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What changed in OXFORD INDUSTRIES INC's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of OXFORD INDUSTRIES INC's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+464 added−516 removedSource: 10-K (2024-04-01) vs 10-K (2023-03-28)

Top changes in OXFORD INDUSTRIES INC's 2024 10-K

464 paragraphs added · 516 removed · 373 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

141 edited+16 added−32 removed96 unchanged
Biggest changeThe table below provides certain information regarding the Emerging Brands direct to consumer locations as of January 28, 2023. 17 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ Southern Tide ​ TBBC ​ Total Emerging Brands Florida 5 2 7 North Carolina 1 — 1 South Carolina — 1 1 Total 6 3 9 Average square feet per store 1,700 1,400 Total square feet at year end 10,000 4,200 ​ The table below reflects the changes in direct to consumer location count for Emerging Brands during Fiscal 2022. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Southern Tide ​ TBBC ​ Total Emerging Brands Open as of beginning of fiscal year 4 1 5 Opened 2 2 4 Closed — — — Open as of end of fiscal year 6 3 9 ​ During the First Quarter of Fiscal 2023, we acquired three Southern Tide Signature Stores located in Massachusetts, and during Fiscal 2023 we expect to open at least five additional Southern Tide stores, with the majority of those in Florida, resulting in a planned store count increase of eight or more for Southern Tide during Fiscal 2023.
Biggest changeThe table below provides certain information regarding the Emerging Brands direct to consumer locations as of February 3, 2024. 17 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ Southern Tide ​ TBBC ​ Total Emerging Brands Florida 9 2 11 South Carolina 3 1 4 Massachusetts ​ 3 ​ — ​ — North Carolina 2 — 2 Other states 2 — 2 Total 19 3 22 Average square feet per store 1,600 1,400 Total square feet at year end 30,000 4,200 ​ The table below reflects the changes in direct to consumer location count for Emerging Brands during Fiscal 2023. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Southern Tide ​ TBBC ​ Total Emerging Brands Open as of beginning of fiscal year 6 3 9 Opened / Acquired 13 — 13 Closed — — — Open as of end of fiscal year 19 3 22 ​ We opened a total of 13 new Southern Tide stores during Fiscal 2023, including the acquisition of three former Southern Tide signature stores located in Massachusetts during the First Quarter of Fiscal 2023 and three additional former signature stores in the Fourth Quarter of Fiscal 2023, two of which are in South Carolina and one in Georgia.
Our direct to consumer strategy for the Tommy Bahama brand also includes locating and operating full-price retail stores in upscale malls, lifestyle shopping centers, resort destinations and brand-appropriate street locations. Generally, we seek to locate our full-price retail stores in shopping areas and malls that have high-profile or upscale consumer brand adjacencies.
Our direct to consumer strategy for the Tommy Bahama brand also includes locating and operating full-price retail stores in lifestyle shopping centers, resort destinations, brand-appropriate street locations and upscale malls. Generally, we seek to locate our full-price retail stores in shopping areas and malls that have high-profile or upscale consumer brand adjacencies.
In addition to new store openings, we also incur capital expenditure costs related to remodels or expansions of existing stores, particularly when we renew or extend a lease beyond the original lease term, or otherwise determine that a remodel of a store is appropriate.
In addition to new store openings, we also incur capital expenditure costs related to remodels or expansions of existing stores, particularly when we renew or extend a lease beyond the original lease term, or otherwise determine that a remodel of a store is appropriate.
Full-price retail store sales per gross square foot for Johnny Was for the 12 months ended January 28, 2023 were approximately $740 for the full-price retail stores which were open the full 12 months.
Full-price retail store sales per gross square foot for Johnny Was were approximately $740 for the full-price retail stores which were open the full 12 months ended January 28, 2023.
We continue to value our long-standing relationships with our wholesale customers and are committed to working with them to enhance the success of our lifestyle brands within their stores. We operate in a highly competitive apparel market that continues to evolve rapidly with the expanding application of technology to fashion retail.
We continue to value our long-standing relationships with our wholesale customers and are committed to working with them to enhance the success of our lifestyle brands within their stores. Competitive Environment We operate in a highly competitive apparel market that continues to evolve rapidly with the expanding application of technology to fashion retail.
The use of third party manufacturers reduces the amount of capital investment required by us, as operating manufacturing facilities requires a significant amount of capital investment, labor and oversight. We depend on third party producers to secure a sufficient supply of specified raw materials, adequately finance the production of goods ordered and maintain sufficient manufacturing and shipping capacity.
The use of third-party producers reduces the amount of capital investment required by us, as operating manufacturing facilities requires a significant amount of capital investment, labor and oversight. We depend on third-party producers to secure a sufficient supply of specified raw materials, adequately finance the production of goods ordered and maintain sufficient manufacturing and shipping capacity.
Our operating groups, either internally, using in-house employees located in the United States and/or Hong Kong, or through the use of third party buying agents, manage the production and sourcing of substantially all of our apparel and related products from non-exclusive, third party producers located in foreign countries.
Our operating groups, either internally, using in-house employees located in the United States and/or Hong Kong, or through the use of third-party vendors or buying agents, manage the production and sourcing of substantially all of our apparel and related products from non-exclusive, third party producers located in foreign countries.
In addition, apparel and other related products sold by us are subject to stringent and complex product performance and security and safety standards, laws and other regulations. These regulations relate principally to product labeling, certification of product safety and importer security procedures. We believe that we are in material compliance with those regulations.
In addition, apparel and other related products sold by us are subject to stringent and complex product performance and security and safety standards, laws and other regulations. These regulations relate principally to product labeling, product content, certification of product safety and importer security procedures. We believe that we are in material compliance with those regulations.
We purchase our apparel and related products from third party producers, substantially all as package purchases of finished goods. These products are manufactured with oversight by us or our third party buying agents and to our design and fabric specifications.
We purchase our apparel and related products from third-party producers, substantially all as package purchases of finished goods. These products are manufactured to our design and fabric specifications with oversight by us or our third-party vendors or buying agents.
As our merchandising departments must estimate our requirements for finished goods purchases for our own full-price retail stores and e-commerce sites based on historical product demand data and other factors, and as purchases for our wholesale accounts must be committed to prior to the receipt of 20 Table of Contents all wholesale customer orders, we carry the risk that we have purchased more inventory than will ultimately be desired or that we will not have purchased sufficient inventory to satisfy demand, resulting in lost sales opportunities.
As our merchandising departments must estimate our requirements for finished goods purchases for our own full-price retail stores and e-commerce sites based on historical product demand data and other factors, and as purchases for our wholesale accounts must be committed to prior to the receipt of all wholesale customer orders, we carry the risk that we have purchased more inventory than will ultimately be desired or that we will not have purchased sufficient inventory to satisfy demand, resulting in lost sales opportunities.
Additionally, our Tommy Bahama brand operates 21 food and beverage locations, including Marlin Bars and full-service restaurants, generally adjacent to a Tommy Bahama full-price retail store. These food and beverage locations provide us with the opportunity to immerse customers in the ultimate Tommy Bahama experience as well as attract new customers to the Tommy Bahama brand.
Additionally, our Tommy Bahama brand operates 22 food and beverage locations, including Marlin Bars and full-service restaurants, generally adjacent to a Tommy Bahama full-price retail store. These food and beverage locations provide us with the opportunity to immerse customers in the ultimate Tommy Bahama experience as well as attract new customers to the Tommy Bahama brand.
Item 1. Business BUSINESS AND PRODUCTS Overview We are a leading branded apparel company that designs, sources, markets and distributes products bearing the trademarks of our portfolio of lifestyle brands: Tommy Bahama, Lilly Pulitzer, Johnny Was, Southern Tide, TBBC and Duck Head.
Item 1. Business BUSINESS AND PRODUCTS Overview We are a leading branded apparel company that designs, sources, markets and distributes products bearing the trademarks of our portfolio of lifestyle brands: Tommy Bahama, Lilly Pulitzer, Johnny Was, Southern Tide, TBBC, Duck Head and Jack Rogers.
These wholesale operations, which represented 16% of Lilly Pulitzer’s net sales in Fiscal 2022, are primarily with Signature Stores, independent specialty stores, better department stores and multi-branded e-commerce retailers that generally follow a retail model approach with limited discounting.
These wholesale operations, which represented 16% of Lilly Pulitzer’s net sales in Fiscal 2023, are primarily with Signature Stores, independent specialty stores, better department stores and multi-branded e-commerce retailers that generally follow a retail model approach with limited discounting.
To further strengthen each lifestyle brand’s connections with consumers, we directly communicate through digital and print media on a regular basis with our loyal consumers, including the approximately 2.5 million who have transacted with us in the last year.
To further strengthen each lifestyle brand’s connections with consumers, we directly communicate through digital and print media on a regular basis with our loyal consumers, including the approximately 2.7 million who have transacted with us in the last year.
During Fiscal 2022, 80% of our consolidated net sales were through our direct to consumer channels of distribution, which consist of our brand specific full-price retail stores, e-commerce websites and outlets, as well as our Tommy Bahama food and beverage operations.
During Fiscal 2023, 80% of our consolidated net sales were through our direct to consumer channels of distribution, which consist of our brand specific full-price retail stores, e-commerce websites and outlets, as well as our Tommy Bahama food and beverage operations.
The construction of and relocation of retail stores requires a greater amount of initial capital investment than wholesale operations, as well as greater ongoing operating costs. The cost to build-out a Johnny Was retail store is typically less than $0.5 million.
The construction or relocation of retail stores requires a greater amount of initial capital investment than wholesale operations, as well as greater ongoing operating costs. The cost to build out a Johnny Was retail store is typically less than $0.5 million.
As we seek to maintain the integrity and continued success of our lifestyle brands by limiting promotional activity in our full-price retail stores and e-commerce websites, we intend to maintain controlled distribution with careful selection of the retailers through which we sell our products and generally target wholesale customers that follow a limited promotions approach.
At the same time, as we seek to maintain the integrity and continued success of our lifestyle brands by limiting promotional activity in our full-price retail stores and e-commerce websites, we intend to maintain controlled distribution with careful selection of the retailers through which we sell our products and generally target wholesale customers that follow a limited promotions approach.
Our Tommy Bahama direct to consumer channels, which consist of full-price retail store, e-commerce, food and beverage and outlet store operations, in the aggregate, represented 83% of Tommy Bahama’s net sales in Fiscal 2022.
Our Tommy Bahama direct to consumer channels, which consist of full-price retail store, e-commerce, food and beverage and outlet store operations, in the aggregate, represented 83% of Tommy Bahama’s net sales in Fiscal 2023.
We regularly evaluate the adequacy of our information technologies and upgrade or enhance our systems to gain operating efficiencies, to provide additional consumer access and to support our anticipated growth as well as other changes in our business.
We periodically evaluate the adequacy of our information technologies and upgrade or enhance our systems to gain operating efficiencies, to provide additional consumer access and to support our anticipated growth as well as other changes in our business.
Our Tommy Bahama outlet stores are generally located in outlet shopping centers that include other upscale retailers and serve an important role in overall inventory management by often allowing us to sell discontinued and out-of-season products at better prices than are otherwise available from outside parties.
Our Tommy Bahama outlet stores are generally located in outlet shopping centers that include other upscale retailers and serve 11 Table of Contents an important role in overall inventory management by often allowing us to sell discontinued and out-of-season products at better prices than are otherwise available from outside parties.
During Fiscal 2022 and Fiscal 2021, the operating loss for Corporate and Other also included $3 million of transaction expenses and integration costs associated with the Johnny Was acquisition and a gain on sale of an unconsolidated entity of $12 million, respectively. ​ Tommy Bahama Tommy Bahama designs, sources, markets and distributes men’s and women’s sportswear and related products.
The operating loss for Corporate and Other in Fiscal 2022 also included $3 million of transaction expenses and integration costs associated with the Johnny Was acquisition. Fiscal 2021 also included a gain on sale of an unconsolidated entity of $12 million. ​ Tommy Bahama Tommy Bahama designs, sources, markets and distributes men’s and women’s sportswear and related products.
Among our management employees, who comprise approximately 18% of our workforce, the self-disclosed figures were 29% male, 71% female and less than 1% undisclosed or choosing not to identify.
Among our management employees, who comprise approximately 19% of our workforce, the self-disclosed figures were 29% male, 71% female and less than 1% undisclosed or choosing not to identify.
Refer to Note 11 and Note 2 of our consolidated financial statements included in this report for additional information about the Lanier Apparel exit and Fiscal 2021 operating results.
Refer to Note 12 and Note 2 of our consolidated financial statements included in this report for additional information about the Lanier Apparel exit and Fiscal 2021 operating results.
In Fiscal 2022, 80% of our net sales were direct to consumer sales, which are filled on a current basis; accordingly, an order backlog is not material to our business.
In Fiscal 2023, 80% of our net sales were direct to consumer sales, which are filled on a current basis; accordingly, an order backlog is not material to our business.
It also affords the opportunity to enhance overall brand awareness and exposure. In 23 Table of Contents evaluating a licensee for our brands, we consider the candidate’s experience, financial stability, sourcing expertise and marketing ability. We also evaluate the marketability and compatibility of the proposed licensed products with the brand image and our own products.
It also affords the opportunity to enhance overall brand awareness and exposure. In evaluating a licensee for our brands, we consider the candidate’s experience, financial stability, sourcing expertise and marketing ability. We also evaluate the marketability and compatibility of the proposed licensed products with the brand image and our own products.
We believe that continuous upgrading and enhancements to our information systems with newer technology that offers greater efficiency, functionality and reporting capabilities is critical to our operations and financial condition.
We believe that, where possible, continuous upgrading and enhancements to our information systems with newer technology that offers greater efficiency, functionality and reporting capabilities is critical to our operations and financial condition.
It is possible that additional duty increases could occur in future years, which could have a 22 Table of Contents significant unfavorable impact on the apparel retail industry and our cost of goods sold, operations, net sales, net earnings and cash flows.
It is possible that additional duty increases could occur in future years, which could have a significant unfavorable impact on the apparel retail industry and our cost of goods sold, operations, net sales, net earnings and cash flows.
All employees at the time of hire are required to read and certify compliance with the Code of Conduct and are given an opportunity to ask questions. ​ Talent and Development We are always looking for great people to join our team.
All employees at the time of hire are required to read and certify compliance with the Code of Conduct and are given an opportunity to ask questions. ​ 24 Table of Contents Talent and Development We are always looking for great people to join our team.
Each of our brands has selected recipient organizations that are working to address disparities in educational access and barriers to success for children in our local communities. ​ IMPORT RESTRICTIONS AND OTHER GOVERNMENT REGULATIONS We are exposed to certain risks as a result of our international operations as substantially all of our merchandise, as well as the products purchased by our licensing partners, is manufactured by foreign suppliers as discussed above.
Each of our brands has selected recipient organizations that are working to address disparities in educational access and barriers to success for children in our local communities. ​ 21 Table of Contents IMPORT RESTRICTIONS AND OTHER GOVERNMENT REGULATIONS We are exposed to certain risks as a result of our international operations as substantially all of our merchandise, as well as the products purchased by our licensing partners, is manufactured by foreign suppliers.
In addition to our capital investments, we must continue to invest in our SG&A expense infrastructure, including people, technology, advertising and other resources.
In addition to our capital investments, we will continue to invest in our SG&A expense infrastructure, including people, technology, advertising and other resources.
Our apparel products generally incorporate fabrics made of cotton, silk, linen, nylon, leather, tencel and other natural and man-made fibers, or blends of two or more of these materials. PRODUCT SOURCING We intend to maintain flexible, diversified, cost-effective sourcing operations that provide high-quality apparel and related products.
Our apparel products generally incorporate fabrics made of cotton, silk, linen, polyester, cellulosic fibers, leather and other natural and man-made fibers, or blends of two or more of these materials. PRODUCT SOURCING We intend to maintain flexible, diversified, cost-effective sourcing operations that provide high-quality apparel and related products.
Generally, our trademarks are subject to registrations and pending applications throughout the world for use on apparel and, in some cases, apparel-related products, accessories, home furnishings and beauty products, as well as in connection 18 Table of Contents with retail services. We continue to evaluate our worldwide usage and registration of our trademarks.
Generally, our trademarks are subject to registrations and pending applications throughout the world for use on apparel and, in some cases, apparel-related products, accessories and home furnishings, as well as in connection with retail services. We continue to evaluate our worldwide usage and registration of our trademarks.
Our licensed products and licensing partners are also generally subject to such regulations. Important factors relating to risks associated with government regulations include those described in Part I, Item 1A. Risk Factors. DISTRIBUTION CENTERS We operate a number of distribution centers.
Our licensed products and licensing partners are also generally subject to such regulations. Important factors relating to risks associated with government regulations, including forced labor laws, include those described in Part I, Item 1A. Risk Factors. DISTRIBUTION CENTERS We operate a number of distribution centers.
During Fiscal 2022, 34%, 34% and 14% of Lilly Pulitzer’s net sales were for women’s dresses, sportswear, and Luxletic apparel products, respectively, with the remaining sales consisting of Lilly Pulitzer accessories, including scarves, bags, jewelry and belts, children’s apparel, swim, footwear and licensed products. 13 Table of Contents Direct to Consumer Operations Lilly Pulitzer’s direct to consumer distribution channel, which consists of e-commerce operations and full-price retail stores, represented 84% of Lilly Pulitzer’s net sales in Fiscal 2022.
During Fiscal 2023, 38%, 35% and 14% of Lilly Pulitzer’s net sales were for women’s dresses, sportswear, and Luxletic athleisure products, respectively, with the remaining sales consisting of Lilly Pulitzer accessories, including scarves, bags, jewelry and belts, children’s apparel, swim, footwear and licensed products. 13 Table of Contents Direct to Consumer Operations Lilly Pulitzer’s direct to consumer distribution channel, which consists of e-commerce operations and full-price retail stores, represented 84% of Lilly Pulitzer’s net sales in Fiscal 2023.
As part of our supplier audit processes, we conduct human rights due diligence to identify risks and work to mitigate them, and our supplier codes of conduct set forth minimum social responsibility requirements to ensure that the human rights of all people in our value chain are respected.
As part of our supplier audit processes, we conduct human rights due diligence to identify risks and work to mitigate them, and our Supplier Code of Conduct sets forth minimum social responsibility requirements to ensure that the human rights of all people in our value chain are respected.
In certain seasonal locations such as Nantucket and Watch Hill, our stores are only open during the resort season. Additionally, we may open temporary pop-up stores in certain locations.
In certain seasonal locations such as Nantucket, Massachusetts and Watch Hill, Rhode Island, our stores are only open during the resort season. Additionally, we may open temporary pop-up stores in certain locations.
A key element of our Lilly Pulitzer strategy is the lillypulitzer.com website, which generated $172 million, or 51%, of Lilly Pulitzer’s net sales in Fiscal 2022. Another key component of our Lilly Pulitzer direct to consumer strategy is to operate our own Lilly Pulitzer stores, which represented 33% of Lilly Pulitzer’s net sales in Fiscal 2022.
A key element of our Lilly Pulitzer strategy is the lillypulitzer.com website, which generated $175 million, or 51%, of Lilly Pulitzer’s net sales in Fiscal 2023. Another key component of our Lilly Pulitzer direct to consumer strategy is to operate our own Lilly Pulitzer stores, which represented 33% of Lilly Pulitzer’s net sales in Fiscal 2023.
The remaining wholesale sales were primarily to national accounts, including on-line retailers, and off-price retailers. Lilly Pulitzer’s net sales to its 10 largest wholesale customers represented 8% of Lilly Pulitzer’s net sales in Fiscal 2022 with its largest customer representing less than 5% of Lilly Pulitzer’s net sales.
The remaining wholesale sales were primarily to off-price retailers and national accounts, including on-line retailers. Lilly Pulitzer’s net sales to its 10 largest wholesale customers represented 9% of Lilly Pulitzer’s net sales in Fiscal 2023 with its largest customer representing less than 5% of Lilly Pulitzer’s net sales.
The Marlin Bar concept, like our traditional restaurant locations, is adjacent to one of our full-price retail store locations and serves food and beverages, but in a smaller space and with food options more focused on small plate offerings rather than entrees.
The Marlin Bar concept, like our traditional restaurant locations, is adjacent to one of our full-price retail store locations and serves food and beverages, but in a smaller space and with food options more focused on fast, yet upscale, casual dining, with small plate offerings rather than entrees.
For Tommy Bahama’s domestic full-price retail stores and retail-food and beverage locations operating for the full Fiscal 2022 year, sales per gross square foot, excluding food and beverage sales and food and beverage space, were approximately $790, compared to approximately $645 in Fiscal 2021.
For Tommy Bahama’s domestic full-price retail stores and retail-food and beverage locations operating for the full Fiscal 2023 year, sales per gross square foot, excluding food and beverage sales and food and beverage space, were approximately $815, compared to approximately $790 in Fiscal 2022.
Including e-commerce sales, during Fiscal 2022, Florida, California, Hawaii and Texas represented 27%, 15%, 9% and 8%, respectively, of total Tommy Bahama direct to consumer sales. ​ The table below reflects the changes in store count for Tommy Bahama locations during Fiscal 2022. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Full-Price Retail ‑ Food & Beverage ​ ​ ​ ​ Retail Stores ​ Locations ​ Outlet Stores ​ Total Open as of beginning of fiscal year 102 21 35 158 Opened 2 — — 2 Closed (1) — (2) (3) Open as of end of fiscal year 103 21 33 157 ​ In future periods, we anticipate that many of our new Tommy Bahama store openings will be Marlin Bar locations that are either new locations or conversions of existing full-price retail stores.
Including e-commerce sales, during Fiscal 2023, Florida, California, Hawaii and Texas represented 28%, 15%, 9% and 8%, respectively, of total Tommy Bahama direct to consumer sales. ​ The table below reflects the changes in store count for Tommy Bahama locations during Fiscal 2023. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Full-Price Retail ‑ Food & Beverage ​ ​ ​ ​ Retail Stores ​ Locations ​ Outlet Stores ​ Total Open as of beginning of fiscal year 103 21 33 157 Opened 7 2 3 12 Closed (8) (1) (2) (11) Open as of end of fiscal year 102 22 34 158 ​ In future periods, we anticipate that many of our new Tommy Bahama store openings will be Marlin Bar locations that are either new locations or conversions of existing full-price retail stores.
We believe that this approach provides us with the greatest flexibility in identifying the appropriate manufacturers while considering quality, cost, timing of product delivery and other criteria. During Fiscal 2022, we purchased our products from more than 250 suppliers, with a significant concentration of suppliers in Asia. Our 10 largest suppliers provided approximately one-third of our product purchases.
We believe that this approach provides us with the greatest flexibility in identifying the appropriate manufacturers while considering quality, cost, timing of product delivery and other criteria. During Fiscal 2023, we purchased our products from approximately 260 suppliers, with a significant concentration of suppliers in Asia. Our 10 largest suppliers provided approximately one-third of our product purchases.
With our acquisition of Johnny Was on September 19, 2022, our business is organized as our Tommy Bahama, Lilly Pulitzer, Johnny Was and Emerging Brands operating groups. Operating results for periods prior to Fiscal 2022 also include the Lanier Apparel operating group, which we exited in Fiscal 2021.
Subsequent to our acquisition of Johnny Was, our business is organized as our Tommy Bahama, Lilly Pulitzer, Johnny Was and Emerging Brands operating groups. Operating results for periods prior to Fiscal 2022 also include the Lanier Apparel operating group, which we exited in Fiscal 2021.
These retail-food and beverage locations, which generated approximately 25% of Tommy Bahama’s net sales in Fiscal 2022, provide us with the opportunity to immerse customers in the ultimate Tommy Bahama experience.
These retail-food and beverage locations, which generated over 25% of Tommy Bahama’s net sales in Fiscal 2023, provide us with the opportunity to immerse customers in the ultimate Tommy Bahama experience.
Tommy Bahama utilizes its outlet stores, which generated 7% of total Tommy Bahama sales in Fiscal 2022, and sales to off-price retailers to sell the remaining end of season or excess inventory.
Tommy Bahama utilizes its outlet stores, which generated 8% of total Tommy Bahama sales in Fiscal 2023, and sales to off-price retailers to sell the remaining end of season or excess inventory.
Lilly Pulitzer’s full-price retail store sales per gross square foot for Fiscal 2022 were approximately $765 for the full-price retail stores which were open the full Fiscal 2022 year, as compared to $685 in Fiscal 2021.
Lilly Pulitzer’s full-price retail store sales per gross square foot for Fiscal 2023 were approximately $737 for the full-price retail stores which were open the full Fiscal 2023 year, as compared to $765 in Fiscal 2022.
While about one-half of our full-price retail stores are located in warm weather resort or travel-to destinations and states, we believe there are 7 Table of Contents opportunities for new stores in both warmer and colder climates, as we believe the more important consideration is whether the location attracts the affluent consumer that we are targeting.
Approximately one-half of our full-price retail stores are located in warm weather resort or travel-to destinations and states. We believe there are still opportunities for new stores in both warmer and colder climates as we believe the more important consideration is whether the location attracts the affluent consumer that we are targeting.
We believe that we have opportunities for continued sales growth for Tommy Bahama, particularly in our women’s business, which represented 34% and 33% of sales in our direct to consumer operations in Fiscal 2022 and Fiscal 2021, respectively, with women’s swim representing about one-fourth of the women’s business.
We believe that we have opportunities for continued sales growth for Tommy Bahama, particularly in our women’s business, which represented 36% and 34% of sales in our direct to consumer operations in Fiscal 2023 and Fiscal 2022, respectively, with women’s swim representing about one-third of the women’s business.
We anticipate that most future retail store openings for Southern Tide and TBBC will generally be approximately 1,500 to 2,500 square feet; however, the determination of actual size of the store will depend on a variety of criteria.
We anticipate that most future retail store openings for Southern Tide and TBBC will generally be approximately 1,500 to 2,000 square feet; however, the determination of actual size of the store will depend on a variety of criteria, including the potential opportunities that become available.
Additionally, for TBBC, we anticipate opening two new stores during Fiscal 2023. We continue to look at additional opportunities for new full-price store locations for both Southern Tide and TBBC. The operation of full-price retail stores requires a greater amount of initial capital investment than wholesale operations, as well as greater ongoing operating costs.
We continue to look at additional opportunities for new full-price store locations for both Southern Tide and TBBC. The operation of full-price retail stores requires a greater amount of initial capital investment than wholesale operations, as well as greater ongoing operating costs.
ADVERTISING AND MARKETING During Fiscal 2022, we incurred $82 million, or 6% of net sales, of advertising expense. Advertising and marketing are an integral part of the long-term strategy for our lifestyle brands, and we therefore devote significant resources to these efforts.
ADVERTISING AND MARKETING During Fiscal 2023, we incurred $105 million, or 7% of net sales, of advertising expense. Advertising and marketing are an integral part of the long-term strategy for our lifestyle brands, and we therefore devote significant resources to these efforts.
In 2018, we launched an ongoing initiative to assess how well we are doing in managing performance, developing our people and putting our talent to its highest and best use across our company. Our aim is greater employee engagement and ultimately a more effective organization.
We continue to assess how well we are doing in managing performance, developing our people and putting our talent to its highest and best use across our company. Our aim is greater employee engagement and ultimately a more effective organization.
As of January 28, 2023, the majority of our Tommy Bahama full-price retail stores were in street-front locations or lifestyle centers with the remainder primarily in regional indoor malls, with a number of those regional indoor locations in resort travel destinations.
As of February 3, 2024, the majority of our Tommy Bahama full-price retail stores were in street-front locations or lifestyle centers with the remainder primarily in regional indoor malls, with a number of those regional indoor locations in resort travel destinations.
During the 12 months ended January 28, 2023, 90% of the net sales of Johnny Was were for women’s apparel, with the remaining sales consisting of Johnny Was accessories, including home products, shoes, scarves, handbags, and jewelry. 15 Table of Contents Direct to Consumer Operations The Johnny Was direct to consumer distribution channel, which consists of e-commerce operations and the Johnny Was retail stores, represented 75% of the Johnny Was net sales in the 12 months ended January 28, 2023.
During Fiscal 2023, approximately 90% of the net sales of Johnny Was were for women’s apparel, with the remaining sales consisting of Johnny Was accessories, including home products, shoes, scarves, handbags, and jewelry. 15 Table of Contents Direct to Consumer Operations The Johnny Was direct to consumer distribution channel, which consists of e-commerce operations and the Johnny Was retail stores, represented 79% of the Johnny Was net sales in Fiscal 2023.
As of January 28, 2023, we have agreements for the distribution of Tommy Bahama products in the Middle East and parts of Latin America. The products sold by the distributors generally are identical to the products sold in our own Tommy Bahama stores.
As of February 3, 2024, we have agreements for the distribution of Tommy Bahama products in the Middle East and parts of Latin America. The products sold by the distributors generally are identical to the products sold in our own Tommy Bahama stores.
(2) Square feet for retail-food and beverage locations consists of retail square footage and excludes square feet used in the associated food and beverage operations. During Fiscal 2022, Florida, California, Hawaii and Texas represented 33%, 16%, 13% and 9%, respectively, of our Tommy Bahama direct to consumer retail and retail-food and beverage location sales.
(2) Square feet for retail-food and beverage locations consists of retail square footage and excludes square feet used in the associated food and beverage operations. During Fiscal 2023, Florida, California, Hawaii and Texas represented 34%, 16%, 12% and 8%, respectively, of our Tommy Bahama direct to consumer retail and retail-food and beverage location sales.
Our Tommy Bahama e-commerce business, which generated $214 million of net sales in Fiscal 2022, has grown significantly over the last few years, including a 16% increase in net sales compared to Fiscal 2021. Our Tommy Bahama websites allow consumers to buy Tommy Bahama products directly from us via the internet.
Our Tommy Bahama e-commerce business, which generated $224 million of net sales in Fiscal 2023, has grown significantly over the last few years, including a 5% increase in net sales compared to Fiscal 2022. Our Tommy Bahama websites, including the tommybahama.com website, allow consumers to buy Tommy Bahama products directly from us via the internet.
Johnny Was On September 19, 2022, we acquired the Johnny Was California lifestyle brand and related operations, which includes the design, sourcing, marketing and distribution of collections of affordable luxury, artisan-inspired bohemian apparel, accessories and home goods.
Johnny Was In the Third Quarter of Fiscal 2022, we acquired the Johnny Was California lifestyle brand and related operations, which includes the design, sourcing, marketing and distribution of collections of affordable luxury, artisan-inspired bohemian apparel, accessories and home goods.
Our various initiatives are effective in increasing online and in-store traffic resulting in the proportion of our sales that occur during our marketing initiatives increasing in recent years, which puts some downward pressure on our direct to consumer gross margins.
Our various initiatives are effective in increasing online and in-store traffic resulting in the proportion of our sales that occur during our promotional marketing initiatives, such as Tommy Bahama’s Friends & Family events, increasing in recent years, which puts some downward pressure on our direct to consumer gross margins.
We also have other locations in the pipeline for openings in Fiscal 2024 and beyond and anticipate opening as many as five Marlin Bar locations in Fiscal 2024, subject to lease negotiation, construction timing and other factors. We continue to look for other appropriate locations for full-price retail stores and Marlin Bars.
We also have other locations in the pipeline for openings in Fiscal 2025 and beyond and anticipate opening at least three Marlin Bar locations in Fiscal 2025, subject to lease negotiation, construction timing and other factors. We continue to look for other appropriate locations for full-price retail stores and Marlin Bars.
The shared resources provide for operating efficiencies and enhanced knowledge sharing across the brands. We acquired Southern Tide in 2016, Duck Head in 2016 and TBBC in 2017.
The shared resources provide for operating efficiencies and enhanced knowledge sharing across the brands. We acquired Southern Tide in 2016, Duck Head in 2016, TBBC in 2017 and Jack Rogers, a footwear brand, in 2023.
During Fiscal 2022, the majority of the sales of both Southern Tide and Duck Head were wholesale sales, while the majority of TBBC sales were direct to consumer sales.
During Fiscal 2023, the majority of the net sales of both Southern Tide and Duck Head were wholesale sales, while the majority of TBBC and Jack Rogers sales were direct to consumer sales.
We believe that presenting our products in a digital or physical setting specifically designed to showcase the lifestyle on which the brands are based enhances the image of our brands.
We believe that presenting our products in a digital or physical setting specifically designed to showcase the lifestyle on which the brands are based enhances the image of our brands. Our brand-specific e-commerce business continues to grow.
Our community partners include the United Way of Greater Atlanta, the Woodruff Arts Center and Grady Hospital, and each of our operating groups partners with organizations improving quality of life in the communities where our customers and employees live and work, such as the Garden of Hope and Courage, the Breast Cancer Research Foundation, Folds of Honor and the Kentucky Children’s Hospital. ​ In 2020, we announced the launch of the Oxford Educational Access Initiative to further our goal of reducing economic and racial inequality through access to education.
Our community partners include the United Way of Greater Atlanta, the Woodruff Arts Center and Grady Hospital, and each of our operating groups partners with organizations improving quality of life in the communities where our customers and employees live and work. ​ In 2020, we announced the launch of the Oxford Educational Access Initiative to further our goal of reducing economic and racial inequality through access to education.
As of January 28, 2023, about 40% of our Lilly Pulitzer full-price stores were located in outdoor regional lifestyle centers and approximately one-third of our Lilly Pulitzer stores were located in indoor regional malls, with the remaining locations in resort or street locations.
As of February 3, 2024, about 40% of our Lilly Pulitzer full-price stores were located in outdoor regional lifestyle centers and approximately one-quarter of our Lilly Pulitzer stores were located in indoor regional malls, with the remaining locations in resort or street locations.
During Fiscal 2022, about one-third of Lilly Pulitzer’s wholesale sales were to Lilly Pulitzer’s Signature Stores, one-third of Lilly Pulitzer’s wholesale sales were to specialty stores and about one-fifth of Lilly Pulitzer’s wholesale sales, or less than 5% of Lilly Pulitzer’s net sales, were to department stores.
During Fiscal 2023, approximately one-quarter of Lilly Pulitzer’s wholesale sales were to Lilly Pulitzer’s Signature Stores, approximately one-fifth of Lilly Pulitzer’s wholesale sales were to specialty stores and less than one-fifth of Lilly Pulitzer’s wholesale sales, or less than 5% of Lilly Pulitzer’s net sales, were to department stores.
The table below provides certain information regarding Lilly Pulitzer direct to consumer locations as of January 28, 2023. ​ ​ ​ ​ ​ ​ ​ Full-Price ​ ​ Retail Stores Florida 20 Massachusetts 7 Virginia 5 North Carolina ​ 4 Other 23 Total 59 Average square feet per store 2,500 Total square feet at year-end 145,000 ​ 14 Table of Contents During Fiscal 2022, 50% of Lilly Pulitzer’s full-price retail store sales were in stores located in Florida with no other state generating more than 10% of full-price retail store sales.
The table below provides certain information regarding Lilly Pulitzer direct to consumer locations as of February 3, 2024. ​ ​ ​ ​ ​ ​ ​ Full-Price ​ ​ Retail Stores Florida 21 Massachusetts 6 Virginia 5 North Carolina ​ 5 Other 23 Total 60 Average square feet per store 2,500 Total square feet at year-end 152,000 ​ 14 Table of Contents During Fiscal 2023, 51% of Lilly Pulitzer’s full-price retail store sales were in stores located in Florida with no other state generating more than 10% of full-price retail store sales.
We sell products to these Lilly Pulitzer Signature Stores on a wholesale basis and do not receive royalty income associated with these sales. As of January 28, 2023, there were 48 Lilly Pulitzer Signature Stores.
We sell products to these Lilly Pulitzer Signature Stores on a wholesale basis and do not receive royalty income associated with these sales. As of February 3, 2024, there were 46 Lilly Pulitzer Signature Stores.
We paid total duties of more than $57 million on products imported into the United States directly by us in Fiscal 2022, with the average duty rate on those products of approximately 17% of the value of the imported product in Fiscal 2022.
We paid total duties of $58 million on products imported into the United States directly by us in Fiscal 2023, with the average duty rate on those products of approximately 19% of the value of the imported product in Fiscal 2023.
The cost of a Tommy Bahama Marlin Bar is significantly more than the cost of a full-price retail store and can vary significantly depending on a variety of factors. Historically, the cost to build out our Marlin Bar locations has been approximately $3 million and future locations may be more expensive than that amount.
The cost of a Tommy Bahama Marlin Bar is significantly more than the cost of a full-price retail store and can vary significantly depending on a variety of factors. The cost to build out a Marlin Bar location averages $4 million and future locations may be more or less expensive than that amount.
The property will be managed and operated by a national commercial and hospitality real estate company with considerable experience in premier resort development and operations. Lilly Pulitzer Lilly Pulitzer designs, sources, markets and distributes upscale collections of women’s and girl’s dresses, sportswear and related products.
Tommy Bahama will earn royalty income calculated as a percentage of revenues associated with the resort. The property is managed and operated by a national commercial and hospitality real estate company with considerable experience in premier resort development and operations. Lilly Pulitzer Lilly Pulitzer designs, sources, markets and distributes upscale collections of women’s and girl’s dresses, sportswear and related products.
During Fiscal 2022, approximately 36%, 23%, and 11% of our apparel and related products acquired directly by us or via buying agents, were from producers located in China, Vietnam and Peru, respectively, with no other country representing more than 10% of such purchases.
During Fiscal 2023, approximately 41% and 23% of our apparel and related products acquired directly by us or via vendors or buying agents, were from producers located in China and Vietnam, respectively, with no other country representing more than 10% of such purchases. Johnny Was, which was acquired in 2022, sources approximately 90% of its products from China.
Therefore, due to the potential impact of these items and the September 2022 acquisition of Johnny Was, we do not believe that net sales or operating income by quarter in Fiscal 2022 is indicative of the expected proportion of amounts by quarter for future periods.
Therefore, due to the potential impact of these items, we do not believe that net sales or operating income by quarter in Fiscal 2023 are necessarily indicative of the expected proportion of amounts by quarter for future periods.
Each of our lifestyle brands’ products are designed and developed by dedicated brand-specific teams who focus on the target consumer for the respective brand. The design process includes feedback from buyers, consumers and sales agents, along with market trend research.
Our design-led, commercially informed lifestyle brand operations strive to provide exciting, differentiated products each season. 19 Table of Contents Each of our lifestyle brands’ products are designed and developed by dedicated brand-specific teams who focus on the target consumer for the respective brand. The design process includes feedback from buyers, consumers and sales agents, along with market trend research.
We believe that this approach has helped us protect the integrity of the Tommy Bahama brand by allowing our full-price retail stores to limit promotional activity while controlling the distribution of discontinued and out-of-season product. To supplement the clearance items sold in Tommy Bahama outlets, we merchandise our Tommy Bahama outlets with certain made-for products.
We believe that this approach has helped us protect the integrity of the Tommy Bahama brand by allowing our full-price retail stores to limit promotional activity while controlling the distribution of discontinued and out-of-season product.
Further, the impact of certain unusual or non-recurring items, economic conditions, our e-commerce flash clearance sales, wholesale product shipments, weather, acquisitions or other factors affecting our operations may vary from one year to the next.
Thus, our third quarter historically has had the lowest net sales and net earnings compared to other quarters. Further, the impact of certain unusual or non-recurring items, economic conditions, our e-commerce flash clearance sales, wholesale product shipments, weather, acquisitions or other factors affecting our operations may vary from one year to the next.
We are in the process of identifying sites or negotiating leases for additional locations. We continue to look for other appropriate locations and anticipate returning to a pace of opening as many as five locations per year in the future. At the same time, we may relocate or close a limited number of locations at lease expiration.
We are in the process of identifying sites or negotiating leases for additional locations. We continue to look for other appropriate locations and anticipate returning to a pace of opening as many as five to six locations per year in the future.
For example, we acquired Johnny Was on September 19, 2022. Important factors relating to certain risks, many of which are beyond our ability to control or predict, which could impact our business are described in Part I, Item 1A. Risk Factors of this report.
Important factors relating to certain risks, many of which are beyond our ability to control or predict, which could impact our business are described in Part I, Item 1A. Risk Factors of this report.
Corporate and Other Corporate and Other is a reconciling category for reporting purposes and includes our corporate offices, substantially all financing activities, the elimination of inter-segment sales, any other items that are not allocated to the operating groups, including LIFO inventory accounting adjustments as our LIFO pool does not correspond to our operating group definitions, and the operations of our Lyons, Georgia distribution center and our Oxford America business, which generated net sales of $1 million and was exited in Fiscal 2022, and our $8 million minority ownership interest in a property in Indian Wells, California that will be converted into the Tommy Bahama Miramonte Resort and Spa during Fiscal 2023.
Corporate and Other Corporate and Other is a reconciling category for reporting purposes and includes our corporate offices, substantially all financing activities, the elimination of inter-segment sales, any other items that are not allocated to the operating groups, including LIFO inventory accounting adjustments as our LIFO pool does not correspond to our operating group definitions, the operations of our Lyons, Georgia distribution center, our Oxford America business, which generated net sales of $1 million and was exited in Fiscal 2022, and our initial $8 million minority ownership interest in a property in Indian Wells, California that was converted and rebranded in Fiscal 2023 as the Tommy Bahama Miramonte Resort & Spa. 18 Table of Contents TRADEMARKS We own trademarks, many of which are very important and valuable to our business, including Tommy Bahama®, Lilly Pulitzer®, Johnny Was®, Southern Tide®, The Beaufort Bonnet Company®, Duck Head® and Jack Rogers®.
During Fiscal 2022, no individual third party manufacturer, licensee or other supplier provided more than 10% of our product purchases in total. We generally acquire products sold in our food and beverage operations from various third party domestic suppliers, with a particular emphasis on procuring sustainably sourced food and locally grown produce.
During Fiscal 2023, no individual third party manufacturer, licensee or other supplier provided more than 10% of our product purchases in total. We generally acquire products sold in our food and beverage operations from various third party domestic suppliers.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeAlthough we have experienced significant growth in our e-commerce businesses in recent years, there is no assurance that we will realize a return on these investments, be successful in continuing to grow our e-commerce businesses over the long term or that any increase we may see in net sales from our e-commerce business will not cannibalize, or be sufficient to offset any decreases in, net sales from bricks and mortar retail stores. ​ 29 Table of Contents Any inability on our part to effectively adapt to rapidly evolving consumer behavioral trends may result in lost sales, increase our costs and/or adversely impact our results of operations, financial condition, reputation and credibility. ​ We may be unable to grow our business through organic growth, which could have a material adverse effect on our business, financial condition, liquidity and results of operations. ​ A key component of our business strategy is organic growth in our brands.
Biggest changeAlthough we have experienced significant growth in our e-commerce businesses in recent years, there is no assurance that we will realize a return on these investments, be successful in continuing to grow our e-commerce businesses over the long term or that any increase we may see in net sales from our e-commerce business will not cannibalize, or be sufficient to offset any decreases in, net sales from bricks and mortar retail stores.
We collect, use, store and transmit sensitive and confidential personal information of our customers, employees, suppliers and others as an ongoing part of our business operations, and we are regularly subject to attempts by attackers to gain unauthorized access to our networks, systems and data, or to obtain, change or destroy confidential information.
We collect, use, store and transmit sensitive and confidential business information and personal information of our customers, employees, suppliers and others as an ongoing part of our business operations, and we are regularly subject to attempts by attackers to gain unauthorized access to our networks, systems and data, or to obtain, change or destroy confidential information.
These changes included sustained declines in bricks and mortar retail traffic; entry into the fashion retail space by large e-commerce retailers and others with significant financial resources and enhanced distribution capabilities; increased costs to attract and retain consumers; increased investment in technology and multi-channel distribution strategies by large, traditional bricks and mortar and big box retailers; ongoing emphasis on off-price and fast fashion channels of distribution, in particular those who offer brand label products at clearance; and increased appeal for consumers of products that incorporate sustainable materials and processes in the supply chain and/or otherwise reflect their social or personal values.
These changes included declines in bricks and mortar retail traffic; entry into the fashion retail space by large e-commerce retailers and others with significant financial resources and enhanced distribution capabilities; increased costs to attract and retain consumers; increased investment in technology and multi-channel distribution strategies by large, traditional bricks and mortar and big box retailers; ongoing emphasis on off-price and fast fashion channels of distribution, in particular those who offer brand label products at clearance; and increased appeal for consumers of products that incorporate sustainable materials and processes in the supply chain and/or otherwise reflect their social or personal values.
A failure to effectively convey our core principles to our customers and investors or to accurately communicate our social responsibility and environmental sustainability initiatives and respond to concerns raised about them, including through our social media channels, could result in a negative public perception of our brands and products and negatively impact our business. ​ As a multi-national apparel company, we may experience fluctuations in our tax liabilities and effective tax rate. ​ As a multi-national apparel company, we are subject to income taxes in the United States and various foreign jurisdictions.
A failure to effectively convey our core principles to our customers and investors or to accurately communicate our social responsibility and environmental sustainability initiatives and respond to concerns raised about them, including through our websites and social media channels, could result in a negative public perception of our brands and products and negatively impact our business. ​ As a multi-national apparel company, we may experience fluctuations in our tax liabilities and effective tax rate. ​ As a multi-national apparel company, we are subject to income taxes in the United States and various foreign jurisdictions.
While we have diversified the jurisdictions from which we source products and product inputs, our manufacturing operations remain concentrated in China, cotton is among the principal raw materials used in many of our goods and even the cotton used in our products manufactured outside of China largely originates from Chinese fabric mills. Starting in Fiscal 2020, the U.S.
While we have diversified the jurisdictions from which we source products and product inputs, our manufacturing operations remain concentrated in Asia, cotton is among the principal raw materials used in many of our goods and even the cotton used in our products manufactured outside of China largely originates from Chinese fabric mills. Starting in Fiscal 2020, the U.S.
Despite our efforts, we cannot ensure that our manufacturers and vendors will at all times conduct their operations in accordance with ethical practices or that the products we purchase will always meet our safety and quality control standards, and any failure to do so could disrupt our supply chain and adversely affect our business operations. ​ The presence or perception of forced labor in our supply chain in spite of our efforts to ensure that our third party manufacturers and vendors meet human rights and labor standards could result in adverse impacts on our business, including the detention of goods at U.S. ports of entry, challenges in identifying replacement vendors and harm to our reputation.
Despite our efforts, we cannot ensure that our producers and vendors will at all times conduct their operations in accordance with ethical practices or that the products we purchase will always meet our safety and quality control standards, and any failure to do so could disrupt our supply chain and adversely affect our business operations. ​ The presence or perception of forced labor in our supply chain in spite of our efforts to ensure that our third-party producers and vendors meet human rights and labor standards could result in adverse impacts on our business, including the detention of goods at U.S. ports of entry, challenges in identifying replacement vendors and harm to our reputation.
The terms of any such financing or our inability to secure such financing could adversely affect our ability to execute our strategies, and the negative covenants in our debt agreements, now or in the future, may increase our vulnerability to adverse economic and industry conditions and/or limit our flexibility in carrying out our business strategy and plans. ​ The loss of one or more of our key wholesale customers, or a significant adverse change in a customer’s financial position, could negatively impact our net sales and profitability. ​ We generate a material percentage of our wholesale sales, which was 20% of our net sales in Fiscal 2022, from a few key customers.
The terms of any such financing or our inability to secure such financing could adversely affect our ability to execute our strategies, and the negative covenants in our debt agreements, now or in the future, may increase our vulnerability to adverse economic and industry conditions and/or limit our flexibility in carrying out our business strategy and plans. ​ The loss of one or more of our key wholesale customers, or a significant adverse change in a customer’s financial position, could negatively impact our net sales and profitability. ​ We generate a material percentage of our wholesale sales, which was 20% of our net sales in Fiscal 2023, from a few key customers.
We could be subject to penalties, fines or sanctions if any of the manufacturers from which we purchase goods is found or suspected to have dealings, directly or indirectly, with the XUAR or entity list companies, and any actions taken by customs officials to block the import of products suspected of being manufactured with forced labor, whether or not founded, could adversely impact our operations and financial results. ​ Furthermore, consumers are increasingly attuned to the environmental and social impact of the products they purchase and companies with which they do business.
We could be subject to penalties, fines or sanctions if any of the producers from which we purchase goods is found or suspected to have dealings, directly or indirectly, with the XUAR or entity list companies, and any actions taken by customs officials to block the import of products suspected of being manufactured with forced labor, whether or not founded, could adversely impact our operations and financial results. ​ Furthermore, consumers are increasingly attuned to the environmental and social impact of the products they purchase and companies with which they do business.
Due to these concentrations, as well as our brands’ association with the resort lifestyle and destinations, we have heightened exposure to factors that impact these regions, including general economic conditions, weather patterns, natural disasters, public health crises, changing demographics and other factors. ​ Our international operations, including foreign sourcing, result in an exposure to fluctuations in foreign currency exchange rates. ​ We are exposed to certain currency exchange risks in conducting business outside of the United States.
Due to these concentrations, as well as our brands’ association with the resort lifestyle and destinations, we have heightened exposure to factors that impact these regions, including general economic conditions, weather patterns, climate-related conditions, natural disasters, public health crises, changing demographics and other factors. ​ Our international operations, including foreign sourcing, result in an exposure to fluctuations in foreign currency exchange rates. ​ We are exposed to certain currency exchange risks in conducting business outside of the United States.
Additionally, currency fluctuations could also disrupt the business of our independent manufacturers by making their purchases of raw materials more expensive and difficult to finance. ​ ​ Risks Related to Regulatory, Tax and Financial Reporting Matters ​ Our business is subject to various federal, foreign, state and local laws and regulations, and the costs of compliance with, or the violation of, such laws and regulations could have an adverse effect on our costs or operations. ​ We are subject to stringent standards, laws and other regulations, including those relating to labor, employment, privacy and data security, consumer protection, marketing, health, product performance, content and safety, anti-bribery, taxation, customs, logistics and other operational matters.
Additionally, currency fluctuations could also disrupt the business of our independent manufacturers by making their purchases of raw materials more expensive and difficult to finance. ​ Risks Related to Regulatory, Tax and Financial Reporting Matters ​ Our business is subject to various federal, foreign, state and local laws and regulations, and the costs of compliance with, or the violation of, such laws and regulations could have an adverse effect on our costs or operations. ​ We are subject to an increasing number of evolving and stringent standards, laws and other regulations, including those relating to labor, employment, privacy and data security, consumer protection, marketing, health, product performance, content and safety, anti-bribery, taxation, customs, logistics and other operational matters.
In addition, if our e-commerce businesses continue to grow, they may do so in part by attracting existing customers, rather than new customers, who choose to purchase products from us online through our websites rather than from our physical stores, thereby reducing the financial performance of our bricks and mortar operations, which could have a material adverse effect on our results of operations or financial condition. ​ We make use of debt to finance our operations, which could expose us to risks that adversely affect our business, financial position and operating results. ​ Our levels of debt vary as a result of the seasonality of our business, investments in our operations, acquisitions we undertake and working capital needs.
In addition, if our e-commerce businesses continue to grow, they may do so in part by attracting existing customers, rather than new customers, who choose to purchase products from us online through our websites rather than from our physical stores, thereby reducing the financial performance of our bricks and mortar operations, which could have a material adverse effect on our results of operations or financial condition. ​ 30 Table of Contents We make use of debt to finance our operations, which could expose us to risks that adversely affect our business, financial position and operating results. ​ Our levels of debt vary as a result of the seasonality of our business, investments in our operations, acquisitions we undertake and working capital needs.
The negative impact of adverse publicity relating to allegations of actual or perceived violations at one of our restaurants may extend beyond the restaurant involved to affect some or all of our other restaurants, as well as the image of the Tommy Bahama brand as a whole. ​ General Risks ​ Our business depends on our senior management and other key personnel, and failure to successfully attract, retain and implement succession of our senior management and key personnel or to attract, develop and retain personnel to fulfill other critical functions may have an adverse effect on our operations and ability to execute our strategies. ​ Our senior management has substantial experience in the apparel and related industries, with our Chairman and Chief Executive Officer Mr.
The negative impact of adverse publicity relating to allegations of actual or perceived violations at one of our restaurants may extend beyond the restaurant involved to affect some or all of our other restaurants, as well as the image of the Tommy Bahama brand as a whole. ​ General Risks 37 Table of Contents ​ Our business depends on our senior management and other key personnel, and failure to successfully attract, retain and implement succession of our senior management and key personnel or to attract, develop and retain personnel to fulfill other critical functions may have an adverse effect on our operations and ability to execute our strategies. ​ Our senior management has substantial experience in the apparel and related industries, with our Chairman and Chief Executive Officer Mr.
Further, changes to U.S. and foreign tax laws and compliance with new tax laws could have a material adverse effect on our tax expense, cash flows and operations. ​ Impairment charges for goodwill or intangible assets could have a material adverse impact on our financial results. ​ The carrying values of our goodwill and intangible assets, including those recorded in connection with our acquisition of a business or our bricks and mortar operations, are subject to periodic impairment testing.
Further, changes to U.S. and foreign tax laws and compliance with new tax laws could have a material adverse effect on our tax expense, cash flows and operations. ​ Impairment charges for goodwill or intangible assets could have a material adverse impact on our financial results. ​ The carrying values of our goodwill and intangible assets, including those recorded in connection with our acquisition of a business, are subject to periodic impairment testing.
Litigation and other legal action of this type, regardless of whether it is successful, could result in substantial costs to us and diversion of the attention of our management and other resources. ​ We are subject to periodic litigation, which may cause us to incur substantial expenses or unexpected liabilities. ​ From time to time, we are involved in litigation matters, which may relate to employment practices, consumer protection, intellectual property infringement, product liability and contract disputes, and which may include a class action, and we are subject to various claims and pending or threatened lawsuits in the ordinary course of our business operations.
Litigation and other legal action of this type, regardless of whether it is successful, could result in substantial costs to us and diversion of the attention of our management and other resources. ​ We are subject to periodic litigation, which may cause us to incur substantial expenses or unexpected liabilities. 38 Table of Contents ​ From time to time, we are involved in litigation matters, which may relate to employment practices, consumer protection, intellectual property infringement, product liability and contract disputes, and which may include a class action, and we are subject to various claims and pending or threatened lawsuits in the ordinary course of our business operations.
These risks include imposition of additional or new antidumping, countervailing or other duties, tariffs, taxes or quota restrictions; government-imposed restrictions as a result of public health issues; changes in customs procedures for importing apparel products; restrictions on the transfer of funds to or from foreign countries; and the issuance of sanctions and trade orders.
These risks include imposition of antidumping, countervailing or other duties, tariffs, taxes or quota restrictions; government-imposed restrictions as a result of public health issues; changes in customs procedures for importing apparel products; restrictions on the transfer of funds to or from foreign countries; and the issuance of sanctions and trade orders.
Although we attempt to mitigate the effect of increases in our cost of goods sold, labor costs, occupancy costs, other operational costs and SG&A items through sourcing initiatives and by selectively increasing the prices of our products, we may be unable to fully pass on these costs to our customers, and material increases in our costs may reduce the profitability of our operations and/or adversely impact our results of operations. ​ Labor-related matters, including labor disputes, may adversely affect our operations. ​ We may be adversely affected as a result of labor disputes in our own operations or in those of third parties with whom we work.
Although we attempt to mitigate the effect of increases in our cost of goods sold, labor costs, occupancy costs, other operational costs and SG&A items through sourcing initiatives and by selectively increasing the prices of our products, we may be unable to fully pass on these costs to our customers, and material increases in our costs may reduce the profitability of our operations and/or adversely impact our results of operations. ​ Labor-related matters, including labor disputes, may adversely affect our operations. 34 Table of Contents ​ We may be adversely affected as a result of labor disputes in our own operations or in those of third parties with whom we work.
The market price of our common stock may decline if the results of our operations or projected results do not meet the expectations of securities analysts or our shareholders, investors are unreceptive to an announcement of changes in our business or our strategic initiatives or securities analysts who follow our company change their ratings or estimates of our future performance.
The market price of our common stock may decline, or litigation may ensue, if the results of our operations or projected results do not meet the expectations of securities analysts or our shareholders, investors are unreceptive to an announcement of changes in our business or our strategic initiatives or securities analysts who follow our company change their ratings or estimates of our future performance.
Privacy breaches of confidential information stored or used by our third party service providers or disruptions in their systems may expose us to the same risks as a breach of our own systems, including negative publicity, potential out-of-pocket costs and adverse effects on our business and customer relationships. ​ Our operations are reliant on information technology, and any interruption or other failure could have an adverse effect on our business or results of operations. ​ 33 Table of Contents The efficient operation of our business depends on information technology.
Privacy breaches of confidential information stored or used by our third party service providers or disruptions in their systems may expose us to the same risks as a breach of our own systems, including negative publicity, potential out-of-pocket costs and adverse effects on our business and customer relationships. ​ Our operations are reliant on information technology, and any interruption or other failure could have an adverse effect on our business or results of operations. ​ The efficient operation of our business depends on information technology.
While we are not subject to any organized labor agreements and have historically enjoyed good employee relations, there can be no assurance that we will not experience work stoppages or other labor problems in the future with our non-unionized employees.
While we are not subject to any organized labor agreements and have historically enjoyed good employee relations, there can be no assurance that we will not experience work stoppages or other labor problems in the future with our employees.
Significant tariffs or other restrictions placed on Chinese imports and any related countermeasures that are taken by China could have an adverse effect on our financial condition or results of operations. ​ Any violation or perceived violation of our codes of conduct or environmental and social compliance programs, including by our manufacturers or vendors, could have a material adverse effect on our brands. ​ We have a robust legal, social and environmental compliance program, including codes of conduct and vendor compliance standards.
Significant tariffs or other restrictions placed on Chinese imports and any related countermeasures that are taken by China could have an adverse effect on our financial condition or results of operations. ​ Any violation or perceived violation of our Supplier Code of Conduct or environmental and social compliance programs, including by our manufacturers or vendors, could have a material adverse effect on our brands. ​ We have a robust legal, social and environmental compliance program, including a Supplier Code of Conduct and vendor compliance standards.
In addition, a decision by one or more of our key wholesale customers to terminate its relationship with us or to reduce its purchases, whether motivated by competitive considerations, a change in desired product assortment, quality or style issues, financial difficulties, economic conditions or otherwise, could also adversely affect our business. ​ Risks Related to Cybersecurity and Information Technology ​ Cybersecurity attacks and/or breaches of information security or privacy could disrupt our operations, cause us to incur additional expenses, expose us to litigation and/or cause us financial harm. ​ Cybersecurity attacks continue to become increasingly sophisticated, and experienced computer programmers and hackers may be able to penetrate our network security and misappropriate or compromise our assets, including confidential information, or disrupt our systems.
In addition, a decision by one or more of our key wholesale customers to terminate its relationship with us or to reduce its purchases, whether motivated by competitive considerations, a change in desired product assortment, quality or style issues, financial difficulties, economic conditions or otherwise, could also adversely affect our business. ​ Risks Related to Cybersecurity and Information Technology ​ Cybersecurity attacks and/or breaches of information security or privacy could disrupt our operations, cause us to incur additional expenses, expose us to litigation and/or cause us financial harm. ​ 31 Table of Contents Cybersecurity attacks continue to become increasingly sophisticated, and experienced computer programmers and hackers may be able to penetrate our network security and misappropriate or compromise our assets or disrupt our systems.
Any potential labor dispute, either in our own operations or in those of third parties on whom we rely, could materially affect our costs, decrease our sales, harm our reputation or otherwise negatively affect our operations. ​ Our geographic concentration of retail stores, restaurants and wholesale customers exposes us to certain regional risks. ​ Our operations and retail and restaurant locations are heavily concentrated in the United States and certain geographic areas within the United States, including Florida, California, Texas and Hawaii for our Tommy Bahama operations; Florida for our Lilly Pulitzer operations; California for our Johnny Was operations; and Florida for our Emerging Brands operations.
Any potential labor dispute, either in our own operations or in those of third parties on whom we rely, could materially affect our costs, decrease our sales, harm our reputation or otherwise negatively affect our operations. ​ Our geographic concentration exposes us to certain regional risks. ​ Our operations and retail and restaurant locations are heavily concentrated in the United States and certain geographic areas within the United States, including Florida, California, Texas and Hawaii for our Tommy Bahama operations; Florida for our Lilly Pulitzer operations; California for our Johnny Was operations; and Florida for our Emerging Brands operations.
Item 1A. Risk Factors The risks described below highlight some of the factors that could materially affect our operations. If any of these risks actually occurs, our business, financial condition, prospects and/or operating results may be adversely affected. These are not the only risks and uncertainties we face.
Item 1A. Risk Factors The risks described below highlight some of the factors that could materially affect our operations. If any of these risks actually occurs, our business, financial condition, prospects and/or operating results may be adversely 25 Table of Contents affected. These are not the only risks and uncertainties we face.
Failure to adequately produce and timely ship our products to customers could lead to increased costs and lost sales, negatively impact our relationships with customers, and adversely impact our brand reputation. ​ Any disruption or failure in our primary distribution facilities may materially adversely affect our business or operations. ​ We rely on our primary distribution facilities in order to support our direct to consumer and wholesale operations, meet customer fulfillment expectations, manage inventory, complete sales and achieve operating efficiencies.
Failure to adequately produce and timely ship our products to customers could lead to increased costs and lost sales, negatively impact our relationships with customers, and adversely impact our brand reputation. ​ 33 Table of Contents Any disruption or failure in our primary distribution facilities may materially adversely affect our business or operations. ​ We rely on our primary distribution facilities in order to support our direct to consumer and wholesale operations, meet customer fulfillment expectations, manage inventory, complete sales and achieve operating efficiencies.
Our effective income tax rate in any particular period or in future periods may be affected by a number of factors, including a shift in the mix of revenues, income and/or losses among domestic and international sources during a year or over a period of years; changes in tax laws and regulations and/or international tax treaties; the outcome of income tax audits in various jurisdictions; the difference 38 Table of Contents between the income tax deduction and the previously recognized income tax benefit related to the vesting of equity-based compensation awards; and the resolution of uncertain tax positions, any of which could adversely affect our effective income tax rate and profitability.
Our effective income tax rate in any particular period or in future periods may be affected by a number of factors, including a shift in the mix of revenues, income and/or losses among domestic and international sources during a year or over a period of years; changes in tax laws, regulations or international tax treaties; the outcome of income tax audits; the difference between the income tax deduction and the previously recognized income tax benefit related to the vesting of equity-based compensation awards; and the resolution of uncertain tax positions, any of which could adversely affect our effective income tax rate and profitability.
Any of these factors may disrupt our supply chain, and we may be unable to offset any associated cost increases by shifting production to suitable manufacturers in other jurisdictions in a timely manner or at acceptable prices, and future regulatory actions or changes in international trade regulation may provide our competitors with a material advantage over us or render our products less desirable in the marketplace. ​ 37 Table of Contents There has been heightened trade tension between the United States and China, from which we sourced 36% of our products in Fiscal 2022 and from which Johnny Was has sourced more than 90% of its products in recent years, with multiple rounds of increased U.S. tariffs on China-imported goods implemented in 2018 and 2019.
Any of these factors may disrupt our supply chain, and we may be unable to offset any associated cost increases by shifting production to suitable manufacturers in other jurisdictions in a timely manner or at acceptable prices, and future regulatory actions or changes in international trade regulation may provide our competitors with a material advantage over us or render our products less desirable in the marketplace. ​ There has been heightened trade tension between the United States and China, from which we sourced 41% of our products in Fiscal 2023 and from which Johnny Was has sourced more than 90% of its products in recent years, with multiple rounds of increased U.S. tariffs on China-imported goods implemented in 2018 and 2019.
Additionally, the wholesale sales for our businesses are also geographically concentrated, including in geographic areas where we have concentrations of our own retail store locations.
Additionally, the wholesale sales for our businesses are also geographically concentrated, including in geographic areas where we have concentrations of our own retail store and restaurant locations.
We have also experienced inherent, expanding challenges with enforcing our intellectual property rights on third party e-commerce websites, especially those based in foreign jurisdictions.
We have also experienced challenges with enforcing our intellectual property rights on third party e-commerce websites, especially those based in foreign jurisdictions.
The apparel industry is also impacted by changing consumer preferences regarding spending categories generally, including shifts away from traditional consumer product spending and towards “experiential” spending and sustainable products. There can be no assurance that we will be able to successfully evaluate and adapt our products to align with evolving trends.
The apparel industry is also impacted by changing consumer preferences regarding spending categories generally, including shifts away from traditional consumer product spending and towards “experiential” spending and sustainable products. There can be no assurance that we will be able to successfully evaluate and adapt our products to 26 Table of Contents align with evolving trends.
The Uyghur Forced Labor Prevention Act (“UFLPA”), which was enacted in 2021, created a rebuttable presumption that goods produced in whole or in part in the XUAR or connected with certain listed companies, including the XPCC and its affiliates, were produced using forced labor and are, therefore, barred from entry into the United States.
The Uyghur Forced Labor Prevention Act (“UFLPA”), which was enacted in 2021, created a rebuttable presumption that goods produced in whole or in part in the XUAR or connected with certain listed companies, including 36 Table of Contents the XPCC and its affiliates, were produced using forced labor and are, therefore, barred from entry into the United States.
We cannot provide assurances that there will continue to be an 40 Table of Contents active trading market for our stock, and the price of our common stock may also be affected by illiquidity or perceived illiquidity of our shares.
We cannot provide assurances that there will continue to be an active trading market for our stock, and the price of our common stock may also be affected by illiquidity or perceived illiquidity of our shares.
In addition, we may be unable to retain or recruit qualified personnel in key areas such as product design, sales, marketing (including individuals with key insights into digital and social media marketing strategies), distribution, technology, sourcing and other support functions, which could result in missed sales opportunities and harm to key business relationships. ​ During Fiscal 2021 and Fiscal 2022, we experienced staffing shortages, higher turnover rates and challenges in recruiting and retaining qualified employees at all levels of our organization, which may continue in the future.
In addition, we may be unable to retain or recruit qualified personnel in key areas such as product design, sales, marketing (including individuals with key insights into digital and social media marketing strategies), distribution, technology, sourcing and other support functions, which could result in missed sales opportunities and harm to key business relationships. ​ In recent years, we have experienced staffing shortages, higher turnover rates and challenges in recruiting and retaining qualified employees at all levels of our organization, which may continue in the future.
Although we do not have operations or generate revenues in the impacted regions, the geopolitical tensions related to the war could result in broader impacts that expand into other markets, cyberattacks, supply chain and logistics disruptions and lower consumer demand, any of which could have a material adverse effect on our business and operations. ​ Risks Related to our Business Strategy and Operations ​ Failure to maintain the reputation or value of our brands could harm our business operations and financial condition. ​ Our success depends on the reputation and value of our brand names.
Although we do not have operations or generate revenues in the impacted regions, the geopolitical tensions related to the wars could result in broader impacts that expand into other markets, cyberattacks, supply chain and logistics disruptions, including shipping disruptions in the Red Sea region, and lower consumer demand, any of which could have a material adverse effect on our business and operations. ​ Risks Related to our Business Strategy and Operations ​ Failure to maintain the reputation or value of our brands could harm our business operations and financial condition. ​ Our success depends on the reputation and value of our brand names.
Our indebtedness under the U.S. Revolving Credit Agreement includes certain obligations and limitations, including the periodic payment of principal, interest and unused line fees, maintenance of certain covenants and certain other limitations. The negative covenants in the U.S.
Revolving Credit Agreement includes certain obligations and limitations, including the periodic payment of principal, interest and unused line fees, maintenance of certain covenants and certain other limitations. The negative covenants in the U.S.
Even if we determine that it is desirable to exit a particular 31 Table of Contents location, we may be unable to close an underperforming location due to continuous use clauses and/or because negotiating an early termination would be cost prohibitive.
Even if we determine that it is desirable to exit a particular location, we may be unable to close an underperforming location due to continuous use clauses and/or because negotiating an early termination would be cost prohibitive.
Although our largest customer only represented 4% of our consolidated net sales in Fiscal 2022, the failure to increase or maintain our sales with our key customers as much as we anticipate would have a negative 32 Table of Contents impact on our growth prospects and any decrease or loss of these customers’ business could result in a decrease in our net sales and operating income if we are unable to capture these sales through our direct to consumer operations or other wholesale accounts.
Although our largest customer only represented less than 4% of our consolidated net sales in Fiscal 2023, the failure to increase or maintain our sales with our key customers as much as we anticipate would have a negative impact on our growth prospects and any decrease or loss of these customers’ business could result in a decrease in our net sales and operating income if we are unable to capture these sales through our direct to consumer operations or other wholesale accounts.
The concentration in our portfolio heightens the risks we face if one of our larger brands is adversely impacted by actions we or third parties take with respect to that brand. ​ The improper or detrimental actions of a licensee or wholesale customer, including a third party distributor in an international market, or for example, the operator of the planned Tommy Bahama Miramonte Resort & Spa targeted 28 Table of Contents to open in late Fiscal 2023, which is an unproven concept with previously untested brand and operating standards, could also significantly impact the perception of our brands.
The concentration in our portfolio heightens the risks we face if one of our larger brands is adversely impacted by actions we or third parties take with respect to that brand. ​ The improper or detrimental actions of a licensee or wholesale customer, including a third party distributor in an international market, or for example, the operator of the Tommy Bahama Miramonte Resort & Spa, which opened in late-2023 and is an unproven concept with previously untested brand and operating standards, could also significantly impact the perception of our brands.
Conversely, if we underestimate the timing or extent of demand for our products or if we are unable to access our products when we need them, for example due to a third party manufacturer’s inability to source materials or produce goods in a timely fashion or as a result of delays in the delivery of products to us, issues which have been exacerbated by the COVID-19 pandemic, we may experience inventory shortages, which might result in lost sales, unfilled orders, negatively impacted customer relationships, and diminished brand loyalty, any of which could harm our business.
Conversely, if we underestimate the timing or extent of demand for our products or if we are unable to access our products when we need them, for example due to a third party manufacturer’s inability to source materials or produce goods in a timely fashion or as a result of delays in the delivery of products to us, we may experience inventory shortages, which might result in lost sales, unfilled orders, negatively impacted customer relationships, and diminished brand loyalty, any of which could harm our business.
These trends accelerated during the COVID-19 pandemic and are likely to continue to evolve in ways that may not yet be evident. ​ In response to these evolving and rapidly changing trends in consumer shopping behavior, we have made and expect to continue to make significant investments in expanding our digital capabilities and technologies in three key areas: mobile technology; digital marketing; and the digital customer experience.
These trends accelerated in recent years and are likely to continue to evolve in ways that may not yet be evident. ​ In response to these evolving and rapidly changing trends in consumer shopping behavior, we have made and expect to continue to make significant investments in expanding our digital capabilities and technologies in three key areas: mobile technology; digital marketing; and the digital customer experience.
In addition, we may become responsible for unexpected liabilities, which could adversely affect our financial condition and results of operations. ​ Our business could be harmed if we fail to maintain proper inventory levels. ​ Many factors, such as economic conditions, fashion trends, consumer preferences, the financial condition of our wholesale customers and weather, make it difficult to accurately forecast demand for our products.
Such dispositions and/or discontinuations may result in unexpected liabilities, which could adversely affect our financial condition and results of operations. ​ Our business could be harmed if we fail to maintain proper inventory levels. ​ Many factors, such as economic conditions, fashion trends, consumer preferences, the financial condition of our wholesale customers and weather, make it difficult to accurately forecast demand for our products.
Furthermore, as each of our leases expire, we may be unable to negotiate renewals, either on commercially acceptable terms or at all, including as a result of shifts in how shopping center operators seek to merchandise the particular center’s lineup, which could force us to close retail stores and/or restaurants in desirable locations. ​ Furthermore, a deterioration in the financial condition of shopping center operators or developers could, for example, limit their ability to invest in improvements and finance tenant improvements for us and other retailers and lead consumers to view these locations as less desirable.
Furthermore, as each of our leases expire and as competition and rental rates for prime retail and restaurant locations continues to accelerate, as we have experienced in recent years, we may be unable to negotiate renewals, either on commercially acceptable terms or at all, including as a result of shifts in how shopping center operators seek to merchandise the particular center’s lineup, which could force us to close retail stores and/or restaurants in desirable locations. ​ Furthermore, a deterioration in the financial condition of shopping center operators or developers could, for example, limit their ability to invest in improvements and finance tenant improvements for us and other retailers and lead consumers to view these locations as less desirable.
The principal fabrics used in our business are cotton, silk, linen, leather, tencel, and other natural and man-made fibers, or blends of 35 Table of Contents two or more of these materials. The prices paid for these fabrics depend on the market price for raw materials used to produce them.
The principal fabrics used in our business are cotton, silk, linen, polyester, cellulosic fibers, leather, and other natural and man-made fibers, or blends of two or more of these materials. The prices paid for these fabrics depend on the market price for raw materials used to produce them.
Any of these risks, and others of which we are not aware or that we currently consider to be immaterial, could, individually or in the aggregate, have a material adverse effect on our business, financial condition and results of operations. ​ Item 1B. Unresolved Staff Comments None.
Any of these risks, and others of which we are not aware or that we currently consider to be immaterial, could, individually or in the aggregate, have a material adverse effect on our business, financial condition and results of operations. ​
These price increases could continue in future years. ​ Employment costs represented more than 40% of our consolidated SG&A in Fiscal 2022, and we have seen increases in the cost of labor in our retail, restaurant and distribution center operations as well as at many of our suppliers in recent years, which intensified during the last two years.
These price increases could continue in future years. ​ Employment costs represented more than 40% of our consolidated SG&A in Fiscal 2023, and we have seen increases in the cost of labor in our retail, restaurant and distribution center operations as well as at many of our suppliers in recent years.
These trends may be influenced by employment levels; recessions; inflation and increased interest rates; fuel and energy costs; tax rates; personal debt levels; savings rates; stock market and housing market volatility; shifting social ideology; and general uncertainty about the future.
These trends may be influenced by employment levels; recessions; inflation and elevated interest rates; fuel and energy costs; tax rates; personal debt levels; savings rates; stock market and housing market volatility; shifting social ideology; concerns about the political and economic climate; and general uncertainty about the future.
The reputation of our brands could be harmed if we or our third-party manufacturers and vendors, substantially all of which are located outside the United States, fail to meet appropriate product safety, product quality and social and environmental compliance standards.
The reputation of our brands could be harmed if we or our third-party producers and vendors, substantially all of which are located outside the United States, fail to meet appropriate human rights, environmental, product safety and product quality standards.
Any such difficulties may impact our ability to deliver quality products to our customers on a timely basis, increase our costs, negatively impact our customer relationships and result in lower net sales and profits. ​ Our operations are dependent on the global supply chain, and the impact of supply chain constraints may adversely impact our business and operating results. ​ Our operations in recent years have been, and may continue to be, impacted by supply chain constraints, labor shortages and raw material shortages, resulting in increased costs for raw materials, longer lead times, port congestion and increased freight costs caused, in part, by the COVID-19 pandemic, increased consumer demand, the uncertain economic environment, and other macroeconomic trends.
Any such difficulties may impact our ability to deliver quality products to our customers on a timely basis, increase our costs, negatively impact our customer relationships and result in lower net sales and profits. ​ Our operations are dependent on the global supply chain, and the impact of supply chain constraints may adversely impact our business and operating results. ​ Our operations in recent years have been, and may continue to be, impacted by supply chain constraints, labor shortages and raw material shortages, resulting in increased costs for raw materials, longer lead times, port congestion and increased freight costs.
ESG risks include increased stakeholder focus on social and environmental sustainability matters, including forced labor, chemical use, energy and water use, packaging and waste, animal welfare and land use.
Risks related to corporate responsibility include increased stakeholder focus on social and environmental sustainability matters, including forced labor, chemical use, energy and water use, packaging and waste, animal welfare and land use.
Because of the seasonality of our business, the concentration of a significant proportion of our retail stores and wholesale customers in certain geographic regions, including a resort and/or coastal focus for most of our lifestyle brands, and the concentration of our sourcing and distribution center operations, the occurrence of such events could disproportionately impact our business, financial condition and operating results. ​ The ongoing war between Russia and Ukraine has adversely affected the global economy, resulted in heightened economic sanctions against Russia from the United States, the United Kingdom, the European Union, and the international community, and has resulted in geopolitical instability and market disruption.
Because of the seasonality of our business, the concentration of a significant proportion of our retail stores and wholesale customers in certain geographic regions, including a resort and/or coastal focus for most of our lifestyle brands, and the concentration of our sourcing and distribution center operations, the occurrence of such events could disproportionately impact our business, financial condition and operating results. ​ The ongoing war between Russia and Ukraine and the ongoing war between Israel and Hamas have adversely affected the global economy and resulted in economic sanctions, geopolitical instability and market disruption.
In addition, we cannot always control the marketing and promotion of our products by our wholesale customers, and actions by such parties that adversely affect the appeal of our products could diminish the value or reputation of one or more of our brands and have an adverse effect on our sales, gross margins and business operations. ​ The appeal of our brands may also depend on the perceived relevance and success of our environmental, social and governance (“ESG”) initiatives and our commitments to operating our business in a socially responsible fashion.
In addition, we cannot always control the marketing and promotion of our products by our wholesale customers, and actions by such parties could diminish the value or reputation of one or more of our brands and have an adverse effect on our sales, gross margins and business operations. ​ 27 Table of Contents The appeal of our brands may also depend on the perceived relevance and success of our initiatives related to corporate responsibility and our commitments to operating our business in a socially responsible fashion.
Revolving Credit Agreement, particularly in the current macroeconomic environment. An increase in the interest rate environment, such as the recent increases in interest rates implemented by the Federal Reserve, would require us to pay a greater amount towards interest on our borrowings. ​ The continued growth of our business depends on our access to sufficient funds.
Revolving Credit Agreement, particularly in the current macroeconomic environment. An increase in the interest rate environment would require us to pay a greater amount towards interest on our borrowings. ​ The continued growth of our business depends on our access to sufficient funds.
Minority investments present additional risks, including the potential disproportionate distraction to our management team relative to the potential financial benefit; the potential for a conflict of interest; the damage to our reputation of associating with a brand which may take actions inconsistent with our values; and the financial risks associated with making an investment in an unproven business model. ​ The divestiture or discontinuation of businesses and product lines could result in unexpected liabilities and adversely affect our financial condition, cash flows and results of operations. ​ From time to time, we may also divest or discontinue businesses, product lines and/or wholesale relationships that do not align with our strategy or provide the returns that we expect or desire, such as our Fiscal 2021 exit of the Lanier Apparel business.
Minority investments present additional risks, including the potential disproportionate distraction to our management team relative to the potential financial benefit; the potential for a conflict of interest; the damage to our reputation of associating with a brand which may take actions inconsistent with our values; and the financial risks associated with making an investment in an unproven business model, including the potential for impairment charges such as the $2 million noncash impairment charges recognized in Fiscal 2023 from our equity method investment in a smaller lifestyle brand that resulted from that entity, which we do not control, forecasting continued, future losses. ​ The divestiture or discontinuation of businesses and product lines could result in unexpected liabilities and adversely affect our financial condition, cash flows and results of operations. ​ 29 Table of Contents From time to time, we may also divest or discontinue businesses, product lines and/or wholesale relationships that do not align with our strategy or provide the returns that we expect or desire.
Additionally, as a result of acquisitions, we may become responsible for unexpected liabilities that we failed or were unable to discover in the course of performing due diligence. ​ 30 Table of Contents As the fashion retail environment evolves, our investment criteria for acquisitions has grown to include smaller brands and non-controlling investments in burgeoning brands seeking debt or equity financing.
Additionally, as a result of acquisitions, we may become responsible for unexpected liabilities that we failed or were unable to discover in the course of performing due diligence, or may incur material, unrecoverable costs to evaluate and pursue an acquisition that is ultimately not consummated. ​ As the fashion retail environment evolves, our investment criteria for acquisitions has grown to include smaller brands and non-controlling investments in burgeoning brands seeking debt or equity financing.
Digital commerce and marketing have continued to increase in importance to our business, and we have invested and will continue to invest significant capital in the digital strategies, systems, expertise and capabilities necessary for us to compete effectively in this arena.
Digital commerce and marketing have continued to increase in importance to our business, and we have invested and will continue to invest significant capital in the digital strategies, systems, expertise and capabilities necessary for us to compete effectively in this arena. Upgrades to our systems may be expensive undertakings, may not be successful and/or could be abandoned.
If any of our international operations, or our employees or agents, violates such laws, we could become subject to sanctions or other penalties that could negatively affect our reputation, business and operating results. ​ We may be required to make significant expenditures and devote significant time and management resources to comply with existing or future laws or regulations, and a violation of applicable laws and regulations by us, or any of our suppliers or licensees, may restrict our ability to import products, require a recall of our products, lead to fines or otherwise increase our costs, negatively impact our ability to attract and retain employees or materially limit our ability to operate our business.
We may be required to make significant expenditures and devote significant time and management resources to comply with any existing or future laws or regulations, and a violation of applicable laws and regulations by us, or any of our suppliers or licensees, may restrict our ability to import products, require a recall of our products, lead to fines or otherwise increase our costs, negatively impact our ability to attract and retain employees or materially limit our ability to operate our business.
Service interruptions may occur as a result of a number of factors, including power outages, consumer traffic levels, computer viruses, sabotage, hacking or other unlawful activities by third parties, human error, disasters or failures to properly install, upgrade, integrate, protect, repair or maintain our various systems, networks and e-commerce websites.
Service interruptions may occur as a result of a number of factors, including power outages, consumer traffic levels, computer viruses, sabotage, hacking or other unlawful activities by third parties, human error, disasters or failures to properly install, upgrade, integrate, protect, repair or maintain our various systems, networks and e-commerce websites. 32 Table of Contents All of these events could have a material adverse effect on our financial condition and results of operations.
Our inability or failure to recruit and retain skilled personnel could adversely impact our business, financial performance, reputation, ability to keep up with the needs of our customers and overall customer satisfaction. 39 Table of Contents ​ We may be unable to protect our trademarks and other intellectual property. ​ We believe that our trademarks and other intellectual property rights have significant value and are important to our continued success and our competitive position due to their recognition by consumers and retailers.
Our inability or failure to recruit and retain skilled personnel, or the still undeterminable longer term impact of our embracing remote and hybrid work arrangements on professional development and progression, retention and company culture, could adversely impact our business, financial performance, reputation, ability to keep up with the needs of our customers and overall customer satisfaction. ​ We may be unable to protect our trademarks and other intellectual property. ​ We believe that our trademarks and other intellectual property rights have significant value and are important to our continued success and our competitive position due to their recognition by consumers and retailers.
Organic growth may be achieved by, among other things, increasing sales in our direct to consumer channels; selling our products in new markets; increasing our market share in existing markets; expanding the demographic appeal of our brands; expanding our margins through product cost reductions, price increases or otherwise; expanding the customer reach of our brands through new and enhanced advertising initiatives; and increasing the product offerings and concepts within our various operating groups, such as the opening of additional Marlin Bars at Tommy Bahama and owned retail stores at Southern Tide and TBBC.
Organic growth may be achieved by, among other things, increasing sales in our direct to consumer channels; selling our products in new markets; increasing our market share in existing markets; expanding the demographic appeal of our brands; expanding our margins through 28 Table of Contents product cost reductions, price increases or otherwise; expanding the customer reach of our brands through new and enhanced advertising initiatives; and increasing the product offerings and concepts within our various operating groups.
Successful operation of our retail stores and restaurants depends, in part, on our ability to identify desirable, brand appropriate locations; the overall ability of the location to attract a consumer base sufficient to make sales volume profitable; our ability to negotiate satisfactory lease terms and employ qualified personnel; and our ability to timely construct and complete any build out and open the location in accordance with our plans, which could be delayed due to supply chain constraints, delays in permitting and government approval processes and/or labor or materials shortages.
Successful operation of our retail stores and restaurants depends, in part, on our ability to identify desirable, brand appropriate locations; the overall ability of the location to attract a consumer base sufficient to make sales volume profitable; our ability to negotiate satisfactory lease terms and employ qualified personnel; and our ability to timely construct and complete any build out and open the location in accordance with our plans.
Any failure on our part to develop and market appealing products could harm the reputation and desirability of our brands and products and/or result in weakened financial performance. ​ Our operations and those of our suppliers, vendors and wholesale customers may be affected by changes in weather patterns, natural or man-made disasters, public health crises, war, terrorism or other catastrophes. ​ Our sales volume and operations and the operations of third parties on whom we rely, including our suppliers, vendors, licensees and wholesale customers, may be adversely affected by unseasonable or severe weather conditions, natural or man-made disasters, hurricanes, public health crises, war, terrorist attacks, including heightened security measures and responsive military actions, or other catastrophes which may cause consumers to alter their purchasing habits or result in a disruption to our operations.
Any failure on our part to develop and market appealing products could harm the reputation and desirability of our brands and products and/or result in weakened financial performance. ​ Our operations and those of our suppliers, vendors and wholesale customers may be affected by changes in weather patterns, natural or man-made disasters, public health crises, war, terrorism or other catastrophes. ​ Our sales volume and operations and the operations of third parties on whom we rely, including our suppliers, vendors, licensees and wholesale customers, may be adversely affected by unseasonable or severe weather conditions or other climate-related events, natural or man-made disasters, hurricanes, public health crises, pandemics, war, terrorist attacks, including heightened security measures and responsive military actions, or other catastrophes which may cause consumers to alter their purchasing habits or result in a disruption to our operations, such as the damage to, and temporary closure of, our Tommy Bahama restaurant and retail store in Naples, Florida due to Hurricane Ian in September 2022 and the destruction of our Tommy Bahama Marlin Bar in Lahaina, Hawaii by wildfires in August 2023.
ESG risks may also include increased pressure to expand our disclosures in these areas, make commitments, set targets or establish additional goals and take actions to meet them, which could expose us to market, operational and execution costs or risks.
We may also face increased pressure from stakeholders or the public to voluntarily expand our disclosures, make commitments, set targets or establish additional goals and take actions to meet them, which could expose us to market, operational and execution costs or risks.
In addition, fast fashion, value fashion and off-price retailers have shifted customer expectations of pricing for well-known brands and have contributed to additional promotional pressure in recent years. ​ These and other competitive factors within the apparel industry may result in reduced sales, increased costs, lower prices for our products and/or decreased margins. ​ 27 Table of Contents Failure to anticipate and adapt to changing fashion trends and consumer preferences could harm our reputation and financial performance. ​ We believe that our ability to compete successfully is directly related to our proficiency in foreseeing changes and trends in fashion and consumer preference and presenting appealing products for consumers when and where they seek it.
These and other competitive factors within the apparel industry may result in reduced sales, increased costs, lower prices for our products and/or decreased margins. ​ Failure to anticipate and adapt to changing fashion trends and consumer preferences could harm our reputation and financial performance. ​ We believe that our ability to compete successfully is directly related to our proficiency in foreseeing changes and trends in fashion and consumer preference and presenting appealing products for consumers when and where they seek them.
If the value of the U.S. dollar decreases relative to certain foreign currencies in the future, then the prices that we negotiate for products could increase and we may be unable to pass this increase on to customers, which would negatively impact our margins. 36 Table of Contents However, if the value of the U.S. dollar increases between the time a price is set and payment for a product, the price we pay may be higher than that paid for comparable goods by competitors that pay for goods in local currencies, and these competitors may be able to sell their products at more competitive prices.
However, if the value of the U.S. dollar increases between the time a price is set and payment for a product, the price we pay may be higher than that paid for comparable goods by competitors that pay for goods in local currencies, and these competitors may be able to sell their products at more competitive prices.
In Fiscal 2021 and Fiscal 2022, we saw increased costs of raw materials, including cotton, that impacted our production costs.
In recent years, we experienced increased costs of raw materials, including cotton, that impacted our production costs.
In addition, customers may use devices or software that are beyond our control environment to purchase our products, which may provide additional avenues for attackers to gain access to confidential information. ​ Despite our implementation of security measures, if an actual or perceived data security breach occurs, whether as a result of cybersecurity attacks, computer viruses, vandalism, ransomware, human error or otherwise, or if there are perceived vulnerabilities in our systems, the image of our brands and our reputation and credibility could be damaged, and, in some cases, our continued operations may be impaired or restricted.
Additionally, the security systems of businesses that we acquire could pose additional risks to us, such as those related to the collection, use, maintenance and disclosure of data, or present other cybersecurity vulnerabilities. ​ Despite our implementation of security measures, if an actual or perceived data security breach occurs, whether as a result of cybersecurity attacks, computer viruses, vandalism, ransomware, human error or otherwise, or if there are perceived vulnerabilities in our systems, the image of our brands and our reputation and credibility could be damaged, and, in some cases, our continued operations may be impaired or restricted.
Furthermore, other public health crises, including any outbreak of other diseases or pandemics, could negatively impact our business and results of operations. ​ We operate in a highly competitive industry with significant pricing pressures and heightened customer expectations. ​ We operate in a highly competitive industry in which the principal competitive factors are the reputation, value and image of brand names; design of differentiated, innovative or otherwise compelling product; consumer preference; price; quality; marketing (including through rapidly shifting digital and social media vehicles); product fulfillment capabilities; and customer service.
A decline in consumer confidence or change in discretionary consumer spending could reduce our sales, increase our inventory levels, result in more promotional activities and/or lower our gross margins, any or all of which may adversely affect our business and financial condition. ​ We operate in a highly competitive industry with significant pricing pressures and heightened customer expectations. ​ We operate in a highly competitive industry in which the principal competitive factors are the reputation, value and image of brand names; design of differentiated, innovative or otherwise compelling product; consumer preference; price; quality; marketing (including through rapidly shifting digital and social media vehicles); product fulfillment capabilities; and customer service.
These initiatives may not be available to us on desirable terms, inhibiting our ability to increase profitability. ​ The acquisition of new businesses is inherently risky, and we cannot be certain that we will realize the anticipated benefits of any acquisition. ​ Growth of our business through acquisitions of lifestyle brands that fit within our business model is a key component of our long-term business strategy, as evidenced by our acquisition of Johnny Was in September 2022.
If we are unable to increase our revenues organically, we may be required to pursue other strategic initiatives, including reductions in costs and/or acquisitions, which may inhibit our ability to increase profitability. ​ The acquisition of new businesses is inherently risky, and we cannot be certain that we will realize the anticipated benefits of any acquisition. ​ Growth of our business through acquisitions of lifestyle brands that fit within our business model is a key component of our long-term business strategy, as evidenced by our acquisition of Johnny Was in Fiscal 2022. ​ Integrating an acquired business, regardless of the size of the acquired operations, is a complex, time-consuming and expensive process.
Although we continue to enhance our enterprise order management capabilities to deliver products from other physical locations, our ability to effectively support our direct to consumer and wholesale operations, meet customer expectations, manage inventory and achieve objectives for operating efficiencies depends on the proper operation of these distribution facilities, each of which manages the receipt, storage, sorting, packing and distribution of finished goods. ​ If any of our primary distribution facilities were to shut down or otherwise become inoperable or inaccessible for any reason, including as a result of natural or man-made disasters, pandemics or epidemics, human error, or cybersecurity attacks or computer viruses, or if we are unable to receive or ship the goods in a distribution center, as a result of a technology failure, labor shortages or otherwise, we could experience a substantial loss of inventory, a reduction in sales, higher costs, insufficient inventory at our retail stores to meet consumer expectations and longer lead times associated with the distribution of our products.
In addition, we may face challenges integrating the distribution center with the systems supporting our brands and transitioning operations to the distribution center around peak selling seasons, and there can be no assurance that any such investments will achieve anticipated efficiencies. ​ If any of our primary distribution facilities were to shut down or otherwise become inoperable or inaccessible for any reason, including as a result of natural or man-made disasters, pandemics or epidemics, human error, or cybersecurity attacks or computer viruses, or if we are unable to receive or ship the goods in a distribution center, as a result of a technology failure, labor shortages or otherwise, we could experience a substantial loss of inventory, a reduction in sales, higher costs, insufficient inventory at our retail stores to meet consumer expectations and longer lead times associated with the distribution of our products.
Although we have business continuity plans and other safeguards in place, our operations may be adversely affected by an actual or perceived data security breach. Costs to resolve any litigation or to investigate and remediate any actual or perceived breach could result in significant financial losses and expenses, as well as lost sales.
Costs to resolve any litigation or to investigate and remediate any actual or perceived breach could result in significant financial losses and expenses, as well as lost sales.
Cybersecurity attacks or data security incidents resulting from a failure to manage these risks could negatively impact our business and results of operations. ​ Risks Related to our Sourcing and Distribution Strategies ​ Our reliance on third party producers in foreign countries to meet our production demands exposes us to risks that could disrupt our supply chain, increase our costs and negatively impact our operations. ​ 34 Table of Contents We source substantially all of our products from non-exclusive, third party producers located in foreign countries.
Additionally, if such upgraded information technology systems fail to operate or are unable to support our growth, our store operations and websites could be severely disrupted, and we could be required to make significant additional expenditures to remedy any such failure. ​ Risks Related to our Sourcing and Distribution Strategies ​ Our reliance on third party producers in foreign countries to meet our production demands exposes us to risks that could disrupt our supply chain, increase our costs and negatively impact our operations. ​ We source substantially all of our products from non-exclusive, third party producers located in foreign countries.
If we do not comply with the applicable standards, we may be subject to fines or restrictions on our ability to accept payment cards, which could have a material adverse effect on our operations. ​ Changes in international trade regulation could increase our costs and/or disrupt our supply chain. ​ Due to our international sourcing activities, we are exposed to risks associated with changes in the laws and regulations governing the importing and exporting of apparel products into and from the countries in which we operate.
In addition, regardless of whether any allegations of violations of the laws and regulations governing our business are valid or whether we ultimately become liable, we may be materially affected by negative publicity as a result of such allegations. ​ Changes in international trade regulation could increase our costs and/or disrupt our supply chain. ​ Due to our international sourcing activities, we are exposed to risks associated with changes in the laws and regulations governing the importing and exporting of apparel products into and from the countries in which we operate.
Acquisitions may cause us to incur debt, as we did in connection with the Johnny Was acquisition, or make dilutive issuances of our equity securities, and may result in certain impairment or amortization charges in our statements of operations.
Acquisitions may cause us to incur debt or make dilutive issuances of our equity securities, and may result in certain impairment or amortization charges in our statements of operations, as evidenced by the noncash impairment charges for goodwill and intangible assets of $111 million recognized in Johnny Was in the Fourth Quarter of Fiscal 2023, which was driven by the challenging macroeconomic environment and elevated interest rates during Fiscal 2023.
As a result of these factors within the global supply chain, our gross margins were negatively impacted during Fiscal 2021 and, to a lesser extent in Fiscal 2022. We also rely on logistics providers to transport our products to our distribution centers.
As a result of these factors within the global supply chain, our gross margins may be adversely impacted. We also rely on logistics providers to transport our products to our distribution centers. Delays in shipping may cause us to have to use more expensive air freight or other more costly methods to ship our products.
The factors impacting consumer confidence and discretionary consumer spending patterns are outside of our control and difficult to predict, and, often, the apparel industry experiences longer periods of recession and greater declines than the general economy. ​ In recent months, we have seen increased uncertainty about current and future economic conditions, which has led to heightened concerns about inflation, a global economic recession, geopolitical issues, the stability of the U.S. banking system, the availability and cost of credit and continued increases in interest rates.
The factors impacting consumer confidence and discretionary consumer spending patterns are outside of our control and difficult to predict, and, often, the apparel industry experiences longer periods of recession and greater declines than the general economy. ​ Recently, the U.S. economy has been impacted by elevated inflation rates, which has created a complex and challenging retail environment that has affected consumer spending and consumer preferences.
In addition, regardless of whether any allegations of violations of the laws and regulations governing our business are valid or whether we ultimately become liable, we may be materially affected by negative publicity as a result of such allegations. ​ In addition, the regulatory environment governing our use of individually identifiable data is complex, and compliance with new and modified state, federal and international privacy and security laws may require us to modify our operations and/or incur costs to make necessary systems changes and implement new administrative processes.
While we continue to evolve and modify our business continuity plans, there can be no assurance in an escalating threat environment that they will be effective in avoiding disruption and business impacts. ​ In addition, the regulatory environment governing our use of individually identifiable data is complex, and compliance with new and modified state, federal and international privacy and security laws may require us to modify our operations and/or incur costs to make necessary systems changes and implement new administrative processes, which may include deploying additional personnel and protection technologies, training employees and engaging third party experts and consultants.
As of January 28, 2023, we had $119 million of borrowings under our U.S. Revolving Credit Agreement, which was primarily driven by our acquisition of Johnny Was. ​ In the future, our debt levels may increase under our existing facility or potentially under new facilities, or the terms or forms of our financing arrangements may change.
Our debt levels may increase or decrease from time to time under our existing facility or potentially under new facilities, or the terms or forms of our financing arrangements may change. Our indebtedness under the U.S.
These conditions are creating a complex and challenging retail environment, which may impact consumer spending and consumer preferences. For instance, entering Fiscal 2023, these concerns have led to conservative purchase order decisions for future seasons by 26 Table of Contents many of our wholesale customers.
In Fiscal 2023 and continuing into Fiscal 2024, the prevailing macroeconomic concerns have led to conservative purchase order decisions for future seasons by many of our wholesale customers.
For example, in Fiscal 2020, we recognized $60 million of non-cash impairment charges for goodwill and intangible assets, which reflected the impact of COVID-19 on the operations, plans and strategy of the Southern Tide business.
In Fiscal 2023, we recognized $111 million of noncash impairment charges for goodwill and intangible assets in connection with the operations of Johnny Was, which was driven by the prevailing macroeconomic environment’s impact on near-term expectations for our business operations and higher interest rates.
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A decline in consumer confidence or change in discretionary consumer spending patterns could reduce our sales, increase our inventory levels, result in more promotional activities and/or lower our gross margins, any or all of which may adversely affect our business and financial condition. ​ The COVID-19 pandemic has had, and may in the future have, a material adverse effect on our business, revenues, financial condition and results of operations. ​ Since 2020, the COVID-19 pandemic has created tremendous uncertainty and disruption in the global economy and has had an adverse impact on our business, revenues and results of operations.
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In addition, fast fashion, value fashion and off-price retailers, as well as the more recent declines in spending within the consumer and retail sector, have contributed to additional promotional pressure.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe also own one property located in Merida, Mexico that was previously used in our Lanier Apparel manufacturing operations. In the ordinary course of business, we enter into lease agreements for our direct to consumer operations, including leases for full-price retail store, food and beverage and outlet store space.
Biggest changeIn the ordinary course of business, we enter into lease agreements for our direct to consumer operations, including leases for full-price retail store, food and beverage and outlet store space. The leases have varying terms and expirations and may have provisions to extend, renew or terminate the lease agreement, among other terms and conditions.
Details of the principal administrative, sales and distribution facilities used in our operations, including approximate square footage, are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Square Lease Location ​ Primary Use ​ Operating Group ​ Footage ​ Expiration Seattle, Washington Sales/administration Tommy Bahama 125,000 2026 Auburn, Washington Distribution center Tommy Bahama 335,000 2025 King of Prussia, Pennsylvania Sales/administration and distribution center Lilly Pulitzer 160,000 Owned Los Angeles, California ​ Sales/administration ​ Johnny Was ​ 30,000 ​ 2032 Los Angeles, California ​ Administration and distribution center ​ Johnny Was ​ 70,000 ​ 2025 Atlanta, Georgia Sales/administration Corporate/Other 30,000 2024 Lyons, Georgia Distribution center Various 420,000 Owned ​ ​ 41 Table of Contents
The terms and conditions of lease renewals or relocations may not be as favorable as existing leases. 40 Table of Contents Details of the principal administrative, sales and distribution facilities used in our operations, including approximate square footage, are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Square Lease Location ​ Primary Use ​ Operating Group ​ Footage ​ Expiration Seattle, Washington Sales/administration Tommy Bahama 125,000 2026 Auburn, Washington (1) Distribution center Tommy Bahama 335,000 2025 King of Prussia, Pennsylvania Sales/administration and distribution center Lilly Pulitzer 160,000 Owned Los Angeles, California ​ Sales/administration ​ Johnny Was ​ 30,000 ​ 2032 Los Angeles, California ​ Administration and distribution center ​ Johnny Was ​ 70,000 ​ 2025 Atlanta, Georgia Sales/administration Corporate/Other 30,000 2026 Lyons, Georgia Distribution center Various 420,000 Owned ​ ​ (1) The lease on the Auburn, Washington Distribution center was extended in Fiscal 2024 through Fiscal 2035.
For existing leases in desirable locations, we anticipate that we will be able to extend our leases, to the extent that they expire in the near future, on terms that are satisfactory to us, or if necessary, locate substitute properties on acceptable terms. The terms and conditions of lease renewals or relocations may not be as favorable as existing leases.
Despite prevailing market conditions becoming increasingly competitive and commanding significantly higher rents for the most desired properties, we anticipate that we will be able to extend our leases for existing leases in desirable locations, to the extent that they expire in the near future, on terms that are satisfactory to us, or if necessary, locate substitute properties on acceptable terms.
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The leases have varying terms and expirations and may have provisions to extend, renew or terminate the lease agreement, among other terms and conditions.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4. Mine Safety Disclosures 42 ​ ​ PART II ​ Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 42 Item 6. Reserved 44 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 45 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 70 Item 8.
Biggest changeItem 4. Mine Safety Disclosures 41 ​ ​ PART II ​ Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 41 Item 6. Reserved 43 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 44 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 67 Item 8.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changePurchases of Equity Securities by the Issuer and Affiliated Purchasers During the Fourth Quarter of Fiscal 2022, we repurchased the following shares of our common stock: 42 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Number of ​ Dollar Value ​ ​ ​ ​ ​ ​ ​ Shares ​ (000s) of Shares ​ ​ ​ ​ Average ​ Purchased as ​ That May Yet be ​ ​ Total Number ​ Price ​ Part of Publicly ​ Purchased Under ​ ​ of Shares ​ Paid per ​ Announced Plans ​ the Plans or Fiscal Month Purchased Share or Programs Programs November (10/30/22 - 11/26/22) ​ 40,132 ​ $ 103.27 ​ 40,132 ​ $ 50,726 December (11/27/22 - 12/31/22) ​ 6,376 ​ $ 113.92 ​ 6,376 ​ $ 50,000 January (1/1/23 - 1/28/23) ​ - ​ $ - ​ - ​ $ 50,000 Total ​ 46,508 ​ $ 104.73 ​ 46,508 ​ $ 50,000 ​ As disclosed in our Quarterly Report on Form 10-Q for the Third Quarter of Fiscal 2021, and in subsequent filings, on December 7, 2021, our Board of Directors authorized us to spend up to $150 million to repurchase shares of our stock.
Biggest changeDuring the Fourth Quarter of Fiscal 2023, no shares were repurchased pursuant to these plans. As disclosed in our Quarterly Report on Form 10-Q for the Third Quarter of Fiscal 2021, and in subsequent filings, on December 7, 2021, our Board of Directors authorized us to spend up to $150 million to repurchase shares of our stock.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market and Dividend Information Our common stock is listed and traded on the New York Stock Exchange under the symbol "OXM." As of March 24, 2023, there were 262 record holders of our common stock.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market and Dividend Information Our common stock is listed and traded on the New York Stock Exchange under the symbol "OXM." As of March 24, 2024, there were 255 record holders of our common stock.
Also, we have certain stock incentive plans as described in Note 8 of our consolidated financial statements included in this report, all of which are publicly announced plans. Under the plans, we can repurchase shares from employees to cover employee tax liabilities related to the vesting of shares of our stock.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers We have certain stock incentive plans as described in Note 8 to our consolidated financial statements included in this report, all of which are publicly announced plans. Under the plans, we can repurchase shares from employees to cover employee tax liabilities related to the vesting of shares of our stock.
For details about limitations on our ability to pay dividends, see the discussion of our $325 million Fourth Amended and Restated Credit Agreement (as amended, the “U.S. Revolving Credit Agreement”) in Note 5 of our consolidated financial statements and Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations, both contained in this report.
For details about limitations on our ability to pay dividends, see the discussion of our $325 million Fourth Amended and Restated Credit Agreement (as amended, the “U.S. Revolving Credit Agreement”) in Note 6 of our consolidated financial statements and Part II, Item 7.
On March 21, 2023, our Board of Directors approved a cash dividend of $0.65 per share payable on April 28, 2023 to shareholders of record as of the close of business on April 14, 2023.
On March 25, 2024, our Board of Directors approved a cash dividend of $0.67 per share payable on May 3, 2024 to shareholders of record as of the close of business on April 19, 2024.
Over the life of the $100 million open market repurchase program we repurchased 1.1 million, or 6%, of our outstanding shares at the commencement of the program, for an average price of $90 per share.
Over the life of the $20 million open market repurchase program we repurchased 196,000 shares, or 1%, of our outstanding shares at the commencement of the program for an average price of $102 per share. During the Fourth Quarter of Fiscal 2023, we did not repurchase any shares of our stock pursuant to this authorization.
Stock Price Performance Graph The graph below reflects cumulative total shareholder return (assuming an initial investment of $100 and the reinvestment of dividends) on our common stock compared to the cumulative total return for a period of five years, 43 Table of Contents beginning February 3, 2018 and ending January 28, 2023, of (1) The S&P SmallCap 600 Index and (2) The S&P 500 Apparel, Accessories and Luxury Goods. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ INDEXED RETURNS ​ ​ Base Period ​ Years Ended Company / Index 2/3/18 2/2/19 2/1/20 1/30/21 1/29/22 1/28/23 Oxford Industries, Inc. 100 99.19 90.92 87.29 110.21 163.46 S&P SmallCap 600 Index 100 100.35 107.00 131.80 142.77 142.43 S&P 500 Apparel, Accessories & Luxury Goods 100 93.20 85.87 83.98 82.72 60.32 ​ ​
After considering the repurchases during Fiscal 2023 as of February 3, 2024, there were no amounts remaining under the open market repurchase program and $30 million remaining under the Board of Directors’ authorization. 42 Table of Contents Stock Price Performance Graph The graph below reflects cumulative total shareholder return (assuming an initial investment of $100 and the reinvestment of dividends) on our common stock compared to the cumulative total return for a period of five years, beginning February 2, 2019, and ending February 3, 2024, of (1) The S&P SmallCap 600 Index and (2) The S&P 500 Apparel, Accessories and Luxury Goods. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ INDEXED RETURNS ​ ​ Base Period ​ Years Ended Company / Index 2/2/19 2/1/20 1/30/21 1/29/22 1/28/23 2/3/24 Oxford Industries, Inc. 100 91.67 88.01 111.12 164.80 138.81 S&P SmallCap 600 Index 100 106.63 131.34 142.26 141.93 147.56 S&P 500 Apparel, Accessories & Luxury Goods 100 92.13 90.11 88.75 64.72 52.88 ​ ​
Pursuant to the Board of Directors’ authorization, we entered into a $100 million open market stock repurchase program (Rule 10b5-1 plan) to acquire shares of our stock, under which we repurchased shares of our stock totaling: (1) $8 million in the Fourth Quarter of Fiscal 2021, (2) $43 million in the First Quarter of Fiscal 2022, (3) $30 million in the Second Quarter of Fiscal 2022, (4) $14 million in the Third Quarter of Fiscal 2022 and (5) $5 million in the Fourth Quarter of Fiscal 2022, which completed the purchases pursuant to the open market stock repurchase program.
This authorization superseded and replaced all previous authorizations to repurchase shares of our stock and has no automatic expiration. Pursuant to the Board of Directors’ authorization, in the First Quarter of Fiscal 2023, we entered into a $20 million open market stock repurchase program (Rule 10b5-1 plan) to acquire shares of our stock.
Recent Sales of Unregistered Securities We did not sell any unregistered equity securities during Fiscal 2022.
Management’s Discussion and Analysis of Financial Condition and Results of Operations, both contained in this report. 41 Table of Contents Recent Sales of Unregistered Securities We did not sell any unregistered equity securities during Fiscal 2023.
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This authorization superseded and replaced all previous authorizations to repurchase shares of our stock and has no automatic expiration.
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During the Second Quarter of Fiscal 2023 and the Third Quarter of Fiscal 2023, we repurchased 186,000 and 10,000 shares, respectively, of our common stock for $19 million and $1 million, respectively.
Removed
After considering the repurchases during Fiscal 2021 and Fiscal 2022 as of January 28, 2023, there were no amounts remaining under the open market repurchase program and $50 million remaining under the Board of Directors’ authorization.
Removed
No shares were repurchased from employees during the Fourth Quarter of Fiscal 2022.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeOperating income ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal 2022 Fiscal 2021 $ Change % Change Tommy Bahama ​ $ 172,761 ​ $ 111,733 ​ $ 61,028 54.6 % Lilly Pulitzer ​ 67,098 ​ 63,601 ​ 3,497 5.5 % Johnny Was ​ ​ (1,544) ​ ​ — ​ ​ (1,544) 100.0 % Emerging Brands ​ 15,602 ​ 16,649 ​ (1,047) (6.3) % Lanier Apparel ​ — ​ 4,888 ​ (4,888) (100.0) % Corporate and Other ​ (35,143) ​ (31,368) ​ (3,775) NM % Consolidated operating income ​ $ 218,774 ​ $ 165,503 ​ $ 53,271 32.2 % Notable items included in amounts above: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ LIFO adjustments in Corporate and Other ​ $ 2,667 ​ $ 15,870 ​ ​ Inventory step-up charge included in Johnny Was ​ $ 4,230 ​ $ — ​ ​ ​ ​ ​ ​ Reduction of Lanier Apparel exit charges in cost of goods sold ​ $ — ​ $ (2,826) ​ ​ ​ ​ ​ ​ Tommy Bahama lease termination charge ​ $ — ​ $ 4,850 ​ ​ ​ ​ ​ ​ Amortization of Johnny Was intangible assets ​ $ 5,194 ​ $ — ​ ​ ​ ​ ​ ​ TBBC change in fair value of contingent consideration ​ $ — ​ $ 1,188 ​ ​ ​ ​ ​ ​ Lanier Apparel exit charges in SG&A ​ $ — ​ $ 3,788 ​ ​ ​ ​ ​ ​ Gain on sale of Lanier Apparel distribution center ​ $ — ​ $ (2,669) ​ ​ ​ ​ ​ ​ Transaction expenses and integration costs associated with the Johnny Was acquisition included in Corporate and Other ​ $ 2,783 ​ $ — ​ ​ ​ ​ ​ ​ Gain on sale of investment in unconsolidated entity ​ $ — ​ $ (11,586) ​ ​ ​ Operating income was $219 million in Fiscal 2022 compared to $166 million in Fiscal 2021.
Biggest changeThese decreases were partially offset by a $2 million gain on the sale of the Merida manufacturing facility in Mexico in Fiscal 2023. 52 Table of Contents Operating income ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal 2023 Fiscal 2022 $ Change % Change Tommy Bahama ​ $ 160,543 ​ $ 172,761 ​ $ (12,218) (7.1) % Lilly Pulitzer ​ 56,110 ​ 67,098 ​ (10,988) (16.4) % Johnny Was ​ ​ (104,776) ​ ​ (1,544) ​ ​ (103,232) NM % Emerging Brands ​ 6,714 ​ 15,602 ​ (8,888) (57.0) % Corporate and Other ​ (37,609) ​ (35,143) ​ (2,466) NM % Consolidated operating income ​ $ 80,982 ​ $ 218,774 ​ $ (137,792) (63.0) % Notable items included in amounts above: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ LIFO adjustments in Corporate and Other ​ $ 9,605 ​ $ 2,667 ​ ​ Inventory step-up charge included in Johnny Was ​ $ — ​ $ 4,230 ​ ​ ​ ​ ​ ​ Amortization of Johnny Was intangible assets ​ $ 13,852 ​ $ 5,194 ​ ​ ​ ​ ​ ​ Transaction expenses and integration costs associated with the Johnny Was acquisition included in Corporate and Other ​ $ — ​ $ 2,783 ​ ​ ​ ​ ​ ​ Johnny Was goodwill and intangible asset impairment charge ​ $ 111,136 ​ $ — ​ ​ ​ ​ ​ ​ Impairment of investment in unconsolidated entity ​ $ 2,475 ​ $ — ​ ​ ​ ​ ​ ​ Gain on sale of Merida manufacturing facility ​ $ (1,756) ​ $ — ​ ​ ​ ​ ​ ​ ​ Operating income was $81 million in Fiscal 2023 compared to $219 million in Fiscal 2022.
Additionally, the U.S. Revolving Credit Agreement contains a financial covenant that applies only if excess availability under the agreement for three consecutive business days is less than the greater of (1) $23.5 million or (2) 10% of availability. In such case, our fixed charge coverage ratio as defined in the U.S.
Additionally, the U.S. Revolving Credit Agreement contains a financial covenant that applies only if excess availability under the agreement for three consecutive business days is less than the greater of (1) $23.5 million or (2) 10% of availability. In such a case, our fixed charge coverage ratio as defined in the U.S.
For additional information about our business and each of our operating groups, see Part I, Item 1. Business included in this report. Important factors relating to certain risks which could impact our business are described in Part I, Item 1A. Risk Factors of this report.
For additional information about our business and each of our operating groups, see Part I, Item 1. Business included in this report. Important factors relating to certain risks which could impact our business are described in Part I, Item 1A.
The cash flow from operating activities for each period primarily consisted of net earnings for the relevant period adjusted, as applicable, for non-cash activities including depreciation, amortization, equity-based compensation, gains on sale of assets and other non-cash items as well as the net impact of changes in deferred income taxes and operating assets and liabilities.
The cash flow from operating activities for each period primarily consisted of net earnings for the relevant period adjusted, as applicable, for non-cash activities including impairment charges, depreciation, amortization, equity-based compensation, gains on sale of assets and other non-cash items as well as the net impact of changes in deferred income taxes and operating assets and liabilities.
During Fiscal 2022, 80% of our consolidated net sales were through our direct to consumer channels of distribution, which consist of our brand specific full-price retail stores, e-commerce websites and outlets, as well as our Tommy Bahama food and beverage operations.
During Fiscal 2023, 80% of our consolidated net sales were through our direct to consumer channels of distribution, which consist of our brand specific full-price retail stores, e-commerce websites and outlets, as well as our Tommy Bahama food and beverage operations.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis of our results of operations, cash flows, liquidity and capital resources compares Fiscal 2022 to Fiscal 2021 and should be read in conjunction with our consolidated financial statements contained in this report.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis of our results of operations, cash flows, liquidity and capital resources compares Fiscal 2023 to Fiscal 2022 and should be read in conjunction with our consolidated financial statements contained in this report.
Item 7 of our 2021 Annual Report on Form 10-K, filed with the SEC on March 28, 2022, which is available on the SEC’s website at www.sec.gov and under the Investor Relations section of our website at www.oxfordinc.com.
Item 7 of our 2022 Annual Report on Form 10-K, filed with the SEC on March 28, 2023, which is available on the SEC’s website at www.sec.gov and under the Investor Relations section of our website at www.oxfordinc.com.
For a discussion of our results of operations, cash flows, liquidity and capital resources for Fiscal 2021 compared to Fiscal 2020 and certain other financial information related to Fiscal 2021 and Fiscal 2020, refer to the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II.
For a discussion of our results of operations, cash flows, liquidity and capital resources for Fiscal 2022 compared to Fiscal 2021 and certain other financial information related to Fiscal 2022 and Fiscal 2021, refer to the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II.
In our direct to consumer operations, which represented 80% of our consolidated net sales in Fiscal 2022, consumers have certain rights to return product within a specified period and are eligible for certain point of sale discounts.
In our direct to consumer operations, which represented 80% of our consolidated net sales in Fiscal 2023, consumers have certain rights to return product within a specified period and are eligible for certain point of sale discounts.
We continue to believe that our lifestyle brands, with their strong emotional connections with consumers, are well suited to succeed and thrive in the long term while managing the various challenges facing our industry.
We continue to believe that our lifestyle brands, with their strong emotional connections with consumers, are well suited to succeed and thrive in the long term while managing the various challenges facing our industry in the current environment.
Revolving Credit Agreement generally (1) is limited to a borrowing base consisting of specified percentages of eligible categories of assets, (2) accrues variable-rate interest (weighted average interest rate of 6% as of January 28, 2023), unused line fees and letter of credit fees based upon average utilization or unused availability, as applicable, (3) requires periodic interest payments with principal due at maturity and (4) is secured by a first priority security interest in substantially all of the assets of Oxford Industries, Inc. and its domestic subsidiaries, including accounts receivable, books and records, chattel paper, deposit accounts, equipment, certain general intangibles, inventory, investment property (including the equity interests of certain subsidiaries), negotiable collateral, life insurance policies, supporting obligations, commercial tort claims, cash and cash equivalents, eligible trademarks, proceeds and other personal property.
Revolving Credit Agreement generally (1) is limited to a borrowing base consisting of specified percentages of eligible categories of assets, (2) accrues variable-rate interest (weighted average interest rate of 7% as of February 3, 2024), unused line fees and letter of credit fees based upon average utilization or unused availability, as applicable, (3) requires periodic interest payments with principal due at maturity and (4) is secured by a first priority security interest in substantially all of the assets of Oxford Industries, Inc. and its domestic subsidiaries, including accounts receivable, books and records, chattel paper, deposit accounts, equipment, certain general intangibles, inventory, investment property (including the equity interests of certain subsidiaries), negotiable collateral, life insurance policies, supporting obligations, commercial tort claims, cash and cash equivalents, eligible trademarks, proceeds and other personal property.
As certain allowances, other deductions and returns are not finalized until the end of a season, program or other event which may not have occurred yet, we estimate such discounts, allowances and returns on an ongoing basis to estimate the consideration from the customer that we expect to 66 Table of Contents ultimately receive.
As certain allowances, other deductions and returns are not finalized until the end of a season, program or other event which may not have occurred yet, we estimate such discounts, allowances and returns on an ongoing basis to estimate the consideration from the customer that we expect to ultimately receive.
The results of operations, cash flows, liquidity and capital resources for Fiscal 2021 compared to Fiscal 2020 are not included in this report on Form 10-K.
The results of operations, cash flows, liquidity and capital resources for Fiscal 2022 compared to Fiscal 2021 are not included in this report on Form 10-K.
Although we have paid dividends each quarter since we became a public company in July 1960, including $35 million in total, or $2.20 per common share, in Fiscal 2022, we may discontinue or modify dividend payments at any time if we determine that other uses of our capital, including payment of outstanding debt, funding of acquisitions, funding of capital expenditures or repurchases of outstanding shares, may be in our best interest; if our expectations of future cash flows and future cash needs outweigh the ability to pay a dividend; or if the terms of our credit facility, other debt instruments or applicable law limit our ability to pay dividends.
Although we have paid dividends each quarter since we became a public company in July 1960, including $42 million in total, or $2.60 per common share, in Fiscal 2023, we may discontinue or modify dividend payments at any time if we determine that other uses of our capital, including payment of outstanding debt, funding of acquisitions, funding of capital expenditures or repurchases of outstanding shares, may be in our best interest; if our expectations of future cash flows and future cash needs outweigh the ability to pay a dividend; or if the terms of our credit facility, other debt instruments or applicable law limit our ability to pay dividends.
We believe it is possible that other professionals, applying reasonable judgment to the same set of facts and circumstances, could develop and support a range of alternative estimated amounts. We believe that we have appropriately applied our critical accounting policies.
We believe it is possible that other professionals, applying reasonable judgment to the same set of facts and circumstances, could develop and support a range of alternative estimated amounts. We believe that we have appropriately applied our critical accounting 62 Table of Contents policies.
A 10% change in the amount of such markdowns would have had an impact of less than $1 million on net earnings in Fiscal 2022.
A 10% change in the amount of such markdowns would have had an impact of less than $1 million on net earnings in Fiscal 2023.
As of January 28, 2023, our total reserves for discounts, returns and allowances for our wholesale businesses were $4 million compared to $3 million as of January 29, 2022. If these allowances changed by 10% it would have had an impact of less than $1 million on net earnings in Fiscal 2022.
As of February 3, 2024, our total reserves for discounts, returns and allowances for our wholesale businesses were $3 million compared to $4 million as of January 28, 2023. If these allowances changed by 10% it would have had an impact of less than $1 million on net earnings in Fiscal 2023.
For our comparable sales disclosures, we exclude (1) outlet store sales and e-commerce flash clearance sales, as those clearance sales are used primarily to liquidate end of season inventory, which may vary significantly depending on the level of end of season inventory on hand and generally occur at lower gross margins than our non-clearance direct to consumer sales, and (2) food and beverage sales, as we do not currently believe that the inclusion of food and beverage sales in our comparable sales disclosures is meaningful in assessing our branded apparel businesses.
For our comparable sales disclosures, we exclude (1) outlet store sales and e-commerce flash clearance sales, as those clearance sales are used primarily to liquidate end of season inventory, which may vary significantly depending on the level of end of season inventory on hand and generally occur at lower gross margins than our non-clearance direct to consumer sales, and (2) food and beverage sales, as we do not currently believe that the inclusion of food and beverage sales in our comparable sales disclosures is meaningful in assessing our total company operations.
With our acquisition of Johnny Was on September 19, 2022, our business is organized as our Tommy Bahama, Lilly Pulitzer, Johnny Was and Emerging Brands operating groups. Operating results for periods prior to Fiscal 2022 also include the Lanier Apparel operating group, which we exited in Fiscal 2021.
Subsequent to our acquisition of Johnny Was in September 2022, our business is organized as our Tommy Bahama, Lilly Pulitzer, Johnny Was and Emerging Brands operating groups. Operating results for periods prior to Fiscal 2022 also include the Lanier Apparel operating group, which we exited in Fiscal 2021.
Base rent amounts specified in the 64 Table of Contents leases are included in determining the operating lease liabilities included in our consolidated balance sheet, while amounts for real estate taxes, sales tax, insurance, other operating expenses and contingent rent applicable to the properties pursuant to the respective leases are not included in determining the operating lease liabilities included in our consolidated balance sheets.
Base rent amounts specified in the leases are included in determining the operating lease liabilities included in our consolidated balance sheet, while amounts for real estate taxes, sales tax, insurance, other operating expenses and contingent rent applicable to the properties pursuant to the respective leases are not included in determining the operating lease liabilities included in our consolidated balance sheets.
Thus, the effective tax rates for Fiscal 2022 and Fiscal 2021 are not indicative of the effective tax rate expected in future periods. Refer to Note 10 of our consolidated financial statements included in this report for our income tax rate reconciliation and other information about our income tax expense for Fiscal 2022 and Fiscal 2021.
Thus, the effective tax rates for Fiscal 2023 and Fiscal 2022 are not indicative of the effective tax rate expected in future periods. Refer to Note 11 of our consolidated financial statements included in this report for our income tax rate reconciliation and other information about our income tax expense for Fiscal 2023 and Fiscal 2022.
We use certain market-based and internally derived information and make assumptions about the information in (1) determining the fair values of assets and liabilities acquired as part of a business combination, including the acquisition of Johnny Was in Fiscal 2022, (2) adjusting recognized assets and liabilities to fair value and (3) assessing recognized assets for impairment, including intangible assets, goodwill and other non-current assets.
We use certain market-based and internally derived information and make assumptions about the information in (1) determining the fair values of assets and liabilities acquired as part of a business combination, (2) adjusting recognized assets and liabilities to fair value and (3) assessing recognized assets for impairment, including intangible assets, goodwill and other non-current assets.
Revolving Credit Agreement above and in Note 5 of our consolidated financial statements contained in this report.
Revolving Credit Agreement above and in Note 6 of our consolidated financial statements contained in this report.
As of both January 28, 2023 and January 29, 2022, our provision for credit losses for our wholesale receivables was $1 million. If the provision for credit losses changed by 10% it would have had an impact of less than $1 million on net earnings in Fiscal 2022.
As of both February 3, 2024 and January 28, 2023, our provision for credit losses for our wholesale receivables was $1 million. If the provision for credit losses changed by 10% it would have had an impact of less than $1 million on net earnings in Fiscal 2023.
The amounts below include our permanent locations and exclude any pop-up or temporary store locations which have an initial lease term of 12 months or less. 48 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ January 28, ​ January 29, ​ January 30, ​ February 2, ​ 2023 2022 2021 2020 Tommy Bahama full-price retail stores 103 102 105 111 Tommy Bahama retail-food & beverage locations 21 21 20 16 Tommy Bahama outlets 33 35 35 35 Total Tommy Bahama locations 157 158 160 162 Lilly Pulitzer full-price retail stores 59 58 59 61 Johnny Was full-price retail stores ​ 65 ​ — ​ — ​ — Johnny Was outlets ​ 2 ​ — ​ — ​ — Total Johnny Was locations ​ 67 ​ — ​ — ​ — Southern Tide full-price retail stores ​ 6 ​ 4 ​ 3 ​ 1 TBBC full-price retail stores ​ 3 ​ 1 ​ — ​ — Total Oxford direct to consumer locations 292 221 222 224 ​ RESULTS OF OPERATIONS The following table sets forth the specified line items in our consolidated statements of operations both in dollars (in thousands) and as a percentage of net sales.
The amounts 46 Table of Contents below include our permanent locations and exclude any pop-up or temporary store locations which have an initial lease term of 12 months or less. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ February 3, ​ January 28, ​ January 29, ​ January 30, ​ 2024 2023 2022 2021 Tommy Bahama full-price retail stores 102 103 102 105 Tommy Bahama retail-food & beverage locations 22 21 21 20 Tommy Bahama outlets 34 33 35 35 Total Tommy Bahama locations 158 157 158 160 Lilly Pulitzer full-price retail stores 60 59 58 59 Johnny Was full-price retail stores ​ 72 ​ 65 ​ — ​ — Johnny Was outlets ​ 3 ​ 2 ​ — ​ — Total Johnny Was locations ​ 75 ​ 67 ​ — ​ — Southern Tide full-price retail stores ​ 19 ​ 6 ​ 4 ​ 3 TBBC full-price retail stores ​ 3 ​ 3 ​ 1 ​ — Total Oxford direct to consumer locations 315 292 221 222 ​ RESULTS OF OPERATIONS The following table sets forth the specified line items in our consolidated statements of operations both in dollars (in thousands) and as a percentage of net sales.
Intangible assets with finite lives totaled $58 million as of January 28, 2023 and primarily consist of customer relationships, certain trademarks and reacquired rights. These assets are amortized over their estimated useful lives and reviewed for impairment periodically if events or changes in circumstances indicate that the carrying amount may not be recoverable.
Intangible assets with finite lives primarily consist of customer relationships, certain trademarks and reacquired rights. These assets are amortized over their estimated useful lives and reviewed for impairment periodically if events or changes in circumstances indicate that the carrying amount may not be recoverable.
Industry Overview We operate in a highly competitive apparel market that continues to evolve rapidly with the expanding application of technology to fashion retail. No single apparel firm or small group of apparel firms dominates the apparel industry, and our competitors vary by operating group and distribution channel.
Risk Factors of this report. 44 Table of Contents Industry Overview We operate in a highly competitive apparel market that continues to evolve rapidly with the expanding application of technology to fashion retail. No single apparel firm or small group of apparel firms dominates the apparel industry, and our competitors vary by operating group and distribution channel.
Thus, we believe our anticipated future cash flows from operating activities will provide (1) sufficient cash over both the short and long term to satisfy our ongoing operating cash requirements, (2) ample funds to continue to invest in our lifestyle brands, direct to consumer initiatives and information technology projects, (3) additional cash flow to repay outstanding debt and (4) sufficient cash for other strategic initiatives.
Thus, we believe our anticipated future cash flows from operating activities will provide (1) sufficient cash over both the short and long term to satisfy our ongoing operating cash requirements, (2) ample funds to continue to invest in our lifestyle brands, the project to build a new distribution center in the Southeastern United States, direct to consumer initiatives and information technology projects, (3) additional cash flow to repay outstanding debt and (4) sufficient cash for other strategic initiatives.
Corporate and Other: The gross profit in Corporate and Other primarily includes the impact of LIFO accounting adjustments, the sales of the Lyons, Georgia distribution center operations to third parties and the sales of the Oxford America business. The primary driver for the improved gross profit was the $13 million lower LIFO accounting charge.
Corporate and Other: The gross profit in Corporate and Other primarily includes the impact of LIFO accounting adjustments, the sales of the Lyons, Georgia distribution center operations to third parties and the sales of the Oxford America business. The primary driver for the decreased gross profit was the $7 million higher LIFO accounting charge.
Changes in cash flows in Fiscal 2022 and Fiscal 2021 related to operating activities, investing activities and financing activities are discussed below. Operating Activities: In Fiscal 2022 and Fiscal 2021, operating activities provided $126 million and $198 million of cash, respectively.
Changes in cash flows in Fiscal 2023 and Fiscal 2022 related to operating activities, investing activities and financing activities are discussed below. Operating Activities: In Fiscal 2023 and Fiscal 2022, operating activities provided $244 million and $126 million of cash, respectively.
A change in inventory levels, the mix of inventory by category or the PPI at the end of future fiscal years compared to amounts as of January 28, 2023 could result in a material impact on our consolidated financial statements in the future.
A change in inventory levels, the mix of inventory by category or the PPI at the end of future fiscal years compared to amounts as of February 3, 2024 could result in a material impact on our consolidated financial statements in the future.
As of January 28, 2023, our direct to consumer return reserve liability was $12 million compared to $11 million as of January 29, 2022. A 10% change in the direct to consumer sales return reserve as of January 28, 2023 would have had an impact of less than $1 million on net earnings in Fiscal 2022.
As of February 3, 2024, our direct to consumer return reserve liability was $13 million compared to $12 million as of January 28, 2023. A 10% change in the direct to consumer sales return reserve as of February 3, 2024 would have had an impact of less than $1 million on net earnings in Fiscal 2023.
As of January 28, 2023, we had recorded a reserve of $4 million related to inventory on the lower of FIFO cost or market method and for inventory on the lower of LIFO cost or market method with markdowns in excess of our LIFO reserve.
As of February 3, 2024, we had recorded a reserve of $4 million related to inventory on the lower of FIFO cost or market method and for inventory on the lower of LIFO cost or market method with markdowns in excess of our LIFO reserve.
The U.S. Revolving Credit Agreement is subject to a number of affirmative covenants regarding the delivery of financial information, compliance with law, maintenance of property, insurance requirements and conduct of business. Also, the U.S.
The U.S. Revolving Credit Agreement is subject to several affirmative covenants regarding the delivery of financial information, compliance with law, maintenance of property, insurance requirements and conduct of business. 60 Table of Contents Also, the U.S.
During Fiscal 2022 and as of January 28, 2023, no financial covenant testing was required pursuant to our U.S. Revolving Credit Agreement as the minimum availability threshold was met at all times. As of January 28, 2023, we were compliant with all applicable covenants related to the U.S. Revolving Credit Agreement.
During Fiscal 2023 and as of February 3, 2024, no financial covenant testing was required pursuant to our U.S. Revolving Credit Agreement or the Prior Credit Agreement, as applicable, as the minimum availability threshold was met at all times. As of February 3, 2024, we were compliant with all applicable covenants related to the U.S. Revolving Credit Agreement.
These favorable items were partially offset by various unfavorable items related to non-deductible amounts associated with executive compensation and other items.
These favorable items were partially offset by unfavorable items related to the non-deductible amounts associated with executive compensation.
When determining the fair value, significant assumptions may include our planned use of the asset as well as estimates of net sales, royalty income, operating income, growth rates, royalty rates for the trademarks, a risk-adjusted market based cost of capital as the discount rates and income tax rates, among other factors.
When determining the fair value of intangible assets, including trademarks, customer relationships and other items, significant assumptions may include our planned use of the asset as well as estimates of net sales, royalty income, operating income, growth rates, royalty rates for the trademarks, a risk-adjusted, market-based cost of capital for the discount rates, income tax rates, anticipated cash flows and probabilities of cash flows, among other factors.
With our long history of strong positive cash flows from operations exceeding cash requirements for capital expenditures and dividends and our strong balance sheet, we believe our anticipated future cash flows from operations will provide sufficient cash over both the short and the long term to satisfy our ongoing operating cash requirements, ample funds to continue to invest in our lifestyle brands, direct to consumer initiatives and 47 Table of Contents information technology projects, additional cash flow to repay outstanding debt and sufficient cash for other strategic initiatives.
With our long history of strong positive cash flows from operations 45 Table of Contents exceeding cash requirements for capital expenditures and dividends and our strong balance sheet, we believe our anticipated future cash flows from operations will provide sufficient cash to satisfy our ongoing operating cash requirements, ample funds to continue to invest in our lifestyle brands, the project to build a new distribution center in the Southeastern United States, direct to consumer initiatives and information technology projects, additional cash flow to repay outstanding debt and sufficient cash for other strategic initiatives.
LIFO reserves are based on the Producer Price Index (“PPI”) as published by the United States Department of Labor. We write down inventories valued at the lower of LIFO cost or market when LIFO cost exceeds market value.
The remaining $13 million of our inventories were valued at the lower of FIFO cost or market as of February 3, 2024. LIFO reserves are based on the Producer Price Index (“PPI”) as published by the United States Department of Labor. We write down inventories valued at the lower of LIFO cost or market when LIFO cost exceeds market value.
Over the life of the $100 million open market repurchase program we repurchased 1.1 million, or 6%, of our outstanding shares at the commencement of the program for an average price of $90 per share.
Over the life of the $20 million open market repurchase program we repurchased 196,000 shares, or 1% of our outstanding shares at the commencement of the program for an average price of $102 per share.
We have calculated all percentages below on actual data, and percentages may not add to 100 due to rounding. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal 2022 Fiscal 2021 Fiscal 2020 Retail 39 % 39 % 27 % E-commerce 33 % 32 % 43 % Food & beverage 8 % 8 % 6 % Wholesale 20 % 20 % 23 % Total 100 % 100 % 100 % ​ 49 Table of Contents FISCAL 2022 COMPARED TO FISCAL 2021 The discussion and tables below compare certain line items included in our consolidated statements of operations for Fiscal 2022 to Fiscal 2021, except where indicated otherwise.
We have calculated all percentages below on actual data, and percentages may not add to 100 due to rounding. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal 2023 Fiscal 2022 Fiscal 2021 Retail 39 % 39 % 39 % E-commerce 34 % 33 % 32 % Food & beverage 7 % 8 % 8 % Wholesale 20 % 20 % 20 % Total 100 % 100 % 100 % ​ FISCAL 2023 COMPARED TO FISCAL 2022 The discussion and tables below compare certain line items included in our consolidated statements of operations for Fiscal 2023, which includes 53 weeks, to Fiscal 2022, which includes 52 weeks, except where indicated otherwise.
Capital expenditures were $47 million and $32 million in Fiscal 2022 and Fiscal 2021, respectively. During Fiscal 2022, we paid $264 million for the acquisition of Johnny Was. We also converted $165 million of short-term investments into cash to fund a portion of the Johnny Was acquisition.
During Fiscal 2022, we paid $264 million for the acquisition of Johnny Was and also converted $165 million of short-term investments into cash to fund a portion of the acquisition.
Our capital expenditure amounts in future years will fluctuate from the amounts incurred in prior years depending on the investments we believe appropriate for that year to support future expansion of our businesses. ​ Dividends: On March 21, 2023, our Board of Directors approved a cash dividend of $0.65 per share payable on April 28, 2023 to shareholders of record as of the close of business on April 14, 2023.
Our capital expenditure amounts in 61 Table of Contents future years will fluctuate from the amounts incurred in prior years depending on the investments we believe appropriate for that year to support future expansion of our businesses. ​ Dividends: On March 25, 2024, our Board of Directors approved a cash dividend of $0.67 per share payable on May 3, 2024 to shareholders of record as of the close of business on April 19, 2024.
The following table presents the proportion of net sales by distribution channel for Tommy Bahama for each period presented: ​ ​ ​ ​ ​ ​ ​ ​ Fiscal 2022 Fiscal 2021 Retail 46 % 47 % E-commerce 24 % 25 % Food & beverage 13 % 13 % Wholesale 17 % 15 % Total 100 % 100 % ​ Lilly Pulitzer: Lilly Pulitzer net sales increased $40 million, or 14%, in Fiscal 2022, with an increase in the e-commerce flash, retail store and wholesale sales channels.
The following table presents the proportion of net sales by distribution channel for Tommy Bahama for each period presented: ​ ​ ​ ​ ​ ​ ​ ​ Fiscal 2023 Fiscal 2022 Retail 45 % 46 % E-commerce 25 % 24 % Food & beverage 13 % 13 % Wholesale 17 % 17 % Total 100 % 100 % ​ Lilly Pulitzer: Lilly Pulitzer net sales increased $4 million, or 1%, in Fiscal 2023, with an increase in e-commerce flash clearance sales of $7 million, or 13%.
Also, if cash inflows are less than cash outflows, we have access to amounts under our $325 million Fourth Amended and Restated Credit Agreement (as amended, the “U.S.
Also, if cash inflows are less than cash outflows, we have access to amounts under our $325 million Fourth Amended and Restated Credit Agreement (as amended, the “U.S. Revolving Credit Agreement”), subject to its terms, which is described below.
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES Our primary source of revenue and cash flow is through our design, sourcing, marketing and distribution of branded apparel products bearing the trademarks of our Tommy Bahama, Lilly Pulitzer, Johnny Was, Southern Tide, TBBC and Duck Head lifestyle brands.
These decreases were partially offset by a lower effective tax rate . FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES Our primary source of revenue and cash flow is through our design, sourcing, marketing and distribution of branded apparel products bearing the trademarks of our Tommy Bahama, Lilly Pulitzer, Johnny Was, Southern Tide, TBBC, Duck Head and Jack Rogers lifestyle brands.
OVERVIEW Business Overview We are a leading branded apparel company that designs, sources, markets and distributes products bearing the trademarks of our portfolio of lifestyle brands: Tommy Bahama, Lilly Pulitzer, Johnny Was, Southern Tide, TBBC and Duck Head.
OVERVIEW Business Overview We are a leading branded apparel company that designs, sources, markets and distributes products bearing the trademarks of our Tommy Bahama, Lilly Pulitzer, Johnny Was, Southern Tide, TBBC, Duck Head and Jack Rogers lifestyle brands. Our business strategy is to drive excellence across a portfolio of lifestyle brands that create sustained, profitable growth.
If the assets are determined to not be recoverable on an undiscounted cash flow basis and the expected future discounted cash flows of the asset group are less than the carrying amount, an asset group is impaired and a loss is recorded for the amount by which the carrying value of the asset group exceeds its fair value. 68 Table of Contents Other Fair Value Measurements For many assets and liabilities, the determination of fair value may not require the use of many assumptions or other estimates.
If the assets are determined to not be recoverable on an undiscounted cash flow basis and the expected future discounted cash flows of the asset group are less than the carrying amount, an asset group is impaired and a loss is recorded for the amount by which the carrying value of the asset group exceeds its fair value.
Pursuant to the Board of Directors’ authorization, we entered into a $100 million open market stock repurchase program (Rule 10b5-1 plan) to acquire shares of our stock, under which we repurchased shares of our stock totaling: (1) $8 million in the Fourth Quarter of Fiscal 2021, (2) $43 million in the First Quarter of Fiscal 2022, (3) $30 million in the Second Quarter of Fiscal 2022, (4) $14 million in the Third Quarter of Fiscal 2022, and (5) $5 million in the Fourth Quarter of Fiscal 2022, which completed the purchases pursuant to the open market stock repurchase program.
Pursuant to the Board of Directors’ authorization, we entered into a $20 million open market stock repurchase program (Rule 10b5-1 plan) in the First Quarter of Fiscal 2023 to acquire shares of our stock, under which we repurchased shares of our stock totaling: (1) $19 million in Second Quarter of Fiscal 2023 and (2) $1 million in the Third Quarter of Fiscal 2023, which completed the purchases pursuant to the open market stock repurchase program.
After considering the repurchases during Fiscal 2021 and Fiscal 2022, as of January 28, 2023, there were no amounts remaining under the open market repurchase program and $50 million remaining under the Board of Directors’ authorization.
After considering the repurchases during Fiscal 2023, as of February 3, 2024, there were no amounts remaining under the open market repurchase program and $30 million remaining under the Board of Directors’ authorization.
We have calculated all percentages based on actual data, but percentage columns may not add due to rounding. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal 2022 Fiscal 2021 Fiscal 2020 Net sales $ 1,411,528 100.0 % $ 1,142,079 100.0 % $ 748,833 100.0 % Cost of goods sold ​ 522,673 37.0 % 435,861 38.2 % 333,626 44.6 % Gross profit ​ 888,855 63.0 % 706,218 61.8 % 415,207 55.4 % SG&A ​ 692,004 49.0 % 573,636 50.2 % 492,628 65.8 % Impairment of goodwill and intangible assets ​ ​ — ​ — % ​ — ​ — % ​ 60,452 ​ 8.1 % Royalties and other operating income ​ 21,923 1.6 % 32,921 2.9 % 14,024 1.9 % Operating income (loss) ​ 218,774 15.5 % 165,503 14.5 % (123,849) (16.5) % Interest expense, net ​ 3,049 0.2 % 944 0.1 % 2,028 0.3 % Earnings (loss) before income taxes ​ 215,725 15.3 % 164,559 14.4 % (125,877) (16.8) % Income taxes (benefit) ​ 49,990 3.5 % 33,238 2.9 % (30,185) (4.0) % Net earnings (loss) ​ $ 165,735 11.7 % $ 131,321 11.5 % $ (95,692) (12.8) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net earnings (loss) per share ​ $ 10.19 ​ ​ ​ $ 7.78 ​ ​ ​ $ (5.77) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average shares outstanding - diluted ​ 16,259 ​ ​ ​ 16,869 ​ 16,576 ​ ​ The following table presents the proportion of our consolidated net sales, including any net sales of Johnny Was and Lanier Apparel, by distribution channel for each period presented.
We have calculated all percentages based on actual data, but percentage columns may not add due to rounding. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal 2023 Fiscal 2022 Fiscal 2021 Net sales $ 1,571,475 100.0 % $ 1,411,528 100.0 % $ 1,142,079 100.0 % Cost of goods sold ​ 575,890 36.6 % 522,673 37.0 % 435,861 38.2 % Gross profit ​ 995,585 63.4 % 888,855 63.0 % 706,218 61.8 % SG&A ​ 820,705 52.2 % 692,004 49.0 % 573,636 50.2 % Impairment of goodwill and intangible assets ​ ​ 113,611 ​ 7.2 % ​ — ​ — % ​ — ​ — % Royalties and other operating income ​ 19,713 1.3 % 21,923 1.6 % 32,921 2.9 % Operating income ​ 80,982 5.2 % 218,774 15.5 % 165,503 14.5 % Interest expense, net ​ 6,036 0.4 % 3,049 0.2 % 944 0.1 % Earnings before income taxes ​ 74,946 4.8 % 215,725 15.3 % 164,559 14.4 % Income taxes ​ 14,243 0.9 % 49,990 3.5 % 33,238 2.9 % Net earnings ​ $ 60,703 3.9 % $ 165,735 11.7 % $ 131,321 11.5 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net earnings per share ​ $ 3.82 ​ ​ ​ $ 10.19 ​ ​ ​ $ 7.78 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average shares outstanding - diluted ​ 15,906 ​ ​ ​ 16,259 ​ 16,869 ​ ​ 47 Table of Contents The following table presents the proportion of our consolidated net sales, including any net sales of Johnny Was and Lanier Apparel, by distribution channel for each period presented.
The following table presents the proportion of net sales by distribution channel for Lilly Pulitzer for each period presented: ​ ​ ​ ​ ​ ​ ​ ​ Fiscal 2022 Fiscal 2021 Retail 33 % 34 % E-commerce 51 % 50 % Wholesale 16 % 16 % Total 100 % 100 % ​ Johnny Was: Johnny Was net sales were $73 million in the 19 weeks from September 19, 2022 through the end of the fiscal year.
The following table presents the proportion of net sales by distribution channel for Lilly Pulitzer for each period presented: ​ ​ ​ ​ ​ ​ ​ ​ Fiscal 2023 Fiscal 2022 Retail 33 % 33 % E-commerce 51 % 51 % Wholesale 16 % 16 % Total 100 % 100 % ​ Johnny Was: Johnny Was net sales were $203 million in Fiscal 2023.
The financial information included in the results of operations discussion below for Fiscal 2022, includes the 19 weeks from the September 19, 2022 acquisition date through January 28, 2023 only.
The financial information included in the results of operations discussion below for Fiscal 2022, includes only the nineteen weeks from the September 19, 2022 acquisition through January 28, 2023. Therefore, the amounts included in the results of operations below for Fiscal 2022 are not indicative of results for a full year.
During Fiscal 2022, we used cash to repurchase $95 million of shares, consisting of repurchased shares of our stock pursuant to an open market stock repurchase program and equity awards in respect of employee tax withholding liabilities, to pay $35 million of dividends and to pay $2 million of contingent consideration for the final contingent consideration payment related to the TBBC acquisition, which is included in other financing activities.
In Fiscal 2022, we repurchased $95 million of shares, including repurchased shares of our stock pursuant to an open market stock repurchase program and of equity awards in respect of employee tax withholding liabilities; paid 59 Table of Contents $35 million of dividends; and paid $2 million of contingent consideration for the final contingent consideration payment related to the TBBC acquisition.
The planned increase is primarily due to increased investment in our various technology systems initiatives, the commencement of a significant multi-year project at our Lyons, Georgia distribution center to modernize the operations into a more efficient e-commerce distribution center for our brands, increased Marlin Bar openings, the addition of Johnny Was, which is increasing its store count by 10 or more stores this year and increases in store openings in our other brands.
The planned increase is primarily due the commencement of a significant multi-year project at our new Lyons, Georgia distribution center to modernize the operations into a more efficient e-commerce distribution center for our brands, increased investment in our various technology systems initiatives, increased Marlin Bar openings and increases in store openings in Tommy Bahama, Lilly Pulitzer, Johnny Was, Southern Tide and TBBC.
Key Operating Results The following table sets forth our consolidated operating results (in thousands, except per share amounts) for Fiscal 2022 and Fiscal 2021: ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal 2022 ​ Fiscal 2021 Net sales ​ $ 1,411,528 ​ $ 1,142,079 Operating income ​ $ 218,774 ​ $ 165,503 Net earnings ​ $ 165,735 ​ $ 131,321 Net earnings per diluted share ​ $ 10.19 ​ $ 7.78 Weighted average shares outstanding - diluted ​ 16,259 ​ 16,869 ​ Net earnings per diluted share were $10.19 in Fiscal 2022 compared to $7.78 in Fiscal 2021.
Key Operating Results The following table sets forth our consolidated operating results (in thousands, except per share amounts) for Fiscal 2023 and Fiscal 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal ​ Fiscal 2023 ​ Fiscal 2022 Net sales ​ $ 1,571,475 ​ $ 1,411,528 Operating income ​ $ 80,982 ​ $ 218,774 Net earnings ​ $ 60,703 ​ $ 165,735 Net earnings per diluted share ​ $ 3.82 ​ $ 10.19 Weighted average shares outstanding - diluted ​ 15,906 ​ 16,259 ​ Net earnings per diluted share were $3.82 in Fiscal 2023 compared to $10.19 in Fiscal 2022.
We believe our lifestyle brands have true competitive advantages, and we continue to invest in and leverage technology to serve our consumers when and where they want to be served.
However, we believe our lifestyle brands have true competitive advantages, and we continue to invest in our brands’ direct to consumer initiatives and distribution capabilities while further leveraging technology to serve our consumers when and where they want to be served.
Pursuant to the amended agreement, the interest rate applicable to our borrowings under the U.S. Revolving Credit Agreement will be based on either the Term Secured Overnight Financing Rate plus an applicable margin of 135 to 185 basis points or prime plus an applicable margin of 35 to 85 basis points. The U.S.
Revolving Credit Agreement is based on either the Term Secured Overnight Financing Rate plus an applicable margin of 135 to 185 basis points or prime plus an applicable margin of 25 to 75 basis points. The U.S.
While we have the option for a qualitative test, we performed a quantitative test for each test date in Fiscal 2022, Fiscal 2021 and Fiscal 2020. If our operating results, plans for the acquired business and/or macroeconomic conditions, anticipated results or other assumptions change after an acquisition, it could result in the impairment of the acquired intangible assets or goodwill.
If our operating results, plans for the acquired business and/or macroeconomic conditions, anticipated results or other assumptions change after an acquisition, it could result in the impairment of the acquired intangible assets or goodwill.
Thus, if the Johnny Was business does not achieve the anticipated growth and operating income in future years or if interest rates or tax rates increase, the Johnny Was intangible assets and/or goodwill could be determined to be impaired in the future.
Thus, if the Johnny Was business does not achieve the anticipated growth and operating income in future years or if interest rates or tax rates increase, additional impairments of the Johnny Was intangible assets could be necessary in the future. No impairment charges related to intangible assets or goodwill were recognized in Fiscal 2022 and Fiscal 2021.
RECENT ACCOUNTING PRONOUNCEMENTS Refer to Note 1 of our consolidated financial statements included in this report for a discussion of recent accounting pronouncements issued by the FASB that we have not yet adopted that may have a material effect on our financial position, results of operations or cash flows in the future. 69 Table of Contents SEASONALITY Each of our operating groups is impacted by seasonality as the demand by specific product or style, as well as by distribution channel, may vary significantly depending on the time of year.
RECENT ACCOUNTING PRONOUNCEMENTS Refer to Note 1 of our consolidated financial statements included in this report for a discussion of recent accounting pronouncements issued by the FASB that we have not yet adopted that may have a material effect on our financial position, results of operations or cash flows in the future.
However, in some cases the assumptions or inputs associated with the determination of fair value may require the use of many assumptions which may be internally derived or otherwise unobservable. These assumptions may include the planned use of the assets, anticipated cash flows, probabilities of cash flows, discount rates and other factors.
Other Fair Value Measurements For many assets and liabilities, the determination of fair value may not require the use of many assumptions or other estimates. However, in some cases the assumptions or inputs associated with the determination of fair value may require the use of many assumptions which may be internally derived or otherwise unobservable.
If this analysis indicates an impairment of a trademark with an indefinite life or goodwill, the amount of the impairment is recognized based on the amount that the carrying value of the intangible asset or goodwill exceeds the estimated fair value.
If an annual or interim analysis indicates an impairment of an intangible asset with an indefinite useful life, the amount of the impairment is recognized in our consolidated financial statements based on the amount that the carrying value exceeds the estimated fair value of the asset for an intangible asset with an indefinite life or the reporting unit for goodwill.
The use of different assumptions related to the income tax matters above, as well as a shift in earnings among jurisdictions, changes in tax laws, enacted rates or interpretations, court case decisions, statute of limitation expirations or audit settlements, each could have a significant impact on our income tax rate.
Our assessment of these income tax matters requires our consideration of taxable income and other items for historical periods, projected future taxable income, projected future reversals of existing timing differences, tax planning strategies and other information. 66 Table of Contents The use of different assumptions related to the income tax matters above, as well as a shift in earnings among jurisdictions, changes in tax laws, enacted rates or interpretations, court case decisions, statute of limitation expirations or audit settlements, each could have a significant impact on our income tax rate.
Gross Profit The tables below present gross profit by operating group and in total for Fiscal 2022 and Fiscal 2021, as well as the change between those two periods and gross margin by operating group and in total.
The decrease in net sales was primarily due to the exit of Oxford America. Gross Profit The tables below present gross profit by operating group and in total for Fiscal 2023 and Fiscal 2022, as well as the change between those two periods and gross margin by operating group and in total.
Income taxes ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal 2022 Fiscal 2021 $ Change % Change Income tax expense ​ $ 49,990 ​ $ 33,238 ​ $ 16,752 50.4 % Effective tax rate ​ 23.2 % 20.2 % ​ ​ Both Fiscal 2022 and Fiscal 2021 benefitted from the net favorable impact of certain items that resulted in a lower tax rate than the more typical annual effective tax rate of between 25% and 26%.
Income taxes ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal 2023 Fiscal 2022 $ Change % Change Income tax expense ​ $ 14,243 ​ $ 49,990 ​ $ (35,747) (71.5) % Effective tax rate ​ 19.0 % 23.2 % ​ ​ Both Fiscal 2023 and Fiscal 2022 benefitted from the net favorable impact of certain items that resulted in a lower tax rate than the more typical annual effective tax rate of approximately 25%.
Furthermore, we believe lifestyle brands that create an emotional connection can command greater loyalty and higher price points and create licensing opportunities. We believe the attraction of a lifestyle brand depends on creating compelling product, effectively communicating the respective lifestyle brand message and distributing products to consumers where and when they want them.
We believe the attraction of a lifestyle brand depends on creating compelling product, effectively communicating the respective lifestyle brand message and distributing products to consumers where and when they want them.
Base rent amounts required to be paid in the future over the remaining lease terms under our existing leases as of January 28, 2023, totaled $336 million, including $83 million, $66 million, $50 million, $43 million and $30 million of required payments in each of the next five years.
Base rent amounts required to be paid in the future over the remaining lease terms under our existing leases as of February 3, 2024, totaled $368 million, including $79 million, $64 million, $58 million, $45 million and $39 million of required payments in each of the next five years.
We do recognize changes in markdown reserves during each quarter of the fiscal year as those amounts can be estimated on an interim basis.
Our policy of typically not adjusting the LIFO reserve at interim periods may result in significant LIFO accounting adjustments in the Fourth Quarter of the fiscal year. We do recognize changes in markdown reserves during each quarter of the fiscal year as those amounts can be estimated on an interim basis.
Such amounts incurred in Fiscal 2022 totaled $43 million. Refer to Note 1 and Note 6 of our consolidated financial statements for additional disclosures about our operating lease agreements and related commitments. Capital Expenditures: Our anticipated capital expenditures for Fiscal 2023 are expected to be approximately $90 million, as compared to $47 million in Fiscal 2022.
Such amounts incurred in Fiscal 2023 totaled $48 million. Refer to Note 1 and Note 7 of our consolidated financial statements for additional disclosures about our operating lease agreements and related commitments. Capital Expenditures: We anticipate capital expenditures for Fiscal 2024 to increase compared to the $74 million in Fiscal 2023.
As the amount to be ultimately realized for the goods is not necessarily known at period end, we must use certain assumptions considering historical experience, inventory quantity, quality, age and mix, historical sales trends, future sales projections, consumer and retailer preferences, market trends, general economic conditions and our anticipated plans to sell the inventory.
As the amount to be ultimately realized for the goods is not necessarily known at period end, we must use certain assumptions considering historical experience, inventory quantity, quality, age and mix, historical sales trends, future sales projections, consumer and retailer preferences, market trends, general economic conditions and our anticipated plans to sell the inventory. 63 Table of Contents For consolidated financial reporting, $146 million, or 92%, of our inventories were valued at the lower of the last-in, first-out (“LIFO”) cost or market after deducting the $83 million LIFO reserve as of February 3, 2024.
Our gross profit and gross margin, which is calculated as gross profit divided by net sales, may not be directly comparable to those of our competitors, as the statement of operations classification of certain expenses may vary by company. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal 2022 Fiscal 2021 $ Change % Change Tommy Bahama ​ $ 567,557 ​ $ 459,575 ​ $ 107,982 23.5 % Lilly Pulitzer ​ 225,028 ​ 201,145 ​ 23,883 11.9 % Johnny Was ​ 44,765 ​ — ​ 44,765 100.0 % Emerging Brands ​ 53,012 ​ 47,667 ​ 5,345 11.2 % Lanier Apparel ​ — ​ 12,256 ​ (12,256) (100.0) % Corporate and Other ​ (1,507) ​ (14,425) ​ 12,918 NM % Consolidated gross profit ​ $ 888,855 ​ $ 706,218 ​ $ 182,637 25.9 % Notable items included in amounts above: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ LIFO adjustments in Corporate and Other ​ $ 2,667 ​ $ 15,870 ​ ​ Inventory step-up charge included in Johnny Was ​ $ 4,230 ​ $ — ​ ​ ​ ​ ​ ​ Reduction of Lanier Apparel exit charges in cost of goods sold ​ $ — ​ $ (2,826) ​ ​ ​ ​ ​ ​ ​ 52 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ Fiscal 2022 Fiscal 2021 Tommy Bahama 64.5 % 63.5 % Lilly Pulitzer 66.3 % 67.3 % Johnny Was ​ 61.7 % — % Emerging Brands 45.5 % 52.9 % Lanier Apparel — % 49.3 % Corporate and Other NM % NM % Consolidated gross margin 63.0 % 61.8 % ​ The increased gross profit of 26% was primarily due to the 24% increase in net sales as well as increased consolidated gross margin.
Our gross profit and gross margin, which is calculated as gross profit divided by net sales, may not be directly comparable to those of our competitors, as the statement of operations classification of certain expenses may vary by company. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal 2023 Fiscal 2022 $ Change % Change Tommy Bahama ​ $ 579,118 ​ $ 567,557 ​ $ 11,561 2.0 % Lilly Pulitzer ​ 226,206 ​ 225,028 ​ 1,178 0.5 % Johnny Was ​ 137,567 ​ 44,765 ​ 92,802 NM % Emerging Brands ​ 61,798 ​ 53,012 ​ 8,786 16.6 % Corporate and Other ​ (9,104) ​ (1,507) ​ (7,597) NM % Consolidated gross profit ​ $ 995,585 ​ $ 888,855 ​ $ 106,730 12.0 % Notable items included in amounts above: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ LIFO adjustments in Corporate and Other ​ $ 9,605 ​ $ 2,667 ​ ​ Inventory step-up charge included in Johnny Was ​ $ — ​ $ 4,230 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal 2023 Fiscal 2022 Tommy Bahama 64.4 % 64.5 % Lilly Pulitzer 65.9 % 66.3 % Johnny Was ​ 67.8 % 61.7 % Emerging Brands 48.7 % 45.5 % Corporate and Other NM % NM % Consolidated gross margin 63.4 % 63.0 % ​ The increased gross profit of 12% was primarily due to the 11% increase in net sales as well as increased consolidated gross margin.
The 24% increase in net sales included double-digit percentage increases in each of our Tommy Bahama, Lilly Pulitzer, and Emerging Brands operating groups as well as $73 million of sales for Johnny Was, which we acquired during the Third Quarter of Fiscal 2022.
The 11% increase in net sales included (1) a $130 million increase in sales for Johnny Was, which we owned for 19 out of the 52 weeks of Fiscal 2022 and (2) single-digit percentage increases in each of our Tommy Bahama, Lilly Pulitzer, and Emerging Brands operating groups.
Trademarks with indefinite lives, which totaled $225 million as of January 28, 2023, and goodwill, which totaled $120 million as of January 28, 2023, are not amortized but instead evaluated, either qualitatively or quantitatively, for impairment annually as of the first day of our fourth quarter, or more frequently if events or circumstances indicate that the intangible asset or goodwill might be impaired.
Intangible assets with indefinite lives, which primarily consist of trademarks, are not amortized but instead evaluated for impairment annually or more frequently if events or circumstances indicate that the intangible asset might be impaired.
The apparel industry is cyclical and very dependent on the overall level and focus of discretionary consumer spending, which changes as consumer preferences and regional, domestic and international economic conditions change.
The apparel industry is cyclical and very dependent on the overall level and focus of discretionary consumer spending, which changes as consumer preferences and regional, domestic and international economic conditions change. Also, in recent years consumers have chosen to spend less of their discretionary spending on certain product categories, including apparel, while spending more on services and other product categories.
Emerging Brands: The lower gross margin for Emerging Brands was primarily due to more inventory markdowns and increased freight costs partially offset by a change in sales mix with direct to consumer sales representing a greater proportion of net sales. Lanier Apparel: There was no gross profit for Lanier Apparel in Fiscal 2022.
Emerging Brands: The higher gross margin for Emerging Brands was primarily due to (1) fewer inventory markdowns and (2) a change in sales mix with direct to consumer sales representing a greater proportion of net sales.
Other non-current liabilities as of January 28, 2023 decreased primarily due to decreases in deferred compensation liabilities. 61 Table of Contents Statement of Cash Flows The following table sets forth the net cash flows resulting in the change in our cash and cash equivalents (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal 2022 Fiscal 2021 Fiscal 2020 Cash provided by operating activities ​ $ 125,610 ​ $ 198,006 ​ $ 83,850 Cash used in investing activities ​ (151,747) ​ (181,572) ​ (34,651) Cash used in financing activities ​ (11,527) ​ (38,175) ​ (35,848) Net change in cash and cash equivalents ​ $ (37,664) ​ $ (21,741) ​ $ 13,351 ​ Cash and cash equivalents were $9 million as of January 28, 2023, compared to $45 million as of January 29, 2022.
Deferred income taxes decreased as of February 3, 2024, due primarily to the impairment of the Johnny Was goodwill and intangible asset balances that resulted in a change from a net deferred income tax liability position to a net deferred income tax asset position. 58 Table of Contents Statement of Cash Flows The following table sets forth the net cash flows resulting in the change in our cash and cash equivalents (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal 2023 Fiscal 2022 Fiscal 2021 Cash provided by operating activities ​ $ 244,284 ​ $ 125,610 ​ $ 198,006 Cash used in investing activities ​ (83,981) ​ (151,747) ​ (181,572) Cash used in financing activities ​ (161,172) ​ (11,527) ​ (38,175) Net change in cash and cash equivalents ​ $ (869) ​ $ (37,664) ​ $ (21,741) ​ Cash and cash equivalents were $8 million as of February 3, 2024, compared to $9 million as of January 28, 2023.
Our fair value assessment may also consider any comparable market transactions. The use of different assumptions related to these uncertain factors at acquisition could result in a material change to the amounts of intangible assets and goodwill initially recorded at acquisition, which could result in a material impact on our consolidated financial statements.
The use of different assumptions related to these uncertain factors at acquisition could result in a material change to the amounts of intangible assets and goodwill initially recorded at acquisition, which could result in a material impact on our consolidated financial statements. 64 Table of Contents The acquisition method requires us to record provisional amounts for any items for which the accounting is not complete at the end of a reporting period.
Investing Activities: In Fiscal 2022 and Fiscal 2021, investing activities used $152 million and $182 million of cash, respectively.
Financing Activities: In Fiscal 2023 and Fiscal 2022, financing activities used $161 million and $12 million of cash, respectively.
The 21% increase in SG&A in Fiscal 2022 included (1) increased employment costs of $54 million, including increases in retail store, food and beverage and distribution center operations and other functions, as well as higher stock compensation, employee benefits and bonus amounts, (2) a $22 million increase in advertising expense, (3) an $18 million increase in variable expenses related to higher sales, including credit card transaction fees, supplies, 54 Table of Contents commissions, royalties and other expenses, (4) a $12 million increase in occupancy expenses, including increases in percentage rent, occupancy related operating costs and base rent, (5) a $5 million increase in amortization of intangible assets expense, due to the amortization associated with Johnny Was, (6) $3 million of higher travel expenses, (7) $3 million of charges related to transaction expenses and integration costs associated with the Johnny Was acquisition, (8) a $3 million increase in administrative expenses including professional fees and other items, and (9) a $2 million increase in depreciation expense.
The 19% increase in total SG&A in Fiscal 2023 included the following, each of which includes the SG&A of Johnny Was: (1) increased employment costs of $46 million, primarily due to increased head count, pay rate increases and other employment cost increases, including in our direct to 51 Table of Contents consumer and distribution center operations partially offset by lower incentive compensation amounts, (2) a $22 million increase in advertising expense, (3) a $15 million increase in occupancy expenses, (4) a $12 million increase in variable expenses related to higher sales, including credit card transaction fees, supplies, commissions, royalties and other expense, (5) a $9 million increase in amortization of intangible assets, (6) a $6 million increase in depreciation expense and (7) a $5 million increase in administrative expenses including professional fees, travel and other items.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeItem 7A. Quantitative and Qualitative Disclosures About Market Risk We are exposed to market risk in the ordinary course of business from changes in interest rates, foreign currency exchange rates and commodity prices.
Biggest changeItem 7A. Quantitative and Qualitative Disclosures About Market Risk We are exposed to market risk in the ordinary course of business from changes in interest rates, commodity prices and foreign currency exchange rates.
Inflation/deflation risks are managed by each operating group, when possible, through negotiating product prices in advance, selective price increases and cost containment initiatives. We have not historically entered into significant long-term sales or purchase contracts or engaged in hedging activities with respect to our commodity risks. 70 Table of Contents ​ ​
Inflation/deflation risks are managed by each operating group, when possible, through negotiating product prices in advance, selective price increases and cost containment initiatives. We have not historically entered into significant long-term sales or purchase contracts or engaged in hedging activities with respect to our commodity risks. 68 Table of Contents
Also, although we purchase substantially all of our product purchases pursuant to a U.S. dollar denominated arrangement, future product costs could increase as a result of fluctuations in the exchange rate between the U.S. dollar and the local currencies of our suppliers.
Also, although we purchase substantially all of our product purchases pursuant to a U.S. dollar 67 Table of Contents denominated arrangement, future product costs could increase as a result of fluctuations in the exchange rate between the U.S. dollar and the local currencies of our suppliers.
Commodity and Inflation Risk We are affected by inflation and changing prices through the purchase of full-package finished goods from suppliers, who manufacture products consisting of various raw material components, including fabrics made of cotton, silk, linen, nylon, leather, tencel and other natural and man-made fibers, or blends of two or more of these materials.
Commodity and Inflation Risk We are affected by inflation and changing prices through the purchase of full-package finished goods from suppliers, who manufacture products consisting of various raw material components, including fabrics made of cotton, silk, linen, polyester, cellulosic fibers, leather and other natural and man-made fibers, or blends of two or more of these materials.
We do not consider that amount to necessarily be indicative of the average borrowings outstanding expected for Fiscal 2023 due to our expectation that we will reduce debt levels during Fiscal 2023, particularly after the first quarter.
We do not consider that amount to necessarily be indicative of the average borrowings outstanding expected for Fiscal 2024 due to our expectation that we will reduce debt levels during Fiscal 2024, particularly in the first quarter.
Our expected cash flows from operations is expected to be sufficient to fund our planned capital expenditures and dividends as well as allow for the repayment of some of our outstanding debt in Fiscal 2023.
Our expected cash flows from operations is expected to be sufficient to fund our planned capital expenditures and dividends as well as allow for the repayment of a portion of our outstanding debt in Fiscal 2024.
Revolving Credit Agreement we pay unused line fees, which are based on a specified percentage of the unused line amounts. As of January 28, 2023, we had $119 million of borrowings outstanding under our U.S. Revolving Credit Agreement, after borrowing amounts to fund the Johnny Was acquisition in September 2022.
Revolving Credit Agreement we pay unused line fees, which are based on a specified percentage of the unused line amounts. As of February 3, 2024, we had $29 million of borrowings outstanding under our U.S. Revolving Credit Agreement, after borrowing amounts to fund the Johnny Was acquisition in Fiscal 2022.
As of March 24, 2023, the weighted average interest rate on our borrowings was 6%, which includes borrowings pursuant to arrangements based on the Term Secured Overnight Financing Rate or the lender’s prime rate plus an applicable margin.
As of February 3, 2024, the weighted average interest rate on our borrowings was 7%, which includes borrowings pursuant to arrangements based on the Term Secured Overnight Financing Rate or the lender’s prime rate plus an applicable margin.
Using the $119 million of variable-rate debt outstanding as of January 28, 2023 as an example, a 100 basis point increase in interest rates would increase interest expense by less than $1 million.
Using the $29 million of variable-rate debt outstanding as of February 3, 2024 as an example, a 100 basis point increase in interest rates would increase interest expense by less than $1 million.

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