expertise by offering a limited number of private label programs to retailers.

In fiscal 2016,2018, our Men’s Sportswear and Swim segment, which is comprised of men’s sportswear, swimwear and accessories, accounted for 71%74% of our total revenues, our Women’s Sportswear segment accounted for 14%12% of our total revenues, ourDirect-to-Consumer segment, which is comprised of retail ande-commerce, accounted for 11%10% of our total revenues and our licensing segment accounted for approximately 4% of our total revenues. Finally, our U.S. based business represented approximately 87%86% of total revenues, while our foreign operations represented 13%14% of total revenues for fiscal 2016.2018.

The revenue generated through our licensing business, in which we license to third parties for certain production, sales and/or distribution rights through geographic licensing arrangements, is a significant contributor to our operating income, and our arrangements heighten the overall awareness of our brands without requiring us to make capital investments or incur additional operating expenses. As of Fiscal 2016,fiscal 2018, we licensed our brands through four worldwide, 7160 domestic and 91100 international license agreements coveringin over 100150 countries.

Our products have historically been geared towards lighter weight apparel generally worn during the spring and summer months. We believe that this seasonality has been reduced with the strengthening of our fall, winter, and holiday merchandise. Our swimwear business, however, is highly seasonal in nature, with the significant majority of our sales occurring in our first and fourth quarters. Seasonality can be affected by a variety of factors, including the mix of advance andfill-in orders, the amount of sales to different distribution channels, and overall product mix among traditional merchandise, fashion merchandise and swimwear. Our higher-priced products generally tend to be less sensitive to economic and weather conditions. Revenues for our second quarter will typically be lower than our other quarters due to the impact of seasonal sales.

We believe that our future growth will come as a result of organic growth from our continued emphasis on our existing brands; new and expanded product lines; domestic and international licensing opportunities; international, direct retail ande-commerce opportunities and selective acquisitions and opportunities that fit strategically with our business model. Our future results may be impacted by risks and trends as set forth in “Item 1A. Risk Factors” and elsewhere in this report.

32

Our Results of Operations for Fiscal 2018

The following table sets forth, for the periods indicated selected items in our consolidated statements of operations expressed as a percentage of total revenues:

33

The following table sets forth, for the periods indicated, selected financial data expressed by segments and includes a reconciliation of EBITDA to operating income by segment, the most directly comparable GAAP financial measure:

EBITDA consists of earnings before interest expense, cost on early extinguishment of debt, depreciation and amortization, and income taxes. EBITDA is not a measurement of financial performance under accounting principles generally accepted in the United States of America, and does not represent cash flow from operations. The most directly comparable GAAP financial measure, presented above, is operating income by segment. EBITDA and EBITDA margin by segment are presented solely as a supplemental disclosure because management believes that they are a common measure of operating performance in the apparel industry.

The following is a discussion of our results of operations for the fiscal year ended February 3, 2018 (“fiscal 2018”) as compared with the fiscal year ended January 28, 2017 (“fiscal 2017”) and fiscal 2017 as compared with the fiscal year ended January 30, 2016 (“fiscal 2016”).

34

Our fiscal 2018 results as compared to our fiscal 2017 results

Net sales. Men’s Sportswear and Swim net sales in fiscal 2018 were $648.8 million, an increase of $23.7 million, or 3.8%, from $625.1 million in fiscal 2017. The net sales increase was attributed to strong sell through rates throughout the fiscal year. Of particular strength were sales of our core brands, specifically Perry Ellis, Original Penguin, Nike swim and golf lifestyle apparel businesses.

Women’s Sportswear net sales in fiscal 2018 were $102.4 million, a decrease of $5.4 million, or 5.0%, from $107.8 million in fiscal 2017. The net sales decrease was primarily due to the planned reductions in the Laundry brand as we transitioned the dress business to a licensing partner, during the fourth quarter of fiscal 2018. The decrease was partially offset by increases in the Rafaella business.

Direct-to-consumer net sales in fiscal 2018 were $89.1 million, a decrease of $3.1 million, or 3.4%, from $92.2 million in fiscal 2017. The decrease was primarily attributed to the closure of 10 stores, as well as the temporary closing of certain stores due to the effects of Hurricanes Harvey, Irma and Maria. The decrease was partially offset by a comparable store sales increase in the low single digits.

Royalty income. Royalty income for fiscal 2018 was $34.6 million, a decrease of $1.4 million, or 3.9%, from $36.0 million in fiscal 2017. Royalty income decreases were attributed to the transition of one of our licenses, to anin-house business. Approximately 90.4% of our royalty income was attributed to guaranteed minimum royalties with the balance attributable to royalty income in excess of guaranteed minimums for fiscal 2018.

Gross profit.Gross profit was $330.2 million in fiscal 2018, an increase of $11.7 million, or 3.7%, as compared to $318.5 million in fiscal 2017. This increase was attributed to a strong sales performance by our core brands coupled with strong inventory management, as well as, the sales increases described above and the factors described within the gross profit margin section below.

Gross profit margin.In fiscal 2018, gross profit margins were 37.7% as a percentage of total revenue as compared to 37.0% in fiscal 2017, an increase of 70 basis points. The increase was attributed to the disciplined management of inventory across all channels, increased sales of higher margin core brands and efficiencies achieved within our supply chain infrastructure. Additionally, ourdirect-to-consumer gross profit margin increased due to improved pricing strategies and our departure from highly promotional events.

Selling, general and administrative expenses. Selling, general and administrative expenses in fiscal 2018 were $274.7 million, a decrease of $5.3 million, or 1.9%, from $280.0 million in fiscal 2017. The decrease was attributed primarily to reduced employee expenses resulting from our continued focus on our core infrastructure in fiscal 2018 and the lack in fiscal 2018 of certain expenses incurred in fiscal 2017, including, pension expense of $10.0 million associated with the termination of our defined pension plan in fiscal 2017 and expenses related to a required acceleration of compensation costs relating to the new contract for our executive chairman during fiscal 2017. The decrease was partially offset by the payout of $2.3 million for a retail lease termination and an increase in certain unplanned legal fees of $0.5 million. In fiscal 2019, we have incurred and will continue to incur expenses, which will be significant, in connection with our Board’s exploration and evaluation of potential strategic alternatives and the related February 6, 2018 proposal to acquire all of our outstanding common shares not already beneficially owned by Mr. Feldenkreis.

EBITDA Margin. Men’s Sportswear and Swim EBITDA margin in fiscal 2018 increased 300 basis points to 6.6%, from 3.6% in fiscal 2017. The EBITDA margin was favorably impacted by sourcing efficiencies and the strong sales performance of our core brands, specifically our Perry Ellis, Original Penguin, Nike swim and golf lifestyle apparel businesses. Additionally, EBITDA margin was favorably impacted by the settlement charge related to the termination of our defined benefit plan in the amount of $10.0 million during fiscal 2017. Such expense did not occur during fiscal 2018.

Women’s Sportswear EBITDA margin in fiscal 2018 decreased 260 basis points to (6.2%), from (3.6%) in fiscal 2017. The EBITDA margin was unfavorably impacted by the decrease in net sales described above. As a result of this decrease in net sales, we were not able to realize favorable leverage in selling, general and administrative expenses.

35

Direct-to-consumer EBITDA margin in fiscal 2018 increased 270 basis points to (8.5%), from (11.2%) in fiscal 2017. The EBITDA margin was favorably impacted by the product sales mix as we focus on being less dependent on everyday promotions and thus increased our gross profit margin and achieved favorable leverage in selling, general and administrative expenses. Additionally, we closed underperforming stores and decreased the associated selling, general and administrative expenses accordingly.

Licensing EBITDA margin in fiscal 2018 decreased to 76.6%, from 80.1% in fiscal 2017. The EBITDA margin was unfavorably impacted by the decrease in royalty income described above.

Depreciation and amortization.Depreciation and amortization in fiscal 2018 was $14.3 million, a decrease of $0.2 million, or 1.4%, from $14.5 million in fiscal 2017. The decrease was primarily reflected in thedirect-to-consumer segment as a result of ten store closures since the second half of fiscal 2017.

Interest expense. Interest expense in fiscal 2018 was $7.1 million, a decrease of $0.3 million, or 4.1%, from $7.4 million in fiscal 2017. The decrease was primarily attributed to the lower average amount borrowed on our credit facility as compared to the prior year period.

Income taxes.Our income tax (benefit) provision in fiscal 2018 was ($22.9) million, a $23.3 million decrease as compared to $0.4 million in fiscal 2017. For fiscal 2018, our effective tax rate was (68.0%) as compared to 2.6% for fiscal 2017. The decrease in the tax rate was primarily attributable to the benefit resulting from the release of the valuation allowance previously established against the Company’s U.S. deferred taxes offset by the increase in taxes associated with the recently enacted Tax Cuts and Jobs Act (the “Tax Act”). See Footnotes to the Consolidated Financial Statements in “Item 8. Financial Statements and Supplementary Data” for further details regarding taxable income by jurisdiction.

Net income.Our net income in fiscal 2018 was $56.7 million, an increase of $42.2 million in net income, or 291.0%, as compared to net income of $14.5 million in fiscal 2017. The changes in operating results were due to the items described above.

Our fiscal 2017 results as compared to our fiscal 2016 results

Net sales. Men’s Sportswear and Swim net sales in fiscal 2017 were $625.1 million, a decrease of $15.5 million, or 2.4%, from $640.6 million in fiscal 2016. The net sales decrease was attributed primarily to exited brands coupled with the negative impact in our special markets programs and foreign currency conversions, partially offset by increases in Perry Ellis collection, as well as our golf lifestyle apparel and Nike swim business.

Women’s Sportswear net sales in fiscal 2017 were $107.8 million, a decrease of $19.9 million, or 15.6%, from $127.7 million in fiscal 2016. The net sales decrease was primarily due to the sale of C&C California in the prior year, planned decreases in special markets programs and softer replenishment business across the women’s market driven by higher levels of available goods.

Direct-to-consumer net sales in fiscal 2017 were $92.2 million, a decrease of $4.3 million, or 4.5%, from $96.5 million in fiscal 2016. The decrease was driven by the closure of ten stores during fiscal 2017, and a comparable sales decrease of 1.7%. This was partially offset by an 18% increase in ecommerce sales. We experienced a significant decline in traffic and comparable same store sales for our retail locations that cater to a higher level of tourist activity. These doors represented close to 45% of our total store count.

Royalty income. Royalty income for fiscal 2017 was $36.0 million, an increase of $1.3 million, or 3.7%, from $34.7 million in fiscal 2016. Royalty income increases were attributed to increases in our Perry Ellis and Original Penguin brands as well as the new licenses signed during this and last year, and from our initiatives to upgrade our licensing partners, partially offset by the transition of two of our licensing partners to new partnerships. Approximately 89.9% of our royalty income was attributed to guaranteed minimum royalties with the balance attributable to royalty income in excess of guaranteed minimums for fiscal 2017.

Gross profit.Gross profit was $318.5 million in fiscal 2017, a decrease of $0.6 million, or 0.2%, as compared to $319.1 million in fiscal 2016. This slight decrease was attributed to the sales decrease from our brand exits, foreign currency translations and softer replenishment business across the women’s market described above.

36

Gross profit margin.In fiscal 2017, gross profit margins were 37.0% as a percentage of total revenue as compared to 35.5% in fiscal 2016, an increase of 150 basis points. The increase was attributed to stronger product margins and reduced markdowns in our Perry Ellis men’s collection, golf lifestyle apparel and Nike businesses as well as an increase in royalty income and reduced cost realized through consolidation of our foreign buying offices and freight services. The increase was partially offset by unfavorable foreign currency translation.

Selling, general and administrative expenses. Selling, general and administrative expenses in fiscal 2017 were $280.0 million, an increase of $4.1 million, or 1.5%, from $275.9 million in fiscal 2016. The increase was attributed to expenses associated with the termination of our defined pension plan in the amount of $10 million, slightly higher incentive compensation accruals, severance costs and the acceleration of executive compensation costs in the amount of $3.7 million, partially offset by reduced costs resulting from our continued focus on the core infrastructure.

EBITDA Margin.Men’s Sportswear and Swim EBITDA margin in fiscal 2017 decreased 70 basis points to 3.6%, from 4.3% in fiscal 2016. The EBITDA margin was unfavorably impacted by a settlement charge related to the termination of our defined benefit plan in the amount of $10 million, partially offset by the increase in gross profit and margins in our Perry Ellis men’s collection, golf lifestyle apparel and Nike businesses.

Women’s Sportswear EBITDA margin in fiscal 2017 increased 190 basis points to (3.6%), from (5.5%) in fiscal 2016. The EBITDA margin was favorably impacted by a reduction in operating expenses, partially offset by the exit of C&C California, planned decreases in special markets programs and softer replenishment business across the women’s market. As a result of these factors we were able to realize favorable leverage in selling, general and administrative expenses.

Direct-to-consumer EBITDA margin in fiscal 2017 decreased 300 basis points to (11.2%), from (8.2%) in fiscal 2016. The EBITDA margin was unfavorably impacted by the closing of ten stores. Additionally, selling, general and administrative expenses were unfavorably impacted by increases in rent as we renewed some of our leases at higher rates.

Licensing EBITDA margin in fiscal 2017 increased to 80.1%, from 22.6% in fiscal 2016. The EBITDA margin was favorably impacted by the increase in royalty income and a decrease in the direct costs associated with the licensing segment. The increase was partially offset by the sale of C&C California in the prior year described below. EBITDA margin was unfavorably impacted during fiscal 2016 by the impairment of trademarks as described below.

Depreciation and amortization.Depreciation and amortization in fiscal 2017 was $14.5 million, an increase of $0.8 million, or 5.8%, from $13.7 million in fiscal 2016. The increase was attributed to depreciation related to our increased capital expenditures, primarily in leasehold improvements made during fiscal 2017 and 2016.

Impairment on assets and goodwill. As a result of our annual impairment analysis, during fiscal 2016, we recorded trademark and goodwill impairment charges of $18.2 million and $6.0 million, respectively, due to decreases in our projected revenues principally resulting from our internal review of brands and businesses that will be afforded a reduced focus in our forward strategy. This is a positive step as we streamline our business/brand model. Some of the impairments resulted from a decline in the future anticipated cash flows from these trademarks, which was due, in part, to the current economic challenges and market conditions in the apparel industry. There was no such impairment for fiscal 2017. In addition, during fiscal 2017 and 2016, we recorded a $1.5 million and a $2.4 million impairment charge to reduce the net carrying value of certain long-lived assets (primarily leaseholds in ourdirect-to-consumer segment) to their estimated fair value.

Gain (Loss) on sale of long-lived assets. During fiscal 2016, we entered into a sales agreement, in the amount of $8.2 million, for the sale of our sourcing office building located in Beijing, China. As a result of this transaction we recorded a gain in the amount of $4.5 million. Also, during fiscal 2016, we entered into an agreement to sell the intellectual property of our C&C California brand to a third party. As a result of this transaction, we recorded a loss of ($0.7) million in the licensing segment.

Cost on early extinguishment of debt. On April 6, 2015, we called for the partial redemption of $100 million of our $150 million outstanding 7 ⁷ / ₈ % Senior Subordinated Notes. The redemption terms provided for the payment of a redemption premium of

37

103.938% of the principal amount redeemed. On May 6, 2015, we completed the redemption of $100 million of our senior subordinated notes. We incurred debt extinguishment costs of approximately $5.1 million in connection with the redemption premium and thewrite-off of note issuance costs.

Interest expense. Interest expense in fiscal 2017 was $7.4 million, a decrease of $1.9 million, or 20.4%, from $9.3 million in fiscal 2016. The decrease was primarily attributable to a decrease in interest resulting from the partial redemption of $100 million of our senior subordinated notes during the second quarter of fiscal 2016 as well as a lower average amount borrowed on our credit facility as compared to the prior year period.

Income taxes.Our income tax (benefit) provision in fiscal 2017 was $0.4 million, a $0.8 million increase as compared to ($0.4) million in fiscal 2016. For fiscal 2017, our effective tax rate was 2.6% as compared to 5.6% for fiscal 2016. The decrease in the tax rate is primarily attributable to the benefit resulting from the termination of the Company’s pension plan during fiscal 2017. See Footnotes to the Consolidated Financial Statements in “Item 8. Financial Statements and Supplementary Data” for further details regarding taxable income by jurisdiction.

Net income (loss).Our net income (loss) in fiscal 2017 was $14.5 million, an increase of $21.8 million in income, or 298.6%, as compared to net loss of ($7.3) million in fiscal 2016. The changes in operating results were due to the items described above.

Our Liquidity and Capital Resources

We rely principally on cash flow from operations and borrowings under our senior credit facility to finance our operations, acquisitions, and capital expenditures. We believe that our working capital requirements will increase slightly in fiscal 2019 as we continue to expand internationally. As of February 3, 2018, our total working capital was $249.5 million as compared to $223.4 million as of January 28, 2017. We believe that our cash flows from operations and availability under our senior credit facility and remaining letter of credit facility are sufficient to meet our working capital needs and capital expenditure needs over the next year including the senior subordinated notes due April 1, 2019.

The recently enacted Tax Act included aone-time transition tax on unremitted foreign earnings as of December 31, 2017 (the “Transition Tax”), and accordingly, we recorded U.S. current tax expense of $5.8 million, net of available foreign tax credits on theone-time mandatory deemed repatriation. We intend to repatriate the funds associated with the foreign earnings subjected to the Transition Tax. As such, during fiscal 2018, we have accrued deferred taxes associated with the expected future repatriation pertaining to foreign withholding and U.S. state taxes of $0.4 million and $0.2 million, respectively. See Footnotes to the Consolidated Financial Statements in “Item 8. Financial Statements and Supplementary Data” for further details regarding the Company’s indefinite reinvestment assertion.

Net cash provided by operating activities was $30.2 million in fiscal 2018 as compared to net cash provided by operating activities of $43.4 million in fiscal 2017 and net cash provided by operating activities of $31.4 million in fiscal 2016.

The net cash provided by operating activities in fiscal 2018 was primarily attributable to an increase in accounts payable and accrued expenses of $18.6 million, an increase in income taxes payable of $5.3 million as well as a decrease in prepaid income taxes of $1.9 million. This was partially offset by an increase in inventory of $21.5 million, an increase in accounts receivable of $17.9 million, a decrease of prepaid expenses and other assets of $1.6 million, as well as, a decrease in unearned revenue and other liabilities of $4.5 million. Our inventory turnover ratio was 3.8 as compared to 3.9 for fiscal 2017 evidencing our strong inventory management.

The net cash provided by operating activities in fiscal 2017 was primarily attributable to a decrease in inventory of $29.6 million, a decrease of prepaid expenses and other assets of $1.9 million, as well as, an increase in unearned revenue and other liabilities of $2.2 million. This was partially offset by an increase in accounts receivable of $10.9 million, a decrease in accounts payable and accrued expenses of $16.0 million, as well as, a decrease in deferred pension obligation of $12.3 million. Our inventory turnover ratio increased to 3.9 as compared to 3.7 for fiscal 2016 resulting from tighter inventory management.

Net cash used in investing activities was $10.9 million in fiscal 2018, as compared to net cash used in investing activities of $14.2 million in fiscal 2017. The net cash used in investing activities during fiscal 2018 primarily reflects the purchase of investments of $39.2 million and the purchase of property and equipment of $7.9 million primarily for leasehold improvements and store fixtures;

38

partially offset by proceeds from the maturities of investments of $35.9 million. Capital expenditures for fiscal 2019 are expected to be approximately $8 million to $10 million.

Net cash used in investing activities was $14.2 million in fiscal 2017, as compared to net cash provided by investing activities of $3.0 million in fiscal 2016. The net cash used in investing activities during fiscal 2017 primarily reflects the purchase of investments of $13.9 million and the purchase of property and equipment of $13.3 million primarily for leasehold improvements and store fixtures; partially offset by proceeds from the maturities of investments of $12.7 million.

Net cash used in financing activities was $14.4 million in fiscal 2018, as compared to cash used in financing activities of $30.6 million in fiscal 2017. The net cash used during fiscal 2018 primarily reflects net payments on our senior credit facility of $11.4 million, payments for employee taxes on shares withheld of $1.0 million, payments of $0.9 million on our mortgage loans, purchases of treasury stock of $0.9 million, as well payments on capital leases of $0.3 million; partially offset by exercises of stock options of $0.02 million.

Net cash used in financing activities was $30.6 million in fiscal 2017, as compared to cash used in financing activities of $46.7 million in fiscal 2016. The net cash used during fiscal 2017 primarily reflects net payments on our senior credit facility of $39.3 million, payments of $11.8 million on our mortgage loans, purchases of treasury stock of $2.2 million, payments for employee taxes on shares withheld of $1.1 million, as well as deferred financing fees of $0.3 million and payments on capital leases of $0.3 million; partially offset by proceeds from refinancing our existing real estate mortgages of $24.1 million and exercises of stock options of $0.07 million.

Our Board of Directors has authorized us to purchase, from time to time and as market and business conditions warrant, up to $70 million of our common stock for cash in the open market or in privately negotiated transactions through October 31, 2018. Although our Board of Directors allocated a maximum of $70 million to carry out the program, we are not obligated to purchase any specific number of outstanding shares and will reevaluate the program on an ongoing basis. Total purchases under the planlife-to-date amount to approximately $61.7 million.

During fiscal 2018, 2017, and 2016, we repurchased shares of our common stock at a cost of $0.9 million, $2.2 million and $7.0 million, respectively. There was no treasury stock outstanding as of February 3, 2018 and January 28, 2017.

During fiscal 2018, we retired shares of treasury stock recorded at a cost of approximately $0.9 million. Accordingly, we reduced additional paid in capital by $0.9 million. During fiscal 2017, we retired shares of treasury stock recorded at a cost of approximately $2.2 million. Accordingly, we reduced common stock and additional paid in capital by $1,000 and $2.2 million, respectively.

7 ⁷ / ₈ % $150 Million Senior Subordinated Notes Payable

In March 2011, we issued $150 million of 7 ⁷ / ₈ % senior subordinated notes, due April 1, 2019. The proceeds of this offering were used to retire the $150 million of 8 ⁷ / ₈ % senior subordinated notes due September 15, 2013 and to repay a portion of the outstanding balance on the senior credit facility. The proceeds to us were $146.5 million yielding an effective interest rate of 8.0%.

On April 6, 2015, we elected to call for the partial redemption of $100 million of our $150 million 7 ⁷ / ₈ % senior subordinated notes due 2019 and a notice of redemption was sent to all registered holders of the senior subordinated notes. The redemption terms provided for the payment of a redemption premium of 103.938% of the principal amount redeemed. On May 6, 2015, we completed the redemption of the $100 million of our senior subordinated notes. We incurred debt extinguishment costs of approximately $5.1 million in connection with the redemption, including the redemption premium as well as thewrite-off of note issuance costs. At February 3, 2018, the balance of the 7 ⁷ / ₈ % senior subordinated notes totaled $49.8 million, net of debt issuance costs in the amount of $0.2 million. At January 28, 2017, the balance of the 7 ⁷ / ₈ % senior subordinated notes totaled $49.7 million, net of debt issuance costs in the amount of $0.3 million.

Certain Covenants.The indenture governing our senior subordinated notes contains certain covenants which restrict our ability and the ability of our subsidiaries to, among other things, incur additional indebtedness in certain circumstances, pay dividends or make other distributions on, redeem or repurchase capital stock, make investments or other restricted payments, create liens on assets

39

to secure debt, engage in transactions with affiliates, and effect a consolidation or merger. We are not aware of anynon-compliance with any of our covenants in this indenture. We could be materially harmed if we violate any covenants because the indenture’s trustee could declare the outstanding notes, together with accrued interest, to be immediately due and payable, which we may not be able to satisfy. In addition, a violation could also constitute a cross-default under the senior credit facility, the letter of credit facilities and the real estate mortgages resulting in all of our debt obligations becoming immediately due and payable, which we may not be able to satisfy.

We plan to call and payoff the remaining senior subordinated notes during the second quarter of fiscal 2019.

Senior Credit Facility

On April 22, 2015, we amended and restated our existing senior credit facility (the “Credit Facility”), with Wells Fargo Bank, National Association, as agent for the lenders, and Bank of America, N.A., as syndication agent. The Credit Facility provides a revolving credit facility of up to an aggregate amount of $200 million. The Credit Facility has been extended through April 30, 2020 (“Maturity Date”). In connection with this amendment and restatement, we paid fees in the amount of $0.6 million. These fees will be amortized over the term of the Credit Facility as interest expense. At February 3, 2018, we had outstanding borrowings of $11.2 million under the Credit Facility. At January 28, 2017, we had outstanding borrowings of $22.5 million under the Credit Facility.

Certain Covenants. The Credit Facility contains certain financial and other covenants, which, among other things, require us to maintain a minimum fixed charge coverage ratio if availability falls below certain thresholds. We are not aware of anynon-compliance with any of our covenants in this Credit Facility. These covenants may restrict our ability and the ability of our subsidiaries to, among other things, incur additional indebtedness and liens in certain circumstances, redeem or repurchase capital stock, make certain investments or sell assets. We may pay cash dividends subject to certain restrictions set forth in the covenants including, but not limited to, meeting a minimum excess availability threshold and no occurrence of a default. We could be materially harmed if we violate any covenants, as the lenders under the Credit Facility could declare all amounts outstanding, together with accrued interest, to be immediately due and payable. If we are unable to repay those amounts, the lenders could proceed against our assets and the assets of our subsidiaries that are borrowers or guarantors. In addition, a covenant violation that is not cured or waived by the lenders could also constitute a cross-default under certain of our other outstanding indebtedness, such as the indenture relating to our 7⁷ / ₈ % senior subordinated notes due April 1, 2019, our letter of credit facilities, or our real estate mortgage loans. A cross-default could result in all of our debt obligations becoming immediately due and payable, which we may not be able to satisfy. Additionally, our Credit Facility includes a subjective acceleration clause if a “material adverse change” in our business occurs. We believe that the likelihood of the lender exercising this right is remote.

Borrowing Base. Borrowings under the Credit Facility are limited to a borrowing base calculation, which generally restricts the outstanding balance to the sum of (a) 87.5% of eligible receivables plus (b) 87.5% of eligible foreign accounts up to $1.5 million plus (c) the lesser of (i) the inventory loan limit, which equals 80% of the maximum credit under the Credit Facility at the time, and (ii) a maximum of 70.0% of eligible finished goods inventory with an inventory limit not to exceed $125 million, or 90.0% of the net recovery percentage (as defined in the Credit Facility) of eligible inventory.

Interest. Interest on the outstanding principal balance drawn under the Credit Facility accrues at the prime rate and at the rate quoted by the agent for Eurodollar loans. The margin adjusts quarterly, in a range of 0.50% to 1.00% for prime rate loans and 1.50% to 2.00% for Eurodollar loans, based on the previous quarterly average of excess availability plus excess cash on the last day of the previous quarter.

Security. As security for the indebtedness under the Credit Facility, we granted to the lenders a first priority security interest (subject to liens permitted under the Credit Facility to be senior thereto) in substantially all of our existing and future assets, including, without limitation, accounts receivable, inventory, deposit accounts, general intangibles, equipment and capital stock or membership interests, as the case may be, of certain subsidiaries, and real estate, but excluding ournon-U.S. subsidiaries and all of our trademark portfolio.

40

Letter of Credit Facilities

As of February 3, 2018, we maintained one U.S. dollar letter of credit facility totaling $30.0 million. Each documentary letter of credit is secured primarily by the consignment of merchandise in transit under that letter of credit and certain subordinated liens on our assets.

During the third quarter of fiscal 2017, one letter of credit facility totaling, $0.3 million utilized by our United Kingdom subsidiary, expired and has not been renewed.

At February 3, 2018 and January 28, 2017, there was $19.7 million and $19.2 million, respectively, available under the existing letter of credit facilities.

Real Estate Mortgage Loans

In November 2016, we paid off our existing real estate mortgage loan and refinanced our main administrative office, warehouse and distribution facility in Miami with a $21.7 million mortgage loan. The loan is due on November 22, 2026. The interest rate is 3.715% per annum. Monthly payments of principal and interest approximate $112,000, based on a25-year amortization with the outstanding principal due at maturity. At February 3, 2018, the balance of the real estate mortgage loan totaled $20.9 million, net of discount, of which $557,000 is due within one year.

In June 2006, we entered into a mortgage loan for $15 million secured by our Tampa facility. The loan was due on January 23, 2019. In January 2014, we amended the mortgage loan to modify the interest rate. The interest rate was reduced to 3.25% per annum and the terms were restated to reflect new monthly payments of principal and interest of approximately $68,000, based on a20-year amortization, with the outstanding principal due at maturity. In November 2016, we amended the mortgage to increase the amount to $13.2 million. The loan is due on November 22, 2026. The interest rate is 3.715% per annum. Monthly payments of principal and interest approximate $68,000, based on a25-year amortization with the outstanding principal due at maturity. At February 3, 2018, the balance of the real estate mortgage loan totaled $12.7 million, net of discount, of which approximately $339,000 is due within one year.

Additionally, we used the excess funds generated from the new mortgage loans described above to pay down our senior credit facility.

The real estate mortgage loans described above contain certain covenants. We are not aware of anynon-compliance with any of the covenants. If we violate any covenants, the lender under the real estate mortgage loans could declare all amounts outstanding thereunder to be immediately due and payable, which we may not be able to satisfy. A covenant violation could constitute a cross-default under our senior credit facility, our letter of credit facilities and the indenture relating to our senior subordinated notes resulting in all of our debt obligations becoming immediately due and payable, which we may not be able to satisfy.

41

Contractual Obligations and Commercial Contingent Commitments

The following tables illustrate the balance of our contractual obligations and commercial contingent commitments as of February 3, 2018: