Cherokee Inc. Reports Fiscal 2012 Second Quarter Financial Results

Cherokee Inc. (NASDAQ:CHKE), a global brand management company, today reported financial results for the second quarter ended July 30, 2011. Net revenues were $6.7 million compared to $7.5 million for the prior year, SG&A expenses were $3.95 million, compared to $3.36 million for the prior year and net income was $1.7 million, or $0.20 per diluted share, compared to $2.5 million, or $0.28 per diluted share, for the prior year.

"Over the past quarter, we continued to dedicate financial resources to marketing and creative services designed to expand our product offerings, brand visibility, and capabilities to support our partners, brand vision, and direction. We are starting to see the positive impact of our efforts, as evidenced by the Back-to-School sell-throughs and holiday commitments. We remain confident in our strategic direction and will monitor our investments in marketing and infrastructure to ensure that we continue maintaining proper discipline going forward,” said Henry Stupp, Chief Executive Officer of Cherokee, Inc.

At July 30, 2011, the Company had cash and cash equivalents of $10.5 million, down 7% from $11.3 million at April 30, 2011 due mainly to the repurchase of common stock and a paydown of our loan to US Bank. Our current quarter cash and cash equivalents as compared to second quarter last year is up 44% from $7.3 million, continuing with our dedication to maintaining a strong and positive cash position for our investors.

Conference Call

The Company will host a conference call today at 1:30 p.m. PDT / 4:30 p.m. EDT. To participate in the call, please dial (877) 941-1427 (U.S.) or (480) 629-9664 (International) ten minutes prior to the start time and use conference ID: 4469432. The earnings call and accompanying slides will also be broadcast live over the Internet and can be accessed on the Investor Relations section of the Company’s Web site at http://www.cherokeegroup.com. To listen to the live webcast, please visit the site prior to the start of the call in order to register, download and install any necessary audio software. For those unable to participate during the live broadcast, a replay will be available beginning Sept. 8, 2011 at 4:30 p.m. PDT / 7:30 p.m. EDT, through Sept. 22, 2011, at 8:59 p.m. PDT / 11:59 p.m. EDT. To access the replay, dial (877) 870-5176 (U.S.) or (858) 384-5517 (International) and use conference ID: 4469432.

About Cherokee Inc.

Cherokee Inc., is a global marketer and manager of a portfolio of fashion and lifestyle brands it owns and represents in multiple consumer product categories and sectors around the world. The Company has license agreements with premier retailers and manufacturers covering over 30 countries around the world including Target Stores (U.S.), Tesco (U.K., Ireland and certain Central European countries), Zellers (Canada), RT-Mart (Peoples Republic of China), Pick ‘N Pay (South Africa), Falabella (Chile, Peru and Colombia), Arvind Mills (India and certain Middle Eastern countries), Shufersal LTD. (Israel), Comercial Mexicana (Mexico), Eroski (Spain), Nishimatsuya (Japan), Magnit (Russia) and the TJX Companies (U.S., Canada and Europe).

Statements included within this news release may contain forward-looking statements for purposes of the safe harbor provided by the Private Securities Litigation Reform Act of 1995. When used, the words "anticipates”, "believes”, "expects”, "may”, "should” and similar expressions are intended to identify such forward-looking statements. Forward-looking statements included in this press release (including, without limitation, express or implied statements regarding potential future business development or strategic initiatives) involve known and unknown risks and uncertainties that may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such risks and uncertainties, include, but are not limited to, the effect of global economic conditions, the financial condition of the apparel and retail industry, adverse changes in licensee or consumer acceptance of products bearing the Company’s brands the ability and/or commitment of the Company’s licensees to design, manufacture and market Cherokee, Sideout and Carole Little branded products, the Company’s dependence on two licensees for most of the Company’s revenues, the Company’s failure to implement or otherwise achieve the benefits of its strategic initiatives, the requirements under the Company’s term loan with U.S. Bank and the Company’s dependence on its key management personnel. The risks included here are not exhaustive. A further list and description of these risks, uncertainties and other matters can be found in the Company’s Annual Report on Form 10-K for Fiscal Year 2011, and in its periodic reports on Forms 10-Q and 8-K (if any). Given these risks and uncertainties, you should not place undue reliance on forward-looking statements as a prediction of actual results. The Company disclaims any intent or obligation to update any of the forward-looking statements contained herein to reflect future events and developments.