Oxford Industries
Annual Report 2017

Plain-text annual report

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549FORM 10-KýANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE ACT OF 1934For the fiscal year ended January 28, 2017oroTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE ACT OF 1934For the transition period from to Commission File Number: 1-4365OXFORD INDUSTRIES, INC.(Exact name of registrant as specified in its charter)Georgia(State or other jurisdiction of incorporation or organization) 58-0831862(I.R.S. Employer Identification No.)999 Peachtree Street, N.E., Suite 688, Atlanta, Georgia 30309 (Address of principal executive offices) (Zip Code)Registrant's telephone number, including area code: (404) 659-2424Securities registered pursuant to Section 12(b) of the Act:Title of each class Name of each exchange on which registeredCommon Stock, $1 par value New York Stock ExchangeSecurities registered pursuant to Section 12(g) of the Act:NONEIndicate by check mark if the registrant is a well-known seasoned issuer as defined in Rule 405 of the Securities Act. Yes ý No oIndicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No ýIndicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No oIndicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted andposted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post suchfiles). Yes ý No oIndicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant'sknowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ýIndicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of"large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.Large accelerated filer ýAccelerated filer oNon-accelerated filer oSmaller reporting company oIndicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No ýAs of July 29, 2016, which is the last business day of the registrant's most recently completed second fiscal quarter, the aggregate market value of the voting stock held bynon-affiliates of the registrant (based upon the closing price for the common stock on the New York Stock Exchange on that date) was $928,252,209. For purposes of this calculationonly, shares of voting stock directly and indirectly attributable to executive officers, directors and holders of 10% or more of the registrant's voting stock (based on Schedule 13Gfilings made as of or prior to July 29, 2016) are excluded. This determination of affiliate status and the calculation of the shares held by any such person are not necessarily conclusivedeterminations for other purposes.Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of the latest practicable date.Title of Each Class Number of Shares Outstandingas of March 15, 2017Common Stock, $1 par value 16,768,230Documents Incorporated by ReferencePortions of our proxy statement to be filed with the Securities and Exchange Commission pursuant to Regulation 14A relating to the Annual Meeting of Shareholders ofOxford Industries, Inc. to be held on June 14, 2017 are incorporated by reference in Part III of this Form 10-K.Table of Contents PagePART IItem 1.Business5Item 1A.Risk Factors23Item 1B.Unresolved Staff Comments35Item 2.Properties35Item 3.Legal Proceedings36Item 4.Mine Safety Disclosures36PART IIItem 5.Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of EquitySecurities37Item 6.Selected Financial Data38Item 7.Management's Discussion and Analysis of Financial Condition and Results of Operations39Item 7A.Quantitative and Qualitative Disclosures About Market Risk67Item 8.Financial Statements and Supplementary Data69Item 9.Changes in and Disagreements With Accountants on Accounting and Financial Disclosure105Item 9A.Controls and Procedures105Item 9B.Other Information107PART IIIItem 10.Directors, Executive Officers and Corporate Governance107Item 11.Executive Compensation107Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters108Item 13.Certain Relationships and Related Transactions, and Director Independence108Item 14.Principal Accounting Fees and Services108PART IVItem 15.Exhibits, Financial Statement Schedules108Signatures 111CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING STATEMENTSOur SEC filings and public announcements may include forward-looking statements about future events. Generally, the words "believe," "expect,""intend," "estimate," "anticipate," "project," "will" and similar expressions identify forward-looking statements, which generally are not historical in nature.We intend for all forward-looking statements contained herein, in our press releases or on our website, and all subsequent written and oral forward-lookingstatements attributable to us or persons acting on our behalf, to be covered by the safe harbor provisions for forward-looking statements within the meaningof the Private Securities Litigation Reform Act of 1995 and the provisions of Section 27A of the Securities Act of 1933 and Section 21E of the SecuritiesExchange Act of 1934 (which Sections were adopted as part of the Private Securities Litigation Reform Act of 1995). Such statements are subject to a numberof risks, uncertainties and assumptions including, without limitation, competitive conditions, which may be impacted by evolving consumer shoppingpatterns; the impact of economic conditions on consumer demand and spending for apparel and related products, particularly in light of general economicuncertainty; changes in international, federal or state tax, trade and other laws and regulations, including changes in corporate tax rates, quota restrictions orthe imposition of safeguard controls; demand for our products; timing of shipments requested by our wholesale customers; expected pricing levels; retentionof and disciplined execution by key management; the timing and cost of store openings and of planned capital expenditures; weather; costs of products aswell as the raw materials used in those products; costs of labor; acquisition and disposition activities; expected outcomes of pending or potential litigationand regulatory actions; access to capital and/or credit markets; our ability to timely recognize our expected synergies from any acquisitions we pursue; andfactors that could affect our consolidated effective tax rate such as the results of foreign operations or stock based compensation. Forward-looking statementsreflect our current expectations, based on currently available information, and are not guarantees of performance. Although we believe that the expectationsreflected in such forward-looking statements are reasonable, these expectations could prove inaccurate as such statements involve risks and uncertainties,many of which are beyond our ability to control or predict. Should one or more of these risks or uncertainties, or other risks or uncertainties not currentlyknown to us or that we currently deem to be immaterial, materialize, or should underlying assumptions prove incorrect, actual results may vary materiallyfrom those anticipated, estimated or projected. Important factors relating to these risks and uncertainties include, but are not limited to, those described inPart I, Item 1A. Risk Factors and elsewhere in this report and those described from time to time in our future reports filed with the SEC. We caution that oneshould not place undue reliance on forward-looking statements, which speak only as of the date on which they are made. We disclaim any intention,obligation or duty to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as requiredby law.DEFINITIONSAs used in this report, unless the context requires otherwise, "our," "us" or "we" means Oxford Industries, Inc. and its consolidated subsidiaries; "SG&A"means selling, general and administrative expenses; "SEC" means U.S. Securities and Exchange Commission; "FASB" means Financial Accounting StandardsBoard; "ASC" means the FASB Accounting Standards Codification; "GAAP" means generally accepted accounting principles in the United States; and"discontinued operations" means the assets and operations of our former Ben Sherman operating group which we sold in July 2015. Unless otherwiseindicated, all references to assets, liabilities, revenues, expenses or other information in this report reflect continuing operations and exclude any amountsrelated to the discontinued operations of our former Ben Sherman operating group. Additionally, the3terms listed below reflect the respective period noted:Fiscal 201852 weeks ending February 2, 2019Fiscal 201753 weeks ending February 3, 2018Fiscal 201652 weeks ended January 28, 2017Fiscal 201552 weeks ended January 30, 2016Fiscal 201452 weeks ended January 31, 2015Fiscal 201352 weeks ended February 1, 2014Fiscal 201253 weeks ended February 2, 2013Fourth quarter Fiscal 201714 weeks ending February 3, 2018Third quarter Fiscal 201713 weeks ending October 28, 2017Second quarter Fiscal 201713 weeks ending July 29, 2017First quarter Fiscal 201713 weeks ending April 29, 2017Fourth quarter Fiscal 201613 weeks ended January 28, 2017Third quarter Fiscal 201613 weeks ended October 29, 2016Second quarter Fiscal 201613 weeks ended July 30, 2016First quarter Fiscal 201613 weeks ended April 30, 2016Fourth quarter Fiscal 201513 weeks ended January 30, 2016Third quarter Fiscal 201513 weeks ended October 31, 2015Second quarter Fiscal 201513 weeks ended August 1, 2015First quarter Fiscal 201513 weeks ended May 2, 20154PART IItem 1. BusinessBUSINESS AND PRODUCTSOverviewWe are a global apparel company that designs, sources, markets and distributes products bearing the trademarks of our Tommy Bahama®, LillyPulitzer® and Southern Tide® lifestyle brands, other owned brands and licensed brands as well as private label apparel products. During Fiscal 2016, 92% ofour net sales were from products bearing brands that we own and 66% of our net sales were through our direct to consumer channels of distribution. In Fiscal2016, 96% of our consolidated net sales were to customers located in the United States, with the sales outside the United States consisting primarily of ourTommy Bahama products in Canada and the Asia-Pacific region.Our business strategy is to develop and market compelling lifestyle brands and products that evoke a strong emotional response from our targetconsumers. We consider lifestyle brands to be those brands that have a clearly defined and targeted point of view inspired by an appealing lifestyle orattitude. Furthermore, we believe lifestyle brands like Tommy Bahama, Lilly Pulitzer and Southern Tide that create an emotional connection with consumerscan command greater loyalty and higher price points at retail and create licensing opportunities, which may drive higher earnings. We believe the attractionof a lifestyle brand depends on creating compelling product, effectively communicating the respective lifestyle brand message and distributing products toconsumers where and when they want it. Our ability to compete successfully in styling and marketing is directly related to our proficiency in foreseeing changes and trends in fashion andconsumer preference, and presenting appealing products for consumers. Our design-led, commercially informed lifestyle brand operations strive to provideexciting, differentiated products each season.To further strengthen each lifestyle brand's connections with consumers, we directly communicate with consumers through electronic and print mediaon a regular basis. We believe our ability to effectively communicate the images, lifestyle and products of our brands and create an emotional connectionwith consumers is critical to the success of the brands. Our advertising for our brands often attempts to convey the lifestyle of the brand as well as a specificproduct.We distribute our owned lifestyle branded products primarily through our direct to consumer channels, consisting of our Tommy Bahama and LillyPulitzer full-price retail stores and our e-commerce sites for Tommy Bahama, Lilly Pulitzer and Southern Tide, and through our wholesale distributionchannels. Our direct to consumer operations provide us with the opportunity to interact directly with our customers, present to them a broad assortment of ourcurrent season products and immerse them in the theme of the lifestyle brand. We believe that presenting our products in a setting specifically designed toshowcase the lifestyle on which the brands are based enhances the image of our brands. Our 128 Tommy Bahama and 40 Lilly Pulitzer full-price retail storesprovide high visibility for our brands and products, and allow us to stay close to the preferences of our consumers, while also providing a platform for long-term growth for the brands. In Tommy Bahama, we also operate 17 restaurants, generally adjacent to a Tommy Bahama full-price retail store location, whichwe believe further enhance the brand's image with consumers.Additionally, our e-commerce websites, which represented 18% of our consolidated net sales in Fiscal 2016, provide the opportunity to increaserevenues by reaching a larger population of consumers and at the same time allow our brands to provide a broader range of products. Our e-commerce flashclearance sales on our websites and our 40 Tommy Bahama outlet stores play an important role in overall brand and inventory management by allowing us tosell discontinued and out-of-season products in brand appropriate settings and often at better prices than are typically available from third party off-priceretailers.The wholesale operations of our lifestyle brands complement our direct to consumer operations and provide access to a larger group of consumers. Aswe seek to maintain the integrity of our lifestyle brands by limiting promotional activity in our full-price retail stores and e-commerce websites, we generallytarget wholesale customers that follow this same approach in their stores. Our wholesale customers for our Tommy Bahama, Lilly Pulitzer and Southern Tidebrands include better department stores and specialty stores, including Signature Stores for Lilly Pulitzer and Southern Tide. Within our Lanier Appareloperating group, we sell tailored clothing and sportswear products under licensed brands, private labels and owned brands. Lanier Apparel's customersinclude department stores, discount and off-price retailers, warehouse clubs, national chains, specialty retailers and others throughout the United States.All of our operating groups operate in highly competitive apparel markets in which numerous U.S.-based and foreign apparel firms compete. Nosingle apparel firm or small group of apparel firms dominates the apparel industry, and our direct5competitors vary by operating group and distribution channel. We believe the principal competitive factors in the apparel industry are reputation, value, andimage of brand names; design; consumer preference; price; quality; marketing; product fulfillment capabilities; and customer service. The apparel industry iscyclical and very dependent upon the overall level and focus of discretionary consumer spending, which changes as regional, domestic and internationaleconomic conditions change. Often, negative economic conditions have a longer and more severe impact on the apparel industry than on other industries. We believe current global economic conditions and the resulting economic uncertainty continue to impact our business, and the apparel industry as a whole.We believe the retail apparel market is evolving very rapidly and in ways that are having a disruptive impact on traditional fashion retailing. Theapplication of technology, including the internet and mobile devices, to fashion retail provides consumers increasing access to multiple, responsivedistribution platforms and an unprecedented ability to communicate directly with brands, retailers and others. As a result, consumers have more informationand broader, faster and cheaper access to goods than they have ever had before. This, along with the coming of age of the “millennial” generation, isrevolutionizing the way that consumers shop for fashion and other goods. The evidence is increasingly apparent with marked weakness in department storesand mall-based retailers, decreased consumer retail traffic, a more promotional retail environment, expansion of off-price and discount retailers, and growinginternet purchases.Important factors relating to certain risks, many of which are beyond our ability to control or predict, which could impact our business are described inPart I, Item 1A. Risk Factors of this report.Investments and OpportunitiesWhile evolution in the fashion retail industry presents significant risks, especially for traditional retailers who fail or are unable to adapt, we believeit also presents a tremendous opportunity for brands and retailers. We believe our brands have attributes that are true competitive advantages in this newretailing paradigm and we are leveraging technology to serve our consumers when and where they want to be served. We continue to believe that our lifestylebrands are well suited to succeed and thrive in the long term while managing the various challenges facing our industry.Specifically, we believe our lifestyle brands have opportunities for long-term growth in their direct to consumer businesses. We anticipate increasedsales in our e-commerce operations, which are expected to grow at a faster rate than bricks and mortar comparable full-price retail store sales. This growth canalso be achieved through prudent expansion of bricks and mortar full-price retail store operations and modest comparable full-price retail store salesincreases. Despite the changes in the retail environment, we expect there will continue to be desirable locations to increase our store count.Our lifestyle brands also have an opportunity for modest sales increases in their wholesale businesses in the long term primarily from currentcustomers adding to their existing door count and increasing their on-line business, increased sales to on-line retailers and the selective addition of newwholesale customers who generally follow a retail model with limited discounting; however, we must be diligent in our effort to avoid compromising theintegrity of the brand by maintaining or growing sales with wholesale customers that may not be aligned with our long-term strategy. This is particularlyimportant with the challenges in the department store channel, which represents about one-half of our consolidated wholesale sales, or 16% of ourconsolidated net sales. We also believe that there are opportunities for modest sales growth for Lanier Apparel in the future through new product programs forexisting and new customers.We believe we must continue to invest in our lifestyle brands to take advantage of their long-term growth opportunities. Investments include capitalexpenditures primarily related to the direct to consumer operations such as technology enhancements, e-commerce initiatives, full-price retail store andrestaurant build-out for new and relocated locations as well as remodels, and distribution center and administrative office expansion initiatives. Additionally,while we anticipate increased employment, advertising and other costs in key functions to support the ongoing business operations and fuel future salesgrowth, we remain focused on appropriately managing our operating expenses.In the midst of the challenges in our industry, an important focus for us in Fiscal 2017 is advancing various initiatives to increase the profitability ofthe Tommy Bahama business. These initiatives generally focus on increasing gross margin and operating margin through efforts such as: product costreductions; selective price increases; reducing inventory purchases; more rapidly clearing excess inventory; redefining our approach to inventory clearance;effectively managing controllable and discretionary operating expenses; taking a more conservative approach to full-price retail store and outlet openingsand renewals; and continuing our efforts to reduce Asia-Pacific operating losses.We continue to believe it is important to maintain a strong balance sheet and liquidity. We believe positive cash flow from operations in the futurecoupled with the strength of our balance sheet and liquidity will provide us with sufficient6resources to fund future investments in our owned lifestyle brands. While we believe we have significant opportunities to appropriately deploy our capitaland resources in our existing lifestyle brands, we will continue to evaluate opportunities to add additional lifestyle brands to our portfolio if we identifyappropriate targets which meet our investment criteria.We believe that an attractive acquisition target would most likely be a lifestyle brand that has a strong emotional connection with its consumer andhas a disciplined distribution model consisting of wholesale customers with limited discounting and/or a direct to consumer distribution model via e-commerce or full-price retail stores. Further, while our existing businesses are primarily apparel brands, we could also be interested in a company with a moresignificant concentration in accessories, footwear or other product categories. The acquisition of a premier lifestyle brand is a meticulous process as such abrand is not available very often, and we most likely would have stiff competition from both strategic and private equity firms.Operating GroupsOur business is primarily operated through our Tommy Bahama, Lilly Pulitzer, Lanier Apparel and Southern Tide operating groups. We identify ouroperating groups based on the way our management organizes the components of our business for purposes of allocating resources and assessingperformance. Our operating group structure reflects a brand-focused management approach, emphasizing operational coordination and resource allocationacross each brand's direct to consumer, wholesale and licensing operations, as applicable.Tommy Bahama, Lilly Pulitzer and Southern Tide each design, source, market and distribute apparel and related products bearing their respectivetrademarks and also license their trademarks for other product categories, while Lanier Apparel designs, sources and distributes branded and private labelmen's tailored clothing, sportswear and other products. Corporate and Other is a reconciling category for reporting purposes and includes our corporateoffices, substantially all financing activities, elimination of inter-segment sales, LIFO inventory accounting adjustments, other costs that are not allocated tothe operating groups and operations of our other businesses which are not included in our operating groups, including our Lyons, Georgia distribution centeroperations. Our LIFO inventory pool does not correspond to our operating group definitions; therefore, LIFO inventory accounting adjustments are notallocated to our operating groups.For additional information about each of our operating groups, see Part II, Item 7. Management's Discussion and Analysis of Financial Condition andResults of Operations, and Note 2 to our consolidated financial statements, each included in this report. The table below presents net sales and operatinginformation about our operating groups (in thousands). Fiscal 2016Fiscal 2015Net Sales Tommy Bahama$658,911$658,467Lilly Pulitzer233,294204,626Lanier Apparel100,753105,106Southern Tide27,432—Corporate and Other2,1981,091Total$1,022,588$969,290Operating Income (Loss) Tommy Bahama$44,101$65,993Lilly Pulitzer51,99542,525Lanier Apparel6,9557,700Southern Tide(282)—Corporate and Other (1)(12,885)(18,704)Total operating income$89,884$97,514(1)The Fiscal 2016 and Fiscal 2015 operating loss for Corporate and Other included a LIFO accounting credit of $5.9 million and a LIFO accountingcharge of $0.3 million, respectively.7The table below presents the total assets of each of our operating groups (in thousands). January 28,2017January 30,2016Assets Tommy Bahama$451,990$458,234Lilly Pulitzer126,506115,419Lanier Apparel30,26935,451Southern Tide96,208—Corporate and Other(19,814)(26,414)Total$685,159$582,690Total assets for Corporate and Other include LIFO reserves of $58.0 million and $59.4 million as of January 28, 2017 and January 30, 2016,respectively.Tommy BahamaTommy Bahama designs, sources, markets and distributes men's and women's sportswear and related products. The target consumers of Tommy Bahamaare primarily affluent men and women age 35 and older who embrace a relaxed and casual approach to daily living. Tommy Bahama products can be found inour Tommy Bahama stores and on our Tommy Bahama e-commerce website, tommybahama.com, as well as in better department stores and independentspecialty stores throughout the United States. We also operate Tommy Bahama restaurants and license the Tommy Bahama name for various productcategories. During Fiscal 2016, 95% of Tommy Bahama's sales were to customers within the United States, with the remaining sales in Canada, Australia andAsia.We believe that the attraction of the Tommy Bahama brand to our consumers is a reflection of our efforts over many years of maintaining appropriatequality and design of our Tommy Bahama apparel, accessories and licensed products, limiting the distribution of Tommy Bahama products to a select tier ofretailers, and effectively communicating the relaxed and casual Tommy Bahama lifestyle to consumers. We expect to continue to follow this approach for thebrand in the future. We believe that the retail sales value of all Tommy Bahama branded products sold during Fiscal 2016, including our estimate of retailsales by our wholesale customers and other third party retailers, was approximately $1.2 billion.We believe there is ample opportunity to expand the reach of the Tommy Bahama brand, while at the same time maintaining the select distribution thatTommy Bahama has historically maintained. We believe that in order to take advantage of opportunities for long-term growth, we must continue to invest inthe Tommy Bahama brand. These investments include amounts associated with capital expenditures and ongoing expenses to enhance e-commerce and othertechnology capabilities; capital expenditures and pre-opening expenses of new stores and restaurants; the remodeling and relocation of existing stores andrestaurants; and capital expenditures related to distribution and other facilities.We believe there are opportunities for continued growth in the United States through direct to consumer expansion and wholesale channels ofdistribution. However, an important focus for us in Fiscal 2017 is advancing various initiatives to increase the profitability of the Tommy Bahama business.These initiatives generally focus on:•Increasing gross margins through product cost reductions and selective price increases to combat the shift of a greater proportion of our sales to periodsof our marketing events;•Reducing inventory purchases and more rapidly clearing excess inventory to reduce clearance losses, particularly on women's products which are oftencostly to liquidate;•Redefining our approach to inventory clearance by marking down certain products in our full-price retail stores during traditional end of seasonclearance periods for the apparel retail industry, by selling additional amounts for certain product categories to third party off-price retailers ifnecessary, and by improving the presentation and offer in our outlet stores to increase sales and gross margins of products sold on clearance;•Effectively managing controllable and discretionary operating expenses including employment costs;•Taking a more conservative approach to full-price retail store and outlet openings and renewals given the ongoing decline in consumer traffic andrelated challenges; and•Continuing our efforts to reduce Asia-Pacific losses, with a targeted Fiscal 2017 Asia-Pacific loss of approximately $5 million compared to $7 millionin Fiscal 2016.8In recent years we began expansion of the Tommy Bahama brand into international markets. These efforts included the acquisition of the assets andoperations of the Tommy Bahama business from our former licensees in Australia in Fiscal 2012 and Canada in Fiscal 2013. The licensees in each of thesecountries had developed a certain level of brand awareness, but we determined that after considering the potential direct to consumer and wholesale growthopportunities in those countries, it was appropriate for us to re-acquire the rights to the operations. We also commenced operations in Asia by opening retailstore locations in Asia beginning in Fiscal 2012. The operations in Asia thus far have generated operating losses as we developed a significant Hong Kong-based team and infrastructure to support a larger Asia retail operation. The roll-out of retail stores in Asia was at a modest pace as we attempted to focus onimproving store operations in Asia. As a lifestyle brand, we continue to believe it is appropriate that in certain key markets we initially set the tone for thebrand rather than engaging a partner. However, in the future, we may engage a local partner to accelerate growth in certain markets.Consistent with the prior year, our near term focus in the Asia-Pacific region remains on our direct to consumer operations in Australia and Japan whileat the same time further reducing our infrastructure costs in Hong Kong to better align with the footprint of our current Asia retail operations. During Fiscal2015 and Fiscal 2016, we closed our retail stores in Macau and Singapore and outlet stores in Hong Kong and Japan, with only one store remaining in HongKong. These closures result in our Asia-Pacific retail operations primarily consisting of stores in Australia and Japan. By focusing on Australia and Japan webelieve we can do a better job of increasing brand awareness and sales by focusing our marketing spend in a location where the consumer has a variety ofoptions for purchasing Tommy Bahama product, including our own retail stores, our wholesale customers' stores and, in the case of Japan, an in-countryTommy Bahama website. While we believe there are long-term opportunities for our Tommy Bahama operations in the Asia-Pacific region, we believe thatthe operating losses associated with these operations will continue to put downward pressure on our operating margin in the near future until we havesufficient sales to leverage the operating costs or have identified partners for jurisdictions which are not profitable.Design, Sourcing, Marketing and DistributionTommy Bahama products are designed by product specific teams who focus on the target consumer. The design process includes feedback from buyers,consumers and sales agents, along with market trend research. Our Tommy Bahama 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.We operate a buying office located in Hong Kong to manage the production and sourcing of the substantial majority of our Tommy Bahama products.During Fiscal 2016, we utilized approximately 250 suppliers to manufacture our Tommy Bahama products. In Fiscal 2016, 73% of Tommy Bahama's productpurchases were from manufacturers in China. The largest 10 suppliers of Tommy Bahama products provided 43% of the products acquired during Fiscal2016, with no individual supplier providing greater than 10%.We believe that advertising and marketing are an integral part of the long-term strategy for the Tommy Bahama brand, and we therefore devotesignificant resources to advertising and marketing. While the advertising for Tommy Bahama promotes our products, the primary emphasis is on brand imageand brand lifestyle. Tommy Bahama's advertising attempts to engage individuals within the brand's consumer demographic and guide them on a regular basisto our retail stores, e-commerce websites or wholesale customers' stores in search of our products. The marketing of the Tommy Bahama brand includes email,internet and social media advertising and traditional media such as catalogs, print and other correspondence with customers, as well as moving media andtrade show initiatives. As a lifestyle brand, we believe that it is very important that Tommy Bahama communicate regularly with consumers via the use ofemail, internet and social media about product offerings or other brand events in order to maintain and strengthen Tommy Bahama's connections with itsconsumers.We also believe that highly visible full-price retail store locations with creative design, broad merchandise selection and brand appropriate visualpresentation are key enticements for customers to visit our full-price retail stores and buy merchandise. We intend that our full-price retail stores enhance theshopping experience of our customers, which we believe will increase consumer brand loyalty. Marketing initiatives at our full-price retail stores may includespecial event promotions and a variety of public relations activities designed to create awareness of our products.In addition, we utilize loyalty award cards, Flip-Side events and Friends & Family events to drive traffic to our stores and websites. These initiatives areeffective in increasing traffic as the proportion of our sales that occur during our marketing initiatives have increased in recent years. We believe ourtraditional and electronic media communications increase the sales of our own full-price retail stores and e-commerce operations, as well as the sales of ourproducts for our wholesale customers.For certain of our wholesale customers, we also provide point-of-sale materials and signage to enhance the presentation of our products at their retaillocations and/or participate in cooperative advertising programs.We operate a Tommy Bahama distribution center in Auburn, Washington, which serves our North America direct to consumer and wholesaleoperations. Activities at the distribution center include receiving finished goods from suppliers,9inspecting the products and shipping the products to our Tommy Bahama stores, our wholesale customers and our e-commerce customers. We seek tomaintain sufficient levels of Tommy Bahama inventory at the distribution center to support our direct to consumer operations, as well as pre-booked ordersand some limited replenishment ordering for our wholesale customers. We use local third party distribution centers for our Asia-Pacific operations.Direct to Consumer OperationsA key component of our Tommy Bahama growth strategy is to operate our own stores and e-commerce websites, which we believe permits us todevelop and build brand awareness by presenting our products in a setting specifically designed to showcase the aspirational lifestyle on which the productsare based. Our Tommy Bahama direct to consumer channels, which consist of retail store, e-commerce and restaurant operations, in the aggregate, represented77% of Tommy Bahama's net sales in Fiscal 2016. We expect the percentage of our Tommy Bahama sales which are direct to consumer sales will increaseslightly in future years as we anticipate that the direct to consumer distribution channel will grow at a faster pace than the wholesale distribution channel.Retail store, e-commerce and restaurant net sales accounted for 50%, 16% and 11%, respectively, of Tommy Bahama's net sales in Fiscal 2016.Our direct to consumer strategy for the Tommy Bahama brand includes locating and operating full-price retail stores in upscale malls, lifestyleshopping centers, resort destinations and brand-appropriate street locations. Generally, we seek shopping areas and malls with high-profile or upscaleconsumer brands for our full-price retail stores. As of January 28, 2017, the majority of our Tommy Bahama full-price retail stores were in street-frontlocations or lifestyle centers with the remainder primarily in regional indoor malls. Our full-price retail stores allow us the opportunity to carry a full line ofcurrent season merchandise, including apparel, home products and accessories, all presented in an aspirational, island-inspired atmosphere designed to berelaxed, comfortable and unique. We believe that the Tommy Bahama full-price retail stores provide high visibility for the brand and products, and allow usto stay close to the preferences of our consumers. Further, we believe that our presentation of products and our strategy to operate the full-price retail storeswith limited in-store promotional activities are good for the Tommy Bahama brand and, in turn, enhance business with our wholesale customers. Generally,we believe there are opportunities for full-price retail stores in both warmer and colder climates, as we believe the more important consideration is whether thelocation attracts the affluent consumer that we are targeting.Disposal of discontinued or end of season inventory is an ongoing part of any apparel business and historically Tommy Bahama has utilized its outletstores, supplemented by e-commerce flash clearance sales and sales to off-price retailers, to sell any excess inventory. Our Tommy Bahama outlet stores,which generated 10% of our total Tommy Bahama net sales in Fiscal 2016, are generally located in outlet shopping centers that include upscale retailers andserve an important role in overall inventory management by allowing us to sell discontinued and out-of-season products at better prices than are otherwiseavailable from outside parties. We believe that this approach has helped us protect the integrity of the Tommy Bahama brand by allowing our full-price retailstores to limit promotional activity and controlling the distribution of discontinued and out-of-season product. To supplement the clearance items sold inTommy Bahama outlets, approximately 20% of the product sold in our Tommy Bahama outlets was made specifically for our outlets. At this time and basedon our anticipated proportion of clearance versus made-for items in our outlet stores, we anticipate that we would generally operate one outlet forapproximately every three full-price retail stores.In an effort to improve the profitability of our end of season clearance strategy for our products, in January 2017, we initiated selected initialmarkdowns in our full-price retail stores and on-line for end of season product for our women's, home and other products. We expect to continue that strategyand also plan to dispose of more end of season inventory for women's, home and other product categories through off-price retailers in the future than we havehistorically. These changes are expected to reduce the quantity of end of season product for those product categories that are transferred to our outlets in thefuture. We believe that reducing the amounts of these product categories, which were overrepresented in our outlets, will greatly improve the product offeringand presentation in our outlet stores, which may ultimately improve the sales and profitability of our outlet stores and the profitability of our end of seasonclearance sales.For Tommy Bahama's domestic full-price retail stores and retail-restaurant locations operating for the full Fiscal 2016 year, sales per gross square foot,excluding restaurant sales and restaurant space, were approximately $605 during Fiscal 2016, compared to $655 for stores operating for the full Fiscal2015 year. The decrease in sales per square foot was primarily due to the negative comparable full-price retail store sales during Fiscal 2016. In Fiscal 2016,our domestic outlet stores generated approximately $355 of sales per square foot for outlets open for the entire 2016 fiscal year.As of January 28, 2017 we operated 17 restaurants or Marlin Bar locations, generally adjacent to a Tommy Bahama full-price retail store location,which together we often refer to as islands. These retail-restaurant locations provide us with the opportunity to immerse customers in the ultimate TommyBahama experience. We do not anticipate that many of our retail locations will have an adjacent restaurant; however, in select high-profile, brand appropriatelocations, such as Naples, Florida, Waikiki, Hawaii, and New York City, we have determined that an adjacent restaurant can further enhance the image of the10brand. The net sales per square foot in our domestic full-price retail stores which are adjacent to a restaurant are on average two times the sales per square footof our other domestic full-price retail stores. We believe that the experience of a meal or drink in a Tommy Bahama restaurant may entice the customer topurchase additional Tommy Bahama merchandise and potentially provide a memorable consumer experience that further enhances the relationship betweenTommy Bahama and the consumer. During the Fourth Quarter of Fiscal 2016, we opened our first Marlin Bar concept location in Coconut Point, Florida. TheMarlin Bar concept, like our traditional restaurant, is adjacent to one of our retail locations and serves food and beverages, but in a smaller space and withfood options more focused on small plate offerings rather than entrees. The initial results of the Marlin Bar, in both the restaurant and full-price retail store ofthe location, have been well received and have exceeded our expectations. We believe that with the smaller footprint, reduced labor requirements and lowerrequired capital expenditure for build-out, the Marlin Bar concept provides us the long-term potential for opening retail-restaurant locations in sites thatotherwise may not have been suitable or brand appropriate for one of our traditional retail-restaurant locations.As of January 28, 2017, the total square feet of space utilized for our Tommy Bahama full-price retail store and outlet store operations was 0.6 millionwith another 0.1 million of total square feet utilized in our Tommy Bahama restaurant operations. The table below provides certain information regardingTommy Bahama retail stores operated by us as of January 28, 2017. Full-Price Retail StoresOutlet StoresRetail-RestaurantLocations (1)TotalFlorida204630California155323Texas74112Hawaii4138Nevada4116Maryland32—5New York2215Other states3816155Total domestic933516144Canada83—11Total North America1013816155Australia82—10Japan1—12Other international1——1Total1114017168Average square feet per store (2)3,4004,6004,300 Total square feet at year end380,000185,00075,000 (1)Consists of 16 retail-restaurant locations of our traditional island format and one Marlin Bar retail-restaurant concept.(2)Average square feet for retail-restaurant locations consists of average retail space and excludes space used in the associated restaurant operations.The table below reflects the changes in store count for Tommy Bahama stores during Fiscal 2016. Full-Price RetailStoresOutlet StoresRetail-RestaurantLocationsTotalOpen as of beginning of fiscal year1074116164Opened8——8Closed(3)(1)—(4)Retail store relocated/converted to Marlin Bar(1)—1—Open as of end of fiscal year1114017168During Fiscal 2017, we anticipate that the number of stores will remain comparable to our store count at the end of Fiscal 2016. Although we expect toopen a handful of full-price retail stores during the year, including full-price retail stores in Delray Beach, Florida and Napa, California as well as a retail-restaurant location at Legacy West in Dallas, Texas, we also expect to opportunistically close certain under-performing locations through lease expirationsduring the year. In future years, we do not11anticipate as many closures as we expect in Fiscal 2017. Therefore, in future years, we anticipate that we will increase the number of our retail locations, butmost likely at a more modest pace than our historical trend.The operation of full-price retail stores, outlet stores and retail-restaurant locations requires a greater amount of initial capital investment thanwholesale operations, as well as greater ongoing operating costs. We estimate that we will spend approximately $1.3 million on average in connection withthe build-out of a domestic full-price retail store. However, individual locations, particularly those in urban locations, may require investments greater thanthese amounts depending on a variety of factors, including the location and size of the full-price retail store. The cost of a traditional Tommy Bahama retail-restaurant location and a 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 of our retail-restaurant locations has been approximately $5 million; however, we have spent significantly more than that amount forcertain locations, including New York City and Waikiki. For most of our retail stores and restaurants, the landlord provides certain incentives to fund aportion of our capital expenditures.We also incur capital expenditures when a lease expires and we determine it is appropriate to relocate to a new location in the same vicinity as theprevious store. The cost of store relocations is generally comparable to the costs of opening a new full-price retail store or outlet store. Additionally, we incurcapital expenditure costs related to periodic remodels of existing stores, particularly when we renew or extend a lease beyond the original lease term, orotherwise determine that a remodel of a store is appropriate. When a lease expires we may decide to close the store rather than relocating the store to anotherlocation or renewing the lease. As we reach the expirations of more of our lease agreements in the near future, we anticipate that the capital expenditures forrelocations and remodels, in the aggregate, may continue to increase in future periods.In addition to our full-price retail stores and outlet stores, our direct to consumer approach includes various e-commerce websites, including thetommybahama.com website. During Fiscal 2016, e-commerce sales represented 16% of Tommy Bahama's net sales. Our Tommy Bahama websites allowconsumers to buy Tommy Bahama products directly from us via the internet. These websites also enable us to increase our database of consumer contacts,which allows us to communicate directly and frequently with consenting consumers. As we reach more customers in the future, we anticipate that our e-commerce distribution channel for Tommy Bahama will continue to grow at a faster pace than our domestic full-price retail store operations or wholesaleoperations. In Fiscal 2016, we held a select number of e-commerce flash clearance sales as a means of complementing our outlets in liquidating discontinuedor out-of-season inventory. These sales represented 10% of Tommy Bahama e-commerce sales in Fiscal 2016.Wholesale OperationsTo complement our direct to consumer operations and have access to a larger group of consumers, we continue to maintain our wholesale operations forTommy Bahama. Tommy Bahama's wholesale customers consist of sales to better department stores and specialty stores that generally follow a retail modelapproach with limited discounting. We value our long-standing relationships with our wholesale customers and are committed to working with them toenhance the success of the Tommy Bahama brand within their stores.Wholesale sales for Tommy Bahama accounted for 23% of Tommy Bahama's net sales in Fiscal 2016. Approximately two-thirds of Tommy Bahama'swholesale business reflects sales to major department stores with the remaining wholesale sales primarily sales to specialty stores. Tommy Bahama men'sproducts are available in more than 2,000 North America retail locations, while Tommy Bahama women's products are available in more than 1,000 NorthAmerica retail locations. During Fiscal 2016, 18% of Tommy Bahama's net sales were to Tommy Bahama's ten largest wholesale customers, with its largestcustomer representing 6% of Tommy Bahama's net sales.At the same time, we believe that the integrity and continued success of the Tommy Bahama brand, including its direct to consumer operations, isdependent, in part, upon controlled wholesale distribution, with careful selection of the retailers through which Tommy Bahama products are sold. As a resultof our approach to limiting our wholesale customers, we believe that sales growth in our men's apparel wholesale business, which represented approximately88% of Tommy Bahama's domestic wholesale sales in Fiscal 2016, may be somewhat limited. However, we believe that we have opportunities for wholesalesales increases for our Tommy Bahama women's business, with its appeal evidenced by women's product representing 28% of sales in our full-price retailstores and e-commerce websites. Overall, we anticipate that the Tommy Bahama wholesale business will grow at a slower rate than the direct to consumerdistribution channel.We maintain Tommy Bahama apparel sales offices and showrooms in New York and Seattle, as well as other locations, to facilitate sales to ourwholesale customers. Our Tommy Bahama wholesale operations utilize a sales force consisting of a combination of independent commissioned salesrepresentatives and Tommy Bahama employees.Licensing Operations12We believe licensing is an attractive business opportunity for the Tommy Bahama brand. For an established lifestyle brand, licensing typically requiresmodest additional investment but can yield high-margin income. It also affords the opportunity to enhance overall brand awareness and exposure. Inevaluating a licensee for Tommy Bahama, we typically consider the candidate's experience, financial stability, sourcing expertise and marketing ability. Wealso evaluate the marketability and compatibility of the proposed licensed products with other Tommy Bahama products.Our agreements with Tommy Bahama licensees are for specific geographic areas and expire at various dates in the future, and in limited cases includecontingent renewal options. Generally, the agreements require minimum royalty payments as well as additional royalty payments and, in most cases,advertising payments and/or obligations to expend certain funds towards marketing the brand on an approved basis. Our license agreements generallyprovide us the right to approve all products, advertising and proposed channels of distribution. Third party license arrangements for our Tommy Bahamaproducts include the following product categories:Men's and women's headwearWatchesOutdoor furniture and related productsOuterwearBelts, leather goods and giftsIndoor furnitureFootwearHandbagsMattresses and box springsMen's socksLuggageBedding and bath linensSleepwearRugsTable top accessoriesShampoo, soap and bath amenitiesFragrancesFabricsIn addition to our licenses for the specific product categories listed above, we may enter into certain international distributor agreements which allowthose parties to distribute Tommy Bahama apparel and other products on a wholesale and/or retail basis within certain countries or regions. As of January 28,2017, we have agreements for distribution of Tommy Bahama products in the Middle East, Greater China and parts of Central and South America.Substantially all of the products sold by the distributors are identical to the products sold in our own Tommy Bahama stores. In addition to selling TommyBahama goods to wholesale accounts, the distributors may, in some cases, operate their own retail stores. None of these agreements are expected to impact theoperating results of Tommy Bahama in the near term in a meaningful manner.Seasonal Aspects of BusinessTommy Bahama's operating results are impacted by seasonality as the demand by specific product or style, as well as by distribution channel, may varysignificantly depending on the time of year. As the timing of certain unusual or non-recurring items, economic conditions, wholesale product shipments orother factors affecting the business may vary from one year to the next, we do not believe that net sales or operating income (loss) for any particular quarter orthe distribution of net sales and operating income (loss) for Fiscal 2016 are necessarily indicative of anticipated results for the full fiscal year or expecteddistribution in future years. The timing of Tommy Bahama's sales in the direct to consumer and wholesale distribution channels generally varies. Typically,the demand in the direct to consumer operations, including sales at our own stores and e-commerce site, for Tommy Bahama products in our principal marketsis generally higher in the spring, summer and holiday seasons and lower in the fall season. However, wholesale product shipments are generally shipped priorto each of the retail selling seasons. The following table presents the percentage of net sales and operating income (loss) for Tommy Bahama by quarter forFiscal 2016: First QuarterSecond QuarterThird QuarterFourth QuarterNet sales25%28%19 %28%Operating income (loss)30%47%(16)%39%Lilly PulitzerLilly Pulitzer designs, sources, markets and distributes upscale collections of women's and girl's dresses, sportswear and related products. The LillyPulitzer brand was originally created in the late 1950s by Lilly Pulitzer and is an affluent brand with a heritage and aesthetic based on the Palm Beach resortlifestyle. The brand is somewhat unique among women's brands in that it has demonstrated multi-generational appeal, including young women in college orrecently graduated from college; young mothers with their daughters; and women who are not tied to the academic calendar. Lilly Pulitzer products can befound in our owned Lilly Pulitzer stores, in Lilly Pulitzer Signature Stores, which are described below, and on our Lilly Pulitzer website, lillypulitzer.com, aswell as in better department and independent specialty stores. During Fiscal 2016, 46% and 38% of Lilly Pulitzer's net sales were for women's sportswear anddresses, respectively, with the remaining sales consisting of Lilly Pulitzer accessories, including scarves, bags, jewelry and belts; children's apparel; footwear;and licensed products.13We believe that there is significant opportunity to expand the reach of the Lilly Pulitzer brand, while at the same time maintaining the exclusivedistribution that Lilly Pulitzer has historically maintained. We believe that in order to take advantage of opportunities for long-term growth, we mustcontinue to invest in the Lilly Pulitzer brand. These investments include costs to enhance e-commerce and other technology capabilities; opening andoperating full-price retail stores; the remodeling and relocation of existing stores; and an increase in employment, advertising and other costs to support agrowing business. While we believe that these investments will generate long-term benefits, the investments may have a short-term negative impact on LillyPulitzer's operating margin.We believe the attraction of the Lilly Pulitzer brand to our consumers is a reflection of years of maintaining appropriate quality and design of the LillyPulitzer apparel, accessories and licensed products, restricting the distribution of the Lilly Pulitzer products to a select tier of retailers and effectivelycommunicating the message of Lilly Pulitzer's optimistic Palm Beach resort chic lifestyle. We believe this approach to quality, design, distribution andcommunication has been critical in allowing us to achieve the current retail price points for Lilly Pulitzer products. We believe that the retail sales value ofall Lilly Pulitzer branded products sold during Fiscal 2016, including our estimate of retail sales by our wholesale customers and other third party retailers,exceeded $300 million.Design, Sourcing, Marketing and DistributionLilly Pulitzer's products are developed by our dedicated design teams located at the Lilly Pulitzer headquarters in King of Prussia, Pennsylvania as wellas in Palm Beach, Florida. Our Lilly Pulitzer design teams focus on the target consumer, and the design process combines feedback from buyers, consumersand our sales force, along with market trend research. Lilly Pulitzer apparel products are designed to incorporate various fiber types, including cotton, silk,linen and other natural and man-made fibers, or blends of two or more of these materials.Lilly Pulitzer uses a combination of in-house employees in our King of Prussia and Hong Kong offices and third party buying agents primarily based inAsia to manage the production and sourcing of the Lilly Pulitzer apparel products. Through its buying agents and direct sourcing, Lilly Pulitzer usedapproximately 50 vendors, with the largest individual supplier providing 10%, and the largest 10 suppliers providing 59%, of the Lilly Pulitzer productsacquired during Fiscal 2016. In Fiscal 2016, 56% of Lilly Pulitzer's product purchases were from manufacturers located in China.We believe that advertising and marketing are an integral part of the long-term strategy of the Lilly Pulitzer brand, and we therefore devote significantresources to advertising and marketing. Lilly Pulitzer's advertising attempts to engage individuals within the brand's consumer demographic and guide themon a regular basis to our full-price retail stores, e-commerce websites and wholesale customers' stores in search of our products. The marketing of the LillyPulitzer brand includes email, internet and social media advertising as well as traditional media such as catalogs, print and other correspondence withcustomers and moving media and trade show initiatives. We believe that it is very important that a lifestyle brand effectively communicate with consumerson a regular basis via the use of electronic media and print correspondence about product offerings or other brand events in order to maintain and strengthenthe brand's connections with consumers.In addition to our ongoing Lilly Pulitzer marketing initiatives, on occasion we also enter into collaborations with others, including airlines and otherretailers, to increase brand awareness or create additional brand excitement. Often these collaborations do not generate direct revenue for Lilly Pulitzer, butinstead provide significant press or social media exposure and excitement for the brand that complement our ongoing advertising and marketing initiatives.We believe in today's environment it is important to continue to find new, creative ways to advertise and market in ways that differentiate the brand.We believe that highly visible full-price retail store locations with creative design, broad merchandise selection and brand appropriate visualpresentation are key enticements for customers to visit our full-price retail stores and buy merchandise. We believe that our full-price retail stores enhance theshopping experience of our customers, which will increase consumer brand loyalty. Marketing initiatives at certain of our full-price retail stores may includespecial event promotions and a variety of public relations activities designed to create awareness of our stores and products. At certain times during the year,an integral part of the marketing plan for Lilly Pulitzer includes certain gift with purchase programs where the consumer earns the right to a Lilly Pulitzer giftproduct if certain spending thresholds are achieved. We believe that our full-price retail store operations, as well as our traditional and electronic mediacommunications and periodic collaborations with others, enhance brand awareness and increase the sales of Lilly Pulitzer products in all channels ofdistribution.For certain of our wholesale customers, we also provide point-of-sale materials and signage to enhance the presentation of our branded products at theirretail locations and/or participate in cooperative advertising programs.Lilly Pulitzer operates a distribution center in King of Prussia, Pennsylvania. Activities at the distribution center include receiving finished goods fromsuppliers, inspecting the products and shipping the products to wholesale customers, Lilly Pulitzer full-price retail stores and our e-commerce customers. Weseek to maintain sufficient levels of inventory at the14distribution center to support our direct to consumer operations, as well as pre-booked orders and some limited replenishment ordering for our wholesalecustomers.Direct to Consumer OperationsA key component of our Lilly Pulitzer growth strategy is to operate our own stores and e-commerce website, which we believe permits us to developand build brand awareness by presenting products in a setting specifically designed to showcase the aspirational lifestyle on which they are based. Thedistribution channels included in Lilly Pulitzer's direct to consumer strategy consist of full-price retail store and e-commerce operations and represented 68%of Lilly Pulitzer's net sales in both Fiscal 2016 and Fiscal 2015. We expect the percentage of our Lilly Pulitzer sales which are direct to consumer sales willincrease in future years as we anticipate that the retail and e-commerce components of the Lilly Pulitzer business will grow at a faster rate than the wholesaledistribution channel.Our direct to consumer strategy for the Lilly Pulitzer brand includes operating full-price retail stores in higher-end malls, lifestyle shopping centers,resort destinations and brand-appropriate street locations. Sales at our full-price retail stores represented 36% of Lilly Pulitzer's net sales during Fiscal 2016.As of January 28, 2017, less than one-half of the Lilly Pulitzer stores were located in indoor regional malls, slightly more than one-third of the Lilly Pulitzerstores were located in outdoor regional lifestyle centers and the remaining locations were primarily street locations. Each full-price retail store carries a widerange of merchandise, including apparel, footwear and accessories, all presented in a manner intended to enhance the Lilly Pulitzer image, brand awarenessand acceptance. Our Lilly Pulitzer full-price retail stores allow us to present Lilly Pulitzer's full line of current season products. We believe our Lilly Pulitzerfull-price retail stores provide high visibility for the brand and products and also enable us to stay close to the needs and preferences of consumers. We alsobelieve that our presentation of products and our strategy to operate the full-price retail stores with limited promotional activities complement our businesswith our wholesale customers. Generally, we believe there are opportunities for full-price retail stores in both warmer and colder climates, as we believe themore important consideration is whether the location attracts the affluent consumer that we are targeting.Lilly Pulitzer's full-price retail store sales per gross square foot for Fiscal 2016 were approximately $840 for the full-price retail stores which were openthe full Fiscal 2016 year compared to approximately $835 for the Lilly Pulitzer stores open for the full Fiscal 2015 year. The increase in sales per gross squarefoot from the prior year was primarily due to the favorable impact of the Fiscal 2016 closure of one store which offset a 1% decrease in sales in full-price retailstores that were determined to be comparable stores for Fiscal 2016. The table below provides certain information regarding Lilly Pulitzer full-price retailstores as of January 28, 2017. Number ofFull-Price RetailStoresFlorida14Texas4Other22Total40Average square feet per store2,700Total square feet at year-end110,000The table below reflects the changes in store count for Lilly Pulitzer stores during Fiscal 2016. Full-Price RetailStoresOpen as of beginning of fiscal year34Opened7Closed(1)Open as of end of fiscal year40In Fiscal 2017, we expect to open six full-price retail stores, including stores in St. Louis, Missouri, Raleigh, North Carolina, Columbus, Ohio, andWatch Hill, Rhode Island. Subsequent to Fiscal 2017, we expect to open four to six full-price retail stores each year in the near future. 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 anticipatethat most future full-price retail store openings will generally be 2,500 square feet on average; however, many stores will be larger or smaller than 2,500square feet with the determination of size of the store depending on a variety of criteria. To open a 2,500 square foot Lilly Pulitzer full-15price retail store, we anticipate capital expenditures of approximately $0.8 million on average. For most of our full-price retail stores, the landlord providescertain incentives to fund a portion of our capital expenditures.In addition to new store openings, we also incur capital expenditure costs related to remodels, expansions or downsizing of existing stores, particularlywhen we renew or extend a lease beyond the original lease term, or otherwise determine that a remodel of a store is appropriate. We may also incur capitalexpenditures if we determine it is appropriate to relocate a store to a new location. The cost of store relocations, if any, will generally be comparable to thecost of opening a new store. Alternatively, when a lease expires we may decide to close the store rather than relocating the store to another location orrenewing the lease. As an example, in Fiscal 2016, we closed our East Hampton, New York store at the expiration of the lease agreement.In addition to operating Lilly Pulitzer full-price retail stores, another key element of our direct to consumer strategy is the lillypulitzer.com website,which represented 32% of Lilly Pulitzer's net sales in Fiscal 2016 compared to 30% in Fiscal 2015. The Lilly Pulitzer e-commerce business has experiencedsignificant growth in recent years, and we anticipate that the rate of growth of the e-commerce business will remain strong in the future.We also utilize the Lilly Pulitzer website as an effective means of liquidating discontinued or out-of-season inventory in a brand appropriate manner.Usually, we have two e-commerce flash clearance sales per year, both of which are in typical industry end-of-season promotional periods. These sales arebrand appropriate events that create a significant amount of excitement with loyal Lilly Pulitzer consumers, who are looking for an opportunity to purchaseLilly Pulitzer products at a discounted price. Each of these two e-commerce flash clearance sales are for a very limited number of days, allowing the LillyPulitzer website to remain full-price for the remainder of the year. During Fiscal 2016, approximately 39% of Lilly Pulitzer's e-commerce sales were e-commerce flash clearance sales.Wholesale OperationsTo complement our direct to consumer operations and have access to a larger group of consumers, including those who may wish to shop at a specialtystore or department store, we continue to maintain our wholesale operations for Lilly Pulitzer. These wholesale operations are with better department storesand independent specialty stores that generally follow a retail model approach with limited discounting. During Fiscal 2016, approximately 32% of LillyPulitzer's net sales were sales to wholesale customers. During Fiscal 2016, 40% of Lilly Pulitzer's wholesale sales were to Lilly Pulitzer's Signature Stores, asdescribed below, while approximately one-third of Lilly Pulitzer's wholesale sales were to department stores. Lilly Pulitzer's net sales to its ten largestwholesale customers represented 17% of Lilly Pulitzer's net sales in Fiscal 2016 with its largest customer representing 5% of Lilly Pulitzer's net sales.An important part of Lilly Pulitzer's wholesale distribution is sales to Signature Stores. For these stores, we enter into agreements whereby we grant theother party the right to independently operate one or more stores as a Lilly Pulitzer Signature Store, subject to certain conditions, including designatingsubstantially all the store specifically for Lilly Pulitzer products and adhering to certain trademark usage requirements. These agreements are generally for atwo-year period. We sell products to these Lilly Pulitzer Signature Stores on a wholesale basis and do not receive royalty income associated with these sales.As of January 28, 2017, there were 67 Lilly Pulitzer Signature Stores.Although we do not expect that the Lilly Pulitzer wholesale business will grow at the same pace as the direct to consumer distribution channel, wevalue our long-standing relationships with our wholesale customers and are committed to working with them to enhance the success of the Lilly Pulitzerbrand within their stores. We believe that the integrity and continued success of the Lilly Pulitzer brand, including its direct to consumer operations, isdependent, in part, upon controlled wholesale distribution with careful selection of the retailers through which Lilly Pulitzer products are sold. Lilly Pulitzerapparel products are available in more than 250 locations of our wholesale customers.We maintain Lilly Pulitzer apparel sales offices and showrooms in Palm Beach, Florida, King of Prussia, Pennsylvania and New York City. Ourwholesale operations for Lilly Pulitzer utilize a sales force consisting of salaried sales employees.Licensing OperationsWe license the Lilly Pulitzer trademark to licensees in categories beyond Lilly Pulitzer's core product categories. In the long term, we believe licensingmay be an attractive business opportunity for the Lilly Pulitzer brand, particularly once our direct to consumer presence has expanded. Once a brand isestablished, licensing requires modest additional investment but can yield high-margin income. It also affords the opportunity to enhance overall brandawareness and exposure. In evaluating a potential Lilly Pulitzer licensee, we consider the candidate's experience, financial stability, manufacturingperformance and marketing ability. We also evaluate the marketability and compatibility of the proposed products with other Lilly Pulitzer brand products.16Our agreements with Lilly Pulitzer licensees are for specific geographic areas and expire at various dates in the future. Generally, the agreements requireminimum royalty payments as well as royalty and advertising payments based on specified percentages of the licensee's net sales of the licensed products.Our license agreements generally provide us the right to approve all products, advertising and proposed channels of distribution.Third party license arrangements for Lilly Pulitzer products include the following product categories: stationery and gift products; home furnishingfabrics; and eyewear.Seasonal Aspects of BusinessLilly Pulitzer's operating results are impacted by seasonality as the demand by specific product or style as well as demand by distribution channel mayvary significantly depending on the time of year. Typically, the demand in the direct to consumer operations, including sales for our own stores and e-commerce sites, for Lilly Pulitzer products in our principal markets is generally higher in the spring, summer and resort seasons and lower in the fall season.However, wholesale product shipments are generally shipped prior to each of the retail selling seasons. Further, in the third and fourth quarters of our fiscalyear, which have not historically been strong direct to consumer or wholesale quarters for Lilly Pulitzer, Lilly Pulitzer has held significant e-commerce flashclearance sales which partially offsets the impact of seasonality on Lilly Pulitzer's sales. As the timing of certain unusual or non-recurring items, economicconditions, wholesale product shipments, the magnitude of e-commerce flash clearance sales or other factors affecting the business may vary from one year tothe next, we do not believe that net sales or operating income for any particular quarter or the distribution of net sales for Fiscal 2016 are necessarilyindicative of anticipated results for the full fiscal year or expected distribution in future years. The following table presents the percentage of net sales andoperating income for Lilly Pulitzer by quarter for Fiscal 2016: First QuarterSecond QuarterThird QuarterFourth QuarterNet sales28%30%22%20%Operating income40%44%12%4%Lanier ApparelLanier Apparel designs, sources and distributes branded and private label men's apparel, including tailored clothing, casual pants and sportswear, acrossa wide range of price points, but primarily at moderate price points. The majority of our Lanier Apparel products are sold under certain trademarks licensed tous by third parties. Lanier Apparel's licensed brands for certain product categories include Kenneth Cole®, Dockers®, Geoffrey Beene®, Nick Graham® andAndrew Fezza®. Additionally, we design and market products for our owned Billy London®, Oxford® (formerly Oxford Golf®), Duck Head® and StrongSuitTM brands. Both Duck Head and Strong Suit were acquired during Fiscal 2016. Sales of branded products licensed to us or owned by us represented 75%of Lanier Apparel's net sales during Fiscal 2016.In addition to these branded businesses, Lanier Apparel designs and sources private label apparel products for certain customers, including tailoredclothing and pants programs for large department stores, warehouse clubs and other retailers. For our large retail customers, the private label programs offerthe customer product exclusivity, generally at higher gross margins than they would achieve on branded products, while allowing us the opportunity toleverage our design, sourcing, production, logistics and distribution infrastructure. For other customers, we may perform any combination of design, sourcing,production, logistics or distribution services for a brand owner who will then distribute the product acquired from us through their wholesale or direct toconsumer operations. In these cases, the brand owner may have determined it is more efficient to outsource certain functions, may be a smaller company thatlacks such functional expertise or may want to focus their energies on the other aspects of their brand. Lanier Apparel, as an efficient operator that excels insourcing, production, logistics, distribution and design, can increase its profitability by providing valuable services and resources to these smaller companieswhich may also allow the third party to operate their business in a more cost-effective manner than if the third party performed all the functions in-house.Our Lanier Apparel products are primarily sold through large retailers including department stores, discount and off-price retailers, warehouse clubs,national chains, specialty retailers and others throughout the United States. Lanier Apparel's products are sold in more than 5,000 retail locations. In LanierApparel, we have long-standing relationships with some of the United States' largest retailers. During Fiscal 2016, Lanier Apparel's two largest customersrepresented 18% and 16%, respectively, of Lanier Apparel's net sales. Sales to Lanier Apparel's 10 largest customers represented 73% of Lanier Apparel's netsales during Fiscal 2016. The amount and percentage of net sales attributable to an individual customer in future years may be different than Fiscal 2016 assales to wholesale customers are not tied to long-term contracts.As much of Lanier Apparel's private label sales are program based, where Lanier Apparel must bid for a program on a case-by-case and season-by-seasonbasis, an individual customer could increase, decrease or discontinue its purchases from us17at any time. Thus, significant fluctuations in Lanier Apparel's operating results from one year to the next may result, particularly if a program is not renewed,the customer decides to use another vendor, we determine that the return on the program is not acceptable to us, a new program is initiated, there is asignificant increase in the volume of the program or otherwise. Additionally, in accordance with normal industry practice, as part of maintaining an ongoingrelationship with certain customers, Lanier Apparel may be required to provide cooperative advertising or other incentives to the customer.The moderate price point tailored clothing and sportswear markets are extremely competitive sectors, with significant retail competition as well as grossmargin pressures due to retail sales price pressures and production cost increases. We believe that our Lanier Apparel business has historically excelled atbringing quality products to our customers at competitive prices and managing inventory risk appropriately while requiring minimal capital expenditureinvestments.Design, Manufacturing, Sourcing, Marketing and DistributionWe believe that superior customer service and supply chain management, as well as the design of quality products, are all integral components of ourstrategy in the branded and private label tailored clothing and sportswear markets in which Lanier Apparel operates. Our Lanier Apparel design teams, whichare primarily located in New York City and Atlanta, focus on the target consumer for each brand and product. The design process combines feedback frombuyers and sales agents along with market trend research and input from manufacturers. Our various Lanier Apparel products are manufactured from a varietyof fibers, including wool, silk, linen, cotton and other natural fibers, as well as synthetics and blends of these materials.Lanier Apparel manages production in Asia and Latin America through a combination of efforts from our Lanier Apparel offices in Atlanta and HongKong as well as with third party buying agents. Lanier Apparel's sourcing operations are also supplemented, as appropriate, by third party contractors whomay provide certain sourcing functions or in-country quality assurance to further enhance Lanier Apparel's global sourcing operations. During Fiscal 2016,77% of Lanier Apparel's product purchases were from manufacturers located in Vietnam. Lanier Apparel purchased goods from approximately 150 suppliersin Fiscal 2016. The 10 largest suppliers of Lanier Apparel provided 85% of the finished goods and raw materials Lanier Apparel acquired from third partiesduring Fiscal 2016, with 31% of our product purchases acquired from Lanier Apparel's largest third party supplier. In addition to purchasing products fromthird parties, Lanier Apparel operates a manufacturing facility, located in Merida, Mexico, which produced 10% of our Lanier Apparel products during Fiscal2016.The advertising efforts of Lanier Apparel are much more product specific than advertising for our owned lifestyle brands. For Lanier Apparel's brandedproducts, advertising primarily consists of cooperative advertising with our larger customers, contributions to the licensor based on a specified percentage ofour net sales to fund the licensor's general brand advertising initiatives and attending brand appropriate trade shows. As a provider of private label apparel,we are generally not responsible for advertising for private label brands.For Lanier Apparel, we utilize a distribution center located in Toccoa, Georgia, a distribution center in Lyons, Georgia and certain third partydistribution centers for our product shipments, where we receive goods from our suppliers, inspect those products and ship the goods to our customers. Weseek to maintain sufficient levels of inventory to support programs for pre-booked orders and to meet customer demand for at-once ordering. For certainstandard product styles, we maintain in-stock replenishment programs, providing shipment to customers within just a few days of receiving the order. Thesetypes of programs generally require higher inventory levels. Lanier Apparel utilizes various off-price retailers to sell excess prior-season inventory.We maintain apparel sales offices and showrooms for our Lanier Apparel products in several locations, including New York City and Atlanta andemploy a sales force consisting of a combination of salaried employees and independent sales reps. Lanier Apparel operates a number of websites for certainof its businesses and also ships orders directly to consumers who purchase products from the websites of certain of its wholesale customers.Seasonal Aspects of BusinessLanier Apparel's operating results are impacted by seasonality as the demand by specific product or style may vary significantly depending on the timeof year. As a wholesale apparel business, in which product shipments generally occur prior to the retail selling seasons, the seasonality of Lanier Apparelgenerally reflects stronger spring and fall wholesale deliveries which typically occur in our first and third quarters; however, in some fiscal years this will notbe the case due to much of Lanier Apparel's operations resulting from program-driven businesses. The timing of certain unusual or non-recurring items,economic conditions, wholesale product shipments, the introduction of new programs, the loss of programs or customers or other factors affecting thebusiness may vary significantly from one year to the next. Therefore, we do not believe that net sales or operating income of Lanier Apparel for any particularquarter or the distribution of net sales and operating income for Fiscal 2016 are necessarily indicative of anticipated results for the full fiscal year or expecteddistribution in future years. The following table presents the percentage of net sales and operating income for Lanier Apparel by quarter for Fiscal 2016:18 First QuarterSecond QuarterThird QuarterFourth QuarterNet sales27%19%35%19%Operating income41%1%53%5%Southern TideOn April 19, 2016, we acquired Southern Tide, LLC, which owns the Southern Tide lifestyle apparel brand. Southern Tide designs, sources, marketsand distributes high-quality apparel bearing the distinctive Skipjack logo. Southern Tide offers an extensive selection of men’s shirts, pants, shorts,outerwear, ties, swimwear, footwear and accessories, as well as women's and youth collections. Launched in 2006, Southern Tide combines the modern designelements of today's youthful trends with love for the Southern culture and lifestyle. The brand has an appeal to all ages who have an appreciation for classicdesign, vibrant colors, a great fit and an affection for the coast. Southern Tide products can be found in independent specialty retailers, better departmentstores, Southern Tide Signature Stores as described below, and on our Southern Tide website, southerntide.com. During the period from the acquisition datein April 2016 through the end of Fiscal 2016, 77% of Southern Tide's sales were wholesale sales and 23% of Southern Tide's sales were e-commerce sales.Since the acquisition, we have emphasized the integration of the Southern Tide operations, as appropriate, into our infrastructure, including integratingSouthern Tide into our existing corporate infrastructure for many back-office functions and services such as accounting, treasury, credit, human resources,information technology, insurance, product quality control, factory compliance and inbound/outbound logistics. Additionally, the inventory anddistribution operations of Southern Tide were transferred from a third party distribution center to our Lyons, Georgia distribution center. Southern Tide hasalso began utilizing our Hong Kong-based sourcing operations for certain product categories starting in the Fall 2017 season. We believe that integratingthese sourcing, distribution, administrative and back-office functions into our existing infrastructure allows the Southern Tide management team greaterability to focus on the consumer facing functions of the Southern Tide business, including design, sales and marketing, while also leveraging our existingexpertise in certain areas, which we believe will allow for more efficient and effective operations for the Southern Tide business.We believe that there is significant opportunity to expand the reach of the Southern Tide brand by increasing the specialty store, department store andSignature Store presence of the brand, as well as increasing e-commerce sales. However, this growth and expansion will be at a prudent pace as we believethat the integrity and success of the Southern Tide brand is dependent, in part, upon controlled wholesale distribution with careful selection of the retailersthrough which Southern Tide products are sold.We believe that in order to take advantage of opportunities for long-term growth, we must continue to invest in the Southern Tide brand. In the nearterm, these investments will primarily consist of an increase in employment, advertising and other costs to support a growing wholesale business withspecialty and department stores, increasing the number of Southern Tide Signature Stores and costs to enhance e-commerce and other technologycapabilities. While we believe that these investments will generate long-term benefits, the investments may have a short-term negative impact on SouthernTide's operating margin given the current size of the Southern Tide business. We believe that the retail sales value of all Southern Tide branded products soldduring the period from the acquisition date through the end of Fiscal 2016, including our estimate of retail sales by our wholesale customers and other thirdparty retailers, exceeded $50 million.Design, Sourcing, Marketing and DistributionSouthern Tide's products are developed by our dedicated design teams located at the Southern Tide headquarters in Greenville, South Carolina. OurSouthern Tide design teams focus on the target consumer, and the design process combines feedback from buyers, consumers and our sales force, along withmarket trend research. Southern Tide apparel products are designed to incorporate various fiber types, including cotton and other natural and man-madefibers, or blends of two or more of these materials.During the period from the acquisition date through the end of Fiscal 2016, Southern Tide primarily used third party buying agents for the productionand sourcing of apparel products. Through its third party buying agents, Southern Tide used approximately 50 suppliers with the largest individual supplierproviding 24% and three other suppliers each providing more than 10% of the Southern Tide products. The largest 10 suppliers of Southern Tide provided81% of the Southern Tide products acquired, while 61% and 18% were sourced from China and Peru, respectively. Southern Tide currently is in the processof transitioning some of its product purchases from third party buying agents to our Hong Kong-based sourcing team. We believe that products can generallybe sourced in a more cost effective manner through our existing internal sourcing operations than through third party buying agents.We believe that advertising and marketing are an integral part of the long-term strategy for the Southern Tide brand, and we therefore devote significantresources to advertising and marketing. Southern Tide's advertising attempts to engage19individuals within the brand's consumer demographic and guide them on a regular basis to our e-commerce website and wholesale customers' stores in searchof our products. The marketing of the Southern Tide brand includes email, internet and social media advertising as well as traditional media such as catalogs,print and other correspondence with customers and moving media and trade show initiatives. We believe that it is very important that a lifestyle brandeffectively communicate with consumers on a regular basis via the use of electronic media and print correspondence about product offerings or other brandevents in order to maintain and strengthen the brand's connections with consumers. For certain of our wholesale customers, we also provide point-of-salematerials and signage to enhance the presentation of our branded products at their retail locations and/or participate in cooperative advertising programs.Southern Tide utilizes our owned distribution center in Lyons, Georgia for its warehouse and distribution center operations. Activities at thedistribution center include receiving finished goods from suppliers, inspecting the products and shipping the products to wholesale customers and our e-commerce customers. We seek to maintain sufficient levels of inventory at the distribution center to support our direct to consumer operations, as well as pre-booked orders and some limited replenishment ordering for our wholesale customers.Wholesale OperationsAt this time, Southern Tide's business is predominantly a wholesale business with sales to independent specialty stores, department stores and SouthernTide Signature Stores. Southern Tide's wholesale operations provide an opportunity to grow our business and have access to a large group of consumers.During the period from the acquisition date through the end of Fiscal 2016, less than 10% of Southern Tide's sales were to department stores and less than 5%of sales were to Southern Tide Signature Stores. Southern Tide's net sales to its five largest wholesale customers represented 20% of Southern Tide's net salesin the period from the acquisition date through the end of Fiscal 2016, with its largest customer representing 6% of Southern Tide's net sales. Southern Tideproducts are available in more than 950 retail locations.A component of Southern Tide's plans for growth in wholesale distribution is sales to Signature Stores. For these stores, we enter into agreementswhereby we grant the other party the right to independently operate one or more stores as a Southern Tide Signature Store, subject to certain conditions,including designating substantially all the store specifically for Southern Tide products and adhering to certain trademark usage requirements. We sellproducts to these Southern Tide Signature Stores on a wholesale basis and do not receive royalty income associated with these sales. As of January 28, 2017,there were three Signature Stores located in Kiawah Island, South Carolina, Greenville, South Carolina and Naperville, Illinois. We anticipate entering intoadditional Signature Store arrangements in the future.We maintain Southern Tide apparel sales offices and showrooms in Greenville, South Carolina. Our wholesale operations for Southern Tide utilize asales force consisting of a combination of salaried sales employees and commissioned agents.Direct to Consumer OperationsA key component of our Southern Tide growth strategy is to expand our direct to consumer operations, which currently consists of the Southern Tidewebsite. In the future, we may open owned retail stores; however, we do not expect to open any owned retail stores during Fiscal 2017. The Southern Tidewebsite markets a full line of merchandise, including apparel and accessories, all presented in a manner intended to enhance the Southern Tide image, brandawareness and acceptance. We believe our Southern Tide website enables us to stay close to the needs and preferences of consumers.We also utilize the Southern Tide website as a means of liquidating discontinued or out-of-season inventory in a brand appropriate manner. During theyear, we have a number of e-commerce flash clearance sales per year, which are typically in industry end of season promotional periods.Licensing OperationsWe currently license the Southern Tide trademark to a licensee for bed and bath product categories. The agreement requires minimum royalty paymentsas well as royalty and advertising payments and provides us the right to approve all products, advertising and proposed channels of distribution. In the longterm, we believe licensing may be an attractive business opportunity for Southern Tide, but opportunities may be somewhat limited until the sales volumeand distribution of the Southern Tide brand expands. Once the brand is more fully established, licensing requires modest additional investment but can yieldhigh-margin income. It also affords the opportunity to enhance overall brand awareness and exposure.Seasonal Aspects of BusinessSouthern Tide's operating results are impacted by seasonality as the demand by specific product or style as well as demand by distribution channel mayvary significantly depending on the time of year. As the timing of certain unusual or non-recurring items, economic conditions, wholesale product shipmentsor other factors affecting the business may vary from one year to the next, we do not believe that net sales or operating income for any particular quarter or thedistribution of net sales20for Fiscal 2016 are necessarily indicative of anticipated results for the full fiscal year or expected distribution in future years. Typically, wholesale productshipments are generally shipped prior to each retail selling seasons.Corporate and OtherCorporate and Other is a reconciling category for reporting purposes and includes our corporate offices, substantially all financing activities,elimination of inter-segment sales, LIFO inventory accounting adjustments, other costs that are not allocated to the operating groups and operations of otherbusinesses which are not included in our operating groups, including our Lyons, Georgia distribution center operations (which performs warehouse anddistribution services for third parties, as well as our Southern Tide and Lanier Apparel businesses). Our LIFO inventory pool does not correspond to ouroperating group definitions; therefore, LIFO inventory accounting adjustments are not allocated to operating groups.Discontinued OperationsDiscontinued operations include the assets and operations of our former Ben Sherman operating group which we sold in July 2015. Unless otherwiseindicated, all references to assets, liabilities, revenues, expenses and other information in this report reflect continuing operations and exclude any amountsrelated to the discontinued operations of our former Ben Sherman operating group. Refer to Note 13 in our consolidated financial statements included in thisreport for additional information about discontinued operations.TRADEMARKSWe own trademarks, several of which are very important and valuable to our business including Tommy Bahama, Lilly Pulitzer and Southern Tide.Generally, our significant 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 with retail services. We continue to evaluate ourworldwide usage and registration of certain of our trademarks. In general, trademarks remain valid and enforceable as long as the trademarks are used inconnection with our products and services in the relevant jurisdiction and the required registration renewals are filed. Important factors relating to risksassociated with our trademarks include, but are not limited to, those described in Part I, Item 1A. Risk Factors.PRODUCT SOURCINGWe intend to maintain flexible, diversified, cost-effective sourcing operations that provide high-quality apparel products. Our operating groups, eitherinternally or through the use of third party buying agents, source virtually all of our products from non-exclusive, third party producers located in foreigncountries, with a significant concentration in Asia, or from our licensees for licensed products sold in our direct to consumer distribution channels. DuringFiscal 2016, we sourced approximately 58% and 16% of our products from producers located in China and Vietnam, respectively, with no other countrygreater than 10%. Although we place a high value on long-term relationships with our suppliers and have used many of our suppliers for a number of years,generally we do not have long-term contracts with our suppliers. Instead, we conduct business on an order-by-order basis. Thus, we compete with othercompanies for the production capacity of independent manufacturers. We believe that this approach provides us with the greatest flexibility in identifyingthe appropriate manufacturers while considering quality, cost, timing of product delivery and other criteria and also utilizing the expertise of themanufacturers. During Fiscal 2016, no individual third party manufacturer supplied more than 10% of our product purchases.We purchase virtually all of our products from third party producers as package purchases of finished goods, which are manufactured with oversight byus or our buying agents and to our design and fabric specifications. The use of contract manufacturers reduces the amount of capital investment required byus as operating manufacturing facilities can require a significant amount of capital investment. We depend upon the ability of third party producers to securea sufficient supply of raw materials specified by us, adequately finance the production of goods ordered and maintain sufficient manufacturing and shippingcapacity rather than us providing or financing the costs of these items. We believe that purchasing substantially all of our products as package purchasesallows us to reduce our working capital requirements as we are not required to purchase, or finance the purchase of, the raw materials or other production costsrelated to our product purchases until we take ownership of the finished goods, which typically occurs when the goods are shipped by the third partyproducers. In addition to purchasing products from third parties, our Lanier Apparel operating group operates our only owned manufacturing facility, whichis located in Merida, Mexico and produced 2% of our total company, or 10% of our total Lanier Apparel, products during Fiscal 2016.As the design, manufacture and transportation of apparel products for our brands may take as many as six months for each season, we typically makecommitments months in advance of when products will arrive in our retail stores or our wholesale customers' stores. We continue to seek ways to reduce thetime required from design and ordering to bringing products to our customer. As our merchandising departments must estimate our requirements for finishedgoods purchases for our own retail stores and e-commerce sites based on historical product demand data and other factors, and as purchases for our21wholesale accounts must be committed to and purchased by us prior to the receipt of customer orders in some cases, we carry the risk that we have purchasedmore inventory than we will ultimately desire.As part of our commitment to source our products in a lawful and responsible manner, each of our operating groups has implemented a code of conductprogram applicable to vendors from whom we purchase goods, which includes provisions related to abiding by applicable laws as well as compliance withother business or ethical standards, including related human rights, health, safety, working conditions, environmental and other requirements. We require thateach of our vendors and licensees comply with the applicable code of conduct or substantially similar compliance standards. On an ongoing basis we assessvendors' compliance with the applicable code of conduct and applicable laws and regulations through audits performed by either our employees or ourdesignated agents. This assessment of compliance by vendors is directed by our corporate leadership team. In the event we determine that a vendor is notabiding by our required standards, we work with the vendor to remediate the violation. If the violation is not satisfactorily remediated, we will discontinueuse of the vendor.IMPORT RESTRICTIONS AND OTHER GOVERNMENT REGULATIONSWe are exposed to certain risks as a result of our international operations as substantially all of our merchandise is manufactured by foreign suppliers.During Fiscal 2016, we sourced approximately 58% of our products from producers located in China. Our imported products are subject to customs, trade andother laws and regulations governing their entry into the United States and other countries where we sell our products.Substantially all of the merchandise we acquire is subject to duties which are assessed on the value of the imported product and represent a componentof the cost of the goods we sell. Duty rates vary depending on the type of garment and its fiber content and are subject to change in future periods. Inaddition, while the World Trade Organization's member nations have eliminated quotas on apparel and textiles, the United States and other countries intowhich we import our products are still allowed in certain circumstances to unilaterally impose "anti-dumping" or "countervailing" duties in response tothreats to their comparable domestic industries.Although we have not been materially inhibited from doing business in desired markets in the past, we cannot assure that significant impediments willnot arise in the future as we expand product offerings and brands and enter into new markets. In addition, after the 2016 elections in the United States, therehas been discussion of the United States government implementing significant tax and trade reform, including disallowing deductibility of importedproducts, providing for a border adjustability tax mechanism for imports and other potential changes. There is a significant amount of uncertainty related tothese topics; however it is possible that the proposed changes, if implemented, could have a significant unfavorable impact on the apparel retail industry andour cost of goods sold, operations, net earnings and cash flows. Our management regularly monitors proposed regulatory changes and the existing regulatoryenvironment, including any impact on our operations or on our ability to import products.In addition, apparel and other products sold by us are subject to stringent and complex product performance and security and safety standards, laws andother regulations. These regulations relate principally to product labeling, certification of product safety and importer security procedures. We believe thatwe are in material compliance with those regulations. Our licensed products and licensing partners are also subject to such regulation. Our agreements requireour licensing partners to operate in compliance with all laws and regulations.Important factors relating to risks associated with government regulations include those described in Part I, Item 1A. Risk Factors.INFORMATION TECHNOLOGIESWe believe that sophisticated information systems and functionality are important components of maintaining our competitive position and supportingcontinued growth of our businesses, particularly in the ever changing consumer shopping environment. Our information systems are designed to provideeffective retail store, e-commerce and wholesale operations while emphasizing efficient point-of-sale, distribution center, design, sourcing, order processing,marketing, customer relationship management, accounting and other functions. We regularly evaluate the adequacy of our information technologies andupgrade or enhance our systems to gain operating efficiencies, to provide additional consumer access and to support our anticipated growth as well as otherchanges in our business. We believe that continuous upgrading and enhancements to our information systems with newer technology that offers greaterefficiency, functionality and reporting capabilities is critical to our operations and financial condition.SEASONAL ASPECTS OF BUSINESS22Each of our operating groups is impacted by seasonality as the demand by specific product or style, as well as by distribution channel, may varysignificantly depending on the time of year. For details of the impact of seasonality on each of our operating groups, see the business discussion of eachoperating group above.As the timing of certain unusual or non-recurring items, economic conditions, wholesale product shipments, weather or other factors affecting the retailbusiness may vary from one year to the next, we do not believe that net sales or operating income for any particular quarter or the distribution of net sales andoperating income for Fiscal 2016 are necessarily indicative of anticipated results for the full fiscal year or expected distribution in future years. Our thirdquarter has historically been our smallest net sales and operating income quarter and that result is expected to continue as we continue the expansion of ourretail store operations in the future. The following table presents our percentage of net sales and operating results by quarter for Fiscal 2016: FirstQuarterSecondQuarterThirdQuarterFourthQuarterNet sales25%28%22 %25%Operating income (loss)36%43%— %21%ORDER BACKLOGAs 66% of our sales are direct to consumer sales, which are not reflected in an order backlog, and the order backlog for wholesale sales may be impactedby a variety of factors, we do not believe that order backlog information is necessarily indicative of sales to be expected for future periods. Therefore, webelieve the order backlog is not material for an understanding of our business taken as a whole. Further, as our sales continue to shift towards direct toconsumer rather than wholesale sales, the order backlog will continue to be less meaningful as a measure of our future sales and results of operations.EMPLOYEESAs of January 28, 2017, we employed approximately 5,800 persons, of whom approximately 85% were employed in the United States. Approximately70% of our employees were retail store and restaurant employees. We believe our employee relations are good.INFORMATIONOxford Industries, Inc. is a Georgia corporation originally founded in 1942. Our corporate headquarters are located at 999 Peachtree Street, N.E., Ste.688, Atlanta, Georgia 30309. Our internet address is oxfordinc.com. Copies of our annual report on Form 10-K, proxy statement, quarterly reports onForm 10-Q and current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities ExchangeAct of 1934, as amended, are available free of charge on our website the same day that they are electronically filed with the SEC. The information on ourwebsite is not and should not be considered part of this Annual Report on Form 10-K and is not incorporated by reference in this document.In addition, copies of our annual report on Form 10-K, excluding exhibits, are available without cost to our shareholders by writing to InvestorRelations, Oxford Industries, Inc., 999 Peachtree Street, N.E., Suite 688, Atlanta, Georgia 30309.Item 1A. Risk FactorsThe 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. We operate in acompetitive and rapidly changing business environment, and additional risks and uncertainties not presently known to us or that we currently considerimmaterial may also adversely affect our business.We operate in a highly competitive industry which is evolving very rapidly; our ability to execute and/or transform our direct to consumer and portfolio-level strategies in light of shifts in consumer shopping behavior subjects us to risks that could adversely affect our financial results and operations.23We operate in a highly competitive industry in which the principal competitive factors are the reputation, value and image of brand names; design;consumer preference; price; quality; marketing; product fulfillment capabilities; and customer service. We believe that our ability to compete successfully isdirectly related to our proficiency in foreseeing changes and trends in fashion and consumer preference, including the manner in which retail consumers seekto transact business and access products, and presenting appealing products for consumers when and where they seek it.The highly competitive apparel industry has historically been characterized by low barriers to entry and includes numerous domestic and foreignapparel designers, manufacturers, distributors, importers, licensors and retailers, some of whom are also our customers, and some of whom may besignificantly larger, are more diversified and/or have significantly greater financial resources than we do. Competitive factors within the apparel industry mayresult in reduced sales, increased costs, lower prices for our products and/or decreased margins.One of our key initiatives has been to grow our branded businesses through distribution strategies that allow our consumers to access our brandswhenever and wherever they choose to shop. Our success depends to a large degree on our ability to introduce new retail concepts and products; identifyretail locations with the proper consumer demographics; establish the infrastructure necessary to support growth; source appropriate levels of inventory; hireand train qualified personnel; anticipate and implement innovations in sales and marketing technology to align with our consumers’ shopping preferences;and maintain brand specific websites and other social media presence that offer the functionality and security customers expect.We believe the retail apparel market is evolving very rapidly and in ways that are having a disruptive impact on traditional fashion retailers:•Technology, including the internet and mobile devices, is providing consumers with unprecedented access to multiple, responsive distributionplatforms, an unprecedented ability to communicate directly with brands, retailers and others and opportunities to shop for products shipped byretailers globally. As a result, consumers in today’s retail environment have more information, including transparency in product pricing andcompetitive offerings from competing brands, and broader, faster and cheaper access to goods than they have ever had before, which isrevolutionizing the way that consumers shop for fashion and other goods.•Large e-commerce retailers, who have historically focused on commoditized product categories, are dedicating resources to enter the fashion retailspace, resulting in increased competition from competitors with significant financial resources and enhanced distribution capabilities. As a result,many fashion brands are confronting the challenge of making their products available through these distribution channels while, at the same time,taking a cautious approach to ensure brand integrity.•At the same time, the bricks and mortar outlet mall, off-price and fast fashion channels of distribution, in particular off-price retailers carrying brandlabel products at clearance, have seen strong retail consumer traffic and strengthening comparable store sales, with consumers seeking bargains onfashion brands. Many of these retailers have announced plans for significant growth in door counts, adding traffic and pricing pressure to traditionalretailers. In response, traditional fashion retailers have become promotional, both online and in-store, and have modified the merchandising of theiroutlet mall locations for greater consumer appeal and to find growth and profitability.•These changes in consumer shopping behavior patterns and the proliferation of smaller, e-commerce focused apparel brands have contributed to thechallenges facing the traditional department store model. These traditional department stores are challenged to effectively service today’s consumeras a one-stop destination for fashion branded products, further exacerbating promotional pressure at the department stores and the decline inconsumer retail traffic for mall-based retailers.This evolution in the manner in which consumers transact business globally and our efforts to respond to these changes and execute our direct toconsumer strategies could adversely affect our financial results and operations as a result of, among other things: investment in technology and infrastructure,which is extremely complex, in order to remain competitive (including investments to maintain modern technology and functionality similar to thatprovided by our competitors and expected by our customers); reliance on outdated technology that is not as appealing or functionally effective as those ofour competitors; an inability to provide customer-facing technology systems, including mobile technology solutions, that function reliably and provide aconvenient and consistent experience for our customers; our own e-commerce business and/or third party offers diverting sales from our bricks and mortarretail stores, where we have made substantial capital expenditures on leasehold improvements and have significant remaining long-term financialcommitments; the decisions we make with respect to which wholesale customers we are willing to sell our products to in order to maintain a consistent brandmessage and pricing24strategy; our own promotional activity and pricing strategies; any failure to properly communicate our brand message or recreate the ambiance of our retailstores through social media; a reliance on third party service providers for software, processing and similar services; liability for our online content; creditcard fraud; and failure of computer systems, theft of personal consumer information and computer viruses. Additionally, the rapid dissemination ofinformation and opinions in the current marketplace through social media and other platforms increases the challenges of responding to negative perceptionsor commentary about our brands or products.Any inability on our part to properly manage these risks and effectively adapt to the evolving consumer shopping behavioral trends may result inlost sales and/or adversely impact our results of operations, reputation and credibility.Our success depends on the reputation and value of our brand names; any failure to maintain the reputation or value of our brands and/or to offerinnovative, fashionable and desirable products could adversely affect our business operations and financial condition.Our success depends on the reputation and value of our brand names. The value of our brands could be diminished by actions taken by us or by ourwholesale customers or others who have an interest in the brands. Actions that could cause harm to our brands include failing to respond to emerging fashiontrends or meet consumer quality expectations; selling products bearing our brands through distribution channels that are inconsistent with the retail channelsin which our customers expect to find those brands; becoming overly promotional; or setting up consumer expectations for promotional activity for ourproducts. We are becoming more reliant on social media as one of our marketing strategies and the value of our brands could be adversely affected if we donot effectively communicate our brand message through social media vehicles that interface with our consumers in “real-time.” In addition, we cannot alwayscontrol the marketing and promotion of our products by our wholesale customers or other third parties, and actions by such parties that are inconsistent withour own marketing efforts or that otherwise adversely affect the appeal of our products could diminish the value or reputation of one or more of our brandsand have an adverse effect on our sales and business operations.During Fiscal 2016, Tommy Bahama’s and Lilly Pulitzer’s net sales represented 64% and 23%, respectively, of our consolidated net sales. Thesignificant concentration in our portfolio may heighten the risks we face if one of these brands fails to meet our expectations and/or is adversely impacted byactions we or third parties take with respect to that brand or by competitive conditions in the apparel industry.Although certain of our products carry over from season to season, the apparel industry is subject to rapidly changing fashion trends and shiftingconsumer demands. Due to the competitive nature of the apparel industry, there can be no assurance that the demand for our products will not decline or thatwe will be able to successfully evaluate and adapt our products to align with consumer preferences and changes in consumer demographics. Any failure onour part to develop and market appealing products could result in weakened financial performance and/or harm the reputation and desirability of our brandsand products.We also license certain of our brands to third party licensees, including in Tommy Bahama for purposes of retail and/or wholesale distribution of ourapparel products in certain international markets. While we enter into comprehensive license and similar collaborative agreements with third parties coveringproduct design, product quality, sourcing, distribution, manufacturing and marketing requirements and approvals, there can be no guarantee our brands willnot be negatively impacted through our association with products outside of our core apparel products, by the market perception of the third parties withwhom we associate and/or due to the actions of a licensee. The improper or detrimental actions of a licensee could significantly impact the perception of ourbrands.In addition, the reputation of our brands could be harmed if our third party manufacturers and vendors, substantially all of which are located outsidethe United States, fail to meet appropriate product safety, product quality and social compliance standards, including the terms of our applicable codes ofconduct and vendor compliance standards. We cannot assure that our manufacturers and vendors will at all times conduct their operations in accordance withethical practices or that the products we purchase will always meet our safety and quality control standards. Any violation of our applicable codes of conductor local laws relating to labor conditions by our manufacturers or vendors or other actions or failures by us or such parties may result in negative publicperception of our brands or products, as well as disrupt our supply chain, which may adversely affect our business operations.The apparel industry is heavily influenced by general economic conditions, and a deterioration or worsening of consumer confidence or consumerpurchases of discretionary products may adversely affect our business and financial condition, including as a result of adverse business conditions forthird parties with whom we do business.25We are a consumer products company and are highly dependent on consumer discretionary spending and retail traffic patterns. The levels of demandfor apparel products change as regional, domestic and international economic conditions change. Demand for our products may be significantly impacted bytrends in consumer confidence and discretionary consumer spending, which may be influenced by employment levels; recessions; fuel and energy costs;interest rates; tax rates and changes in tax laws; personal debt levels; stock market volatility; and general uncertainty about the future. The factors impactingconsumer confidence and discretionary consumer spending are outside of our control and difficult to predict, and, often, the apparel industry experienceslonger periods of recession and greater declines than the general economy. Any deterioration or worsening of consumer confidence or discretionary consumerspending could reduce our sales and/or adversely affect our business and financial condition.Additionally, significant changes in the operations or liquidity of any of the parties with which we conduct our business, including suppliers,customers, trademark licensees and lenders, among others, now or in the future, or in the access to capital markets for any such parties, could result in lowerdemand for our products, lower sales, higher costs or other disruptions in our business.Loss of one or more of our key wholesale customers, or a significant adverse change in a customer’s financial performance or financial position, couldnegatively impact our net sales and profitability.We generate a significant percentage of our wholesale sales from a few key customers. For example, during Fiscal 2016, 46% of our consolidatedwholesale sales, or 16% of our consolidated net sales, were to our five largest customers. Over the last several years, there have been significant levels of storeclosures by department stores and other large retailers, particularly as the retail industry has transitioned more towards online and mobile transactions;increased prevalence and emphasis on private label products at large retailers; direct sourcing of products by large retailers; consolidation of a number ofretailers; and increased competition experienced by our wholesale customers from online competitors. A decrease in the number of stores that carry ourproducts, restructuring of our customers’ operations, continued store closures by major department stores, direct sourcing and greater leverage by customers,realignment of customer affiliations or other factors could negatively impact our net sales and profitability.We generally do not have long-term contracts with our wholesale customers. Instead, we rely on long-standing relationships with these customers,the appeal of our brands and our position within the marketplace. As a result, purchases generally occur on an order-by-order basis, and each relationship cantypically be terminated by either party at any time. A decision by one or more of our key wholesale customers to terminate its relationship with us or toreduce its purchases from us, whether motivated by competitive considerations, quality or style issues, financial difficulties, economic conditions orotherwise, could adversely affect our net sales and profitability, as it would be difficult to immediately, if at all, replace this business with new customers,reduce our operating costs or increase sales volumes with other existing customers. In addition, as department stores and other large retailers become morepromotional, we may decide to terminate or curtail our sales to certain customers, for brand protection or otherwise, which could similarly impact our netsales and profitability.We also extend credit to most of our key wholesale customers without requiring collateral, which results in a large amount of receivables from just afew customers. At January 28, 2017, our five largest outstanding customer balances represented $29 million, or 50% of our consolidated receivables balance.Companies in the apparel industry, including some of our customers, may experience financial difficulties, including bankruptcies, restructurings andreorganizations, tightened credit markets and/or declining sales and profitability. A significant adverse change in a customer’s financial position could causeus to limit or discontinue business with that customer, require us to assume greater credit risk relating to that customer’s receivables or limit our ability tocollect amounts related to shipments to that customer.We rely to a large extent on third party producers in foreign countries to meet our production demands, and failures by these producers to meet ourrequirements, the unavailability of suitable producers at reasonable prices and/or changes in international trade regulation may negatively impact ourability to deliver quality products to our customers on a timely basis, disrupt our supply chain or result in higher costs or reduced net sales.We source substantially all of our products from non-exclusive, third party producers located in foreign countries, including sourcing approximately58% and 16% of our product purchases from China and Vietnam, respectively, during Fiscal 2016. Although we place a high value on long-termrelationships with our suppliers, generally we do not have long-term supply contracts but, instead, conduct business on an order-by-order basis. Therefore, wecompete with other companies for the production capacity of independent manufacturers. We also depend on the ability of these third party producers tosecure a sufficient supply of raw materials, adequately finance the production of goods ordered and maintain sufficient manufacturing and shipping capacity,and in some cases, the products we purchase and the raw materials that are used in our products are available only from one source or a limited number ofsources. Although we monitor production in third party manufacturing26locations, we cannot be certain that we will not experience operational difficulties with our manufacturers, such as the reduction of availability of productioncapacity, errors in complying with product specifications, insufficient quality control, failures to meet production deadlines or increases in manufacturingcosts. Such difficulties may negatively impact our ability to deliver quality products to our customers on a timely basis. This would jeopardize our ability toservice our customers and properly merchandise our direct to consumer channels, which may, in turn, have a negative impact on our customer relationshipsand result in lower net sales.In addition, due to our sourcing activities, we are exposed to risks associated with changes in the laws and regulations governing the importing andexporting of apparel products into and from the countries in which we operate. These risks include changes in social, political, labor and economicconditions or terrorist acts that could result in the disruption of trade from the countries in which our manufacturers are located; the imposition of additionalor new duties, tariffs, taxes, quota restrictions or other changes and shifts in sourcing patterns as a result of such changes; significant delays in the delivery ofour products, due to security or other considerations; fluctuations in sourcing costs; the imposition of antidumping or countervailing duties; fluctuations inthe value of the dollar against foreign currencies; changes in customs procedures for importing apparel products; and restrictions on the transfer of funds to orfrom foreign countries. We may not be able to offset any disruption or cost increases to our supply chain as a result of any of these factors by shiftingproduction to suitable manufacturers in other jurisdictions in a timely manner or at acceptable prices, and future regulatory actions or changes ininternational trade regulation may provide our competitors with a material advantage over us.In this regard, the results of the November 2016 U.S. election have introduced greater uncertainty with respect to future trade regulations. Forexample, the new Presidential administration has suggested modifying existing trade agreements and/or imposing tariffs on foreign products. We cannotpredict whether or not any of the foreign countries in which our products are produced will be subject to import restrictions or new or increased duties, taxesor other charges on imports. Trade restrictions, including increased tariffs, or more restrictive quotas including safeguard quotas, or anything similar,applicable to apparel items could affect the importation of apparel generally and increase the cost, or reduce the supply, of products we may be able to sell toour customers.Changes in tax laws and unanticipated tax liabilities could adversely affect our effective income tax rate and profitability.As a global apparel company, we are subject to income taxes in the United States and various foreign jurisdictions. We record our income taxliability based on an analysis and interpretation of local tax laws and regulations, which requires a significant amount of judgment and estimation. Inaddition, we may from time to time modify our operations in an effort to minimize our global income tax exposure. Our effective income tax rate in anyparticular 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 domesticand 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 incometax audits in various jurisdictions; new expensing rules associated with stock compensation; and the resolution of uncertain tax positions, any of whichcould adversely affect our effective income tax rate and profitability.Changes in the tax laws of the jurisdictions where we do business, including an increase in tax rates or an adverse change in the treatment of an itemof income or expense, could result in a material increase in our tax expense. For example, in the United States, a number of proposals for broad reform of thecorporate tax system are being discussed by legislators, including a border adjustability tax, increased taxes on imports and a limit on the ability of U.S.companies to defer U.S. tax on unrepatriated foreign earnings. In addition, policy statements by the new Presidential administration have introduced greateruncertainty with respect to future tax and trade regulations. Although we cannot accurately predict whether, when or to what extent new U.S. federal tax laws,regulations, interpretations or rulings will be issued, or the overall effect of any such changes on our effective tax rate, changes such as these may have amaterial adverse effect on our results of operations and cash flows.Breaches of information security or privacy could damage our reputation or credibility and cause us financial harm.As an ongoing part of our business operations, including direct to consumer transactions and marketing through various social media tools, weregularly collect and utilize sensitive and confidential personal information, including of our customers, employees and suppliers and including credit cardinformation. The routine operation of our business involves the storage and transmission of customer personal information, preferences and credit cardinformation, and we use social media and other online activities to connect with our customers. The regulatory environment governing our use ofindividually identifiable data of customers, employees and others is complex, and the security of personal information is a matter of public concern.Cybersecurity attacks continue to become increasingly sophisticated, and experienced computer programmers and hackers may be able to penetrateour network security and misappropriate or compromise our confidential information or27disrupt our systems. Despite our implementation of security measures, if an actual or perceived data security breach occurs, whether as a result ofcybersecurity attacks, computer viruses, vandalism, human error or otherwise, the image of our brands and our reputation and credibility could be damaged.The costs to eliminate or alleviate cyber or other security problems and vulnerabilities, including to comply with security or other measures under state,federal and international laws governing the unauthorized disclosure of confidential information or to resolve any litigation, and to enhance cybersecurityprotection through organizational changes, deploying additional personnel and protection technologies, training employees and engaging third partyexperts and consultants could be significant and result in significant financial losses and expenses, as well as lost sales.As part of our routine operations, we also contract with third party service providers to store, process and transmit personal information of ouremployees and customers. Although we contractually require that these providers implement reasonable security measures, we cannot control third partiesand cannot guarantee that a security breach will not occur at their location or within their systems. Privacy breaches of confidential information stored orused by our third party service providers may expose us to negative publicity, as well as potential out-of-pocket costs which could materially adversely affectour business and customer relationships.In addition, privacy and information security laws and requirements change frequently, and compliance with them or similar security standards, suchas those created by the payment card industry, may require us to modify our operations and/or incur costs to make necessary systems changes and implementnew administrative processes. Our failure to comply with these laws and regulations, or similar security standards, could lead to fines, penalties or adversepublicity.Our business depends on our senior management and other key personnel, and the unsuccessful transition of key management responsibilities, theunexpected loss of individuals integral to our business, our inability to attract and retain qualified personnel in the future or our failure to successfullyplan for and implement succession of our senior management and key personnel may have an adverse effect on our operations, business relationships andability to execute our strategies.Our senior management has substantial experience and expertise in the apparel and related industries, with our Chairman and Chief ExecutiveOfficer Mr. Thomas C. Chubb III having worked with our company for more than 25 years, including in various executive management capacities. Oursuccess depends on disciplined execution at all levels of our organization, including our senior management, and continued succession planning.Competition for qualified personnel in the apparel industry is intense, and we compete to attract and retain these individuals with other companies that mayhave greater financial resources than us. While we believe that we have depth within our management team, the unexpected loss of any of our seniormanagement, or the unsuccessful integration of new leadership, could harm our business and financial performance. In addition, we may be unable to retainor recruit qualified personnel in key areas such as product design, sales, marketing (including individuals with key insights into digital and social mediamarketing strategies), technology, sourcing and other support functions, which could result in missed sales opportunities and harm to key businessrelationships.Our operations are reliant on information technology and any interruption or other failure, in particular at one of our principal distribution facilities, mayimpair our ability to provide products to our customers, efficiently conduct our operations and meet the needs of our management.The efficient operation of our business is dependent on information technology. Information systems are used in all stages of our operations and as amethod of communication with our customers, service providers and suppliers. Additionally, each of our operating groups utilizes e-commerce websites tosell goods directly to consumers. Our management also relies on information systems to provide relevant and accurate information in order to allocateresources and forecast and report our operating results. Service interruptions may occur as a result of a number of factors, including power outages, consumertraffic levels, computer viruses, hacking or other unlawful activities by third parties, disasters or failures to properly install, upgrade, integrate, protect, repairor maintain our various systems and e-commerce websites. We regularly evaluate upgrades or enhancements to our information systems to more efficientlyand competitively operate our businesses. We may experience difficulties during the implementation, upgrade or subsequent operation of our systems and/ornot be equipped to address system problems. Any material disruption in our information technology systems, or any failure to timely, efficiently andeffectively integrate new systems, could have an adverse effect on our business or results of operations.We may additionally have a greater risk than our peers due to the concentration of our distribution facilities. The primary distribution facilities thatwe operate are: a distribution center in Auburn, Washington for substantially all of our Tommy Bahama products; a distribution center in King of Prussia,Pennsylvania for substantially all of our Lilly Pulitzer products; distribution centers in Toccoa, Georgia and Lyons, Georgia for substantially all of our LanierApparel products; and a distribution center in Lyons, Georgia for substantially all of our Southern Tide products. Each of these distribution centers relies28on computer-controlled and automated equipment, which may be subject to a number of risks. Our ability to support our direct to consumer operations, meetcustomer 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 ofnatural or man-made disasters, cybersecurity attacks, computer viruses or otherwise, if our distribution facilities fail to upgrade their technological systems toensure efficient operations or if we are unable to receive goods in a distribution center or to ship the goods in a distribution center, as a result of a technologyfailure or otherwise, we could experience a reduction in sales, a substantial loss of inventory or higher costs, insufficient inventory at our retail stores to meetconsumer expectations and longer lead times associated with the distribution of our products. In addition, for the distribution facilities that we operate, thereare substantial fixed costs associated with these large, highly automated distribution centers, and we could experience reduced operating and cost efficienciesduring periods of economic weakness. Any disruption to our distribution facilities or in their efficient operation could negatively affect our operating resultsand our customer relationships.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 andregulations could have an adverse effect on our costs or operations.In the United States, we are subject to stringent standards, laws and other regulations, including those relating to health, product performance andsafety, labor, employment, privacy and data security, anti-bribery, consumer protection, taxation, customs, logistics and similar operational matters. Inaddition, operating in foreign jurisdictions, including those where we may operate retail stores, requires compliance with similar laws and regulations. Theselaws and regulations, in the United States and abroad, are complex and often vary widely by jurisdiction, making it difficult for us to ensure that we arecurrently or will in the future be compliant with all applicable laws and regulations. We may be required to make significant expenditures or modify ourbusiness practices to comply with existing or future laws or regulations, and unfavorable resolution to litigation or a violation of applicable laws andregulations 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 otherwiseincrease our costs, negatively impact our ability to attract and retain employees, materially limit our ability to operate our business or result in adversepublicity. Compliance with these laws and regulations requires us to devote time and management resources, and to update our processes and programs, inresponse to newly implemented or changing regulatory requirements, all of which could affect the manner in which we operate our business or adverselyaffect our results of operations.In addition, like many retailers, we are impacted by trends in litigation, including class action litigation brought under various consumer protectionand employment laws and are subject to various claims and pending or threatened lawsuits in the ordinary course of our business operations. Due to theinherent uncertainties of litigation, we cannot accurately predict the ultimate outcome of any such proceedings, and regardless of the outcome or whether theclaims have merit, legal proceedings may be expensive and require that our management devote significant time to defend.Also, the restaurant industry requires compliance with a variety of federal, state and local regulations. In particular, all of our Tommy Bahamarestaurants, as well as our recently launched Marlin Bar concept at Tommy Bahama, serve alcohol and, therefore, maintain liquor licenses. Our ability tomaintain our liquor licenses depends on our compliance with applicable laws and regulations. The loss of a liquor license would adversely affect theprofitability of that restaurant. Additionally, as a participant in the restaurant industry, we face risks related to food quality, food-borne illness, injury, healthinspection scores and labor relations.Regardless of whether any allegations of violations of the laws and regulations governing our business are valid or whether we ultimately becomeliable, we may be materially affected by negative publicity associated with these issues. For example, the negative impact of adverse publicity relating toallegations of violations at one of our restaurants may extend beyond the restaurant involved to affect some or all of the other restaurants, as well as the imageof the Tommy Bahama brand as a whole.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. In order to meet the expected demand for our products in a cost-effective manner, we makecommitments for production several months prior to our receipt of these goods and often in advance of firm commitments, if any, from wholesale customers.Depending on the demand levels for our products, we may be unable to sell the products we have ordered or that we have in our inventory, which may29result in inventory markdowns, such as the $5 million of inventory markdowns recognized by Tommy Bahama in the Fourth Quarter of Fiscal 2016, or thesale of excess inventory at discounted prices and through off-price channels. These events could significantly harm our operating results and impair theimage of our brands. Conversely, if we underestimate demand for our products or if we are unable to access our products when we need them, for example dueto 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, suchas the delay in arrival of Lilly Pulitzer product during the Third Quarter of Fiscal 2016 as a result of the Hanjin shipping bankruptcy, we may experienceinventory shortages, which might result in unfilled orders, negatively impact customer relationships, diminish brand loyalty and result in lost sales, any ofwhich could harm our business.We may be unable to grow our business through organic growth, and any failure to successfully execute this aspect of our business strategy may have amaterial adverse effect on our business, financial condition, liquidity and results of operations.One key component of our business strategy is organic growth in our brands. Organic growth may be achieved by, among other things, increasingsales in our direct to consumer channels; selling our products in new markets, including international markets; increasing our market share in existingmarkets, including to existing wholesale customers; expanding the demographic appeal of our brands; expanding our margins through product costreductions, price increases, or otherwise; and increasing the product offerings within our various operating groups. Successful growth of our business issubject to, among other things, our ability to implement plans for expanding and/or maintaining our existing businesses and categories within our businessesat satisfactory levels. We may not be successful in achieving suitable organic growth, and our inability to grow our business may have a material adverseeffect on our business, financial condition, liquidity and results of operations.In addition, investments we make in technology and infrastructure, retail stores and restaurants, office and distribution center facilities, personneland elsewhere may not yield the full benefits we anticipate and/or sales growth may be outpaced by increases in operating costs, putting downward pressureon our operating margins and adversely affecting our results of operations. If we are unable to increase our sales growth targets organically, we may berequired to pursue other strategic initiatives, including reductions in costs and/or acquisitions, in order to grow our business. These initiatives may not beavailable to us on desirable terms, inhibiting our ability to increase profitability.The acquisition of new businesses and the divestiture or discontinuation of businesses and product lines have certain inherent risks, including, forexample, strains on our management team and unexpected costs and other charges resulting from the transaction. Growth of our business through acquisitions of lifestyle brands that fit within our business model is a component of our business strategy. Forexample, during Fiscal 2016, we acquired Southern Tide, LLC, which owns the Southern Tide lifestyle brand, and also acquired the Duck Head and StrongSuit brands. Acquisitions involve numerous risks, including: the competitive climate for desirable acquisition candidates, which drives market multiples; thebenefits of the acquisition not materializing as planned or not materializing within the time periods or to the extent anticipated; our ability to manage thepeople and processes of an acquired business; difficulties in retaining key relationships with customers and suppliers; risks in entering geographic marketsand/or product categories in which we have no or limited prior experience; and the possibility that we pay more to consummate an acquisition than the valuewe derive from the acquired business. Additionally, acquisitions may cause us to incur debt, assume other liabilities or make dilutive issuances of our equitysecurities.As described in Note 1 in our consolidated financial statements included in this report, at the time of an acquisition, we estimate and record the fairvalue of purchased intangible assets, such as trademarks, reacquired rights and customer relationships, and record goodwill generally to the extent the cost toacquire a business exceeds our assessment of the net fair value of tangible and intangible assets. We test indefinite-lived intangible assets and goodwill forpossible impairment as of the first day of the fourth quarter of each fiscal year, or at an interim date if indicators of impairment exist at that date. It is possiblethat we could have an impairment charge for goodwill or intangible assets in future periods if, among other things, economic conditions decline, ourstrategies for an acquired business change, the results of operations of an acquired business are less than anticipated at the time of acquisition or enterprisevalues of comparable publicly traded companies decline, resulting in an impairment of the goodwill and/or intangible assets associated with an acquiredbusiness. A future impairment charge for goodwill or intangible assets could have a material adverse effect on our consolidated financial position or results ofoperations.As a result of acquisitions, we may become responsible for unexpected liabilities that we failed or were unable to discover in the course ofperforming due diligence. Although we may be entitled to indemnification against undisclosed liabilities from the sellers of the acquired business, ourrecourse may be limited and we cannot be certain that the indemnification, even if obtained, will be enforceable or collectible. Any of these liabilities,individually or in the aggregate, could have a material adverse effect on our business, financial condition and results of operations.30In addition, integrating acquired businesses is a complex, time-consuming and expensive process. The integration process for newly acquiredbusinesses could create for us a number of challenges and adverse consequences associated with the integration of product lines, employees, sales teams andoutsourced manufacturers; employee turnover, including key management and creative personnel of the acquired and existing businesses; disruption inproduct cycles for newly acquired product lines; maintenance of acceptable standards, controls, procedures and policies; operating business in newgeographic territories; diversion of the attention of our management from other areas of our business; and the impairment of relationships with customers ofthe acquired and existing businesses. Merger and acquisition activity is inherently risky, and we cannot be certain that any acquisition will be successful andwill not materially harm our business, operating results or financial condition.From time to time, we also divest or discontinue businesses and/or product lines that do not align with our strategy or provide the returns that weexpect or desire. For example, during Fiscal 2015, we sold the operations and assets of our former Ben Sherman operating group. Disposition transactions, aswell as the discontinuation of business and/or product lines, may result in underutilization of our retained resources if the exited operations are not replacedwith new lines of business, either internally or through acquisition. In addition, we may become responsible for unexpected liabilities, some of which may betriggered or increased by a purchaser’s operation of the disposed business following the transaction. Those liabilities combined with any other liabilities wecontractually retain, individually or in the aggregate, could adversely affect our financial condition and results of operations.We may be unable to protect our trademarks and other intellectual property.We believe that our trademarks and other intellectual property, as well as certain contractual arrangements, including licenses, and other proprietaryintellectual property rights, have significant value and are important to our continued success and our competitive position due to their recognition byretailers and consumers. In Fiscal 2016, 92% of our consolidated net sales were attributable to branded products for which we own the trademark. Therefore,our success depends to a significant degree on our ability to protect and preserve our intellectual property. We rely on laws in the United States and othercountries to protect our proprietary rights. However, we may not be able to sufficiently prevent third parties from using our intellectual property without ourauthorization, particularly in those countries where the laws do not protect our proprietary rights as fully as in the United States. The use of our intellectualproperty or similar intellectual property by others could reduce or eliminate any competitive advantage we have developed, causing us to lose sales orotherwise harm the reputation of our brands.We devote significant resources to the registration and protection of our trademarks and to anti-counterfeiting efforts. Despite these efforts, weregularly discover products that are counterfeit reproductions of our products, that otherwise infringe on our proprietary rights or that otherwise seek to mimicor leverage our intellectual property. These counterfeiting activities typically increase as brand recognition increases, especially in markets outside theUnited States. Counterfeiting of our brands could divert away sales, and association of our brands with inferior counterfeit reproductions could adverselyaffect the integrity and reputation of our brands.Additionally, there can be no assurance that the actions that we have taken will be adequate to prevent others from seeking to block sales of ourproducts as violations of proprietary rights. As we extend our brands into new product categories and new product lines and expand the geographic scope ofour manufacture, distribution and marketing, we could become subject to litigation or challenge based on allegations of the infringement of intellectualproperty rights of third parties, including by various third parties who have acquired or claim ownership rights in some of our trademarks internationally. Inthe event a claim of infringement against us is successful or would otherwise affect our operations, we may be required to pay damages, royalties or licensefees or other costs to continue to use intellectual property rights that we had been using, or we may be unable to obtain necessary licenses from third parties ata reasonable cost or within a reasonable time. Litigation and other legal action of this type, regardless of whether it is successful, could result in substantialcosts to us and diversion of the attention of our management and other resources.Fluctuations and volatility in the cost and availability of raw materials, labor and freight may materially increase our costs.We and our third party suppliers rely on the availability of raw materials at reasonable prices. The principal fabrics used in our business are cotton,linens, wools, silk, other natural fibers, synthetics and blends of these materials. The prices paid for these fabrics depend on the market price for raw materialsused to produce them. In addition, the cost of the materials that are used in our manufacturing process, such as oil-related commodity prices and other rawmaterials, such as dyes and chemicals, and other costs, can fluctuate. In recent years, we have seen increases in the costs of certain raw materials as a result ofweather-related supply disruptions, significant declines in U.S. inventory and a sharp rise in the futures market for cotton. We historically have not enteredinto any futures contracts to hedge commodity prices.31In recent years, we have also seen increases in the cost of labor at many of our suppliers, particularly with the growth of the middle class in certaincountries, as well as in freight costs. In China, for example, apparel manufacturers have experienced increased costs due to labor shortages and other factors,and these increased costs are often passed on to us. Although we attempt to mitigate the effect of increases in our cost of goods sold through sourcinginitiatives and by selectively increasing the prices of our products, these product costing pressures, as well as other variable cost pressures, may materiallyincrease our costs, and we may be unable to fully pass on these costs to our customers.As of January 28, 2017, we had approximately 4,000 retail store and restaurant employees. The employment and employment-related costsassociated with these employees are a significant component in the SG&A of our retail store and restaurant operations. Employment costs are affected byvarious federal, state and foreign laws governing matters such as minimum wage rates, overtime compensation and other requirements. For example, in recentyears, there has been significant political pressure and legislative action to increase the minimum wage rate in many of the jurisdictions within which ourstores are located. Although we have not thus far been materially affected by these legislative increases in minimum wage rates, any increases in ouremployment costs, as a result of continued increases in minimum wage rates or otherwise, may materially increase our costs, reduce the profitability orexpected profitability of continuing and prospective retail and restaurant operations and/or adversely impact our results of operations.We may not be successful in identifying locations and negotiating appropriate lease terms for retail stores and restaurants.An integral part of our strategy has been to develop and operate retail stores and restaurants for certain of our lifestyle brands. Net sales from ourretail stores and restaurants were 48% of our consolidated net sales during Fiscal 2016.We lease all of our retail store and restaurant locations. Successful operation of our retail stores and restaurants depends, in part, on our ability toidentify desirable, brand appropriate locations; the overall ability of the location to attract a consumer base sufficient to make store 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 thelocation in accordance with our plans. A decline in the volume of consumer traffic at our retail stores and restaurants, due to economic conditions, shifts inconsumer shopping preferences or technology, a decline in the popularity of malls or lifestyle centers in general or at those in which we operate, the closingof anchor stores or other adjacent tenants or otherwise, could have a negative impact on our sales, gross margin and results of operations. In addition, as andwhen we seek to open new retail stores and restaurants, we compete with others for favorable locations, lease terms and desired personnel. Retail growth maybe limited if we are unable to identify new locations with consumer traffic sufficient to support a profitable sales level or the local market reception to a newretail store opening is inconsistent with our expectations.Our retail store and restaurant leases generally represent long-term financial commitments, with substantial costs at lease inception for a location’sdesign, leasehold improvements, fixtures and systems installation. Impairment testing of our retail stores’ long-lived assets requires us to make estimatesabout our future performance and cash flows that are inherently uncertain. These estimates can be affected by numerous factors, including changes ineconomic conditions, our results of operations, and competitive conditions in the industry. Due to the fixed-cost structure associated with our retailoperations, negative cash flows or the closure of a retail store or restaurant could result in write-downs of inventory, impairment of leasehold improvements,impairment of other long-lived assets, severance costs, lease termination costs or the loss of working capital, which could adversely impact our business andfinancial results. For example, during the Fourth Quarter of Fiscal 2016, we recognized certain charges in connection with closing three Tommy Bahamaretail stores, including outlets. These charges may increase as we continue to evaluate our retail operations.In addition, our retail store and restaurant leases generally grant the third party landlord with discretion on a number of operational matters, such asstore hours and construction of our improvements. The recent consolidation within the commercial real estate development, operation and/or managementindustries may reduce our leverage with those parties, thereby adversely affecting the terms of future leases for our retail stores and restaurants or makingentering into long-term commitments with such parties cost prohibitive.Our geographic concentration of retail stores and wholesale customers for certain of our brands exposes us to certain regional risks.Our retail locations are heavily concentrated in certain geographic areas in the United States, including Florida and California for our TommyBahama retail stores (53 out of 144 domestic stores in these states as of January 28, 2017) and Florida and Texas for our Lilly Pulitzer retail stores (18 out of40 stores as of January 28, 2017). Additionally, the wholesale sales for each of Tommy Bahama, Lilly Pulitzer and Southern Tide experience geographicconcentration, including in geographic areas where we have concentrations of our own retail store locations. Due to this concentration, we have32heightened exposure to factors that impact these regions, including general economic conditions, weather patterns, natural disasters, changing demographicsand other factors.Our direct to consumer operations in international markets may continue to adversely impact our results of operations.In recent years we began expansion of the Tommy Bahama brand into international markets. These efforts included the acquisition of the assets andoperations of the Tommy Bahama business from former licensees in Australia in Fiscal 2012 and in Canada in Fiscal 2013. We also commenced operations inAsia by opening retail store locations in Asia beginning in Fiscal 2012. The operations in the Asia-Pacific region thus far have generated operating losses aswe developed a significant Hong Kong-based team and infrastructure to support a larger Asia retail operation. Although we closed our retail stores in Macauand Singapore, as well as outlet stores in Hong Kong and Japan, during Fiscal 2015 and Fiscal 2016, we believe that the operating losses associated with ourTommy Bahama operations in the Asia-Pacific region will continue in the near-future, adversely impacting our results of operations and putting downwardpressure on our operating margin, until we have sufficient sales to leverage the operating costs or have otherwise fully exited direct operations in unprofitablejurisdictions.In addition, we have limited experience with regulatory environments and market practices related to international operations and there are risksassociated with doing business in these markets, including lack of brand recognition in certain markets; understanding fashion trends and satisfyingconsumer tastes; understanding sizing and fitting in these markets; market acceptance of our products, which is difficult to assess immediately; establishingappropriate market-specific operational and logistics functions; managing compliance with the various legal requirements; staffing and managing foreignoperations; fluctuations in currency exchange rates; obtaining governmental approvals that may be required to operate; potentially adverse tax implications;and maintaining proper levels of inventory. If we are unable to properly manage these risks or if our international efforts do not prove successful, ourbusiness, financial condition and results of operations could continue to be negatively impacted.As we continue to explore long-term opportunities for our Tommy Bahama brand internationally while simultaneously seeking to reduce theoperating losses associated with our Tommy Bahama operations in the Asia-Pacific region, we may elect to enter into retail license and/or wholesaledistribution arrangements, or joint ventures, with third parties for certain markets. Any such arrangements are subject to a number of risks and uncertainties,including our reliance on the operational skill and expertise of a local operator, the ability of the joint venture or operator to manage its employees andappropriately represent our brands in those markets and any protective rights that we may be forced to grant to the third party, which could limit our ability tofully realize the anticipated benefits of such a relationship.We are also subject to certain anti-corruption laws, including the U.S. Foreign Corrupt Practices Act, in addition to the local laws of the foreigncountries into which we enter. If any of our international operations, or our employees or agents, violates such laws, we could become subject to sanctions orother penalties that could negatively affect our reputation, business and operating results.We hold licenses for the use of other parties’ brand names, and we cannot guarantee our continued use of such brand names or the quality or salability ofsuch brand names.We have entered into license and design agreements to use certain trademarks and trade names, such as Kenneth Cole, Dockers, Geoffrey Beene,Nick Graham and Andrew Fezza, to market some of our products. During Fiscal 2016, sales of products bearing brands licensed to us accounted for 6% of ourconsolidated net sales and 60% of our Lanier Apparel net sales. When we enter into these license and design agreements, they generally provide for shortcontract durations (typically three to five years); these agreements often include options that we may exercise to extend the term of the contract but, whenavailable, those option rights are subject to our satisfaction of certain contingencies (e.g., minimum sales thresholds) that may be difficult for us to satisfy.Competitive conditions for the right to use popular trademarks means that we cannot guarantee that we will be able to renew these licenses on acceptableterms upon expiration, that the terms of any renewal will not result in operating margin pressures or reduced profitability or that we will be able to acquirenew licenses to use other desirable trademarks. The termination or expiration of a license agreement will cause us to lose the sales and any associated profitsgenerated pursuant to such license, which could be material, and in certain cases could also result in an impairment charge for related assets.Our license agreements generally require us to receive approval from the brand’s owner of all design and other elements of the licensed products wesell prior to production, as well as to receive approval from the brand owner of distribution channels in which we may sell and the manner in which we marketand distribute licensed products. Any failure by us to comply with these requirements could result in the termination of the license agreement.33In addition to certain compliance obligations, all of our significant licenses provide minimum thresholds for royalty payments and advertisingexpenditures for each license year, which we must pay regardless of the level of our sales of the licensed products. If these thresholds are not met, ourlicensors may be permitted contractually to terminate these agreements or seek payment of minimum royalties even if the minimum sales are not achieved. Inaddition, our licensors produce their own products and license their trademarks to other third parties, and we are unable to control the quality of these goods.If licensors or others do not maintain the quality of these trademarks or if the brand image deteriorates, or the licensors otherwise change the parameters ofdesign, pricing, distribution or marketing, our sales and any associated profits generated by such brands may decline.We make use of debt to finance our operations, which exposes us to risks that could 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 and working capital needs. As of January 28,2017, we had $91.5 million of borrowings outstanding under our U.S. Revolving Credit Agreement. In the future, our debt levels may increase under ourexisting facility or potentially under new facilities, or the terms or forms of our financing arrangements may change.Our indebtedness includes, and any future indebtedness may include, certain obligations and limitations, including the periodic payment ofprincipal and interest, maintenance of certain covenants and certain other limitations. The negative covenants in our debt agreements limit our ability toincur debt; guaranty certain obligations; incur liens; pay dividends; repurchase common stock; make investments, including the amount we may generallyinvest in, or use to support, our foreign operations; sell assets; make acquisitions; merge with other companies; or satisfy other debt. These obligations andlimitations may increase our vulnerability to adverse economic and industry conditions, place us at a competitive disadvantage compared to our competitorsthat are less leveraged and limit our flexibility in carrying out our business plan and planning for, or reacting to, industry changes.In addition, we have interest rate risk on indebtedness under our U.S. Revolving Credit Agreement. Our exposure to variable rate indebtedness mayincrease in the future, based on our debt levels and/or the terms of future financing arrangements. An increase in interest rates may require us to pay a greateramount of our funds from operations towards interest, even if the amount of borrowings outstanding remains the same. As a result, we may have to revise ordelay our business plans, reduce or delay capital expenditures or otherwise adjust our plans for operations.The continued growth of our business, whether organically, through acquisitions or otherwise, also depends on our access to sufficient funds. Forexample, we used borrowings under our U.S. Revolving Credit Agreement to finance the acquisition of Southern Tide during Fiscal 2016. We typically relyon cash flow from operations and borrowings under our U.S. Revolving Credit Agreement to fund our working capital, capital expenditures and investmentactivities. As of January 28, 2017, we had $185.5 million in unused availability under our U.S. Revolving Credit Agreement. If the need arises in the future tofinance expenditures in excess of those supported by our operations and existing credit facilities, we may need to seek additional funding, whether throughdebt or equity financing. Our ability to obtain that financing will depend on many factors, including prevailing market conditions, our financial conditionand, depending on the sources of financing, our ability to negotiate favorable terms and conditions. The terms of any such financing or our inability to securesuch financing could adversely affect our ability to execute our strategies.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. Our businessdepends on our ability to source and distribute products in a timely manner, and our new retail store and restaurant growth is dependent on timelyconstruction of our locations. While we are not subject to any organized labor agreements and have historically enjoyed good employee relations, there canbe no assurance that we will not experience work stoppages or other labor problems in the future with our non-unionized employees. In addition, potentiallabor disputes at independent factories where our goods are produced, shipping ports, or transportation carriers create risks for our business, particularly if adispute results in work slowdowns, lockouts, strikes or other disruptions during our peak manufacturing, shipping and selling seasons. For example, a severeand prolonged disruption to ocean freight transportation, such as the disruption to West Coast port operations in 2014 and 2015 due to a port workers’ uniondispute, delayed our receipt of product. Further, we plan our inventory purchases and forecasts based on the anticipated timing of retail store and restaurantopenings, which could be delayed as a result of a number of factors, including labor disputes among contractors engaged to construct our locations or withingovernment licensing or permitting offices. Any potential labor dispute, either in our own operations or in those of third parties on whom we rely, couldmaterially affect our costs, decrease our sales, harm our reputation or otherwise negatively affect our operations.34Our international operations, including foreign sourcing, result in an exposure to fluctuations in foreign currency exchange rates.As a result of our international operations, we are exposed to certain risks in conducting business outside of the United States. The substantialmajority of our orders for the production of apparel in foreign countries is denominated in U.S. dollars. If the value of the U.S. dollar decreases relative tocertain foreign currencies in the future, then the prices that we negotiate for products could increase, and it is possible that we would not be able to pass thisincrease on to customers, which would negatively impact our margins. However, if the value of the U.S. dollar increases between the time a price is set andpayment 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 thesecompetitors may be able to sell their products at more competitive prices. Additionally, currency fluctuations could also disrupt the business of ourindependent manufacturers by making their purchases of raw materials more expensive and difficult to finance.We received U.S. dollars for 96% of our product sales during Fiscal 2016, with the remaining sales primarily related to our retail operations inCanada, Australia and Japan. An increase in the value of the U.S. dollar compared to other currencies in which we have sales could result in lower levels ofsales and earnings in our consolidated statements of operations, although the sales in foreign currencies could be equal to or greater than amounts in priorperiods. In addition, to the extent that a stronger U.S. dollar increases costs, and the products are sold in another currency but the additional cost cannot bepassed on to our customers, our gross margins will be negatively impacted.Our operations may be affected by changes in weather patterns, natural or man-made disasters, war, terrorism or other catastrophes.Our sales volume and operations may be adversely affected by unseasonable or severe weather conditions, natural or man-made disasters, war,terrorist attacks, including heightened security measures and responsive military actions, or other catastrophes which may cause consumers to alter theirpurchasing habits or result in a disruption to our operations. Because of the seasonality of our business, the concentration of a significant proportion of ourretail stores and wholesale customers in certain geographic regions, the concentration of our sourcing operations and the concentration of our distributionoperations, the occurrence of such events could disproportionately impact our business, financial condition and operating results.Our business could be impacted as a result of actions by activist shareholders or others.We may be subject, from time to time, to legal and business challenges in the operation of our company due to actions instituted by activistshareholders or others. Responding to such actions could be costly and time-consuming, may not align with our business strategies and could divert theattention of our Board of Directors and senior management from the pursuit of our business strategies. Perceived uncertainties as to our future direction as aresult of shareholder activism may lead to the perception of a change in the direction of the business or other instability and may affect our relationships withvendors, customers, prospective and current employees and others.Item 1B. Unresolved Staff CommentsNone.Item 2. PropertiesWe lease and own space for our retail stores, distribution centers, sales/administration office space and manufacturing facilities in various domestic andinternational locations. We believe that our existing properties are well maintained, are in good operating condition and will be adequate for our presentlevel of operations.In the ordinary course of business, we enter into lease agreements for retail space. Most of the leases require us to pay specified minimum rent, as well asa portion of operating expenses, real estate taxes and insurance applicable to the property, plus a contingent rent based on a percentage of the store's net salesin excess of a specific threshold. The leases have varying terms and expirations and may have provisions to extend, renew or terminate the lease agreement,among other terms and conditions. Assets leased under operating leases are not recognized as assets and liabilities in our consolidated balance sheets.Periodically, we assess the operating results of each of our retail stores and restaurants to assess whether the location provides, or is expected to provide, anappropriate long-term return on investment, whether the location remains brand appropriate and other factors. As a result of this assessment, we maydetermine that it is appropriate to close certain stores that do not continue to meet our investment criteria, not renew certain leases, exercise an earlytermination option, or otherwise negotiate an early35termination. For existing leases in desirable locations, we anticipate that we will be able to extend our retail leases, to the extent that they expire in the nearfuture, on terms that are satisfactory to us, or if necessary, locate substitute properties on acceptable terms. The terms and conditions of lease renewals orrelocations may not be as favorable as existing leases.As of January 28, 2017, our 208 retail and restaurant locations utilized approximately 0.9 million square feet of leased space in the United States,Canada, Australia, Japan and Hong Kong. Each of our retail stores and restaurants is less than 20,000 square feet, and we do not believe that we are dependentupon any individual retail store or restaurant location for our business operations. Greater detail about the retail space used by each operating group isincluded in Part I, Item 1, Business included in this report.As of January 28, 2017, we utilized approximately 1.6 million square feet of owned or leased distribution, manufacturing and administrative/salesfacilities in the United States, Mexico and Hong Kong. In addition to our owned distribution facilities, we may utilize certain third partywarehouse/distribution providers where we do not own or lease any space. Our distribution, manufacturing, administrative and sales facilities provide spacefor employees and functions used in support of our retail, wholesale and e-commerce operations.Details of the principal administrative, sales, distribution and manufacturing facilities used in our operations, including approximate square footage,are as follows:LocationPrimary UseOperating GroupSquareFootageLeaseExpirationSeattle, WashingtonSales/administrationTommy Bahama115,0002026Auburn, WashingtonDistribution centerTommy Bahama325,0002025King of Prussia, PennsylvaniaSales/administration anddistribution centerLilly Pulitzer160,000OwnedToccoa, GeorgiaDistribution centerLanier Apparel310,000OwnedMerida, MexicoManufacturing plantLanier Apparel80,000OwnedGreenville, South CarolinaSales/administrationSouthern Tide12,0002017Atlanta, GeorgiaSales/administrationCorporate and Other and LanierApparel30,0002023Lyons, GeorgiaSales/administration anddistribution centerCorporate and Other, LanierApparel and Southern Tide420,000OwnedNew York, New YorkSales/administrationVarious40,000VariousHong KongSales/administrationVarious20,000VariousItem 3. Legal ProceedingsFrom time to time, we are a party to litigation and regulatory actions arising in the ordinary course of business. These actions may relate to trademarkand other intellectual property, licensing arrangements, real estate, importing or exporting regulations, taxation, employee relation matters or other topics.We are not currently a party to litigation or regulatory actions, or aware of any proceedings contemplated by governmental authorities, that we believe couldreasonably be expected to have a material impact on our financial position, results of operations or cash flows. However, our assessment of any litigation orother legal claims could potentially change in light of the discovery of additional factors not presently known or determinations by judges, juries, or otherswhich are not consistent with our evaluation of the possible liability or outcome of such litigation or claims.Item 4. Mine Safety DisclosuresNot applicable.36PART IIItem 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity SecuritiesMarket and Dividend InformationOur common stock is listed and traded on the New York Stock Exchange under the symbol "OXM." As of March 15, 2017, there were 289 recordholders of our common stock. The following table sets forth the high and low sale prices and quarter-end closing prices of our common stock as reported onthe New York Stock Exchange for the quarters indicated. Additionally, the table indicates the dividends per share declared on shares of our common stock byour Board of Directors for each quarter. HighLowCloseDividendsFiscal 2016 First Quarter$77.99$58.28$66.42$0.27Second Quarter$67.15$52.54$57.18$0.27Third Quarter$74.00$55.14$62.78$0.27Fourth Quarter$76.19$51.81$54.07$0.27Fiscal 2015 First Quarter$80.93$51.13$78.11$0.25Second Quarter$90.00$73.36$83.93$0.25Third Quarter$91.24$67.62$72.82$0.25Fourth Quarter$74.72$54.79$69.86$0.25We have paid dividends in each quarter since we became a public company in July 1960; however, we may discontinue or modify dividend paymentsat any time if we determine that other uses of our capital, including payment of outstanding debt, funding of acquisitions, funding of capital expenditures orrepurchases 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 adividend; or if the terms of our credit facility, other debt instruments or applicable law limit our ability to pay dividends. We may borrow to fund dividendsin the short term based on our expectation of operating cash flows in future periods subject to the terms and conditions of our credit facility, other debtinstruments and applicable law. All cash flow from operations will not necessarily be paid out as dividends in all periods.For details about limitations on our ability to pay dividends, see Note 5 of our consolidated financial statements and Part II, Item 7. Management'sDiscussion and Analysis of Financial Condition and Results of Operations, both contained in this report.Recent Sales of Unregistered SecuritiesWe did not sell any unregistered equity securities during Fiscal 2016.Purchases of Equity Securities by the Issuer and Affiliated PurchasersWe have certain stock incentive plans as described in Note 7 to our consolidated financial statements included in this report, all of which are publiclyannounced plans. Under the plans, we can repurchase shares from employees to cover employee tax liabilities related to the vesting of equity awards. Duringthe Fourth Quarter of Fiscal 2016, no shares were repurchased pursuant to these plans.In March 2017, our Board of Directors authorized us to spend up to $50 million to repurchase shares of our stock. This authorization superseded andreplaced all previous authorizations to repurchase shares of our stock and has no automatic expiration.Securities Authorized for Issuance Under Equity Compensation PlansThe information required by this Item 5 of Part II will appear in our definitive proxy statement under the heading "Equity Compensation PlanInformation" and is incorporated herein by reference.37Stock Price Performance GraphThe graph below reflects cumulative total shareholder return (assuming an initial investment of $100 and the reinvestment of dividends) on ourcommon stock compared to the cumulative total return for a period of five years, beginning January 28, 2012 and ending January 28, 2017, of:•The S&P SmallCap 600 Index; and•The S&P 500 Apparel, Accessories and Luxury Goods. INDEXED RETURNS BaseYears Ended Period Company / Index1/28/20122/2/20132/1/20141/31/20151/30/20161/28/2017Oxford Industries, Inc.100102.03156.90117.90149.31117.62S&P SmallCap 600 Index100116.02147.38156.45149.12201.31S&P 500 Apparel, Accessories & Luxury Goods10092.94107.86111.8293.6979.82Item 6. Selected Financial DataOur selected financial data included in the table below reflects the acquisition of the Southern Tide operations and assets in April 2016 and thedivestiture of the operations and assets of our former Ben Sherman operating group in July 2015,38resulting in the Ben Sherman operations being classified as discontinued operations in our consolidated statements of operations for all periods presented.Cash flow, capital expenditures, equity compensation, depreciation and amortization amounts below include amounts for both continuing and discontinuedoperations as our consolidated statements of cash flow are presented on a consolidated basis including continuing and discontinued operations. Fiscal 2016Fiscal 2015Fiscal 2014Fiscal 2013Fiscal 2012 (in millions, except per share amounts)Net sales$1,022.6$969.3$920.3$849.9$773.6Cost of goods sold439.8411.2402.4368.4343.5Gross profit582.8558.1517.9481.5430.1SG&A507.1475.0439.1399.1362.7Royalties and other operating income14.214.413.913.910.7Operating income89.997.592.896.378.1Loss on repurchase of debt————9.1Interest expense, net3.42.53.23.98.7Earnings from continuing operations beforeincome taxes86.595.189.692.460.3Income taxes32.036.535.836.923.1Net earnings from continuing operations54.558.553.855.437.2(Loss) income, including loss on sale, fromdiscontinued operations, net of taxes(2.0)(28.0)(8.0)(10.1)(5.9)Net earnings$52.5$30.6$45.8$45.3$31.3Diluted earnings from continuing operationsper share$3.27$3.54$3.27$3.36$2.24Diluted (loss) income, including loss on sale,from discontinued operations per share$(0.12)$(1.69)$(0.49)$(0.62)$(0.36)Diluted net earnings per share$3.15$1.85$2.78$2.75$1.89Diluted weighted average shares outstanding16.616.616.516.516.6Dividends declared and paid$18.1$16.6$13.9$11.9$9.9Dividends declared and paid per share$1.08$1.00$0.84$0.72$0.60Total assets, at period-end$685.2$582.7$622.4$606.9$533.1Long-term debt at period-end$91.5$44.0$104.8$137.6$108.6Shareholders' equity, at period-end$376.1$334.4$290.6$260.2$229.8Cash provided by operating activities$118.6$105.4$95.4$52.7$67.1Capital expenditures$49.4$73.1$50.4$43.4$60.7Depreciation and amortization expense$42.2$36.4$37.6$33.9$26.3Equity compensation expense$6.4$5.2$4.1$1.7$2.8LIFO accounting (credit) charge$(5.9)$0.3$2.1$—$4.0Book value per share at period-end$22.43$20.14$17.64$15.85$13.85Item 7. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe following discussion and analysis of our operations, cash flows, liquidity and capital resources should be read in conjunction with ourconsolidated financial statements contained in this report.OVERVIEW39We are a global apparel company that designs, sources, markets and distributes products bearing the trademarks of our Tommy Bahama, LillyPulitzer and Southern Tide lifestyle brands, other owned brands and licensed brands as well as private label apparel products. During Fiscal 2016, 92% of ournet sales were from products bearing brands that we own and 66% of our net sales were through our direct to consumer channels of distribution. In Fiscal2015, 96% of our consolidated net sales were to customers located in the United States, with the sales outside the United States consisting primarily of ourTommy Bahama products in Canada and the Asia-Pacific region.Our business strategy is to develop and market compelling lifestyle brands and products that evoke a strong emotional response from our targetconsumers. We consider lifestyle brands to be those brands that have a clearly defined and targeted point of view inspired by an appealing lifestyle orattitude. Furthermore, we believe lifestyle brands like Tommy Bahama, Lilly Pulitzer and Southern Tide that create an emotional connection with consumerscan command greater loyalty and higher price points at retail and create licensing opportunities, which may drive higher earnings. We believe the attractionof a lifestyle brand depends on creating compelling product, effectively communicating the respective lifestyle brand message and distributing products toconsumers where and when they want it. Our ability to compete successfully in styling and marketing is directly related to our proficiency in foreseeing changes and trends in fashion andconsumer preference, and presenting appealing products for consumers. Our design-led, commercially informed lifestyle brand operations strive to provideexciting, differentiated products each season.To further strengthen each lifestyle brand's connections with consumers, we directly communicate with consumers through electronic and print mediaon a regular basis. We believe our ability to effectively communicate the images, lifestyle and products of our brands and create an emotional connectionwith consumers is critical to the success of the brands. Our advertising for our brands often attempts to convey the lifestyle of the brand as well as a specificproduct.We distribute our owned lifestyle branded products primarily through our direct to consumer channels, consisting of our Tommy Bahama and LillyPulitzer retail stores and our e-commerce sites for Tommy Bahama, Lilly Pulitzer and Southern Tide, and through our wholesale distribution channels. Ourdirect to consumer operations provide us with the opportunity to interact directly with our customers, present to them a broad assortment of our currentseason products and immerse them in the theme of the lifestyle brand. We believe that presenting our products in a setting specifically designed to showcasethe lifestyle on which the brands are based enhances the image of our brands. Our Tommy Bahama and Lilly Pulitzer full-price retail stores provide highvisibility for our brands and products, and allow us to stay close to the preferences of our consumers, while also providing a platform for long-term growth forthe brands. In Tommy Bahama, we also operate a limited number of restaurants, generally adjacent to a Tommy Bahama full-price retail store location, whichwe believe further enhance the brand's image with consumers.Additionally, our e-commerce websites, which represented 18% of our consolidated net sales in Fiscal 2016, provide the opportunity to increaserevenues by reaching a larger population of consumers and at the same time allow our brands to provide a broader range of products. Our e-commerce flashclearance sales on our websites and our Tommy Bahama outlet stores play an important role in overall brand and inventory management by allowing us tosell discontinued and out-of-season products in brand appropriate settings and often at better prices than are typically available from third party off-priceretailers.The wholesale operations of our lifestyle brands complement our direct to consumer operations and provide access to a larger group of consumers. Aswe seek to maintain the integrity of our lifestyle brands by limiting promotional activity in our full-price retail stores and e-commerce websites, we generallytarget wholesale customers that follow this same approach in their stores. Our wholesale customers for our Tommy Bahama, Lilly Pulitzer and Southern Tidebrands include better department stores and specialty stores, including Signature Stores for Lilly Pulitzer and Southern Tide.Within our Lanier Apparel operating group, we sell tailored clothing and sportswear products under licensed brands, private labels and ownedbrands. Lanier Apparel's customers include department stores, discount and off-price retailers, warehouse clubs, national chains, specialty retailers and othersthroughout the United States.All of our operating groups operate in highly competitive apparel markets in which numerous U.S.-based and foreign apparel firms compete. Nosingle apparel firm or small group of apparel firms dominates the apparel industry, and our direct competitors vary by operating group and distributionchannel. We believe the principal competitive factors in the apparel industry are reputation, value, and image of brand names; design; consumer preference;price; quality; marketing; product fulfillment capabilities; and customer service.The apparel industry is cyclical and very dependent upon the overall level and focus of discretionary consumer spending, which changes as regional,domestic and international economic conditions change. Often, negative economic conditions have a longer and more severe impact on the apparel industrythan on other industries. We believe current global40economic conditions and the resulting economic uncertainty continue to impact our business, and the apparel industry as a whole.We believe the retail apparel market is evolving very rapidly and in ways that are having a disruptive impact on traditional fashion retailing. Theapplication of technology, including the internet and mobile devices, to fashion retail provides consumers increasing access to multiple, responsivedistribution platforms and an unprecedented ability to communicate directly with brands, retailers and others. As a result, consumers have more informationand broader, faster and cheaper access to goods than they have ever had before. This, along with the coming of age of the “millennial” generation, isrevolutionizing the way that consumers shop for fashion and other goods. The evidence is increasingly apparent with marked weakness in department storesand mall-based retailers, decreased consumer retail traffic, a more promotional retail environment, expansion of off-price and discount retailers, and growinginternet purchases.While this evolution in the fashion retail industry presents significant risks, especially for traditional retailers who fail or are unable to adapt, webelieve it also presents a tremendous opportunity for brands and retailers. We believe our brands have attributes that are true competitive advantages in thisnew retailing paradigm and we are leveraging technology to serve our consumers when and where they want to be served. We continue to believe that ourlifestyle brands are well suited to succeed and thrive in the long term while managing the various challenges facing our industry.Specifically, we believe our lifestyle brands have opportunities for long-term growth in their direct to consumer businesses. We anticipate increasedsales in our e-commerce operations, which are expected to grow at a faster rate than bricks and mortar comparable full-price retail store sales. This growth canalso be achieved through prudent expansion of bricks and mortar full-price retail store operations and modest comparable full-price retail store salesincreases. Despite the changes in the retail environment, we expect there will continue to be desirable locations to increase our store count.Our lifestyle brands also have an opportunity for modest sales increases in their wholesale businesses in the long term primarily from currentcustomers adding to their existing door count and increasing their on-line business, increased sales to on-line retailers and the selective addition of newwholesale customers who generally follow a retail model with limited discounting; however, we must be diligent in our effort to avoid compromising theintegrity of the brand by maintaining or growing sales with wholesale customers that may not be aligned with our long-term strategy. This is particularlyimportant with the challenges in the department store channel, which represents about one-half of our consolidated wholesale sales, or 16% of ourconsolidated net sales. We also believe that there are opportunities for modest sales growth for Lanier Apparel in the future through new product programs forexisting and new customers.We believe we must continue to invest in our lifestyle brands to take advantage of their long-term growth opportunities. Investments include capitalexpenditures primarily related to the direct to consumer operations such as technology enhancements, e-commerce initiatives, full-price retail store andrestaurant build-out for new and relocated locations as well as remodels, and distribution center and administrative office expansion initiatives. Additionally,while we anticipate increased employment, advertising and other costs in key functions to support the ongoing business operations and fuel future salesgrowth, we remain focused on appropriately managing our operating expenses.In the midst of the challenges in our industry, an important focus for us in Fiscal 2017 is advancing various initiatives to increase the profitability ofthe Tommy Bahama business. These initiatives generally focus on increasing gross margin and operating margin through efforts such as: product costreductions; selective price increases; reducing inventory purchases; more rapidly clearing excess inventory; redefining our approach to inventory clearance;effectively managing controllable and discretionary operating expenses; taking a more conservative approach to full-price retail store and outlet openingsand renewals; and continuing our efforts to reduce Asia-Pacific operating losses.We continue to believe it is important to maintain a strong balance sheet and liquidity. We believe positive cash flow from operations in the futurecoupled with the strength of our balance sheet and liquidity will provide us with sufficient resources to fund future investments in our owned lifestyle brands.While we believe we have significant opportunities to appropriately deploy our capital and resources in our existing lifestyle brands, we will continue toevaluate opportunities to add additional lifestyle brands to our portfolio if we identify appropriate targets which meet our investment criteria.Important factors relating to certain risks, many of which are beyond our ability to control or predict, which could impact our business are described inPart I, Item 1A. Risk Factors of this report.41The following table sets forth our consolidated operating results from continuing operations (in thousands, except per share amounts) for Fiscal2016 compared to Fiscal 2015: Fiscal 2016Fiscal 2015Net sales$1,022,588$969,290Operating income$89,884$97,514Net earnings from continuing operations$54,499$58,537Net earnings from continuing operations per diluted share$3.27$3.54The primary reasons for the lower earnings from continuing operations per diluted share in Fiscal 2016 were the lower operating income in TommyBahama and increased interest expense partially offset by higher income in Lilly Pulitzer, improved operating results in Corporate and Other and a lowereffective tax rate.Southern Tide AcquisitionOn April 19, 2016, we acquired Southern Tide, LLC, which owns the Southern Tide lifestyle apparel brand. Southern Tide carries an extensiveselection of men’s shirts, pants, shorts, outerwear, ties, swimwear, footwear and accessories, as well as a women’s collection. The brand’s products are soldthrough its wholesale operations to specialty stores, department stores and Southern Tide Signature Stores as well as through its direct to consumer operationson the Southern Tide website. The purchase price for the acquisition was $85 million in cash, subject to adjustment based on net working capital as of theclosing date for the acquisition. We used borrowings under our revolving credit facility to finance the transaction. For additional information about theSouthern Tide acquisition, refer to Part I, Item 1. Business and Note 2 to our consolidated financial statements, both included in this report.OPERATING GROUPSOur business is primarily operated through our Tommy Bahama, Lilly Pulitzer, Lanier Apparel and Southern Tide operating groups. We identify ouroperating groups based on the way our management organizes the components of our business for purposes of allocating resources and assessingperformance. Our operating group structure reflects a brand-focused management approach, emphasizing operational coordination and resource allocationacross each brand's direct to consumer, wholesale and licensing operations, as applicable.Tommy Bahama, Lilly Pulitzer and Southern Tide each design, source, market and distribute apparel and related products bearing their respectivetrademarks and also license their trademarks for other product categories, while Lanier Apparel designs, sources and distributes branded and private labelmen's tailored clothing, sportswear and other products. Corporate and Other is a reconciling category for reporting purposes and includes our corporateoffices, substantially all financing activities, elimination of inter-segment sales, LIFO inventory accounting adjustments, other costs that are not allocated tothe operating groups and operations of our other businesses which are not included in our operating groups, including our Lyons, Georgia distribution centeroperations. Our LIFO inventory pool does not correspond to our operating group definitions; therefore, LIFO inventory accounting adjustments are notallocated to our operating groups.For additional information about each of our operating groups, see Part I, Item 1. Business and Note 2 to our consolidated financial statements, bothincluded in this report.COMPARABLE STORE SALESWe often disclose comparable store sales in order to provide additional information regarding changes in our results of operations between periods.Our disclosures of comparable store sales include net sales from full-price retail stores and our e-commerce sites, excluding sales associated with e-commerceflash clearance sales. We believe that the inclusion of both our full-price retail stores and e-commerce sites in the comparable store sales disclosures is a moremeaningful way of reporting our comparable store sales results, given similar inventory planning, allocation and return policies, as well as our cross-channelmarketing and other initiatives for the direct to consumer channel. For our comparable store sales disclosures, we exclude (1) outlet store sales, warehousesales and e-commerce flash clearance sales, as those clearance sales are used primarily to liquidate end of season inventory, which may vary significantlydepending 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) restaurant sales, as we do not currently believe that the inclusion of restaurant sales is meaningful in assessing our consolidated results of operations.Comparable store sales information reflects net sales, including shipping and handling revenues, if any, associated with product sales.42 For purposes of our disclosures, we consider a comparable store to be, in addition to our e-commerce sites, a physical full-price retail store that wasowned and open as of the beginning of the prior fiscal year and which did not have during the relevant periods, and is not within the current fiscal yearscheduled to have, (1) a remodel resulting in the store being closed for an extended period of time (which we define as a period of two weeks or longer), (2) agreater than 15% change in the size of the retail space due to expansion, reduction or relocation to a new retail space, (3) a relocation to a new space that wassignificantly different from the prior retail space, or (4) a closing or opening of a Tommy Bahama restaurant adjacent to the full-price retail store. For thosestores which are excluded from comparable stores based on the preceding sentence, the stores continue to be excluded from comparable store sales until thecriteria for a new store is met subsequent to the remodel, relocation or restaurant closing or opening. A store that is remodeled generally will continue to beincluded in our comparable store sales metrics as a store is not typically closed for a two week period during a remodel; however, in some cases a store may beclosed for more than two weeks during a remodel. A store that is relocated generally will not be included in our comparable store sales metrics until that storehas been open in the relocated space for the entirety of the prior fiscal year as the size or other characteristics of the store typically change significantly fromthe prior location. Additionally, any stores that were closed during the prior fiscal year or current fiscal year, or which we plan to close or vacate in the currentfiscal year, are excluded from the definition of comparable store sales. Definitions and calculations of comparable store sales differ among retail companies, and therefore comparable store sales metrics disclosed by usmay not be comparable to the metrics disclosed by other companies.RESULTS OF OPERATIONSThe following table sets forth the specified line items in our consolidated statements of operations both in dollars (in thousands) and as a percentage ofnet sales. We have calculated all percentages based on actual data, but percentage columns may not add due to rounding. Fiscal 2016Fiscal 2015Fiscal 2014Net sales$1,022,588100.0%$969,290100.0%$920,325100.0%Cost of goods sold439,81443.0%411,18542.4%402,37643.7%Gross profit582,77457.0%558,10557.6%517,94956.3%SG&A507,07049.6%475,03149.0%439,06947.7%Royalties and other operating income14,1801.4%14,4401.5%13,9391.5%Operating income89,8848.8%97,51410.1%92,81910.1%Interest expense, net3,4210.3%2,4580.3%3,2360.4%Earnings from continuing operationsbefore income taxes86,4638.5%95,0569.8%89,5839.7%Income taxes31,9643.1%36,5193.8%35,7863.9%Net earnings from continuing operations$54,4995.3%$58,5376.0%$53,7975.8%Loss from discontinued operations, net oftaxes(2,038)NM(27,975)NM(8,039)NMNet earnings$52,461NM$30,562NM$45,758NMWeighted average shares outstanding -diluted16,649 16,559 16,471 Unless otherwise indicated, all references to assets, liabilities, revenues, expenses and other information in this report reflect continuing operationsand exclude any amounts related to the discontinued operations of our former Ben Sherman operating group which we sold in Fiscal 2015. Refer to Note 13in our consolidated financial statements included in this report for additional information about discontinued operations.FISCAL 2016 COMPARED TO FISCAL 2015The discussion and tables below compare certain line items included in our statements of operations for Fiscal 2016 to Fiscal 2015. Each dollar andpercentage change provided reflects the change between these periods unless indicated otherwise. Each dollar and share amount included in the tables is inthousands except for per share amounts. Individual line43items of our consolidated statements of operations may not be directly comparable to those of our competitors, as classification of certain expenses may varyby company.Net Sales Fiscal 2016Fiscal 2015$ Change% ChangeTommy Bahama$658,911$658,467$4440.1 %Lilly Pulitzer233,294204,62628,66814.0 %Lanier Apparel100,753105,106(4,353)(4.1)%Southern Tide27,432—27,432NMCorporate and Other2,1981,0911,107NMTotal$1,022,588$969,290$53,2985.5 % Consolidated net sales increased $53.3 million, or 5.5%, in Fiscal 2016 compared to Fiscal 2015. The increase in consolidated net sales wasprimarily driven by (1) the $27.4 million of net sales of Southern Tide, which was acquired on April 19, 2016, (2) an incremental net sales increase of $20.2million associated with the operation of additional full-price retail stores in Tommy Bahama and Lilly Pulitzer, (3) a $7.0 million net increase in direct toconsumer clearance sales reflecting an increase in e-commerce flash clearance sales at Lilly Pulitzer and decreases in outlet store sales at Tommy Bahama and(4) a $5.4 million increase in restaurant sales in Tommy Bahama. These sales increases were partially offset by a $6.5 million, or 2%, decrease in comparablestore sales to $404.1 million in Fiscal 2016 from $410.6 million in Fiscal 2015 reflecting a decrease in comparable store sales at Tommy Bahama of 3% andan increase in comparable store sales at Lilly Pulitzer of 2%. We believe that certain macroeconomic factors, including lower retail store traffic, the evolvingimpact of digital technology on consumer shopping habits and the 2016 election cycle, impacted the sales in each of our direct to consumer and wholesalebusinesses in Fiscal 2016. The changes in net sales by operating group are discussed below.The following table presents the proportion of our consolidated net sales by distribution channel for each period presented: Fiscal 2016Fiscal 2015Full-price retail stores and outlets41%42%E-commerce18%17%Restaurant7%7%Wholesale34%34%Total100%100%Tommy Bahama: The Tommy Bahama net sales increase of $0.4 million, or 0.1%, was primarily driven by (1) an incremental net sales increase of $12.4 millionassociated with the operation of additional full-price retail stores and (2) a $5.4 million increase in restaurant sales primarily resulting from the impact of afull year of operations of the Waikiki restaurant in Fiscal 2016 and a modest increase at restaurants open for the full year of Fiscal 2016 and Fiscal 2015.These sales increases were offset by (1) a $8.8 million, or 3%, decrease in comparable store sales to $302.5 million in Fiscal 2016 from $311.3 million inFiscal 2015, (2) a $3.6 million decrease in net sales through our off-price direct to consumer clearance channels, primarily reflecting a decrease in sales inexisting outlet stores, and (3) a $5.2 million decrease in wholesale sales. The decreases in the direct to consumer channels were primarily due to lower trafficin both our full-price retail stores and outlet stores. The decrease in wholesale sales reflects lower full-price wholesale sales reflecting the challengingenvironment of our wholesale department store and specialty store accounts.As of January 28, 2017, we operated 168 Tommy Bahama stores globally, consisting of 111 full-price retail stores, 17 retail-restaurant locations and40 outlet stores. As of January 30, 2016, we operated 164 Tommy Bahama stores consisting of 107 full-price retail stores, 16 retail-restaurant locations and 41outlet stores. The following table presents the proportion of net sales by distribution channel for Tommy Bahama for each period presented:44 Fiscal 2016Fiscal 2015Full-price retail stores and outlets50%50%E-commerce16%15%Restaurant11%11%Wholesale23%24%Total100%100% Lilly Pulitzer: The Lilly Pulitzer net sales increase of $28.7 million, or 14.0%, was primarily a result of (1) an incremental net sales increase of $11.2 millionassociated with the operation of additional full-price retail stores, (2) a $10.7 million increase in e-commerce flash clearance sales, (3) an $8.2 millionincrease in wholesale sales primarily resulting from increased orders from existing wholesale customers and (4) a $2.2 million, or 2%, increase in comparablestore sales to $101.5 million in Fiscal 2016 compared to $99.3 million in Fiscal 2015. These sales increases were partially offset by a net $3.8 milliondecrease in warehouse sales as Lilly Pulitzer did not anniversary its June warehouse sale in 2016. As of January 28, 2017, we operated 40 Lilly Pulitzer full-price retail stores, after opening six new stores, acquiring one former Signature Store and closing one store during Fiscal 2016, compared to 34 full-price retailstores as of January 30, 2016. The following table presents the proportion of net sales by distribution channel for Lilly Pulitzer for each period presented: Fiscal 2016Fiscal 2015Full-price retail stores and warehouse sales36%38%E-commerce32%30%Wholesale32%32%Total100%100% Lanier Apparel: The decrease in net sales for Lanier Apparel of $4.4 million, or 4.1%, was primarily due to lower sales of $6.5 million in the tailored clothingbusiness partially offset by a $2.0 million increase in the sportswear business. The decreased sales in the tailored clothing business was primarily due to lowersales in certain programs including reductions in volume, shifts of timing and exits from various programs. These reductions in volume were partially offsetby initial shipments and volume increases in other programs. The increased sales in the sportswear business were primarily due to increased volumes inprivate label sportswear programs.Southern Tide:The net sales of Southern Tide reflect the sales of Southern Tide for the period from the date of acquisition on April 19, 2016 through January 28,2017. During the period from April 19, 2016 through January 28, 2017, 77% of Southern Tide's net sales were wholesale sales with the remainder of the salesconsisting of e-commerce sales. We estimate that net sales in Fiscal 2017 will be in excess of $40 million, with about 75% to 80% of the sales consisting ofwholesale sales and the remainder consisting of e-commerce sales on the Southern Tide website.Corporate and Other: Corporate and Other net sales primarily consist of the net sales of our Lyons, Georgia distribution center to third party warehouse customers as wellas the impact of the elimination of intercompany sales between our operating groups. Net sales in Fiscal 2015 included the unfavorable impact of theelimination of intercompany sales between our operating groups with no meaningful impact of intercompany sales between our operating groups in Fiscal2016. Gross Profit The table below presents gross profit by operating group and in total for Fiscal 2016 and Fiscal 2015 as well as the change between those twoperiods. Our gross profit and gross margin, which is calculated as gross profit divided by net sales, may not be directly comparable to those of ourcompetitors, as the statement of operations classification of certain expenses may vary by company.45 Fiscal 2016Fiscal 2015$ Change% ChangeTommy Bahama$386,650$393,221$(6,571)(1.7)%Lilly Pulitzer148,345132,79115,55411.7 %Lanier Apparel29,49030,460(970)(3.2)%Southern Tide10,912—10,912NMCorporate and Other7,3771,6335,744NMTotal gross profit$582,774$558,105$24,6694.4 %LIFO (credit) charge included in Corporate and Other$(5,884)$254 Inventory step-up charge included in Southern Tide$2,667$— The increase in consolidated gross profit was primarily due to higher net sales, as discussed above, and the net favorable impact of LIFOaccounting. The favorable impact of these items was partially offset by the unfavorable impact of the inventory step-up charge included in Southern Tide andlower gross margins in Tommy Bahama and Lilly Pulitzer, both as discussed below. The table below presents gross margin by operating group and in total forFiscal 2016 and Fiscal 2015. Fiscal 2016Fiscal 2015Tommy Bahama58.7%59.7%Lilly Pulitzer63.6%64.9%Lanier Apparel29.3%29.0%Southern Tide39.8%NMCorporate and OtherNMNMConsolidated gross margin57.0%57.6%On a consolidated basis, gross margin decreased in Fiscal 2016, primarily as a result of lower gross margins in Tommy Bahama and Lilly Pulitzer,partially offset by the net favorable impact of LIFO accountingTommy Bahama:The decrease in Tommy Bahama's gross margin in Fiscal 2016 was primarily due to $5 million of inventory markdowns in the Fourth Quarter ofFiscal 2016 for certain women's, home and other products as well as lower gross margin in both the direct to consumer and wholesale businesses. Theinventory markdowns primarily resulted from a change in Tommy Bahama's approach to inventory clearance; starting in January 2017, Tommy Bahamaintends to aggressively clear prior season inventory by taking initial markdowns on certain product categories in its full-price retail stores and then clearingany remaining inventory through both its outlet stores and third party off-price retailers and by operating the outlet stores with lower inventory levels andwith better merchandised assortments.The lower gross margins in the direct to consumer channel primarily reflects lower gross margins in outlet store and e-commerce flash clearancesales which were primarily due to our efforts to drive traffic in our outlet stores, reduce inventory levels and dispose of prior season inventory during Fiscal2016. The higher discounting in our off-price direct to consumer channel was focused on women's, home and other products as well as footwear, which wehave transitioned to a third party licensee. Full-price retail store and e-commerce gross margins were also lower primarily due to a greater proportion of salesin Fiscal 2016 occurring in connection with our loyalty award card, Flip-Side and Friends & Family marketing events, which typically have lower grossmargins than sales during non-promotional periods, and the impact of Tommy Bahama discounting certain end-of-season women, home and other product instore and on-line beginning in January 2017. The decrease in gross margin in the wholesale distribution channel was primarily due to a change in sales mixwith off-price sales representing a greater proportion of Tommy Bahama's wholesale sales in Fiscal 2016.Lilly Pulitzer: 46The decrease in gross margin for Lilly Pulitzer in Fiscal 2016 was primarily driven by the change in sales mix as e-commerce flash clearance salesrepresented a greater proportion of sales during Fiscal 2016 and in-store markdowns were more significant in Fiscal 2016. Lanier Apparel:The increase in gross margin for Lanier Apparel was primarily due to the net favorable impact of in-stock program allowances and inventorymarkdowns in Fiscal 2016 as compared to Fiscal 2015.Southern Tide:The gross profit of Southern Tide for Fiscal 2016 includes the gross profit of Southern Tide for the period from the date of acquisition on April 19,2016 through January 28, 2017, which was impacted by $2.7 million of incremental cost of goods sold associated with the step-up of inventory recognized atacquisition. Therefore, we do not consider the gross profit or gross margin for this period to be indicative of expected gross profit, or gross margin, for futureperiods. All amounts related to the step-up of inventory were recognized during Fiscal 2016, thus gross margin for Southern Tide is expected to be higher infuture periods.Corporate and Other:The gross profit in Corporate and Other in each period primarily reflects (1) the gross profit of our Lyons, Georgia distribution center operations, (2)the impact of LIFO accounting adjustments and (3) the impact of certain consolidating adjustments, including the elimination of intercompany sales betweenour operating groups. The primary driver for the higher gross profit was that Fiscal 2016 was favorably impacted by a LIFO accounting credit of $5.9 millionwith no significant impact from LIFO accounting in Fiscal 2015. The LIFO accounting credit in Fiscal 2016 was primarily due to the LIFO accountingreversal of the significant inventory markdowns recognized in Tommy Bahama during Fiscal 2016. SG&A Fiscal 2016Fiscal 2015$ Change% ChangeSG&A$507,070$475,031$32,0396.7%SG&A (as a % of net sales)49.6%49.0% Amortization of intangible assets included in TommyBahama associated with Tommy Bahama Canada acquisition$1,491$1,521 Amortization of intangible assets included in Southern Tide$263$— Transaction expenses associated with the Southern Tideacquisition included in Corporate and Other$762$— Distribution center integration charges$454$— The increase in SG&A was primarily due to (1) $16.9 million of incremental costs in Fiscal 2016 associated with additional Tommy Bahama full-price retail stores and restaurants and Lilly Pulitzer full-price retail stores, (2) $11.4 million of SG&A associated with Southern Tide, including amortizationof intangible assets and distribution center integration costs, (3) an increase in brand advertising, marketing and other expenses in Tommy Bahama and LillyPulitzer to increase brand awareness and provide support for the brands, (4) increased depreciation expense of $2.2 million related to e-commerce operationsand inventory/order management systems in Tommy Bahama and Lilly Pulitzer that were implemented in the First Quarter of Fiscal 2016, (5) assetimpairment charges of $1.9 million primarily related to three outlet store closings and certain information technology assets, (6) an increase in severanceexpenses of $1.5 million and (6) $0.8 million of transaction expenses associated with the Southern Tide acquisition, which are included in Corporate andOther. These SG&A increases were partially offset by $8.0 million of lower incentive compensation, with decreases in each operating group as well asCorporate and Other.SG&A included amortization of intangible assets of $2.2 million in Fiscal 2016 and $2.0 million in Fiscal 2015 with the increase primarily due toamortization related to the Southern Tide intangible assets. We anticipate that amortization of intangible assets for Fiscal 2017 will be approximately $2.2million.Royalties and other operating income47 Fiscal 2016Fiscal 2015$ Change% ChangeRoyalties and other operating income$14,180$14,440$(260)(1.8)% Royalties and other operating income in Fiscal 2016 primarily reflects income received from third parties from the licensing of our Tommy Bahama,Lilly Pulitzer and Southern Tide brands. The decrease in royalty income for Fiscal 2016 reflects a decrease in royalty income from Lilly Pulitzer which waspartially offset by an increase in royalty income from Tommy Bahama and the royalty income associated with the Southern Tide business.Operating income (loss) Fiscal 2016Fiscal 2015$ Change% ChangeTommy Bahama$44,101$65,993$(21,892)(33.2)%Lilly Pulitzer51,99542,5259,47022.3 %Lanier Apparel6,9557,700(745)(9.7)%Southern Tide(282)—(282)NMCorporate and Other(12,885)(18,704)5,81931.1 %Total operating income$89,884$97,514$(7,630)(7.8)%LIFO (credit) charge included in Corporate and Other$(5,884)$254 Inventory step-up charge included in Southern Tide$2,667$— Amortization of intangible assets included in Tommy Bahama associatedwith Tommy Bahama Canada acquisition$1,491$1,521 Amortization of intangible assets included in Southern Tide$263$— Transaction expenses associated with the Southern Tide acquisitionincluded in Corporate and Other$762$— Distribution center integration charges$454$— The decrease in operating income in Fiscal 2016 as compared to Fiscal 2015 was primarily due to the lower operating income in Tommy Bahama,including $7.1 million of inventory markdown, severance and store closing charges incurred in the Fourth Quarter of Fiscal 2016, and Lanier Apparel and theoperating loss in Southern Tide. These items were partially offset by higher income in Lilly Pulitzer and improved operating results in Corporate and Other.Changes in operating income (loss) by operating group are discussed below. Tommy Bahama: Fiscal 2016Fiscal 2015$ Change% ChangeNet sales$658,911$658,467$4440.1 %Gross margin58.7%59.7% Operating income$44,101$65,993$(21,892)(33.2)%Operating income as % of net sales6.7%10.0% Amortization of intangible assets included in Tommy Bahamaassociated with Tommy Bahama Canada acquisition$1,491$1,521 The lower operating results for Tommy Bahama were primarily due to the lower gross margin, as discussed above, and higher SG&A in Fiscal 2016.The higher SG&A for Fiscal 2016 includes (1) $11.8 million of incremental SG&A associated with operating additional full-price retail stores and restaurants,(2) an increase in brand advertising, marketing and other expenses in Tommy Bahama to increase brand awareness and provide support for the brand, (3) $1.3million of increased severance costs, (4) increased depreciation expense of $1.9 million related to e-commerce operations, which were primarily related towebsite upgrades implemented in the First Quarter of Fiscal 2016, and the Tommy Bahama office in Seattle, Washington, and (5) asset impairment charges of$0.9 million primarily related to outlet store closures. These SG&A increases were partially offset by $0.7 million of lower incentive compensation. Includedin the gross margin impact and SG&A items above, we incurred charges of $7.1 million in the Fourth Quarter of Fiscal 2016 consisting of $4.7 million ofinventory markdowns, $0.9 million of severance charges and $1.6 million of charges related to outlet store closings which are anticipated to improve futureoperating results.48Lilly Pulitzer: Fiscal 2016Fiscal 2015$ Change% ChangeNet sales$233,294$204,626$28,66814.0%Gross margin63.6%64.9% Operating income$51,995$42,525$9,47022.3%Operating income as % of net sales22.3%20.8% The increase in operating income in Lilly Pulitzer was primarily due to the higher net sales partially offset by the impact of the lower gross marginand higher SG&A. SG&A increased primarily due to (1) $5.2 million of incremental SG&A associated with operating additional Lilly Pulitzer full-price retailstores, (2) an increase in brand advertising, marketing and other expenses in Lilly Pulitzer to increase brand awareness and provide support for the brand, (3)increased depreciation expense of $1.1 million related to inventory/order management system upgrades implemented in the First Quarter of Fiscal 2016, and(4) other increases in SG&A, including additional employee headcount to support the growing business. These increases in SG&A were partially offset by a$5.4 million reduction in incentive compensation during Fiscal 2016, primarily resulting from the retirement of the former co-chief executive officers fromthe business in the First Quarter of Fiscal 2016. Lanier Apparel: Fiscal 2016Fiscal 2015$ Change% ChangeNet sales$100,753$105,106$(4,353)(4.1)%Gross margin29.3%29.0% Operating income$6,955$7,700$(745)(9.7)%Operating income as % of net sales6.9%7.3% The decrease in operating income for Lanier Apparel was primarily due to lower sales partially offset by improved gross margin and lower SG&A,resulting from lower incentive compensation.Southern Tide: Fiscal 2016Fiscal 2015$ Change% ChangeNet sales$27,432$—$27,432NMGross margin39.8 %NA Operating loss$(282)$—$(282)NMOperating loss as % of net sales(1.0)%NA Inventory step-up charge included in Southern Tide$2,667$— Amortization of intangible assets included in Southern Tide$263$— Distribution center integration charges$454$— The net sales, gross margin and operating loss of Southern Tide reflect the results of Southern Tide for the period from the date of acquisition onApril 19, 2016 through January 28, 2017. We do not consider the results for this period to be indicative of expected results on an annual basis or for futureperiods. During Fiscal 2016, the operating results of Southern Tide were impacted by the $2.7 million of incremental cost of goods sold related to the step-upof inventory at acquisition, recognized in cost of goods sold as the acquired inventory was sold, $0.3 million of amortization of intangible assets and the $0.5million of distribution center integration charges recognized during the Second Quarter of Fiscal 2016.Corporate and Other: Fiscal 2016Fiscal 2015$ Change% ChangeNet sales$2,198$1,091$1,107NMOperating loss$(12,885)$(18,704)$5,81931.1%LIFO (credit) charge included in Corporate and Other$(5,884)$254 Transaction expenses associated with the Southern Tide acquisitionincluded in Corporate and Other$762$— 49 The improved operating results in Corporate and Other were primarily due to the net favorable impact of LIFO accounting of $6.1 million and $0.9million of lower incentive compensation amounts in Fiscal 2016. These favorable items were partially offset by the impact of $0.8 million of transactionexpenses associated with the Southern Tide acquisition in the First Quarter of Fiscal 2016 and the prior year including a $0.9 million gain on the sale of realestate. Interest expense, net Fiscal 2016Fiscal 2015$ Change% ChangeInterest expense, net$3,421$2,458$96339.2% Interest expense for Fiscal 2016 increased from the prior year primarily due to higher average borrowings outstanding during the year and the writeoff of approximately $0.3 million of deferred financing costs associated with our amendment and restatement of our revolving credit agreement. Weanticipate that we will incur approximately $4 million of interest expense in Fiscal 2017 due to higher expected interest rates.Income taxes Fiscal 2016Fiscal 2015$ Change% ChangeIncome taxes$31,964$36,519$(4,555)(12.5)%Effective tax rate37.0%38.4% Income tax expense for Fiscal 2016 decreased, reflecting lower earnings and a lower effective tax rate. The lower effective tax rate in Fiscal 2016compared to Fiscal 2015 was primarily due to (1) improved operating results in our Hong Kong-based sourcing operations and Tommy Bahama Asia-Pacificretail operations resulting in the utilization of certain foreign net operating loss carryforwards, (2) the reversal of valuation allowances in certain foreignjurisdictions based on our assessment of the facts and circumstances related to our ability to realize those net operating loss carryforwards in future periods,(3) lower domestic earnings and (4) certain favorable discrete items, including the tax benefit associated with the vesting of certain restricted stock awards.Our effective tax rate for Fiscal 2017 is expected to be approximately 39%, reflecting an expected unfavorable impact on tax expense of stock awards with agrant date fair value of $78 per share that vest in April 2017 and the absence of operating loss carryforwards we may utilize in Fiscal 2017.Net earnings from continuing operations Fiscal 2016Fiscal 2015Net earnings from continuing operations$54,499$58,537Net earnings from continuing operations per diluted share$3.27$3.54Weighted average shares outstanding - diluted16,64916,559 The primary reasons for the lower earnings from continuing operations per diluted share in Fiscal 2016 were the lower operating income in TommyBahama and increased interest expense partially offset by higher income in Lilly Pulitzer, improved operating results in Corporate and Other and a lowereffective tax rate.Discontinued operations Fiscal 2016Fiscal 2015$ Change% ChangeLoss from discontinued operations, net of taxes$(2,038)$(27,975)$25,937NM The loss from discontinued operations, net of taxes in Fiscal 2016 primarily reflects an additional loss related to the retained lease obligations of ourdiscontinued operations primarily as a result of the default and failure to pay by a sub-tenant and an updated assessment of the anticipated losses consideringanticipated sub-lease income to be earned, timing of obtaining a tenant, lease incentives and market rents. Fiscal 2015 reflects the loss on the sale of ourformer Ben Sherman business, which was sold in the Second Quarter of Fiscal 2015, as well as the operations of the discontinued operations prior to disposaland any charges related to the discontinued operations subsequent to disposal. We do not anticipate significant operations or earnings related to thediscontinued operations in future periods, with cash flow attributable to discontinued operations in the future primarily related to the amounts associatedwith certain retained lease obligations, which are estimated at $5.4 million as of January 28, 2017. The estimated lease liability represents our best estimate ofthe future net loss anticipated with respect to the50retained lease obligations; however, the ultimate loss remains uncertain as the amount of any sub-lease income is dependent upon negotiated terms of anysub-lease agreements entered into for the space and the ability of those sub-tenants to pay the sub-lease income or alternatively, dependent upon leasetermination costs negotiated with the landlords in the future.FISCAL 2015 COMPARED TO FISCAL 2014 The discussion and tables below compare certain line items included in our statements of operations for Fiscal 2015 and Fiscal 2014. Each dollarand percentage change provided reflects the change between these periods unless indicated otherwise. Each dollar and share amount included in the tables isin thousands except for per share amounts. Individual line items of our consolidated statements of operations may not be directly comparable to those of ourcompetitors, as classification of certain expenses may vary by company. Net Sales Fiscal 2015Fiscal 2014$ Change% ChangeTommy Bahama$658,467$627,498$30,9694.9 %Lilly Pulitzer204,626167,73636,89022.0 %Lanier Apparel105,106126,430(21,324)(16.9)%Corporate and Other1,091(1,339)2,430NMTotal net sales$969,290$920,325$48,9655.3 % Consolidated net sales increased $49.0 million, or 5.3%, in Fiscal 2015 compared to Fiscal 2014 reflecting changes in net sales of each operatinggroup, as discussed below. The 5.3% increase in consolidated net sales was primarily driven by (1) a $28.8 million, or 7%, increase in comparable store salesto $418.3 million in Fiscal 2015 from $389.5 million in Fiscal 2014, (2) an incremental net sales increase of $28.4 million associated with the operation ofadditional full-price retail stores, (3) a $5.4 million increase in restaurant sales resulting from the operation of additional restaurants and increased sales atexisting restaurants, (4) a $5.2 million net increase in outlet store, e-commerce flash clearance and warehouse sales. These increases in net sales were partiallyoffset by an $18.9 million decrease in wholesale sales including the $21.3 million decrease in Lanier Apparel. The following table presents the proportion ofour consolidated net sales by distribution channel for each period presented: Fiscal 2015Fiscal 2014Full-price retail stores, outlets and warehouse sales42%40%E-commerce, e-commerce flash clearance sales17%15%Restaurant7%7%Wholesale34%38%Total100%100%Tommy Bahama: The Tommy Bahama net sales increase of $31.0 million, or 4.9%, was primarily driven by (1) an incremental net sales increase of $18.0 millionassociated with the operation of additional full-price retail stores, (2) a $7.8 million, or 3%, increase in comparable store sales to $317.8 million in Fiscal2015 from $310.0 million in Fiscal 2014, (3) a $5.4 million increase in restaurant sales resulting from the operation of two restaurants opened in Fiscal 2014and Fiscal 2015 as well as increased sales in existing restaurants and (4) a $2.1 million increase in outlet store and flash clearance sales, including the impactof new outlets opened in Fiscal 2014 and Fiscal 2015. These increases in net sales were partially offset by a $2.9 million decrease in wholesale sales.As of January 30, 2016, we operated 164 Tommy Bahama stores globally, consisting of 107 full-price retail stores, 16 retail-restaurant locations and41 outlet stores. As of January 31, 2015 we operated 157 Tommy Bahama stores globally consisting of 101 full-price retail stores, 15 retail-restaurantlocations and 41 outlet stores. The following table presents the proportion of net sales by distribution channel for Tommy Bahama for each period presented:51 Fiscal 2015Fiscal 2014Full-price retail stores and outlets50%50%E-commerce, including e-commerce flash clearance sales15%14%Restaurant11%10%Wholesale24%26%Total100%100% Lilly Pulitzer: The Lilly Pulitzer net sales increase of $36.9 million, or 22.0%, was primarily a result of (1) a $21.1 million, or 27%, increase in comparable storesales to $100.5 million in Fiscal 2015 compared to $79.5 million in Fiscal 2014, (2) an incremental net sales increase of $10.4 million associated with theoperation of additional full-price retail stores, (3) a $2.9 million increase in wholesale sales, (4) an increase in e-commerce flash clearance sales of $1.7million to $18.4 million in Fiscal 2015, and (5) $0.9 million higher sales at the June warehouse sale. As of January 30, 2016, we operated 34 Lilly Pulitzerfull-price retail stores compared to 28 full-price retail stores as of January 31, 2015. The following table presents the proportion of net sales by distributionchannel for Lilly Pulitzer for each period presented: Fiscal 2015Fiscal 2014Full-price retail stores and warehouse sales38%34%E-commerce, including e-commerce flash clearance sales30%28%Wholesale32%38%Total100%100% Lanier Apparel: The decrease in net sales for Lanier Apparel of $21.3 million, or 16.9%, reflects a decrease in net sales in the private label and branded businessesfor both tailored clothing and sportswear. The branded and private label businesses were unfavorably impacted by the reduction in or exit from certainreplenishment and other programs. Corporate and Other: Corporate and Other net sales primarily consist of the net sales of our Lyons, Georgia distribution center as well as the impact of the elimination ofintercompany sales between our operating groups, which exceeded net sales of our Lyons, Georgia distribution center in Fiscal 2014. The increase inCorporate and Other sales was primarily due to a smaller unfavorable impact of the elimination of intercompany sales in Fiscal 2015. Gross Profit The table below presents gross profit by operating group and in total for Fiscal 2015 and Fiscal 2014 as well as the change between those twoperiods. Our gross profit and gross margin, which is calculated as gross profit divided by net sales, may not be directly comparable to those of ourcompetitors, as statement of operations classification of certain expenses may vary by company. Fiscal 2015Fiscal 2014$ Change% ChangeTommy Bahama$393,221$377,415$15,8064.2 %Lilly Pulitzer132,791106,31726,47424.9 %Lanier Apparel30,46034,159(3,699)(10.8)%Corporate and Other1,633581,575NMTotal gross profit$558,105$517,949$40,1567.8 %LIFO charge included in Corporate and Other$254$2,131 The increase in consolidated gross profit was primarily driven by higher net sales, as discussed above, as well as a change in sales mix as a greaterproportion of consolidated net sales were sales at Lilly Pulitzer, which typically has higher gross margins than our other operating groups, and the netfavorable impact of LIFO accounting in Fiscal 2015 as compared to52Fiscal 2014. In addition to the impact of the changes in net sales, gross profit on a consolidated basis and for each operating group was impacted by thechange in sales mix and gross margin within each operating group, as discussed below. The table below presents gross margin by operating group and in totalfor Fiscal 2015 and Fiscal 2014. Fiscal 2015Fiscal 2014Tommy Bahama59.7%60.1%Lilly Pulitzer64.9%63.4%Lanier Apparel29.0%27.0%Corporate and OtherNMNMConsolidated gross margin57.6%56.3%On a consolidated basis, gross margin increased in Fiscal 2015, primarily as a result of (1) Lilly Pulitzer representing a greater proportion andLanier Apparel representing a lower proportion of consolidated net sales, (2) direct to consumer sales, which typically provide a higher gross margin,representing a greater proportion of consolidated net sales, (3) improved gross margins in Lilly Pulitzer and Lanier Apparel and (4) the net favorable impactof LIFO accounting in Fiscal 2015 as compared to Fiscal 2014. These favorable items were partially offset by the lower gross margin in Tommy Bahama. Tommy Bahama:The reduction in gross margin for Tommy Bahama reflected lower gross margins in both the direct to consumer and wholesale channels ofdistribution, which offset the favorable impact of a change in sales mix with direct to consumer sales representing a greater proportion of net sales. The lowerdirect to consumer gross margin was primarily due to a greater proportion of sales in our full-price retail stores and e-commerce website occurring inconnection with Tommy Bahama's loyalty award card, Flip-Side and Friends & Family events and more significant in-store discounts in our outlet stores. Thelower gross margin in the wholesale business was primarily a result of more significant discounts and allowances, particularly for wholesale off-price sales.Lilly Pulitzer: The increase in gross margin for Lilly Pulitzer was primarily driven by a change in sales mix towards the direct to consumer channel of distributionand an increase in gross margins of the direct to consumer businesses. Lanier Apparel:The increase in gross margin for Lanier Apparel was primarily due to a change in sales mix with a greater proportion of sales consisting of highergross margin branded business programs, in both the tailored clothing and sportswear businesses, which was partially offset by the impact of more significantinventory markdowns in Fiscal 2015.Corporate and Other:The gross profit in Corporate and Other in each period primarily reflects (1) the gross profit of our Lyons, Georgia distribution center operations, (2)the impact of LIFO accounting adjustments and (3) the impact of certain consolidating adjustments, including the elimination of intercompany sales betweenour operating groups. The higher gross profit for Corporate and Other was due to the lower impact of LIFO accounting in Fiscal 2015. SG&A Fiscal 2015Fiscal 2014$ Change% ChangeSG&A$475,031$439,069$35,9628.2%SG&A as % of net sales49.0%47.7% Amortization of intangible assets included in TommyBahama associated with Tommy Bahama Canada acquisition$1,521$1,764 Change in fair value of contingent consideration included inLilly Pulitzer$—$275 53The increase in SG&A was primarily due to (1) $19.9 million of incremental costs in Fiscal 2015 associated with additional Tommy Bahama full-price retail stores and restaurants, including the Waikiki retail-restaurant location, and Lilly Pulitzer stores, (2) costs to support the growing Lilly Pulitzer andTommy Bahama businesses, (3) $2.7 million of increased occupancy costs associated with duplicate rent expense, moving costs and higher rent structurerelated to the relocation of Tommy Bahama's office in Seattle, Washington and (4) $1.1 million of additional equity compensation expense. SG&A included$1.9 million of amortization of intangible assets in Fiscal 2015 compared to $2.3 million in Fiscal 2014.Royalties and other operating income Fiscal 2015Fiscal 2014$ Change% ChangeRoyalties and other operating income$14,440$13,939$5013.6% Royalties and other operating income primarily reflect income received from third parties from the licensing of our Tommy Bahama and LillyPulitzer brands. The $0.5 million increase in royalties and other income reflects increased royalty income for both Tommy Bahama and Lilly Pulitzer.Operating income (loss) Fiscal 2015Fiscal 2014$ Change% ChangeTommy Bahama$65,993$71,132$(5,139)(7.2)%Lilly Pulitzer42,52532,19010,33532.1 %Lanier Apparel7,70010,043(2,343)(23.3)%Corporate and Other(18,704)(20,546)1,8429.0 %Total operating income$97,514$92,819$4,6955.1 %LIFO charge included in Corporate and Other$254$2,131 Amortization of intangible assets included in Tommy Bahama associatedwith Tommy Bahama Canada acquisition$1,521$1,764 Change in fair value of contingent consideration included in LillyPulitzer$—$275 The increase in operating income was primarily due to the higher operating income in Lilly Pulitzer and a lower operating loss in Corporate andOther, partially offset by lower operating income in Tommy Bahama and Lanier Apparel. Changes in operating income (loss) by operating group arediscussed below. Tommy Bahama: Fiscal 2015Fiscal 2014$ Change% ChangeNet sales$658,467$627,498$30,9694.9 %Gross margin59.7%60.1% Operating income$65,993$71,132$(5,139)(7.2)%Operating income as % of net sales10.0%11.3% Amortization of intangible assets included in Tommy Bahamaassociated with Tommy Bahama Canada acquisition$1,521$1,764 The lower operating income for Tommy Bahama was primarily due to the higher SG&A and lower gross margin partially offset by higher sales. Thehigher SG&A reflects (1) $15.1 million of incremental SG&A associated with the cost of operating additional full-price retail stores and restaurants, includingpre-opening rent and set-up costs associated with new stores and restaurants, (2) $2.7 million of increased occupancy costs associated with duplicate rentexpense, moving costs and higher rent structure related to the relocation of Tommy Bahama's office in Seattle, Washington during the Third Quarter of Fiscal2015 and (3) higher costs to support the growing Tommy Bahama business. These higher SG&A amounts were partially offset by reductions in other SG&Aaccounts, including incentive compensation. The operating loss for the Tommy Bahama Waikiki retail-restaurant location prior to opening in late October2015 was $2.1 million, with the substantial majority of this loss consisting of pre-opening rent and set-up costs, which are included in the incremental SG&Aamount associated with new locations above. Fiscal 2015 included an operating loss of $8.3 million related to our Tommy Bahama Asia-Pacific expansioncompared to an operating loss of $10.3 million in Fiscal 2014.54Lilly Pulitzer: Fiscal 2015Fiscal 2014$ Change% ChangeNet sales$204,626$167,736$36,89022.0%Gross margin64.9%63.4% Operating income$42,525$32,190$10,33532.1%Operating income as % of net sales20.8%19.2% Change in fair value of contingent consideration included in LillyPulitzer$—$275 The increase in operating income in Lilly Pulitzer was primarily due to the higher net sales and gross margin. These items were partially offset byincreased SG&A. The increased SG&A was primarily associated with (1) higher costs to support the growing business, reflecting increased infrastructure costsand advertising expense, (2) $4.8 million of incremental SG&A associated with the cost of operating additional full-price retail stores and (3) $1.0 million ofhigher incentive compensation. Lanier Apparel: Fiscal 2015Fiscal 2014$ Change% ChangeNet sales$105,106$126,430$(21,324)(16.9)%Gross margin29.0%27.0% Operating income$7,700$10,043$(2,343)(23.3)%Operating income as % of net sales7.3%7.9% The lower operating income for Lanier Apparel was primarily due to the reduction in net sales partially offset by higher gross margin and lowerSG&A. The lower SG&A primarily reflects decreases in certain variable and other expenses including royalty, advertising and distribution expenses.Corporate and Other: Fiscal 2015Fiscal 2014$ Change% ChangeNet sales$1,091$(1,339)$2,430NMOperating loss$(18,704)$(20,546)$1,8429.0%LIFO charge included in Corporate and Other$254$2,131 The improved operating results in Corporate and Other were primarily due to the lower LIFO accounting charge in Fiscal 2015 and a $0.9 milliongain on sale of real estate, which were partially offset by higher incentive compensation amounts. Interest expense, net Fiscal 2015Fiscal 2014$ Change% ChangeInterest expense, net$2,458$3,236$(778)(24.0)% Interest expense for Fiscal 2015 decreased from the prior year primarily due to lower average debt outstanding, particularly in second half of Fiscal2015, and lower borrowing rates during Fiscal 2015. The lower average debt outstanding in the second half of Fiscal 2015 was primarily a result of the use ofproceeds from the July 2015 sale of Ben Sherman for debt repayment.Income taxes Fiscal 2015Fiscal 2014$ Change% ChangeIncome taxes$36,519$35,786$7332.0%Effective tax rate38.4%39.9% 55Income tax expense for Fiscal 2015 increased, reflecting higher earnings partially offset by a lower effective tax rate. The lower effective tax rate inFiscal 2015 compared to Fiscal 2014 primarily resulted from improved operating results in our Hong-Kong based sourcing and Tommy Bahama Asia-Pacificretail operations.Net earnings from continuing operations Fiscal 2015Fiscal 2014Net earnings from continuing operations$58,537$53,797Net earnings from continuing operations per diluted share$3.54$3.27Weighted average shares outstanding - diluted16,55916,471 The higher net earnings in Fiscal 2015 primarily resulted from (1) higher operating income in Lilly Pulitzer, (2) a lower operating loss in Corporateand Other, (3) lower interest expense and (4) a lower effective tax rate. These favorable items were partially offset by (1) lower operating income in TommyBahama and (2) lower operating income in Lanier Apparel.Discontinued operations Net loss from discontinued operations, net of taxes was $28.0 million in Fiscal 2015 compared to a net loss from discontinued operations, net oftaxes of $8.0 million in Fiscal 2014 with the larger net loss primarily due to the $20.5 million loss on sale of the Ben Sherman operations, which wascompleted in the Second Quarter of Fiscal 2015.FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCESOur primary source of revenue and cash flow is through our design, sourcing, marketing and distribution of branded apparel products bearing thetrademarks of our Tommy Bahama, Lilly Pulitzer and Southern Tide lifestyle brands, as well as certain licensed and private label products. Our primary usesof cash flow include the purchase of products in the operation of our business from third party contract manufacturers outside of the United States, as well asoperating expenses including employee compensation and benefits, occupancy-related costs, marketing and advertising costs, other general andadministrative expenses and the payment of periodic interest payments related to our financing arrangements. Additionally, we use cash for the funding ofcapital expenditures, dividends and repayment of indebtedness. In the ordinary course of business, we maintain certain levels of inventory and extend creditto our wholesale customers. Thus, we require a certain amount of working capital to operate our business. If cash inflows are less than cash outflows, we haveaccess to amounts under our U.S. Revolving Credit Agreement, subject to its terms, which is described below. We may seek to finance our future cashrequirements through various methods, including cash flow from operations, borrowings under our current or additional credit facilities, sales of debt orequity securities and cash on hand.As of January 28, 2017, we had $6.3 million of cash and cash equivalents on hand, with $91.5 million of borrowings outstanding and $185.5million of availability under our U.S. Revolving Credit Agreement. We believe our balance sheet and anticipated future positive cash flow from operatingactivities provide sufficient cash flow to satisfy our ongoing cash requirements as well as ample opportunity to continue to invest in our brands and our directto consumer initiatives.Key Liquidity Measures56($ in thousands)January 28,2017January 30,2016$ Change% ChangeTotal Current Assets$231,628$216,796$14,8326.8%Total Current Liabilities131,396128,8992,4971.9%Working capital$100,232$87,897$12,33514.0%Working capital ratio1.761.68 Debt to total capital ratio20%24% Our working capital ratio is calculated by dividing total current assets by total current liabilities. Current assets increased from January 30, 2016 toJanuary 28, 2017 primarily due to the $22.9 million of current assets related to the Southern Tide business, partially offset by lower current assets in our otheroperating groups. Current liabilities as of January 28, 2017 was comparable to current liabilities as of January 30, 2016 reflecting increases in accountspayable, other accrued expenses and liabilities and liabilities related to discontinued operations partially offset by a decrease in accrued compensation.Changes in current assets and current liabilities are discussed below.For the ratio of debt to total capital, debt is defined as short-term and long-term debt included in continuing operations, and total capital is definedas debt plus shareholders' equity. Debt was $91.5 million at January 28, 2017 and $44.0 million at January 30, 2016, while shareholders’ equity was $376.1million at January 28, 2017 and $334.4 million at January 30, 2016. The increase in debt since January 30, 2016 was primarily due to the payment of $95.0million related to acquisitions, $49.4 million of capital expenditures and the payment of $18.1 million of dividends which were partially offset by $118.6million of cash flow from operations. Shareholders' equity increased from January 30, 2016, primarily as a result of net earnings less dividends paid. Our debtlevels and ratio of debt to total capital in future periods may not be comparable to historical amounts as we continue to assess, and possibly make changes to,our capital structure. Changes in our capital structure in the future, if any, will depend on prevailing market conditions, our liquidity requirements,contractual restrictions and other factors. The amounts involved may be material.Balance SheetThe following tables set forth certain information included in our consolidated balance sheets (in thousands). As a result of our acquisition of SouthernTide during the First Quarter of Fiscal 2016, a number of line items in our balance sheet increased as discussed below. Below each table are explanations forany significant changes in the balances from January 30, 2016 to January 28, 2017.Current Assets: January 28,2017January 30,2016$ Change% ChangeCash and cash equivalents$6,332$6,323$90.1 %Receivables, net58,27959,065(786)(1.3)%Inventories, net142,175129,13613,03910.1 %Prepaid expenses24,84222,2722,57011.5 %Total Current Assets$231,628$216,796$14,8326.8 %Cash and cash equivalents as of January 28, 2017 and January 30, 2016 include typical cash amounts maintained on an ongoing basis in ouroperations, which generally ranges from $5 million to $10 million at any given time. Any excess cash is generally used to repay amounts outstanding underour U.S. Revolving Credit Agreement. The decrease in receivables, net as of January 28, 2017 was primarily due to a decrease in receivables in our LanierApparel business reflecting the lower sales in that business during the Fourth Quarter of Fiscal 2016, which was partially offset by the receivables related tothe Southern Tide business.Inventories, net as of January 28, 2017 increased from January 30, 2016 as a result of inventories related to the Southern Tide business. Inventoriesin our other businesses decreased year over year as lower inventories in Tommy Bahama were partially offset by higher inventories in Lilly Pulitzer andCorporate and Other. The lower inventories in Tommy Bahama reflect Tommy Bahama's focus on managing inventory buys on a total operating group basis,sale of a greater amount of inventory units through outlet stores and off-price wholesale channels during Fiscal 2016 and certain inventory markdowns.Theincrease in inventory in Corporate and Other was primarily due to the impact of LIFO accounting including57the reversal of inventory markdowns. Prepaid expenses increased at January 28, 2017 primarily as a result of a $4.4 million increase in prepaid taxes as wellas higher prepaid advertising and the prepaid expenses associated with the Southern Tide business which were partially offset by lower prepaid rent as ofJanuary 28, 2017 due to the timing of payment of rent amounts as February 2017 rent payments generally had not been paid as of January 28, 2017, butsubstantially all February 2016 rent payments had been made as of January 30, 2016.Non-current Assets: January 28,2017January 30,2016$ Change% ChangeProperty and equipment, net$193,931$184,094$9,8375.3%Intangible assets, net175,245143,73831,50721.9%Goodwill60,01517,22342,792248.5%Other non-current assets, net24,34020,8393,50116.8%Total non-current assets, net$453,531$365,894$87,63724.0%Property and equipment, net as of January 28, 2017 increased from January 30, 2016 primarily as a result of capital expenditures partially offset bydepreciation expense. The increase in intangible assets, net and goodwill at January 28, 2017 were primarily due to the acquisition of the Southern Tidebusiness, partially offset by amortization of intangible assets. The increase in other non-current assets, net as of January 28, 2017 was primarily due to anincrease in asset balances set aside for potential deferred compensation plan obligations, non-current deferred tax assets due to the reversal of certain foreignoperating loss carryforwards and deferred financing costs paid during Fiscal 2016.Liabilities: January 28,2017January 30,2016$ Change% ChangeTotal Current Liabilities$131,396$128,899$2,4971.9 %Long-term debt91,50943,97547,534108.1 %Other non-current liabilities70,00267,1882,8144.2 %Deferred taxes13,5783,6579,921271.3 %Liabilities related to discontinued operations2,5444,571(2,027)(44.3)%Total liabilities$309,029$248,290$60,73924.5 %Current liabilities as of January 28, 2017 were comparable to January 30, 2016 reflecting an $8.5 million increase in accounts payable and a $3.9million increase in other accrued expenses and liabilities and a $0.5 million increase in liabilities related to discontinued operations partially offset by a$10.4 million decrease in accrued compensation. The increase in accounts payable was primarily due to an increase in payables related to imports in transitdue to the timing of the Chinese New Year holiday, while the decrease in accrued compensation was due to a decrease in accrued bonus for each operatinggroup as well as Corporate and Other.The increase in debt as of January 28, 2017 was primarily due to the payment of $95.0 million related to acquisitions, $49.4 million of capitalexpenditures and the payment of $18.1 million of dividends which were partially offset by $118.6 million of cash flow from operations. Other non-currentliabilities increased as of January 28, 2017 compared to January 30, 2016 primarily due to increases in deferred rent liabilities.Deferred taxes increased as of January 28, 2017 compared to January 30, 2016 primarily due to the impact of purchase accounting on the basisdifferences for the acquired assets of Southern Tide and timing differences associated with depreciation, amortization, accrued compensation and inventories.Non-current liabilities related to discontinued operations as of January 28, 2017 decreased primarily as a result of certain amounts now being classified ascurrent liabilities, and included in total current liabilities, rather than non-current liabilities related to discontinued operations. The aggregate amountincluded in current and non-current liabilities related to discontinued operations represents our best estimate of the future net loss anticipated with respect tocertain retained lease obligations as discussed in Note 13 to our consolidated financial statements; however, the ultimate loss to be recognized remainsuncertain as the amount of any sub-lease income is dependent upon a variety of factors including anticipated future sublease income and market rentalamounts.Statement of Cash Flows58The following table sets forth the net cash flows, including continuing and discontinued operations, resulting in the change in our cash and cashequivalents (in thousands): Fiscal 2016Fiscal 2015Fiscal 2014Cash provided by operating activities$118,565$105,373$95,409Cash used in investing activities(146,491)(13,946)(50,355)Cash provided by (used in) financing activities27,367(91,466)(47,619)Net change in cash and cash equivalents$(559)$(39)$(2,565)Cash and cash equivalents on hand were $6.3 million and $6.3 million at January 28, 2017 and January 30, 2016, respectively. Changes in cashflows in Fiscal 2016 and Fiscal 2015 related to operating activities, investing activities and financing activities are discussed below.Fiscal 2016 Compared to Fiscal 2015Operating Activities:In Fiscal 2016 and Fiscal 2015, operating activities provided $118.6 million and $105.4 million of cash, respectively. The cash flow from operatingactivities was primarily the result of net earnings for the relevant period adjusted, as applicable, for non-cash activities including depreciation, amortization,equity-based compensation and loss on sale of discontinued operations as well as the net impact of changes in deferred taxes and our working capitalaccounts. Working capital account changes, as well as deferred taxes, had a favorable impact on cash flow from operations in both Fiscal 2016 and Fiscal2015. In Fiscal 2016 the more significant changes in working capital accounts were a decrease in receivables, net and inventories, each of which increasedcash flow from operations partially offset by the impact of an increase in other non-current assets and an increase in prepaid expenses. During Fiscal 2015 themore significant changes in working capital accounts were a decrease in receivables and an increase in non-current liabilities, each of which increased cashflow from operations, partially offset by increases in inventories and prepaid expenses each of which decreased cash flow from operations. Investing Activities: During Fiscal 2016, investing activities used $146.5 million of cash, while in Fiscal 2015, investing activities used $13.9 million of cash. In Fiscal2016, we paid $95.0 million of cash for acquisitions, consisting of $92.0 million for the acquisition of Southern Tide and $3.1 million for certain acquisitionsin our Lanier Apparel operating group, $49.4 million for capital expenditures and $2.0 million for the final working capital settlement associated with ourBen Sherman discontinued operations. The capital expenditures in Fiscal 2016 primarily consisted of opening, relocating and remodeling full-price retailstores and restaurants, information technology initiatives, including e-commerce capabilities, and facility enhancements for distribution centers and officelocations. During Fiscal 2015, we used $73.1 million of cash for capital expenditures which primarily related to costs associated with new full-price retailstores and restaurants; facility enhancements, including the build-out of Tommy Bahama's new office in Seattle and the acquisition of additional distributioncenter space for our Lilly Pulitzer business; information technology initiatives, including e-commerce enhancements; and full-price retail store remodeling.Additionally, during Fiscal 2015, we received $59.3 million of proceeds for the sale of our Ben Sherman business. Other investing activities in Fiscal 2015include the net impact of a $1.1 million investment of cash in an unconsolidated entity, partially offset by the $0.9 million proceeds from the sale of realestate.Financing Activities: During Fiscal 2016, financing activities provided $27.4 million of cash while in Fiscal 2015 financing activities used $91.5 million of cash. InFiscal 2016, we increased debt primarily for the purpose of purchasing the Southern Tide business, funding our capital expenditures and payment ofdividends, which in the aggregate exceeded our cash flow from operations. During Fiscal 2015, we decreased debt as cash provided by our operatingactivities and the proceeds from the sale of Ben Sherman exceeded our cash requirements for capital expenditures, contingent consideration payments anddividends. During Fiscal 2016 and Fiscal 2015, we paid $18.1 million and $16.6 million of dividends, respectively. In Fiscal 2015, we also paid $12.5million for the final payment for the contingent consideration arrangement related to the Lilly Pulitzer acquisition.We anticipate that cash flow provided by or used in financing activities in the future will be dependent upon whether our cash flow from operatingactivities exceeds our capital expenditures, dividend payments and any other investing or financing activities. Generally, we anticipate that excess cash, ifany, will be used to repay debt on our U.S. Revolving Credit Agreement.59Fiscal 2015 Compared to Fiscal 2014Operating Activities: In Fiscal 2015 and Fiscal 2014, operating activities provided $105.4 million and $95.4 million of cash, respectively. The cash flow from operatingactivities was primarily the result of net earnings for the relevant period adjusted, as applicable, for non-cash activities including depreciation, amortization,equity-based compensation and loss on sale of discontinued operations as well as the net impact of changes in our working capital accounts. In Fiscal 2015the more significant changes in working capital accounts were a decrease in receivables and an increase in non-current liabilities, each of which increasedcash flow from operations, partially offset by increases in inventories and prepaid expenses each of which decreased cash flow from operations. In Fiscal 2014the more significant changes in working capital were increases in current liabilities and non-current liabilities, each of which increased cash flow fromoperations, partially offset by increases in receivables and inventories, each of which decreased cash flow from operations.Investing Activities: During Fiscal 2015 and Fiscal 2014, investing activities used $13.9 million and $50.4 million of cash, respectively. In Fiscal 2015, we used $73.1million of cash for capital expenditures and received $59.3 million of proceeds for the sale of our Ben Sherman business. Other investing activities in Fiscal2015 include the net impact of a $1.1 million investment of cash in an unconsolidated entity, partially offset by the $0.9 million proceeds from the sale ofreal estate. In Fiscal 2014, investing cash flow activities consisted of purchases of property and equipment, which were primarily related to costs associatedwith new full-price retail stores, information technology initiatives and full-price retail store and restaurant remodeling.Financing Activities: During Fiscal 2015 and Fiscal 2014, financing activities used $91.5 million and $47.6 million of cash, respectively. In Fiscal 2015, we decreaseddebt as cash provided by our operating activities and the proceeds from the sale of Ben Sherman exceeded our cash requirements for capital expenditures,contingent consideration payments and dividends. In Fiscal 2014, we also decreased debt as cash provided by our operating activities exceeded our cashneeds for capital expenditures, dividends and contingent consideration payments. In Fiscal 2015, we paid dividends of $16.6 million and $12.5 million forthe final payment for the contingent consideration arrangement related to the Lilly Pulitzer acquisition, while in Fiscal 2014 we paid dividends of $13.9million and contingent consideration of $2.5 million.Liquidity and Capital Resources We had $91.5 million outstanding as of January 28, 2017 under our $325 million Fourth Amended and Restated Credit Agreement ("U.S.Revolving Credit Agreement") compared to $44.0 million of borrowings outstanding as of January 30, 2016 under our Third Amended and Restated CreditAgreement ("Prior Credit Agreement"). On May 24, 2016, the U.S. Revolving Credit Agreement amended and restated the Prior Credit Agreement to (i)increase the borrowing capacity of the facility, (ii) extend the maturity of the facility and (iii) modify certain other provisions and restrictions of the PriorCredit Agreement. The U.S. Revolving Credit Agreement generally (i) is limited to a borrowing base consisting of specified percentages of eligible categoriesof assets, (ii) accrues variable-rate interest (weighted average borrowing rate of 2.3% as of January 28, 2017), unused line fees and letter of credit fees basedupon average unused availability or utilization, (iii) requires periodic interest payments with principal due at maturity (May 2021) and (iv) is secured by afirst priority security interest in substantially all of the assets of Oxford Industries, Inc. and substantially all of its domestic subsidiaries, including accountsreceivable, books and records, chattel paper, deposit accounts, equipment, certain general intangibles, inventory, investment property (including the equityinterests of certain subsidiaries), negotiable collateral, life insurance policies, supporting obligations, commercial tort claims, cash and cash equivalents,eligible trademarks, proceeds and other personal property.To the extent cash flow needs exceed cash flow provided by our operations we will have access, subject to its terms, to our U.S. Revolving CreditAgreement to provide funding for operating activities, capital expenditures and acquisitions, if any. Our credit facility is also used to finance trade letters ofcredit for product purchases, which reduce the amounts available under our line of credit when issued. As of January 28, 2017, $4.7 million of letters of creditwere outstanding against our U.S. Revolving Credit Agreement. After considering these limitations and the amount of eligible assets in our borrowing base,as applicable, as of January 28, 2017, we had $185.5 million in unused availability under the U.S. Revolving Credit Agreement, subject to certain limitationson borrowings.Covenants, Other Restrictions and Prepayment Penalties60The U.S. Revolving Credit Agreement is subject to a number of affirmative covenants regarding the delivery of financial information, compliance withlaw, maintenance of property, insurance requirements and conduct of business. Also, the U.S. Revolving Credit Agreement is subject to certain negativecovenants or other restrictions including, among other things, limitations on our ability to (i) incur debt, (ii) guaranty certain obligations, (iii) incur liens,(iv) pay dividends to shareholders, (v) repurchase shares of our common stock, (vi) make investments, (vii) sell assets or stock of subsidiaries, (viii) acquireassets or businesses, (ix) merge or consolidate with other companies or (x) prepay, retire, repurchase or redeem debt.Additionally, the U.S. Revolving Credit Agreement contains a financial covenant that applies if excess availability under the agreement for threeconsecutive days is less than the greater of (i) $23.5 million or (ii) 10% of availability. In such case, our fixed charge coverage ratio as defined in the U.S.Revolving Credit Agreement must not be less than 1.0 to 1.0 for the immediately preceding 12 fiscal months for which financial statements have beendelivered. This financial covenant continues to apply until we have maintained excess availability under the U.S. Revolving Credit Agreement of more thanthe greater of (i) $23.5 million or (ii) 10% of availability for 30 consecutive days.We believe that the affirmative covenants, negative covenants, financial covenants and other restrictions under the U.S. Revolving Credit Agreementare customary for those included in similar facilities entered into at the time we entered into the U.S. Revolving Credit Agreement. During Fiscal 2016 and asof January 28, 2017, no financial covenant testing was required pursuant to our U.S. Revolving Credit Agreement or Prior Credit Agreement as the minimumavailability threshold was met at all times. As of January 28, 2017, we were compliant with all covenants related to the U.S. Revolving Credit Agreement.Other Liquidity Items:We anticipate that we will be able to satisfy our ongoing cash requirements, which generally consist of working capital and other operating activityneeds, capital expenditures, interest payments on our debt and dividends, if any, primarily from positive cash flow from operations supplemented byborrowings under our U.S. Revolving Credit Agreement. Our need for working capital is typically seasonal with the greatest requirements generally in the falland spring of each year. Our capital needs will depend on many factors including our growth rate, the need to finance inventory levels and the success of ourvarious products. We anticipate that at the maturity of the U.S. Revolving Credit Agreement or as otherwise deemed appropriate, we will be able to refinancethe facility or obtain other financing on terms available in the market at that time. The terms of any future financing arrangements may not be as favorable asthe terms of the current agreement or current market terms.We have paid dividends in each quarter since we became a public company in July 1960. However, we may discontinue or modify dividend paymentsat any time if we determine that other uses of our capital, including payment of outstanding debt, funding of acquisitions, funding of capital expenditures orrepurchases 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 adividend; or if the terms of our U.S. Revolving Credit Agreement, other debt instruments or applicable law limit our ability to pay dividends. We may borrowto fund dividends in the short term based on our expectation of operating cash flows in future periods subject to the terms and conditions of the U.S.Revolving Credit Agreement, other debt instruments and applicable law. All cash flow from operations will not be paid out as dividends in all periods. Fordetails about limitations on our ability to pay dividends, see the discussion of the U.S. Revolving Credit Agreement above.Contractual ObligationsThe following table summarizes our contractual cash obligations, as of January 28, 2017, by future period (in thousands): Payments Due by Period Less Than1 year1-3 Years3-5 YearsMore Than5 YearsTotalContractual Obligations: U.S. Revolving Credit Agreement (1)$—$—$—$—$—Operating leases (2)66,226121,924110,295175,985474,430Minimum royalty and advertising payments pursuant toroyalty agreements5,8859,0707,596—22,551Letters of credit$4,717———4,717Other (3)(4)(5)—————Total$76,828$130,994$117,891$175,985$501,698_______________________________________________________________________________61(1)Principal and interest amounts payable in future periods on our U.S. Revolving Credit Agreement have been excluded from the table above, as theamount that will be outstanding and interest rate during any fiscal year will be dependent upon future events which are not known at this time.During Fiscal 2016, we paid $2.6 million of interest.(2)Amounts to be paid in future periods for real estate taxes, insurance, other operating expenses and contingent rent applicable to the propertiespursuant to the respective operating leases have been excluded from the table above, as the amounts payable in future periods are, in most cases, notquantified in the lease agreements and are dependent on factors which are not known at this time. Such amounts incurred in Fiscal 2016 totaled$23.9 million.(3)Amounts totaling $10.9 million of deferred compensation obligations, which are included in other non-current liabilities in our consolidatedbalance sheet as of January 28, 2017, have been excluded from the table above, due to the uncertainty of the timing of the payment of theseobligations, which are generally at the discretion of the individual employees or upon the death of the individual, respectively.(4)An environmental reserve liability of $1.2 million, which is included in other non-current liabilities in our consolidated balance sheet as ofJanuary 28, 2017 and discussed in Note 6 to our consolidated financial statements included in this report, has been excluded from the above table,as we were not contractually obligated to incur these costs as of January 28, 2017 and the timing of payment, if any, is uncertain.(5)Non-current deferred taxes, which is the net amount of deferred tax liabilities and deferred tax assets, of $13.6 million included in our consolidatedbalance sheet as of January 28, 2017 and discussed in Note 8 to our consolidated financial statements included in this report have been excludedfrom the above table, as deferred income tax liabilities are calculated based on temporary differences between the tax basis and book basis of assetsand liabilities, which will result in taxable amounts in future years when the amounts are settled at their reported financial statement amounts. As theresults of these calculations do not have a direct connection with the amount of cash taxes to be paid in any future periods, scheduling deferredincome tax amounts by period could be misleading.Our anticipated capital expenditures for Fiscal 2017, which are excluded from the table above as we are generally not contractually obligated to paythese amounts as of January 28, 2017, are expected to be approximately $55 million. These expenditures are expected to consist primarily of costs associatedwith information technology initiatives, including e-commerce capabilities; opening, relocating and remodeling full-price retail stores and restaurants; andfacilities enhancements. Our capital expenditure amounts in future years may increase or decrease from the amounts incurred in prior years or the amountexpected for Fiscal 2017 depending on the information technology initiatives, full-price retail store and restaurant openings, relocations and remodels andother infrastructure requirements deemed appropriate for that year to support future expansion of our businesses.Off Balance Sheet ArrangementsWe have not entered into agreements which meet the SEC's definition of an off balance sheet financing arrangement, other than operating leases, andhave made no financial commitments to or guarantees with respect to any unconsolidated subsidiaries or special purpose entities.CRITICAL ACCOUNTING POLICIESThe discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have beenprepared in accordance with GAAP in a consistent manner. The preparation of these financial statements requires the selection and application of accountingpolicies. Further, the application of GAAP requires us to make estimates and judgments about future events that affect the reported amounts of assets,liabilities, revenues and expenses and related disclosures. On an ongoing basis, we evaluate our estimates, including those discussed below. We base ourestimates on historical experience, current trends and various other assumptions that we believe are reasonable under the circumstances, the results of whichform the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.Actual results may differ from these estimates under different assumptions or conditions. We believe it is possible that other professionals, applyingreasonable judgment to the same set of facts and circumstances, could develop and support a range of alternative estimated amounts. We believe that we haveappropriately applied our critical accounting policies. However, in the event that inappropriate assumptions or methods were used relating to the criticalaccounting policies below, our consolidated statements of operations could be misstated.62A detailed summary of significant accounting policies is included in Note 1 to our consolidated financial statements contained in this report. Thefollowing is a brief discussion of the more significant estimates, assumptions and judgments we use or the amounts most sensitive to change from outsidefactors.Revenue Recognition and Accounts ReceivableOur revenue consists of direct to consumer sales, which includes retail store, e-commerce and restaurant sales, as well as wholesale sales. We considerrevenue realized or realizable and earned when the following criteria are met: (1) persuasive evidence of an agreement exists, (2) delivery has occurred,(3) our price to the buyer is fixed or determinable and (4) collectibility is reasonably assured.An area of judgment affecting reported revenues and net earnings involves estimating sales reserves, which represent a portion of revenues not expectedto be realized. We record our revenues net of estimated discounts, allowances, co-operative advertising, operational chargebacks and returns, as appropriate.As certain allowances and other deductions are not finalized until the end of a season, program or other event which may not have occurred yet, we estimatesuch discounts and allowances on an ongoing basis. Significant considerations in determining our estimates for discounts, allowances, operationalchargebacks and returns for wholesale customers may include historical and current trends, agreements with customers, projected seasonal results, anevaluation of current economic conditions, specific program or product expectations and retailer performance. Actual discounts and allowances to ourwholesale customers have not differed materially from our estimates in prior periods. As of January 28, 2017, our total reserves for discounts, returns andallowances for our wholesale businesses were $9.3 million and, therefore, if the allowances changed by 10% it would have had a pre-tax impact of$0.9 million on earnings in Fiscal 2016. The substantial majority of these reserves relate to our Lanier Apparel business as of January 28, 2017.As direct to consumer products may be returned after the date of original purchase by the consumer, we must make estimates of reserves for productswhich were sold prior to the balance sheet date but that we anticipate may be returned by the consumer subsequent to that date. The determination of direct toconsumer return reserve amounts requires judgment and consideration of historical and current trends, evaluation of current economic trends and otherfactors. Our historical estimates of direct to consumer return reserves have not differed materially from actual results. As of January 28, 2017, our direct toconsumer return reserve was $3.0 million. A 10% change in the direct to consumer return reserve as of January 28, 2017 would have had a $0.3 million pre-tax impact on earnings in Fiscal 2016.For our wholesale receiveables, we recognize estimated reserves for bad debts based on our historical collection experience, the financial condition ofour customers, an evaluation of current economic conditions and anticipated trends, each of which is subjective and requires certain assumptions. Actualcharges for uncollectible amounts have not differed materially from our estimates in prior periods. As of January 28, 2017, our allowance for doubtfulaccounts was $0.8 million, and therefore, if the allowance for doubtful accounts changed by 10% it would have had a pre-tax impact of $0.1 million onearnings in Fiscal 2016. While the amounts deemed uncollectible have not been significant in recent years if, in the future, amounts due from significantcustomer(s) were deemed to be uncollectible as a result of events that occur subsequent to January 28, 2017 this could result in a material charge to ourconsolidated statements of operations in future periods.Inventories, netFor operating group reporting, inventory is carried at the lower of the first-in, first-out (FIFO) method cost or market. We continually evaluate thecomposition of our inventories, substantially all of which is finished goods inventory, for identification of distressed inventory. In performing this evaluationwe consider slow-turning products, an indication of lack of consumer acceptance of particular products, prior seasons' fashion products and current levels ofreplenishment program products as compared to future sales estimates. We estimate the amount of goods that we will not be able to sell in the normal courseof business and write down the value of these goods as necessary. As the amount to be ultimately realized for the goods is not necessarily known at periodend, we must utilize certain assumptions considering historical experience, inventory quantity, quality, age and mix, historical sales trends, future salesprojections, consumer and retailer preferences, market trends, general economic conditions and our plans to sell the inventory. Also, we provide an allowancefor shrinkage, as appropriate, for the period between the last count and each balance sheet date. Historically, our estimates of inventory markdowns andinventory shrinkage have not varied significantly from actual results.For consolidated financial reporting, $133.8 million, or 94%, of our inventories are valued at the lower of last-in, first-out (LIFO) method cost or marketafter deducting the $58.1 million LIFO reserve as of January 28, 2017. The remaining $8.4 million of our inventories are valued at the lower of FIFO cost ormarket as of January 28, 2017. LIFO reserves are based on the Producer Price Index (PPI) as published by the United States Department of Labor. We writedown inventories valued at the lower of LIFO cost or market when LIFO cost exceeds market value. We deem LIFO accounting adjustments to not onlyinclude changes in the LIFO reserve, but also changes in markdown reserves which are considered in LIFO accounting. As our LIFO inventory pool does notcorrespond to our operating group definitions, LIFO inventory accounting adjustments are not63allocated to the respective operating groups. Thus, the impact of accounting for inventories on the LIFO method is reflected in Corporate and Other foroperating group reporting purposes.As of January 28, 2017, we had recorded a reserve of $2.2 million related to inventory on the lower of FIFO cost or market method and for inventory onthe lower of LIFO cost or market method with markdowns in excess of our LIFO reserve. A 10% change in the amount of such markdowns would have a pre-tax impact of $0.2 million on earnings in Fiscal 2016. A change in the markdowns of our inventory valued at the lower of LIFO cost or market method that isnot marked down in excess of our LIFO reserve typically would not be expected to have a material impact on our consolidated financial statements. A changein inventory levels, or the mix by inventory category, at the end of future fiscal years compared to inventory balances as of January 28, 2017 could result in amaterial impact on our consolidated financial statements as such a change may erode portions of our earlier base year layers for purposes of making ourannual LIFO computation. Additionally, a change in the PPI as published by the United States Department of Labor as compared to the indexes as ofJanuary 28, 2017 could result in a material impact on our consolidated financial statements as inflation or deflation would change the amount of our LIFOreserve.Given the significant amount of uncertainties surrounding the year-end LIFO calculation, including the estimate of year-end inventory balances, theproportion of inventory in each inventory category and the year-end PPI, we typically do not adjust our LIFO reserve in the first three quarters of a fiscal year.This policy may result in significant LIFO accounting adjustments in the fourth quarter of the fiscal year resulting from the year over year changes ininventory levels, the PPI and markdown reserves. We do recognize on a quarterly basis during each of the first three quarters of the fiscal year changes inmarkdown reserves as those amounts can be estimated on a quarterly basis.Accounting for business combinations requires that assets and liabilities, including inventories, are recorded at fair value at acquisition. In accordancewith GAAP, the definition of fair value of inventories acquired generally will equal the expected sales price less certain costs associated with selling theinventory, which may exceed the actual cost of producing the acquired inventories. Based on the inventory turn of the acquired inventories, amounts arerecognized as additional cost of goods sold in the periods subsequent to the acquisition as the acquired inventory is sold in the ordinary course of business.In determining the fair value of the acquired inventory, as well as the appropriate period to recognize the charge in our consolidated statements of operationsas the acquired inventory is sold, we must make certain assumptions regarding costs incurred prior to acquisition for the acquired inventory, an appropriateprofit allowance, estimates of the costs to sell the inventory and the timing of the sale of the acquired inventory. Such estimates involve significantuncertainty, and the use of different assumptions could have a material impact on our consolidated financial statements.Goodwill and Intangible Assets, netThe cost of each acquired business is allocated to the individual tangible and intangible assets acquired and liabilities assumed or incurred as a resultof the acquisition based on their estimated fair values. The assessment of the estimated fair values of assets and liabilities acquired requires us to make certainassumptions regarding the use of the acquired assets, anticipated cash flows, probabilities of cash flows, discount rates and other factors. In most of ouracquisitions, significant intangible assets and goodwill were acquired resulting in $175.2 million of intangible assets and $60.0 million of goodwill in ourconsolidated balance sheet as of January 28, 2017.Our intangibles assets primarily consist of trademarks, reacquired rights and customer relationships. Goodwill is recognized as the amount by which thecost to acquire a company or group of assets exceeds the fair value of assets acquired less any liabilities assumed at acquisition. See Note 4 in ourconsolidated financial statements included in this report for further details about our various intangible assets and goodwill amounts.The fair values and useful lives of these intangible assets and goodwill are estimated based on our assessment as well as independent third partyappraisals in some cases. Such valuations, which are dependent upon a number of uncertain factors, may include a discounted cash flow analysis ofanticipated revenues and expenses or cost savings resulting from the acquired intangible asset using an estimate of a risk-adjusted market-based cost ofcapital as the discount rate. The valuation of intangible assets and goodwill requires significant judgment due to the variety of uncertain factors, includingplanned use of the intangible assets as well as estimates of net sales, royalty income, operating income, growth rates, royalty rates for the trademarks, discountrates and income tax rates, among other factors. The use of different assumptions related to these uncertain factors at acquisition could result in a materialchange to the amounts of intangible assets initially recorded at acquisition, which could result in a material impact on our consolidated financial statements.Trademarks with indefinite lives and goodwill are not amortized but instead evaluated, either qualitatively or quantitatively, for impairment annuallyas of the first day of the fourth quarter of our fiscal year or more frequently if events or circumstances indicate that the intangible asset or goodwill might beimpaired. The evaluation of the recoverability of trademarks with indefinite lives and goodwill includes valuations based on a discounted cash flow analysiswhich is typically64similar to the analysis performed at acquisition. This approach is dependent upon a number of uncertain factors, including those used in the initial valuationof the intangible assets and goodwill listed above. Such estimates involve significant uncertainty, and if our plans or anticipated results change, the impacton our financial statements could be significant. If this analysis indicates an impairment of a trademark with an indefinite useful life, the amount of theimpairment is recognized in the consolidated financial statements based on the amount that the carrying value exceeds the estimated fair value of the asset.Amortization of intangible assets with finite lives, which primarily consist of reacquired rights and customer relationships, is recognized over theirestimated useful lives using the straight line method of amortization or another method of amortization that reflects the pattern in which the economicbenefits of the intangible assets are consumed or otherwise realized. We amortize our intangible assets with finite lives for periods of up to 20 years. Thedetermination of an appropriate useful life for amortization is based on the remaining contractual period, as applicable, our plans for the intangible asset aswell as factors outside of our control, including customer attrition. Intangible assets with finite lives are reviewed for impairment periodically if events orchanges in circumstances indicate that the carrying amount may not be recoverable. If expected future discounted cash flows from operations are less thantheir carrying amounts, an asset is determined to be impaired and a loss is recorded for the amount by which the carrying value of the asset exceeds its fairvalue. Amortization related to intangible assets with finite lives totaled $2.2 million during Fiscal 2016 and is anticipated to be approximately $2.2 millionin Fiscal 2017.Intangible asses and goodwill acquired in recent transactions are naturally more susceptible to impairment, primarily due to the fact that they arerecorded at fair value based on recent operating plans and macroeconomic conditions present at the time of acquisition. Consequently if operating results,plans for the acquired business and/or macroeconomic conditions change after an acquisition, it could result in the impairment of the acquired assets. Achange in macroeconomic conditions may not only impact the estimated operating cash flows used in our cash flow models but may also impact otherassumptions used in our analysis, including but not limited to, the risk-adjusted market-based cost of capital and/or discount rates. Additionally, we arerequired to ensure that assumptions used to determine fair value in our analyses are consistent with the assumptions a hypothetical market participant woulduse. Therefore the cost of capital discount rates used in our analyses may increase or decrease based on market conditions and trends regardless of whether ouractual cost of capital changed. As we acquired Southern Tide in Fiscal 2016 and recorded a significant amount of intangible assets and goodwill related tothis acquisition the assets recognized are more sensitive to changes in assumptions than our other intangible assets and goodwill amounts.In Fiscal 2016, Fiscal 2015 and Fiscal 2014, no impairment charges related to intangible assets or goodwill were recognized.Other Fair Value MeasurementsFor many assets and liabilities the determination of fair value may not require the use of many assumptions or other estimates. However, in some casesthe assumptions or inputs associated with the determination of fair value as of a measurement date may require the use of many assumptions and may beinternally derived or otherwise unobservable. We utilize certain market-based and internally derived information and make assumptions about theinformation in determining the fair values of assets and liabilities acquired as part of a business combination, as well as in other circumstances, adjustingpreviously recorded assets and liabilities to fair value at each balance sheet date, including the fair value of any contingent consideration obligations andany lease loss obligations incurred, and assessing recognized assets for impairment, including intangible assets, goodwill and property and equipment asdiscussed above.As noted above, the cost of each acquired business is allocated to the individual tangible and intangible assets acquired and liabilities assumed orincurred as a result of the acquisition based on its estimated fair value. The assessment of the estimated fair values of assets and liabilities acquired requires usto make certain assumptions regarding the use of the acquired assets, anticipated cash flows, probabilities of cash flows, discount rates and other factors. Tothe extent information to revise the allocation becomes available during the allocation period the allocation of the purchase price will be adjusted. Shouldinformation become available after the allocation period indicating that adjustments to the allocation are appropriate, those adjustments will be included inoperating results.For the determination of fair value for assets and liabilities acquired as part of a business combination, adjusting previously recorded assets andliabilities to fair value at each balance sheet date and assessing, and possibly adjusting, recognized assets for impairment, the assumptions, or the timing ofchanges in these assumptions, that we make regarding the valuation of these assets could differ significantly from the assumptions made by other parties. Theuse of different assumptions could result in materially different valuations for the respective assets and liabilities, which would impact our consolidatedfinancial statements.In connection with certain acquisitions, we have entered into contingent consideration arrangements to compensate the sellers if certain targets areachieved. For a contingent consideration arrangement, if any, as of the date of acquisition we must determine the fair value of the contingent considerationwhich would estimate the discounted fair value of any expected65payments. Such valuation requires assumptions regarding anticipated cash flows, probabilities of cash flows, discount rates and other factors, each requiring asignificant amount of judgment. Subsequent to the date of acquisition, we are required to periodically adjust the liability for the contingent consideration toreflect the fair value of the contingent consideration by reassessing any valuation assumptions as of the balance sheet date.From time to time, we may recognize certain obligations related to certain leased space associated with exiting retail or office space. In these cases, wemust determine the net loss related to the space if the anticipated cash outflows for the space exceed the estimated cash inflows related to the space. Whileestimated cash outflows are generally known since there is an underlying lease, the estimated cash inflows for sublease rental income and other costs are oftenvery subjective if there is not a sub-lease agreement in place at that time since those amounts are dependent upon many factors including, but not limited to,whether a sub-tenant will be obtained, the time required to obtain the sub-tenant as well as the rent payments and any tenant allowances agreed with the sub-tenant as part of the future lease negotiations. Also, it is possible that we could negotiate a lease termination in the future that would differ from the amount ofthe required payments pursuant to the lease agreement.As of January 30, 2016, we have amounts in non-current liabilities related to discontinued operations totaling $5.4 million related to retained leasesassociated with our former Ben Sherman operations. In Fiscal 2016 we took a charge of $2.8 million related to these retained lease obligations based on ourupdated assessment of the losses associated with the retained lease obligations. As we do not currently have a sub-lease tenant identified for the spaces ornegotiated lease terminations with landlords, we have made certain assumptions about the estimated cash inflows that could partially offset cash outflows forthe in-place leases. Our estimate of the liability related to the lease could change significantly as we obtain better information in the future or if our currentassumptions do not materialize. The assumptions made by another party related to such leases could be different than the assumptions made by us. See Note13 in our consolidated financial statements included in this report for further discussion of discontinued operations and the related lease obligations.Income TaxesWe recognize deferred tax assets to the extent we believe these assets are more likely than not to be realized. In making such a determination, weconsider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income,taxable income in carryback years, tax-planning strategies, and results of recent operations. Valuation allowances are established when we determine that it ismore-likely-than-not that some portion or all of a deferred tax asset will not be realized.Valuation allowances, which total $4.1 million as of January 28, 2017, are analyzed periodically and adjusted as events occur or circumstances changethat would indicate adjustments to the valuation allowances are appropriate. Valuation allowance amounts could have a material impact on our consolidatedstatements of operations in the future if assumptions related to valuation allowances changed significantly. Additionally, the timing of recognition of avaluation allowance or any reversal of a valuation allowance requires a significant amount of judgment to assess all the positive and negative evidence,particularly when operating results in the respective jurisdiction have changed or are expected to change from losses to income or from income to losses. Asrealization of deferred tax assets and liabilities is dependent upon future taxable income in specific jurisdictions, changes in tax laws and rates and shifts inthe amount of taxable income among state and foreign jurisdictions may have a significant impact on the amount of benefit ultimately realized for deferredtax assets and liabilities.As a global company, we are subject to income taxes in a number of domestic and foreign jurisdictions. Therefore, our income tax provision involvesmany uncertainties due to not only the timing differences of income for financial statement reporting and tax return reporting, but also the application ofcomplex tax laws and regulations, which are subject to interpretation and management judgment. The use of different assumptions or a change in ourassumptions related to book to tax timing differences, our determination of whether foreign investments or earnings are permanently reinvested, the ability torealize uncertain tax positions, the appropriateness of valuation allowances, a reduction in valuation allowances or other considerations, transfer pricingpractices, the impact of our tax planning strategies and the jurisdictions or significance of earnings in future periods each could have a significant impact onour income tax rate. Additionally, factors impacting income taxes including changes in tax laws or interpretations, court case decisions, statute of limitationexpirations or audit settlements could have a significant impact on our income tax rate. An increase in our consolidated income tax rate from 37.0% to 38.0%during Fiscal 2016 would have reduced net earnings by $0.9 million.Income tax expense recorded during interim periods is generally based on the expected tax rate for the year, considering projections of earnings andbook to tax differences as of the balance sheet date, subject to certain limitations associated with separate foreign jurisdiction losses in interim periods. Thetax rate ultimately realized for the year may increase or decrease due to actual operating results or book to tax differences varying from the amounts on whichour interim calculations were based. Any changes in assumptions related to the need for a valuation allowance, the ability to realize an uncertain tax position,changes in enacted tax rates, the expected operating results in total or by jurisdiction for the year, or other assumptions are accounted for in the period inwhich the change occurs. As certain of our foreign operations are in a loss position and66realization of a future benefit for the losses is uncertain, a significant variance in losses in such jurisdictions from our expectations can have a significantimpact on our expected annual tax rate. The recognition of the benefit of losses expected to be realized may be limited in an interim period and may requireadjustments to tax expense in the interim period that yield an effective tax rate for the interim period that is not representative of the expected tax rate for thefull year.See Note 8 in our consolidated financial statements included in this report for further discussion of income taxes.RECENT ACCOUNTING PRONOUNCEMENTSRefer to Note 1 in our consolidated financial statements included in this report for a discussion of recent accounting pronouncements issued by theFASB that we have not yet adopted that are expected to possibly have a material effect on our financial position, results of operations or cash flows.SEASONALITYEach of our operating groups is impacted by seasonality as the demand by specific product or style, as well as by distribution channel, may varysignificantly depending on the time of year. For information regarding the seasonality impact on individual operating groups and for our total company, seePart I, Item 1, Business, included in this report.Item 7A. Quantitative and Qualitative Disclosures About Market RiskInterest Rate RiskWe are exposed to market risk from changes in interest rates on our indebtedness, which could impact our financial condition and results of operationsin future periods. We may attempt to limit the impact of interest rate changes on earnings and cash flow, primarily through a mix of variable-rate and fixed-rate debt, although at times all of our debt may be either variable-rate or fixed-rate debt. Further at times, we may enter into interest rate swap arrangementsrelated to certain of our variable-rate debt in order to fix the interest rate if we determine that our exposure to interest rate changes is higher than optimal. Ourassessment also considers our need for flexibility in our borrowing arrangements resulting from the seasonality of our business, anticipated future cash flowsand our expectations about the risk of future interest rate changes, among other factors. We continuously monitor interest rates to consider the sources andterms of our borrowing facilities in order to determine whether we have achieved our interest rate management objectives. We do not enter into debtagreements or interest rate hedging transactions on a speculative basis.As of January 28, 2017, all of our $91.5 million of debt outstanding was subject to variable interest rates. Our U.S. Revolving Credit Agreement accruesinterest based on variable interest rates while providing the necessary borrowing flexibility we require due to the seasonality of our business and our need tofund certain product purchases with trade letters of credit. During Fiscal 2016, our interest expense was $3.4 million. Based on the average amount ofvariable-rate debt outstanding in Fiscal 2016, a 100 basis point increase in interest rates would have increased our interest expense by $1.0 million. To theextent that the amounts outstanding under our variable-rate lines of credit increase or decrease, our exposure to changes in interest rates would also change.We anticipate that our average borrowings for Fiscal 2017 will generally be comparable to our average borrowings for Fiscal 2016 as Fiscal 2017 willinclude the full year impact of the borrowings associated with the April 2016 Southern Tide acquisition partially offset by the impact of our cash flow fromoperations. Interest rates in the financial markets increased in Fiscal 2016 and there are indications that interest rates may increase further in Fiscal 2017which would increase our borrowing rates. Accordingly, we anticipate that our interest expense will be higher in Fiscal 2017 than Fiscal 2016.Foreign Currency RiskTo the extent that we have assets, liabilities, revenues or expenses, denominated in foreign currencies that are not hedged, we are subject to foreigncurrency transaction and translation gains and losses. As of January 28, 2017, our foreign currency exchange risk exposure primarily results from transactionsof our businesses operating outside of the United States, which is primarily related to (1) our Tommy Bahama operations in Canada, Australia and Japanpurchasing goods in United States dollars or other currencies which are not the functional currency of the business and (2) certain other transactions,including intercompany transactions.Less than 5% of our net sales in Fiscal 2016 were denominated in currencies other than the United States dollar, while substantially all of our inventorypurchases, including goods for operations in Canada, Japan and Australia, from contract manufacturers throughout the world are denominated in UnitedStates dollars. Purchase prices for our products may be impacted by fluctuations in the exchange rate between the United States dollar and the localcurrencies of the contract67manufacturers, which may have the effect of increasing our cost of goods sold in the future even though our inventory is purchased on a United States dollararrangement. Additionally, to the extent that the exchange rate between the United States dollar and the currency that the inventory will be sold in (e.g. theCanadian dollar, Australian dollar or Japanese Yen) changes, the gross margins of those businesses could be impacted significantly, particularly if we are notable to increase sales prices to our customers.We may enter into short-term forward foreign currency exchange contracts in the ordinary course of business to mitigate a portion of the risk associatedwith foreign currency exchange rate fluctuations related to purchases of inventory or selling goods in currencies other than the functional currencies bycertain of our foreign operations. As of January 28, 2017, we were not a party to any foreign currency forward exchange contracts. Due to the limitedmagnitude and the uncertainty about timing of cash flows provided by or used in the Tommy Bahama operations in Canada, Australia and Japan, we have nothistorically entered into forward foreign currency exchange contract for these operations. However, it may be appropriate in the future to enter into hedgingarrangements for these operations. At this time, we do not anticipate that the impact of foreign currency changes on Tommy Bahama's internationaloperations would have a material impact on Tommy Bahama's operating income or our consolidated net earnings in Fiscal 2017 given the proportion ofTommy Bahama's operations in international markets.In addition to foreign currency risks related to specific transactions listed above, we also have foreign currency exposure risk associated withtranslating the financial statements of our foreign operations with a functional currency other than the United States dollar into United States dollars forfinancial reporting purposes. A strengthening United States dollar could result in lower levels of sales and earnings in our consolidated statements ofoperations in future periods although the sales and earnings in the foreign currencies could be equal to or greater than amounts as reported in the prior year.Alternatively, if foreign operations have operating losses, then a strengthening United States dollar could result in lower losses although the losses in foreigncurrencies could be equal to or greater than amounts as previously reported.We view our foreign investments as long term and we generally do not hedge such foreign investments. Also, we do not hold or issue any derivativefinancial instruments related to foreign currency exposure for speculative purposes.Commodity and Inflation RiskWe are affected by inflation and changing prices through the purchase of full-package finished goods from contract manufacturers, who manufactureproducts consisting of various raw material components. Inflation/deflation risks are managed by each operating group through, when possible, negotiatingproduct prices in advance, selective price increases, productivity improvements and cost containment initiatives. We have not historically entered intosignificant long-term sales or purchase contracts or engaged in hedging activities with respect to our commodity risk.68Item 8. Financial Statements and Supplementary DataOXFORD INDUSTRIES, INC.CONSOLIDATED BALANCE SHEETS($ in thousands, except par amounts) January 28,2017January 30,2016ASSETS Current Assets Cash and cash equivalents$6,332$6,323Receivables, net58,27959,065Inventories, net142,175129,136Prepaid expenses24,84222,272Total Current Assets$231,628$216,796Property and equipment, net193,931184,094Intangible assets, net175,245143,738Goodwill60,01517,223Other non-current assets, net24,34020,839Total Assets$685,159$582,690LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities Accounts payable$76,825$68,306Accrued compensation19,71130,063Other accrued expenses and liabilities32,00028,136Liabilities related to discontinued operations2,8602,394Total Current Liabilities$131,396$128,899Long-term debt91,50943,975Other non-current liabilities70,00267,188Deferred taxes13,5783,657Liabilities related to discontinued operations2,5444,571Commitments and contingenciesShareholders' Equity Common stock, $1.00 par value per share16,76916,601Additional paid-in capital131,144125,477Retained earnings233,493199,151Accumulated other comprehensive loss(5,276)(6,829)Total Shareholders' Equity$376,130$334,400Total Liabilities and Shareholders' Equity$685,159$582,690 See accompanying notes.69OXFORD INDUSTRIES, INC.CONSOLIDATED STATEMENTS OF OPERATIONS($ and shares in thousands, except per share amounts) Fiscal 2016Fiscal 2015Fiscal 2014Net sales$1,022,588$969,290$920,325Cost of goods sold439,814411,185402,376Gross profit$582,774$558,105$517,949SG&A507,070475,031439,069Royalties and other operating income14,18014,44013,939Operating income$89,884$97,514$92,819Interest expense, net3,4212,4583,236Earnings from continuing operations before income taxes$86,463$95,056$89,583Income taxes31,96436,51935,786Net earnings from continuing operations$54,499$58,537$53,797Loss from discontinued operations, net of taxes(2,038)(27,975)(8,039)Net earnings$52,461$30,562$45,758 Net earnings from continuing operations per share: Basic$3.30$3.56$3.27Diluted$3.27$3.54$3.27Loss from discontinued operations, net of taxes, per share: Basic$(0.12)$(1.70)$(0.49)Diluted$(0.12)$(1.69)$(0.49)Net earnings per share: Basic$3.18$1.86$2.79Diluted$3.15$1.85$2.78Weighted average shares outstanding: Basic16,52216,45616,429Diluted16,64916,55916,471Dividends declared per share$1.08$1.00$0.84 See accompanying notes.70OXFORD INDUSTRIES, INC.CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME($ in thousands) Fiscal 2016Fiscal 2015Fiscal 2014Net earnings$52,461$30,562$45,758Other comprehensive income, net of taxes: Foreign currency translation adjustment1,55324,071(7,617)Net (loss) gain on cash flow hedges—(746)1,081Total other comprehensive income (loss), net of taxes$1,553$23,325$(6,536)Comprehensive income$54,014$53,887$39,222 See accompanying notes.71OXFORD INDUSTRIES, INC.CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY($ in thousands) CommonStockAdditionalPaid-InCapitalRetainedEarningsAccumulatedOtherComprehensiveIncome (Loss)TotalFebruary 1, 2014$16,416$114,021$153,344$(23,618)$260,163Net earnings and othercomprehensive loss——45,758(6,536)39,222Shares issued under equity plans62928——990Compensation expense for equityawards—4,103——4,103Cash dividends declared and paid——(13,873)—(13,873)January 31, 2015$16,478$119,052$185,229$(30,154)$290,605Net earnings and othercomprehensive income——30,56223,32553,887Shares issued under equity plans1231,184——1,307Compensation expense for equityawards—5,241——5,241Cash dividends declared and paid——(16,640)—(16,640)January 30, 2016$16,601$125,477$199,151$(6,829)$334,400Net earnings and othercomprehensive income——52,4611,55354,014Shares issued under equity plans1961,061——1,257Compensation expense for equityawards—6,445——6,445 Repurchase of shares(28)(1,839)——(1,867)Cash dividends declared and paid——(18,119)—(18,119)January 28, 2017$16,769$131,144$233,493$(5,276)$376,130 See accompanying notes.72OXFORD INDUSTRIES, INC.CONSOLIDATED STATEMENTS OF CASH FLOWS($ in thousands) Fiscal 2016Fiscal 2015Fiscal 2014Cash Flows From Operating Activities: Net earnings$52,461$30,562$45,758Adjustments to reconcile net earnings to cash provided by operating activities: Depreciation40,06934,47635,165Amortization of intangible assets2,1501,9512,481Equity compensation expense6,4455,2414,103Change in fair value of contingent consideration——275Amortization of deferred financing costs693385385Loss on sale of discontinued operations—20,517—Gain on sale of property and equipment—(853)—Deferred income taxes7,880(361)(3,217)Changes in working capital, net of acquisitions and dispositions, if any: Receivables, net7,37711,371(5,672)Inventories, net4,222(8,058)(7,101)Prepaid expenses(1,799)(2,641)(1,646)Current liabilities434(553)18,314Other non-current assets, net(2,086)1,81937Other non-current liabilities71911,5176,527Cash provided by operating activities$118,565$105,373$95,409Cash Flows From Investing Activities: Acquisitions, net of cash acquired(95,046)——Purchases of property and equipment(49,415)(73,082)(50,355)Proceeds from sale of discontinued operations(2,030)59,336—Other investing activities—(200)—Cash used in investing activities$(146,491)$(13,946)$(50,355)Cash Flows From Financing Activities: Repayment of revolving credit arrangements(430,995)(345,485)(352,784)Proceeds from revolving credit arrangements478,529281,852320,548Deferred financing costs paid(1,438)——Payment of contingent consideration amounts earned—(12,500)(2,500)Proceeds from issuance of common stock1,2571,307990Repurchase of stock awards for employee tax withholding liabilities(1,867)——Cash dividends declared and paid(18,119)(16,640)(13,873)Cash provided by (used in) financing activities$27,367$(91,466)$(47,619)Net change in cash and cash equivalents$(559)$(39)$(2,565)Effect of foreign currency translation on cash and cash equivalents5681,081(637)Cash and cash equivalents at the beginning of year6,3235,2818,483Cash and cash equivalents at the end of year$6,332$6,323$5,281Supplemental disclosure of cash flow information: Cash paid for interest, net$2,626$2,301$3,297Cash paid for income taxes$29,872$35,369$41,806 See accompanying notes.73OXFORD INDUSTRIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTSJanuary 28, 2017Note 1. Summary of Significant Accounting PoliciesPrincipal Business ActivityWe are a global apparel company that designs, sources, markets and distributes products bearing the trademarks of our Tommy Bahama®, LillyPulitzer® and Southern Tide® lifestyle brands, other owned brands and licensed brands as well as private label apparel products. We distribute our ownedlifestyle branded products through our direct to consumer channel, consisting of retail stores and e-commerce sites, and our wholesale distribution channel,which includes better department stores and specialty stores. Additionally, we operate Tommy Bahama restaurants, generally adjacent to selected TommyBahama retail stores. Our branded and private label apparel products of Lanier Apparel are distributed through department stores, national chains, warehouseclubs, specialty stores, specialty catalogs and internet retailers.Unless otherwise indicated, all references to assets, liabilities, revenues and expenses in our consolidated financial statements reflect continuingoperations and exclude any amounts related to the discontinued operations of our former Ben Sherman operating group, as discussed in Note 13.Fiscal YearWe operate and report on a 52/53 week fiscal year. Our fiscal year ends on the Saturday closest to January 31. As used in our consolidated financialstatements, the terms Fiscal 2014, Fiscal 2015, Fiscal 2016 and Fiscal 2017 reflect the 52 weeks ended January 31, 2015; 52 weeks ended January 30, 2016;52 weeks ended January 28, 2017; and 53 weeks ending February 3, 2018, respectively.Principles of ConsolidationOur consolidated financial statements include the accounts of Oxford Industries, Inc. and any other entities in which we have a controlling financialinterest, including our wholly-owned domestic and foreign subsidiaries, or variable interest entities for which we are the primary beneficiary, if any.Generally, we consolidate businesses that we control through ownership of a majority voting interest. However, there are situations in which consolidation isrequired even though the usual condition of consolidation (ownership of a majority voting interest) does not apply. In determining whether a controllingfinancial interest exists, we consider ownership of voting interests, as well as other rights of the investors which might indicate which investor is the primarybeneficiary. The primary beneficiary has both the power to direct the activities of the entity that most significantly impact the entity's economic performanceand the obligation to absorb losses or the right to receive benefits from the entity that could potentially be significant to the entity. The results of operationsof acquired businesses are included in our consolidated statements of operations from the respective dates of the acquisitions.We account for investments in which we exercise significant influence, but do not control via voting rights and were determined to not be the primarybeneficiary, using the equity method of accounting. Generally, we determine that we exercise significant influence over a corporation or a limited liabilitycompany when we own 20% or more or 3% or more, respectively, of the voting interests unless the facts and circumstances of that investment do not indicatethat we have the ability to exhibit significant influence. Under the equity method of accounting, original investments are recorded at cost, and aresubsequently adjusted for our contributions to, distributions from and share of income or losses of the entity. Our investments accounted for using the equitymethod of accounting are included in other non-current assets in our consolidated balance sheets, while the income or loss related to our investmentsaccounted for using the equity method of accounting is included in royalties and other operating income in our consolidated statements of operations.All significant intercompany accounts and transactions are eliminated in consolidation.Business CombinationsThe cost of each acquired business is allocated to the individual tangible and intangible assets acquired and liabilities assumed based on theirestimated fair values. The assessment of the estimated fair values of assets and liabilities acquired requires us to make certain assumptions regarding the useof the acquired assets, anticipated cash flows, probabilities of cash flows, discount rates and other factors. The purchase price allocation may be revisedduring an allocation period as necessary when, and if, information becomes available to revise the fair values of the assets acquired and the liabilitiesassumed. The allocation period will not exceed one year from the date of the acquisition. Should information become available after the allocation periodindicating that an adjustment to the purchase price allocation is appropriate, that adjustment will be included74OXFORD INDUSTRIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)Note 1. Summary of Significant Accounting Policies (Continued)in our consolidated statements of operations. Transaction costs related to business combinations are included in SG&A in our consolidated statements ofoperations as incurred. Refer to Note 12 for additional disclosures related to business combinations.Revenue Recognition and Accounts ReceivableOur revenue, which is recognized net of applicable taxes in our consolidated statements of operations, consists of direct to consumer sales, whichinclude retail store, e-commerce and restaurant and sales, and wholesale sales. We consider revenue realized or realizable and earned when the followingcriteria are met: (1) persuasive evidence of an agreement exists, (2) delivery has occurred, (3) our price to the buyer is fixed or determinable and(4) collectibility is reasonably assured.Retail store, e-commerce and restaurant revenues are recognized at the time of sale to consumers, which is at the time of purchase for retail andrestaurant transactions and the time of delivery to consumers for e-commerce sales. Each of these types of transactions requires payment at the time of thetransaction, which is typically made via a credit card and collected by us upon settlement of the credit card transaction within a few days. Retail store, e-commerce and restaurant revenues are recorded net of estimated returns and discounts, as applicable.For sales within our wholesale operations, we consider a submitted purchase order or some form of electronic communication from the customerrequesting shipment of the goods to be persuasive evidence of an agreement. For substantially all of our wholesale sales, our products are considered sold anddelivered at the time of shipment. For certain transactions in which the goods do not pass through our owned or third party distribution centers and title andthe risks and rewards of ownership pass at the time the goods leave the foreign port, revenue is recognized at that time.In the normal course of business we offer certain discounts or allowances to our wholesale customers. Wholesale sales are recorded net of such discountsand allowances, as well as advertising support not specifically relating to the reimbursement for actual advertising expenses by our customers, operationalchargebacks and provisions for estimated returns. As certain allowances and other deductions are not finalized until the end of a season, program or otherevent which may not have occurred yet, we estimate such discounts and allowances on an ongoing basis. Significant considerations in determining ourestimates for discounts, allowances, operational chargebacks and returns for wholesale customers may include historical and current trends, agreements withcustomers, projected seasonal results, an evaluation of current economic conditions, specific program or product expectations and retailer performance. Werecord the discounts, returns and allowances as a reduction to net sales in our consolidated statements of operations and a reduction to receivables, net in ourconsolidated balance sheets. As of January 28, 2017 and January 30, 2016, reserve balances related to these items were $9.3 million and $8.4 million,respectively.We extend credit to certain wholesale customers based on an evaluation of the customer's financial capacity and condition, usually without requiringcollateral. In circumstances where we become aware of a specific wholesale customer's inability to meet its financial obligations, a specific reserve for baddebt is taken as a reduction to accounts receivable to reduce the net recognized receivable to the amount reasonably expected to be collected. Such amountsare written off at the time that the amounts are not considered collectible. For all other wholesale customers, we recognize estimated reserves for bad debtsbased on our historical collection experience, the financial condition of our customers, an evaluation of current economic conditions and anticipated trends,each of which is subjective and requires certain assumptions. We include such charges and write-offs in SG&A in our consolidated statements of operationsand as a reduction to receivables, net in our consolidated balance sheets. As of January 28, 2017 and January 30, 2016, bad debt reserve balances were $0.8million and $0.5 million, respectively.Gift cards and merchandise credits issued by us are recorded as a liability until they are redeemed, at which point revenue is recognized. We recognizebreakage income for gift cards and merchandise credits, subject to applicable laws in certain states, using the redemption recognition method or in some caseswhen we determine that the likelihood of the redemption of the gift cards and merchandise credits is remote. Deferred revenue for gift cards purchased byconsumers and merchandise credits received by customers but not yet redeemed, less any breakage income recognized to date, is included in other accruedexpenses and liabilities in our consolidated balance sheets and totaled $9.5 million and $8.5 million as of January 28, 2017 and January 30, 2016,respectively. Gift card breakage, which was not material in any period presented, is included in net sales in our consolidated statements of operations.Royalties from the license of our owned brands, which are generally based on the greater of a percentage of the licensee's actual net sales or acontractually determined minimum royalty amount, are recorded based upon the guaranteed minimum75OXFORD INDUSTRIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)Note 1. Summary of Significant Accounting Policies (Continued)levels and adjusted as sales data, or estimates thereof, is received from licensees. In some cases, we may receive initial payments for the grant of license rights,which are recognized as revenue over the term of the license agreement. Royalty income was $14.0 million, $14.2 million and $13.7 million during Fiscal2016, Fiscal 2015 and Fiscal 2014, respectively, and is included in royalties and other operating income in our consolidated statements of operations.Cost of Goods SoldWe include in cost of goods sold all sourcing and procurement costs and expenses incurred prior to or in association with the receipt of finished goodsat our distribution facilities, as well as freight from our warehouse to our own retail stores, wholesale customers and e-commerce consumers. The costs prior toreceipt at our distribution facilities include product cost, inbound freight charges, import costs, purchasing costs, internal transfer costs, direct labor,manufacturing overhead, insurance, duties, brokers' fees, consolidators' fees and depreciation and amortization expense associated with our manufacturing,sourcing and procurement operations. Our gross margins may not be directly comparable to those of our competitors, as statement of operationsclassifications of certain expenses may vary by company.SG&AWe include in SG&A costs incurred subsequent to the receipt of finished goods at our distribution facilities, such as the cost of inspection, stocking,warehousing, picking and packing, and all costs associated with the operations of our retail stores, e-commerce sites, restaurants and concessions, such aslabor, occupancy costs, store and restaurant pre-opening costs (including rent, marketing, store set-up costs and training expenses) and other fees. SG&A alsoincludes product design costs, selling costs, royalty costs, advertising, promotion and marketing expenses, professional fees, other general and administrativeexpenses, our corporate overhead costs and amortization of intangible assets.Distribution network costs, including costs associated with preparing goods to ship to customers and our costs to operate our distribution facilities aswell as shipping and handling, are included as a component of SG&A. We consider distribution network costs to be the costs associated with operating ourdistribution centers, as well as the costs paid to third parties who perform those services for us. In Fiscal 2016, Fiscal 2015 and Fiscal 2014, distributionnetwork costs, including shipping and handling, included in SG&A totaled $23.6 million, $21.6 million and $19.8 million, respectively. We generallyclassify amounts billed to customers for shipping and handling fees in net sales, and classify outbound shipping costs in cost of goods sold in ourconsolidated statements of operations.All costs associated with advertising, promotion and marketing of our products are expensed during the period when the advertisement is first shown.Costs associated with cooperative advertising programs under which we agree to make general contributions to our wholesale customers' advertising andpromotional funds are generally recorded as a reduction to net sales as recognized. If we negotiate an advertising plan and share in the cost for an advertisingplan that is for specific ads run for products purchased by the customer from us, and the customer is required to provide proof that the advertisement was run,such costs are generally recognized as SG&A. Advertising, promotion and marketing expenses included in SG&A for Fiscal 2016, Fiscal 2015 and Fiscal2014 were $42.6 million, $34.5 million and $32.2 million, respectively. Prepaid advertising, promotion and marketing expenses included in prepaidexpenses in our consolidated balance sheets as of January 28, 2017 and January 30, 2016 were $3.7 million and $2.5 million, respectively.Royalties related to our license of third party brands, which are generally based on the greater of a percentage of our actual net sales for the brand or acontractually determined minimum royalty amount, are recorded based upon the guaranteed minimum levels and adjusted based on net sales of the brandedproducts, as appropriate. In some cases, we may be required to make certain up-front payments for the license rights, which are deferred and recognized asroyalty expense over the term of the license agreement. Royalty expenses recognized as SG&A in Fiscal 2016, Fiscal 2015 and Fiscal 2014 were $4.8 million,$4.6 million and $5.3 million, respectively.Cash and Cash EquivalentsWe consider cash equivalents to be short-term investments with original maturities of three months or less for purposes of our consolidated statementsof cash flows.Inventories, net76OXFORD INDUSTRIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)Note 1. Summary of Significant Accounting Policies (Continued)Substantially all of our inventories are finished goods inventories of apparel, accessories, footwear and related products. Inventories are valued at thelower of cost or market.For operating group reporting, inventory is carried at the lower of FIFO cost or market. We continually evaluate the composition of our inventories foridentification of distressed inventory. In performing this evaluation we consider slow-turning products, an indication of lack of consumer acceptance ofparticular products, prior-seasons' fashion products, broken assortments, and current levels of replenishment program products as compared to expected sales.We estimate the amount of goods that we will not be able to sell in the normal course of business and write down the value of these goods as necessary. As theamount to be ultimately realized for the goods is not necessarily known at period end, we must utilize certain assumptions considering historical experience,inventory quantity, quality, age and mix, historical sales trends, future sales projections, consumer and retailer preferences, market trends, general economicconditions and our plans to sell the inventory. Also, we provide an allowance for shrinkage, as appropriate, for the period between the last inventory countand each balance sheet date.For consolidated financial reporting, as of January 28, 2017 and January 30, 2016, $133.8 million, or 94%, and $120.9 million, or 94%, of ourinventories were valued at the lower of LIFO cost or market after deducting our LIFO reserve. The remaining $8.4 million and $8.3 million of our inventorieswere valued at the lower of FIFO cost or market as of January 28, 2017 and January 30, 2016, respectively. Generally, inventories of our domestic operationsare valued at the lower of LIFO cost or market, and our inventories of our international operations are valued at the lower of FIFO cost or market. LIFOreserves are based on the Producer Price Index as published by the United States Department of Labor. We write down inventories valued at the lower of LIFOcost or market when LIFO cost exceeds market value. We deem LIFO accounting adjustments to not only include changes in the LIFO reserve, but alsochanges in markdown reserves which are considered in LIFO accounting. As our LIFO inventory pool does not correspond to our operating group definitions,LIFO inventory accounting adjustments are not allocated to the respective operating groups. Thus, the impact of accounting for inventories on the LIFOmethod is reflected in Corporate and Other for operating group reporting purposes included in Note 2.There were no material LIFO inventory layer liquidations in Fiscal 2016, Fiscal 2015 or Fiscal 2014. As of January 28, 2017 and January 30, 2016, theLIFO reserves included in our consolidated balance sheets were $58.0 million and $59.4 million, respectively.Accounting for business combinations requires that assets and liabilities, including inventories, are recorded at fair value at acquisition. In accordancewith GAAP, the definition of fair value of inventories acquired generally will equal the expected sales price less certain costs associated with selling theinventory, which may exceed the actual cost of the acquired inventories.Property and Equipment, netProperty and equipment, including leasehold improvements that are reimbursed by landlords as a tenant improvement allowance and any assets undercapital leases, is carried at cost less accumulated depreciation. Additions are capitalized while repair and maintenance costs are charged to our consolidatedstatements of operations as incurred. Depreciation is calculated using both straight-line and accelerated methods generally over the estimated useful lives ofthe assets as follows:Leasehold improvements Lesser of remaining life of the asset or lease termFurniture, fixtures, equipment and technology 2 – 15 yearsBuildings and improvements 7 – 40 yearsProperty and equipment is reviewed periodically for impairment if events or changes in circumstances indicate that the carrying amount may not berecoverable. Events that would typically result in such an assessment would include a change in the estimated useful life of the assets, including a change inour plans of the anticipated period of operating a leased retail store or restaurant location, the discontinued use of an asset and other factors. This reviewincludes the evaluation of any under-performing stores and assessing the recoverability of the carrying value of the assets related to the store. We calculatethe fair value of long-lived assets using the age-life method. If the estimated fair value is less than the carrying amount of the asset, an asset is determined tobe impaired and a loss is recorded for the amount by which the carrying value of the asset exceeds its fair value.77OXFORD INDUSTRIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)Note 1. Summary of Significant Accounting Policies (Continued)Substantially all of our depreciation expense is included in SG&A in our consolidated statements of operations, with the only depreciation includedelsewhere within our consolidated statements of operations reflecting depreciation associated with our manufacturing, sourcing and procurement processes,which is included in cost of goods sold. During Fiscal 2016, $1.9 million of property and equipment impairment charges were recognized related toinformation technology assets and outlet store assets. No material impairment of fixed assets was recognized in Fiscal 2015 or Fiscal 2014. Depreciation byoperating group, as discussed in Note 2, and in our consolidated statements of cash flows includes any fixed asset impairment charges.Intangible Assets, netAt acquisition, we estimate and record the fair value of purchased intangible assets, which primarily consist of trademarks, reacquired rights andcustomer relationships. The fair values and useful lives of these intangible assets are estimated based on our assessment as well as independent third partyappraisals in some cases. Such valuations, which are dependent upon a number of uncertain factors, may include a discounted cash flow analysis ofanticipated revenues and expenses or cost savings resulting from the acquired intangible asset using an estimate of a risk-adjusted market-based cost ofcapital as the discount rate. Any costs associated with extending or renewing recognized intangible assets are generally expensed as incurred.Intangible assets with indefinite lives, which primarily consist of trademarks, are not amortized but instead evaluated for impairment annually or morefrequently if events or circumstances indicate that the intangible asset might be impaired. The evaluation of the recoverability of trademarks with indefinitelives includes valuations based on a discounted cash flow analysis utilizing the relief from royalty method, among other considerations. Like the initialvaluation, the evaluation of recoverability is dependent upon a number of uncertain factors which require certain assumptions to be made by us, includingestimates of net sales, royalty income, operating income, growth rates, royalty rates for the trademark, discount rates and income tax rates, among otherfactors. If an annual or interim analysis indicates an impairment of a trademark with an indefinite useful life, the amount of the impairment is recognized inour consolidated financial statements based on the amount that the carrying value exceeds the estimated fair value of the asset.We have the option to first assess qualitative factors to determine whether it is more likely than not that an indefinite-lived intangible asset is impairedas a basis for determining whether it is necessary to perform the quantitative impairment test. We also have the option to bypass the qualitative assessment forany indefinite-lived intangible asset in any period and proceed directly to performing the quantitative impairment test. Bypassing the qualitative assessmentin any period does not prohibit us from performing the qualitative assessment in any subsequent period.We test, either quantitatively or qualitatively, intangible assets with indefinite lives for impairment as of the first day of the fourth quarter of our fiscalyear, or at an interim date if indicators of impairment exist at that date. No impairment of intangible assets with indefinite lives was recognized during anyperiod presented.We recognize amortization of intangible assets with finite lives, which primarily consist of reacquired rights and customer relationships, over theestimated useful lives of the intangible assets using the straight line method or a method of amortization that reflects the pattern in which the economicbenefits of the intangible assets are consumed or otherwise realized. Certain of our intangible assets with finite lives may be amortized over periods of up to20 years in some cases. The determination of an appropriate useful life for amortization considers the remaining contractual period of the reacquired right, asapplicable, our plans for the intangible assets and factors outside of our control, including expected customer attrition. Amortization of intangible assets isincluded in SG&A in our consolidated statements of operations. Intangible assets with finite lives are reviewed for impairment periodically if events orchanges in circumstances indicate that the carrying amount may not be recoverable. If expected future discounted cash flows resulting from the intangibleassets are less than their carrying amounts, an asset is determined to be impaired and a loss is recorded for the amount by which the carrying value of the assetexceeds its fair value. No impairment of intangible assets with finite lives was recognized during any period presented.Goodwill, netGoodwill is recognized as the amount by which the cost to acquire a company or group of assets exceeds the fair value of tangible and intangible assetsacquired less any liabilities assumed at acquisition. Thus, the amount of goodwill recognized in connection with a business combination is dependent uponthe fair values assigned to the individual assets acquired and liabilities assumed in a business combination. Goodwill is allocated to the respective reportingunit at the time of acquisition.78OXFORD INDUSTRIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)Note 1. Summary of Significant Accounting Policies (Continued)Goodwill is not amortized but instead is evaluated for impairment annually or more frequently if events or circumstances indicate that the goodwill might beimpaired.We test, either qualitatively or as a two-step quantitative evaluation, goodwill for impairment as of the first day of the fourth quarter of our fiscal year orwhen impairment indicators exist. The qualitative factors that we use to determine the likelihood of goodwill impairment, as well as to determine if an interimtest is appropriate, include: (a) macroeconomic conditions, (b) industry and market considerations, (c) cost factors, (d) overall financial performance, (e) otherrelevant entity-specific events, (f) events affecting a reporting unit, (g) a sustained decrease in share price, or (h) other factors as appropriate. In the event wedetermine that we will bypass the qualitative impairment option or if we determine that a quantitative test is appropriate, the quantitative test includesvaluations of each applicable underlying business using fair value techniques and market comparables, which may include a discounted cash flow analysis oran independent appraisal. Significant estimates, some of which may be very subjective, considered in such a discounted cash flow analysis are future cashflow projections of the business, the discount rate, which estimates the risk-adjusted market based cost of capital, income tax rates and other assumptions. Theestimates and assumptions included in the two-step evaluation of the recoverability of goodwill involve significant uncertainty, and if our plans oranticipated results change, the impact on our financial statements could be significant.If an annual or interim analysis indicates an impairment of goodwill balances, the impairment is recognized in our consolidated financial statements.No impairment of goodwill was recognized during any period presented.Prepaid Expenses and Other Non-Current Assets, netAmounts included in prepaid expenses primarily consist of prepaid operating expenses, including rent, advertising, samples, taxes, maintenancecontracts, insurance, retail supplies, advertising and royalties. Other non-current assets primarily consist of assets set aside for potential deferredcompensation liabilities related to our deferred compensation plan as discussed below, assets related to certain investments in officers' life insurance policies,security deposits, investments in unconsolidated entities and deferred financing costs related to our revolving credit agreement.Officers' life insurance policies that are owned by us, which are included in other non-current assets, net, are recorded at their cash surrender value, lessany outstanding loans associated with the life insurance policies that are payable to the life insurance company with which the policy is outstanding. As ofJanuary 28, 2017 and January 30, 2016, the officers' life insurance policies, net, recorded in our consolidated balance sheets totaled $5.1 million and $4.9million, respectively.Deferred financing costs for our revolving credit agreements are included in other non-current assets, net in our consolidated financial statements.Deferred financing costs are amortized on a straight-line basis, which approximates the effective interest method over the life of the related debt.Amortization expense and write-off of deferred financing costs, which are included in interest expense in our consolidated statements of operations, was $0.7million, $0.4 million and $0.4 million during Fiscal 2016, Fiscal 2015 and Fiscal 2014, respectively. Unamortized deferred financing costs included in othernon-current assets, net totaled $1.8 million and $1.1 million at January 28, 2017 and January 30, 2016, respectively.Deferred CompensationWe have a non-qualified deferred compensation plan offered to a select group of highly compensated employees and our non-employee directors. Theplan provides participants with the opportunity to defer a portion of their cash compensation in a given plan year, of which a percentage may be matched byus in accordance with the terms of the plan. We make contributions to rabbi trusts or other investments to provide a source of funds for satisfying thesedeferred compensation liabilities. Investments held for our deferred compensation plan consist of insurance contracts and are recorded based on valuationswhich generally incorporate unobservable factors. A change in the value of the underlying assets would substantially be offset by a change in the liability tothe participant resulting in an immaterial net impact on our consolidated financial statements. These securities approximate the participant-directedinvestment selections underlying the deferred compensation liabilities.The total value of the assets set aside for potential deferred compensation liabilities, which are included in other non-current assets, net, as ofJanuary 28, 2017 and January 30, 2016 was $11.0 million and $9.6 million, respectively, substantially all of which are held in a rabbi trust. Substantially allthe assets set aside for potential deferred compensation liabilities are life insurance policies recorded at their cash surrender value, less any outstanding loansassociated with the life insurance policies that are payable to the life insurance company with which the policy is outstanding. The liabilities associated withthe non-79OXFORD INDUSTRIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)Note 1. Summary of Significant Accounting Policies (Continued)qualified deferred compensation plan are included in other non-current liabilities in our consolidated balance sheets and totaled $10.9 million and $10.6million at January 28, 2017 and January 30, 2016, respectively.Accounts Payable, Accrued Compensation and Other Accrued Expenses and LiabilitiesLiabilities for accounts payable, accrued compensation and other accrued expenses and liabilities are carried at cost, which reflects the fair value of theconsideration expected to be paid in the future for goods and services received, whether or not billed to us. Accruals for employee insurance and workers'compensation, which are included in other accrued expenses and liabilities in our consolidated balance sheets, include estimated settlements for knownclaims, as well as accruals for estimates of incurred but not reported claims based on our claims experience and statistical trends.Legal and Other ContingenciesWe are subject to certain claims and assessments in the ordinary course of business. The claims and assessments may relate, among other things, todisputes about intellectual property, real estate and contracts, as well as labor, employment, environmental, customs and tax matters. For those matters whereit is probable that we have incurred a loss and the loss, or range of loss, can be reasonably estimated, we have recorded reserves in other accrued expenses andliabilities or other non-current liabilities in our consolidated financial statements for the estimated loss and related expenses, such as legal fees. In otherinstances, because of the uncertainties related to both the probable outcome or amount or range of loss, we are unable to make a reasonable estimate of aliability, if any, and therefore have not recorded a reserve. As additional information becomes available or as circumstances change, we adjust our assessmentand estimates of such liabilities accordingly. Additionally, for any potential gain contingencies, we do not recognize the gain until the period that allcontingencies have been resolved and the amounts are realizable. We believe the outcome of outstanding or pending matters, individually and in theaggregate, will not have a material impact on our consolidated financial statements, based on information currently available.In connection with acquisitions, we may enter into contingent consideration arrangements, which provide for the payment of additional purchaseconsideration to the sellers if certain performance criteria are achieved during a specified period. We must recognize the fair value of the contingentconsideration based on its estimated fair value at the date of acquisition. Such valuation requires assumptions regarding anticipated cash flows, probabilitiesof cash flows, discount rates and other factors. Each of these assumptions may involve a significant amount of uncertainty. Subsequent to the date ofacquisition, we must periodically adjust the liability for the contingent consideration to reflect the fair value of the contingent consideration by reassessingour valuation assumptions as of that date. A change in assumptions related to contingent consideration amounts could have a material impact on ourconsolidated financial statements. Any change in the fair value of the contingent consideration is recognized in SG&A in our consolidated statements ofoperations.As part of our acquisition of the Lilly Pulitzer brand and operations on December 21, 2010, we entered into a contingent consideration arrangementwhereby we were obligated to pay up to $20 million in cash in the aggregate, over the four years following the closing of the acquisition, based on LillyPulitzer's achievement of certain earnings targets. As a result of Lilly Pulitzer exceeding the earnings targets specified in the contingent considerationagreement, the maximum $20 million amount was earned in full. A summary of the fair value of the contingent consideration liability, including current andnon-current amounts, is as follows (in thousands): Fiscal 2016Fiscal 2015Fiscal 2014Balance at beginning of year$—$12,500$14,725Change in fair value of contingent consideration——275Contingent consideration payments made to sellers during the year—(12,500)(2,500)Balance at end of year$—$—$12,500Other Non-current LiabilitiesAmounts included in other non-current liabilities primarily consist of deferred rent related to our operating lease agreements as discussed below anddeferred compensation as discussed above.Leases80OXFORD INDUSTRIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)Note 1. Summary of Significant Accounting Policies (Continued)In the ordinary course of business we enter into lease agreements for retail, restaurant, office and warehouse/distribution space, as well as leases forcertain equipment. The leases have varying terms and expirations and frequently have provisions to extend, renew or terminate the lease agreement, amongother terms and conditions, as negotiated. We assess the lease at inception and determine whether the lease qualifies as a capital or operating lease. Assetsleased under capital leases, if any, and the related liabilities are included in our consolidated balance sheets in property and equipment and long-term debt,respectively. Assets leased under operating leases are not recognized as assets and liabilities in our consolidated balance sheets.When a non-cancelable operating lease includes fixed escalation clauses, lease incentives for rent holidays or landlord build-out-related allowances,rent expense is generally recognized on a straight-line basis over the initial term of the lease from the date that we take possession of the space and does notassume that any termination options included in the lease will be exercised. The amount by which rents payable under the lease differs from the amountrecognized on a straight-line basis is recorded in other non-current liabilities in our consolidated balance sheets. Deferred rent as of January 28, 2017 andJanuary 30, 2016 was $57.3 million and $54.6 million, respectively. Contingent rents, including those based on a percentage of retail sales over stated levels,and rental payment increases based on a contingent future event are recognized as the expense is incurred.If we vacate leased space and determine that we do not plan to use the space in the future, we recognize a loss for any future rent payments, less anyanticipated future sublease income and adjusted for any deferred rent amounts included in our consolidated balance sheet on that date. Additionally, for anylease that we terminate and agree to a lease termination payment, we recognize in SG&A in our consolidated statements of operations a loss for the leasetermination payment at the time of the agreement.Foreign Currency Transactions and TranslationWe are exposed to foreign currency exchange risk when we generate net sales or incur expenses in currencies other than the functional currency of therespective operations. The resulting assets and liabilities denominated in amounts other than the respective functional currency are re-measured into therespective functional currency at the rate of exchange in effect on the balance sheet date, and income and expenses are re-measured at the average rates ofexchange prevailing during the relevant period. The impact of any such re-measurement is recognized in our consolidated statements of operations in thatperiod. Net gains (losses) related to foreign currency transactions recognized in Fiscal 2016, Fiscal 2015 and Fiscal 2014 were not material to ourconsolidated financial statements.Additionally, the financial statements of our operations for which the functional currency is a currency other than the United States dollar are translatedinto United States dollars at the rate of exchange in effect on the balance sheet date for the balance sheet and at the average rates of exchange prevailingduring the relevant period for the statements of operations. The impact of such translation is recognized in accumulated other comprehensive income (loss) inour consolidated balance sheets and included in other comprehensive income (loss) in our consolidated statements of comprehensive income resulting in noimpact on net earnings for the relevant period.Derivative Financial InstrumentsDerivative financial instruments, if any, are measured at their fair values in our consolidated balance sheets. Fair values of any derivative financialinstruments are determined by us based on dealer quotes, which may be based on a variety of factors including observable and unobservable inputs.Unrealized gains and losses are recognized as prepaid expenses or accrued expenses, respectively. The accounting for changes in the fair value of derivativeinstruments depends on whether the derivative has been designated and qualifies for hedge accounting. The criteria used to determine if a derivativefinancial instrument qualifies for hedge accounting treatment are whether an appropriate hedging instrument has been identified and designated to reduce aspecific exposure and whether there is a high correlation between changes in the fair value of the hedging instrument and the identified exposure based onthe nature of the hedging relationship. Based on the nature of the hedging relationship, a qualifying derivative is designated for accounting purposes as a fairvalue hedge, a cash flow hedge or a hedge of a net investment in a foreign business.We may formally document hedging instruments and hedging relationships at the inception of each contract. Further, we assess both at the inception ofa contract and on an ongoing basis whether the hedging instrument is effective in offsetting the risk of the hedged transaction. For any derivative financialinstrument that is designated and qualifies for hedge accounting81OXFORD INDUSTRIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)Note 1. Summary of Significant Accounting Policies (Continued)treatment and has not been settled as of period-end, the unrealized gains (losses) on the outstanding derivative financial instrument is recognized, to theextent the hedge relationship has been effective, as a component of comprehensive income in our consolidated statements of comprehensive income andaccumulated other comprehensive income (loss) in our consolidated balance sheets. For any financial instrument that is not designated as a hedge foraccounting purposes, or for any ineffective portion of a hedge, the unrealized gains (losses) on the outstanding derivative financial instrument is included innet earnings. Cash flows related to hedging transactions are classified in our consolidated statements of cash flows and consolidated statements of operationsin the same category as the items hedged. We do not use derivative financial instruments for trading or speculative purposes.Foreign Currency Risk ManagementAs of January 28, 2017, our foreign currency exchange risk exposure primarily results from our businesses operating outside of the United States, whichare primarily related to (1) our Tommy Bahama operations in Canada, Australia and Japan purchasing goods in United States dollars or other currencieswhich are not the functional currency of the business and (2) certain other transactions, including intercompany transactions. We may enter into short-termforward foreign currency exchange contracts in the ordinary course of business to mitigate a portion of the risk associated with foreign currency exchangerate fluctuations related to purchases of inventory or selling goods in currencies other than the functional currencies by certain of our foreign operations. Asof January 28, 2017, we were not a party to any forward foreign currency exchange contracts.Interest Rate Risk ManagementAs of January 28, 2017, we are exposed to market risk from changes in interest rates on our variable-rate indebtedness under our U.S. Revolving CreditAgreement. We may attempt to limit the impact of interest rate changes on earnings and cash flow, primarily through a mix of variable-rate and fixed-ratedebt, although at times all of our debt may be either variable-rate or fixed-rate debt. At times we may enter into interest rate swap arrangements related tocertain of our variable-rate debt in order to fix the interest rate if we determine that our exposure to interest rate changes is higher than optimal. Ourassessment also considers our need for flexibility in our borrowing arrangements resulting from the seasonality of our business, anticipated future cash flowsand our expectations about the risk of future interest rate changes, among other factors. We continuously monitor interest rates to consider the sources andterms of our borrowing facilities in order to determine whether we have achieved our interest rate management objectives. As of January 28, 2017, we do nothave any interest rate swap agreements.Fair Value MeasurementsFair value, in accordance with GAAP, is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) inthe principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. As such,fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability.Valuation techniques include the market approach (comparable market prices), the income approach (present value of future income or cash flow), and thecost approach (cost to replace the service capacity of an asset or replacement cost). These valuation techniques may be based upon observable andunobservable inputs. The three levels of inputs used to measure fair value pursuant to the guidance are as follows:•Level 1—Quoted prices in active markets for identical assets or liabilities.•Level 2—Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets;quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated byobservable market data.•Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities,which includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.Our financial instruments consist primarily of our cash and cash equivalents, accounts receivable, accounts payable, accrued expenses and debt. Giventheir short-term nature, the carrying amounts of cash and cash equivalents, receivables,82OXFORD INDUSTRIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)Note 1. Summary of Significant Accounting Policies (Continued)accounts payable and accrued expenses generally approximate their fair values. Additionally, we believe the carrying amounts of our variable-rateborrowings approximate fair value. Additionally, we have determined that our property and equipment, intangible assets and goodwill, for which the bookvalues are disclosed in Notes 3 and 4, are non-financial assets measured at fair value on a non-recurring basis. We have determined that our approaches fordetermining fair values of our property and equipment, intangible assets and goodwill generally are based on Level 3 inputs.Equity CompensationWe have certain equity compensation plans as described in Note 7, which provide for the ability to grant restricted shares, restricted share units, optionsand other equity awards to our employees and non-employee directors. We recognize equity awards to employees and non-employee directors in SG&A inour consolidated statements of operations based on their fair values on the grant date. The fair values of restricted shares and restricted share units aredetermined based on the fair value of our common stock on the grant date, regardless of whether the awards are performance or service based.Using the fair value method, compensation expense, with a corresponding entry to additional paid-in capital, is recognized related to the equity awardsover the specified service and performance period, as applicable. For awards with specified service requirements, the fair value of the equity awards granted toemployees is recognized over the respective service period. For performance-based awards, during the performance period we assess expected performanceversus the predetermined performance goals and adjust the cumulative equity compensation expense to reflect the relative expected performanceachievement. The equity compensation expense is recognized on a straight-line basis over the aggregate performance period and any additional requiredservice period. No estimate of future stock award forfeitures are considered in our calculation of compensation expense as the impact of forfeitures oncompensation expense are recognized at the time of forfeit.Comprehensive Income and Accumulated Other Comprehensive LossComprehensive income (loss) consists of net earnings and specified components of other comprehensive income (loss). Other comprehensive income(loss) includes changes in assets and liabilities that are not included in net earnings pursuant to GAAP, such as foreign currency translation adjustments andthe net unrealized gain (loss) associated with cash flow hedges which qualify for hedge accounting, if any. These amounts of other comprehensive income(loss) are deferred in accumulated other comprehensive income (loss), which is included in shareholders' equity in our consolidated balance sheets.DividendsDividends are accrued at the time declared by our Board of Directors and typically paid within the same fiscal quarter.Concentration of Credit Risk and Significant CustomersWe are exposed to concentrations of credit risk as a result of our receivables balances, for which the total exposure is limited to the amount recognizedin our consolidated balance sheets. We sell our merchandise to customers operating in a number of retail distribution channels in the United States and othercountries. We extend credit to certain wholesale customers based on an evaluation of the customer's credit history, financial capacity and condition, usuallywithout requiring collateral. Credit risk is impacted by conditions or occurrences within the economy and the retail industry and is principally dependent oneach customer's financial condition. Additionally, a decision by the controlling owner of a group of stores or any significant customer to decrease the amountof merchandise purchased from us or to cease carrying our products could have an adverse effect on our results of operations in future periods. No individualcustomer represented greater than 10% of our consolidated net sales in Fiscal 2016, Fiscal 2015 or Fiscal 2014. As of January 28, 2017, three customers eachrepresented 13% of our receivables included in our consolidated balance sheet.Income TaxesIncome taxes included in our consolidated financial statements are determined using the asset and liability method. Under this method, income taxesare recognized based on amounts of income taxes payable or refundable in the current year as well as the impact of any items that are recognized in differentperiods for consolidated financial statement reporting and tax return reporting purposes. Prepaid income taxes and income taxes payable are recognized inprepaid expenses and other accrued expenses and liabilities, respectively, in our consolidated balance sheets. As certain amounts are recognized in differentperiods83OXFORD INDUSTRIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)Note 1. Summary of Significant Accounting Policies (Continued)for consolidated financial statement and tax return reporting purposes, financial statement and tax bases of assets and liabilities differ, resulting in therecognition of deferred tax assets and liabilities. The deferred tax assets and liabilities reflect the estimated future tax effects attributable to these differences,as well as the impact of net operating loss, capital loss and federal and state credit carry-forwards, each as determined under enacted tax laws and ratesexpected to apply in the period in which such amounts are expected to be realized or settled.We recognize deferred tax assets to the extent we believe these assets are more likely than not to be realized. In making such a determination, weconsider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income,taxable income in carryback years, tax-planning strategies, and results of recent operations. Valuation allowances are established when we determine that it ismore-likely-than-not that some portion or all of a deferred tax asset will not be realized.Valuation allowances are analyzed periodically and adjusted as events occur or circumstances change that would indicate adjustments to the valuationallowances are appropriate. If we determine that we will be able to realize our deferred tax assets in the future, in excess of their net recorded amount, we willreduce the deferred tax asset valuation allowance, which will reduce income tax expense. As realization of deferred tax assets and liabilities is dependentupon future taxable income in specific jurisdictions, changes in tax laws and rates and shifts in the amount of taxable income among state and foreignjurisdictions may have a significant impact on the amount of benefit ultimately realized for deferred tax assets and liabilities. We account for the effect ofchanges in tax laws or rates in the period of enactment.We utilize a two-step approach for evaluating uncertain tax positions. Under the two-step method, recognition occurs when we conclude that a taxposition, based solely on technical merits, is more-likely-than-not to be sustained upon examination. The second step, measurement, is only addressed if stepone has been satisfied. The tax benefit recorded is measured as the largest amount of benefit determined on a cumulative probability basis that is more-likely-than-not to be realized upon ultimate settlement. Those tax positions failing to qualify for initial recognition are recognized in the first subsequent interimperiod they meet the more-likely-than-not threshold or are resolved through negotiation or litigation with the relevant taxing authority or upon expiration ofthe statute of limitations. Alternatively, de-recognition of a tax position that was previously recognized occurs when we subsequently determine that a taxposition no longer meets the more-likely-than-not threshold of being sustained. Interest and penalties associated with unrecognized tax positions arerecorded within income tax expense in our consolidated statements of operations. As of January 28, 2017 and January 30, 2016 and during Fiscal 2016,Fiscal 2015 and Fiscal 2014, we did not have any material unrecognized tax benefit amounts, including any related potential penalty or interest expense, ormaterial changes in such amounts.In the case of foreign subsidiaries there are certain exceptions to the requirement that deferred tax liabilities be recognized for the difference in thefinancial and tax bases of assets. When the financial basis of the investment in a foreign subsidiary, excluding undistributed earnings, exceeds the tax basis insuch investment, the deferred liability is not recognized if management considers the investment to be essentially permanent in duration. Further, deferred taxliabilities are not required to be recognized for undistributed earnings of foreign subsidiaries when management considers those earnings to be permanentlyreinvested outside the United States. We consider substantially all of our investments in and undistributed earnings of our foreign subsidiaries to bepermanently reinvested outside the United States as of January 28, 2017 and therefore have not recorded a deferred tax liability on these amounts in ourconsolidated financial statements.We generally receive a United States income tax benefit upon the vesting of shares granted to employees. The benefit is equal to the difference,multiplied by the appropriate tax rate, between the fair value of the share and the taxes payable by the employee at the time of vesting of a restricted shareaward. We record the tax benefit associated with the vesting of share awards granted to employees as a reduction to income taxes payable. Prior to Fiscal2016, to the extent the tax benefit related to the value of awards recognized as compensation expense in our financial statements, income tax expense wasreduced, while any additional tax benefit was recorded directly to shareholders' equity in our consolidated balance sheets. Further, if a tax benefit wasrealized on compensation of an amount less than the amount recorded for financial statement purposes, the decrease in income tax benefit was also recordeddirectly to shareholders' equity. Beginning in Fiscal 2016 upon the adoption of new guidance issued by the FASB in March 2016, all tax benefit or expenseassociated with the vesting of share awards granted to employees is recorded as a reduction to income taxes in our consolidated statements of operationsrather than directly to shareholders' equity.84OXFORD INDUSTRIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)Note 1. Summary of Significant Accounting Policies (Continued)We file income tax returns in the United States and various state, local and foreign jurisdictions. Our federal, state, local and foreign income tax returnsfiled for the years ended on or before February 2, 2013, with limited exceptions, are no longer subject to examination by tax authorities.Earnings (Loss) Per ShareBasic net earnings from continuing operations, net earnings from discontinued operations and net earnings per share are calculated by dividing therespective earnings amount by the weighted average shares outstanding during the period. Shares repurchased are removed from the weighted averagenumber of shares outstanding upon repurchase and delivery.Diluted net earnings from continuing operations, net earnings from discontinued operations and net earnings per share are calculated similarly to theamounts above, except that the weighted average shares outstanding in the diluted calculations also includes the potential dilution using the treasury stockmethod that could occur if dilutive securities, including restricted share awards, options or other dilutive awards, were converted to shares. The treasury stockmethod assumes that shares are issued for any restricted share awards, options or other dilutive awards that are "in the money," and that we use the proceedsreceived to repurchase shares at the average market value of our shares for the respective period. For purposes of the treasury stock method, proceeds consistof cash to be paid and future compensation expense to be recognized.Use of EstimatesThe preparation of our consolidated financial statements in conformity with GAAP requires us to make certain estimates and assumptions that affect theamounts reported as assets, liabilities, revenues and expenses in the consolidated financial statements and accompanying notes. Actual results could differfrom those estimates.Accounting Standards Adopted in Fiscal 2016In March 2016, the FASB issued an update to the accounting guidance on equity compensation with the intent of simplifying and improving theaccounting and statement of cash flow presentation for income taxes at settlement, forfeitures, and settlements for withholding taxes. We early adopted thisguidance in Fiscal 2016 resulting in no material impact on our consolidated financial statements in Fiscal 2016. This guidance was adopted prospectivelywith no adjustments to prior periods. This guidance may have a material impact on our effective tax rate and income tax expense in future periods, dependingin part on whether significant restricted stock awards vest and if the price of our stock at the vesting date differs from the price of our stock on the grant date.Recently Issued Accounting Standards Applicable to Future YearsIn May 2014, the FASB issued guidance which provides a single, comprehensive accounting model for revenue arising from contracts with customers.This guidance has been revised and clarified through various supplemental adoption guidance subsequent to May 2014. This new revenue recognitionguidance supersedes most of the existing revenue recognition guidance which specifies that revenue is recognized when risks and rewards transfer to acustomer. Under the new guidance, revenue will be recognized pursuant to a five-step approach to revenue recognition: (1) identify the contracts with thecustomer; (2) identify the separate performance obligations in the contracts; (3) determine the transaction price; (4) allocate the transaction price to separateperformance obligations; and (5) recognize revenue when, or as, each performance obligation is satisfied. The new guidance also requires additionaldisclosures about the nature, timing and uncertainty of revenue and cash flow arising from customer contracts, including significant judgments and changesin judgments. The new guidance is effective for us beginning in Fiscal 2018, and may be applied via the full retrospective method to all prior periodspresented or through the modified retrospective method as a cumulative adjustment to the opening retained earnings balance at the date of initial adoption.We have not finalized our determination of our adoption method. We have initiated a review of revenue streams including retail, e-commerce, wholesale androyalty income to evaluate the impact of the adoption of the revised guidance on our consolidated financial statements, but have not completed theassessment of the impact of adopting the new guidance on our consolidated financial statements.In February 2016, the FASB issued a new accounting standard on leasing. The new standard will require companies to record most leased assets andliabilities on the balance sheet. For these leases we will be required to recognize a right to use asset and lease liability for the obligation created by the leases.This guidance will be effective in 2019 with early adoption permitted. The guidance requires the use of the modified retrospective transition approach. Weare in process of evaluating the85OXFORD INDUSTRIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)Note 1. Summary of Significant Accounting Policies (Continued)impact of the new guidance on our consolidated financial statements, but considering our in-place operating leases, we anticipate that the new lease guidancewill have a significant impact on our consolidated balance sheet for the recognition of the lease related assets and liabilities.In June 2016, the FASB issued revised guidance on the measurement of credit losses on financial instruments, which amends the impairment model byrequiring companies to use a forward-looking approach based on expected losses to estimate credit losses on certain financial instruments, including tradereceivables. This guidance will be effective in 2020 with early adoption permitted. We are currently assessing the impact that adopting this guidance willhave on our consolidated financial statements.In October 2016, the FASB issued revised guidance on the recognition of current and deferred income taxes for intra-entity asset transfers. The revisedguidance requires an entity to recognize the income tax consequences of an intra-entity transfer of an asset (other than inventory) when the transfer occurs.This guidance will be effective in 2018 with early adoption permitted. The guidance requires the use of the modified retrospective method of adoption whichresults in a cumulative adjustment to retained earnings as of the beginning of the period of adoption. We are currently assessing the impact that adopting theguidance will have on our consolidated financial statements.In January 2017, the FASB issued revised guidance on the subsequent measurement of goodwill by eliminating the second step from the quantitativegoodwill impairment test. The single quantitative step test requires companies to compare the fair value of a reporting unit with its carrying amount andrecord an impairment charge for the amount that the carrying amount exceeds the fair value, up to the total amount of goodwill allocated to that reportingunit. This guidance will be effective in 2020 with early adoption permitted for goodwill impairment testing dates after January 1, 2017.In January 2017, the FASB issued new guidance that provides a more narrow framework to be used in evaluating whether a set of assets and activitiesconstitute a business. The guidance will be effective in Fiscal 2018 with early adoption permitted. We expect that we will apply this guidance to any futurebusiness combination. The impact on our consolidated financial statements will depend on the facts and circumstances of any specific future transactions.Note 2. Operating GroupsOur business is primarily operated through our Tommy Bahama, Lilly Pulitzer, Lanier Apparel and Southern Tide operating groups. We identify ouroperating groups based on the way our management organizes the components of our business for purposes of allocating resources and assessingperformance. Our operating group structure reflects a brand-focused management approach, emphasizing operational coordination and resource allocationacross each brand's direct to consumer, wholesale and licensing operations, as applicable.Tommy Bahama, Lilly Pulitzer and Southern Tide each design, source, market and distribute apparel and related products bearing their respectivetrademarks and also license their trademarks for other product categories, while Lanier Apparel designs, sources and distributes branded and private labelmen's tailored clothing, sportswear and other products. Corporate and Other is a reconciling category for reporting purposes and includes our corporateoffices, substantially all financing activities, elimination of inter-segment sales, LIFO inventory accounting adjustments, other costs that are not allocated tothe operating groups and operations of our other businesses which are not included in our operating groups, including our Lyons, Georgia distribution centeroperations. Our LIFO inventory pool does not correspond to our operating group definitions; therefore, LIFO inventory accounting adjustments are notallocated to our operating groups.The tables below present certain financial information (in thousands) about our operating groups, as well as Corporate and Other. Amounts associatedwith our Ben Sherman operations, which were sold in Fiscal 2015, are classified as discontinued86OXFORD INDUSTRIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)Note 2. Operating Groups (Continued)operations as disclosed in Note 13 and therefore excluded from the tables below. Fiscal 2016Fiscal 2015Fiscal 2014Net Sales Tommy Bahama$658,911$658,467$627,498Lilly Pulitzer233,294204,626167,736Lanier Apparel100,753105,106126,430Southern Tide27,432——Corporate and Other2,1981,091(1,339)Total$1,022,588$969,290$920,325Depreciation and Amortization of Intangible Assets Tommy Bahama$31,796$28,103$27,412Lilly Pulitzer7,9685,6444,616Lanier Apparel478456350Southern Tide390——Corporate and Other1,4511,5572,186Total$42,083$35,760$34,564Operating Income (Loss) Tommy Bahama$44,101$65,993$71,132Lilly Pulitzer51,99542,52532,190Lanier Apparel6,9557,70010,043Southern Tide(282)——Corporate and Other(12,885)(18,704)(20,546)Total operating income89,88497,51492,819Interest expense, net3,4212,4583,236Earnings Before Income Taxes$86,463$95,056$89,583 Fiscal 2016Fiscal 2015Fiscal 2014Purchases of Property and Equipment Tommy Bahama$34,191$54,490$35,782Lilly Pulitzer14,14217,1977,335Lanier Apparel2952061,740Southern Tide27——Corporate and Other7605291,208Total$49,415$72,422$46,06587OXFORD INDUSTRIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)Note 2. Operating Groups (Continued) January 28,2017January 30,2016Total Assets Tommy Bahama$451,990$458,234Lilly Pulitzer126,506115,419Lanier Apparel30,26935,451Southern Tide96,208—Corporate and Other(19,814)(26,414)Total$685,159$582,690Net book value of our property and equipment, by geographic area is presented below (in thousands): January 28,2017January 30,2016United States$186,549$178,390Other foreign (1)7,3825,704Total$193,931$184,094(1) The net book value of our property and equipment outside of the United States primarily relates to property and equipment associated with ourTommy Bahama operations in Canada, Australia and Japan.Net sales recognized by geographic area is presented below (in thousands): Fiscal 2016Fiscal 2015Fiscal 2014United States$986,062$932,878$885,271Other foreign (1)36,52636,41235,054Total$1,022,588$969,290$920,325(1) The net sales outside of the United States primarily relates to our Tommy Bahama international retail operations in Canada, Australia and Japan.Note 3. Property and Equipment, NetProperty and equipment, carried at cost, is summarized as follows (in thousands): January 28,2017January 30,2016Land$3,166$3,166Buildings and improvements34,98631,461Furniture, fixtures, equipment and technology185,498167,230Leasehold improvements223,253208,472Subtotal446,903410,329Less accumulated depreciation and amortization(252,972)(226,235)Total property and equipment, net$193,931$184,094Note 4. Intangible Assets and Goodwill88OXFORD INDUSTRIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)Note 4. Intangible Assets and Goodwill (Continued)Intangible assets by category are summarized below (in thousands): January 28,2017January 30,2016Intangible assets with finite lives$46,030$38,897Accumulated amortization(35,785)(33,359)Total intangible assets with finite lives, net10,2455,538 Intangible assets with indefinite lives: Trademarks165,000138,200Total intangible assets, net$175,245$143,738The changes in carrying amount of intangible assets, by operating group and in total, for Fiscal 2016, Fiscal 2015 and Fiscal 2014 are as follows (inthousands): TommyBahamaLilly PulitzerLanierApparelSouthernTideTotalBalance, February 1, 2014$119,858$29,310$—$—$149,168Amortization(2,004)(278)——(2,282)Other, including foreign currency changes(752)———(752)Balance, January 31, 2015117,10229,032——146,134Amortization(1,688)(238)——(1,926)Other, including foreign currency changes(470)———(470)Balance, January 30, 2016114,94428,794——143,738Acquisition——3,13730,24033,377Amortization(1,599)(199)(89)(263)(2,150)Other, including foreign currency changes280———280Balance, January 28, 2017$113,625$28,595$3,048$29,977$175,245Based on the current estimated useful lives assigned to our intangible assets, amortization expense for each of the next five years is expected to be $2.2million, $1.5 million, $0.6 million, $0.6 million and $0.6 million.The changes in the carrying amount of goodwill by operating group and in total, for Fiscal 2016, Fiscal 2015 and Fiscal 2014 are as follows (inthousands): TommyBahamaLilly PulitzerSouthern TideTotalBalance, February 1, 2014$904$16,495$—$17,399Other, including foreign currency changes(103)——$(103)Balance, January 31, 201580116,495—17,296Other, including foreign currency changes(73)— $(73)Balance, January 30, 201672816,495—17,223Acquisition——42,745$42,745Other, including foreign currency changes47——$47Balance, January 28, 2017$775$16,495$42,745$60,01589OXFORD INDUSTRIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)Note 4. Intangible Assets and Goodwill (Continued)The goodwill included in the balance sheet for Tommy Bahama and Lilly Pulitzer is deductible for tax purposes, while the majority of the goodwillincluded in the balance sheet for Southern Tide is deductible for tax purposes.Note 5. DebtWe had $91.5 million outstanding as of January 28, 2017 under our $325 million Fourth Amended and Restated Credit Agreement ("U.S.Revolving Credit Agreement") compared to $44.0 million of borrowings outstanding as of January 30, 2016 under our Third Amended and Restated CreditAgreement ("Prior Credit Agreement"). On May 24, 2016, the U.S. Revolving Credit Agreement amended and restated the Prior Credit Agreement to (i)increase the borrowing capacity of the facility, (ii) extend the maturity of the facility and (iii) modify certain other provisions and restrictions of the PriorCredit Agreement. The U.S. Revolving Credit Agreement generally (i) is limited to a borrowing base consisting of specified percentages of eligible categoriesof assets, (ii) accrues variable-rate interest (weighted average borrowing rate of 2.3% as of January 28, 2017), unused line fees and letter of credit fees basedupon average unused availability or utilization, (iii) requires periodic interest payments with principal due at maturity (May 2021) and (iv) is secured by afirst priority security interest in substantially all of the assets of Oxford Industries, Inc. and substantially all of its domestic subsidiaries, including accountsreceivable, books and records, chattel paper, deposit accounts, equipment, certain general intangibles, inventory, investment property (including the equityinterests of certain subsidiaries), negotiable collateral, life insurance policies, supporting obligations, commercial tort claims, cash and cash equivalents,eligible trademarks, proceeds and other personal property. The May 24, 2016 amendment and restatement resulted in a write off of unamortized deferredfinancing costs of $0.3 million.To the extent cash flow needs exceed cash flow provided by our operations we will have access, subject to its terms, to our U.S. Revolving CreditAgreement to provide funding for operating activities, capital expenditures and acquisitions, if any. Our credit facility is also used to finance trade letters ofcredit for product purchases, which reduce the amounts available under our line of credit when issued. As of January 28, 2017, $4.7 million of letters of creditwere outstanding against our U.S. Revolving Credit Agreement. After considering these limitations and the amount of eligible assets in our borrowing base,as applicable, as of January 28, 2017, we had $185.5 million in unused availability under the U.S. Revolving Credit Agreement, subject to certain limitationson borrowings.Covenants, Other Restrictions and Prepayment PenaltiesThe U.S. Revolving Credit Agreement is subject to a number of affirmative covenants regarding the delivery of financial information, compliance withlaw, maintenance of property, insurance requirements and conduct of business. Also, the U.S. Revolving Credit Agreement is subject to certain negativecovenants or other restrictions including, among other things, limitations on our ability to (i) incur debt, (ii) guaranty certain obligations, (iii) incur liens,(iv) pay dividends to shareholders, (v) repurchase shares of our common stock, (vi) make investments, (vii) sell assets or stock of subsidiaries, (viii) acquireassets or businesses, (ix) merge or consolidate with other companies or (x) prepay, retire, repurchase or redeem debt.Additionally, the U.S. Revolving Credit Agreement contains a financial covenant that applies if excess availability under the agreement for threeconsecutive days is less than the greater of (i) $23.5 million or (ii) 10% of availability. In such case, our fixed charge coverage ratio as defined in the U.S.Revolving Credit Agreement must not be less than 1.0 to 1.0 for the immediately preceding 12 fiscal months for which financial statements have beendelivered. This financial covenant continues to apply until we have maintained excess availability under the U.S. Revolving Credit Agreement of more thanthe greater of (i) $23.5 million or (ii) 10% of availability for 30 consecutive days.We believe that the affirmative covenants, negative covenants, financial covenants and other restrictions under the U.S. Revolving Credit Agreementare customary for those included in similar facilities entered into at the time we entered into the U.S. Revolving Credit Agreement. During Fiscal 2016 and asof January 28, 2017, no financial covenant testing was required pursuant to our U.S. Revolving Credit Agreement or Prior Credit Agreement as the minimumavailability threshold was met at all times. As of January 28, 2017, we were compliant with all covenants related to the U.S. Revolving Credit Agreement.Note 6. Commitments and ContingenciesWe have operating lease agreements for retail space, restaurants, warehouses and sales and administrative offices as well as equipment with varyingterms. Total rent expense, which includes minimum rents, real estate taxes, insurance and other90OXFORD INDUSTRIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)Note 6. Commitments and Contingencies (Continued)operating expenses and contingent rents incurred under all leases was $87.8 million, $82.6 million and $72.8 million in Fiscal 2016, Fiscal 2015 and Fiscal2014, respectively. Most of our leases provide for payments of real estate taxes, insurance and other operating expenses applicable to the property and mostof our retail leases also provide for contingent rent based on retail sales. Payments for real estate taxes, insurance, other operating expenses and contingentpercentage rent are included in rent expense above, but are generally not included in the aggregate minimum rental commitments below, as, in many cases,the amounts payable in future periods are not quantified in the lease agreement and are dependent on future events. The total amount of such chargesincluded in total rent expense above were $23.9 million, $22.1 million and $19.3 million in Fiscal 2016, Fiscal 2015 and Fiscal 2014, respectively, whichincludes $1.1 million, $1.0 million and $0.9 million of contingent percentage rent during Fiscal 2016, Fiscal 2015 and Fiscal 2014, respectively.As of January 28, 2017, the aggregate minimum base rental commitments for all non-cancelable operating real property leases with original terms inexcess of one year are $66.2 million, $62.5 million, $59.4 million, $56.4 million, $53.9 million for each of the next five years and $175.0 million thereafter.As of January 28, 2017, we are also obligated under certain apparel license and design agreements to make future minimum royalty and advertisingpayments of $5.9 million, $4.7 million, $4.4 million, $4.3 million, $3.3 million for each of the next five years and none thereafter. These amounts do notinclude amounts, if any, that exceed the minimums required pursuant to the agreements.During the 1990s, we discovered the presence of hazardous waste on one of our properties. We believe that remedial action will be required, includingcontinued investigation, monitoring and treatment of groundwater and soil, although the timing of such remedial action is uncertain. As of January 28, 2017and January 30, 2016, the reserve for the remediation of this site was $1.2 million and $1.2 million, respectively, which is included in other non-currentliabilities in our consolidated balance sheets. The amount recorded represents our estimate of the costs, on an undiscounted basis, to clean up the site, basedon currently available information. This estimate may change in future periods as more information on the remediation activities required and timing of thoseactivities become known. No material amounts related to this reserve were recorded in the statements of operations in Fiscal 2016, Fiscal 2015 or Fiscal 2014.During Fiscal 2016, we collected and recognized a benefit of $1.9 million in connection with settlements of certain outstanding economic loss claimsfiled pursuant to the Deepwater Horizon Economic and Property Damages Settlement Program. Additionally, in Fiscal 2016, we recognized a charge of $1.3million related to an assertion of underpaid customs duties concerning the method used to determine the dutiable value of imported inventory. The chargereflects the full amount of the assessment through January 28, 2017. We have appealed this assessment in accordance with the standard procedures of therelevant customs authorities. The charge may be adjusted or reversed as the matter progresses and additional information becomes available, but the outcomeis subject to risk and uncertainty. Both of these matters were recognized in cost of goods sold in Tommy Bahama.Note 7. Shareholders' EquityCommon StockWe had 60 million shares of $1.00 par value per share common stock authorized for issuance as of January 28, 2017 and January 30, 2016. We had 16.8million and 16.6 million shares of common stock issued and outstanding as of January 28, 2017 and January 30, 2016, respectively.Long-Term Stock Incentive PlanAs of January 28, 2017, 1.0 million shares were available for issuance under our Long-Term Stock Incentive Plan (the "Long-Term Stock IncentivePlan"). The Long-Term Stock Incentive Plan allows us to grant equity-based awards to employees and non-employee directors in the form of stock options,stock appreciation rights, restricted shares and/or restricted share units. No additional grants are available under any predecessor plans.Restricted share awards and restricted share unit awards granted to officers and other key employees generally vest three or four years from the date ofgrant if (1) the performance threshold, if any, was met and (2) the employee is still employed by us on the vesting date. At the time that restricted shares areissued, the shareholder is generally, subject to the terms of the91OXFORD INDUSTRIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)Note 7. Shareholders' Equity (Continued)respective agreement, be entitled to the same dividend and voting rights as other holders of our common stock as long as the restricted shares are outstanding.At the time that restricted share units are issued, the recipient may, subject to the terms of the respective agreement, earn non-forfeitable dividend equivalentsequal to the dividend paid per share to holders of our common stock, but does not obtain voting rights associated with the restricted share units. Theemployee generally is restricted from transferring or selling any restricted shares or restricted share units, and generally forfeits the awards upon thetermination of employment prior to the end of the vesting period. The specific provisions of the awards, including exercisability and term of the award, areevidenced by agreements with the employee as determined by our compensation committee or Board of Directors, as applicable.The table below summarizes the restricted share award activity for officers and other key employees (in shares) during Fiscal 2016, Fiscal 2015, andFiscal 2014: Fiscal 2016Fiscal 2015Fiscal 2014 Number ofSharesWeighted-averagegrant datefair valueNumber ofSharesWeighted-averagegrant datefair valueNumber ofSharesWeighted-averagegrant datefair valueRestricted share awards outstanding atbeginning of fiscal year175,886$6791,172$5956,521$47Service-based restricted share awardsgranted/issued44,437$7323,637$6035,641$78Performance-based restricted shareawards issued related to prior yearperformance awards87,009$5887,153$78—$—Restricted share awards vested,including restricted shares repurchasedfrom employees for employees' taxliability(58,711)$51(4,645)$64—$—Restricted shares forfeited(19,939)67(21,431)70(990)$78Restricted shares outstanding at end offiscal year228,682$69175,886$6791,172$59The following table summarizes information about the unvested restricted share awards as of January 28, 2017. The unvested restricted share awardswill be settled in shares of our common stock on the vesting date, subject to the employee still being an employee at that time.GrantNumber ofUnvestedShare AwardsAverageMarketPrice onDate ofGrantVestingDateFiscal 2014 Service-based Restricted Share Awards24,751$78April 2017Fiscal 2014 Performance-based Restricted Share Awards65,196$78April 2017Fiscal 2015 Performance-based Restricted Share Awards73,361$58April 2018Fiscal 2016 Service-based Restricted Share Awards31,594$76April 2019Other Service-based Restricted Share Awards33,780$60April 2018 - April 2020Total228,682 Restricted shares pursuant to performance-based awards are not issued until approved by our compensation committee following completion of theperformance period. During Fiscal 2016, approximately 30,000 restricted shares were earned by recipients related to the Fiscal 2016 performance period andissued in Fiscal 2017; however these awards were not included in92OXFORD INDUSTRIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)Note 7. Shareholders' Equity (Continued)the tables above as the awards had not been issued as of January 28, 2017. The grant date fair value of these 30,000 awards was $76 per share, and the awardsvest in April 2019.As of January 28, 2017, there was $7.1 million of unrecognized compensation expense related to the unvested restricted share awards, which have beengranted to employees but have not yet vested, including the Fiscal 2016 performance-based awards issued in the First Quarter of Fiscal 2017.In addition, we grant restricted shares to our non-employee directors for a portion of each non-employee director's compensation. The non-employeedirectors must complete certain service requirements; otherwise, the restricted shares are subject to forfeiture. On the date of issuance, the non-employeedirectors are entitled to the same dividend and voting rights as other holders of our common stock. The non-employee directors are restricted fromtransferring or selling the restricted shares prior to the end of the vesting period.Employee Stock Purchase PlanThere were 0.4 million shares of our common stock authorized for issuance under our Employee Stock Purchase Plan ("ESPP") as of January 28, 2017.The ESPP allows qualified employees to purchase shares of our common stock on a quarterly basis, based on certain limitations, through payroll deductions.The shares purchased pursuant to the ESPP are not subject to any vesting or other restrictions. On the last day of each calendar quarter, the accumulatedpayroll deductions are applied toward the purchase of our common stock at a price equal to 85% of the closing market price on that date. Equitycompensation expense related to the employee stock purchase plan recognized was $0.2 million, $0.2 million and $0.2 million in Fiscal 2016, Fiscal 2015and Fiscal 2014, respectively.Preferred StockWe had 30 million shares of $1.00 par value preferred stock authorized for issuance as of January 28, 2017 and January 30, 2016. No preferred shareswere issued or outstanding as of January 28, 2017 or January 30, 2016.Accumulated Other Comprehensive Income (loss)The following table details the changes in our accumulated other comprehensive loss by component (in thousands), net of related income taxes duringFiscal 2016, Fiscal 2015 and Fiscal 2014. Foreign currency translation gain (loss)Net unrealized gain (loss) on cash flow hedgesAccumulated other comprehensive income (loss)Balance, February 1, 2014$(23,283)$(335)$(23,618)Other comprehensive (loss) income, net oftaxes(7,617)1,081(6,536)Balance, January 31, 2015(30,900)746(30,154)Other comprehensive income (loss), net oftaxes24,071(746)23,325Balance, January 30, 2016(6,829)—(6,829)Other comprehensive income, net of taxes1,553—1,553Balance, January 28, 2017$(5,276)$—$(5,276)Substantially all of the change in accumulated other comprehensive income (loss) during Fiscal 2015 resulted from the sale of our discontinuedoperations as the related amounts previously classified in accumulated other comprehensive loss were recognized in net loss from discontinued operations,net of taxes in our consolidated statement of operations. Substantially all of the change in accumulated other comprehensive income (loss) in Fiscal 2016 andFiscal 2014 resulted from changes in foreign currency exchange rates between certain functional and reporting currencies in the respective period. Nomaterial amounts of accumulated other comprehensive loss were reclassified from accumulated other comprehensive loss into our consolidated statements ofoperations during Fiscal 2016 or Fiscal 2014. Substantially all of the remaining balance in93OXFORD INDUSTRIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)Note 7. Shareholders' Equity (Continued)accumulated other comprehensive income (loss) as of January 28, 2017 relates to our Tommy Bahama operations in Canada, Japan and Australia withchanges during Fiscal 2016 reflecting the changes in foreign currency exchange rates between the local currency and the United States dollar during thatperiod.Note 8. Income TaxesThe following table summarizes our distribution between domestic and foreign earnings (loss) before income taxes and the provision (benefit) forincome taxes (in thousands): Fiscal 2016Fiscal 2015Fiscal 2014Earnings from continuing operations before income taxes: Domestic$84,843$96,512$94,607Foreign1,620(1,456)(5,024)Earnings from continuing operations before income taxes$86,463$95,056$89,583 Income taxes: Current: Federal$19,704$33,205$33,552State4,4754,7894,865Foreign599138516 24,77838,13238,933Deferred—primarily Federal8,108(1,508)(3,071)Deferred—Foreign(922)(105)(76)Income taxes$31,964$36,519$35,786Reconciliations of the United States federal statutory income tax rates and our effective tax rates are summarized as follows: Fiscal 2016Fiscal 2015Fiscal 2014Statutory tax rate35.0 %35.0 %35.0%State income taxes—net of federal income tax benefit3.8 %3.3 %3.0%Impact of foreign operations rate differential (1)(0.4)%0.6 %1.1%Valuation allowance against foreign losses and other carry-forwards (2)(0.6)%0.3 %0.8%Other, net(0.8)%(0.8)%—%Effective tax rate for continuing operations37.0 %38.4 %39.9%(1) Impact of foreign operations rate differential primarily reflects the rate differential between the United States and the respective foreign jurisdictionsfor any foreign income or losses, and the impact of any permanent differences.(2) Valuation allowance against foreign losses and other carry-forwards primarily reflects the valuation allowance recorded due to our inability torecognize an income tax benefit related to certain operating loss carry-forwards and deferred tax assets during the period. The benefit in Fiscal 2016 was dueto the utilization of certain operating loss carryforward benefits against current year earnings and changes in our assessment of the likelihood of recognitionof certain foreign operating loss carryforwards.Deferred tax assets and liabilities included in our consolidated balance sheets are comprised of the following (in thousands):94OXFORD INDUSTRIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)Note 8. Income Taxes (Continued) January 28, 2017January 30, 2016Deferred Tax Assets: Inventories$14,886$16,610Accrued compensation and benefits11,81714,287Receivable allowances and reserves2,5612,601Deferred rent and lease obligations6,6715,981Operating loss and other carry-forwards3,6913,455Other, net3,9602,559Deferred tax assets43,58645,493Deferred Tax Liabilities: Depreciation and amortization(5,360)(2,689)Acquired intangible assets(46,524)(41,683)Deferred tax liabilities(51,884)(44,372)Valuation allowance(4,115)(4,553)Net deferred tax liability$(12,413)$(3,432)As of January 28, 2017 and January 30, 2016 our operating loss and other carry-forwards primarily relate to our operations in Canada, Hong Kong andJapan, as well as certain states. The majority of these operating loss carry-forwards allow for carry-forward of at least 15 years. Substantially all of ourvaluation allowance of $4.1 million and $4.6 million as of January 28, 2017 and January 30, 2016, respectively, relates to the foreign and state operating losscarry-forwards and deferred tax assets in those jurisdictions. The recent history of operating losses in certain jurisdictions is considered significant negativeevidence against the realizability of these tax benefits. The amount of the valuation allowance considered necessary, however, could change in the future ifour operating results or estimates of future taxable operating results changes, particularly if, in future years, objective evidence in the form of cumulativelosses is no longer present in certain jurisdictions. Alternatively, if we generate operating losses in future periods in certain jurisdictions, we may determine itis necessary to increase valuation allowances for certain deferred tax assets.No deferred tax liabilities related to our original investments in our foreign subsidiaries and foreign earnings, if any, were recorded at either balancesheet date, as substantially all our original investments and earnings related to our foreign subsidiaries are considered permanently reinvested outside of theUnited States. Further, because the financial basis in each foreign entity does not exceed the tax basis by an amount exceeding undistributed earnings, noadditional United States tax would be due if the original investment were to be repatriated in the future. As of January 28, 2017 and January 30, 2016, we hadundistributed earnings of foreign subsidiaries of $4.4 million and $4.7 million, respectively, which were considered permanently reinvested. Theseundistributed earnings could become subject to United States taxes if they are remitted as dividends or as a result of certain other types of intercompanytransactions, but the amount of taxes payable upon remittance would not be significant after considering any foreign tax credits.Accounting for income taxes requires that we offset all deferred tax liabilities and assets within each particular tax jurisdiction and present them as asingle amount in our consolidated balance sheets, with all net deferred tax assets or deferred tax liabilities by jurisdiction recognized as non-current deferredtax assets or deferred tax liabilities in our consolidated balance sheets. The amounts of deferred income taxes included in the following line items in ourconsolidated balance sheets are as follows (in thousands):95OXFORD INDUSTRIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)Note 8. Income Taxes (Continued) January 28, 2017January 30, 2016Assets: Deferred tax assets$1,165$225Liabilities: Deferred tax liabilities(13,578)(3,657)Net deferred tax liability$(12,413)$(3,432)Note 9. Defined Contribution PlansWe have a tax-qualified voluntary retirement savings plan covering substantially all full-time United States employees and other similar plans coveringcertain foreign employees. If a participant decides to contribute, a portion of the contribution is matched by us. Additionally, we incur certain charges relatedto our non-qualified deferred compensation plan as discussed in Note 1. Realized and unrealized gains and losses on the deferred compensation planinvestments are recorded in SG&A in our consolidated statements of operations and substantially offset the changes in deferred compensation liabilities toparticipants resulting from changes in market values. Our aggregate expense under these defined contribution and non-qualified deferred compensation plansin Fiscal 2016, Fiscal 2015 and Fiscal 2014 was $3.5 million, $3.3 million and $2.9 million, respectively.Note 10. Related Party TransactionsSunTrustMr. E. Jenner Wood, III, one of our directors, served as Corporate Executive Vice President of SunTrust Banks, Inc. ("SunTrust") until his retirement atthe end of 2016. We maintain a syndicated credit facility under which SunTrust serves as agent and lender, and a SunTrust affiliate acted as lead arranger andbook runner in connection with our Fiscal 2016 refinancing of our U.S. Revolving Credit Agreement. The services provided and fees paid to SunTrust inconnection with such services for each period are set forth below (in thousands):ServiceFiscal 2016Fiscal 2015Fiscal 2014Interest and agent fees for our credit facility$1,190$459$606Cash management services$92$90$92Lead arranger, book runner and upfront fees$657$—$—Other$10$56$9Our credit facilities were entered into in the ordinary course of business. Our aggregate payments to SunTrust and its subsidiaries for these services didnot exceed 1% of our gross revenues during the periods presented or 1% of SunTrust's gross revenues during its fiscal years ended December 31, 2016,December 31, 2015 and December 31, 2014.Contingent Consideration AgreementIn connection with our acquisition of the Lilly Pulitzer brand and operations in December 2010, we entered into a contingent consideration agreementpursuant to which the beneficial owners of the Lilly Pulitzer brand and operations prior to the acquisition were entitled to earn up to an additional $20million in cash, in the aggregate, over the four years following the closing of the acquisition based on Lilly Pulitzer's achievement of certain earnings targets.The potential contingent consideration was comprised of: (1) four individual performance periods, consisting of the period from the date of our acquisitionthrough the end of Fiscal 2011, Fiscal 2012, Fiscal 2013 and Fiscal 2014, in respect of which the prior owners of the Lilly Pulitzer brand and operations wereentitled to receive up to $2.5 million for each performance period; and (2) a cumulative performance period consisting of the period from the date of ouracquisition through the end of Fiscal 2014, in respect of which the prior owners of the Lilly Pulitzer brand and operations were entitled to receive up to $10million.96OXFORD INDUSTRIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)Note 10. Related Party Transactions (Continued)Mr. Scott A. Beaumont, one of our former executive officers who was appointed CEO, Lilly Pulitzer Group, in connection with our acquisition of theLilly Pulitzer brand and operations, together with various trusts for the benefit of certain family members, held a 50% ownership interest in the Lilly Pulitzerbrand and operations prior to the acquisition. The principals who owned the Lilly Pulitzer brand and operations prior to the acquisition remained involved inthe Lilly Pulitzer operations through March 2016. As a result of Lilly Pulitzer exceeding the earnings targets specified in the contingent considerationagreement, the maximum $20 million amount was earned in full. The final payment related to the contingent consideration agreement was made in Fiscal2015.Note 11. Summarized Quarterly Data (unaudited)Each of our fiscal quarters consists of thirteen week periods, beginning on the first day after the end of the prior fiscal quarter, except that the fourthquarter in a year with 53 weeks (such as Fiscal 2017) includes 14 weeks. Following is a summary of our Fiscal 2016 and Fiscal 2015, quarterly results (inthousands, except per share amounts): FirstQuarterSecondQuarterThirdQuarterFourthQuarterTotalFiscal 2016 Net sales$256,235$282,996$222,308$261,049$1,022,588Gross profit$152,132$165,706$118,279$146,657$582,774Operating income (loss)$32,006$38,689$(327)$19,516$89,884Net earnings (loss) from continuingoperations$20,177$23,875$(1,598)$12,045$54,499Loss from discontinued operations, netof taxes$—$—$—$(2,038)$(2,038)Net earnings (loss)$20,177$23,875$(1,598)$10,007$52,461Net earnings (loss) from continuingoperations per share: Basic$1.22$1.45$(0.10)$0.73$3.30Diluted$1.21$1.44$(0.10)$0.72$3.27Loss from discontinued operations, netof taxes, per share: Basic$—$—$—$(0.12)$(0.12)Diluted$—$—$—$(0.12)$(0.12)Net earnings (loss) per share: Basic$1.22$1.45$(0.10)$0.61$3.18Diluted$1.21$1.44$(0.10)$0.60$3.15Weighted average shares outstanding: Basic16,50316,51516,53116,53716,522Diluted16,61716,62316,53116,68916,649Fiscal 2015 Net sales$260,394$250,689$198,624$259,583$969,290Gross profit$154,392$151,086$107,889$144,738$558,105Operating income$35,483$34,746$(1,166)$28,451$97,514Net earnings from continuing operations$21,323$21,050$(1,390)$17,554$58,537Loss from discontinued operations, netof taxes$(4,068)$(23,070)$(754)$(83)$(27,975)Net earnings (loss)$17,255$(2,020)$(2,144)$17,471$30,56297OXFORD INDUSTRIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)Note 11. Summarized Quarterly Data (unaudited) (Continued)Net earnings from continuing operationsper share: Basic$1.30$1.28$(0.08)$1.07$3.56Diluted$1.29$1.27$(0.08)$1.06$3.54(Loss) earnings from discontinuedoperations, net of taxes, per share: Basic$(0.25)$(1.40)$(0.05)$(0.01)$(1.70)Diluted$(0.25)$(1.39)$(0.05)$(0.01)$(1.69)Net earnings (loss) per share: Basic$1.05$(0.12)$(0.13)$1.06$1.86Diluted$1.04$(0.12)$(0.13)$1.05$1.85Weighted average shares outstanding: Basic16,44516,45116,45716,46616,456Diluted16,52516,54716,45716,60016,559The sum of the quarterly net earnings (loss) per share amounts may not equal the amounts for the full year due to rounding. The Fourth Quarter of Fiscal2016 and Fiscal 2015 included a LIFO accounting credit of $3.6 million and charge of $0.3 million, respectively. The full year of Fiscal 2016 and Fiscal2015 included a LIFO accounting credit of $5.9 million and a LIFO accounting charge of $0.3 million, respectively.98OXFORD INDUSTRIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)Note 12. Business Combinations On April 19, 2016, we acquired Southern Tide, LLC, which owns the Southern Tide lifestyle apparel brand. Southern Tide carries an extensiveselection of men’s shirts, pants, shorts, outerwear, ties, swimwear, footwear and accessories, as well as a women’s collection. The brand’s products are soldthrough its wholesale operations to specialty stores and department stores as well as through its direct to consumer operations on the Southern Tide website.The purchase price for the acquisition of Southern Tide was $85 million in cash, subject to adjustment based on net working capital as of the closingdate of the acquisition. After giving effect to the final working capital adjustment paid in Fiscal 2016, the purchase price paid was $92.0 million, net ofacquired cash of $2.4 million. We used borrowings under our revolving credit facility to finance the transaction. Transaction costs related to this acquisitiontotaled $0.8 million and are included in SG&A in Corporate and Other in Fiscal 2016.The following table summarizes our allocation of the purchase price for the Southern Tide acquisition (in thousands): Southern Tide acquisition(1)Cash and cash equivalents$2,423Receivables6,616Inventories (2)16,251Prepaid expenses740Property and equipment220Intangible assets30,240Goodwill42,745Other non-current assets344Accounts payable, accrued expenses and other liabilities(3,473)Deferred taxes(1,812)Purchase price$94,294 (1) In the Fourth Quarter of Fiscal 2016, we completed our estimated valuation of assets and liabilities acquired as part of the Southern Tideacquisition, including intangible assets and inventories, resulting in changes to the estimated fair values previously disclosed for intangible assets,inventories, deferred taxes and goodwill. The table above reflects the revised estimates of fair value for the assets and liabilities. The revisedestimated fair values of the acquired assets and liabilities resulted in reductions to finite-lived intangible assets of $3.2 million and indefinite-livedintangible assets of $7.5 million, deferred taxes of $2.2 million, inventories, net of $0.4 million and other smaller changes resulting in a net increaseto goodwill of $9.2 million. The net impact to amounts previously recorded in our consolidated statements of operations for the first, second andthird quarters of Fiscal 2016 for inventory step-up and amortization of intangible assets was not material to our consolidated financial statements forFiscal 2016 or any individual quarter within Fiscal 2016.(2) Includes a step-up of acquired inventory from cost to fair value of $2.7 million. This step-up amount was recognized in Fiscal 2016 incost of goods sold in our consolidated statement of operations. Goodwill represents the amount by which the cost to acquire Southern Tide exceeds the fair value of individual acquired assets less liabilities of thebusiness at acquisition. Intangible assets allocated in connection with our preliminary purchase price allocation consisted of the following (in thousands): Useful lifeSouthern Tide acquisitionFinite lived intangible assets acquired, primarily consisting ofcustomer relationships5 - 20 years$3,440Trade names and trademarksIndefinite26,800 $30,24099OXFORD INDUSTRIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)Note 12. Business Combinations (Continued)Pro Forma Information (unaudited)The consolidated pro forma information presented below (in thousands, except per share data) gives effect to the April 19, 2016 acquisition ofSouthern Tide as if the acquisition had occurred as of the beginning of Fiscal 2015. The information presented below is for illustrative purposes only, is notindicative of results that would have been achieved if the acquisition had occurred as of the beginning of Fiscal 2015 and is not intended to be a projectionof future results of operations. The pro forma statements of operations have been prepared from our and Southern Tide's historical statements of operationsfor the periods presented, including without limitation, purchase accounting adjustments, but excluding any seller specific management/advisory or similarexpenses and any synergies or operating cost reductions that may be achieved from the combined operations in the future. Fiscal 2016Fiscal 2015Net sales$1,034,369$1,007,330Earnings from continuing operations beforeincome taxes$92,212$95,963Earnings from continuing operations$58,035$58,609Earnings from continuing operations per share: Basic$3.51$3.59 Diluted$3.49$3.57Fiscal 2016 pro forma information above includes amortization of acquired intangible assets, but excludes the transaction expenses associated withthe transaction and the incremental cost of goods sold associated with the step-up of inventory at acquisition that were recognized by us in our Fiscal 2016consolidated statement of operations. Fiscal 2015 pro forma information above includes amortization of acquired intangible assets, transaction expensesassociated with the transaction and incremental cost of goods sold associated with the step-up of inventory at acquisition. Additionally, the pro formaadjustments for each period prior to the date of acquisition reflect an estimate of incremental interest expense associated with additional borrowings andincome tax expense that would have been incurred subsequent to the acquisition. We believe that the acquisition of Southern Tide further advances our strategic goal of owning a diversified portfolio of lifestyle brands. Theacquisition provides strategic benefits through growth opportunities and further diversification of our business.In addition to the Southern Tide acquisition, Lanier Apparel completed two acquisitions resulting in total cash payments of $3.1 million duringFiscal 2016. Assets acquired in these acquisitions primarily consisted of intangible assets, as disclosed in Note 4, and inventory.100OXFORD INDUSTRIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)Note 13. Discontinued OperationsOn July 17, 2015, we sold 100% of the equity interests of our Ben Sherman business, consisting of Ben Sherman Limited and its subsidiaries andBen Sherman Clothing LLC, for £40.8 million before any working capital or other purchase price adjustments. The final purchase price received by us wassubject to adjustment based on, among other things, the actual debt and net working capital of the Ben Sherman business on the closing date, which wasfinalized during February 2016. We do not anticipate significant operations or earnings related to the discontinued operations in future periods, with cashflow attributable to discontinued operations in the future primarily limited to amounts associated with certain retained lease obligations. The estimated leaseliability of $5.4 million as of January 28, 2017 represents our best estimate of the future net loss anticipated with respect to certain retained lease obligations;however, the ultimate loss remains uncertain as the amount of any sub-lease income is dependent upon negotiated terms of any sub-lease agreements enteredinto for the space and the ability of those sub-tenants to pay the sub-lease income or, alternatively, dependent upon lease termination costs negotiated withthe landlords in the future. In Fiscal 2016, we incurred an additional loss related to the retained lease obligations primarily as a result of the default andfailure to pay by a sub-tenant and an updated assessment of the anticipated losses considering anticipated sub-lease income to be earned, timing of obtaininga tenant, lease incentives and market rents.We have not classified as discontinued operations any corporate or shared service expenses historically charged to Ben Sherman which wedetermined may not be eliminated as a result of its disposal or offset by any transitional services income amounts. Recognizing these expenses and income ascontinuing operations in Corporate and Other reflected the uncertainty of whether there would be a reduction in such corporate or shared service expenses inthe future as a result of the sale of Ben Sherman as well as the uncertainty regarding the term of any transitional services income. Interest expense under ourprior U.K. revolving credit agreement, which was satisfied in connection with the transaction, is the only interest expense included in discontinuedoperations in our consolidated financial statements as this represents the interest expense directly attributable to the discontinued operations.The following represents major classes of assets and liabilities related to the discontinued operations included in our consolidated balance sheets asof the following dates (in thousands): January 28, 2017January 30, 2016Current liabilities$(2,860)$(2,394)Non-current liabilities(2,544)(4,571)Net (liabilities) assets$(5,404)$(6,965)Operating results of the discontinued operations are shown below (in thousands): Fiscal 2016Fiscal 2015Fiscal 2014Net sales$—$28,081$77,481Cost of goods sold—17,41440,751Gross profit$—$10,667$36,730SG&A2,92820,69850,130Royalties and other operating income—1,9194,184Operating loss$(2,928)$(8,112)$(9,216)Interest expense, net—146247Loss from discontinued operations beforeincome taxes$(2,928)$(8,258)$(9,463)Income taxes(890)(800)(1,424)Loss from discontinued operations, net oftaxes$(2,038)$(7,458)$(8,039)Loss on sale of discontinued operations, netof taxes—(20,517)—Net loss from discontinued operations, net oftaxes$(2,038)$(27,975)$(8,039)101OXFORD INDUSTRIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)Note 13. Discontinued Operations (Continued)Certain information pertaining to depreciation and amortization as well as capital expenditures associated with our discontinued operations, which isincluded in our consolidated statements of cash flows, has been included below (in thousands): Fiscal 2016Fiscal 2015Fiscal 2014Depreciation and amortization$136$667$3,082Capital expenditures$—$660$4,290102SCHEDULE IIOxford Industries, Inc.Valuation and Qualifying AccountsColumn AColumn BColumn C Column D Column EDescriptionBalance atBeginningof PeriodAdditionsCharged toCosts andExpensesChargedto OtherAccounts–Describe Deductions–Describe Balance atEnd ofPeriod (In thousands)Fiscal 2016 Deducted from asset accounts: Accounts receivable reserves(1)$8,402$10,032153(3)$(9,286)(4)$9,301Allowance for doubtful accounts(2)45450680(3)(229)(5)$811Fiscal 2015 Deducted from asset accounts: Accounts receivable reserves(1)$8,265$10,288— $(10,151)(4)$8,402Allowance for doubtful accounts(2)5718— (125)(5)$454Fiscal 2014 Deducted from asset accounts: Accounts receivable reserves(1)$8,343$9,952— $(10,030)(4)$8,265Allowance for doubtful accounts(2)374392— (195)(5)$571_______________________________________________________________________________(1)Accounts receivable reserves include estimated reserves for allowances, returns and discounts related to our wholesale operations as discussed in oursignificant accounting policy disclosure for Revenue Recognition and Accounts Receivable in Note 1 of our consolidated financial statements.(2)Allowance for doubtful accounts consists of amounts reserved for our estimate of a customer's inability to meet its financial obligations as discussedin our significant accounting policy disclosure for Revenue Recognition and Accounts Receivable in Note 1 of our consolidated financialstatements.(3)Addition due to business combinations in Fiscal 2016.(4)Principally amounts written off related to customer allowances, returns and discounts.(5)Principally accounts written off as uncollectible.103Report of Independent Registered Public Accounting FirmThe Board of Directors and Shareholders of Oxford Industries, Inc.We have audited the accompanying consolidated balance sheets of Oxford Industries, Inc. as of January 28, 2017 and January 30, 2016, and the relatedconsolidated statements of operations, comprehensive income, shareholders' equity and cash flows for each of the three years in the period ended January 28,2017. Our audits also included the financial statement schedule listed in the Index at Item 15(a). These financial statements and schedule are theresponsibility of the Company's management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits.We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require thatwe plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accountingprinciples used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our auditsprovide a reasonable basis for our opinion.In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Oxford Industries, Inc.at January 28, 2017 and January 30, 2016, and the consolidated results of its operations and its cash flows for each of the three years in the period endedJanuary 28, 2017, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, whenconsidered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Oxford Industries, Inc.'s internalcontrol over financial reporting as of January 28, 2017, based on criteria established in Internal Control-Integrated Framework issued by the Committee ofSponsoring Organizations of the Treadway Commission (2013 framework), and our report dated March 27, 2017 expressed an unqualified opinion thereon./s/ Ernst & Young LLPAtlanta, GeorgiaMarch 27, 2017104Item 9. Changes in and Disagreements With Accountants on Accounting and Financial DisclosureNone.Item 9A. Controls and ProceduresEvaluation of Disclosure Controls and ProceduresOur company, under the supervision and with the participation of our management, including our principal executive officer and principal financialofficer, have evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Based upon thatevaluation, our principal executive officer and principal financial officer concluded that, as of the end of the period covered by this report, our disclosurecontrols and procedures were effective in ensuring that information required to be disclosed by us in our Securities Exchange Act reports is recorded,processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated andcommunicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisionsregarding required disclosure.Changes in and Evaluation of Internal Control over Financial ReportingThere have not been any changes in our internal control over financial reporting during the fourth quarter of Fiscal 2016 that have materially affected,or are reasonably likely to materially affect, our internal control over financial reporting.Report of Management on Internal Control over Financial ReportingOur management is responsible for establishing and maintaining adequate internal control over financial reporting (as such term is defined inRules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934). Our internal control over financial reporting is a process designed to providereasonable assurance regarding the reliability of financial reporting and the preparation of our consolidated financial statements for external purposes inaccordance with accounting principles generally accepted in the United States. Our internal control over financial reporting is supported by a program ofappropriate reviews by management, written policies and guidelines, careful selection and training of qualified personnel, and a written code of conduct.We assessed the effectiveness of our internal control over financial reporting as of January 28, 2017. In making this assessment, management used theupdated framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control—Integrated Framework(2013). Based on this assessment, we believe that our internal control over financial reporting was effective as of January 28, 2017.Ernst & Young LLP, our independent registered public accounting firm, has audited our internal control over financial reporting as of January 28,2017, and its report thereon is included herein./s/ THOMAS C. CHUBB III /s/ K. SCOTT GRASSMYERThomas C. Chubb III Chairman, Chief Executive Officer and President(Principal Executive Officer) K. Scott Grassmyer Executive Vice President — Finance, Chief Financial Officer and Controller(Principal Financial Officer)March 27, 2017 March 27, 2017Limitations on the Effectiveness of ControlsBecause of their inherent limitations, our disclosure controls and procedures and our internal controls over financial reporting may not prevent ordetect misstatements. Projections of any evaluation of effectiveness for future periods are subject to the risks that controls may become inadequate because ofchanges in conditions, or that the degree of compliance with the policies or procedures may deteriorate. A control system, no matter how well designed andoperated, can provide only reasonable, not absolute, assurance that a control system's objectives will be met.105Report of Independent Registered Public Accounting FirmThe Board of Directors and Shareholders of Oxford Industries, Inc.We have audited Oxford Industries, Inc.’s internal control over financial reporting as of January 28, 2017, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). OxfordIndustries, Inc.’s management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness ofinternal control over financial reporting included in the accompanying Report of Management on Internal Control over Financial Reporting. Ourresponsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require thatwe plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all materialrespects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testingand evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considerednecessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal controlover financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairlyreflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are beingmade only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention ortimely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation ofeffectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliancewith the policies or procedures may deteriorate.In our opinion, Oxford Industries, Inc. maintained, in all material respects, effective internal control over financial reporting as of January 28, 2017, based onthe COSO criteria.We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheetsas of January 28, 2017 and January 30, 2016, and the related consolidated statements of operations, comprehensive income, shareholders’ equity and cashflows for each of the three years in the period ended January 28, 2017 of Oxford Industries, Inc. and our report dated March 27, 2017 expressed an unqualifiedopinion thereon./s/ Ernst & Young LLPAtlanta, GeorgiaMarch 27, 2017106Item 9B. Other InformationNone.PART IIIItem 10. Directors, Executive Officers and Corporate GovernanceThe following table sets forth certain information concerning the members of our Board of Directors:NamePrincipal OccupationHelen BallardMs. Ballard is the owner of Helen Ballard LLC, a home furnishing product design business.Thomas C. Chubb IIIMr. Chubb is our Chairman, Chief Executive Officer and President.Thomas C. GallagherMr. Gallagher is Chairman of the Board of Directors of Genuine Parts Company, a distributor ofautomotive replacement parts, industrial replacement parts, office products and electrical/electronicmaterials.Virginia A. HepnerMs. Hepner is President and Chief Executive Officer of the Woodruff Arts Center, one of the world’slargest arts centers.John R. HolderMr. Holder is Chairman and Chief Executive Officer of Holder Properties, a full-service commercialand residential real estate developer.J. Reese LanierMr. Lanier was self-employed in farming and related businesses until his retirement in 2009.Dennis M. LoveMr. Love served as Chairman of Printpack Inc., a manufacturer of flexible and specialty rigidpackaging, until his retirement in January 2017.Clarence H. SmithMr. Smith is Chairman of the Board, President and Chief Executive Officer of Haverty FurnitureCompanies, Inc., a home furnishings retailer.Clyde C. TuggleMr. Tuggle is Senior Vice President and Chief Public Affairs and Communications Officer of TheCoca-Cola Company.E. Jenner Wood IIIMr. Wood served as Corporate Executive Vice President of SunTrust Banks, Inc. until his retirement atthe end of 2016.The following table sets forth certain information concerning our executive officers:NamePosition HeldThomas C. Chubb IIIChairman, Chief Executive Officer and PresidentThomas E. CampbellExecutive Vice President - Law and Administration, General Counsel and SecretaryK. Scott GrassmyerExecutive Vice President - Finance, Chief Financial Officer and ControllerJ. Wesley Howard, Jr. President, Lanier ApparelMichelle M. KellyCEO, Lilly Pulitzer GroupDouglas B. WoodCEO, Tommy Bahama GroupAdditional information required by this Item 10 of Part III will appear in our definitive proxy statement under the headings "Corporate Governance andBoard Matters—Directors," "Executive Officers," "Common Stock Ownership by Management and Certain Beneficial Owners—Section 16(a) BeneficialOwnership Reporting Compliance," "Corporate Governance and Board Matters—Website Information," "Additional Information—Submission of DirectorCandidates by Shareholders," and "Corporate Governance and Board Matters—Board Meetings and Committees of our Board of Directors," and isincorporated herein by reference.Item 11. Executive CompensationThe information required by this Item 11 of Part III will appear in our definitive proxy statement under the headings "Corporate Governance and BoardMatters—Director Compensation," "Executive Compensation," "Nominating, Compensation & Governance Committee Report" and "CompensationCommittee Interlocks and Insider Participation" and is incorporated herein by reference.107Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder MattersThe information required by this Item 12 of Part III will appear in our definitive proxy statement under the headings "Equity Compensation PlanInformation" and "Common Stock Ownership by Management and Certain Beneficial Owners" and is incorporated herein by reference.Item 13. Certain Relationships and Related Transactions, and Director IndependenceThe information required by this Item 13 of Part III will appear in our definitive proxy statement under the headings "Certain Relationships and RelatedTransactions" and "Corporate Governance and Board Matters—Director Independence" and is incorporated herein by reference.Item 14. Principal Accounting Fees and ServicesThe information required by this Item 14 of Part III will appear in our definitive proxy statement under the heading "Audit-Related Matters—Fees Paidto Independent Registered Public Accounting Firm" and "Audit-Related Matters—Audit Committee Pre-Approval of Audit and Permissible Non-AuditServices of Independent Auditors" and is incorporated herein by reference.PART IVItem 15. Exhibits, Financial Statement Schedules (a) 1. Financial StatementsThe following consolidated financial statements are included in Part II, Item 8 of this report:•Consolidated Balance Sheets as of January 28, 2017 and January 30, 2016.•Consolidated Statements of Operations for Fiscal 2016, Fiscal 2015 and Fiscal 2014.•Consolidated Statements of Comprehensive Income for Fiscal 2016, Fiscal 2015 and Fiscal 2014.•Consolidated Statements of Shareholders' Equity for Fiscal 2016, Fiscal 2015 and Fiscal 2014.•Consolidated Statements of Cash Flows for Fiscal 2016, Fiscal 2015 and Fiscal 2014.•Notes to Consolidated Financial Statements for Fiscal 2016, Fiscal 2015 and Fiscal 2014. 2. Financial Statement Schedules•Schedule II—Valuation and Qualifying AccountsAll other schedules for which provisions are made in the applicable accounting regulation of the SEC are not required under the related instructions orare inapplicable and, therefore, have been omitted.(b) Exhibits1082.1Agreement for the Sale and Purchase of the Entire Issued Share Capital of Ben Sherman Limited and 100% of theLimited Liability Company Interests in Ben Sherman Clothing LLC, dated July 17, 2015, between the Companyand Ben Sherman UK Acquisition Limited. Incorporated by reference to Exhibit 2.1 to the Company's Form 8-Kfiled on July 22, 2015.2.2Membership Interest and Stock Purchase Agreement, dated April 19, 2016, by and among S/T Group Blocker, Inc.;GCP Southern Tide Coinvest, Inc.; S/T Group Holdings, LLC; the Sellers identified therein; Brazos Equity GP III,as the Sellers' Representative; and Oxford of South Carolina, Inc. Incorporated by reference to Exhibit 2.1 to theCompany's Form 8-K filed on April 20, 2016.3.1Restated Articles of Incorporation of Oxford Industries, Inc. Incorporated by reference to Exhibit 3.1 to theCompany's Form 10-Q for the fiscal quarter ended August 29, 2003.3.2Bylaws of Oxford Industries, Inc., as amended. Incorporated by reference to Exhibit 3.2 to the Company's Form 10-K for the fiscal year ended February 1, 2014.10.1Amended and Restated Long-Term Stock Incentive Plan, effective as of March 24, 2015.Incorporated by referenceto Exhibit 10.2 to the Company's Form 10-K for the fiscal year ended January 31, 2015.†10.2Form of Oxford Industries, Inc. Performance Equity Award Agreement (Fiscal 2014 Performance-Based).Incorporated by reference to Exhibit 10.1 to the Company's Form 8-K filed on April 4, 2014.†10.3Form of Oxford Industries, Inc. Restricted Stock Award Agreement. Incorporate by reference to Exhibit 10.2 to theCompany's Form 8-K filed April 4, 2014.† 10.4Form of Oxford Industries, Inc. Performance Equity Award Agreement (Fiscal 2015 Performance Based).Incorporated by reference to the Company's Form 10-K for the fiscal year ended January 30, 2016.†10.5Oxford Industries, Inc. Deferred Compensation Plan (as amended and restated effective June 13, 2012).Incorporated by reference to Exhibit 10.1 to the Company's Form 10-Q for the fiscal quarter ended October 27,2012.†10.6First Amendment to Oxford Industries, Inc. Deferred Compensation Plan dated July 1, 2016. Incorporated byreference to the Company's Form 10-Q/A for the fiscal quarter ended on July 30, 2016 filed on September 2, 2016.†10.7Oxford Industries, Inc. Executive Performance Incentive Plan (as amended and restated, effective March 27, 2013).Incorporated by reference to Appendix A to the Company's Proxy Statement for its Annual Meeting ofShareholders held June 19, 2013, filed on May 17, 2013.†10.8Fourth Amended and Restated Credit Agreement, dated as of May 24, 2016, by and among Oxford Industries, Inc.;Tommy Bahama Group, Inc.; the Persons party thereto from time to time as Guarantors, the financial institutionsparty thereto as lenders, the financial institutions party thereto as Issuing Banks; and SunTrust RobinsonHumphrey, Inc. as a Joint Lead Arranger and a Joint Bookrunner; JPMorgan Chase Bank, N.A. as a Joint LeadArranger, a Joint Bookrunner, and the Syndication Agent; and Bank of America, N.A. and KeyBank NationalAssociation, as the Co-Documentation Agents. Incorporated by reference to Exhibit 10.1 to the Company's Form 8-K filed on May 24, 2016.10.9Fourth Amended and Restated Pledge and Security Agreement, dated as of May 24, 2016, among OxfordIndustries, Inc.; Tommy Bahama Group, Inc.; the additional entities grantor thereto, as Grantors, and SunTrustBank, as administrative agent. Incorporated by reference to Exhibit 10.2 to the Company's Form 8-K filed on May24, 2016.21List of Subsidiaries.*23Consent of Independent Registered Public Accounting Firm.*24Powers of Attorney.*31.1Certification by Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*31.2Certification by Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*32Certification by Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*101INSXBRL Instance Document101SCHXBRL Taxonomy Extension Schema Document101CALXBRL Taxonomy Extension Calculation Linkbase Document101DEFXBRL Taxonomy Extension Definition Linkbase Document101LABXBRL Taxonomy Extension Label Linkbase Document101PREXBRL Taxonomy Extension Presentation Linkbase Document_______________________________________________________________________________109*Filed herewith†Management contract or compensation plan or arrangement required to be filed as an exhibit to this form pursuant to Item 15(b) of this report.We agree to file upon request of the SEC a copy of all agreements evidencing long-term debt omitted from this report pursuant to Item 601(b)(4)(iii) ofRegulation S-K.Shareholders may obtain copies of Exhibits without charge upon written request to the Corporate Secretary, Oxford Industries, Inc., 999 PeachtreeStreet, N.E., Ste. 688, Atlanta, Georgia 30309.110SIGNATURESPursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on itsbehalf by the undersigned, hereunto duly authorized. Oxford Industries, Inc. By:/s/ THOMAS C. CHUBB III Thomas C. Chubb III Chairman, Chief Executive Officer and PresidentDate: March 27, 2017Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of theregistrant and in the capacities and on the dates indicated.SignatureCapacityDate /s/ THOMAS C. CHUBB III Thomas C. Chubb IIIChairman of the Board of Directors, Chief Executive Officer and President(Principal Executive Officer)March 27, 2017/s/ K. SCOTT GRASSMYER K. Scott GrassmyerExecutive Vice President — Finance, Chief Financial Officer and Controller(Principal Financial Officer and Principal Accounting Officer)March 27, 2017* Helen BallardDirectorMarch 27, 2017* Thomas C. GallagherDirectorMarch 27, 2017* Virginia A. HepnerDirectorMarch 27, 2017* John R. HolderDirectorMarch 27, 2017* J. Reese LanierDirectorMarch 27, 2017* Dennis M. LoveDirectorMarch 27, 2017* Clarence H. SmithDirectorMarch 27, 2017* Clyde C. TuggleDirectorMarch 27, 2017* E. Jenner Wood IIIDirectorMarch 27, 2017 *By /s/ THOMAS E. CAMPBELL Thomas E. Campbell as Attorney-in-Fact 111Exhibit 21SUBSIDIARIES OF OXFORD INDUSTRIES, INC.The following table lists each subsidiary of Oxford Industries, Inc. indented under the name of its immediate parent, the percentage of eachsubsidiary’s voting securities beneficially owned by its immediate parent and the jurisdiction under the laws of which each subsidiary was organized:Name % of Voting SecuritiesJurisdiction of Incorporation or OrganizationOxford Industries, Inc. Camisas Bahia Kino S.A. de C.V.100MexicoIndustrias Lanier de Honduras S. de R.L.50(1)HondurasLionshead Clothing Company100DelawareManufacturera de Sonora, S.A. de CV99(2)MexicoOxford Caribbean, Inc.100DelawareOxford de Colon, S.A.100Costa RicaOxford Garment, Inc.100DelawareOxford Lockbox, Inc.100DelawareOxford Industries (UK1) Limited100United KingdomOxford International, Inc.100GeorgiaOxford of South Carolina, Inc.100South CarolinaOxford Private Limited of Delaware LLC100DelawareOxford Products (International) Limited99.99(3)Hong KongPiedmont Apparel Corporation100DelawareServicios de Manufactura de Mérida, S. de R.L. de C.V.99.9(4)MexicoSugartown Worldwide LLC100DelawareTommy Bahama Group, Inc.100DelawareViewpoint Marketing, Inc.100FloridaOxford Caribbean, Inc. Q.R. Fashions S. de R.L.100HondurasOxford Industries (UK2) Limited Oxford Industries (UK3) Limited100United KingdomOxford Products (International) Limited Industrias Oxford de Merida, S.A. de CV99(5)MexicoOxford Industries (UK2) Limited75(6)United KingdomOxford Philippines, Inc.96.25(7)PhilippinesTommy Bahama Global Sourcing Limited100Hong KongOxford of South Carolina, Inc. GCP Southern Tide Coinvest, Inc.100DelawareS/T Group Blocker, Inc.100DelawareS/T Group Blocker, Inc. S/T Group Holdings, LLC50(8)DelawareS/T Group Holdings, LLC Southern Tide, LLC100South CarolinaTommy Bahama Beverages, LLC Tommy Bahama Texas Beverages, LLC100TexasTommy Bahama Global Sourcing Limited Tommy Bahama Australia Pty Ltd100AustraliaTommy Bahama Canada ULC100CanadaTommy Bahama International, Pte. Ltd.100SingaporeTommy Bahama K. K.100JapanTommy Bahama Limited100Hong KongTommy Bahama Trading (Shenzhen) Co., Ltd.100ChinaTommy Bahama Group, Inc. Tommy Bahama R&R Holdings, Inc.100DelawareTommy Bahama R&R Holdings, Inc. Tommy Bahama Beverages, LLC100Delaware(1)50% of the voting securities of Industrias Lanier de Honduras S. de R.L. is owned by Oxford Caribbean, Inc.(2)1% of the voting securities of Manufacturera de Sonora, S.A. de CV is owned by Oxford International, Inc.(3)One share of the voting securities of Oxford Products (International) Limited is owned by Oxford International, Inc. Oxford Products (International)Limited has 150,000 shares issued and outstanding.(4)0.1% of the voting securities of Servicios de Manufactura de Mérida, S. de R.L. de C.V. is owned by Oxford International, Inc.(5)1% of the voting securities of Industrias Oxford de Merida, S.A. de CV is owned by Oxford Industries, Inc.(6)Approximately 25% of the voting securities of Oxford Industries (UK2) Limited is owned by Oxford Industries (UK1) Limited.(7)3.74% of the voting securities of Oxford Phillipines, Inc. is owned by Oxford Industries, Inc. Nominal ownership interests of certain of the voting securitiesof Oxford Phillippines, Inc. are owned by various individuals.(8)48% of the voting securities of S/T Group Holdings, LLC is owned by Oxford of South Carolina, Inc. and 2% of the voting securities of S/T GroupHoldings, LLC is owned by GCP Southern Tide Coinvest, Inc. Exhibit 23Consent of Independent Registered Public Accounting FirmWe consent to the incorporation by reference in the following Registration Statements:(1)Registration Statements (Form S-8 Nos. 333-121538 and 333-161902) pertaining to the Oxford Industries, Inc. Long-Term Stock Incentive Plan,(2)Registration Statements (Form S-8 Nos. 333-121535 and 333-161904) pertaining to the Oxford Industries, Inc. Employee Stock Purchase Plan, and(3)Registration Statement (Form S-8 No. 333-130010) pertaining to the Oxford Industries, Inc. Deferred Compensation Plan;of our reports dated March 27, 2017, with respect to the consolidated financial statements and schedule of Oxford Industries, Inc. and the effectiveness ofinternal control over financial reporting of Oxford Industries, Inc. included in this Annual Report (Form 10-K) of Oxford Industries, Inc. for the year endedJanuary 28, 2017./s/ Ernst & Young LLPAtlanta, GeorgiaMarch 27, 2017POWER OF ATTORNEYThe undersigned, a director of Oxford Industries, Inc. (the “Company”), does hereby constitute and appoint each of Thomas E.Campbell, Mary Margaret Heaton and Suraj A. Palakshappa, or any one of them, my true and lawful attorneys-in-fact for me and in myname for the purpose of executing on my behalf in any and all capacities the Company’s Annual Report on Form 10-K for the fiscalyear ended January 28, 2017, or any amendment or supplement thereto, and causing such Annual Report or any such amendment orsupplement to be filed with the U.S. Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, asamended (the “Act”). In addition, each such attorney-in-fact shall have full power and authority to execute on my behalf in my capacityas a director of the Company subject to the reporting requirements of the Act, all Forms required to be filed by me under the Act,including Forms 4 and 5, in accordance with the Act and the rules and regulations promulgated thereunder. In addition, each suchattorney-in-fact shall have full power and authority to do and perform any and all acts on my behalf which may be necessary ordesirable to complete, execute and timely file any such Forms with the U.S. Securities and Exchange Commission and any stockexchange or similar authority. /s/ Helen Ballard Helen Ballard Date: March 22, 2017POWER OF ATTORNEYThe undersigned, a director of Oxford Industries, Inc. (the “Company”), does hereby constitute and appoint each of Thomas E.Campbell, Mary Margaret Heaton and Suraj A. Palakshappa, or any one of them, my true and lawful attorneys-in-fact for me and in myname for the purpose of executing on my behalf in any and all capacities the Company’s Annual Report on Form 10-K for the fiscalyear ended January 28, 2017, or any amendment or supplement thereto, and causing such Annual Report or any such amendment orsupplement to be filed with the U.S. Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, asamended (the “Act”). In addition, each such attorney-in-fact shall have full power and authority to execute on my behalf in my capacityas a director of the Company subject to the reporting requirements of the Act, all Forms required to be filed by me under the Act,including Forms 4 and 5, in accordance with the Act and the rules and regulations promulgated thereunder. In addition, each suchattorney-in-fact shall have full power and authority to do and perform any and all acts on my behalf which may be necessary ordesirable to complete, execute and timely file any such Forms with the U.S. Securities and Exchange Commission and any stockexchange or similar authority. /s/ Thomas C. Gallagher Thomas C. Gallagher Date: March 22, 2017POWER OF ATTORNEYThe undersigned, a director of Oxford Industries, Inc. (the “Company”), does hereby constitute and appoint each of Thomas E.Campbell, Mary Margaret Heaton and Suraj A. Palakshappa, or any one of them, my true and lawful attorneys-in-fact for me and in myname for the purpose of executing on my behalf in any and all capacities the Company’s Annual Report on Form 10-K for the fiscalyear ended January 28, 2017, or any amendment or supplement thereto, and causing such Annual Report or any such amendment orsupplement to be filed with the U.S. Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, asamended (the “Act”). In addition, each such attorney-in-fact shall have full power and authority to execute on my behalf in my capacityas a director of the Company subject to the reporting requirements of the Act, all Forms required to be filed by me under the Act,including Forms 4 and 5, in accordance with the Act and the rules and regulations promulgated thereunder. In addition, each suchattorney-in-fact shall have full power and authority to do and perform any and all acts on my behalf which may be necessary ordesirable to complete, execute and timely file any such Forms with the U.S. Securities and Exchange Commission and any stockexchange or similar authority. /s/ Virginia A. Hepner Virginia A. Hepner Date: March 22, 2017POWER OF ATTORNEYThe undersigned, a director of Oxford Industries, Inc. (the “Company”), does hereby constitute and appoint each of Thomas E.Campbell, Mary Margaret Heaton and Suraj A. Palakshappa, or any one of them, my true and lawful attorneys-in-fact for me and in myname for the purpose of executing on my behalf in any and all capacities the Company’s Annual Report on Form 10-K for the fiscalyear ended January 28, 2017, or any amendment or supplement thereto, and causing such Annual Report or any such amendment orsupplement to be filed with the U.S. Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, asamended (the “Act”). In addition, each such attorney-in-fact shall have full power and authority to execute on my behalf in my capacityas a director of the Company subject to the reporting requirements of the Act, all Forms required to be filed by me under the Act,including Forms 4 and 5, in accordance with the Act and the rules and regulations promulgated thereunder. In addition, each suchattorney-in-fact shall have full power and authority to do and perform any and all acts on my behalf which may be necessary ordesirable to complete, execute and timely file any such Forms with the U.S. Securities and Exchange Commission and any stockexchange or similar authority. /s/ John R. Holder John R. Holder Date: March 22, 2017POWER OF ATTORNEYThe undersigned, a director of Oxford Industries, Inc. (the “Company”), does hereby constitute and appoint each of Thomas E.Campbell, Mary Margaret Heaton and Suraj A. Palakshappa, or any one of them, my true and lawful attorneys-in-fact for me and in myname for the purpose of executing on my behalf in any and all capacities the Company’s Annual Report on Form 10-K for the fiscalyear ended January 28, 2017, or any amendment or supplement thereto, and causing such Annual Report or any such amendment orsupplement to be filed with the U.S. Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, asamended (the “Act”). In addition, each such attorney-in-fact shall have full power and authority to execute on my behalf in my capacityas a director of the Company subject to the reporting requirements of the Act, all Forms required to be filed by me under the Act,including Forms 4 and 5, in accordance with the Act and the rules and regulations promulgated thereunder. In addition, each suchattorney-in-fact shall have full power and authority to do and perform any and all acts on my behalf which may be necessary ordesirable to complete, execute and timely file any such Forms with the U.S. Securities and Exchange Commission and any stockexchange or similar authority. /s/ J. Reese Lanier J. Reese Lanier Date: March 22, 2017POWER OF ATTORNEYThe undersigned, a director of Oxford Industries, Inc. (the “Company”), does hereby constitute and appoint each of Thomas E.Campbell, Mary Margaret Heaton and Suraj A. Palakshappa, or any one of them, my true and lawful attorneys-in-fact for me and in myname for the purpose of executing on my behalf in any and all capacities the Company’s Annual Report on Form 10-K for the fiscalyear ended January 28, 2017, or any amendment or supplement thereto, and causing such Annual Report or any such amendment orsupplement to be filed with the U.S. Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, asamended (the “Act”). In addition, each such attorney-in-fact shall have full power and authority to execute on my behalf in my capacityas a director of the Company subject to the reporting requirements of the Act, all Forms required to be filed by me under the Act,including Forms 4 and 5, in accordance with the Act and the rules and regulations promulgated thereunder. In addition, each suchattorney-in-fact shall have full power and authority to do and perform any and all acts on my behalf which may be necessary ordesirable to complete, execute and timely file any such Forms with the U.S. Securities and Exchange Commission and any stockexchange or similar authority. /s/ Dennis M. Love Dennis M. Love Date: March 22, 2017POWER OF ATTORNEYThe undersigned, a director of Oxford Industries, Inc. (the “Company”), does hereby constitute and appoint each of Thomas E.Campbell, Mary Margaret Heaton and Suraj A. Palakshappa, or any one of them, my true and lawful attorneys-in-fact for me and in myname for the purpose of executing on my behalf in any and all capacities the Company’s Annual Report on Form 10-K for the fiscalyear ended January 28, 2017, or any amendment or supplement thereto, and causing such Annual Report or any such amendment orsupplement to be filed with the U.S. Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, asamended (the “Act”). In addition, each such attorney-in-fact shall have full power and authority to execute on my behalf in my capacityas a director of the Company subject to the reporting requirements of the Act, all Forms required to be filed by me under the Act,including Forms 4 and 5, in accordance with the Act and the rules and regulations promulgated thereunder. In addition, each suchattorney-in-fact shall have full power and authority to do and perform any and all acts on my behalf which may be necessary ordesirable to complete, execute and timely file any such Forms with the U.S. Securities and Exchange Commission and any stockexchange or similar authority. /s/ Clarence H. Smith Clarence H. Smith Date: March 22, 2017POWER OF ATTORNEYThe undersigned, a director of Oxford Industries, Inc. (the “Company”), does hereby constitute and appoint each of Thomas E.Campbell, Mary Margaret Heaton and Suraj A. Palakshappa, or any one of them, my true and lawful attorneys-in-fact for me and in myname for the purpose of executing on my behalf in any and all capacities the Company’s Annual Report on Form 10-K for the fiscalyear ended January 28, 2017, or any amendment or supplement thereto, and causing such Annual Report or any such amendment orsupplement to be filed with the U.S. Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, asamended (the “Act”). In addition, each such attorney-in-fact shall have full power and authority to execute on my behalf in my capacityas a director of the Company subject to the reporting requirements of the Act, all Forms required to be filed by me under the Act,including Forms 4 and 5, in accordance with the Act and the rules and regulations promulgated thereunder. In addition, each suchattorney-in-fact shall have full power and authority to do and perform any and all acts on my behalf which may be necessary ordesirable to complete, execute and timely file any such Forms with the U.S. Securities and Exchange Commission and any stockexchange or similar authority. /s/ Clyde C. Tuggle Clyde C. Tuggle Date: March 22, 2017POWER OF ATTORNEYThe undersigned, a director of Oxford Industries, Inc. (the “Company”), does hereby constitute and appoint each of Thomas E.Campbell, Mary Margaret Heaton and Suraj A. Palakshappa, or any one of them, my true and lawful attorneys-in-fact for me and in myname for the purpose of executing on my behalf in any and all capacities the Company’s Annual Report on Form 10-K for the fiscalyear ended January 28, 2017, or any amendment or supplement thereto, and causing such Annual Report or any such amendment orsupplement to be filed with the U.S. Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, asamended (the “Act”). In addition, each such attorney-in-fact shall have full power and authority to execute on my behalf in my capacityas a director of the Company subject to the reporting requirements of the Act, all Forms required to be filed by me under the Act,including Forms 4 and 5, in accordance with the Act and the rules and regulations promulgated thereunder. In addition, each suchattorney-in-fact shall have full power and authority to do and perform any and all acts on my behalf which may be necessary ordesirable to complete, execute and timely file any such Forms with the U.S. Securities and Exchange Commission and any stockexchange or similar authority. /s/ E. Jenner Wood III E. Jenner Wood III Date: March 22, 2017EXHIBIT 31.1CERTIFICATION PURSUANT TO RULE 13a-14(a) AND SECTION 302 OFTHE SARBANES-OXLEY ACT OF 2002I, Thomas C. Chubb III, certify that:1.I have reviewed this annual report on Form 10-K of Oxford Industries, Inc.;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by thisreport;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects thefinancial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;4.The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined inExchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others withinthose entities, particularly during the period in which this report is being prepared;(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles;(c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about theeffectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and(d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's mostrecent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likelyto materially affect, the registrant's internal control over financial reporting; and5.The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, tothe registrant's auditors and the audit committee of the registrant's Board of Directors (or persons performing the equivalent functions):(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which arereasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internalcontrol over financial reporting.Date:March 27, 2017 /s/ THOMAS C. CHUBB III Thomas C. Chubb III Chairman, Chief Executive Officer and President(Principal Executive Officer)EXHIBIT 31.2CERTIFICATION PURSUANT TO RULE 13a-14(a) AND SECTION 302 OFTHE SARBANES-OXLEY ACT OF 2002I, K. Scott Grassmyer, certify that:1.I have reviewed this annual report on Form 10-K of Oxford Industries, Inc.;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by thisreport;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects thefinancial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;4.The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined inExchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others withinthose entities, particularly during the period in which this report is being prepared;(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles;(c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about theeffectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and(d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's mostrecent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likelyto materially affect, the registrant's internal control over financial reporting; and5.The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, tothe registrant's auditors and the audit committee of the registrant's Board of Directors (or persons performing the equivalent functions):(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which arereasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internalcontrol over financial reporting.Date:March 27, 2017 /s/ K. SCOTT GRASSMYER K. Scott Grassmyer Executive Vice President — Finance, Chief Financial Officer and Controller(Principal Financial Officer)EXHIBIT 32CERTIFICATION PURSUANT TO18 U.S.C. SECTION 1350,AS ADOPTED PURSUANT TOSECTION 906 OF THE SARBANES-OXLEY ACT OF 2002In connection with the annual report of Oxford Industries, Inc. (the "Company") on Form 10-K ("Form 10-K") for the fiscal year ended January 28, 2017as filed with the Securities and Exchange Commission on the date hereof, I, Thomas C. Chubb III, Chairman, Chief Executive Officer and President of theCompany, and I, K. Scott Grassmyer, Executive Vice President — Finance, Chief Financial Officer and Controller of the Company, each certify, pursuant to18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:(1)The Form 10-K fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and(2)The information contained in the Form 10-K fairly presents, in all material respects, the financial condition and results of operations of theCompany./s/ THOMAS C. CHUBB III Thomas C. Chubb III Chairman, Chief Executive Officer and President(Principal Executive Officer) March 27, 2017 /s/ K. SCOTT GRASSMYER K. Scott Grassmyer Executive Vice President — Finance, Chief Financial Officer and Controller(Principal Financial Officer) March 27, 2017 

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