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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the fiscal year ended January 30, 2021
or
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from to
Commission File Number: 1-4365
OXFORD 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) 659-2424
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Common Stock, $1 par value
Trading Symbol
OXM
Name of each exchange on which registered
New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
NONE
Indicate by check mark if the registrant is a well-known seasoned issuer as defined in Rule 405 of the Securities Act. Yes ☒ No ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒
Indicate 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
preceding 12 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 ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging
growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the
Exchange Act.
Large accelerated filer ☐
Accelerated filer ☒
Non-accelerated filer ☐
Smaller reporting company ☐
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised
financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over
financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒
As of July 31, 2020, 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 by non-affiliates of the registrant (based upon the closing price for the common stock on the New York Stock Exchange on that date) was $510,615,213. For purposes of
this calculation only, 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 31, 2020) are excluded. This determination of affiliate status and the calculation of the shares held by any such person are not
necessarily conclusive determinations 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
Common Stock, $1 par value
Number of Shares Outstanding
as of March 19, 2021
16,930,735
Portions of our proxy statement for our Annual Meeting of Shareholders to be held on June 15, 2021 are incorporated by reference into Part III of this Form 10-K.
Documents Incorporated by Reference
Table of Contents
PART I
Item 1. Business
Item 1A. Risk Factors
Item 1B. Unresolved Staff Comments
Item 2.
Item 3.
Item 4. Mine Safety Disclosures
Properties
Legal Proceedings
PART II
Table of Contents
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Securities
Selected Financial Data
Item 6.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Item 8.
Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
Item 9A. Controls and Procedures
Item 9B. Other Information
Financial Statements and Supplementary Data
PART III
Item 10. Directors, Executive Officers and Corporate Governance
Item 11. Executive Compensation
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Item 13. Certain Relationships and Related Transactions, and Director Independence
Item 14. Principal Accounting Fees and Services
PART IV
Item 15. Exhibits, Financial Statement Schedules
Item 16. Form 10-K Summary
Signatures
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CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING STATEMENTS
Our 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-looking
statements attributable to us or persons acting on our behalf, to be covered by the safe harbor provisions for forward-
looking statements within the meaning of 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 Securities Exchange Act of 1934 (which Sections were
adopted as part of the Private Securities Litigation Reform Act of 1995). Such statements are subject to a number of risks,
uncertainties and assumptions including, without limitation, the impact of the ongoing coronavirus (COVID-19) pandemic,
including uncertainties about its scope and duration (including resurgence of COVID-19 cases), future store closures or
other restrictions (including reduced hours and capacity) due to government mandates, and the effectiveness of store re-
openings and reduction initiatives (including our ability to effectively renegotiate rent obligations), any or all of which may
also affect many of the following risks; demand for our products, which may be impacted by competitive conditions and/or
evolving consumer shopping patterns; macroeconomic factors that may impact consumer discretionary spending for
apparel and related products; the impact of any restructuring initiatives we may undertake in one or more of our business
lines, including the process, timing, costs, uncertainties and effects of our announced exit of the Lanier Apparel business;
costs of products as well as the raw materials used in those products; expected pricing levels; costs of labor; the timing of
shipments requested by our wholesale customers; expected outcomes of pending or potential litigation and regulatory
actions; changes in international, federal or state tax, trade and other laws and regulations, including the potential
imposition of additional duties; the ability of business partners, including suppliers, vendors, licensees and landlords, to
meet their obligations to us and/or continue our business relationship to the same degree in light of current or future
financial stress, staffing shortages, liquidity challenges and/or bankruptcy filings; weather; fluctuations and volatility in
global financial markets; retention of and disciplined execution by key management; the timing and cost of store and
restaurant openings and remodels, technology implementations and other capital expenditures; acquisition and disposition
activities, including our ability to timely recognize expected synergies from acquisitions; access to capital and/or credit
markets; the impact of tax and other legislative changes; changes in accounting standards and related guidance; and factors
that could affect our consolidated effective tax rate, including estimated Fiscal 2020 taxable losses eligible for carry back
under the CARES Act. Forward-looking statements reflect our expectations at the time such forward looking statements
are made, based on information available at such time, and are not guarantees of performance. Although we believe that the
expectations reflected 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 currently known to us or that we currently deem to be
immaterial, materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those
anticipated, estimated or projected. Important factors relating to these risks and uncertainties include, but are not limited to,
those described in Part 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 one should 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 required by
law.
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SUMMARY OF RISKS AFFECTING OUR BUSINESS
Our business is subject to numerous risks. The following summary highlights some of the risks you should
consider with respect to our business and prospects. This summary is not complete and the risks summarized below are not
the only risks we face. You should review and carefully consider the risks and uncertainties described in more detail in Part
I, Item 1A. Risk Factors, which includes a more complete discussion of the risks summarized below:
Risks Related to our Industry and Macroeconomic Conditions
●
The COVID-19 pandemic has had, and will continue to have, a material adverse effect on our business, revenues,
financial condition and results of operations.
●
Our business and financial condition are heavily influenced by general economic and market conditions which are
outside of our control.
●
We operate in a highly competitive industry and may face competition from companies with significantly greater
resources than us.
●
Failure to anticipate and adapt to changing fashion trends and consumer preferences could harm our reputation and
financial performance.
●
Our operations and those of our suppliers, vendors and wholesale customers may be affected by changes in weather
patterns, natural or man-made disasters, civil unrest, public health crises, war, terrorism or other catastrophes.
Risks Related to our Business Strategy and Operations
●
Our inability to execute our direct to consumer and portfolio-level strategies in response to shifts in consumer shopping
behavior could adversely affect our financial results and operations.
●
Failure to maintain the reputation or value of our brands could harm our business operations and financial condition.
●
We may be unable to grow our business through organic growth, which could have a material adverse effect on our
business, financial condition, liquidity and results of operations.
●
Failure to successfully execute our strategic initiative to improve Tommy Bahama’s operating performance may have an
adverse impact on our growth and profitability.
●
The acquisition of new businesses is inherently risky, and we cannot be certain that we will realize the anticipated
benefits of any acquisition.
●
The divestiture or discontinuation of businesses and product lines, such as our exit of the Lanier Apparel business, could
result in unexpected liabilities and adversely affect our financial condition, cash flows and results of operations.
●
The loss of one or more of our key wholesale customers, or a significant adverse change in a customer’s financial
position, could negatively impact our net sales and profitability.
●
Our business could be harmed if we fail to maintain proper inventory levels.
●
We are subject to risks associated with leasing real estate for our retail stores and restaurants.
●
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.
Risks Related to Cybersecurity and Information Technology
●
Cybersecurity attacks and/or breaches of information security or privacy could disrupt our operations, cause us to incur
additional expenses, expose us to litigation and/or cause us financial harm.
●
Our operations are reliant on information technology, and any interruption or other failure could have an adverse effect
on our business or results of operations.
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●
Reliance on outdated technology or failure to upgrade our information technology systems and capabilities could
impair the efficient operation of our business and our ability to compete.
●
Remote work arrangements could inhibit our ability to effectively operate our business and result in enhanced
cybersecurity risks.
Risks Related to our Sourcing and Distribution Strategies
●
Our reliance on third party producers in foreign countries to meet our production demands exposes us to risks that
could disrupt our supply chain, increase our costs and negatively impact our operations.
●
Any disruption or failure in our primary distribution facilities may materially adversely affect our business or
operations.
●
Fluctuations and volatility in the cost and availability of raw materials, labor and freight may materially increase our
costs.
●
Labor-related matters, including labor disputes, may adversely affect our operations.
●
Our international operations, including foreign sourcing, result in an exposure to fluctuations in foreign currency
exchange rates.
●
Our geographic concentration of retail stores, restaurants and wholesale customers exposes us to certain regional risks.
Risks Related to Regulatory, Tax and Financial Reporting Matters
●
Our business is subject to various federal, foreign, state and local laws and regulations, and the costs of compliance
with, or the violation of, such laws and regulations could have an adverse effect on our costs or operations.
●
Changes in international trade regulation could increase our costs and disrupt our supply chain.
●
Any violation or perceived violation of our codes of conduct or environmental and social compliance programs,
including by our manufacturers or vendors, could have a material adverse effect on our brands.
●
As a global apparel company, we may experience fluctuations in our tax liabilities and effective tax rate.
●
Impairment charges for intangible assets or goodwill could have a material adverse impact on our financial results.
●
Any failure to maintain liquor licenses or comply with applicable regulations could adversely affect the profitability of
our restaurant operations.
General Risks
●
Our business depends on our senior management and other key personnel, and failure to successfully attract, retain and
implement succession of our senior management and key personnel may have an adverse effect on our operations and
ability to execute our strategies.
●
We may be unable to protect our trademarks and other intellectual property.
●
We are subject to periodic litigation, which may cause us to incur substantial expenses or unexpected liabilities.
●
Our common stock price may be highly volatile, and we may be unable to meet investor and analyst expectations.
●
Other factors may have an adverse effect on our business, results of operations and financial condition.
As 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 the United
DEFINITIONS
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States Securities and Exchange Commission; "FASB" means the Financial Accounting Standards Board; "ASC" means the
FASB Accounting Standards Codification; "GAAP" means generally accepted accounting principles in the United States;
"TBBC" means The Beaufort Bonnet Company; "U.S. Tax Reform" means the United States Tax Cuts and Jobs Act and
“CARES Act” means the Coronavirus Aid, Relief and Economic Security Act. Additionally, the terms listed below reflect
the respective period noted:
Fiscal 2021
Fiscal 2020
Fiscal 2019
Fiscal 2018
Fiscal 2017
Fiscal 2016
Fiscal 2015
Fourth quarter Fiscal 2020
Third quarter Fiscal 2020
Second quarter Fiscal 2020
First quarter Fiscal 2020
Fourth quarter Fiscal 2019
Third quarter Fiscal 2019
Second quarter Fiscal 2019
First quarter Fiscal 2019
52 weeks ending January 29, 2022
52 weeks ended January 30, 2021
52 weeks ended February 1, 2020
52 weeks ended February 2, 2019
53 weeks ended February 3, 2018
52 weeks ended January 28, 2017
52 weeks ended January 30, 2016
13 weeks ended January 30, 2021
13 weeks ended October, 2020
13 weeks ended August 1, 2020
13 weeks ended May 2, 2020
14 weeks ended February 1, 2020
13 weeks ended November 2, 2019
13 weeks ended August 3, 2019
13 weeks ended May 4, 2019
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Item 1. Business
Overview
PART I
BUSINESS AND PRODUCTS
We are a leading branded apparel company that designs, sources, markets and distributes products bearing the
trademarks of our Tommy Bahama, Lilly Pulitzer and Southern Tide lifestyle brands and other brands. Tommy Bahama
and Lilly Pulitzer, in the aggregate, represent more than 85% of our net sales and 97% of our sales were in the United
States.
Our business strategy is to develop and market compelling lifestyle brands and products that evoke a strong
emotional response from our target consumers. We consider lifestyle brands to be those brands that have a clearly defined
and targeted point of view inspired by an appealing lifestyle or attitude. Furthermore, we believe lifestyle brands that create
an emotional connection, like Tommy Bahama, Lilly Pulitzer and Southern Tide, can command greater loyalty and higher
price points at retail and create licensing opportunities. We believe the attraction of a lifestyle brand depends on creating
compelling product, effectively communicating the respective lifestyle brand message and distributing products to
consumers where and when they want them.
We believe the principal competitive factors in the apparel industry are reputation, value, and image of brand
names; design of differentiated, innovative or otherwise compelling product; consumer preference; price; quality;
marketing; product fulfillment capabilities; and customer service. Our ability to compete successfully in the apparel
industry is directly related to our proficiency in foreseeing changes and trends in fashion and consumer preference and
presenting appealing products for consumers. Our design-led, commercially informed lifestyle brand operations strive to
provide exciting, differentiated products each season.
To further strengthen each lifestyle brand’s connections with consumers, we directly communicate with
consumers through digital and print media on a regular basis. We believe our ability to effectively communicate the
images, lifestyle and products of our brands and create an emotional connection with consumers is critical to the success of
our brands. Advertising for our brands often attempts to convey the lifestyle of the brand as well as a specific product.
During Fiscal 2020, 77% of our net sales were through our direct to consumer channels of distribution, which
consists of our 187 brand-specific full-price retail stores, our e-commerce websites, our 20 Tommy Bahama food and
beverage locations and our 35 Tommy Bahama outlet stores. During Fiscal 2020, our e-commerce, retail (including outlet)
and restaurant operations represented 43%, 27%, and 7%, respectively, of our net sales compared to 23%, 39%, and 8%,
respectively, in Fiscal 2019. Our direct to consumer operations provide us with the opportunity to interact directly with our
customers, present to them a broad assortment of our current season products and immerse them in the theme of the
lifestyle brand. We believe that presenting our products in a digital or physical setting specifically designed to showcase the
lifestyle on which the brands are based enhances the image of our brands.
Our full-price retail stores allow us the opportunity to carry a full line of current season merchandise, including
apparel, accessories and other products, all presented in an aspirational brand-specific atmosphere. We believe that our full-
price retail stores provide high visibility for our brands and products and allow us to 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 stores with
limited in-store promotional activities are good for our lifestyle brands and, in turn, enhance business with our wholesale
customers. While about one-half of our retail locations are located in resort or travel to destinations and states, we believe
there are also opportunities in both warmer and colder climates, as we believe the more important consideration is whether
the location attracts the affluent consumer that we are targeting.
Our e-commerce business continues to grow, with e-commerce sales in Fiscal 2020 totaling $324 million and
representing 43% of our net sales. Our growing e-commerce business is very profitable for our lifestyle brands as each
brand has average e-commerce order values in excess of $100 and a high full-price gross margin in the 70% range. This
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provides a significant amount of profit that is available to pay for the incremental picking, packing and freight expense
associated with an e-commerce sale.
We also operate 20 Tommy Bahama food and beverage locations, including 14 restaurants and six Marlin Bars,
generally adjacent to a Tommy Bahama full-price retail store location, which we believe further enhance the brand’s image
with consumers and 35 Tommy Bahama outlet stores, which play an important role in overall inventory and brand
management. Our e-commerce websites provide the opportunity to increase revenues by reaching a larger population of
consumers and at the same time allow our brands to provide a broader range of products.
The remaining 23% of our net sales in Fiscal 2020 was generated from our wholesale distribution channels. Our
wholesale operations include sales of our lifestyle brands, which complement our direct to consumer operations and
provide access to a larger group of consumers, and also includes the net sales of the Lanier Apparel operating group, which
we are exiting in the second half of Fiscal 2021. Our wholesale operations of our lifestyle brands include sales to various
specialty stores, Signature Stores, better department stores, multi-branded e-commerce retailers and other retailers. As we
seek to maintain the integrity of our lifestyle brands by limiting promotional activity in our retail stores and e-commerce
websites, we generally target wholesale customers that follow this same approach.
Each of our Tommy Bahama, Lilly Pulitzer, Southern Tide and Lanier Apparel operating groups operates in highly
competitive apparel markets. No single apparel firm or small group of apparel firms dominates the apparel industry, and
our direct competitors vary by operating group and distribution channel. The apparel industry is cyclical and very
dependent upon the overall level and focus of discretionary consumer spending, which changes as consumer preferences
and regional, domestic and international economic conditions change. Increasingly, consumers are choosing to spend less
of their discretionary spending on certain product categories, including apparel, while spending more on services and other
product categories. Further, negative economic conditions often have a longer and more severe impact on the apparel
industry than on other industries.
The retail apparel market is evolving very rapidly and in ways that are having a disruptive impact on traditional
fashion retailing. Many of the changes in the industry were accelerated or exacerbated by the COVID-19 pandemic. The
application of technology, including the internet and mobile devices, to fashion retail provides consumers increasing access
to multiple, responsive distribution platforms and an unprecedented ability to communicate directly with brands and
retailers. As a result, consumers have more information and greater control over information they receive as well as
broader, faster and cheaper access to goods than ever before. This is revolutionizing the way that consumers shop for
fashion and other goods, which continues to be evidenced by weakness and store closures for certain department stores and
mall-based retailers, decreased consumer retail traffic, a more promotional retail environment, expansion of off-price and
discount retailers, and a shift from bricks and mortar to internet purchasing. These changes may require that brands and
retailers approach their operations, including marketing and advertising, very differently than historical practices and may
result in increased operating costs and capital investments to generate growth or even maintain current sales levels.
Investments and Opportunities
While the evolution in the fashion retail industry (including as a result of the COVID-19 pandemic) presents
significant risks, especially for traditional retailers and others who fail or are unable to adapt, we believe it also presents a
tremendous opportunity for brands and retailers to capitalize on the changing consumer environment. We believe our
lifestyle brands have true competitive advantages in this new retailing paradigm, and we are leveraging technology to serve
our consumers when and where they want to be served. We continue to believe that our lifestyle brands, with their strong
emotional connections with consumers, are well suited to succeed and thrive in the long term while managing the various
challenges facing our industry, including the near-term challenges resulting from COVID-19. Further, each of our brands
aim to further enhance their customer-focused, dynamic, thriving, digitally-driven, mobile-centered, cross-channel
personalized and seamless shopping experience that recognizes and serves customers in their brand discovery and
purchasing habits of the future.
Meanwhile, we must be very diligent in our effort to avoid compromising the integrity of our brands by
maintaining or growing sales with wholesale customers that may not be aligned with our long-term strategy. This is
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particularly important with the challenges in the department store channel, which represented 9% of our consolidated net
sales in Fiscal 2020.
Even before the COVID-19 pandemic, an important initiative for us has been to increase the profitability of our
Tommy Bahama operating group, which is our largest operating group. Prior to the COVID-19 pandemic, we made
progress in recent years on this initiative, which remains a focus area for the long-term prospects of the business and
continues to focus on increasing gross margin and operating margin through: product cost reductions; selective price
increases; reducing inventory purchases; redefining our approach to inventory clearance; effectively managing controllable
and discretionary operating expenses; and taking a more conservative approach to retail store openings and lease renewals.
In order to maximize the success of each of our brands, we believe we must continue to invest in our lifestyle
brands to take advantage of their long-term growth opportunities. Future investments include capital expenditures primarily
related to the direct to consumer operations, such as technology enhancements, e-commerce initiatives and retail store and
food and beverage build-out for new, relocated or remodeled locations, as well as distribution center and administrative
office expansion initiatives.
While we believe we have significant opportunities to appropriately deploy our capital and resources in our
existing lifestyle brands, we will continue to evaluate opportunities to add additional lifestyle brands to our portfolio if we
identify appropriate targets that meet our investment criteria.
In Fiscal 2020, we made the decision to exit our Lanier Apparel business, which is expected to be completed
during the second half of Fiscal 2021. In Fiscal 2020 and Fiscal 2019, Lanier Apparel, which has primarily sold tailored
clothing products, represented 5% and 8%, respectively, of our consolidated net sales. This decision is in line with our
stated business strategy of developing and marketing compelling lifestyle brands and takes into consideration the increased
challenges faced by the Lanier Apparel business, many of which were magnified by the COVID-19 pandemic.
Important factors relating to certain risks, many of which are beyond our ability to control or predict, which could
impact our business are described in Part I, Item 1A. Risk Factors of this report.
COVID-19 Pandemic
The COVID-19 pandemic has had a significant effect on overall economic conditions and our operations and is
the primary reason for a 33% reduction in net sales and a significant net loss in Fiscal 2020, after years of profitable
operating results. While our mission remains the enhancement of long-term shareholder value, our focus during this crisis
has been (1) the health and well-being of our employees, customers and communities, (2) protecting the reputation, value
and image of our brands and (3) preserving liquidity.
Due to the COVID-19 pandemic, we saw reduced consumer traffic starting in early March 2020 and temporarily
closed all our retail and restaurant locations. We began reopening our stores and restaurants in early May 2020 with
additional stores and restaurants reopening throughout the Second Quarter of Fiscal 2020. We have reopened substantially
all of our direct to consumer locations using a phased approach in accordance with local government guidelines and with
additional safety protocols. Substantially all locations are experiencing reduced traffic, limited operating hours and
capacity, seating and other limitations, with such factors impacting individual locations differently. Certain retail stores and
restaurants, including several in Hawaii and California, were required to close again for certain periods in the Third and
Fourth Quarters of Fiscal 2020 after local jurisdictions reinstated some closure requirements. There can be no assurance
that additional closures will not occur as a result of any resurgence of COVID-19 cases and/or additional government
mandates or recommendations. Generally, locations with attached restaurants or Marlin Bars, in outdoor centers and in
drivable resort vacation destinations performed better than locations in indoor malls in Fiscal 2020. At the same time, the
shift from in-store shopping to online shopping has accelerated during the COVID-19 pandemic resulting in a 24% growth
in our e-commerce businesses during Fiscal 2020.
There is significant uncertainty as to the duration and severity of the pandemic as well as the associated business
disruption, impact on discretionary spending and restrictions on our ongoing operations. Thus, the ultimate
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impact of the pandemic cannot be reasonably estimated at this time. However, the COVID-19 pandemic is expected to
continue to have a material adverse impact on our business, results of operations, cash flows and financial condition in the
near-term due to the anticipated lower net sales from our bricks and mortar locations; reduced demand from our wholesale
customers, several of which filed for bankruptcy in 2020 or are undergoing restructurings or closures; the uncertainty as to
the continued strength of our brands’ e-commerce businesses during the pendency of the pandemic and thereafter; overall
changes in consumer spending habits and consumer confidence; any potential disruptions to our supply chain; and a
slowdown in the U.S. and global economies.
We took several actions in Fiscal 2020 to mitigate the impact of the COVID-19 pandemic on our business,
operations and liquidity, which included:
● we furloughed and laid off a significant number of our retail, restaurant and office employees;
● certain salaried employees, including our Chief Executive Officer, Chief Financial Officer and other
executives, took temporary reductions in base salary during Fiscal 2020;
● our Board of Directors elected to reduce its cash retainers for Fiscal 2020;
● we worked with our suppliers to cancel, delay or suspend future product deliveries;
● we worked with our wholesale customers to identify suitable changes to our business arrangements;
● we negotiated equitable rental arrangements with substantially all of our direct to consumer location
landlords, believing that the payment of rents for both the closure and subsequent periods is
inappropriate due to the impact of the COVID-19 pandemic, and are continuing those discussions with
some landlords;
● under the CARES Act, and other regulations in other countries, we obtained employee retention credits
for certain compensation paid to employees even while they were not working during the COVID-19
pandemic and have deferred the payment of the employer portion of FICA;
● we suspended, cancelled or deferred certain capital expenditure projects, reducing our capital
expenditures for Fiscal 2020;
● during much of Fiscal 2020, we had drawn down certain amounts on our U.S. Revolving Credit
Agreement to increase our cash position and preserve financial flexibility; and
● our Board of Directors reduced the rate of our dividend payable for Fiscal 2020.
Also, we established management committees, reporting to our Chief Executive Officer, to continue to monitor
the COVID-19 pandemic and its impact and are taking the necessary measures to protect the health and safety of our
employees and customers.
We anticipate that net sales in each of our Tommy Bahama, Lilly Pulitzer and Southern Tide operating groups will
continue to be negatively impacted by the COVID-19 pandemic in Fiscal 2021, with the impact being more pronounced in
the first half of the year and then beginning to rebound a little more in the second half of the year once more consumers are
vaccinated, begin to travel again or otherwise begin to return to a more normal way of life.
Given our net cash position as of January 30, 2021, substantial availability under our U.S. Revolving Credit
Agreement and expectation of positive cash flows from operations in Fiscal 2021, among other factors, we believe we have
adequate liquidity and the financial discipline to address the near-term challenges related to the COVID-19 pandemic and
to position ourselves well to thrive in the post-pandemic retail environment.
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Operating Groups
We identify our operating groups based on the way our management organizes the components of our business for
purposes of allocating resources and assessing performance. Our operating group structure reflects a brand-focused
management approach, emphasizing operational coordination and resource allocation across each brand’s direct to
consumer, wholesale and licensing operations, as applicable. Our business has historically been operated primarily through
our Tommy Bahama, Lilly Pulitzer, Southern Tide and Lanier Apparel operating groups. In Fiscal 2020, we made the
decision to exit our Lanier Apparel business, which is expected to be completed during the second half of Fiscal 2021. For
additional information about each of our operating groups, see Part II, Item 7. Management’s Discussion and Analysis of
Financial Condition and Results of Operations, and Note 2 to our consolidated financial statements, each included in this
report. The table below presents certain financial information about each of our operating groups, as well as Corporate and
Other (in thousands).
Net Sales
Tommy Bahama
Lilly Pulitzer
Southern Tide
Lanier Apparel
Corporate and Other
Consolidated net sales
Operating Income (Loss)
Tommy Bahama
Lilly Pulitzer
Southern Tide (1)
Lanier Apparel
Corporate and Other (2)
Consolidated Operating Income
Fiscal 2020 Fiscal 2019 Fiscal 2018
$ 419,817
231,078
34,664
38,796
24,478
$ 748,833
$ 676,652
284,700
46,409
95,200
19,829
$ 1,122,790
$ 675,358
272,299
45,248
99,904
14,657
1,107,466
$
$ (53,310) $
27,702
(64,801)
(26,654)
(6,786)
$ (123,849) $
53,207
51,795
5,554
1,953
(18,834)
93,675
53,139
47,239
5,663
6,000
(21,449)
90,592
(1) Southern Tide included a $60 million impairment charge for goodwill and intangible assets in Fiscal 2020, with no
such charges in Fiscal 2019 and Fiscal 2018.
(2) Corporate and Other included a last-in, first-out (LIFO) accounting credit of $9 million, charge of $1 million and
charge of $1 million in Fiscal 2020, Fiscal 2019 and Fiscal 2018, respectively.
Tommy Bahama
Tommy Bahama designs, sources, markets and distributes men’s and women’s sportswear and related products.
Tommy Bahama’s typical consumer is older than 45 years old, has a household annual income in excess of $100,000, lives
in or travels to warm weather and resort locations and embraces a relaxed and casual approach to daily living. Tommy
Bahama products can be found in our Tommy Bahama stores and on our Tommy Bahama e-commerce website,
tommybahama.com, as well as at better department stores, independent specialty stores and multi-branded e-commerce
retailers. We also operate Tommy Bahama restaurants and license the Tommy Bahama name for various product categories.
During Fiscal 2020, 95% of Tommy Bahama’s sales were to customers within the United States, with the remaining sales
in Canada and Australia.
We believe that the attraction to our consumers of the Tommy Bahama brand, which was founded in 1992, is a
reflection of our efforts over many years to maintain appropriate quality and design of our Tommy Bahama apparel,
accessories and licensed products, limit the distribution of Tommy Bahama products to a select tier of retailers, and
effectively communicate the relaxed and casual Tommy Bahama lifestyle. We expect to continue to follow this approach
for the brand in the future.
We believe there are ample opportunities to expand the direct to consumer reach of the Tommy Bahama brand in
the future, while maintaining its historically select distribution. In order to take advantage of opportunities for long-
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term growth, we must continue to invest in the Tommy Bahama brand. These investments include capital expenditures and
ongoing expenses to enhance e-commerce and other technology capabilities; open new stores and restaurants; remodel
and/or relocate existing stores and restaurants; maintain and upgrade our distribution and other facilities; and enhance our
marketing efforts to communicate the lifestyle to existing and prospective consumers.
Even before the COVID-19 pandemic, an important initiative for us has been to increase the profitability of the
Tommy Bahama operating group. Prior to the COVID-19 pandemic, we made progress in recent years on this initiative,
which remains a focus area for the long-term prospects of the business and continues to focus on increasing gross margin
and operating margin through: product cost reductions; selective price increases; reducing inventory purchases; redefining
our approach to inventory clearance; effectively managing controllable and discretionary operating expenses; and taking a
more conservative approach to retail store openings and lease renewals.
Direct to Consumer Operations
A key component of our Tommy Bahama strategy is to operate our own stores, restaurants and e-commerce
websites, which we believe permits us to develop and build brand awareness by presenting our products in a setting
specifically designed to showcase the aspirational lifestyle on which the products are based. Our Tommy Bahama direct to
consumer channels, which consist of retail store, e-commerce and restaurant operations, in the aggregate, represented 84%
and 80% of Tommy Bahama’s net sales in Fiscal 2020 and Fiscal 2019, respectively. Retail store, e-commerce and
restaurant net sales accounted for 37%, 36% and 11%, respectively, of Tommy Bahama’s net sales in Fiscal 2020 compared
to 48%, 20% and 12%, respectively, in Fiscal 2019.
Our direct to consumer strategy for the Tommy Bahama brand includes locating and operating full-price retail
stores in upscale malls, lifestyle shopping centers, resort destinations and brand-appropriate street locations. Generally, we
seek to locate our full-price retail stores in shopping areas and malls that have high-profile or upscale consumer brand
adjacencies. As of January 30, 2021, the majority of our Tommy Bahama full-price retail stores were in street-front
locations or lifestyle centers with the remainder primarily in regional indoor malls, with a number of those regional indoor
locations in resort travel destinations. We believe that we have opportunities for continued direct to consumer sales growth
for our Tommy Bahama women’s business, which represented 29% of sales in our full-price direct to consumer operations
in Fiscal 2020.
Disposal of discontinued or end of season inventory is an ongoing part of any apparel business and Tommy
Bahama uses its outlet stores, sales to off-price retailers and selected initial markdowns in our full-price retail stores and on
our e-commerce websites to sell its end of season or excess inventory. Our Tommy Bahama outlet stores, which generated
7% and 9% of our total Tommy Bahama net sales in Fiscal 2020 and Fiscal 2019, respectively, are generally located in
outlet shopping centers that include other upscale retailers and serve an important role in overall inventory management by
often allowing us to sell discontinued and out-of-season products at better prices than are otherwise available from outside
parties. We believe that this approach has helped us protect the integrity of the Tommy Bahama brand by allowing our full-
price retail stores to limit promotional activity while controlling the distribution of discontinued and out-of-season product.
To supplement the clearance items sold in Tommy Bahama outlets, we merchandise our Tommy Bahama outlets with some
made-for products. We anticipate that we would generally expect to operate one outlet for approximately every three full-
price retail stores.
As of January 30, 2021, we operated 20 Tommy Bahama food and beverage locations including 14 restaurants and
six Marlin Bar locations, generally adjacent to a Tommy Bahama full-price retail store location. These retail-food and
beverage locations, which generated approximately 25% of Tommy Bahama’s net sales in Fiscal 2019, provide us with the
opportunity to immerse customers in the ultimate Tommy Bahama experience. We do not anticipate that the majority of our
retail locations will have an adjacent food and beverage location; however, we have determined that an adjacent food and
beverage location can further enhance the image or exposure of the brand in select, high-profile, brand appropriate
locations. The net sales per square foot in our domestic full-price retail stores that are adjacent to a food and beverage
location have historically been twice the sales per square foot of our other domestic full-price retail stores. We believe that
the customer immersing themselves into the Tommy Bahama lifestyle by having a meal or a drink at the Tommy Bahama
food and beverage location and visiting the adjacent retail store may entice the customer to purchase additional Tommy
Bahama merchandise and potentially provide a memorable consumer experience that further
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enhances the relationship between Tommy Bahama and the consumer. The Marlin Bar concept, like our traditional
restaurant locations, is adjacent to one of our retail locations and serves food and beverages, but in a smaller space and with
food options more focused on small plate offerings rather than entrees. We believe that with the smaller footprint, reduced
labor requirements and lower required capital expenditure for build-out, the Marlin Bar concept provides us with the long-
term potential for opening retail-food and beverage locations in sites that otherwise may not have been suitable or brand
appropriate for one of our traditional retail-restaurant locations.
The table below provides certain information regarding Tommy Bahama retail stores and restaurants operated by
us as of January 30, 2021.
Florida
California
Texas
Hawaii
Nevada
New York
Other states
Total domestic
Canada
Total North America
Australia
Total
Average square feet per store (2)
Total square feet at year end (2)
Full‑Price Retail
Stores
Outlet Stores
Retail‑Food & Beverage
Locations (1)
Total
18
15
6
5
4
2
38
88
7
95
10
105
3,400
360,000
6
4
4
1
1
2
13
31
2
33
2
35
4,700
165,000
8
3
2
4
1
1
1
20
—
20
—
20
4,300
85,000
32
22
12
10
6
5
52
139
9
148
12
160
(1) Consists of 14 traditional format retail-restaurant locations and six Marlin Bar locations.
(2) Square feet for retail-restaurant locations consists of retail square footage and excludes square feet used in the
associated restaurant operations.
During Fiscal 2020 Florida, California, Texas and Hawaii represented 35%, 17%, 10% and 7%, respectively, of
our Tommy Bahama retail and restaurant sales, while in Fiscal 2019, Florida, California, Texas and Hawaii represented
27%, 17%, 9% and 12%, respectively, of our Tommy Bahama retail and restaurant sales.
The table below reflects the changes in store count for Tommy Bahama locations during Fiscal 2020.
Open as of beginning of fiscal year
Opened
Marlin Bar conversion
Closed
Open as of end of fiscal year
Full‑Price Retail
Stores
Outlet Stores
Retail‑Food & Beverage
Locations
Total
111
1
(2)
(5)
105
35
1
—
(1)
35
16
2
2
—
20
162
4
—
(6)
160
In future periods, we anticipate that many of our new store openings will be Marlin Bar locations that are new
locations or replace existing full-price retail store or traditional restaurant locations. Currently, we have two openings
scheduled for Fiscal 2021 including the Marlin Bar at Fashion Valley in San Diego, which opened in February 2021, and
the conversion of the Tommy Bahama retail-restaurant location in Las Vegas to a Marlin Bar, which is scheduled to open in
the second half of the year. We continue to look for other appropriate locations for retail stores and Marlin Bars. We
believe that in Fiscal 2021, we may close a limited number of locations.
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The operation of full-price retail stores, outlet stores, Marlin Bars and retail-restaurant locations requires a greater
amount of initial capital investment than wholesale operations, as well as greater ongoing operating costs. 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 and the cost of our Marlin Bar locations has been approximately $3 million;
however, the cost of a restaurant and Marlin Bar can vary significantly for certain locations. For most of our retail stores
and our retail-food and beverage locations, the landlord provides certain incentives to fund a portion of our capital
expenditures.
Additionally, we incur capital expenditure costs related to periodic remodels of existing stores, particularly when
we renew or extend a lease beyond the original lease term, or otherwise determine that a remodel of a store is appropriate.
We 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 the previous store. Alternatively, when a lease expires we may decide to close the store rather than
relocating the store to another location or renewing the lease. The capital cost of store relocations is generally comparable
to the costs of opening a new full-price retail store or outlet store.
In addition to our full-price retail stores and outlet stores, our direct to consumer approach includes various e-
commerce websites, including the tommybahama.com website. During Fiscal 2020 and Fiscal 2019, e-commerce sales
represented 36% and 20%, respectively, of Tommy Bahama’s net sales. Our Tommy Bahama website allows consumers 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 wholesale operations.
Wholesale Operations
To complement our direct to consumer operations and have access to a larger group of consumers, we continue to
maintain our wholesale operations for Tommy Bahama. Tommy Bahama’s wholesale customers include better department
stores, specialty stores and multi-brand e-commerce retailers that generally follow a retail model approach with limited
discounting. We value our long-standing relationships with our wholesale customers and are committed to working with
them to enhance the success of the Tommy Bahama brand within their stores.
Wholesale sales for Tommy Bahama accounted for 16% and 20% of Tommy Bahama’s net sales in Fiscal 2020
and Fiscal 2019, respectively. Approximately 9% of Tommy Bahama’s net sales reflects sales to major department stores
with our remaining wholesale sales primarily sales to specialty stores. During Fiscal 2020, 12% of Tommy Bahama’s net
sales were to Tommy Bahama’s 10 largest wholesale customers, with its largest customer representing less than 5% of
Tommy Bahama’s net sales.
We believe that the integrity and continued success of the Tommy Bahama brand, including its direct to consumer
operations, is dependent, in part, upon controlled wholesale distribution, with careful selection of the retailers through
which Tommy Bahama products are sold. As a result of our approach to limiting our wholesale distribution, we believe that
sales growth in our men’s apparel wholesale business may be somewhat limited in the long-term. However, we believe that
we may have opportunities for wholesale sales increases for our Tommy Bahama women’s business in the future, with its
appeal evidenced by its performance in our full-price retail stores and e-commerce websites.
Lilly Pulitzer
Lilly Pulitzer designs, sources, markets and distributes upscale collections of women’s and girl’s dresses,
sportswear and related products. The Lilly Pulitzer 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 resort lifestyle. The brand is somewhat unique among
women’s brands in that it has demonstrated multi-generational appeal, including among young women in college or
recently graduated from college; young mothers with their daughters; and women who are not tied to the academic
calendar. Lilly Pulitzer products can be found in our owned Lilly Pulitzer stores, in Lilly Pulitzer Signature Stores, which
are described below, and on our Lilly Pulitzer website, lillypulitzer.com, as well as in better department and
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independent specialty stores. During Fiscal 2020, 50% and 33% of Lilly Pulitzer’s net sales were for women’s sportswear
and dresses, respectively, with the remaining sales consisting of Lilly Pulitzer accessories, including scarves, bags, jewelry
and belts, children’s apparel, footwear and licensed products.
We believe that there are opportunities to expand the reach of the Lilly Pulitzer brand in the future, while at the
same time maintaining its historically select distribution. We believe that in order to take advantage of opportunities for
long-term growth, we must continue to invest in the Lilly Pulitzer brand. These investments include enhancing e-commerce
and other technology capabilities; opening and operating full-price retail stores; remodeling and/or relocating existing
stores; and increasing headcount, advertising and other functions to support the business. While we believe that these
investments will generate long-term benefits, the investments may have a short-term negative impact on Lilly Pulitzer’s
operating margin, particularly if there is insufficient sales growth to absorb the incremental costs in a particular year.
We believe the attraction of the Lilly Pulitzer brand to our consumers is a reflection of years of maintaining
appropriate quality and design, restricting the distribution of Lilly Pulitzer products to a select tier of retailers and
effectively communicating the message of Lilly Pulitzer’s optimistic Palm Beach resort chic lifestyle. We believe this
approach to quality, design, distribution and communication has been critical in allowing us to achieve the current retail
price points for Lilly Pulitzer products.
Direct to Consumer Operations
Lilly Pulitzer’s direct to consumer distribution channel, which consists of full-price retail store and e-commerce
operations, represented 84% and 79% of Lilly Pulitzer’s net sales in Fiscal 2020 and Fiscal 2019, respectively. A key
element of our Lilly Pulitzer strategy is the lillypulitzer.com website, which represented 64% and 38% of Lilly Pulitzer’s
net sales in Fiscal 2020 and Fiscal 2019, respectively. Another key component of our Lilly Pulitzer direct to consumer
strategy is to operate our own Lilly Pulitzer stores, which represented 20% and 41% of Lilly Pulitzer’s net sales in Fiscal
2020 and Fiscal 2019, respectively.
The Lilly Pulitzer e-commerce business has experienced significant growth in recent years, and we anticipate that
the net sales growth of the e-commerce business will remain strong in the future. We also use the Lilly Pulitzer website as
an effective means of liquidating discontinued or out-of-season inventory in a brand appropriate manner and at gross
margins in excess of 40% via e-commerce flash clearance sales. These sales are brand appropriate events that create a
significant amount of excitement with loyal Lilly Pulitzer consumers, who are looking for an opportunity to purchase Lilly
Pulitzer products at a discounted price. These e-commerce flash clearance sales typically run for three days during the
summer clearance period in September and for two days during the post-holiday clearance period in January, allowing the
Lilly Pulitzer website to generally remain full-price for the remaining 360 days of the year. During Fiscal 2020,
approximately one-third of Lilly Pulitzer’s e-commerce sales were e-commerce flash clearance sales. In addition to the e-
commerce flash clearance events, in Fiscal 2020, we did have a few select promotional events to sell inventory that had
previously been purchased for sale in our retail stores during the year.
Our Lilly Pulitzer retail stores permit us to develop and build brand awareness by presenting Lilly Pulitzer
products in a setting specifically designed to showcase the aspirational lifestyle on which they are based. Our retail store
strategy for the Lilly Pulitzer brand includes operating full-price retail stores in higher-end lifestyle shopping centers and
malls, resort destinations and brand-appropriate street locations. As of January 30, 2021, about 40% of our Lilly Pulitzer
stores were located in outdoor regional lifestyle centers and approximately one-third of our Lilly Pulitzer stores were
located in indoor regional malls, with the remaining locations in resort or street locations. In certain seasonal locations such
as Nantucket and Watch Hill, our stores are only open during the resort season. Additionally, we may open temporary pop-
up stores in certain locations.
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The table below provides certain information regarding Lilly Pulitzer full-price retail stores as of January 30,
2021.
Florida
Massachusetts
Virginia
North Carolina
Ohio
Texas
Other
Total
Average square feet per store
Total square feet at year-end
Number of
Full‑Price Retail
Stores
18
7
5
4
3
3
19
59
2,500
150,000
During Fiscal 2020 and Fiscal 2019, 51% and 43%, respectively, of Lilly Pulitzer’s retail sales were in stores
located in Florida with no other state generating more than 10% of retail sales. The table below reflects the changes in
store count for Lilly Pulitzer stores during Fiscal 2020.
Open as of beginning of fiscal year
Opened
Closed
Open as of end of fiscal year
Full‑Price Retail
Stores
61
—
(2)
59
Currently, we are negotiating leases for certain retail store locations and will continue to look for other appropriate
locations. We believe that in Fiscal 2021, we may close a limited number of locations. 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 anticipate that most future full-price retail store openings will generally be 2,500 square feet or less on
average; however, the determination of actual size of the store will depend on a variety of criteria.
In addition to new store openings, we also incur capital expenditure costs related to remodels or expansions of
existing stores, particularly when we renew or extend a lease beyond the original lease term, or otherwise determine that a
remodel of a store is appropriate. We may also incur capital expenditures if we determine it is appropriate to relocate a
store to a new location. The capital cost of store relocations, if any, will generally be comparable to the cost of opening a
new store.
Wholesale Operations
To complement our direct to consumer operations and have access to a larger group of consumers, we continue to
maintain our wholesale operations for Lilly Pulitzer. These wholesale operations are primarily with Signature Stores,
independent specialty stores, better department stores and multi-branded e-commerce retailers that generally follow a retail
model approach with limited discounting. During Fiscal 2020 and Fiscal 2019, approximately 16% and 21%, respectively,
of Lilly Pulitzer’s net sales were sales to wholesale customers. During Fiscal 2020, about one-third of Lilly Pulitzer’s
wholesale sales were to Lilly Pulitzer’s Signature Stores, one-fourth of Lilly Pulitzer’s wholesale sales were to specialty
stores and about one-fifth of Lilly Pulitzer’s wholesale sales, or less than 5% of Lilly Pulitzer’s net sales, were to
department stores. The remaining wholesale sales were primarily to national accounts, including on-line retailers, and off-
price retailers. Lilly Pulitzer’s net sales to its 10 largest wholesale customers represented 9% of Lilly Pulitzer’s net sales in
Fiscal 2020 with its largest customer representing less than 5% of Lilly Pulitzer’s net sales.
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An important part of Lilly Pulitzer’s wholesale distribution is sales to Signature Stores. For these stores, we enter
into agreements whereby we grant the other party the right to independently operate one or more stores as a Lilly Pulitzer
Signature Store, subject to certain conditions, including designating substantially all floor space specifically for Lilly
Pulitzer products and adhering to certain trademark usage requirements. 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 30, 2021, there
were 44 Lilly Pulitzer Signature Stores.
We believe that the integrity and continued success of the Lilly Pulitzer brand, including its direct to consumer
operations, is dependent, in part, upon controlled wholesale distribution with careful selection of the retailers through
which Lilly Pulitzer products are sold. We continue to value our long-standing relationships with our wholesale customers
and are committed to working with them to enhance the success of the Lilly Pulitzer brand within their stores.
Southern Tide
We acquired the Southern Tide lifestyle apparel brand in Fiscal 2016. Southern Tide designs, sources, markets and
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 design elements 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 classic design, vibrant
colors and a great fit and an affection for the coast. Southern Tide products can be found at independent specialty retailers,
better department stores, Southern Tide Signature Stores which are described below, our Southern Tide website,
southerntide.com, and our three Southern Tide retail stores. During Fiscal 2020, 64% of Southern Tide’s sales were
wholesale sales, 32% of Southern Tide’s sales were e-commerce sales and 4% of Southern Tide’s sales were retail store
sales.
We believe that there is significant opportunity to expand the reach of the Southern Tide brand by further
increasing the wholesale presence of the brand and growing the direct to consumer business including e-commerce and
retail sales. We believe that wholesale growth and expansion will be at a prudent pace as we believe that the integrity and
success of the Southern Tide brand is dependent, in part, upon controlled wholesale distribution with careful selection of
the retailers through which Southern Tide products are sold. We anticipate that the direct to consumer operations will grow
at a faster pace than wholesale operations fueled by the addition of more owned Southern Tide retail stores in future years,
as well as continued growth in our Southern Tide e-commerce operations. We opened the first owned Southern Tide retail
store in the Fourth Quarter of Fiscal 2019, and had two additional store openings in Fiscal 2020.
We believe that in order to take advantage of opportunities for long-term growth, we must continue to invest in the
Southern Tide brand. While we believe that these investments will generate long-term benefits, the investments may have a
short-term negative impact on Southern Tide’s operating margin given the current size of the Southern Tide business.
Wholesale Operations
At this time, Southern Tide’s business is predominantly a wholesale business with sales to independent specialty
stores, department stores and Southern Tide Signature Stores. Southern Tide’s wholesale operations provide an opportunity
to grow our business and have access to a large group of consumers. During Fiscal 2020, approximately 16% and 7% of
Southern Tide’s sales were to department stores and Southern Tide Signature Stores, respectively. Southern Tide’s net sales
to its 10 largest wholesale customers represented 30% of Southern Tide’s net sales in Fiscal 2020, with its largest customer
representing 12% of Southern Tide’s net sales.
A component of Southern Tide’s wholesale distribution is sales to Signature Stores. For Signature Stores, we enter
into license agreements whereby 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 floor space specifically
for Southern Tide products and adhering to certain trademark usage requirements. We sell products to these Southern Tide
Signature Stores on a wholesale basis and do not receive royalty income associated with these sales. As of
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January 30, 2021, there were 18 Signature Stores including stores in Florida, Massachusetts, South Carolina and North
Carolina. We anticipate some additional Signature Stores opening in the future. In addition, we believe there is opportunity
for wholesale growth for Southern Tide in women’s apparel, which represented 18% of Southern Tide’s net sales in Fiscal
2020.
Direct to Consumer Operations
A key component of our Southern Tide growth strategy is to expand our direct to consumer operations, which
consists of the Southern Tide website and retail store operations. The Southern Tide website markets a full line of
merchandise, including apparel and accessories, all presented in a manner intended to enhance the Southern Tide image,
brand awareness and acceptance. We believe our Southern Tide website enables us to stay close to the needs and
preferences of consumers. In addition to off-price retailers, we also use the Southern Tide website as a means of liquidating
discontinued or out-of-season inventory in a brand appropriate manner. During the year, we have a number of e-commerce
clearance sales events, which are typically in industry end of season promotional periods.
In the Fourth Quarter of Fiscal 2019, we opened our first owned Southern Tide retail store in Jacksonville,
Florida. In Fiscal 2020, we opened retail stores in Fort Lauderdale and Destin, Florida. In Fiscal 2021, we plan to open a
retail store in Islamadora, Florida and we continue to look at additional opportunities for locations that may open later in
the year. In the last couple of years, we prepared for these store openings and roll-out by supplementing the Southern Tide
leadership team with retail management experience.
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 anticipate that most future full-price retail store openings will
generally be approximately 2,000 square feet on average; however, the determination of actual size of the store will depend
on a variety of criteria. We anticipate that for most of our full-price retail stores, the landlord will provide certain incentives
to fund a portion of our capital expenditures.
Lanier Apparel
In Fiscal 2020, we made the decision to exit our Lanier Apparel business, which is expected to be completed
during the second half of Fiscal 2021. This decision is in line with our stated business strategy of developing and marketing
compelling lifestyle brands and takes into consideration the increased challenges faced by the Lanier Apparel business,
many of which were magnified by the COVID-19 pandemic.
Lanier Apparel designs, sources and distributes branded and private label men’s apparel, primarily consisting of
tailored clothing and casual pants, across a wide range of price points, but primarily at moderate price points. The moderate
price point tailored clothing market has been an extremely competitive sector for years, with significant retail competition
as well as increasing gross margin pressures due to retail sales price pressures and production cost increases.
The majority of our Lanier Apparel products were historically sold under certain trademarks licensed to us by
third parties including Kenneth Cole®, Dockers®, Cole Haan® and Nick Graham®. Additionally, we designed and
marketed products for our owned Billy London®, Oxford®, and Strong Suit® brands. In addition to these branded
businesses, Lanier Apparel designed and sourced private label apparel products for certain customers. Lanier Apparel
products are sold through large retailers including department stores, discount and off-price retailers, warehouse clubs,
national chains, specialty retailers, multi-branded e-commerce retailers and others.
In Lanier Apparel, we historically had long-standing relationships with some of the United States’ largest retailers,
including department stores which represented approximately 30% of Lanier Apparel’s sales in Fiscal 2020. Lanier
Apparel’s three largest customers represented 20%, 15% and 10%, respectively, of Lanier Apparel’s net sales in Fiscal
2020, while sales to Lanier Apparel’s 10 largest customers represented more than 77% of Lanier Apparel’s net sales during
Fiscal 2020. Approximately 70% of Lanier Apparel’s product purchases were from manufacturers located in Vietnam, with
a significant concentration of purchases from just a few manufacturers.
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Corporate and Other
Corporate and Other is a reconciling category for reporting purposes and includes our corporate offices,
substantially all financing activities, the elimination of inter-segment sales and any other items that are not allocated to the
operating groups including LIFO accounting adjustments. Because our LIFO inventory pool does not correspond to our
operating group definitions, LIFO inventory accounting adjustments are not allocated to the operating groups. Corporate
and Other also includes the operations of other businesses which are not included in our four operating groups. The
operations of TBBC, Duck Head® and our Lyons, Georgia distribution center are included in Corporate and Other. TBBC
designs, sources, markets and distributes premium childrenswear including bonnets, hats, apparel, swimwear and
accessories through the TBBC e-commerce website, thebeaufortbonnetcompany.com, as well as wholesale specialty
retailers. Duck Head designs, sources, markets and distributes premium men’s apparel including pants, shorts and tops
through the Duck Head e-commerce website, duckhead.com, as well as wholesale specialty retailers.
TRADEMARKS
We own trademarks, many of which are very important and valuable to our business including Tommy Bahama,
Lilly Pulitzer and Southern Tide. Generally, our trademarks are subject to registrations and pending applications throughout
the world for use on apparel and, in some cases, apparel-related products, accessories, home furnishings and beauty
products, as well as in connection with retail services. We continue to evaluate our worldwide usage and registration of our
trademarks. In general, trademarks remain valid and enforceable as long as the trademarks are used in connection with our
products and services in the relevant jurisdiction and the required registration renewals are filed. Important factors relating
to risks associated with our trademarks include, but are not limited to, those described in Part I, Item 1A. Risk Factors.
ADVERTISING AND MARKETING
During Fiscal 2020 and Fiscal 2019, we incurred $50 million and $56 million, respectively of advertising expense.
Advertising and marketing are an integral part of the long-term strategy for our lifestyle brands, and we therefore devote
significant resources to these efforts. Thus, we believe that it is very important that our brands communicate regularly with
consumers about product offerings or other brand events in order to maintain and strengthen connections with consumers.
Our advertising emphasizes the respective brand’s image and lifestyle and attempts to engage individuals within the target
consumer demographic and guide them on a regular basis to our e-commerce websites, retail stores or wholesale
customers’ stores and websites in search of our products.
We increasingly utilize digital marketing, social media and email, as well as direct mail, to interact with
consumers. Our marketing may also include sponsorships, collaborations, and co-branding initiatives, which may be for a
particular cause or non-profit organization that is expected to resonate with target consumers, and traditional media such as
catalogs, print and other correspondence with consumers.
We vary our engagement tactics to elevate the consumer experience as we attract new consumers, drive
conversion, build loyalty, activate consumer advocacy and address the transformation of consumer shopping behaviors.
Our creative marketing teams design and produce imagery and content, social media strategies, email and print campaigns
designed to drive traffic to our direct to consumer locations and websites as well as to increase influencer amplification. We
attempt to increase our brand awareness through a strategic emphasis on technology and continuing to elevate our digital
presence which encompasses e-commerce, mobile e-commerce, digital media, social media and influencer marketing. We
are also investing in analytical capabilities to promote a more personalized experience across our distribution channels. We
continue to innovate to better meet consumer online shopping preferences (e.g. loyalty, ratings and reviews and mobile
phone applications) and build brand equity. The COVID-19 pandemic has had a significant impact on consumer behaviors
and has accelerated the trend for a digital first consumer. This provided a catalyst for accelerating the implementation of
new direct to consumer business models and consumer engagement programs, such as selling through social media.
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Marketing initiatives in our direct to consumer operations may include special event promotions, including loyalty
award card, Flip Side, Friends & Family and gift with purchase events and a variety of public relations activities designed
to create awareness of our brands and products, drive traffic to our websites and stores, convert new consumers and
increase demand and loyalty. Our various initiatives are effective in increasing online and in-store traffic resulting in the
proportion of our sales that occur during our marketing initiatives increasing in recent years, which puts some downward
pressure on our direct to consumer gross margins.
We believe that highly visible full-price retail store locations with creative design, broad merchandise selection
and brand appropriate visual presentation are key enticements for customers to visit and buy merchandise. We believe that
full-price retail stores attract new consumers and enhance the shopping experience of our existing customers, which will
increase consumer brand loyalty, our net sales and sales of our products for our wholesale customers.
For certain of our wholesale customers, we may also provide point-of-sale materials and signage to enhance the
presentation of our products at their retail locations and/or participate in cooperative advertising programs.
PRODUCT DESIGN
We believe the principal competitive factors in the apparel industry are the reputation, value, and image of brand
names; design of differentiated, innovative or otherwise compelling product; consumer preference; price; quality;
marketing; product fulfillment capabilities; and customer service. Our ability to compete successfully in the apparel
industry is directly related to our proficiency in foreseeing changes and trends in fashion and consumer preference and
presenting appealing products for consumers. Our design-led, commercially informed lifestyle brand operations strive to
provide exciting, differentiated products each season.
Each of our lifestyle brands’ products are designed and developed by dedicated brand-specific teams who focus
on the target consumer for the respective brand. The design process includes feedback from buyers, consumers and sales
agents, along with market trend research. Our apparel products generally incorporate fabrics made of cotton, silk, linen,
nylon, leather, tencel and other natural and man-made fibers, or blends of two or more of these materials.
PRODUCT SOURCING AND CORPORATE SOCIAL RESPONSIBILITY
We intend to maintain flexible, diversified, cost-effective sourcing operations that provide high-quality apparel
and related products. Our operating groups, either internally, using in-house employees located in the United States and/or
Hong Kong, or through the use of third party buying agents, manage the production and sourcing of substantially all of our
apparel and related products from non-exclusive, third party producers located in foreign countries.
Although we place a high value on long-term relationships with our suppliers of apparel and related products and
have used many of our suppliers for a number of years, generally we do not have long-term contracts with our suppliers.
Instead, we conduct business on an order-by-order basis. Thus, we compete with other companies for the production
capacity of independent manufacturers. We believe that this approach provides us with the greatest flexibility in identifying
the appropriate manufacturers while considering quality, cost, timing of product delivery and other criteria. We generally
acquire products sold in our restaurant operations from various third party domestic suppliers. During Fiscal 2020, no
individual third party manufacturer, licensee or other supplier provided more than 10% of our product purchases in total or
for our Tommy Bahama and Lilly Pulitzer operating groups, while the purchases for our smaller operating groups and
businesses each had certain vendors that provided more than 10% of product purchases. During Fiscal 2020, we purchased
our products from approximately 300 suppliers with the 10 largest suppliers providing approximately 25% of our product
purchases.
The production of our apparel and related products has a significant concentration in Asia. During Fiscal 2020
approximately 35% and 22%, compared to 49% and 18% for Fiscal 2019, of our apparel and related products, excluding
restaurant products, acquired directly by us or via buying agents, were from producers located in China and Vietnam,
respectively with no other country representing more than 10% of such purchases. For Fiscal 2020, the percentage of
products sourced from China for our Tommy Bahama and Lilly Pulitzer operating groups were 47% and 28%,
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respectively, with the percentage concentration from China for both operating groups decreasing from the prior year. We
expect that the percentage of our products sourced from producers located in China will decrease further.
We purchase substantially all of our apparel and related products from third party producers as package purchases
of finished goods, which are manufactured with oversight by us or our third party buying agents and to our design and
fabric specifications. The use of contract manufacturers reduces the amount of capital investment required by us, as
operating manufacturing facilities can require a significant amount of capital investment. We depend on third party
producers to secure a sufficient supply of specified raw materials, adequately finance the production of goods ordered and
maintain sufficient manufacturing and shipping capacity. We believe that purchasing substantially all of our products as
package purchases allows 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 costs related to our apparel and related product purchases until we take
ownership of the finished goods, which typically occurs when the goods are shipped by the third party producers. In
addition to purchasing products from third parties, our Lanier Apparel operating group operated an owned manufacturing
facility located in Merida, Mexico, which ceased operations in Fiscal 2020.
As the design, manufacture and transportation of apparel and related products for our brands may take as many as
six months for each season, we typically make commitments months in advance of when products will arrive in our retail
stores or our wholesale customers’ stores. We continue to seek ways to reduce the time required from design and ordering
to bringing products to our customers. As our merchandising departments must estimate our requirements for finished
goods purchases for our own retail stores and e-commerce sites based on historical product demand data and other factors,
and as purchases for our wholesale accounts must be committed to prior to the receipt of customer orders, we carry the risk
that we have purchased more inventory than will ultimately be desired or that we will not have purchased sufficient
inventory to satisfy demand, resulting in lost sales opportunities.
As part of our commitment to source our products in a lawful, ethical and socially responsible manner, each of our
operating groups has implemented a code of conduct program applicable to vendors from whom we purchase apparel and
related products, which includes provisions related to abiding by applicable laws as well as compliance with other business
or ethical standards, including related human rights, health, safety, working conditions, environmental and other
requirements. We require that each of our vendors and licensees comply with the applicable code of conduct or
substantially similar compliance standards. All of our vendors from whom we purchase goods are also required by us to
adhere to the United States Customs and Border Protection’s Customs-Trade Partnership Against Terrorism program,
including standards relating to facility, procedural, personnel and cargo security. On an ongoing basis we assess vendors’
compliance with the applicable code of conduct and applicable laws and regulations through audits performed by either our
employees or our designated agents. The assessment of compliance by vendors is directed by our corporate leadership
team. In the event we determine that a vendor is not abiding by our required standards, we work with the vendor to
remediate the violation. If the violation is not satisfactorily remediated, we will discontinue use of the vendor. For more
information on our initiatives with respect to corporate social responsibility, please visit our website at oxfordinc.com.
IMPORT RESTRICTIONS AND OTHER GOVERNMENT REGULATIONS
We are exposed to certain risks as a result of our international operations as substantially all of our merchandise,
as well as the products purchased by our licensing partners, is manufactured by foreign suppliers. During Fiscal 2020,
approximately 35% and 22% of our apparel and related products, excluding restaurant products, acquired directly by us or
via buying agents, were from producers located in China and Vietnam, respectively, with no other country representing
more than 10% of such purchases. Products imported by us, or imported by others and ultimately sold to us, are subject to
customs, trade and other laws and regulations governing their entry into the United States and other countries where we sell
our products, including various federal, state and local laws and regulations that govern any of our activities that may have
adverse environmental, health and safety effects. Noncompliance with these laws and regulations may result in significant
monetary penalties.
Substantially all of the merchandise we acquire is subject to certain duties which are assessed on the value of the
imported product. These amounts represent a component of the inventories we sell and are included in cost of goods sold in
our consolidated statements of operations. We paid total duties of more than $30 million and $45 million on
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products imported into the United States directly by us in Fiscal 2020 and Fiscal 2019, respectively, with the average duty
rate on those products of approximately 17% of the value of the imported product in Fiscal 2020. Duty rates vary
depending on the type of garment, fiber content and country of origin and are subject to change in future periods. In
addition, while the World Trade Organization’s member nations have eliminated quotas on apparel and textiles, the United
States and other countries into which we import our products are still allowed in certain circumstances to unilaterally
impose "anti-dumping" or "countervailing" duties in response to threats to their comparable domestic industries.
Although we have not been materially inhibited from sourcing products from desired markets in the past, we
cannot assure that significant impediments will not arise in the future as we expand product offerings and brands and enter
into new markets. In recent years the United States government has implemented additional duties on certain product
categories across various industries. It is possible that additional duty increases could occur in future years, which could
have a significant unfavorable impact on the apparel retail industry and our cost of goods sold, operations, net sales, net
earnings and cash flows. Our management regularly monitors proposed regulatory changes and the existing regulatory
environment, including any impact on our operations or on our ability to import products. As a result of these changes and
increased costs of production in certain countries that unfavorably impact our cost of goods sold, we continue to make
changes in our supply chain, including exiting certain factories and sourcing those products from a factory in a different
foreign country.
In addition, apparel and other related products sold by us are subject to stringent and complex product
performance and security and safety standards, laws and other regulations. These regulations relate principally to product
labeling, certification of product safety and importer security procedures. We believe that we are in material compliance
with those regulations. Our licensed products and licensing partners are also generally subject to such regulation. Our
agreements require our 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.
DISTRIBUTION CENTERS
We operate four distribution centers, with each operating group generally serviced by one distribution center. Our
Auburn, Washington, King of Prussia, Pennsylvania and Toccoa, Georgia distribution centers serve our Tommy Bahama,
Lilly Pulitzer and Lanier Apparel operating groups, respectively. Our Lyons, Georgia distribution center provides services
for our smaller Southern Tide, TBBC and Duck Head businesses, as well as our Lilly Pulitzer business and certain third
party customers.
Activities at the distribution centers include receiving finished goods from suppliers, inspecting the products and
shipping the products to our retail store, e-commerce and wholesale customers, each as applicable. We seek to maintain
sufficient levels of inventory at the distribution centers to support our direct to consumer operations, as well as pre-booked,
at-once and some in-stock replenishment orders for our wholesale customers. We use a local third party distribution center
for our Tommy Bahama Australia operations.
More than 75% of our net sales in Fiscal 2020 were direct to consumer sales, which are filled on a current basis;
accordingly, an order backlog is not material to our business.
INFORMATION TECHNOLOGIES
We believe that sophisticated information systems and functionality are important components of maintaining our
competitive position and supporting continued growth of our businesses, particularly in the ever-changing consumer
shopping environment. Our information systems are designed to provide effective retail store, e-commerce, restaurant 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 and upgrade or enhance our systems to gain operating efficiencies, to provide additional
consumer access and to support our anticipated growth as well as other changes in our business. We believe
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that continuous upgrading and enhancements to our information systems with newer technology that offers greater
efficiency, functionality and reporting capabilities is critical to our operations and financial condition.
LICENSING AGREEMENTS
We license the Tommy Bahama, Lilly Pulitzer and Southern Tide trademarks to licensees in categories beyond our
brands’ core product categories. We believe licensing is an attractive business opportunity for our larger lifestyle brands.
Once a brand is more fully established, licensing typically requires modest additional investment but can yield high-margin
income. It also affords the opportunity to enhance overall brand awareness and exposure. In evaluating a licensee for our
brands, we typically consider the candidate’s experience, financial stability, sourcing expertise and marketing ability. We
also evaluate the marketability and compatibility of the proposed licensed products with our products.
Our agreements with our licensees are brand specific, relate to specific geographic areas and have expirations at
various dates in the future, with contingent renewal options in limited cases. Generally, the agreements require minimum
royalty payments as well as royalty payments based on specified percentages of the licensee’s net sales of the licensed
products as well as certain obligations for advertising and marketing. Our license agreements generally provide us the right
to approve all products, advertising and proposed channels of distribution.
We license the Tommy Bahama brand for a broad range of product categories including indoor furniture, outdoor
furniture, beach chairs, bedding and bath linens, fabrics, leather goods and gifts, headwear, hosiery, sleepwear, shampoo,
toiletries, fragrances, cigar accessories, distilled spirits and other products. Third party license arrangements for Lilly
Pulitzer products include stationery and gift products; home furnishing products; and eyewear. We currently license the
Southern Tide trademark to licensees for certain bed and bath product categories.
In addition to our license arrangements for the specific product categories listed above, we may enter into certain
international distributor agreements which allow those parties to distribute apparel and other products on a wholesale
and/or retail basis within certain countries or regions. As of January 30, 2021, we have agreements for the distribution of
Tommy Bahama products in the Middle East and parts of Latin America. The products sold by the distributors generally
are identical to the products sold in our own Tommy Bahama stores. In addition to selling Tommy Bahama goods to
wholesale accounts, the distributors may, in some cases, operate their own retail stores. As of January 30, 2021, we have
licensed Tommy Bahama stores located in the Middle East and Central America. None of these international distributor
agreements are expected to generate growth that would materially impact our operating results in the near term.
SEASONAL ASPECTS OF BUSINESS
Each of our operating groups is impacted by seasonality as the demand by specific product or style, as well as by
distribution channel, may vary significantly depending on the time of year. Typically, the demand for products for our
larger brands and principal markets is higher in the spring, summer and holiday seasons and lower in the fall season
(generally, the third quarter of our fiscal year). As a result, our quarterly operating results and working capital requirements
fluctuate significantly from quarter to quarter, with the third quarter historically having the lowest net sales compared to
our other quarters and incurring an operating loss. Further, the impact of the timing of certain unusual or non-recurring
items, economic conditions, wholesale product shipments, weather or other factors affecting our operations may vary from
one year to the next. Therefore, we do not believe that net sales or operating income for any particular quarter or the
distribution of net sales and operating income for Fiscal 2019 or Fiscal 2020 are indicative of the expected distribution in
future years, particularly in light of the COVID-19 pandemic’s significant impact on our Fiscal 2020 operating results.
HUMAN CAPITAL MANAGEMENT
Our key strategy is to own brands that make people happy, and we recognize that successful execution of our
strategy starts with people. We believe treating people fairly and with respect is key to long-term success and, more
importantly, is simply the right thing to do.
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As of January 30, 2021, we employed approximately 3,900 individuals globally, more than 95% of whom were in
the United States. Approximately 2,700 and 800 of these employees were dedicated to our Tommy Bahama and Lilly
Pulitzer businesses, respectively, while approximately 70% of our employees were retail store and restaurant employees.
Our employee base fluctuates during the year, as we typically hire seasonal employees to support our retail store and
restaurant operations, primarily during the holiday selling season. None of our employees as of January 30, 2021 was
represented by unions.
Fiscal 2020 was a challenging year for our company, with the COVID-19 pandemic causing temporary, extended
closures of all of our retail stores and restaurants in the First Half of Fiscal 2020 and significantly disrupting the retail
apparel industry. Even after reopening certain of our bricks and mortar operations, due to government and health
requirements and guidelines, we elected to offer only limited curbside pickup at some locations and restrict operating
hours, where necessary. We also made some difficult decisions to strategically reduce our workforce to right-size our
operations to preserve liquidity in the short-term but, more importantly, position ourselves to thrive in a post-pandemic
retail environment. As a result, our total employee headcount declined more than 30% from the end of Fiscal 2019 to the
end of Fiscal 2020.
Commitment to our Core Values
Our actions are guided by our company’s core values:
● Integrity – Build trust through honest relationships. Do the right thing.
● Respect – Have respect for oneself and for one another. Lead by example. Exercise humility.
● Inclusion – Root our relationships with one another in understanding, awareness and mutual respect. Value
and embrace diversity. Welcome the respectful, open expression of differing ideas and perspectives.
● Accountability – Own our words, decisions and actions. Earn our reputation.
● Teamwork – Show up for each other. Solve problems through good and transparent communication. Know
we are strongest when we work as a team.
● Curiosity – Improve and innovate. Simplify and streamline. Embrace change. Challenge ourselves.
We believe that our adherence to these core values in everything we do as a company furthers our good relations
with employees, suppliers and customers.
Talent and Development
We are always looking for great people to join our team. We recognize that in order to remain competitive, we
must attract, develop and retain top caliber employees in our design, marketing, merchandising, information technology
and other functions, as well as in our retail stores, restaurants and distribution centers. Competition for talented employees
is intense.
In furtherance of attracting and retaining employees committed to our core values and business strategy, we
maintain competitive compensation programs that include a variety of components, including competitive pay consistent
with skill level, experience and knowledge, as well as comprehensive benefit plans consisting of health and welfare plans,
retirement benefits and paid leave for our employee base in the United States.
In 2018, we launched an ongoing initiative to assess how well we’re doing in managing performance, developing
our people and putting our talent to its highest and best use across our company. Our aim is greater employee engagement
and ultimately a more effective organization. As part of our commitment to our people, throughout our brands and
businesses, we provide employees with training, growth and development opportunities, including on-the-job training,
learning and development programs, and other educational programs.
Health and Safety
We are committed to maintaining a clean, safe and healthy work environment for all of our employees. In the
interest of the health and safety of our employees, we made the preemptive decision prior to government mandate to close
all of our retail store and restaurant operations in North America starting on March 17, 2020. For our distribution
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centers that continued to operate to service our e-commerce operations, as well as our retail stores, restaurants and
corporate office operations that reopened at various points during Fiscal 2020, we have been carefully monitoring
guidelines published by the Center for Disease Control and Prevention and have established a number of safety protocols,
including face covering and physical distance policies, enhanced cleaning, daily self-health checks and temperature
screenings. We continue to review, monitor and revise our protocols, as appropriate.
Diversity & Inclusion
Our ongoing commitment to having the best people includes a commitment to equal opportunity. We believe in a
diverse and inclusive workplace that respects and invites differing ideas and perspective.
As of January 30, 2021, our global workforce was self-disclosed as 38% male, 62% female and less than 1%
undisclosed or choosing not to identify. Among our management employees, who comprise approximately 20% of our
workforce, the self-disclosed figures were 33% male, 67% female and less than 1% undisclosed or choosing not to identify.
As of January 30, 2021, in the United States, which is the only jurisdiction in which our employees self-disclose ethnicity,
the self-disclosed ethnicity of our workforce was 62% white (not Hispanic or Latino) and 38% non-white, whereas for
management employees in the United States, the self-disclosed ethnicity figures were 78% white (not Hispanic or Latino)
and 22% non-white.
We make a concerted effort to encourage the exchange of ideas and to actively listen to employee dialogue,
provide appropriate training and ensure that the interests of all our employees are supported and advanced. We hope to
maintain an environment where there is a sense of belonging and all voices are heard and valued.
Additional Information
For more information on our human capital management efforts, visit the Corporate Responsibility section of our
website at https://www.oxfordinc.com/corporate-responsibility.
INFORMATION
Oxford 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 on Form 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 Exchange Act 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 our website 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.
Item 1A. Risk Factors
The risks described below highlight some of the factors that could materially affect our operations. If any of these
risks actually occurs, our business, financial condition, prospects and/or operating results may be adversely affected. These
are not the only risks and uncertainties we face. Additional risks and uncertainties that we currently consider immaterial or
are not presently known to us may also adversely affect our business.
Risks Related to our Industry and Macroeconomic Conditions
The COVID-19 pandemic has had, and will continue to have, a material adverse effect on our business, revenues,
financial condition and results of operations.
The ongoing COVID-19 pandemic has severely restricted the level of economic activity around the world. In
response to this pandemic, governments and public health officials of many countries, states, cities and other geographic
regions have taken preventative or protective actions to mitigate the spread and severity of the coronavirus, such as
imposing restrictions on travel and business operations and advising or requiring individuals to limit or forego their time
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outside of their homes. Due to the COVID-19 pandemic, we temporarily closed all our retail stores and restaurants in the
First Half of Fiscal 2020.
Although almost all of our stores and restaurants are open at this time, the operations of our stores continue to be
impacted by requirements imposed by state and local governments with respect to occupancy levels, indoor dining and
health and safety measures. In addition, our business is particularly sensitive to reductions in discretionary consumer
spending, and we cannot predict the duration or severity of the impact of the COVID-19 pandemic on our business. There
continue to be numerous uncertainties associated with the COVID-19 pandemic, including the timing and efficacy of
vaccine distribution in the regions where we operate, the willingness of the public to be vaccinated, the potential spread of
new variants of COVID-19, and the actions of governments and third parties in response to any resurgence of COVID-19
cases or spread of new variants. Further, even after containment of the virus, any prolonged reduction in consumer traffic,
consumer willingness to visit malls and shopping centers or levels of consumer discretionary spending would result in a
further loss of revenues.
The COVID-19 pandemic has also impacted, and may continue to impact, our office locations, distribution centers
and shipping vendors, which may negatively impact our ability to meet consumer demand and may increase our costs of
production and distribution. Our fulfillment of customer orders depends on third party shipping vendors. Service delays or
disruptions, restrictions on services available to us or price increases imposed by these vendors due to increased demand or
operational challenges as a result of the COVID-19 pandemic could lead to higher expenses or an inability to deliver
merchandise to our customers. Any failure to deliver customer orders on a timely and consistent basis could result in
returns, requests for refunds, cancellation of orders or lost sales and could harm our reputation and relationships with our
customers.
Any of the negative impacts of the COVID-19 pandemic, alone or in combination with others, could exacerbate
many of the other risk factors discussed in this report. The full extent to which the COVID-19 pandemic will negatively
affect our results of operations, financial condition and cash flows will depend on future developments that are highly
uncertain and cannot be predicted.
Our business and financial condition are heavily influenced by general economic and market conditions which are
outside of our control.
We are a consumer products company and are highly dependent on consumer discretionary spending and retail
traffic patterns, particularly in the United States. The demand for apparel products changes as regional, domestic and
international economic conditions change and may be significantly impacted by trends in consumer confidence and
discretionary consumer spending patterns, which may be influenced by employment levels; recessions; inflation; fuel and
energy costs; interest rates; tax rates; personal debt levels; savings rates; stock market and housing market volatility;
shifting social ideology; and general uncertainty about the future. The factors impacting consumer confidence and
discretionary consumer spending patterns are outside of our control and difficult to predict, and, often, the apparel industry
experiences longer periods of recession and greater declines than the general economy. In addition, as the growth in our
direct to consumer operations continues to outpace our other operations, we have increased exposure to the risks associated
with a volatile and unpredictable economic environment. Any decline in consumer confidence or change in discretionary
consumer spending patterns could reduce our sales and/or adversely affect our business and financial condition.
The agenda of the new U.S. presidential administration includes a number of potential policy and legislation
changes, including changes to U.S. tax legislation that could adversely affect our effective tax rate and to economic policies
which could impact general economic conditions. Any such changes to U.S. policy or legislation could have a greater
effect on us compared to our peers as a result of the concentration of our operations in the United States.
We operate in a highly competitive industry and may face competition from companies with significantly greater
resources than us.
We operate in a highly competitive industry in which the principal competitive factors are the reputation, value
and image of brand names; design of differentiated, innovative or otherwise compelling product; consumer preference;
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price; quality; marketing; product fulfillment capabilities; and customer service. The highly competitive apparel industry is
characterized by low barriers to entry, with new competition entering the marketplace regularly. There are numerous
domestic and foreign apparel designers, manufacturers, distributors, importers, licensors and retailers, some of whom are
also our customers. Some of these companies may be significantly larger or more diversified than us and/or have
significantly greater financial resources than we do. Competitive factors within the apparel industry may result in reduced
sales, increased costs, lower prices for our products and/or decreased margins.
Failure to anticipate and adapt to changing fashion trends and consumer preferences could harm our reputation and
financial performance.
We believe that our ability to compete successfully is directly related to our proficiency in foreseeing changes and
trends in fashion and consumer preference and presenting appealing products for consumers when and where they seek it.
Although certain of our products carry over from season to season, the apparel industry is subject to rapidly changing
fashion trends and shifting consumer expectations, as evidenced by the recent acceleration of casualization trends in the
apparel industry in the midst of the COVID-19 pandemic. There can be no assurance that we will be able to successfully
evaluate and adapt our products to align with consumer preferences and changes in consumer demographics. Any failure
on our part to develop and market appealing products could harm the reputation and desirability of our brands and products
and/or result in weakened financial performance.
Our operations and those of our suppliers, vendors and wholesale customers may be affected by changes in weather
patterns, natural or man-made disasters, civil unrest, public health crises, war, terrorism or other catastrophes.
Our sales volume and operations and the operations of third parties on whom we rely, including our suppliers,
vendors, licensees and wholesale customers, may be adversely affected by unseasonable or severe weather conditions,
natural or man-made disasters, public health crises, war, terrorist attacks, including heightened security measures and
responsive military actions, or other catastrophes which may cause consumers to alter their purchasing habits or result in a
disruption to our operations. Our business may also be adversely affected by instability, disruption or destruction,
regardless of cause, including civil insurrection or unrest. These events may result in closures of our retail stores,
restaurants, offices or distribution centers and/or declines in consumer traffic, which could have a material adverse effect
on our business, results of operations or financial condition. Because of the seasonality of our business, the concentration
of a significant proportion of our retail stores and wholesale customers in certain geographic regions, including a resort
and/or coastal focus for most of our lifestyle brands, and the concentration of our sourcing and distribution center
operations, the occurrence of such events could disproportionately impact our business, financial condition and operating
results.
Risks Related to our Business Strategy and Operations
Our inability to execute our direct to consumer and portfolio-level strategies in response to shifts in consumer shopping
behavior could adversely affect our financial results and operations.
One of our key long-term initiatives over the last several years has been to grow our branded businesses through
distribution strategies that allow our consumers to access our brands whenever and wherever they choose to shop. Our
ability to anticipate and transform our business in response to the manner in which retail consumers seek to transact
business and access products requires us to introduce new retail, restaurant and other concepts in suitable locations;
anticipate and implement innovations in sales and marketing technology to align with our consumers’ shopping
preferences; invest in appropriate digital and other technologies; establish the infrastructure necessary to support growth;
maintain brand specific websites and mobile applications that offer the functionality and security customers expect; and
effectively enhance our advertising and marketing activities, including our social media presence, to maintain our current
customers and attract and introduce new consumers to our brands and offerings.
Even prior to the emergence of the COVID-19 pandemic, the retail apparel market was evolving very rapidly in
ways that are disruptive to traditional fashion retailers. These changes included sustained declines in bricks and mortar
retail traffic; entry into the fashion retail space by large e-commerce retailers and others with significant financial resources
and enhanced distribution capabilities; increased investment in technology and multi-channel distribution
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strategies by large, traditional bricks and mortar and big box retailers; ongoing emphasis on off-price and fast fashion
channels of distribution, in particular those who offer brand label products at clearance; and increased appeal for
consumers of products that incorporate sustainable materials and processes in the supply chain and/or otherwise reflect
their social or personal values. In response, traditional fashion retailers and competing brands have increasingly offered
greater transparency for consumers in product pricing and continue to engage in increased promotional activities, both
online and in-store. These trends accelerated during the COVID-19 pandemic and are likely to continue to evolve in ways
that may not yet be evident. Any inability on our part to effectively adapt to rapidly evolving consumer behavioral trends
may result in lost sales, increase our costs and/or adversely impact our results of operations, financial condition, reputation
and credibility.
Failure to maintain the reputation or value of our brands could harm our business operations and financial condition.
Our success depends on the reputation and value of our brand names. The value of our brands could be diminished
by actions taken by us or by our licensees, wholesale customers or others who have an interest in our brands. Actions that
could cause harm to our brands include failing to respond to emerging fashion trends or meet consumer quality
expectations; selling products bearing our brands through distribution channels that are inconsistent with customer
expectations; becoming overly promotional; or setting up consumer expectations for promotional activity for our products.
It is possible that certain actions taken by us in response to the COVID-19 pandemic could impair the reputation or image
of our brands despite our focus on protecting the long-term value of our brands. In addition, social media is a critical
marketing and customer acquisition strategy in today’s technology-driven retail environment, and the value of our brands
could be adversely affected if we do not effectively communicate our brand message through social media vehicles,
including with respect to our social responsibility and sustainability initiatives. The significant concentration in our
portfolio heightens the risks we face if one of our brands is adversely impacted by actions we or third parties take with
respect to that brand.
The improper or detrimental actions of a licensee or wholesale customer could also significantly impact the
perception of our brands. While we enter into comprehensive license and similar collaborative agreements with third party
licensees covering product design, product quality, brand standards, sourcing, social compliance, distribution, operations,
manufacturing and/or marketing requirements and approvals, there can be no guarantee our brands will not be negatively
impacted through our association with products or concepts outside of our core apparel products and by the market
perception of the third parties with whom we associate. In addition, we cannot always control the marketing and promotion
of our products by our wholesale customers, and actions by such parties that adversely affect the appeal of our products
could diminish the value or reputation of one or more of our brands and have an adverse effect on our sales, gross margins
and business operations. We may also elect to enter into retail or wholesale distribution arrangements, or joint ventures,
with third parties for certain international markets, and 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 operator to
appropriately represent our brands in those markets and any protective rights to which the third party may be entitled.
We may be unable to grow our business through organic growth, which could have a material adverse effect on our
business, financial condition, liquidity and results of operations.
A key component of our business strategy is organic growth in our brands, the importance of which is heightened
as we seek to return to full operating performance and gross margins following contractions in our business and the
industry as a result of the COVID-19 pandemic. Organic growth may be achieved by, among other things, increasing sales
in our direct to consumer channels; selling our products in new markets; increasing our market share in existing markets;
expanding the demographic appeal of our brands; expanding our margins through product cost reductions, price increases
or otherwise; expanding the customer reach of our brands through new and enhanced advertising initiatives; and increasing
the product offerings and concepts within our various operating groups, such as the opening of additional Marlin Bars at
Tommy Bahama and owned retail stores at Southern Tide. Successful growth of our business is also subject to our ability to
implement plans for expanding and/or maintaining our existing businesses at satisfactory levels. We may not be successful
in achieving suitable organic growth, and our inability to grow our business may have a material adverse effect on our
business, financial condition, liquidity and results of operations.
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In addition, investments we make in technology, advertising and infrastructure, retail stores and restaurants, office
and distribution center facilities, personnel and elsewhere may not yield the full benefits we anticipate, and sales growth
may be outpaced by increases in operating costs, putting downward pressure on our operating margins and adversely
affecting our results of operations. If we are unable to increase our revenues organically, we may be required to pursue
other strategic initiatives, including reductions in costs and/or acquisitions, in order to grow our business. These initiatives
may not be available to us on desirable terms, inhibiting our ability to increase profitability.
Failure to successfully execute our strategic initiative to improve Tommy Bahama’s operating performance may have an
adverse impact on our growth and profitability.
Tommy Bahama, which represented 56% of our net sales in Fiscal 2020 and maintains a larger bricks and mortar
footprint and fixed cost structure, faced several years of lower operating margins. Entering Fiscal 2020, we were in the
process of implementing and executing a multi-year initiative to improve Tommy Bahama’s operating performance and
long-term growth prospects, which included an enhanced outlet and clearance strategy, improved gross margin through
selective price increases and reduced product costs, selective right-sizing of our store footprint, controlling and reducing
overhead and operating expenses, implementing marketing initiatives targeting new customer acquisition and improving
the Tommy Bahama customer experience. A strategic initiative of this nature is inherently challenging and faces significant
potential risks, with the COVID-19 pandemic magnifying the challenges facing Tommy Bahama and requiring adaptability
to today’s more digital retail environment. Any failure in our execution of this strategy, including delays and/or cost
overruns, may adversely affect our ability to achieve long-term sustainable sales and operating margin growth and at the
same time may detract from our focus and execution of other strategic initiatives.
The acquisition of new businesses is inherently risky, and we cannot be certain that we will realize the anticipated
benefits of any acquisition.
Growth of our business through acquisitions of lifestyle brands that fit within our business model is a component
of our long-term business strategy. The competitive climate for desirable acquisition candidates drives higher market
multiples, and we may pay more to consummate an acquisition than the value we derive from the acquired business.
Acquisitions may cause us to incur debt or make dilutive issuances of our equity securities. Additionally, as a result of
acquisitions, we may become responsible for unexpected liabilities that we failed or were unable to discover in the course
of performing due diligence.
In addition, the benefits of an acquisition may not materialize to the extent or within the time periods anticipated.
Integrating acquired businesses is a complex, time-consuming and expensive process. The integration process for newly
acquired businesses could create a number of challenges and adverse consequences for us associated with the integration of
product lines, support functions, employees, sales teams and outsourced manufacturers; employee turnover, including key
management and creative personnel of the acquired business and our existing businesses; disruption in product cycles for
newly acquired product lines; maintenance of acceptable standards, controls, procedures and policies; operating business in
new geographic territories; diversion of the attention of our management from other areas of our business; and the
impairment of relationships with customers of the acquired and existing businesses. Furthermore, certain acquisitions may
also be structured utilizing contingent consideration based on the acquired business’ post-acquisition results, and the
principals from whom we acquired such a business, many of whom may continue to operate the business as our employees,
may have differing interests than those of our shareholders because of such arrangements.
As the fashion retail environment evolves, our investment criteria for acquisitions has grown to include smaller
brands and non-controlling investments in burgeoning brands seeking debt or equity financing. The limited operating
history, less experienced management teams and less sophisticated systems, infrastructure and relationships generally
associated with such brands may heighten the risks associated with acquisitions generally. Minority investments present
additional risks, including the potential disproportionate distraction to our management team relative to the potential
financial benefit; the potential for a conflict of interest; the damage to our reputation of associating with a brand which may
take actions inconsistent with our values; and the financial risks associated with making an investment in an unproven
business model.
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The divestiture or discontinuation of businesses and product lines, such as our exit of the Lanier Apparel business,
could result in unexpected liabilities and adversely affect our financial condition, cash flows and results of operations.
From time to time, we also divest or discontinue businesses, product lines and/or programs, including exiting
relationships with certain wholesale customers, including department stores, that do not align with our strategy or provide
the returns that we expect or desire. Such dispositions and/or discontinuations may result in underutilization of our retained
resources if the exited operations are not replaced with new lines of business, either internally or through acquisition. In
addition, we may become responsible for unexpected liabilities, some of which may be triggered or increased by a
purchaser’s operation of the disposed business following the transaction. Those liabilities combined with any other
liabilities we contractually retain, individually or in the aggregate, could adversely affect our financial condition and results
of operations.
In December 2020, we announced that we are exiting the Lanier Apparel business, which is expected to be
completed during the Second Half of Fiscal 2021. We took significant charges and established reserves during the Second
Half of Fiscal 2020 and have also made estimates as to the future financial impact of an orderly exit. However, if we are
unable to effectively, efficiently and timely execute the wind down of our Lanier Apparel business, we may incur
additional costs and cash outflows. Given the significant uncertainties about the retail environment during the pendency of
the COVID-19 pandemic, there can be no assurance that we will complete the Lanier Apparel exit in a timely fashion in
accordance with our current plans. Our announcement and subsequent actions in furtherance of the wind down may subject
us to substantial risks and uncertainties that may result in a material adverse effect on our financial condition, cash flows
and results of operations, including our ability to retain Lanier Apparel employees through the wind down; the potential for
other losses in excess of our current expectations, including those resulting from third party relationships impacted by our
decision; and the diversion of senior management’s attention from our ongoing operations while executing the exit from
the Lanier Apparel business.
The loss of one or more of our key wholesale customers, or a significant adverse change in a customer’s financial
position, could negatively impact our net sales and profitability.
We generate a significant percentage of our wholesale sales, which was 23% of our net sales in Fiscal 2020, from
a few key customers, with our three largest customers representing 13%, 10% and 8%, respectively of our consolidated
wholesale sales in Fiscal 2020. Over the last several years, department stores and other large retailers have faced increased
competition from online competitors, declining sales and profitability and tightened credit markets, resulting in store
closures, bankruptcies and financial restructurings. These challenges have been exacerbated by the COVID-19 pandemic
and resulting economic downturn. Restructuring of our customers’ operations, continued store closures or increased direct
sourcing by customers could negatively impact our net sales 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 a few customers. A significant adverse change in a customer’s financial position or ability
to satisfy its obligations to us could cause us to limit or discontinue business with that customer, in some cases after we
have already made product purchase commitments for inventory; require us to assume greater credit risk relating to that
customer’s receivables; or limit our ability to collect amounts related to shipments to that customer. In addition, a decision
by one or more of our key wholesale customers to terminate its relationship with us or to reduce its purchases from us or
our licensees, whether motivated by competitive considerations, a change in desired product assortment, quality or style
issues, financial difficulties, economic conditions or otherwise, could also adversely affect our business.
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 make commitments for production several months prior
to our receipt of goods and typically without firm commitments from our customers. Depending on the demand for our
products, we may be unable to sell the products we have ordered or that we have in our inventory, which may result
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in inventory markdowns, costs incurred to cancel inventory purchases or the sale of excess inventory at discounted prices
and through off-price channels. These events, many of which were exacerbated by the COVID-19 pandemic, could
significantly harm our operating results and impair the image 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 due to a third party
manufacturer’s inability to source materials or produce goods in a timely fashion or as a result of delays in the delivery of
products to us, we may experience inventory shortages, which might result in unfilled orders, negatively impact customer
relationships, diminish brand loyalty and result in lost sales, any of which could harm our business. These risks relating to
inventory may also escalate as our direct to consumer sales, for which we do not have any advance purchase commitments,
continue to increase as a proportion of our consolidated net sales.
We are subject to risks associated with leasing real estate for our retail stores and restaurants.
We lease all of our retail store and restaurant locations. Successful operation of our retail stores and restaurants
depends, in part, on our ability to identify desirable, brand appropriate locations; the overall ability of the location to attract
a consumer base sufficient to make sales volume profitable; our ability to negotiate satisfactory lease terms and employ
qualified personnel; and our ability to timely construct and complete any build-out and open the location in accordance
with our plans. A decline in the volume of consumer traffic at our retail stores and restaurants, due to economic conditions,
shifts in consumer shopping preferences or technology, a decline in the popularity of malls or lifestyle centers in general or
at those in which we operate, the closing of anchor stores or other adjacent tenants or otherwise, all of which have been
exacerbated by the COVID-19 pandemic, have had and could continue to have a negative impact on our sales, gross margin
and results of operations. Our growth may be 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 new retail 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’s design, leasehold improvements, fixtures and systems installation and recurring fixed
costs. On an ongoing basis, we review the financial performance of our retail and restaurant locations in order to determine
whether continued operation is appropriate. Even if we determine that it is desirable to exit a particular location, we may be
unable to close an underperforming location due to continuous use clauses and/or because negotiating an early termination
would be cost prohibitive. In addition, due to the fixed-cost structure associated with these operations, negative cash flows
or the closure of a retail store or restaurant could result in impairment of leasehold improvements, impairment of operating
lease assets and/or other long-lived assets, severance costs, lease termination costs or the loss of working capital, which
could adversely impact our business and financial results. Furthermore, as each of our leases expire, we may be unable to
negotiate renewals, either on commercially acceptable terms or at all, which could force us to close retail stores and/or
restaurants in desirable locations.
As a result of temporary retail store and restaurant closures and ongoing depressed consumer traffic due to the
COVID-19 pandemic, we determined that the payment of rents that might have otherwise been due under our retail store
and restaurant leases was inappropriate. Accordingly, with limited exceptions where alternative arrangements with our
landlords had been finalized, we discontinued rent payments starting in April 2020. We have negotiated equitable rental
arrangements with substantially all of the landlords for our retail and restaurant locations and are confident that we will be
able to resolve these matters with the landlords for our remaining locations. However, there can be no assurances, and some
of these outstanding landlords may choose to claim that our non-payment constitutes a default under our leases. Successful
claims against us, if any, could materially affect our business, operations, financial condition and future growth. Even
where successful, litigation could be costly, distract our management and result in reputational harm. In addition, if a
resurgence of COVID-19 cases or the spread of new variants require us to close our stores and restaurants or further restrict
our operations, we may not be able to negotiate further equitable arrangements with our landlords in respect of such future
closures or restrictions.
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.
The continued growth of our business depends on our access to sufficient funds. Our levels of debt vary as a result
of the seasonality of our business, investments in our operations and working capital needs, and the terms or forms
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of our financing arrangements may change. If the need arises in the future to finance expenditures in excess of those
supported by our existing credit facility, we may need to seek additional funding through debt or equity financing. Our
ability to obtain that financing will depend on many factors, including prevailing market conditions, our financial condition
and our ability to negotiate favorable terms and conditions. The terms of any such financing or our inability to secure such
financing could adversely affect our ability to execute our strategies, and the negative covenants in our debt agreements,
now or in the future, may increase our vulnerability to adverse economic and industry conditions and/or limit our flexibility
in carrying out our business strategy and plans.
In addition, we have interest rate risk on indebtedness under our variable rate U.S. Revolving Credit Agreement.
Our exposure to variable rate indebtedness may increase in the future, based on our debt levels and/or the terms of future
financing arrangements. Further, an increase in the interest rate environment would require us to pay a greater amount
towards interest, even if the amount of borrowings outstanding remains the same.
A portion of our indebtedness under the U.S. Revolving Credit Agreement at any time may use the London
Interbank Offered Rate (LIBOR) as the benchmark for establishing the interest rate. Recent regulatory reform efforts may
cause LIBOR to cease to exist, new methods of calculating LIBOR to be established or the use of an alternative reference
rate(s). As the future of LIBOR at this time is uncertain, the potential effect of any future changes cannot yet be determined
but could adversely impact our interest expense and, thus, our results of operations.
Risks Related to Cybersecurity and Information Technology
Cybersecurity attacks and/or breaches of information security or privacy could disrupt our operations, cause us to incur
additional expenses, expose us to litigation and/or cause us financial harm.
Cybersecurity attacks continue to become increasingly sophisticated, and experienced computer programmers and
hackers may be able to penetrate our network security and misappropriate or compromise our assets, including confidential
information, or disrupt our systems. We collect, use, store and transmit sensitive and confidential personal information of
our customers, employees, suppliers and others as an ongoing part of our business operations, and we are regularly subject
to attempts by attackers to gain unauthorized access to our networks, systems and data, or to obtain, change or destroy
confidential information. In addition, customers may use devices or software that are beyond our control environment to
purchase our products, which may provide additional avenues for attackers to gain access to confidential information.
Despite our implementation of security measures, if an actual or perceived data security breach occurs, whether as
a result of cybersecurity attacks, computer viruses, vandalism, ransomware, human error or otherwise, or if there are
perceived vulnerabilities in our systems, the image of our brands and our reputation and credibility could be damaged, and,
in some cases, our continued operations may be impaired or restricted. Ongoing and increasing costs to enhance
cybersecurity protection and prevent, eliminate or mitigate vulnerabilities and comply with required security or other
measures under state, federal and international laws, which may include deploying additional personnel and protection
technologies, training employees and engaging third party experts and consultants, are significant. Although we have
business continuity plans and other safeguards in place, our operations may be adversely affected by an actual or perceived
data security breach. Costs to resolve any litigation or to investigate any actual or perceived breach could result in
significant financial losses and expenses, as well as lost sales. While we continue to evolve and modify our business
continuity plans, there can be no assurance in an escalating threat environment that they will be effective in avoiding
disruption and business impacts.
As part of our routine operations, we also contract with third party service providers to store, process and transmit
personal information of our customers and employees. Although we contractually require that these providers implement
reasonable security measures, we cannot control third parties and cannot guarantee that a security breach will not occur at
their location or within their systems. Privacy breaches of confidential information stored or used by our third party service
providers or disruptions in their systems may expose us to the same risks as a breach of our own systems, including
negative publicity, potential out-of-pocket costs and adverse effects on our business and customer relationships.
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Our operations are reliant on information technology, and any interruption or other failure could have an adverse
effect on our business or results of operations.
The efficient operation of our business depends on information technology. This requires us to devote significant
financial and employee resources to information technology initiatives and operations. Information systems are used in all
stages of our operations and as a method of communication, both internally and with our customers, service providers and
suppliers. Many of our information technology solutions are operated and/or maintained by third parties, including our use
of cloud-based solutions. Additionally, each of our operating groups uses e-commerce websites, point-of-sale systems,
enterprise order management systems, warehouse management systems and wholesale ordering systems to acquire,
manage, sell and distribute goods. Our management also relies on information systems to provide relevant and accurate
information in order to allocate resources, manage operations and forecast, account for and report our operating results.
Service interruptions may occur as a result of a number of factors, including power outages, consumer traffic levels,
computer viruses, sabotage, hacking or other unlawful activities by third parties, human error, disasters or failures to
properly install, upgrade, integrate, protect, repair or maintain our various systems, networks and e-commerce websites. All
of these events could have a material adverse effect on our financial condition and results of operations.
Reliance on outdated technology or failure to upgrade our information technology systems and capabilities could
impair the efficient operation of our business and our ability to compete.
Any failure to timely upgrade our technology systems and capabilities may impair our ability to market, sell and
deliver products to our customers, efficiently conduct our operations and/or meet the needs of our management. We
regularly evaluate upgrades or enhancements to our information systems to more efficiently and competitively operate our
businesses, including periodic upgrades to digital commerce and marketing, warehouse management, guest relations,
omnichannel and/or enterprise order management systems in our businesses. Digital commerce and marketing has
continued to increase in importance to our business, and if we fail to develop and maintain the digital strategies, systems,
expertise and capabilities necessary for us to compete effectively in this arena, our results of operations could be adversely
impacted. Upgrades to our systems may be expensive undertakings, may not be successful and/or could be abandoned, as
we did in the Fourth Quarter of Fiscal 2020 with a Tommy Bahama information technology project. We may also
experience difficulties during the implementation, upgrade or subsequent operation of our systems, including the risk of
introducing cybersecurity vulnerabilities into our systems or the loss of certain functionality, information from our legacy
systems and/or efficient interfaces with third party and continuing systems. Temporary processes or solutions, including
manual operations, which may be required to be instituted in the short term could also significantly increase the risk of loss
or corruption of data and information.
Remote work arrangements could inhibit our ability to effectively operate our business and result in enhanced
cybersecurity risks.
In March 2020, we temporarily closed our corporate offices and implemented remote work arrangements for our
corporate and office employees as a result of the COVID-19 pandemic. The majority of our corporate and office employees
continue to perform some or all of their duties on a remote basis, and we anticipate continuing to implement remote work
arrangements for a substantial portion of our employees in the future. If remote work arrangements negatively impact the
performance or management of our employees, whether as a result of technological challenges, unsuitable work
environments or other limitations, our ability to carry out key functions and successfully manage our operations could be
compromised. In addition, remote work arrangements could exacerbate our existing cybersecurity and privacy risks,
including by introducing vulnerabilities in our systems due to the use of laptops, mobile devices and remote work
environments. Cybersecurity attacks or data security incidents resulting from a failure to manage these risks could
negatively impact our business and results of operations.
Risks Related to our Sourcing and Distribution Strategies
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Our reliance on third party producers in foreign countries to meet our production demands exposes us to risks that
could disrupt our supply chain, increase our costs and negatively impact our operations.
We source substantially all of our products from non-exclusive, third party producers located in foreign countries.
Although we place a high value on long-term relationships with our suppliers, generally we do not have long-term supply
contracts but instead conduct business on an order-by-order basis. Therefore, we compete with other companies for the
production capacity of independent manufacturers. We also depend on the ability of these third party producers to secure a
sufficient supply of raw materials, adequately finance the production of goods ordered and maintain sufficient
manufacturing and shipping capacity, 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 of sources. Although we monitor production in third
party manufacturing locations, we cannot be certain that we will not experience operational difficulties with our
manufacturers, such as the reduction of available production capacity, errors in complying with product specifications,
insufficient quality control, failures to meet production deadlines or increases in manufacturing costs. In addition, we may
experience disruptions in our supply chain as we continue to diversify the jurisdictions from which we source products.
Any such difficulties may impact our ability to deliver quality products to our customers on a timely basis, negatively
impact our customer relationships and result in lower net sales and profits.
Any disruption or failure in our primary distribution facilities may materially adversely affect our business or
operations.
We rely on our primary distribution facilities in order to support our direct to consumer and wholesale operations,
meet customer fulfillment expectations, manage inventory, complete sales and achieve operating efficiencies. We may have
a greater risk than our peers due to the concentration of our distribution facilities, as substantially all of our products for
each operating group are distributed through one or two principal distribution centers. The primary distribution facilities
that we operate are as follows: a distribution center in Auburn, Washington dedicated to our Tommy Bahama products; a
distribution center in King of Prussia, Pennsylvania dedicated to our Lilly Pulitzer products; a distribution center in Toccoa,
Georgia dedicated to our Lanier Apparel products; and a distribution center in Lyons, Georgia primarily dedicated to our
Lilly Pulitzer and Southern Tide products. Although we continue to enhance our enterprise order management capabilities
to deliver products from other physical locations, our ability to effectively support our direct to consumer and wholesale
operations, meet customer expectations, manage inventory and achieve objectives for operating efficiencies depends on the
proper operation of these distribution facilities, each of which manages the receipt, storage, sorting, packing and
distribution of finished goods.
If any of our primary distribution facilities were to shut down or otherwise become inoperable or inaccessible for
any reason, including as a result of natural or man-made disasters, pandemics or epidemics (including, for example, the
ongoing COVID-19 pandemic), human error, or cybersecurity attacks or computer viruses, or if we are unable to receive or
ship the goods in a distribution center, as a result of a technology failure or otherwise, we could experience a substantial
loss of inventory, a reduction in sales, higher costs, insufficient inventory at our retail stores to meet consumer expectations
and longer lead times associated with the distribution of our products. In addition, for the distribution facilities that we
operate, there are substantial fixed costs associated with these large, highly automated distribution centers, and we could
experience reduced operating and cost efficiencies during periods of economic weakness. Any disruption to our
distribution facilities or in their efficient operation could negatively affect our operating results and our customer
relationships.
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 materials used to produce them. The cost of the materials and
components that are used in our manufacturing process, such as oil-related commodity prices and other raw materials, such
as dyes and chemicals, and other costs, can fluctuate. We historically have not entered into any futures contracts to hedge
commodity prices, and in recent years, we have seen significant variability in the costs of certain raw materials, including
cotton and oil. These pricing fluctuations could continue in future years.
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We have also seen increases in the cost of labor in our retail, restaurant and distribution center operations as well
as at many of our suppliers in recent years. Employment costs are affected by labor markets, as well as various federal,
state and foreign laws governing matters such as minimum wage rates, overtime compensation and other requirements. In
addition, in recent years, there has been significant political pressure and legislative action to increase the minimum wage
rate in many of the jurisdictions in which we operate, and the new U.S. presidential administration may advocate for
similar wage rate increases on a federal level. We have also experienced increases in freight costs and distribution and
logistics functions as a result of the COVID-19 pandemic and other factors and may continue to see such cost pressures,
including as a result of the recent blockage of freight through the Suez Canal. Although we attempt to mitigate the effect of
increases in our cost of goods sold, labor costs, occupancy costs, other operational costs and SG&A items through sourcing
initiatives and by selectively increasing the prices of our products, we may be unable to fully pass on these costs to our
customers, and material increases in our costs may reduce the profitability of our operations and/or adversely impact our
results of operations.
Labor-related matters, including labor disputes, may adversely affect our operations.
We may be adversely affected as a result of labor disputes in our own operations or in those of third parties with
whom we work. Our business depends on our ability to source and distribute products in a timely manner, and our new
retail store and restaurant growth is dependent on timely construction of our locations. While we are not subject to any
organized labor agreements and have historically enjoyed good employee relations, there can be no assurance that we will
not experience work stoppages or other labor problems in the future with our non-unionized employees. In addition,
potential labor disputes at independent factories where our goods are produced, shipping ports or transportation carriers
create risks for our business, particularly if a dispute results in work slowdowns, lockouts, strikes or other disruptions
during our peak manufacturing, shipping and selling seasons. Further, we plan our inventory purchases and forecasts based
on the anticipated timing of retail store and restaurant openings, which could be delayed as a result of a number of factors,
including labor disputes among contractors engaged to construct our locations or within government licensing or
permitting offices. Any potential labor dispute, either in our own operations or in those of third parties on whom we rely,
could materially affect our costs, decrease our sales, harm our reputation or otherwise negatively affect our operations.
Our international operations, including foreign sourcing, result in an exposure to fluctuations in foreign currency
exchange rates.
We are exposed to certain currency exchange risks in conducting business outside of the United States. The
substantial majority of our product purchases are from foreign vendors and are denominated in U.S. dollars. If the value of
the U.S. dollar decreases relative to certain foreign currencies in the future, then the prices that we negotiate for products
could increase and we may be unable to pass this increase 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 and payment for a product, the price we
pay may be higher than that paid for comparable goods by competitors that pay for goods in local currencies, and these
competitors may be able to sell their products at more competitive prices. An increase in the value of the U.S. dollar
compared to other currencies in which we have sales could also result in lower levels of sales and earnings reported in our
consolidated statements of operations and lower gross margins. Additionally, currency fluctuations could also disrupt the
business of our independent manufacturers by making their purchases of raw materials more expensive and difficult to
finance.
Our geographic concentration of retail stores, restaurants and wholesale customers exposes us to certain regional risks.
Our operations and retail and restaurant locations are heavily concentrated in the United States and certain
geographic areas within the United States, including Florida, California, Texas and Hawaii for our Tommy Bahama
operations and Florida, Massachusetts and Virginia for our Lilly Pulitzer operations. Additionally, the wholesale sales for
each of Tommy Bahama, Lilly Pulitzer and Southern Tide are also geographically concentrated, including in geographic
areas where we have concentrations of our own retail store locations. Due to these concentrations, as well as our brands’
association with the resort lifestyle and destinations, we have heightened exposure to factors that impact these regions,
including general economic conditions, weather patterns, natural disasters, public health crises, changing demographics
and other factors.
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Risks Related to Regulatory, Tax and Financial Reporting Matters
Our business is subject to various federal, foreign, state and local laws and regulations, and the costs of compliance
with, or the violation of, such laws and regulations could have an adverse effect on our costs or operations.
We are subject to stringent standards, laws and other regulations, including those relating to health, product
performance and safety, labor, employment, privacy and data security, anti-bribery, consumer protection, taxation, customs,
logistics and other operational matters. These laws 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 are currently or will in the future be compliant with
all applicable laws and regulations in all the states and countries in which we operate. In addition to the local laws of the
foreign countries in which we operate, we are subject to certain anti-corruption laws, including the U.S. Foreign Corrupt
Practices Act. If any of our international operations, or our employees or agents, violates such laws, we could become
subject to sanctions or other penalties that could negatively affect our reputation, business and operating results.
We may be required to make significant expenditures and devote significant time and management resources to
comply with existing or future laws or regulations, and a violation of applicable laws and regulations by us, or any of our
suppliers or licensees, may restrict our ability to import products, require a recall of our products, lead to fines or otherwise
increase our costs, negatively impact our ability to attract and retain employees or materially limit our ability to operate our
business. In addition, regardless of whether any allegations of violations of the laws and regulations governing our business
are valid or whether we ultimately become liable, we may be materially affected by negative publicity as a result of such
allegations.
In particular, the regulatory environment governing our use of individually identifiable data is complex, and
compliance with new and modified state, federal and international privacy and security laws, such as the General Data
Protection Regulation in the E.U. and the California Consumer Privacy Act and similar laws being contemplated in other
states, may require us to modify our operations and/or incur costs to make necessary systems changes and implement new
administrative processes. In addition, because we process and transmit payment card information, we are subject to the
payment card industry data security standard and card brand operating rules, which provide for a comprehensive set of
rules relating to the retention and/or transmission of payment card information. If we do not comply with the applicable
standards, we may be subject to fines or restrictions on our ability to accept payment cards, which could have a material
adverse effect on our operations.
Changes in international trade regulation could increase our costs and disrupt our supply chain.
Due to our international sourcing activities, we are exposed to risks associated with changes in the laws and
regulations governing the importing and exporting of apparel products into and from the countries in which we operate.
These risks include imposition of additional or new antidumping, countervailing or other duties, tariffs, taxes, quota
restrictions; government-imposed restrictions as a result of public health issues, such as the ongoing COVID-19 outbreak;
changes in customs procedures for importing apparel products; restrictions on the transfer of funds to or from foreign
countries; and the issuance of sanctions and trade orders. Any of these factors may disrupt our supply chain, and we may
be unable to offset any associated cost increases by shifting production to suitable manufacturers in other jurisdictions in a
timely manner or at acceptable prices, and future regulatory actions or changes in international trade regulation may
provide our competitors with a material advantage over us or render our products less desirable in the marketplace.
Any violation or perceived violation of our codes of conduct or environmental and social compliance programs,
including by our manufacturers or vendors, could have a material adverse effect on our brands.
We have a robust legal and social compliance program, including codes of conduct and vendor compliance
standards. The reputation of our brands could be harmed if we or our third party manufacturers and vendors, substantially
all of which are located outside the United States, fail to meet appropriate product safety, product quality and social
compliance standards. Despite our efforts, we cannot ensure that our manufacturers and vendors will at all times conduct
their operations in accordance with ethical practices or that the products we purchase will always meet our
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safety and quality control standards, and any failure to do so could disrupt our supply chain and adversely affect our
business operations.
In particular, the U.S. Government has issued withhold release orders in response to concerns regarding forced
labor in the Xinjiang Uyghur Autonomous Region of China. While we have diversified the jurisdictions from which we
source products, our manufacturing operations remain concentrated in China, and cotton is among the principal raw
materials used in many of our goods. The presence or perception of forced labor in our supply chain in spite of our efforts
to ensure that our third party manufacturers and vendors meet human rights and labor standards could result in adverse
impacts on our business, including the detention of goods at U.S. points of entry, challenges in identifying replacement
vendors and harm to our reputation.
Furthermore, consumers are increasingly attuned to the environmental and social impact of the products they
purchase and companies with which they do business. A failure to effectively communicate our core principles with our
customers and investors or respond to concerns raised with respect to our social responsibility and sustainability initiatives,
including through our social media channels, could result in a negative public perception of our brands and products and
negatively impact our business.
As a global apparel company, we may experience fluctuations in our tax liabilities and effective tax rate.
As a global apparel company, we are subject to income taxes in the United States and various foreign
jurisdictions. We record our income tax liability based on an analysis and interpretation of local tax laws and regulations,
which requires a significant amount of judgment and estimation. In addition, we may from time to time modify our
operations in an effort to minimize our global income tax expense. Our effective income tax rate in any particular period or
in future periods may be affected by a number of factors, including a shift in the mix of revenues, income and/or losses
among domestic and international sources during a year or over a period of years; changes in tax laws and regulations
and/or international tax treaties; the outcome of income tax audits in various jurisdictions; the difference between the
income tax deduction and the previously recognized income tax benefit related to the vesting of equity-based compensation
awards; and the resolution of uncertain tax positions, any of which could adversely affect our effective income tax rate and
profitability.
Further, changes to U.S. and foreign tax laws and compliance with new tax laws could have a material adverse
effect on our tax expense, cash flows and operations. The CARES Act, signed into law in March 2020, favorably impacted
our U.S. tax rate for Fiscal 2020 by allowing the carryback of net operating losses to periods prior to U.S. Tax Reform and
accelerating depreciation of certain leasehold improvement costs. The issuance of new regulatory guidance on the CARES
Act or other changes in interpretations and assumptions regarding the CARES Act and its impact on U.S. tax laws could
cause our actual U.S. tax rate to differ significantly from historical rates and estimates. In addition, the Organization for
Economic Cooperation and Development has published action plans that, if adopted by countries where we do business,
could materially impact our tax obligations in those countries.
Impairment charges for goodwill or long-lived assets could have a material adverse impact on our financial results.
The carrying values of our goodwill and long-lived assets, including those recorded in connection with our
acquisition of a business or our bricks and mortar operations, are subject to periodic impairment testing. Impairment testing
of goodwill and long-lived assets requires us to make estimates about future performance and cash flows that are inherently
uncertain and can be affected by numerous factors, including changes in economic conditions, income tax rates, our results
of operations and competitive conditions in the industry. For example, in Fiscal 2020, we recognized $60 million of non-
cash impairment charges for goodwill and intangible assets, which reflected the impact of COVID-19 on the operations,
plans and strategy of the Southern Tide business. Future impairment charges may have a material adverse effect on our
consolidated financial statements or results of operations.
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Any failure to maintain liquor licenses or comply with applicable regulations could adversely affect the profitability of
our restaurant operations.
The restaurant industry requires compliance with a variety of federal, state and local regulations. In particular, all
of our Tommy Bahama restaurants and Marlin Bars serve alcohol and, therefore, maintain liquor licenses. Our ability to
maintain our liquor licenses and other permits depends on our compliance with applicable laws and regulations. The loss of
a liquor license or other critical permits would adversely affect the profitability of that restaurant. Additionally, as a
participant in the restaurant industry, we face risks related to food quality, food-borne illness, injury, health inspection
scores and labor relations. The negative impact of adverse publicity relating to allegations of actual or perceived violations
at one of our restaurants may extend beyond the restaurant involved to affect some or all of our other restaurants, as well as
the image of the Tommy Bahama brand as a whole.
General Risks
Our business depends on our senior management and other key personnel, and failure to successfully attract, retain
and implement succession of our senior management and key personnel may have an adverse effect on our operations
and ability to execute our strategies.
Our senior management has substantial experience in the apparel and related industries, with our Chairman and
Chief Executive Officer Mr. Thomas C. Chubb III having worked with our company for more than 30 years, including in
various executive management capacities. Our success depends on disciplined execution at all levels of our organization,
including our senior management, and continued succession planning. Competition for qualified personnel is intense, and
we compete to attract and retain these individuals with other companies that may have greater financial resources than us.
While we believe that we have depth within our management team, the unexpected loss of any of our senior management,
or the unsuccessful integration of new leadership, could harm our business and financial performance. In addition, we may
be unable to retain or recruit qualified personnel in key areas such as product design, sales, marketing (including
individuals with key insights into digital and social media marketing strategies), distribution, technology, sourcing and
other support functions, which could result in missed sales opportunities and harm to key business relationships.
We may be unable to protect our trademarks and other intellectual property.
We believe that our trademarks and other intellectual property rights have significant value and are important to
our continued success and our competitive position due to their recognition by consumers and retailers. Substantially all of
our consolidated net sales are 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 other countries to protect our proprietary rights. However, we may not be able to sufficiently prevent
third parties from using our intellectual property without our authorization, particularly in those countries where the laws
do not protect our proprietary rights as fully as in the United States. The use of our intellectual property or similar
intellectual property by others could reduce or eliminate any competitive advantage we have developed, causing us to lose
sales or otherwise harm the reputation of our brands.
We devote significant resources to the registration and protection of our trademarks and to anti-counterfeiting
efforts. Despite these efforts, we regularly discover products that infringe our proprietary rights or that otherwise seek to
mimic or leverage our intellectual property. Counterfeiting and other infringing activities typically increase as brand
recognition increases, and association of our brands with inferior counterfeit reproductions or third party labels could
adversely affect 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 our products as violations of proprietary rights. As we extend our brands into new product
categories and new product lines and expand the geographic scope of the manufacture, distribution and marketing of our
brands’ products, we could become subject to litigation or challenge based on allegations of the infringement of intellectual
property rights of third parties, including by various third parties who have acquired or claim ownership rights in some of
our trademarks internationally. In the event a claim of infringement against us is successful or would
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otherwise affect our operations, we may be required to pay damages, royalties, license fees 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 at a
reasonable cost or within a reasonable time. Litigation and other legal action of this type, regardless of whether it is
successful, could result in substantial costs to us and diversion of the attention of our management and other resources.
We are subject to periodic litigation, which may cause us to incur substantial expenses or unexpected liabilities.
From time to time, we are involved in litigation matters, which may relate to consumer protection, employment
practices, leasing arrangements, intellectual property infringement and contract disputes, and which may include a class
action, and we are subject to various claims and pending or threatened lawsuits in the ordinary course of our business
operations. Often, these cases raise complex factual and legal issues and, due to the inherent uncertainties of litigation, we
cannot accurately predict the ultimate outcome of any such proceedings. Regardless of the outcome or whether the claims
have merit, legal proceedings may be expensive and require significant management time.
Our common stock price may be highly volatile, and we may be unable to meet investor and analyst expectations.
Our common stock, which is currently listed on the New York Stock Exchange, may be subject to extreme and
unpredictable fluctuations in price. The market price of our common stock may decline if the results of our operations do
not meet the expectations of securities analysts or our shareholders, investors are unreceptive to an announcement of
changes in our business or our strategic initiatives or securities analysts who follow our company change their estimates of
our future performance. Our stock price may also change suddenly as a result of factors beyond our control, including
general economic conditions, new or modified legislation impacting our industry, announcements by our competitors, or
sales of our stock by existing shareholders.
The stock market has also experienced periods of general volatility which result in fluctuations in stock prices
unrelated or disproportionate to operating performance. We cannot provide assurances that there will continue to be an
active trading market for our stock, and the price of our common stock may also be affected by illiquidity or perceived
illiquidity of our shares. In addition, although we have paid dividends in each quarter since we became a public company in
July 1960, we may discontinue or reduce dividend payments based upon several factors, including the terms of our credit
facility and applicable law, the need for funding for our strategic initiatives or other capital expenditures and our future
cash needs. Any modification or suspension of dividends could cause our stock price to decline. We also may be subject,
from time to time, to legal and business challenges or disruptions in the operation of our company due to actions instituted
by activist shareholders or others.
Other factors may have an adverse effect on our business, results of operations and financial condition.
Other risks, many of which are beyond our ability to control or predict, could negatively impact our business and
financial performance, including changes in social, political, labor, health and economic conditions; changes in the
operations or liquidity of any of the parties with which we conduct our business, or in the access to capital markets for any
such parties; increasing costs of customer acquisition, activation and retention; consolidation in the retail industry and other
factors. Any of these risks, and others of which we are not aware or that we currently consider to be immaterial, could,
individually or in the aggregate, have a material adverse effect on our business, financial condition and results of
operations.
Item 1B. Unresolved Staff Comments
None.
Item 2. Properties
We lease and own space for our direct to consumer locations, distribution centers, and sales/administration offices
in various domestic and international locations. We believe that our existing properties are well maintained, are
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in good operating condition and will be adequate for our present level of operations. We also own certain properties that
were previously used in our manufacturing and distribution operations.
In the ordinary course of business, we enter into lease agreements for our direct to consumer operations, including
leases for retail, restaurant and Marlin Bar space. The leases have varying terms and expirations and may have provisions
to extend, renew or terminate the lease agreement, among other terms and conditions. At times, we may determine that it is
appropriate to close certain direct to consumer locations that no longer meet our investment criteria, by either not renewing
the lease, exercising an early termination option, negotiating an early termination or otherwise. For existing leases in
desirable locations, we anticipate that we will be able to extend our leases, to the extent that they expire in the near future,
on terms that are satisfactory to us, or if necessary, locate substitute properties on acceptable terms. The terms and
conditions of lease renewals or relocations may not be as favorable as existing leases. Greater detail about the direct to
consumer space used by each operating group is included in Part I, Item 1, Business included in this report.
Details of the principal administrative, sales, distribution and manufacturing facilities used in our operations,
including approximate square footage, are as follows:
Location
Seattle, Washington
Auburn, Washington
King of Prussia, Pennsylvania
Greenville, South Carolina
Atlanta, Georgia
Lyons, Georgia
Toccoa, Georgia (ceasing operations in Fiscal
2021)
Merida, Mexico (ceased operations in Fiscal
2020)
Item 3. Legal Proceedings
Primary Use
Operating Group
Sales/administration Tommy Bahama
Tommy Bahama
Distribution center
Sales/administration
and distribution
center
Lilly Pulitzer
Sales/administration Southern Tide
Sales/administration
Corporate and Other
and Lanier Apparel
Distribution center
Various
Square
Footage
115,000
325,000
Lease
Expiration
2026
2025
160,000
14,000
30,000
420,000
Owned
2024
2024
Owned
Distribution center
Lanier Apparel
310,000
Owned
Manufacturing plant Lanier Apparel
80,000
Owned
From time to time, we are a party to litigation and regulatory actions arising in the ordinary course of business.
These actions may relate to trademark and other intellectual property, licensing arrangements, real estate, employee
relations matters, importing or exporting regulations, taxation or other topics. We are not currently a party to any litigation
or regulatory action or aware of any proceedings contemplated by governmental authorities that we believe could
reasonably be expected to have a material impact on our financial position, results of operations or cash flows. However,
our assessment of any litigation or other legal claims could potentially change in light of the discovery of additional factors
not presently known or determinations by judges, juries, or others which are not consistent with our evaluation of the
possible liability or outcome of such litigation or claims.
Item 4. Mine Safety Disclosures
Not applicable.
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PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Securities
Market and Dividend Information
Our common stock is listed and traded on the New York Stock Exchange under the symbol "OXM." As of
March 19, 2021, there were 292 record holders of our common stock.
On March 23, 2021, our Board of Directors approved a cash dividend of $0.37 per share payable on April 30,
2021 to shareholders of record as of the close of business on April 16, 2021. Although we have paid dividends in each
quarter since we became a public company in July 1960, including $17 million in total or $1.00 per common share in
Fiscal 2020 and $25 million in total or $1.48 per common share in Fiscal 2019, we may discontinue or modify dividend
payments at any time if we determine that other uses of our capital, including payment of outstanding debt, funding of
acquisitions, funding of capital expenditures or repurchases of outstanding shares, may be in our best interest; if our
expectations of future cash flows and future cash needs outweigh the ability to pay a dividend; or if the terms of our credit
facility, other debt instruments or applicable law limit our ability to pay dividends. We may borrow to fund dividends in the
short term subject to the terms and conditions of our credit facility, other debt instruments and applicable law. All cash flow
from operations will not 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’s Discussion and Analysis
of Financial Condition and Results of Operations, both contained in this report.
Recent Sales of Unregistered Securities
We did not sell any unregistered equity securities during Fiscal 2020.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
We have certain stock incentive plans as described in Note 8 to our consolidated financial statements included in
this report, all of which are publicly announced plans. Under the plans, we can repurchase shares from employees to cover
employee tax liabilities related to the vesting of shares of our stock. During the Fourth Quarter of Fiscal 2020, no shares
were repurchased pursuant to these plans.
As disclosed in our Annual Report on Form 10-K for Fiscal 2017 and subsequent annual and quarterly reports, in
March 2017, our Board of Directors authorized us to spend up to $50 million to repurchase shares of our stock. This
authorization superseded and replaced all previous authorizations to repurchase shares of our stock and has no automatic
expiration. As of February 1, 2020, no shares of our stock had been repurchased pursuant to this authorization. In February
and March 2020, we repurchased 332,000 shares of our common stock for $18 million under an open market stock
repurchase program (Rule 10b5-1 plan) pursuant to the Board of Directors’ authorization. During the Fourth Quarter of
Fiscal 2020, we did not repurchase any shares of our stock pursuant to this authorization. As of January 30, 2021, $32
million of the authorization remains available for future repurchases of our common stock.
Stock Price Performance Graph
The graph below reflects cumulative total shareholder return (assuming an initial investment of $100 and the
reinvestment of dividends) on our common stock compared to the cumulative total return for a period of five years,
beginning January 30, 2016 and ending January 30, 2021, of:
● The S&P SmallCap 600 Index; and
● The S&P 500 Apparel, Accessories and Luxury Goods.
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Company / Index
Oxford Industries, Inc.
S&P SmallCap 600 Index
S&P 500 Apparel, Accessories & Luxury Goods
INDEXED RETURNS
Base Period
1/30/16
1/28/17
100
100
100
78.78
135.00
85.20
2/3/18
117.38
154.01
108.75
Years Ended
2/2/19
116.42
154.55
101.36
2/1/20
106.72
164.80
93.38
1/30/21
102.47
202.99
91.33
Item 6. Selected Financial Data
Intentionally omitted.
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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our results of operations, cash flows, liquidity and capital resources
compares Fiscal 2020 to Fiscal 2019 and should be read in conjunction with our consolidated financial statements
contained in this report.
The results of operations, cash flows, liquidity and capital resources for Fiscal 2019 compared to Fiscal 2018 are
not included in this report on Form 10-K. For a discussion of our results of operations, cash flows, liquidity and capital
resources for Fiscal 2019 compared to Fiscal 2018 and certain other financial information related to Fiscal 2019 and Fiscal
2018, refer to the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II.
Item 7 of our 2019 Annual Report on Form 10-K, filed with the SEC on March 30, 2020, which is available on the SEC’s
website at www.sec.gov and under the Investor Relations section of our website at www.oxfordinc.com.
Business Overview
OVERVIEW
We are a leading branded apparel company that designs, sources, markets and distributes products bearing the
trademarks of our Tommy Bahama, Lilly Pulitzer and Southern Tide lifestyle brands and other brands. Tommy Bahama
and Lilly Pulitzer, in the aggregate, represent more than 85% of our net sales.
Our business strategy is to develop and market compelling lifestyle brands and products that evoke a strong
emotional response from our target consumers. We consider lifestyle brands to be those brands that have a clearly defined
and targeted point of view inspired by an appealing lifestyle or attitude. Furthermore, we believe lifestyle brands that create
an emotional connection, like Tommy Bahama, Lilly Pulitzer and Southern Tide, can command greater loyalty and higher
price points at retail and create licensing opportunities. We believe the attraction of a lifestyle brand depends on creating
compelling product, effectively communicating the respective lifestyle brand message and distributing products to
consumers where and when they want them. We believe the principal competitive factors in the apparel industry are the
reputation, value, and image of brand names; design of differentiated, innovative or otherwise compelling product;
consumer preference; price; quality; marketing; product fulfillment capabilities; and customer service. Our ability to
compete successfully in the apparel industry is directly related to our proficiency in foreseeing changes and trends in
fashion and consumer preference and presenting appealing products for consumers. Our design-led, commercially
informed lifestyle brand operations strive to provide exciting, differentiated products each season.
During Fiscal 2020, 77% of our net sales were through our direct to consumer channels of distribution, which
consists of our brand-specific full-price retail stores, our e-commerce websites, our Tommy Bahama food and beverage
operations and our Tommy Bahama outlets. The remaining 23% of our net sales was generated from our wholesale
distribution channels. Our wholesale operations consist of net sales of products bearing our lifestyle brands, which
complement our direct to consumer operations and provide access to a larger group of consumers, and the net sales of our
Lanier Apparel operating group.
For additional information about our business and each of our operating groups, see Part I, Item 1. Business
included in this report. Important factors relating to certain risks which could impact our business, including those resulting
from the COVID-19 outbreak, are described in Part I, Item 1A. Risk Factors of this report.
Industry Overview
Our operating groups operate in highly competitive apparel markets that continue to evolve rapidly with the
expanding application of technology to fashion retail. No single apparel firm or small group of apparel firms dominates the
apparel industry, and our direct competitors vary by operating group and distribution channel. The apparel industry is
cyclical and very dependent upon the overall level and focus of discretionary consumer spending, which changes as
consumer preferences and regional, domestic and international economic conditions change. Increasingly, consumers are
choosing to spend less of their discretionary spending on certain product categories, including apparel, while spending
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more on services and other product categories. Further, negative economic conditions often have a longer and more severe
impact on the apparel industry than on other industries.
The competitive and evolving environment may require that brands and retailers approach their operations,
including marketing and advertising, very differently than historical practices and may result in increased operating costs
and capital investments to generate growth or even maintain current sales levels. Many of the changes in the industry were
accelerated or exacerbated by the COVID-19 pandemic. While this competition and evolution presents significant risks,
especially for traditional retailers who fail or are unable to adapt, we believe it also presents a tremendous opportunity for
brands and retailers to capitalize on the changing consumer environment.
We believe our lifestyle brands have true competitive advantages in this new retailing paradigm, and we are
leveraging technology to serve our consumers when and where they want to be served. We continue to believe that our
lifestyle brands, with their strong emotional connections with consumers, are well suited to succeed and thrive in the long
term while managing the various challenges facing our industry.
COVID-19 Pandemic
The COVID-19 pandemic has had a significant effect on overall economic conditions and our operations and is
the primary reason for a 33% reduction in net sales and a significant net loss in Fiscal 2020 after years of profitable
operating results. While our mission remains the enhancement of long-term shareholder value, our focus during this crisis
has been (1) the health and well-being of our employees, customers and communities, (2) protecting the reputation, value
and image of our brands and (3) preserving liquidity.
Due to the COVID-19 pandemic, we saw reduced consumer traffic starting in early March 2020 and temporarily
closed all our retail and restaurant locations. We began reopening our stores and restaurants in early May with additional
stores and restaurants reopening throughout the Second Quarter of Fiscal 2020. We have reopened substantially all of our
direct to consumer locations in a phased approach in accordance with local government guidelines and with additional
safety protocols. Substantially all locations are experiencing reduced traffic, limited operating hours and capacity, and
seating and other limitations, with such factors impacting individual locations differently. Certain retail stores and
restaurants, including several in Hawaii and California, were required to close again for certain periods in the Third and
Fourth Quarters of Fiscal 2020 after local jurisdictions reinstated some closure requirements. There can be no assurance
that additional closures will not occur as a result of any resurgence of COVID-19 cases and/or additional government
mandates or recommendations. Generally, locations with attached restaurants or Marlin Bars, in outdoor centers and in
drivable resort vacation destinations performed better than locations in indoor malls in Fiscal 2020. At the same time, the
shift from in-store shopping to online shopping has accelerated during the COVID-19 pandemic resulting in 24% growth in
our e-commerce businesses during Fiscal 2020.
There is significant uncertainty as to the duration and severity of the pandemic as well as the associated business
disruption, impact on discretionary spending and restrictions on our ongoing operations. Thus, the ultimate impact of the
pandemic cannot be reasonably estimated at this time. However, the COVID-19 pandemic is expected to continue to have a
material adverse impact on our business, results of operations, cash flows and financial condition for the foreseeable future
due to the anticipated lower net sales from our bricks and mortar locations; reduced demand from our wholesale customers,
several of which filed for bankruptcy in 2020 or are undergoing restructurings or closures; the uncertainty as to the
continued strength of our brands’ e-commerce businesses during the pendency of the pandemic and thereafter; overall
changes in consumer spending habits and consumer confidence; any potential disruptions to our supply chain; and a
slowdown in the U.S. and global economies.
We took several actions in Fiscal 2020 to mitigate the impact of the COVID-19 pandemic on our business,
operations and liquidity, which included:
● we furloughed and laid off a significant number of our retail, restaurant and office employees;
● certain salaried employees, including our Chief Executive Officer, Chief Financial Officer and other
executives, took temporary reductions in base salary during Fiscal 2020;
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● our Board of Directors elected to reduce its cash retainers for Fiscal 2020;
● we worked with our suppliers to cancel, delay or suspend future product deliveries;
● we worked with our wholesale customers to identify suitable changes to our business arrangements;
● we negotiated equitable rental arrangements with substantially all of our direct to consumer location
landlords, believing that the payment of rents for both the closure and subsequent periods is
inappropriate due to the impact of the COVID-19 pandemic, and are continuing those discussions with
some landlords;
● under the CARES Act, and other regulations in other countries, we obtained employee retention credits
for certain compensation paid to employees even while they were not working during the COVID-19
pandemic and have deferred the payment of the employer portion of FICA;
● we suspended, cancelled or deferred certain capital expenditure projects, reducing our capital
expenditures for Fiscal 2020;
● during much of Fiscal 2020, we had drawn down certain amounts on our U.S. Revolving Credit
Agreement to increase our cash position and preserve financial flexibility; and
● our Board of Directors reduced the rate of our dividend payable for Fiscal 2020.
Also, we established management committees, reporting to our Chief Executive Officer, to continue to monitor
the COVID-19 pandemic and its impact and are taking the necessary measures to protect the health and safety of our
employees and customers.
We anticipate that net sales in each of our Tommy Bahama, Lilly Pulitzer and Southern Tide operating groups will
continue to be negatively impacted by the COVID-19 pandemic in Fiscal 2021, with the impact being more pronounced in
the first half of the year and then beginning to rebound a little more in the second half of the year once more consumers are
vaccinated, begin to travel again or otherwise begin to return to a more normal way of life.
Given our net cash position as of January 30, 2021, substantial availability under our U.S. Revolving Credit
Agreement and expectation of positive cash flows from operations in Fiscal 2021, among other factors, we believe we have
adequate liquidity and the financial discipline to address the near-term challenges related to the COVID-19 pandemic and
to position ourselves well to thrive in the post-pandemic retail environment.
Lanier Apparel Exit
In Fiscal 2020, we made the decision to exit our Lanier Apparel business, which is expected to be completed
during the second half of Fiscal 2021. In Fiscal 2020 and Fiscal 2019, Lanier Apparel represented 5% and 8%, respectively,
of our consolidated net sales. This decision is in line with our stated business strategy of developing and marketing
compelling lifestyle brands and takes into consideration the increased challenges faced by the Lanier Apparel business,
many of which were magnified by the COVID-19 pandemic. The Lanier Apparel business was primarily focused on
moderately priced tailored clothes and related products.
In connection with the planned exit of the Lanier Apparel business, we recorded pre-tax charges of $13 million in
the Lanier Apparel operating group during Fiscal 2020. These charges consist of (1) $6 million of inventory markdowns,
the substantial majority of which were reversed in Corporate and Other as part of LIFO accounting as the inventory has not
been sold as of January 30, 2021, (2) $3 million of employee charges, including severance and employee retention costs,
(3) $3 million of operating lease asset impairment charges for leased office space of Lanier Apparel, (4) $1 million of non-
cash fixed asset impairment charges, primarily related to leasehold improvements, and (5) $1 million of charges related to
our Merida manufacturing facility, which ceased operations in Fiscal 2020. Refer to
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Note 11 in our consolidated financial statements included in this report for more information about the Lanier Apparel exit
charges.
In addition to these charges incurred in Fiscal 2020, we currently expect to incur incremental Lanier Apparel exit
charges totaling approximately $3 million in Fiscal 2021, which are expected to consist of additional employee charges for
employees retained during the exit and the acceleration of certain post-exit contractual commitments.
Key Operating Results
The following table sets forth our consolidated operating results from continuing operations (in thousands, except
per share amounts) for Fiscal 2020 compared to Fiscal 2019:
Net sales
Operating (loss) income
Net (loss) earnings
Net (loss) earnings per diluted share
Weighted average shares outstanding -- diluted
Fiscal 2020 Fiscal 2019
$ 1,122,790
93,675
68,493
4.05
16,914
$ 748,833
$ (123,849) $
$ (95,692) $
(5.77) $
$
16,576
The net loss per share in Fiscal 2020 compared to positive net earnings per share in Fiscal 2019 was primarily due
to (1) the impact of COVID-19 on the operating results of each of our operating groups resulting in lower sales and lower
gross margins, (2) the $60 million Southern Tide impairment charge recognized in the First Quarter of Fiscal 2020, a
significant portion of which was non-deductible, (3) the $15 million write off of an information technology project in
Tommy Bahama, and (4) $13 million of charges incurred in Fiscal 2020 related to the Lanier Apparel exit, which is
expected to be completed in the second half of Fiscal 2021. These items were partially offset by a smaller operating loss in
Corporate and Other, which was primarily due to the favorable impact of LIFO accounting primarily due to the reversal of
inventory markdowns recognized in the operating groups.
OPERATING GROUPS
We identify our operating groups based on the way our management organizes the components of our business for
purposes of allocating resources and assessing performance. Our operating group structure reflects a brand-focused
management approach, emphasizing operational coordination and resource allocation across each brand’s direct to
consumer, wholesale and licensing operations, as applicable. Our business has historically been operated primarily through
our Tommy Bahama, Lilly Pulitzer, Southern Tide and Lanier Apparel operating groups. In Fiscal 2020, we made the
decision to exit our Lanier Apparel business, which is expected to be completed during the second half of Fiscal 2021. For
additional information about each of our operating groups, see Part I, Item 1. Business and Note 2 to our consolidated
financial statements, both included in this report.
STORE COUNT
The table below provides store count information for Tommy Bahama, Lilly Pulitzer and Southern Tide as of the
dates specified. The table includes our permanent stores and excludes any pop-up or temporary store locations which have
an initial lease term less than or equal to 12 months. Due to the impact of the COVID-19 pandemic, all our stores and
restaurants were closed beginning in March 2020. We began reopening our stores and restaurants starting on May 3, 2020
in a phased approach in accordance with local government guidelines and with additional safety protocols implemented
with substantially all direct to consumer locations reopened as of January 30, 2021. Certain retail stores and restaurants in
some jurisdictions, including Hawaii and California, were required to close again for certain periods in the second half of
Fiscal 2020 after local jurisdictions reinstated some closure requirements. Substantially all locations are experiencing
reduced traffic, limited operating hours and capacity, seating and other limitations, with such factors impacting individual
locations differently.
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Tommy Bahama retail stores
Tommy Bahama retail-restaurant locations
Tommy Bahama outlets
Total Tommy Bahama locations
Lilly Pulitzer retail stores
Southern Tide retail stores
Total Oxford locations
January 30, February 1, February 2, February 3,
2021
2020
2019
2018
105
20
35
160
59
3
222
111
16
35
162
61
1
224
113
17
37
167
62
—
229
110
18
38
166
57
—
223
RESULTS OF OPERATIONS
The following table sets forth the specified line items in our consolidated statements of operations both in dollars
(in thousands) and as a percentage of net sales. We have calculated all percentages based on actual data, but percentage
columns may not add due to rounding. Individual line items of our consolidated statements of operations may not be
directly comparable to those of our competitors, as classification of certain expenses may vary by company.
Fiscal 2020
Fiscal 2019
Fiscal 2018
Net sales
Cost of goods sold
Gross profit
SG&A
Impairment of goodwill and intangible assets
Royalties and other operating income
Operating income
Interest expense, net
Earnings from continuing operations
before income taxes
Income taxes
Net earnings
Weighted average shares outstanding -
diluted
$ 748,833
333,626
415,207
492,628
60,452
14,024
(123,849)
2,028
477,823
644,967
566,149
100.0 % $ 1,122,790
44.6 %
55.4 %
65.8 %
8.1 %
1.9 %
(16.5)%
0.3 %
14,857
93,675
1,245
—
100.0 % $ 1,107,466 100.0 %
42.5 %
470,342
42.6 %
57.5 %
637,124
57.4 %
50.6 %
50.4 %
560,508
— %
— %
1.3 %
1.3 %
8.2 %
8.3 %
0.2 %
0.1 %
13,976
90,592
2,283
—
(125,877)
(30,185)
$ (95,692)
(16.8)%
(4.0)%
NM $
92,430
23,937
68,493
8.2 %
2.1 %
NM $
88,309
22,018
66,291
8.0 %
2.0 %
NM
16,576
16,914
16,842
The following table presents the proportion of our consolidated net sales by distribution channel for each period
presented:
Retail
E-commerce
Restaurant
Wholesale
Total
Fiscal 2020
Fiscal 2019 Fiscal 2018
27 %
43 %
7 %
23 %
100 %
39 %
23 %
8 %
30 %
100 %
40 %
21 %
8 %
31 %
100 %
FISCAL 2020 COMPARED TO FISCAL 2019
The discussion and tables below compare certain line items included in our consolidated statements of operations
for Fiscal 2020 to Fiscal 2019. Each dollar and percentage change provided reflects the change between these fiscal periods
unless indicated otherwise. Each dollar and share amount included in the tables is in thousands except for per share
amounts. We have calculated all percentages based on actual data, and percentage columns in tables may not
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add due to rounding. Individual line items of our consolidated statements of operations may not be directly comparable to
those of our competitors, as classification of certain expenses may vary by company.
Net Sales
Tommy Bahama
Lilly Pulitzer
Southern Tide
Lanier Apparel
Corporate and Other
Consolidated net sales
Fiscal 2020
Fiscal 2019
419,817
231,078
34,664
38,796
24,478
748,833
$
$
676,652
284,700
46,409
95,200
19,829
1,122,790
$
$
$ Change
$ (256,835)
(53,622)
(11,745)
(56,404)
4,649
$ (373,957)
% Change
(38.0)%
(18.8)%
(25.3)%
(59.2)%
23.4 %
(33.3)%
Consolidated net sales decreased $374 million, or 33%, in Fiscal 2020 primarily due to the impact of the COVID-
19 pandemic, which has had a negative impact on our retail, wholesale and restaurant operations, impacted by, among other
things, temporary closures and reduced traffic after locations reopen, while our e-commerce business has generated very
strong growth. The decreases in net sales included decreases in (1) full-price retail sales of $213 million, or 56%, (2)
wholesale sales of $161 million, or 48%, (3) restaurant sales of $35 million, or 42%, and (4) outlet sales of $26 million, or
45%. These decreases were partially offset by increased e-commerce sales of $62 million, or 24%, primarily due to more
demand as consumers shifted to online shopping as well as increased online marketing and promotional events to further
engage consumers. The changes in net sales by operating group are discussed below.
Tommy Bahama:
Tommy Bahama net sales decreased $257 million, or 38%, in Fiscal 2020 primarily due to the impact of the
COVID-19 pandemic, which had a negative impact on our retail, wholesale and restaurant operations. The decrease in net
sales in Tommy Bahama included decreases in (1) full-price retail sales of $145 million, or 54%, (2) wholesale sales of $67
million, or 50%, including a decrease in both full-price and off-price sales, (3) restaurant sales of $35 million, or 42%, and
(4) outlet store sales of $27 million, or 46%. These decreases were partially offset by increased e-commerce sales of $17
million, or 13%. The following table presents the proportion of net sales by distribution channel for Tommy Bahama for
each period presented:
Retail
E-commerce
Restaurant
Wholesale
Total
Lilly Pulitzer:
Fiscal 2020 Fiscal 2019
37 %
36 %
11 %
16 %
100 %
48 %
20 %
12 %
20 %
100 %
Lilly Pulitzer net sales decreased $54 million, or 19%, in Fiscal 2020 primarily due to the impact of the COVID-
19 pandemic, which had a negative impact on our retail and wholesale operations. The decrease in net sales in Lilly
Pulitzer included decreases in (1) retail sales of $69 million, or 60%, and (2) wholesale sales of $24 million, or 40%,
primarily due to lower full-price sales. These decreases were partially offset by increased e-commerce sales of $39 million,
or 36%, including a 63% increase in full-price e-commerce sales and a 2% increase in e-commerce flash sales to $49
million. The following table presents the proportion of net sales by distribution channel for Lilly Pulitzer for each period
presented:
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Retail
E-commerce
Wholesale
Total
Southern Tide:
Fiscal 2020
Fiscal 2019
20 %
64 %
16 %
100 %
41 %
38 %
21 %
100 %
Southern Tide net sales decreased $12 million, or 25%, in Fiscal 2020 due to a $15 million, or 39%, decrease in
wholesale sales, which was primarily due to the impact of the COVID-19 pandemic, partially offset by a $1 million, or
15%, increase in e-commerce sales and a $1 million increase in retail store sales resulting from the opening of three
Southern Tide retail stores, with the first store opening in the Fourth Quarter of Fiscal 2019. The following table presents
the proportion of net sales by distribution channel for Southern Tide for each period presented:
Retail
E-commerce
Wholesale
Total
Lanier Apparel:
Fiscal 2020
Fiscal 2019
4 %
32 %
64 %
100 %
— %
21 %
79 %
100 %
Lanier Apparel net sales decreased $56 million, or 59%, in Fiscal 2020 primarily due to the impact of the COVID-
19 pandemic. Lanier Apparel had decreases in net sales in most replenishment, seasonal and other programs for both the
branded and private label businesses, including a large pants program for a warehouse club that did not repeat in Fiscal
2020. These decreases were partially offset by $4 million of sales of COVID-19 related personal protective equipment such
as masks and gowns.
Corporate and Other:
Corporate and Other net sales increased $5 million, or 23%, in Fiscal 2020 primarily due to increased sales in
TBBC as well as increased Duck Head sales.
Gross Profit
The tables below present gross profit by operating group and in total for Fiscal 2020 and Fiscal 2019, as well as
the change between those two periods and gross margin by operating group and in total. Our gross profit and gross margin,
which is calculated as gross profit divided by net sales, may not be directly comparable to those of our competitors, as the
statement of operations classification of certain expenses may vary by company.
Fiscal 2020
Fiscal 2019
Tommy Bahama
Lilly Pulitzer
Southern Tide
Lanier Apparel
Corporate and Other
Consolidated gross profit
Notable items included in amounts above:
LIFO adjustments in Corporate and Other
Tommy Bahama Japan inventory markdown charges
Lanier Apparel exit charges in cost of goods sold
$
$
$
$
$
49
244,197
137,962
11,810
303
20,935
415,207
$
$
(9,220)
$
— $
$
6,684
413,200
174,573
22,786
25,086
9,322
644,967
1,454
159
—
$ Change
$ (169,003)
(36,611)
(10,976)
(24,783)
11,613
$ (229,760)
% Change
(40.9)%
(21.0)%
(48.2)%
(98.8)%
NM %
(35.6)%
Table of Contents
Tommy Bahama
Lilly Pulitzer
Southern Tide
Lanier Apparel
Corporate and Other
Consolidated gross margin
Fiscal 2020
Fiscal 2019
58.2 %
59.7 %
34.1 %
0.8 %
NM %
55.4 %
61.1 %
61.3 %
49.1 %
26.4 %
NM %
57.4 %
The decrease in consolidated gross profit in Fiscal 2020 was due to the lower net sales and lower gross margin.
The lower consolidated gross margin reflects lower gross margin in each operating group as discussed below. During Fiscal
2020, we recognized the negative impact of $15 million of inventory markdowns which were partially offset by a $9
million LIFO accounting credit. In Fiscal 2019, we recognized $4 million of inventory markdowns and a $1 million LIFO
accounting charge.
Tommy Bahama:
The decrease in gross margin for Tommy Bahama was primarily driven by (1) lower gross margin in the full-price
direct to consumer channel primarily due to a change in sales mix as a greater proportion of sales were related to promotion
events, (2) lower gross margin in the wholesale channel resulting from a change in sales mix, with a greater proportion of
off-price wholesale sales, as well as increased inventory markdowns, (3) lower gross margin in outlet sales as discounts
were increased to move product and (4) certain fixed asset and operating lease asset impairment charges related to the
restructuring of our Tommy Bahama sourcing operations.
Lilly Pulitzer:
The decrease in gross margin for Lilly Pulitzer was primarily due to (1) lower gross margin in the ecommerce
flash sales resulting from increased discounting and increased freight expense, and (2) increased inventory markdowns.
These unfavorable items were partially offset by higher initial margins in Fiscal 2020.
Southern Tide:
The decrease in gross margin for Southern Tide was primarily due to (1) increased inventory markdowns and
lower profitability on off-price sales related to excess inventory and (2) more significant discounts and allowances in all
channels of distribution. These items were partially offset by a change in sales mix with direct to consumer sales
representing a larger proportion of net sales in Fiscal 2020.
Lanier Apparel:
The decrease in gross margin for Lanier Apparel was primarily due to (1) the $7 million of Lanier Apparel exit
charges in cost of goods sold, including inventory markdowns and charges related to our Merida manufacturing facility, as
discussed in Note 11 in the consolidated financial statements included in this report, (2) an increase in inventory
markdowns in the First Half of Fiscal 2020, and (3) lower gross margin on various programs due to the challenging tailored
clothing market. Each of these items had a more significant gross margin impact on the lower sales volume of Fiscal 2020.
Corporate and Other:
The gross profit in Corporate and Other primarily reflects the gross profit of TBBC, Duck Head and the Lyons,
Georgia distribution center as well as the impact of LIFO accounting adjustments. The primary drivers for the higher gross
profit were (1) the $11 million net favorable impact of LIFO accounting with a LIFO accounting credit in Fiscal 2020 and a
LIFO accounting charge in Fiscal 2019 and (2) the gross profit resulting from higher net sales. The LIFO accounting
impact in Corporate and Other in each period primarily reflects (1) a charge in Corporate and Other when inventory that
had been marked down to the estimated net realizable value in an operating group in a prior period is
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ultimately sold or (2) a credit in Corporate and Other when inventory has been marked down to the estimated net realizable
value in an operating group in the current period, but has not been sold as of period end.
SG&A
SG&A
SG&A (as a % of net sales)
Notable items included in amounts above:
Tommy Bahama Japan SG&A charges
Tommy Bahama information technology project write-
off
Amortization of Lilly Pulitzer Signature Store intangible
assets
Amortization of Southern Tide intangible assets
Lanier Apparel exit charges in SG&A
TBBC change in fair value of contingent consideration
$
$
$
$
$
$
$
Fiscal 2020
492,628
$
65.8 %
Fiscal 2019
566,149
$ Change
$ (73,521)
% Change
(13.0)%
50.4 %
— $
2,795
15,473
270
288
6,342
593
$
$
$
$
$
—
320
292
—
431
The lower SG&A in Fiscal 2020 was primarily due to:
● decreased employment costs of $63 million primarily due to reductions in our employment cost in
response to COVID-19, including the temporary furlough of substantially all retail and restaurant
employees while direct to consumer operations were temporarily closed, lay-offs, reduced hours or pay
reductions for certain employees, reductions in incentive compensation amounts, suspension of the
company match during Fiscal 2020 for our 401(k) plan and the receipt of certain employee retention
credits, partially offset by certain severance amounts, including employee charges associated with the
Lanier Apparel exit as discussed in Note 11 to the consolidated financial statements included in this
report;
● an $11 million reduction in certain variable expenses including credit card transaction fees, shipping
costs, commissions, supplies and other variable expenses;
● a $10 million reduction in occupancy expenses which includes reductions in percent rent, utilities,
maintenance and other expenses due to COVID-19 impact on store operations, certain negotiated rent
reductions, and fewer Tommy Bahama and Lilly Pulitzer bricks and mortar locations, partially offset by
a $3 million operating lease asset impairment charge associated with the Lanier Apparel exit as
discussed in Note 11 to the consolidated financial statements included in this report;
● a $6 million decrease in travel expenses as the COVID-19 pandemic halted most business travel;
● a $3 million reduction in advertising expenses;
● a $3 million decrease in Tommy Bahama Japan charges, which related to charges associated with the
restructure and exit of our Tommy Bahama Japan operations, with no such charges in Fiscal 2020; and
● decreases in other expense items including communications, samples, and administrative and general
expenses.
These decreases in SG&A were partially offset by:
● a $15 million charge for the write off of costs associated with a Tommy Bahama information technology
project that has been abandoned and will not be implemented;
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● $6 million of increased estimated provisions for credit losses and other charges related to bankruptcies
with respect to multiple customers; and
● a $3 million increase in depreciation expense including impairment charges for certain leasehold
improvements at certain retail locations and Lanier Apparel office space.
Impairment of goodwill and intangible assets
In Fiscal 2020, impairment charges for goodwill and intangible assets totaling $60 million were recognized in
Southern Tide. The impairment charges for Southern Tide primarily reflect the impact of COVID-19 on the operations,
plans and strategy of the Southern Tide business. In addition, a small impairment charge was recognized in Lanier Apparel
related to a trademark that was not deemed recoverable. Refer to Note 4 in the consolidated financial statements included
in this report for additional discussion regarding the impairment charges recognized in Fiscal 2020. There were no
impairment charges for goodwill or intangible assets in Fiscal 2019.
Royalties and other operating income
Royalties and other operating income
$
14,024
$
14,857
$
(833)
(5.6)%
Fiscal 2020
Fiscal 2019
$ Change
% Change
Royalties and other operating income primarily includes income received from third parties from the licensing of
our brands. The decreased royalties and other income in Fiscal 2020 was primarily due to lower royalty income in both
Tommy Bahama and Lilly Pulitzer.
$ Change
$ (106,517)
(24,093)
(70,355)
(28,607)
12,048
$ (217,524)
% Change
NM %
(46.5)%
NM %
NM %
NM %
NM %
Operating income (loss)
Tommy Bahama
Lilly Pulitzer
Southern Tide
Lanier Apparel
Corporate and Other
Consolidated Operating (Loss) Income
Notable items included in amounts above:
LIFO adjustments in Corporate and Other
Tommy Bahama Japan inventory markdown charges
Lanier Apparel exit charges in cost of goods sold
Tommy Bahama Japan SG&A charges
Tommy Bahama information technology project write-
off
Amortization of Lilly Pulitzer Signature Store
intangible assets
Amortization of Southern Tide intangible assets
Southern Tide goodwill and intangible asset
impairment charge
Lanier Apparel intangible asset impairment charge
Lanier Apparel exit charges in SG&A
TBBC change in fair value of contingent consideration
$
$
$
$
$
$
$
$
$
$
$
$
$
Fiscal 2020
Fiscal 2019
(53,310)
27,702
(64,801)
(26,654)
(6,786)
(123,849)
$
$
(9,220)
$
— $
$
— $
6,684
15,473
270
288
60,245
207
6,342
593
$
$
$
$
$
$
$
53,207
51,795
5,554
1,953
(18,834)
93,675
1,454
159
—
2,795
—
320
292
—
—
—
431
The lower operating results in Fiscal 2020 were primarily due to (1) the impact of COVID-19 on each operating
group, (2) the $60 million Southern Tide impairment charge recognized in the First Quarter of Fiscal 2020, (3) the $15
million write off of an information technology project in Tommy Bahama, and (4) the $13 million of Lanier Apparel exit
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charges incurred in Fiscal 2020. These items were partially offset by improved operating results in Corporate and Other,
which was primarily due to the favorable impact of LIFO accounting due to the reversal of inventory markdowns
recognized in the operating groups. Changes in operating income (loss) by operating group are discussed below.
Tommy Bahama:
Net sales
Gross profit
Gross margin
Operating (loss) income
Operating (loss) income as % of net sales
Notable items included in amounts above:
Tommy Bahama Japan inventory markdown
charges
Tommy Bahama Japan SG&A charges
Tommy Bahama information technology project
write-off
$
$
$
$
$
$
Fiscal 2020
Fiscal 2019
% Change
419,817
244,197
$
$
58.2 %
$
(12.7)%
(53,310)
676,652
413,200
$ Change
$ (256,835)
$ (169,003)
(38.0)%
(40.9)%
61.1 %
53,207
$ (106,517)
NM %
7.9 %
— $
— $
159
2,795
15,473
$
—
The lower operating results for Tommy Bahama in Fiscal 2020 were primarily due to lower sales and lower gross
margin partially offset by lower SG&A. The lower SG&A was primarily due to (1) $51 million of lower employment costs,
(2) $9 million of lower variable costs such as credit card transaction fees, commissions, shipping fees and supplies, (3) $7
million of lower occupancy costs, (4) a $4 million decrease in advertising expense, (5) a $3 million decrease in travel
expense, (6) a $3 million decrease in Tommy Bahama Japan charges, which related to Fiscal 2019 charges associated with
the restructure and exit of our Tommy Bahama Japan operations, and (7) decreases in other general and administrative
expenses. These decreases were partially offset by (1) a $15 million charge related to the write off of an information
technology project in Tommy Bahama that was abandoned in the Fourth Quarter of Fiscal 2020, (2) a $2 million increase in
depreciation expense including impairment charges for certain direct to consumer locations and (3) a $1 million increase in
provisions for credit losses.
Lilly Pulitzer:
Net sales
Gross profit
Gross margin
Operating income
Operating income as % of net sales
Notable items included in amounts above:
Amortization of Lilly Pulitzer Signature Store
intangible assets
$
$
$
$
Fiscal 2020
Fiscal 2019
$ Change
% Change
231,078
137,962
$
$
59.7 %
$
12.0 %
27,702
284,700
174,573
$
$
61.3 %
$
18.2 %
51,795
(53,622)
(36,611)
(18.8)%
(21.0)%
(24,093)
(46.5)%
270
$
320
The lower operating income for Lilly Pulitzer in Fiscal 2020 was primarily due to lower sales and lower gross
margin partially offset by lower SG&A. The lower SG&A was primarily due to (1) $9 million of lower employment costs,
(2) $3 million of lower occupancy costs, (3) a $2 million decrease in travel expense, and (4) reductions in other general and
administrative expenses. These decreases in SG&A were partially offset by (1) $3 million of higher marketing expense and
(2) increases in other expenses including provisions for credit losses.
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Southern Tide:
Net sales
Gross profit
Gross margin
Operating (loss) income
Operating (loss) income as % of net sales
Notable items included in amounts above:
Amortization of Southern Tide intangible assets
Southern Tide goodwill and intangible asset
impairment charge
$
$
$
$
$
Fiscal 2020
Fiscal 2019
$ Change
% Change
34,664
11,810
$
$
34.1 %
$
(186.9)%
(64,801)
46,409
22,786
$
$
49.1 %
$
12.0 %
5,554
(11,745)
(10,976)
(25.3)%
(48.2)%
(70,355)
NM %
288
60,245
$
$
292
—
The lower operating results for Southern Tide in Fiscal 2020 were primarily due to the $60 million impairment
charge for goodwill and intangible assets in the First Quarter of Fiscal 2020 as well as lower sales and lower gross margin
partially offset by lower SG&A. Lower SG&A for employment costs, advertising, travel and other expenses were partially
offset by the SG&A associated with the Southern Tide retail store operations and increased provisions for credit losses.
Lanier Apparel:
Fiscal 2020
Fiscal 2019
$ Change
% Change
Net sales
Gross profit
Gross margin
Operating (loss) income
Operating (loss) income as % of net sales
Notable items included in amounts above:
Lanier Apparel exit charges in cost of goods sold
Lanier Apparel intangible asset impairment
charge
Lanier Apparel exit charges in SG&A
$
$
$
$
$
$
$
38,796
$
303
0.8 %
$
(68.7)%
(26,654)
6,684
207
6,342
$
$
$
95,200
25,086
$
$
26.4 %
$
1,953
2.1 %
(56,404)
(24,783)
(59.2)%
(98.8)%
(28,607)
NM %
—
—
—
In Fiscal 2020, we made the decision to exit our Lanier Apparel business, which is expected to be completed
during the second half of Fiscal 2021. The lower operating results for Lanier Apparel in Fiscal 2020 were due to lower
sales, $13 million of charges related to the Lanier Apparel exit, and lower gross margin. The Lanier Apparel exit charges
primarily consist of inventory markdowns and charges related to our Merida manufacturing facility, which are included in
cost of goods sold, and operating lease asset impairment charges, employee charges, and fixed asset impairment charges,
which are included in SG&A. Absent the $6 million of Lanier Apparel exit charges included in SG&A, SG&A decreased
due to reductions in variable expenses, employment costs and other operating costs partially offset by $4 million of
increased estimated provisions for credit losses and other charges related to bankruptcies with respect to multiple Lanier
Apparel customers. The Lanier Apparel exit charges are discussed in Note 11 in the consolidated financial statements
included in this report.
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Corporate and Other:
Fiscal 2020
Fiscal 2019
$ Change
% Change
Net sales
Gross profit
Operating loss
Notable items included in amounts above:
LIFO adjustments in Corporate and Other
TBBC change in fair value of contingent
consideration
$
$
$
$
$
24,478
20,935
(6,786)
(9,220)
593
$
$
$
$
$
19,829
9,322
(18,834)
$
$
$
4,649
11,613
12,048
23.4 %
NM %
NM %
1,454
431
The smaller operating loss for Corporate and Other was primarily due to the $11 million favorable net impact of
LIFO accounting and higher sales.
Interest expense, net
Interest expense, net
Fiscal 2020
Fiscal 2019
$ Change
% Change
$
2,028
$
1,245
$
783
62.9 %
The increased interest expense in Fiscal 2020 was primarily due to higher levels of debt outstanding partially
offset by interest income earned on cash invested in money market accounts in Fiscal 2020. During most of Fiscal 2020, to
ensure liquidity during the COVID-19 pandemic, we maintained certain cash on our balance sheet by drawing down on the
U.S. Revolving Credit Agreement.
Income taxes
Income tax (benefit) provision
Effective tax rate
Fiscal 2020
Fiscal 2019
$ Change
% Change
$
(30,185)
$
24.0 %
23,937
$
25.9 %
(54,122)
NM %
Income taxes were a tax benefit in Fiscal 2020 resulting from an operating loss and the impact of certain discrete
and other items noted below, as compared to a tax expense in Fiscal 2019 resulting from operating income.
The income tax benefit in Fiscal 2020 reflects the benefit of operating losses that will be realized at a federal rate
of 35% pursuant to the CARES Act provision allowing carryback of the Fiscal 2020 loss amounts to pre-U.S. Tax Reform
years, as well as a favorable provision to return adjustment for our Fiscal 2019 returns. These favorable impacts were
offset by (1) the non-deductibility of certain impairment charges which results in an estimated effective income tax benefit
rate of approximately 17% on the impairment charges, (2) estimated book to tax timing differences which may reduce the
amount of Fiscal 2020 expenses currently deductible for income tax return purposes, (3) an increase to the reserve for
uncertain tax positions and (4) restricted stock which vested in the period with a vesting date price lower than the grant
date price. Refer to Note 9 in our consolidated financial statements included in this report for additional information about
our income tax expense for Fiscal 2020 and Fiscal 2019.
Net earnings
Net sales
Operating (loss) income
Net (loss) earnings
Net (loss) earnings per diluted share
Weighted average shares outstanding -- diluted
$
$
$
$
Fiscal 2020
Fiscal 2019
748,833
(123,849)
(95,692)
(5.77)
16,576
$
$
$
$
1,122,790
93,675
68,493
4.05
16,914
The net loss per share in Fiscal 2020 compared to positive net earnings per share in Fiscal 2019 was primarily due
to (1) the impact of COVID-19 on the operating results of each of our operating groups resulting in lower sales and
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lower gross margins, (2) the $60 million Southern Tide impairment charge recognized in the First Quarter of Fiscal 2020, a
significant portion of which was non-deductible, (3) the $15 million write off of an information technology project in
Tommy Bahama, and (4) $13 million of charges related to the Lanier Apparel exit incurred in Fiscal 2020. These items
were partially offset by the smaller operating loss in Corporate and Other, which was primarily due to the favorable impact
of LIFO accounting primarily due to the reversal of inventory markdowns recognized in the operating groups.
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
Our primary source of revenue and cash flow is through our design, sourcing, marketing and distribution of
branded apparel products bearing the trademarks of our Tommy Bahama, Lilly Pulitzer and Southern Tide lifestyle brands
and other owned brands. We distribute our products to our customers via direct to consumer and wholesale channels of
distribution.
Our primary uses of 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 as operating expenses, including employee compensation and
benefits, occupancy-related costs, marketing and advertising costs, distribution costs, other general and administrative
expenses and the payment of periodic interest and other payments related to our financing arrangements. Additionally, we
use cash for the funding of capital expenditures, dividends and repayment of indebtedness. In the ordinary course of
business, we maintain certain levels of inventory, extend credit to our wholesale customers and pay our operating expenses.
Thus, we require a certain amount of working capital to operate our business.
If cash inflows are less than cash outflows, we have access to amounts under our U.S. Revolving Credit
Agreement, subject to its terms, which is described below. We may fund our future cash requirements through various
methods, including cash flow from operations, borrowings under our current or additional credit facilities, sales of debt or
equity securities, and cash on hand.
As of January 30, 2021 and February 1, 2020, we had $66 million and $52 million, respectively, of cash and cash
equivalents on hand, with no borrowings outstanding under our U.S. Revolving Credit Agreement. The increase in cash
and cash equivalents at January 30, 2021 was primarily due to $84 million of cash flow from operations, which includes
significant decreases in working capital amounts, which was partially offset by cash payments of $35 million for investing
activities, $20 million for share repurchases and $17 million for dividends.
As of January 30, 2021, under our U.S. Revolving Credit Agreement, we had $301 million of unused availability,
which includes substantially all of our cash and cash equivalents as eligible assets. We believe our U.S. Revolving Credit
Agreement and anticipated future positive cash flow from operating activities will provide sufficient cash flow to satisfy
our ongoing cash requirements as well as ample opportunity to continue to invest in our brands, direct to consumer
initiatives and other strategic initiatives in both the near term and long term.
Key Liquidity Measures
($ in thousands)
Total current assets
Total current liabilities
Working capital
Working capital ratio
Debt to total capital ratio
January 30,
2021
$ 258,316
$ 196,252
62,064
$
1.32
February 1,
2020
$ 288,826
$ 177,779
$ 111,047
1.62
$ Change
% Change
$
$
(30,510)
18,473
(48,983)
(10.6)%
10.4 %
(44.1)%
— %
— %
Our working capital ratio is calculated by dividing total current assets by total current liabilities. Current assets as
of January 30, 2021 decreased from February 1, 2020 due to lower inventories, receivables and prepaid expenses partially
offset by increased income tax receivables and cash and cash equivalents. Current liabilities as of January 30, 2021
increased from February 1, 2020 primarily due to higher current operating lease liabilities, accounts payable and other
accrued expenses. Changes in current assets and current liabilities are discussed below.
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For the ratio of debt to total capital, debt is defined as short-term and long-term debt, and total capital is defined as
debt plus shareholders’ equity. There was no debt outstanding as of January 30, 2021 or February 1, 2020, while
shareholders’ equity was $406 million as of January 30, 2021 and $529 million as of February 1, 2020. Shareholders’
equity decreased from February 1, 2020, primarily due to net losses, dividends and shares repurchased during Fiscal 2020.
Our debt levels and ratio of debt to total capital in future periods may not be comparable to historical amounts as we
continue to assess, and possibly make changes to, our capital structure. Changes in our capital structure in the future, if any,
will depend on prevailing market conditions, our liquidity requirements, contractual restrictions, the ultimate impact of the
COVID-19 pandemic and other factors. The amounts involved may be material.
Balance Sheet
The following tables set forth certain information included in our consolidated balance sheets (in thousands).
Below each table are explanations for any significant changes in the balances from February 1, 2020 to January 30, 2021.
Current Assets:
Cash and cash equivalents
Receivables, net
Inventories, net
Income tax receivable
Prepaid expenses and other current assets
Total current assets
$
January 30,
2021
66,013
30,418
123,543
17,975
20,367
$ 258,316
February 1,
$
2020
52,460
57,862
152,229
862
25,413
$ 288,826
$ Change
% Change
$
$
13,553
(27,444)
(28,686)
17,113
(5,046)
(30,510)
25.8 %
(47.4)%
(18.8)%
NM %
(19.9)%
(10.6)%
Cash and cash equivalents were $66 million as of January 30, 2021 compared to $52 million as of February 1,
2020. Any cash that is not used to repay amounts outstanding under our U.S. Revolving Credit Agreement is generally
invested in money market investment accounts.
The decrease in receivables, net as of January 30, 2021 was primarily due to lower trade receivables resulting
from lower wholesale sales, lower credit card receivables and a higher provision for credit losses. Inventories, net, which is
net of a $62 million LIFO reserve as of January 30, 2021 and $63 million LIFO reserve as of February 1, 2020, decreased
as of January 30, 2021. The lower inventories are a result of significantly lower inventories in each operating group due to
a focus on decreasing inventories in the COVID-19 environment including reduced inventory purchases, cancellations of
inventory purchases, and liquidation of excess prior season inventory, lower inventory in transit amounts and marking
down inventory amounts to amounts expected to be realized. The decreases in the operating groups were partially offset by
increased inventory in Corporate and Other resulting from the impact of LIFO accounting which requires the reversal of
certain inventory markdowns in the operating groups.
Income tax receivable increased as of January 30, 2021 due to the expected income tax receivable for the benefit
of the Fiscal 2020 operating losses, which we expect to carry back to offset prior year taxable income. Prepaid expenses
and other current assets decreased as of January 30, 2021 primarily due to lower prepaid advertising, royalties, samples and
other prepaid operating expenses.
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Non-current Assets:
Property and equipment, net
Intangible assets, net
Goodwill
Operating lease assets
Other assets, net
Total non-current assets
January 30,
2021
$ 159,732
156,187
23,910
233,775
33,714
$ 607,318
February 1,
2020
$ 191,517
175,005
66,578
287,181
24,262
$ 744,543
$ Change
% Change
$
(31,785)
(18,818)
(42,668)
(53,406)
9,452
$ (137,225)
(16.6)%
(10.8)%
(64.1)%
(18.6)
39.0 %
(18.4)%
Property and equipment, net as of January 30, 2021 decreased primarily due to depreciation expense, the write off
of costs associated with a Tommy Bahama information technology project and impairment of certain property and
equipment during Fiscal 2020, which exceeded capital expenditures during Fiscal 2020. The decrease in intangible assets,
net and goodwill as of January 30, 2021 was primarily due to the impairment charges of $60 million in Southern Tide in
Fiscal 2020, as discussed in Note 4 of our consolidated financial statements included in this report.
Operating lease assets as of January 30, 2021 decreased primarily due to the recognition of amortization related to
existing operating leases, the termination or reduced term of certain operating leases and the impairment of certain
operating lease asset amounts exceeding the increased operating lease assets associated with any new or extended operating
lease agreements. The increase in other assets, net as of January 30, 2021 was primarily due to a $6 million increase in
investment in unconsolidated entities due to the acquisition of an ownership interest in two entities, an increase in non-
current deferred tax assets and an increase in assets set aside for potential deferred compensation obligations.
Liabilities:
Total current liabilities
Long-term debt
Non-current portion of operating lease liabilities
Other non-current liabilities
Deferred income taxes
Total liabilities
January 30,
2021
$ 196,252
February 1,
2020
$ 177,779
—
$
—
239,963
23,691
—
$ 459,906
291,886
18,566
16,540
$ 504,771
$
$ Change
% Change
18,473
—
(51,923)
5,125
(16,540)
(44,865)
10.4 %
— %
(17.8)
27.6 %
(100.0)%
(8.9)%
Current liabilities increased as of January 30, 2021 primarily due to higher operating lease liabilities, as certain
rent amounts were withheld during the pendency of discussions with real property landlords, and accrued expenses and
other liabilities, including higher expected direct to consumer inventory returns, increased gift card liabilities, increases in
other accrued expenses and increased accounts payable. Accrued compensation was comparable as the increased payable
for deferred FICA payments allowable pursuant to the CARES Act offset lower incentive compensation amounts.
Non-current portion of operating lease liabilities as of January 30, 2021 decreased primarily due to the payment of
operating lease liabilities, classification of certain unpaid amounts while negotiating with landlords regarding operating
lease liabilities and reductions in liabilities related to the termination or reduced term of certain operating leases exceeding
operating lease liabilities associated with any new or extended operating lease agreements. Other non-current liabilities
increased as of January 30, 2021 primarily due to an increase in uncertain tax positions as disclosed in Note 9 to our
consolidated financial statements included in this report. Deferred income taxes decreased as of January 30, 2021 primarily
due to timing differences associated with impairment and amortization of intangible assets and goodwill, impact of
operating lease payable amounts, timing differences associated with inventories, and changes in other current liability
amounts.
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Statement of Cash Flows
The following table sets forth the net cash flows, including continuing and discontinued operations, resulting in
the change in our cash and cash equivalents (in thousands):
Cash provided by operating activities
Cash used in investing activities
Cash used in financing activities
Net change in cash and cash equivalents
Fiscal 2020 Fiscal 2019 Fiscal 2018
96,377
$ 121,926
$ 83,850
(37,397)
(37,421)
(34,651)
(56,765)
(41,298)
(35,848)
2,215
$ 43,207
$ 13,351
$
$
Cash and cash equivalents on hand were $66 million and $52 million as of January 30, 2021 and February 1,
2020, respectively. Changes in cash flows in Fiscal 2020 and Fiscal 2019 related to operating activities, investing activities
and financing activities are discussed below.
Operating Activities:
In Fiscal 2020 and Fiscal 2019, operating activities provided $84 million and $122 million of cash, respectively.
The cash flow from operating activities for each period was primarily the result of net earnings (loss) for the relevant
period adjusted, as applicable, for non-cash activities including depreciation, amortization, impairment and equity-based
compensation, as well as the net impact of changes in deferred taxes and operating assets and liabilities. In Fiscal 2020,
changes in operating assets and liabilities had a significant favorable impact on cash flow from operations, and in Fiscal
2019, changes in operating assets and liabilities had a modest favorable impact on cash flow from operations.
In Fiscal 2020, the more significant changes in operating assets and liabilities were decreases in inventories, and
receivables and increases in current liabilities, which increased cash flow from operations, partially offset by an increase in
income tax receivables and a decrease in deferred tax liabilities, which decreased cash flow from operations. In Fiscal
2019, the more significant changes in working capital, after considering the non-cash impact of certain reclassifications
that resulted from the adoption of the revised lease accounting guidance, were a decrease in receivables and inventories,
which increased cash flow from operations, partially offset by decreases in current liabilities, which reduced cash flow
from operations.
Investing Activities:
In Fiscal 2020 and Fiscal 2019, investing activities used $35 million and $37 million of cash, respectively. Our
capital expenditures, which were $29 million in Fiscal 2020 and $37 million in Fiscal 2019, primarily consist of costs
associated with information technology initiatives, including e-commerce capabilities; opening, relocating and remodeling
retail stores and restaurants; and facilities enhancements for distribution centers and offices. In addition to our capital
expenditures, in Fiscal 2020, we invested $6 million for a minority interest in two separate unconsolidated entities, which
operate branded apparel businesses.
On an ongoing basis, our cash flow used in investing activities is expected to primarily consist of our capital
expenditure investments in our existing brands as well as any acquisitions of or minority interests in new businesses.
Financing Activities:
In Fiscal 2020 and Fiscal 2019, financing activities used $36 million and $41 million of cash, respectively. During
Fiscal 2020, we repurchased $18 million of shares of our common stock pursuant to an open market stock repurchase
program, which was suspended on March 17, 2020. During Fiscal 2020 and Fiscal 2019, we paid $17 million and $25
million in dividends, respectively. Both Fiscal 2020 and Fiscal 2019 included certain amounts related to (1) the issuance of
equity pursuant to our employee stock purchase plan, (2) the repurchase of equity awards for employee tax
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withholding liabilities resulting from the vesting of equity awards during the period and (3) the payment of contingent
consideration or other deferred acquisition payment amounts, which are included in other financing activities.
We may borrow or pay down debt depending on whether our cash flow from operating activities exceeds our
capital expenditures, dividend payments, acquisitions and any other investing or financing activities. Generally, we
anticipate that excess cash, if any, will be used to repay any debt on our U.S. Revolving Credit Agreement.
Liquidity and Capital Resources
As of January 30, 2021, we had $66 million of cash and cash equivalents on hand, with no borrowings outstanding
under our U.S. Revolving Credit Agreement. As of January 30, 2021, under our U.S. Revolving Credit Agreement, we had
$301 million of unused availability, which includes substantially all of our cash and cash equivalents as eligible assets. We
believe our U.S. Revolving Credit Agreement and anticipated future positive cash flow from operating activities will
provide sufficient cash flow to satisfy our ongoing cash requirements as well as ample opportunity to continue to invest in
our brands, direct to consumer initiatives and other strategic initiatives in both the near term and long term.
The U.S. Revolving Credit Agreement generally (1) is limited to a borrowing base consisting of specified
percentages of eligible categories of assets, (2) accrues variable-rate interest, unused line fees and letter of credit fees based
upon average unused availability or utilization, (3) requires periodic interest payments with principal due at maturity
(July 2024) and (4) is secured by a first priority security interest in substantially all of the assets of Oxford Industries, Inc.
and its domestic subsidiaries, including accounts receivable, books and records, chattel paper, deposit accounts, equipment,
certain general intangibles, inventory, investment property (including the equity interests of certain subsidiaries),
negotiable collateral, life insurance policies, supporting obligations, commercial tort claims, cash and cash equivalents,
eligible trademarks, proceeds and other personal property.
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 Credit Agreement to provide funding for operating activities, capital expenditures and
acquisitions, if any. Our U.S. Revolving Credit Agreement is also used to establish collateral for certain insurance
programs and leases and to finance trade letters of credit for product purchases, which reduce the amounts available under
our line of credit when issued. As of January 30, 2021, $3 million of letters of credit were outstanding under our U.S.
Revolving Credit Agreement.
Covenants, Other Restrictions and Prepayment Penalties
The U.S. Revolving Credit Agreement is subject to a number of affirmative covenants regarding the delivery of
financial information, compliance with law, maintenance of property, insurance requirements and conduct of business.
Also, the U.S. Revolving Credit Agreement is subject to certain negative covenants or other restrictions including, among
other things, limitations on our ability to (1) incur debt, (2) guaranty certain obligations, (3) incur liens, (4) pay dividends
to shareholders, (5) repurchase shares of our common stock, (6) make investments, (7) sell assets or stock of subsidiaries,
(8) acquire assets or businesses, (9) merge or consolidate with other companies or (10) prepay, retire, repurchase or redeem
debt.
Additionally, the U.S. Revolving Credit Agreement contains a financial covenant that applies only if excess
availability under the agreement for three consecutive business days is less than the greater of (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 been delivered.
This financial covenant continues to apply until we have maintained excess availability under the U.S. Revolving Credit
Agreement of more than the 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 Agreement are customary for those included in similar facilities entered into at the time we amended
the U.S. Revolving Credit Agreement. During Fiscal 2020 and as of January 30, 2021, no financial covenant
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testing was required pursuant to our U.S. Revolving Credit Agreement as the minimum availability threshold was met at all
times. As of January 30, 2021, we were compliant with all applicable 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 activity needs, capital expenditures, interest payments on our debt and dividends, if any,
primarily from borrowings under our U.S. Revolving Credit Agreement and positive cash flows from operations in the long
term. Our need for working capital is typically seasonal with the greatest requirements generally in the fall and spring of
each year. Our capital needs will depend on many factors including the results of our operations and cash flows in the
COVID-19 environment and beyond, future growth rates, the need to finance inventory levels and the success of our
various products. We anticipate that at the maturity of the U.S. Revolving Credit Agreement or as otherwise deemed
appropriate, we will be able to refinance the 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 as the terms of the current agreement or current
market terms.
On March 23, 2021, our Board of Directors approved a cash dividend of $0.37 per share payable on April 30,
2021 to shareholders of record as of the close of business on April 16, 2021. Although we have paid dividends in each
quarter since we became a public company in July 1960, we may discontinue or modify dividend payments at any time if
we determine that other uses of our capital, including payment of outstanding debt, funding of acquisitions, funding of
capital expenditures or repurchases of outstanding shares, may be in our best interest; if our expectations of future cash
flows and future cash needs outweigh the ability to pay a dividend; or if the terms of our credit facility, other debt
instruments or applicable law limit our ability to pay dividends. We may borrow to fund dividends in the short term subject
to the terms and conditions of our credit facility, other debt instruments and applicable law. All cash flow from operations
will not be paid out as dividends in all periods. For details about limitations on our ability to pay dividends, see the
discussion of the U.S. Revolving Credit Agreement above.
Contractual Obligations
The following table summarizes our contractual cash obligations, as of January 30, 2021, by future period (in
thousands):
Less Than
1 year
1‑3 Years
3‑5 Years
More Than
5 Years
Total
Payments Due by Period
Contractual Obligations:
U.S. Revolving Credit Agreement (1)
Operating leases (2)
Minimum royalty obligations pursuant to license agreements
Letters of credit
Other (3)(4)(5)
Total
$
70,338
4,162
3,067
750
$ 78,317
— $
— $
— $
— $
122,208
78,545
68,247
—
—
—
—
—
—
—
—
—
$ 122,208
$ 78,545
$ 68,247
—
339,338
4,162
3,067
750
$ 347,317
(1) Principal, interest, unused line fees and letter of credit fees and amounts payable in future periods on our U.S.
Revolving Credit Agreement have been excluded from the table above, as the principal amount that will be
outstanding and interest rate during any fiscal year will be dependent upon future events which are not known at this
time. During Fiscal 2020, we paid $2 million of interest, unused line fees and letter of credit fees.
(2) Amounts included reflect the rent amounts included in determining the operating lease liabilities. Amounts to be paid
in future periods for real estate taxes, sales tax, insurance, other operating expenses and contingent rent applicable to
the properties pursuant to the respective operating leases have been excluded from the table above, as the amounts
payable in future periods are, in most cases, not quantified in the lease agreements or are dependent on factors which
may not be known at this time. Such amounts incurred in Fiscal 2020 totaled $30 million. Refer to Note 6 in our
consolidated financial statements for disclosures about our operating lease agreements.
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(3) Amounts totaling $16 million of deferred compensation obligations, which are included in other non-current liabilities
in our consolidated balance sheet as of January 30, 2021, have been excluded from the table above, due to the
uncertainty of the timing of the payment of these obligations, which are generally at the discretion of the individual
employees or upon the death of the individual.
(4) Non-current deferred tax liability amounts included in our consolidated balance sheet as of January 30, 2021 and
discussed in Note 9 to our consolidated financial statements included in this report have been excluded from the above
table. Deferred income tax liabilities are calculated based on temporary differences between the tax basis and book
basis of assets and liabilities, which will result in taxable amounts in future years when the amounts are settled at their
reported financial statement amounts. As the results of these calculations do not have a direct connection with the
amount of cash taxes to be paid in any future periods, scheduling deferred income tax amounts by period could be
misleading.
(5)
Includes an estimated amount for the Fiscal 2020 contingent consideration payment to be paid in Fiscal 2021
associated with the TBBC contingent consideration arrangement. Additional amounts totaling $1 million of contingent
consideration amounts, which are included in other non-current liabilities in our consolidated balance sheet as of
January 30, 2021, have been excluded from the table above, due to the uncertainty of the amount or timing of these
potential obligations, which are dependent upon earnings of TBBC in Fiscal 2021.
Our anticipated capital expenditures for Fiscal 2021, which are excluded from the table above as we are generally
not contractually obligated to pay these amounts as of January 30, 2021, are expected to be approximately $35 million in
Fiscal 2021. Amounts actually spent in Fiscal 2021 will be impacted by a variety of factors including the impact of the
COVID-19 pandemic. Our capital expenditure amounts in future years will fluctuate from the amounts incurred in
prior years depending on the information technology initiatives, direct to consumer location openings, relocations and
remodels and other infrastructure requirements deemed appropriate for that year to support future expansion of our
businesses.
Off Balance Sheet Arrangements
We have not entered into agreements which meet the SEC’s definition of an off balance sheet financing
arrangement, other than operating leases, and have made no financial commitments to or guarantees with respect to any
unconsolidated subsidiaries or special purpose entities.
CRITICAL ACCOUNTING POLICIES
The discussion and analysis of our financial condition and results of operations are based upon our consolidated
financial statements, which have been prepared in accordance with GAAP in a consistent manner. The preparation of these
financial statements requires the selection and application of accounting policies. Further, the application of GAAP
requires us to make estimates and judgments about future events that affect the reported amounts of assets, liabilities,
revenues and expenses and related disclosures. On an ongoing basis, we evaluate our estimates, including those discussed
below. We base our estimates on historical experience, current trends, various other assumptions and, in Fiscal 2020, the
uncertain impact of COVID-19 and the Lanier Apparel exit, that we believe are reasonable under the circumstances, the
results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily
apparent from other sources.
Actual results may differ from these estimates under different assumptions or conditions. We believe it is possible
that other professionals, applying reasonable judgment to the same set of facts and circumstances, could develop and
support a range of alternative estimated amounts. We believe that we have appropriately applied our critical accounting
policies. However, in the event that inappropriate assumptions or methods were used relating to the critical accounting
policies below, our consolidated statements of operations could be misstated.
A detailed summary of significant accounting policies is included in Note 1 to our consolidated financial
statements contained in this report. The following is a brief discussion of the more significant estimates, assumptions and
judgments we use or the amounts most sensitive to change from outside factors.
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Revenue Recognition and Accounts Receivable
Our revenue consists of direct to consumer sales, including our retail store, e-commerce and restaurant operations,
and wholesale sales, as well as royalty income, which is included in royalties and other income in our consolidated
statements of operations. We recognize revenue when performance obligations under the terms of the contracts with our
customers are satisfied. Our performance obligations generally consist of delivering our products to our direct to consumer
and wholesale customers. Control of the product is generally transferred upon providing the product to consumers in our
bricks and mortar retail stores and restaurants, upon physical delivery of the products to consumers in our e-commerce
operations and upon shipment from the distribution center to customers in our wholesale operations. Once control is
transferred to the customer, we have completed our performance obligations related to the contract and have an
unconditional right to consideration for the products sold, as outlined in the contract. Our receivables resulting from
contracts with customers in our direct to consumer operations are generally collected within a few days, upon settlement of
the credit card transaction. Our receivables resulting from contracts with our customers in our wholesale operations are
generally due within one quarter, in accordance with established credit terms.
In the ordinary course of our wholesale operations, we offer discounts, allowances and cooperative advertising
support to some of our wholesale customers for certain products. Wholesale sales are recorded net of such discounts,
allowances, cooperative advertising support, operational chargebacks and provisions for estimated wholesale returns. As
certain allowances, other deductions and returns are not finalized until the end of a season, program or other event which
may not have occurred yet, we estimate such discounts, allowances and returns on an ongoing basis to estimate the
consideration from the customer that we expect to ultimately receive. We only recognize revenue to the extent that it is
probable that we will not have a significant reversal of revenue in a future period. Significant considerations in determining
our estimates for discounts, allowances, operational chargebacks and returns for wholesale customers may include
historical and current trends, agreements with customers, projected seasonal or program results, an evaluation of current
economic conditions, specific program or product expectations and retailer performance. Actual discounts and allowances
to our wholesale customers have not differed materially from our estimates in prior years. As of January 30, 2021, our total
reserves for discounts, returns and allowances for our wholesale businesses were $6 million and, therefore, if the
allowances changed by 10% it would have had a pre-tax impact of $1 million on earnings in Fiscal 2020. The substantial
majority of these reserves as of January 30, 2021 relate to our Lanier Apparel business.
We extend credit to certain wholesale customers based on an evaluation of the customer’s financial capacity and
condition, usually without requiring collateral. We recognize estimated provisions for credit losses based 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. Actual charges for credit losses have not
differed materially from our estimates in prior years. The amounts deemed uncollectible have not generally been significant
in recent years prior to Fiscal 2020; in Fiscal 2020, we incurred a charge for provisions for credit losses of $4 million. If, in
the future, amounts due from significant customer(s) were deemed to be uncollectible as a result of events that occur
subsequent to January 30, 2021, this could result in a material charge to our consolidated statements of operations in future
periods. As of January 30, 2021, our provision for credit losses was $3 million, and therefore, if the allowance for bad
debts changed by 10% it would have had a pre-tax impact of less than $1 million on earnings in Fiscal 2020.
In our direct to consumer operations, consumers have certain rights to return product within a specified period and
are eligible for certain point of sale discounts, thus retail store, e-commerce and restaurant revenues are recorded net of
estimated returns and discounts, as applicable. We make estimates of reserves for products which 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 to consumer return reserve amounts requires judgment and consideration of historical and current trends, evaluation
of current economic trends and other factors. Our historical estimates of direct to consumer return reserves have not
differed materially from actual results. As of January 30, 2021, our direct to consumer return liability was $7 million. A
10% change in the direct to consumer sales return reserve as of January 30, 2021 would have had a less than $1 million
impact on gross profit and pre-tax earnings in Fiscal 2020.
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Inventories, net
For operating group reporting, inventory is carried at the lower of the first-in, first-out (FIFO) cost or market. We
evaluate the composition of our inventories, substantially all of which is finished goods inventory, for identification of
distressed inventory at least quarterly. In performing this evaluation, we consider slow-turning products, an indication of
lack of consumer acceptance of particular products, prior seasons’ fashion products, broken assortments, discontinued
products 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 the amount to be ultimately realized for the goods is not necessarily known at period end, we must use
certain assumptions considering historical experience, inventory quantity, quality, age and mix, historical sales trends,
future sales projections, consumer and retailer preferences, market trends, general economic conditions and our anticipated
plans to sell the inventory. Also, we provide an allowance for shrinkage, as appropriate, for the period between the last
physical inventory count and each balance sheet date. Historically, our estimates of inventory markdowns and inventory
shrinkage have not varied significantly from actual results.
For consolidated financial reporting, $116 million, or 94%, of our inventories were valued at the lower of the last-
in, first-out (LIFO) cost or market after deducting the $62 million LIFO reserve as of January 30, 2021. The remaining $8
million of our inventories are valued at the lower of FIFO cost or market as of January 30, 2021. LIFO reserves are based
on the Producer Price Index (PPI) as published by the United States Department of Labor. We write down inventories
valued at the lower of LIFO cost or market when LIFO cost exceeds market value. We deem LIFO accounting adjustments
to not only include changes in the LIFO reserve, but also changes in markdown reserves which are considered in LIFO
accounting. As our LIFO inventory pool does not correspond to our operating group definitions, LIFO inventory
accounting adjustments are not allocated to the respective operating groups. Thus, the impact of accounting for inventories
on the LIFO method is reflected in Corporate and Other for operating group reporting purposes.
As of January 30, 2021, we had recorded a reserve of $6 million related to inventory on the lower of FIFO cost or
market method and for inventory on the lower of LIFO cost or market method with markdowns in excess of our LIFO
reserve. A 10% change in the amount of such markdowns would have a pre-tax impact of less than $1 million on earnings
in Fiscal 2020. A change in the markdowns of our inventory valued at the lower of LIFO cost or market method that is not
marked down in excess of our LIFO reserve typically would not be expected to have a material impact on our consolidated
financial statements. A change in inventory levels, or the mix by inventory category, at the end of future fiscal years
compared to inventory balances as of January 30, 2021 could result in a material impact on our consolidated financial
statements as such a change may erode portions of our earlier base year layers for purposes of making our annual LIFO
computation. Additionally, a change in the PPI as published by the United States Department of Labor as compared to the
indexes as of January 30, 2021 could result in a material impact on our consolidated financial statements as inflation or
deflation would change the amount of our LIFO reserve.
Given the significant amount of uncertainty surrounding the year-end LIFO calculation, including the estimate
of year-end inventory balances, the proportion 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 in inventory levels,
the PPI and markdown reserves. We do recognize changes in markdown reserves during each of the first three quarters of
the fiscal year as those amounts can be estimated on an interim basis.
Accounting for business combinations requires that assets and liabilities, including inventories, are recorded at fair
value at the acquisition date. In accordance with GAAP, the definition of fair value of inventories acquired generally will
equal the expected sales price less certain costs associated with selling the inventory, which may exceed the actual cost of
producing the acquired inventories. Based on the inventory turn of the acquired inventories, amounts are recognized 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 operations as the acquired inventory is sold, we must make certain
assumptions regarding costs incurred prior to acquisition for the acquired inventory, an appropriate profit allowance,
estimates of the costs to sell the inventory and the timing of the sale of the acquired inventory. Such estimates
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involve significant uncertainty, and the use of different assumptions could have a material impact on our consolidated
financial statements.
Goodwill and Intangible Assets, net
The cost of each acquired business is allocated to the individual tangible and intangible assets acquired and
liabilities assumed or incurred as a result of an acquisition based on their estimated fair values. The assessment of the
estimated fair values of assets and liabilities acquired requires us to make certain assumptions regarding the use of the
acquired assets, anticipated cash flows, probabilities of cash flows, discount rates and other factors. As a result of our prior
acquisitions and any subsequent impairment charges, we had $156 million of intangible assets and $24 million of goodwill
in our consolidated balance sheet as of January 30, 2021.
Our intangibles assets primarily consist of trademarks, reacquired rights and customer relationships. Goodwill is
recognized as the amount by which the cost 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 our consolidated 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 acquired intangible assets and goodwill are estimated based on our
assessment as well as independent third party appraisals in some cases. Such valuations, which are dependent upon a
number of uncertain factors, may include a discounted cash flow analysis of anticipated revenues and expenses or cost
savings resulting from the acquired intangible asset using an estimate of a risk-adjusted, market-based cost of capital as the
discount rate. The valuation of intangible assets and goodwill requires significant judgment due to the variety of uncertain
factors, including planned use of the intangible assets as well as estimates of net sales, royalty income, operating income,
growth rates, royalty rates for the trademarks, a risk-adjusted, market based cost of capital as the discount rate and income
tax rates, among other factors. The use of different assumptions related to these uncertain factors at acquisition or a later
date could result in a material change to the amounts of intangible assets and goodwill initially recorded at acquisition,
which could result in a material impact on our consolidated financial statements.
Amortization of intangible assets with finite lives, which primarily consist of trademarks, reacquired rights and
customer relationships, is recognized over their estimated useful lives using the straight line method of amortization or
another method of amortization that reflects the pattern in which the economic benefits of the intangible assets are
consumed or otherwise realized. We amortize our intangible assets with finite lives for periods of up to 20 years. The
determination of an appropriate useful life for amortization is based on the remaining contractual period, as applicable, and
our plans for the intangible asset, as well as factors outside of our control. Intangible assets with finite lives are reviewed
for impairment periodically if events or changes in circumstances indicate that the carrying amount may not be
recoverable. If expected future discounted cash flows from operations are less than their carrying amounts, an asset is
determined to be impaired and a loss is recorded for the amount by which the carrying value of the asset exceeds its fair
value. Amortization related to intangible assets with finite lives totaled $1 million during Fiscal 2020 and is anticipated to
be $1 million in Fiscal 2021.
Trademarks with indefinite lives and goodwill are not amortized but instead evaluated, either qualitatively or
quantitatively, for impairment annually as 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 be impaired. The quantitative test includes
valuations of each applicable underlying trademark or business using fair value techniques and market comparables, which
may include a discounted cash flow analysis or an independent appraisal. The evaluation of the recoverability of
trademarks with indefinite lives and goodwill includes valuations based on a discounted cash flow analysis which is
typically similar to the analysis performed at acquisition and compares that amount to the carrying value. This valuation
approach is dependent upon a number of uncertain factors, including those used in the initial valuation of the intangible
assets and goodwill listed above. Such estimates involve significant uncertainty, particularly in light of COVID-19, and if
our plans or anticipated results change, the impact on our financial statements could be significant. If this analysis indicates
an impairment of a trademark with an indefinite useful life or goodwill, the amount of the impairment is recognized in the
consolidated financial statements based on the amount that the carrying value of the intangible asset or goodwill exceeds
the estimated fair value of the asset. If our plans or anticipated results change in the future, the impact on our financial
statements could be significant.
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Intangible assets and goodwill acquired in recent transactions are naturally more susceptible to impairment,
primarily since they are recorded at fair value based on 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 intangible assets or goodwill. A change in
macroeconomic conditions may not only impact the estimated operating cash flows used in our cash flow models but may
also impact other assumptions used in our analysis, including but not limited to, the risk-adjusted market-based cost of
capital and/or discount rates. Additionally, we are required to ensure that assumptions used to determine fair value in our
analyses are consistent with the assumptions a hypothetical market participant would use. Therefore, the cost of capital
discount rates used in our analyses may increase or decrease based on market conditions and trends regardless of whether
our actual cost of capital changed.
During Fiscal 2020, we recognized impairment charges for goodwill and intangible assets of Southern Tide of $60
million, resulting in the impairment of all goodwill for Southern Tide and the majority of the indefinite-lived intangible
assets for Southern Tide. As noted above, the use of different assumptions related to the estimated fair value of the
Southern Tide amounts could have resulted in the determination of a different fair value and a different impairment charge
or charges in different periods. In Fiscal 2019 and Fiscal 2018, no impairment charges related to intangible assets or
goodwill were recognized.
More recent acquisitions of goodwill and indefinite-lived intangible asset amounts that have been impaired
recently, as they have been recorded at fair value, typically are more sensitive to changes in assumptions than our other
intangible asset and goodwill amounts. Thus, the $9 million of indefinite-lived intangible assets of Southern Tide have the
least excess of fair value over book value as of January 30, 2021, The estimated fair value of the indefinite-lived intangible
assets of Tommy Bahama, Lilly Pulitzer and TBBC and the goodwill of Lilly Pulitzer and TBBC are each substantially
higher than the net book value of the respective assets.
Other Fair Value Measurements
For many assets and liabilities, the determination of fair value may not require the use of many assumptions or
other estimates. However, in some cases the assumptions or inputs associated with the determination of fair value as of a
measurement date may require the use of many assumptions and may be internally derived or otherwise unobservable. We
use certain market-based and internally derived information and make assumptions about the information in
(1) determining the fair values of assets and liabilities acquired as part of a business combination, (2) adjusting recognized
assets and liabilities to fair value and (3) assessing recognized assets for impairment, including intangible assets, goodwill
and property and equipment.
As noted above, the cost of each acquired business is allocated to the individual tangible and intangible assets
acquired and liabilities assumed or incurred 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 us to make certain assumptions regarding the use of
the acquired assets, anticipated cash flows, probabilities of cash flows, discount rates and other factors. To the extent
information to revise the allocation becomes available during the allocation period the allocation of the purchase price will
be adjusted. Should information become available after the allocation period indicating that adjustments to the allocation
are appropriate, those adjustments will be included in operating results.
For the determination of fair value for assets and liabilities acquired as part of a business combination, adjusting
recognized assets and liabilities to fair value and assessing, and possibly adjusting, recognized assets for impairment, the
assumptions, or the timing of changes in these assumptions, that we make regarding the valuation of these assets could
differ significantly from the assumptions made by other parties. The use of different assumptions could result in materially
different valuations for the respective assets and liabilities, which would impact our consolidated financial statements.
In connection with certain acquisitions, we have entered into contingent consideration arrangements to
compensate the sellers if certain targets are achieved. For a contingent consideration arrangement as of the date of
acquisition we must determine the fair value of the contingent consideration which would estimate the discounted fair
value of any expected payments. Such valuation requires assumptions regarding anticipated cash flows, probabilities of
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cash flows, discount rates and other factors, each requiring a significant amount of judgment. Subsequent to the date of
acquisition, we are required to periodically adjust the liability for the contingent consideration to reflect 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 asset impairment or other charges related to certain leased space associated
with exiting retail or office space or otherwise. In these cases, we must 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. While estimated cash
outflows are generally known since there is an underlying lease, the estimated cash inflows for sublease rental income, if
any, and other costs are often very 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 and 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 of the required payments pursuant to the lease agreement. Thus, our estimate of a charge related to an operating
lease asset or other lease obligation could change significantly as we obtain better information in the future or if our current
assumptions do not materialize. The assumptions made by another party related to such leases could be different than the
assumptions made by us.
Income Taxes
Income taxes included in our consolidated financial statements are determined using the asset and liability
method. Under this method, income taxes are 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 different periods for consolidated financial statement
reporting and tax return reporting purposes. As certain amounts are recognized in different periods for consolidated
financial statement and tax return reporting purposes, financial statement and tax bases of assets and liabilities differ,
resulting in the recognition 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 rates expected 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 it is more likely than not that these assets will be
realized. In making such a determination, we consider 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 is
more-likely-than-not that some portion or all of a deferred tax asset will not be realized.
Valuation allowances, which total $6 million as of January 30, 2021, are analyzed periodically and adjusted as
events occur or circumstances change that would indicate adjustments to the valuation allowances are appropriate.
Valuation allowance amounts could have a material impact on our consolidated statements of operations in the future if
assumptions related to realizability of the deferred tax assets changed significantly. Additionally, the timing of recognition
of a valuation 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. As realization of deferred tax assets and liabilities is
dependent upon future taxable income in specific jurisdictions, changes in tax laws and rates and shifts in the amount of
taxable income among state and foreign jurisdictions may have a significant impact on the amount of benefit ultimately
realized for deferred tax assets and liabilities.
As a global company, we are subject to income taxes in a number of domestic and foreign jurisdictions. Our
income tax provision involves many uncertainties due to not only the timing differences of income for financial statement
reporting and tax return reporting, but also the application of complex tax laws and regulations, which are subject to
interpretation and judgment. The use of different assumptions or a change in our assumptions related to book to tax timing
differences, our determination of whether foreign investments or earnings are permanently reinvested, the ability to realize
uncertain tax positions, the appropriateness of valuation allowances, transfer pricing practices, the impact of our tax
planning strategies or a shift in earnings among jurisdictions each could have a significant impact on our income tax rate.
Additionally, factors impacting income taxes, including changes in tax laws or interpretations, court
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case decisions, statute of limitation expirations or audit settlements, could have a significant impact on our income tax rate.
A decrease in our consolidated income tax benefit rate from 24.0% to 23.0% during Fiscal 2020 would have reduced net
earnings by $1 million.
Income tax expense recorded during interim periods is generally based on the expected tax rate for the year,
considering projections of earnings and book to tax differences as of the balance sheet date. The tax rate ultimately realized
for the year may increase or decrease due to actual operating results or book to tax differences varying from the amounts on
which our 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 in which the change occurs. As certain of our
foreign operations are in a loss position and realization of a future benefit for the losses is uncertain, a variance in losses in
such jurisdictions from our expectations can have an impact on our expected annual tax rate.
See Note 1 and Note 9 in our consolidated financial statements included in this report for further discussion of
income taxes.
RECENT ACCOUNTING PRONOUNCEMENTS
Refer to Note 1 in our consolidated financial statements included in this report for a discussion of recent
accounting pronouncements issued by the FASB that we have not yet adopted that may have a material effect on our
financial position, results of operations or cash flows.
SEASONALITY
Each of our operating groups is impacted by seasonality as the demand by specific product or style, as well as by
distribution channel, may vary significantly depending on the time of year. For information regarding the impact of
seasonality on our business operations, see Part I, Item 1, Business, included in this report.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Interest Rate Risk
As of January 30, 2021, we had no borrowings outstanding under our U.S. Revolving Credit Agreement and had
$66 million of cash and cash equivalents, including $59 million of money market investments. However, we did have
borrowings outstanding at times during Fiscal 2020 and we may have borrowings outstanding from time to time in Fiscal
2021 due to our seasonal working capital needs or otherwise.
Our U.S. Revolving Credit Agreement provides the necessary borrowing flexibility we require and our need to
fund certain product purchases with trade letters of credit and accrues interest based on variable rate interest rates.
Additionally, for the amounts of unused credit under the U.S. Revolving Credit Agreement we pay unused line fees, which
are based on a specified percentage of the unused line amounts. When we have variable-rate borrowings outstanding under
our U.S. Revolving Credit Agreement, we have exposure to changes in interest rates as an increase in interest rates could
increase our interest expense. Alternatively, when we have cash and cash equivalents on hand, we are exposed to market
risk from changes in interest rates on our cash and cash equivalents, including those invested in money market investments,
as reduction in interest rates could reduce interest income.
During Fiscal 2020, our interest expense was $2 million. Based on the average amount of variable-rate debt
outstanding in Fiscal 2020, a 100 basis point increase in interest rates would not have materially increased our interest
expense, net. If our borrowings increase in the future, our interest expense and exposure to interest rate risk would also
increase. Our interest rate risk and certain mitigation efforts we may take are discussed in Interest Rate Risk in Note 1 to
the consolidated financial statements included in this report. We do not enter into debt agreements or interest rate hedging
transactions on a speculative basis.
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Foreign Currency Risk
As discussed in Foreign Currency in Note 1 to the consolidated financial statements in this report, we have certain
exposure to foreign currency exchange rate changes. During Fiscal 2020, 97% of our net sales were sales in the United
States, with the remaining net sales primarily relating to transactions in our Tommy Bahama Canada and Tommy Bahama
Australia operations, where the underlying products were purchased in U.S. dollars. Additionally, future purchase prices
for our products may be impacted by fluctuations in the exchange rate between the U.S. dollar and the local currencies of
the contract manufacturers, which may have the effect of increasing our cost of goods sold in the future even though our
inventory is purchased on a U.S. dollar denominated arrangement.
As of January 30, 2021 and during Fiscal 2020, we were not a party to any foreign currency forward exchange
contracts to mitigate our risk to changes in foreign currency fluctuations. However, we may enter into short-term forward
foreign currency exchange contracts in the ordinary course of business from time to time in the future in order to mitigate a
portion of the risk associated with foreign currency exchange rate fluctuations related to purchases of inventory or selling
goods in currencies other than the functional currencies by certain of our foreign operations. At this time, we do not
anticipate that the impact of foreign currency changes on our international operations would have a material impact on our
operating income or our net earnings in the near term given the proportion of our operations in international markets.
In addition to foreign currency risks related to specific transactions listed above, we also have foreign currency
exposure risk associated with translating the financial statements of our foreign operations with a functional currency other
than the U.S. dollar into U.S. dollars for financial reporting purposes. We view our foreign investments as long term and
we generally do not hedge such foreign investments. As of January 30, 2021, accumulated other comprehensive loss in our
consolidated balance sheets related to our Canada and Australia investments and operations were $3 million and $1
million, respectively.
Commodity and Inflation Risk
We are affected by inflation and changing prices through the purchase of full-package finished goods from
contract manufacturers, who manufacture products consisting of various raw material components. Inflation/deflation risks
are managed by each operating group, when possible, through negotiating product prices in advance, selective price
increases and cost containment initiatives. We have not historically entered into significant long-term sales or purchase
contracts or engaged in hedging activities with respect to our commodity risks.
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Item 8. Financial Statements and Supplementary Data
OXFORD INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS
($ in thousands, except par amounts)
January 30,
2021
February 1,
2020
ASSETS
Current Assets
Cash and cash equivalents
Receivables, net
Inventories, net
Income tax receivable
Prepaid expenses and other current assets
Total Current Assets
Property and equipment, net
Intangible assets, net
Goodwill
Operating lease assets
Other assets, net
Total Assets
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities
Accounts payable
Accrued compensation
Current portion of operating lease liabilities
Accrued expenses and other liabilities
Total Current Liabilities
Long-term debt
Non-current portion of operating lease liabilities
Other non-current liabilities
Deferred income taxes
Shareholders’ Equity
Common stock, $1.00 par value per share
Additional paid-in capital
Retained earnings
Accumulated other comprehensive loss
Total Shareholders’ Equity
Total Liabilities and Shareholders’ Equity
See accompanying notes.
70
$
$
$
$
$
$
$
66,013
30,418
123,543
17,975
20,367
258,316
159,732
156,187
23,910
233,775
33,714
865,634
$
$
52,460
57,862
152,229
862
25,413
288,826
191,517
175,005
66,578
287,181
24,262
$ 1,033,369
$
71,148
18,897
60,886
45,321
196,252
$
—
239,963
23,691
—
65,491
19,363
50,198
42,727
177,779
—
291,886
18,566
16,540
16,889
156,508
235,995
(3,664)
405,728
865,634
17,040
149,426
366,793
(4,661)
528,598
$
$ 1,033,369
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OXFORD INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
($ and shares in thousands, except per share amounts)
Net sales
Cost of goods sold
Gross profit
SG&A
Impairment of goodwill and intangible assets
Royalties and other operating income
Operating (loss) income
Interest expense, net
(Loss) earnings before income taxes
Income tax (benefit) provision
Net (loss) earnings
Net (loss) earnings per share:
Basic
Diluted
Weighted average shares outstanding:
Basic
Diluted
Dividends declared per share
$
Fiscal
2020
$ 748,833
333,626
$ 415,207
492,628
60,452
14,024
$ (123,849) $
2,028
$ (125,877) $
(30,185)
$ (95,692) $
Fiscal
2019
$ 1,122,790
477,823
644,967
566,149
—
14,857
93,675
1,245
92,430
23,937
68,493
$
Fiscal
2018
$ 1,107,466
470,342
637,124
560,508
—
13,976
90,592
2,283
88,309
22,018
66,291
$
$
$
$
$
$
(5.77) $
(5.77) $
4.09
4.05
16,576
16,576
1.00
$
16,756
16,914
1.48
$
$
$
3.97
3.94
16,678
16,842
1.36
See accompanying notes.
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OXFORD INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
($ in thousands)
Net (loss) earnings
Other comprehensive income (loss), net of taxes:
Net foreign currency translation adjustment
Comprehensive (loss) income
Fiscal
2020
$ (95,692) $
997
$ (94,695) $
Fiscal
2019
68,493
434
68,927
Fiscal
2018
66,291
(1,021)
65,270
$
$
See accompanying notes.
72
Common
Stock
$ 16,839
Additional
Paid-In
Capital
$ 136,664
Accumulated
Other
Comprehensive
(Loss) Income
$
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OXFORD INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
($ in thousands)
February 3, 2018
Net earnings and other comprehensive income
Shares issued under equity plans
Compensation expense for equity awards
Repurchase of shares
Cash dividends declared and paid
Cumulative effect of change in accounting standard
—
150
—
(30)
—
—
February 2, 2019
$ 16,959
$ 142,976
Net earnings and other comprehensive income
Shares issued under equity plans
Compensation expense for equity awards
Repurchase of shares
Cash dividends declared and paid
Cumulative effect of change in accounting standard
—
116
—
(35)
—
—
February 1, 2020
$ 17,040
$ 149,426
Net earnings and other comprehensive income (loss)
Shares issued under equity plans
Compensation expense for equity awards
Repurchase of shares
Cash dividends declared and paid
Cumulative effect of change in accounting standard
—
227
—
(378)
—
—
January 30, 2021
$ 16,889
$ 156,508
See accompanying notes.
73
Retained
Earnings
$ 280,395
66,291
—
—
—
(23,054)
(117)
$ 323,515
68,493
$
—
—
—
(25,215)
—
1,306
7,327
(2,321)
—
—
—
1,523
7,620
(2,693)
—
—
$ 366,793
(95,692)
—
—
$
—
—
1,151
7,755
(1,824)
—
—
(17,721)
(16,886)
(499)
$ 235,995
$
Total
—
—
—
—
(4,074) $ 429,824
65,270
(1,021)
1,456
7,327
(2,351)
(23,054)
(117)
(5,095) $ 478,355
68,927
1,639
7,620
(2,728)
(25,215)
—
(4,661) $ 528,598
(94,695)
1,378
7,755
(19,923)
(16,886)
(499)
(3,664) $ 405,728
434
—
—
—
—
—
997
—
—
—
—
—
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OXFORD INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
($ in thousands)
Cash Flows From Operating Activities:
Net (loss) earnings
Adjustments to reconcile net earnings (loss) to cash flows from operating
activities:
Depreciation
Amortization of intangible assets
Impairment of goodwill and intangible assets
Impairment of property and equipment
Equity compensation expense
Amortization of deferred financing costs
Change in fair value of contingent consideration
Deferred income taxes (benefit) expense
Changes in operating assets and liabilities, net of acquisitions and dispositions:
Receivables, net
Inventories, net
Income tax receivable
Prepaid expenses and other current assets
Current liabilities
Other non-current assets, net
Other non-current liabilities
Cash provided by operating activities
Cash Flows From Investing Activities:
Purchases of property and equipment
Other investing activities
Cash used in investing activities
Cash Flows From Financing Activities:
Repayment of revolving credit arrangements
Proceeds from revolving credit arrangements
Deferred financing costs paid
Repurchase of common stock
Proceeds from issuance of common stock
Repurchase of equity awards for employee tax withholding liabilities
Cash dividends declared and paid
Other financing activities
Cash used in financing activities
Net change in cash and cash equivalents
Effect of foreign currency translation on cash and cash equivalents
Cash and cash equivalents at the beginning of year
Cash and cash equivalents at the end of year
See accompanying notes.
74
Fiscal
2020
Fiscal
2019
Fiscal
2018
$ (95,692) $
68,493
$
66,291
38,975
1,111
60,452
19,828
7,755
344
593
(18,332)
28,429
29,355
(17,113)
5,064
17,611
53,819
(48,349)
83,850
$
38,026
1,171
—
1,090
7,620
384
431
(1,973)
10,252
8,187
19
606
(14,282)
(283,335)
285,237
$ 121,926
$
38,560
2,610
—
1,320
7,327
424
970
2,927
(6,018)
(36,518)
4,458
5,848
5,081
2,286
811
96,377
(37,421)
(28,924)
(5,727)
(37,043)
(354)
$ (34,651) $ (37,421) $ (37,397)
—
(280,963)
280,963
—
(18,053)
1,378
(1,870)
(16,844)
(459)
(122,241)
109,248
(952)
—
1,639
(2,728)
(25,215)
(1,049)
(290,526)
257,710
—
—
1,456
(2,351)
(23,054)
—
$ (35,848) $ (41,298) $ (56,765)
2,215
$
(231)
6,343
8,327
43,207
926
8,327
52,460
13,351
202
52,460
66,013
$
$
$
$
$
Table of Contents
OXFORD INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
January 30, 2021
Note 1. Business and Summary of Significant Accounting Policies
Description of Business
We are a leading apparel company that designs, sources, markets and distributes products bearing the trademarks
of our Tommy Bahama®, Lilly Pulitzer® and Southern Tide® lifestyle brands and other owned and licensed brands. We
distribute our lifestyle 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, specialty stores, multi-branded e-
commerce retailers, off-price retailers and other retailers. Additionally, we operate Tommy Bahama food and beverage
locations, including Marlin Bars and full-service restaurants, generally adjacent to a Tommy Bahama retail store location.
In Fiscal 2020, we made the decision to exit our Lanier Apparel business, which is expected to be completed
during the second half of Fiscal 2021. This decision is in line with our stated business strategy of developing and marketing
compelling lifestyle brands and takes into consideration the increased challenges faced by the Lanier Apparel business,
which has primarily sold tailored clothing products, many of which were magnified by the COVID-19 pandemic.
COVID-19 Pandemic
The COVID-19 pandemic had a significant effect on overall economic conditions, consumer traffic, tourism,
consumer spending on discretionary items and our operations, resulting in disruption and a significant negative impact on
our financial statements in Fiscal 2020. While our mission remains the enhancement of long-term shareholder value, our
focus during this crisis has been (1) the health and well-being of our employees, customers and communities, (2) protecting
the reputation, value and image of our brands and (3) preserving liquidity, including numerous initiatives to manage and
reduce our inventory purchases, ongoing operating expenses, capital expenditures and other cash requirements.
Due to the COVID-19 pandemic, we temporarily closed all our North America retail and restaurant locations in
March 2020 and began reopening our stores and restaurants in a phased approach in May 2020. Certain stores and
restaurants were required to close again for certain periods after reopening, or operate pursuant to other mandated
limitations, after local jurisdictions reinstated some closure requirements. There can be no assurance that additional
closures will not occur as a result of any resurgence of COVID-19 cases and/or additional government mandates or
recommendations. The COVID-19 pandemic is expected to continue to have a material adverse impact on our business,
financial condition, results of operations and cash flows in the near-term due to decreased consumer traffic in stores and
restaurants; uncertainty as to the continued strength of our brands’ e-commerce businesses during the pendency of the
pandemic; overall changes in consumer confidence and consumer spending habits; reduced demand from our wholesale
customers, several of which filed for bankruptcy or are undergoing restructurings and closures; any potential disruptions to
our supply chain; and a slowdown in the U.S. and global economies.
During Fiscal 2020, we incurred certain charges related to adjustments to the carrying value of goodwill,
intangible assets, long-lived assets, inventories and receivables, each as discussed in these notes. We could experience
other potential adverse impacts in the future as a result of the COVID-19 pandemic, including additional charges related to
these assets or other items if the duration or severity of the COVID-19 pandemic is worse than our current expectations.
For many reasons, including those identified above, the full magnitude of the COVID-19 pandemic continues to
be difficult to predict at this time, and its ultimate duration and severity will depend on future developments. Additionally,
consumer shopping and spending preferences and behavior likely have been changed permanently as a result of COVID-
19; however, the ultimate impact of those changes is uncertain.
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Fiscal Year
OXFORD INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
We operate and report on a 52/53-week fiscal year. Our fiscal year ends on the Saturday closest to January 31 and
is designated by the calendar year in which the fiscal year commences. As used in our consolidated financial statements,
the terms Fiscal 2018, Fiscal 2019, Fiscal 2020 and Fiscal 2021 reflect the 52 weeks ended February 2, 2019; 52 weeks
ended February 1, 2020; 52 weeks ended January 30, 2021 and 52 weeks ending January 29, 2022, respectively.
Principles of Consolidation
Our consolidated financial statements include the accounts of Oxford Industries, Inc. and any other entities in
which we have a controlling financial interest, 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 in which we have a
controlling financial interest which may be evidenced through ownership of a majority voting interest or other rights which
might indicate we are the primary beneficiary of the entity. The primary beneficiary has both the power to direct the
activities of the entity that most significantly impact the entity’s economic performance and the obligation to absorb losses
or the right to receive benefits from the entity that could potentially be significant to the entity. All significant
intercompany accounts and transactions are eliminated in consolidation.
Business Combinations
The cost of each acquired business is allocated to the individual tangible and intangible assets acquired and
liabilities assumed or incurred as a result of an acquisition based on their estimated fair values. The assessment of the
estimated fair values of assets and liabilities acquired requires us to make certain assumptions regarding the use of the
acquired assets, anticipated cash flows, probabilities of cash flows, discount rates and other factors. Additionally, the
definition of fair value of inventories acquired generally will equal the expected sales price less certain costs associated
with selling the inventory, which may exceed the actual cost of the acquired inventories resulting in an inventory step-up to
fair value at acquisition, which would be recognized in our consolidated statements of operations as the acquired inventory
is sold. The purchase price allocation may be revised during an allocation period as necessary when, and if, information
becomes available to revise the fair values of the assets acquired and the liabilities assumed. The allocation period will not
exceed one year from the date of the acquisition. Should information become available after the allocation period
indicating that an adjustment to the purchase price allocation is appropriate, that adjustment will be included in our
consolidated statements of operations. The results of operations of acquired businesses are included in our consolidated
statements of operations from the respective dates of the acquisitions. Transaction costs related to business combinations
are included in SG&A in our consolidated statements of operations as incurred.
Revenue Recognition and Receivables
Revenue is recognized at an amount that reflects the consideration expected to be received for those goods and
services pursuant to a five-step approach: (1) identify the contracts with the customer; (2) identify the separate performance
obligations in the contracts; (3) determine the transaction price; (4) allocate the transaction price to separate performance
obligations; and (5) recognize revenue when, or as, each performance obligation is satisfied.
Our revenue consists of direct to consumer sales, including our retail store, e-commerce and restaurant operations,
and wholesale sales, as well as royalty income, which is included in royalties and other income in our
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OXFORD INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
consolidated statements of operations. The table below quantifies the amount of net sales by distribution channel (in
thousands) for each period presented.
Retail
E-commerce
Restaurant
Wholesale
Other
Net sales
Fiscal
2020
$ 202,071
323,900
48,428
173,209
1,225
$ 748,833
$
Fiscal
2019
440,803
262,283
83,836
333,986
1,882
$ 1,122,790
$
Fiscal
2018
439,556
239,034
84,530
341,615
2,731
$ 1,107,466
We recognize revenue when performance obligations under the terms of the contracts with our customers are
satisfied. Our performance obligations generally consist of delivering our products to our direct to consumer and wholesale
customers. Control of the product is generally transferred upon providing the product to consumers in our bricks and
mortar retail stores and restaurants, upon physical delivery of the products to consumers in our e-commerce operations and
upon shipment from our distribution center to customers in our wholesale operations. Once control is transferred to the
customer, we have completed our performance obligations related to the contract and have an unconditional right to
consideration for the products sold as outlined in the contract. Our receivables resulting from contracts with customers in
our direct to consumer operations are generally collected within a few days, upon settlement of the credit card transaction,
while our receivables resulting from contracts with our customers in our wholesale operations are generally due within one
quarter, in accordance with established credit terms. All of our performance obligations under the terms of our contracts
with customers in our direct to consumer and wholesale operations have an expected original duration of one year or less.
Our revenue, including any freight income, is recognized net of applicable taxes in our consolidated statements of
operations.
In our direct to consumer operations, consumers have certain rights to return product within a specified period and
are eligible for certain point of sale discounts; thus retail store, e-commerce and restaurant revenues are recorded net of
estimated returns and discounts, as applicable. The sales return allowance is based on historical direct to consumer return
rates and current trends and is recognized on a gross basis as a return liability for the amount of sales estimated to be
returned and a return asset for the right to recover the product estimated to be returned by the customer. The value of
inventory associated with a right to recover the goods returned in our direct to consumer operations are included in prepaid
expenses and other current assets in our consolidated balance sheets. The changes in the return liability are recognized in
net sales and the changes in the return asset are recognized in cost of goods sold in our consolidated statements of
operations.
In the ordinary course of our wholesale operations, we offer discounts, allowances and cooperative advertising
support to some of our wholesale customers for certain products. Some of these arrangements are written agreements,
while others may be implied by customary practices or expectations in the industry. As certain allowances, other
deductions and returns are not finalized until the end of a season, program or other event which may not have occurred yet,
we estimate such discounts, allowances and returns on an ongoing basis to estimate the consideration from the customer
that we expect to ultimately receive. We only recognize revenue to the extent that it is probable that we will not have a
significant reversal of revenue in a future period. Significant considerations in determining our estimates for discounts,
allowances, operational chargebacks and returns for wholesale customers may include historical and current trends,
agreements with customers, projected seasonal or program results, an evaluation of current economic conditions, specific
program or product expectations and retailer performance. We record the discounts, returns, allowances and operational
chargebacks as a reduction to net sales in our consolidated statements of operations and as a reduction to receivables, net in
our consolidated balance sheets, with the estimated value of inventory expected to be returned in prepaid expenses and
other current assets in our consolidated balance sheets. As of January 30, 2021 and February 1, 2020, reserve balances
recorded as a reduction to wholesale receivables related to these items were $6 million and $9 million, respectively.
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OXFORD INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
We extend credit to certain wholesale customers based on an evaluation of the customer’s financial capacity and
condition, usually without requiring collateral. In circumstances where we become aware of a specific wholesale
customer’s inability to meet its financial obligations, a specific provision for credit losses is taken as a reduction to
accounts receivable to reduce the net recognized receivable to the amount reasonably expected to be collected. Such
amounts are ultimately written off at the time that the amounts are not considered collectible. For all other wholesale
customer receivable amounts, we recognize estimated provisions for credit losses based on our historical collection
experience, the financial condition of our customers, an evaluation of current economic conditions, anticipated trends and
the risk characteristics of the receivables, each of which is subjective and requires certain assumptions. During Fiscal 2020,
we estimated these losses using the current expected loss approach including consideration of the expected impact of the
ongoing COVID-19 pandemic on our receivables, whereas in Fiscal 2019, we estimated these losses using the incurred loss
model under the previous guidance. We include such charges for credit losses and write-offs in SG&A in our consolidated
statements of operations and as a reduction to receivables, net in our consolidated balance sheets. Provisions for credit loss
expense, which is included in SG&A in our consolidated statements of operations, for Fiscal 2020, Fiscal 2019 and Fiscal
2018 were $4 million, $0 million and $0 million, respectively, while write-offs of credit losses for Fiscal 2020, Fiscal 2019
and Fiscal 2018 were $2 million, $0 million and $1 million. The increase in write-offs was due to bankruptcies of various
wholesale customers during Fiscal 2020. As of January 30, 2021 and February 1, 2020, our provision for credit losses
related to receivables was $3 million and $1 million, respectively.
In addition to trade receivables, tenant allowances due from landlord of $2 million and $1 million are included in
receivables, net in our consolidated balance sheet, as of January 30, 2021 and February 1, 2020, respectively. Substantially
all other amounts recognized in receivables, net represent trade receivables related to contracts with customers, including
receivables from wholesale customers, credit card receivables related to our direct to consumer operations, and receivables
from licensing partners. As of January 30, 2021 and February 1, 2020, prepaid expenses and other current assets included
$4 million and $3 million, respectively, representing the estimated value of inventory for expected wholesale and direct to
consumer sales returns in the aggregate. An estimated sales return liability of $7 million and $3 million for expected direct
to consumer returns is classified in accrued expenses and other liabilities in our consolidated balance sheet as of January
30, 2021 and February 1, 2020, respectively. We did not have any significant contract assets related to contracts with
customers, other than trade receivables and the value of inventory associated with expected sales returns, as of January 30,
2021 and February 1, 2020.
In addition to our estimated expected return amounts, contract liabilities related to contracts with our customers
include gift cards and merchandise credits issued by us. Gift cards and merchandise credits issued by us are redeemable on
demand by the holder and do not have an expiration date or incur administrative fees. Historically, substantially all gift
cards and merchandise credits are redeemed within one year of issuance. Gift cards and merchandise credits are recorded as
a liability until our performance obligation is satisfied, which occurs when redeemed by the consumer, at which point
revenue is recognized. However, we recognize estimated breakage income for certain gift cards and merchandise credits
using the redemption recognition method, subject to applicable laws in certain states. Contract liabilities for gift cards
purchased by consumers and merchandise credits received by customers but not yet redeemed, less any breakage income
recognized to date, is included in accrued expenses and other liabilities in our consolidated balance sheets and totaled $13
million and $12 million as of January 30, 2021 and February 1, 2020, respectively. Gift card breakage income, which is
included in net sales in our consolidated statements of operations, was $1 million, $2 million and $0 million in Fiscal 2020,
Fiscal 2019 and Fiscal 2018, respectively.
Royalties from the license of our owned brands are recognized over the time that licensees are provided access to
our trademarks (i.e. symbolic intellectual property) and benefit from such access through their sales of licensed products.
Payments are generally due quarterly, and depending on time of receipt, may be recorded as a liability until recognized as
revenue. Royalty income is based upon the contractually guaranteed minimum royalty obligations and adjusted as sales
data, or estimates thereof, is received from licensees, when the related royalties based on a percentage of the licensee’s
sales exceed the contractually determined minimum royalty amount. Royalty income, which is included in royalties and
other operating income in our consolidated statements of operations, were $14 million, $15 million and $14 million during
Fiscal 2020, Fiscal 2019 and Fiscal 2018, respectively.
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Cost of Goods Sold
OXFORD INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
We include in cost of goods sold all sourcing, procurement and other costs incurred prior to or in association with
the receipt of finished goods at our distribution facilities, as well as freight from our warehouse to our own retail stores,
wholesale customers and e-commerce consumers. The costs prior to receipt at our distribution facilities include product
cost, inbound freight charges, import costs, purchasing costs, internal transfer costs, direct labor, manufacturing overhead,
insurance, duties, brokers’ fees, consolidators’ fees and depreciation expense associated with our manufacturing, sourcing
and procurement operations. We generally classify amounts billed to customers for freight in net sales, and classify freight
costs for shipments to customers in cost of goods sold in our consolidated statements of operations. Our gross profit and
gross margin may not be directly comparable to those of our competitors, as statement of operations classifications of
certain expenses may vary by company.
SG&A
We 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 costs associated with the operations of our retail
stores, e-commerce sites, restaurants and concessions, such as labor, occupancy costs, store and restaurant pre-opening
costs (including rent, marketing, store set-up costs and training expenses), depreciation and other fees. SG&A also includes
product design costs, selling costs, royalty expense, provision for credit losses, advertising, promotion and marketing
expenses, professional fees, other general and administrative expenses, 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, are included as a component of SG&A. We consider distribution network costs to be the
costs associated with operating our distribution centers, as well as the costs paid to third parties who perform those services
for us. In Fiscal 2020, Fiscal 2019 and Fiscal 2018, distribution network costs included in SG&A totaled $26 million, $30
million and $28 million, respectively.
All costs associated with advertising, promotion and marketing of our products are expensed in SG&A 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 and promotional funds are generally recorded
as a reduction to net sales as recognized. Advertising, promotion and marketing expenses, excluding employment costs for
our advertising and marketing employees, for Fiscal 2020, Fiscal 2019 and Fiscal 2018 were $50 million, $56 million and
$60 million, respectively. Prepaid advertising, promotion and marketing expenses included in prepaid expenses in our
consolidated balance sheets as of January 30, 2021 and February 1, 2020 and were $2 million and $5 million, respectively.
Royalty expense 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 a contractually determined minimum royalty amount, are recorded
based upon the guaranteed minimum levels and adjusted based on our net sales of the licensed products, as appropriate.
Royalty expenses recognized as SG&A in Fiscal 2020, Fiscal 2019 and Fiscal 2018 were $6 million, $7 million and $6
million, respectively. Substantially all of these royalty expense amounts are included in Lanier Apparel for each period
presented.
Cash and Cash Equivalents
We consider cash equivalents to be short-term investments with original maturities of three months or less for
purposes of our consolidated statements of cash flows. As of January 30, 2021 and February 1, 2020, our cash and cash
equivalents included $59 million and $45 million, respectively, of amounts invested in money market funds.
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OXFORD INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Supplemental Cash Flow Information
During Fiscal 2020, Fiscal 2019 and Fiscal 2018, cash paid for income taxes was $6 million, $17 million and $14
million, respectively. During Fiscal 2020, Fiscal 2019 and Fiscal 2018, cash paid for interest, net of interest income was $2
million, $1 million and $2 million, respectively. Non-cash investing activities included capital expenditures incurred but
not yet paid, which were included in accounts payable in our consolidated balances sheets, of $1 million, $3 million and $2
million as of Fiscal 2020, Fiscal 2019 and Fiscal 2018, respectively. Additionally, during Fiscal 2020 and Fiscal 2019, we
recorded a non-cash net increase in operating lease assets and corresponding operating lease liability amounts of $2 million
and $40 million, respectively, related to the net impact of new, modified and terminated operating lease amounts.
Inventories, net
Substantially all of our inventories are finished goods inventories of apparel, accessories and other related
products. Inventories are valued at the lower of cost or market.
For operating group reporting, inventory is carried at the lower of FIFO cost or market. We evaluate the
composition of our inventories for identification of distressed inventory at least quarterly. In performing this evaluation,
we consider slow-turning products, an indication of lack of consumer acceptance of particular products, prior-seasons’
fashion products, broken assortments, discontinued products 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 the amount to be ultimately realized for the goods is not
necessarily known at period end, we must use certain assumptions considering historical experience, inventory quantity,
quality, age and mix, historical sales trends, future sales projections, consumer and retailer preferences, market trends,
general economic conditions, the levels of end of season product in market and the prices being offered by off-price
retailers and our anticipated plans and costs to sell the inventory. Also, we provide an allowance for shrinkage, as
appropriate, for the period between the last physical inventory count and each balance sheet date.
For consolidated financial reporting, as of January 30, 2021 and February 1, 2020, $116 million, or 94%, and $145
million, or 95%, of our inventories were valued at the lower of LIFO cost or market after deducting our LIFO reserve. The
remaining $8 million and $7 million of our inventories were valued at the lower of FIFO cost or market as of January 30,
2021 and February 1, 2020, respectively. Generally, inventories of our domestic operations are valued at the lower of LIFO
cost or market, and our inventories of our international operations are valued at the lower of FIFO cost or market. Our
LIFO reserves are based on the estimated Producer Price Index as published by the United States Department of Labor. We
write down inventories valued at the lower of LIFO cost or market when LIFO cost exceeds market value. We deem LIFO
accounting adjustments to not only include changes in the LIFO reserve, but also changes in markdown reserves which are
considered in LIFO accounting. As our LIFO inventory pool does not correspond to our operating group definitions, LIFO
inventory accounting adjustments are not allocated to our operating groups. Thus, the impact of accounting for inventories
on the LIFO method is reflected in Corporate and Other for operating group reporting purposes included in Note 2.
There were no LIFO inventory layer liquidations that had a material impact on our net earnings in Fiscal 2020,
Fiscal 2019 or Fiscal 2018. As of January 30, 2021 and February 1, 2020, the LIFO reserve included in our consolidated
balance sheets were $62 million and $63 million, respectively.
Property and Equipment, net
Property and equipment, including leasehold improvements that are reimbursed by landlords as a tenant
improvement allowance and assets under capital leases, if any, is carried at cost less accumulated depreciation. Additions
are capitalized while repair and maintenance costs are charged to our consolidated statements of operations as incurred.
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OXFORD INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Depreciation is calculated using both straight-line and accelerated methods generally over the estimated useful lives of the
assets as follows:
Leasehold improvements
Furniture, fixtures, equipment and technology
Buildings and improvements
Lesser of remaining life of the asset or lease term
2 – 15 years
7 – 40 years
Property and equipment is reviewed periodically for impairment if events or changes in circumstances indicate
that the carrying amount may not be recoverable, as discussed in Impairment of Long-Lived Assets, other than Goodwill
and Intangible Assets with Indefinite Lives below.
Substantially all of our depreciation expense is included in SG&A in our consolidated statements of operations.
Cost of goods sold includes the depreciation associated with our manufacturing, sourcing and procurement processes.
Depreciation expense as disclosed in Note 2 includes the property and equipment impairment charges.
Intangible Assets
At acquisition, we estimate and record the fair value of purchased intangible assets, which primarily consist of
trademarks, reacquired rights and customer relationships. The fair values and useful lives of these intangible assets are
estimated based on our assessment as well as independent third party appraisals in some cases. Such valuations, which are
dependent upon a number of uncertain factors, may include a discounted cash flow analysis of anticipated revenues and
expenses or cost savings resulting from the acquired intangible asset using an estimate of a risk-adjusted market-based cost
of capital as the discount rate. Significant assumptions and estimates included in determining the fair value of intangible
assets may include estimates of net sales, royalty income, operating income, growth rates, royalty rates, discount rates and
income tax rates, among other factors. Additionally, at acquisition we must determine whether the intangible asset has an
indefinite or finite life and account for it accordingly.
Intangible assets with indefinite lives, which are detailed by operating group in Note 4, are not amortized but
instead evaluated for impairment annually or more frequently if events or circumstances indicate that the intangible asset
might be impaired. The evaluation of the recoverability of trademarks with indefinite lives includes valuations based on a
discounted cash flow analysis utilizing the relief from royalty method, among other considerations. Like the initial
valuation, the evaluation of recoverability is dependent upon a number of uncertain factors which require assumptions to be
made by us, including estimates of net sales, royalty income, operating income, growth rates, royalty rates, discount rates
and income tax rates, among other factors.
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 impaired as a basis for determining whether it is necessary to perform the quantitative
impairment test. We also have the option to bypass the qualitative assessment for any indefinite-lived intangible asset in
any period and proceed directly to performing the quantitative impairment test. Bypassing the qualitative assessment in 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 fiscal year, or at an interim date if indicators of impairment exist at that date. If an annual or interim analysis
indicates an impairment of a trademark with an indefinite useful life, the amount of the impairment is recognized in our
consolidated financial statements based on the amount that the carrying value exceeds the estimated fair value of the asset.
As discussed in Note 4, an impairment charge related to our Southern Tide intangible assets with an indefinite life
totaling $18 million was recognized in the First Quarter of Fiscal 2020, with no additional impairment charges related to
intangible assets with indefinite lives in the other quarters of Fiscal 2020. No impairment of intangible assets with
indefinite lives was recognized during Fiscal 2019 or Fiscal 2018.
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OXFORD INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Intangible assets with finite lives, which primarily consist of owned trademarks of TBBC and Duck Head,
reacquired rights and customer relationships, are amortized over the estimated useful life of the asset using the straight line
method or a method of amortization that reflects the pattern in which the economic benefits of the intangible asset are
consumed or otherwise realized. Certain of our intangible assets with finite lives may be amortized over periods of up to 20
years. The determination of an appropriate useful life for amortization considers our plans for the intangible assets, the
remaining contractual period of the reacquired right, and factors that may be outside of our control, including expected
customer attrition. Amortization of intangible assets is included in SG&A in our consolidated statements of operations.
Intangible assets with finite lives are reviewed periodically for impairment if events or changes in circumstances indicate
that the carrying amount may not be recoverable, as discussed in Impairment of Long-Lived Assets, other than Goodwill
and Intangible Assets with Indefinite Lives below.
Any costs associated with extending or renewing recognized intangible assets are generally expensed as incurred.
Goodwill, net
Goodwill is recognized as the amount by which the cost to acquire a business exceeds the fair value of identified
tangible and intangible assets acquired, net of assumed liabilities. Thus, the amount of goodwill recognized in connection
with a business combination depends on the fair values assigned to the individual assets acquired and liabilities assumed in
a business combination. Goodwill is allocated to the respective reporting unit at the time of acquisition. Goodwill, which as
of the end of Fiscal 2020 primarily consists of goodwill related to our Lilly Pulitzer and TBBC acquisitions, is not
amortized but instead is evaluated for impairment annually or more frequently if events or circumstances indicate that the
goodwill might be impaired. As of January 30, 2021, all of our goodwill is deductible for income tax purposes.
We test, either qualitatively or quantitatively, goodwill for impairment as of the first day of the fourth quarter of
our fiscal year or when impairment indicators exist. The qualitative factors that we use to determine the likelihood of
goodwill impairment, as well as to determine if an interim test is appropriate, include: (a) macroeconomic conditions,
(b) industry and market considerations, (c) cost factors, (d) overall financial performance, (e) other relevant 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 we determine that we will bypass the qualitative impairment option or if we determine that a quantitative test is
appropriate, the quantitative test includes valuations of each applicable underlying reporting unit using fair value
techniques, which may include a discounted cash flow analysis or an independent appraisal, as well as consideration of any
market comparable transactions. Significant estimates, some of which may be very subjective, considered in a discounted
cash flow analysis are future cash flow projections of the business, an estimate of the risk-adjusted market-based cost of
capital as the discount rate, income tax rates and other assumptions. The estimates and assumptions included in the
evaluation of the recoverability of goodwill involve significant uncertainty, and if our plans or anticipated results change,
the impact on our financial statements could be significant.
If an annual or interim analysis indicates an impairment of goodwill balances, the impairment is recognized in our
consolidated financial statements. As discussed in Note 4, a $43 million goodwill impairment charge related to Southern
Tide was recognized in the First Quarter of Fiscal 2020, with no additional impairment charges related to goodwill in the
other quarters of Fiscal 2020. No impairment of goodwill was recognized during Fiscal 2019 or Fiscal 2018.
Prepaid Expenses and Other Non-Current Assets, net
Amounts included in prepaid expenses and other current assets primarily consist of prepaid operating expenses,
including advertising, taxes, maintenance and other services contracts, royalties, insurance, samples and retail supplies as
well as the estimated value of inventory for anticipated wholesale and direct to consumer sales returns. Other non-current
assets primarily consist of assets set aside for potential liabilities related to our deferred compensation plan,
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equity investments in unconsolidated entities, assets related to certain investments in officers’ life insurance policies,
deposits and amounts placed into escrow accounts, deferred financing costs related to our revolving credit agreement and
non-current deferred tax assets.
Officers’ life insurance policies that are owned by us, substantially all of which are included in other non-current
assets, net, are recorded at their cash surrender value, less any outstanding loans associated with the life insurance policies
that are payable to the life insurance company with which the policy is outstanding. As of January 30, 2021 and
February 1, 2020, officers’ life insurance policies, net, recorded in our consolidated balance sheets totaled $4 million.
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 term of the related debt. Amortization of deferred financing costs is included in interest
expense in our consolidated statements of operations. Unamortized deferred financing costs included in other non-current
assets, net totaled $1 million and $2 million as of January 30, 2021 and February 1, 2020, respectively.
Deferred Compensation
We have a non-qualified deferred compensation plan offered to a select group of highly compensated employees
and our non-employee directors. The plan provides participants with the opportunity to defer a portion of their cash
compensation in a given plan year, of which a percentage may be matched by us in accordance with the terms of the plan.
We make contributions to rabbi trusts or other investments to provide a source of funds for satisfying these deferred
compensation liabilities. Investments held for our deferred compensation plan consist of insurance contracts and are
recorded based on valuations which generally incorporate unobservable factors. A change in the value of the underlying
assets would substantially be offset by a change in the liability to the participant resulting in an immaterial net impact on
our consolidated financial statements. These securities approximate the participant-directed investment selections
underlying the deferred compensation liabilities.
The total value of the assets set aside for potential deferred compensation liabilities, substantially all of which are
included in other non-current assets, net, as of January 30, 2021 and February 1, 2020 was $16 million and $15 million,
respectively, substantially all of which are held in a rabbi trust. Substantially all the assets set aside for potential deferred
compensation liabilities are life insurance policies recorded at their cash surrender value, less any outstanding loans
associated with the life insurance policies that are payable to the life insurance company with which the policy is
outstanding. The liabilities associated with the non-qualified deferred compensation plan are included in other non-current
liabilities in our consolidated balance sheets and totaled $16 million and $15 million at January 30, 2021 and February 1,
2020, respectively.
Equity Investments in Unconsolidated Entities
We account for equity investments in which we exercise significant influence, but do not control via voting rights
and were determined to not be the primary beneficiary of, using the equity method of accounting. Generally, we determine
that we exercise significant influence over a corporation or a limited liability company when we own 20% or more or 3%
or more, respectively, of the voting interests, unless the facts and circumstances of that investment indicate that we do not
have the ability to exhibit significant influence. Under the equity method of accounting, original investments are recorded
at cost, and are subsequently adjusted for our contributions to, distributions from and share of income or losses of the
entity. We account for equity investments in which we do not control or exercise significant influence using the fair value
method of accounting unless there is not a readily determinable fair value for the equity investment. If there is no readily
determinable fair value for such equity investment, we account for the equity investment using the alternative measurement
method of cost adjusted for impairment and any identified observable price changes of the investment.
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Equity investments accounted for using the equity method of accounting, fair value method of accounting, or
alternative measurement method are included in other non-current assets in our consolidated balance sheets, while the
income or loss related to such investments are included in royalties and other operating income in our consolidated
statements of operations. During Fiscal 2020, we paid $6 million, in the aggregate, for equity investments in entities
accounted for using either the equity method of accounting or the alternative measurement method, which are included in
other investing activities in our consolidated statements of cash flows. Each of these investments is in smaller apparel
lifestyle brands in which we have an ownership interest of approximately 10% as of January 30, 2021. As of January 30,
2021 and February 1, 2020, our consolidated balance sheet included equity investments accounted for using the equity
method of accounting, fair value and alternative measurement method totaling, in the aggregate, $6 million and $0 million,
respectively. During Fiscal 2020, Fiscal 2019 and Fiscal 2018 we recognized amounts related to these investments in our
consolidated statements of operations of $0 million, $0 million and a loss of $1 million, respectively.
Impairment of Long-Lived Assets, other than Goodwill and Intangible Assets with Indefinite Lives
We assess our long-lived assets other than goodwill and intangible assets with indefinite lives for impairment
whenever events indicate that the carrying amount of the asset or asset group may not be fully recoverable. This
recoverability and impairment assessment is performed for a specific asset or asset group and includes any property and
equipment, operating lease assets, intangible assets with definite lives and other non-current assets included in the asset
group. Events that would typically result in such an assessment would include a change in the estimated useful life of the
assets, including a change in our plans of the anticipated period of operating a leased retail store or restaurant location, the
decision to vacate a leased space before lease termination, the abandonment of an asset or other factors. These events may
result in a change in the determination of the assets included in an asset group for impairment testing. To analyze
recoverability, we consider undiscounted net future cash flows over the remaining life of the asset or asset group. If the
amounts are determined to not be recoverable an impairment is recognized resulting in the write-down of the asset or asset
group and a corresponding charge to our consolidated statements of operations. Impairment losses are measured based on
the difference between the carrying amount and the estimated fair value of the assets. For assets impaired during Fiscal
2020, Fiscal 2019 and Fiscal 2018, there was no significant fair value at the date of impairment testing.
During Fiscal 2020, Fiscal 2019 and Fiscal 2018, we recognized $20 million, $1 million and $1 million,
respectively, of property and equipment impairment charges, which were primarily included in SG&A. During Fiscal 2020,
these charges primarily related to a $15 million write-off of previously capitalized costs associated with a Tommy Bahama
information technology project that was abandoned in the Fourth Quarter of Fiscal 2020, $2 million of charges related to
retail store assets due to retail store closures in Tommy Bahama and Lilly Pulitzer, $1 million of charges related to office
leasehold improvements resulting from the Lanier Apparel exit and $1 million of charges related to office leasehold
improvements associated with the 2020 restructuring of Tommy Bahama’s international sourcing operations. The
impairment charges in Fiscal 2019 and Fiscal 2018 were primarily related to retail store assets and information technology
assets.
During Fiscal 2020, Fiscal 2019 and Fiscal 2018, we recognized $4 million, $0 million and $0 million,
respectively, of operating lease asset impairment charges, which were primarily included in SG&A. During Fiscal 2020,
these charges primarily related to $3 million of charges related to certain office leases resulting from the Lanier Apparel
exit and $1 million of charges related to an office lease associated with the 2020 restructuring of Tommy Bahama’s
international sourcing operations.
As discussed in Note 4, we recognized an impairment charge of less than $1 million of an intangible asset with a
finite life in Lanier Apparel in Fiscal 2020. No impairment of intangible assets with finite lives was recognized during
Fiscal 2019 or Fiscal 2018.
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Accounts Payable, Accrued Compensation and Accrued Expenses and Other Liabilities
Liabilities for accounts payable, accrued compensation and accrued expenses and other liabilities are carried at
cost, which reflects the fair value of the consideration expected to be paid in the future for goods and services received,
whether or not billed to us as of the balance sheet date. Accruals for medical insurance and workers’ compensation, which
are included in accrued expenses and other liabilities in our consolidated balance sheets, include estimated settlements for
known claims, as well as accruals for estimates of incurred but not reported claims based on our claims experience and
statistical trends.
Legal and Other Contingencies
We are subject to certain litigation, claims and assessments in the ordinary course of business. The claims and
assessments may relate, among other things, to disputes about trademarks and other intellectual property, licensing
arrangements, real estate and contracts, employee relations matters, importing or exporting regulations, environmental
matters, taxation or other topics. For those matters where it is probable that we have incurred a loss and the loss, or range
of loss, can be reasonably estimated, we have recorded reserves in accrued expenses and other liabilities or other non-
current liabilities in our consolidated financial statements for the estimated loss and related expenses, such as legal fees. In
other instances, 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 a liability, if any, and therefore have not recorded a reserve. As additional information
becomes available or as circumstances change, we adjust our assessment and estimates of such liabilities accordingly.
Additionally, for any potential gain contingencies, we do not recognize the gain until the period that all contingencies have
been resolved and the amounts are realizable. We believe the outcome of outstanding or pending matters, individually and
in the aggregate, will not have a material impact on our consolidated financial statements, based on information currently
available.
In connection with acquisitions, we may enter into contingent consideration arrangements, which provide for the
payment of additional purchase price consideration to the sellers if certain performance criteria are achieved during a
specified period. We recognize the fair value of the contingent consideration based on its estimated fair value at the date of
acquisition. Such valuation requires assumptions regarding anticipated cash flows, probabilities of cash flows, discount
rates and other factors. Each of these assumptions may involve a significant amount of uncertainty. Subsequent to the date
of acquisition, we periodically adjust the liability for the contingent consideration to reflect the fair value of the contingent
consideration by reassessing our valuation assumptions as of that date. A change in assumptions related to contingent
consideration amounts could have a material impact on our consolidated financial statements. Any change in the fair value
of the contingent consideration is recognized in SG&A in our consolidated statements of operations.
A change in the fair value of contingent consideration of $1 million, less than $1 million and $1 million associated
with the acquisition of TBBC was recognized in our consolidated statements of operations in Fiscal 2020, Fiscal 2019 and
Fiscal 2018, respectively. As of January 30, 2021 and February 1, 2020, $2 million and $1 million, respectively, of
contingent consideration related to the TBBC acquisition was recognized as a liability in our consolidated balance sheet.
Other Non-current Liabilities
Amounts included in other non-current liabilities primarily consist of deferred compensation amounts, amounts
related to uncertain tax positions and fair value of contingent consideration.
Leases
In the ordinary course of business, we enter into real estate lease agreements for our direct to consumer locations,
which include both retail and food and beverage locations, office and warehouse/distribution space, as well as leases for
certain equipment. Our real estate leases have varying terms and expirations and may have options to extend,
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renew or terminate the lease agreement at our discretion, among other provisions. Our real estate lease terms are typically
for a period of ten years or less and typically require monthly rent payments with specified rent escalations during the lease
term. Our real estate leases usually provide for payments of our pro rata share of real estate taxes, insurance and other
operating expenses applicable to the property, and certain of our leases require payment of sales taxes on rental payments.
Also, our direct to consumer location leases often provide for contingent rent payments based on sales if certain sales
thresholds are achieved. For many of our real estate lease agreements, we obtain lease incentives at lease inception from
the landlord for tenant improvement or other allowances. Our lease agreements do not include any material residual value
guarantees or material restrictive financial covenants. Substantially all of our leases are classified as long-term operating
leases.
For our leases, we are required to recognize operating lease liabilities equal to our obligation to make lease
payments arising from the leases on a discounted basis and operating lease assets which represent our right to use, or
control the use of, a specified asset for a lease term. Operating lease liabilities, which are included in current portion of
operating lease liabilities and non-current portion of operating lease liabilities in our consolidated balance sheets, are
recognized at the lease commencement date based on the present value of lease payments over the lease term. The
significant judgments in calculating the present value of lease obligations include determining the lease term and lease
payment amounts, which are dependent upon our assessment of the likelihood of exercising any renewal or termination
options that are at our discretion, as well as the discount rate applied to the future lease payments. The operating lease
assets, which are included in operating lease assets in our consolidated balance sheets, at commencement represent the
amount of the operating lease liability reduced for any lease incentives, including tenant improvement allowances.
Typically, we do not include any renewal or termination options at our discretion in the underlying lease term at the time of
lease commencement as the probability of exercise is not reasonably certain. Variable rental payments for real estate taxes,
sales taxes, insurance, other operating expenses and contingent rent based on a percentage of net sales or adjusted
periodically for inflation are not included in lease expense used to calculate the present value of lease obligations
recognized in our consolidated balance sheet, but instead are recognized as incurred.
Lease expense for operating leases is generally recognized on a straight-line basis over the lease term, even if
there are fixed escalation clauses, lease incentives for rent holidays, or other similar items from the date that we take
possession of the space. Substantially all of our lease expense is recognized in SG&A in our consolidated statements of
operations.
We account for the underlying operating lease at the individual lease level. The lease guidance requires us to
discount future lease payments using the interest rate implicit in the lease or, if that rate cannot be readily determined, our
estimated incremental borrowing rate. As our leases do not provide an implicit rate, we use an estimated incremental
borrowing rate based on information available at the applicable commencement date. Our estimated incremental borrowing
rate for a lease is the rate of interest we estimate we would have to pay on a collateralized basis over the lease term to
borrow an amount equal to the lease payments.
During the First Quarter of Fiscal 2020, the FASB provided for an optional practical expedient that simplifies how
a lessee accounts for rent concessions that are a direct consequence of the COVID-19 pandemic. The practical expedient
only applies if a lease is modified to allow for a rental concession and (1) the revised consideration is substantially the
same as, or less than, the original consideration in the lease agreement, (2) the reduction in lease payments relates to
payments due on or before June 30, 2021, and (3) no other substantive changes have been made to the terms of the leases.
The practical expedient provides that, if the above conditions are met for the lease agreement, the lessee is not required to
assess whether the eligible rent concessions are lease modifications. We have elected to apply the practical expedient for all
eligible lease modifications resulting in the rent concession being recorded as an adjustment to variable lease payments and
recognized in our consolidated statement of operations in that period. The amounts of concessions recognized in our
consolidated statement of operations pursuant to this practical expedient in Fiscal 2020 was $4 million. For lease
modifications that do not meet the criteria for the practical expedient, we account for the amendment and concession as a
lease modification requiring lease remeasurement with the concession recognized as a reduction to the operating lease asset
and recognized in our consolidated statements of operations over
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the remaining term of the respective lease agreement. The amount of concessions agreed to in Fiscal 2020 that were
recognized as reductions of the operating lease asset and will be recognized in future periods over the remaining lease term
as a reduction to rent expense was $4 million.
In February 2016, the FASB issued revised lease accounting guidance. We adopted the guidance on the first day of
Fiscal 2019 using a modified retrospective approach. The modified retrospective approach allowed us to apply the new
lease accounting guidance to the financial statements for the period of adoption and apply the previous lease accounting
guidance in the prior year comparative periods. The adoption of the new lease accounting guidance had a material impact
on our consolidated balance sheet as a result of the recognition of operating lease assets and operating lease liabilities on
our consolidated balance sheet, but did not have a material impact on our consolidated statements of operations, as the
recognition of operating lease expense was generally consistent under the previous and new lease accounting guidance, or
on our consolidated statements of cash flows, as the lease accounting guidance did not impact the timing of lease
payments.
Foreign Currency
We are exposed to foreign currency exchange risk when we generate net sales or incur expenses in currencies
other than the functional currency of the respective operations. The resulting assets and liabilities denominated in amounts
other than the respective functional currency are re-measured into the respective 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 of exchange prevailing
during the relevant period. The impact of any such re-measurement is recognized in our consolidated statements of
operations in that period. Net losses (gains) included in our consolidated statements of operations related to foreign
currency transactions recognized in Fiscal 2020, Fiscal 2019 and Fiscal 2018 were $0 million, $1 million and $0 million,
respectively.
Additionally, the financial statements of our operations for which the functional currency is a currency other than
the U.S. dollar are translated into U.S. dollars at the rate of exchange in effect on the balance sheet date for the balance
sheet and at the average rates of exchange prevailing during the relevant period for the statements of operations. The
impact of such translation is recognized in accumulated other comprehensive income (loss) in our consolidated balance
sheets and included in other comprehensive income (loss) in our consolidated statements of comprehensive income
resulting in no impact on net earnings for the relevant period.
As of January 30, 2021, our foreign currency exchange risk exposure primarily results from our businesses
operating outside of the United States, which are primarily related to (1) our Tommy Bahama operations in Canada and
Australia purchasing goods in U.S. dollars or other currencies which are not the functional currency of the business and
(2) certain other transactions, including intercompany transactions. During Fiscal 2020, Fiscal 2019 and Fiscal 2018, we
did not enter into and were not a party to any foreign currency exchange contracts for hedging, trading or speculative
purposes.
Interest Rate Risk
We are exposed to market risk from changes in interest rates on any variable-rate indebtedness under our U.S.
Revolving Credit Agreement. If we have significant borrowings, 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. At times we may enter into interest rate swap arrangements related to
certain of our variable-rate debt in order to fix the interest rate if we determine that our exposure to interest rate changes is
higher than optimal. Our assessment also considers our need for flexibility in our borrowing arrangements resulting from
the seasonality of our business, anticipated future cash flows and our expectations about the risk of future interest rate
changes, among other factors. During Fiscal 2020, Fiscal 2019 and Fiscal 2018, we did not enter into and were not a party
to any interest rate swap agreements for hedging, trading or speculative purposes.
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Fair Value Measurements
Fair 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) in the 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 the cost approach (cost to replace the service capacity of an asset or replacement cost). These valuation
techniques may be based upon observable and unobservable inputs.
The three levels of inputs used to measure fair value pursuant to the guidance are as follows: (1) Level 1—Quoted
prices in active markets for identical assets or liabilities; (2) 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 by observable
market data; and (3) 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 include 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, other current liabilities and debt, if any. Given their short-term nature, the carrying amounts of
cash and cash equivalents, receivables, accounts payable, accrued expenses and other current liabilities generally
approximate their fair values. The fair value of cash and cash equivalents invested on an overnight basis in money market
funds is based upon the quoted prices in active markets provided by the holding financial institutions, which are considered
Level 1 inputs in the fair value hierarchy. Additionally, we believe the carrying amounts of our variable-rate borrowings, if
any, approximate fair value. We have determined that our property and equipment, intangible assets, goodwill, operating
lease assets and certain other non-current assets included in our consolidated balance sheets are non-financial assets
measured at fair value on a non-recurring basis. We have determined that our approaches for determining fair values of
each of these assets generally are based on Level 3 inputs. Additionally, for contingent consideration fair value amounts,
we have determined that our approaches for determining fair value are generally based on Level 3 inputs.
In determining the $9 million fair value, and resulting carrying value, of the Southern Tide trade name in our
interim impairment test performed in the First Quarter of Fiscal 2020, which utilized the relief from royalty valuation
method, we used certain Level 3 inputs. The significant unobservable inputs used in determining the fair value of the
Southern Tide trade name as of the First Quarter of Fiscal 2020 included: (a) a double-digit percentage decrease in sales for
the remainder of Fiscal 2020 as compared to the comparable prior year sales amounts, reflecting the anticipated impact of
the COVID-19 pandemic during the remainder of Fiscal 2020; a double-digit percentage increase for sales in Fiscal 2021,
reflecting an anticipated partial recovery from the COVID-19 pandemic; and high single-digit percentage growth rates for
sales subsequent to Fiscal 2021, with the growth rate in future periods ultimately decreasing to a low single-digit
percentage in the long term, and (b) a required rate of return for the intangible asset of 13%.
Equity Compensation
We have certain equity compensation plans as described in Note 8, which provide for the ability to grant restricted
shares, restricted share units, options and other equity awards to our employees and non-employee directors. We recognize
compensation expense related to equity awards to employees and non-employee directors in SG&A in our consolidated
statements of operations based on the fair value of the awards on the grant date. The fair value of restricted shares that are
service and performance-based are determined based on the fair value of our common stock on the grant date. The fair
value of restricted share units that are market-based (e.g. relative total shareholder return (“TSR”)) are determined based on
a Monte Carlo simulation model, which models multiple TSR paths for our common stock as well as the comparator group,
as applicable, to evaluate and determine the estimated fair value of the restricted share unit.
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For awards with specified service requirements, the fair value of the equity awards granted to employees is
recognized over the respective service period. For performance-based awards (e.g. awards based on our earnings per
share), during the performance period we assess expected performance versus the predetermined performance goals and
adjust the cumulative equity compensation expense to reflect the relative expected performance achievement. The fair
value of the performance-based awards, if earned, is recognized on a straight-line basis over the aggregate performance
period and any additional required service period. For market-based awards (e.g. TSR-based awards) with specified service
requirements that are equal to or longer than the market-based specification period, the fair value of the awards granted to
employees is recognized over the requisite service period, regardless of whether, and to the extent to which, the market
condition is ultimately satisfied. The impact of stock award forfeitures on compensation expense is recognized at the time
of forfeit as no estimate of future stock award forfeitures is considered in our calculation of compensation expense for our
service-based, performance-based or market-based awards.
Comprehensive Income and Accumulated Other Comprehensive Loss
Comprehensive income consists of net earnings and specified components of other comprehensive income (loss).
Other comprehensive income includes changes in assets and liabilities that are not included in net earnings pursuant to
GAAP, such as foreign currency translation adjustments between the functional and reporting currencies and certain
unrealized gains (losses), if any. For us, other comprehensive income for each period presented includes the impact of the
foreign currency translation impact of our Tommy Bahama operations in Canada, Australia and Japan. These other
comprehensive income (loss) amounts are deferred in accumulated other comprehensive loss, which is included in
shareholders’ equity in our consolidated balance sheets. As of January 30, 2021, the amounts included in accumulated
other comprehensive loss in our consolidated balance sheet primarily reflect the net foreign currency translation adjustment
related to our Tommy Bahama operations in Canada and Australia.
During Fiscal 2019, we recognized a $1 million charge in our consolidated statement of operations that was
previously recognized in accumulated other comprehensive loss in our consolidated balance sheet. This charge related to
foreign currency amounts associated with our investment and operations in Japan, which in Fiscal 2019 we decided to exit
entirely after exiting a significant portion of the business in Fiscal 2018. No material amounts of accumulated other
comprehensive loss were reclassified from accumulated other comprehensive loss into our consolidated statements of
operations during Fiscal 2020 or Fiscal 2018.
Dividends
Dividends are accrued at the time declared by our Board of Directors and typically paid within the same fiscal
quarter. Certain restricted share units, as described in Note 8, earn dividend equivalents which are accrued at the time of
declaration by the Board of Directors in accrued expenses and other liabilities, but only paid if the restricted share units are
ultimately earned.
Concentration of Credit Risk and Significant Customers
We are exposed to concentrations of credit risk as a result of our receivables balances, for which the total exposure
is limited to the amount recognized in our consolidated balance sheets. We sell our merchandise to wholesale customers
operating in a number of distribution channels in the United States and other countries. We extend credit to certain
wholesale customers based on an evaluation of the customer’s credit history and financial condition, usually without
requiring collateral. Credit risk is impacted by conditions or occurrences within the economy and the retail industry and is
principally dependent on each customer’s financial condition. As of January 30, 2021, three customers each represented
more than 10% individually, and totaled 54% in the aggregate, of our receivables, net included in our consolidated balance
sheet.
While no individual customer represented greater than 10% of our consolidated net sales in Fiscal 2020, Fiscal
2019 or Fiscal 2018, a decision by the controlling owner of a group of stores or any significant customer to decrease the
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amount of merchandise purchased from us or to cease carrying our products could have an adverse effect on our results of
operations in future periods.
Additionally, as of January 30, 2021, we had $66 million of cash and cash equivalents, including $59 million
invested in money market funds. Substantially all of these amounts are with major financial institutions in the United
States. Further, we maintain cash deposits with major financial institutions that exceed the insurance coverage limits
provided by the Federal Deposit Insurance Corporation.
Income Taxes
Income taxes included in our consolidated financial statements are determined using the asset and liability
method. Under this method, income taxes are 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 different periods for consolidated financial statement
reporting and tax return reporting purposes. Prepaid income taxes and income taxes payable are recognized in prepaid
expenses and other accrued expenses and liabilities, respectively, in our consolidated balance sheets. As certain amounts
are recognized in different periods for consolidated financial statement and tax return reporting purposes, financial
statement and tax bases of assets and liabilities differ, resulting in the recognition 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 carrybacks and carryforwards, each as determined
under enacted tax laws at rates expected to apply in the period in which such amounts are expected to be realized or settled.
We account for the effect of changes in tax laws or rates in the period of enactment.
We recognize deferred tax assets to the extent we believe it is more likely than not that these assets will be
realized. In making such a determination, we consider all available positive and negative evidence, including future
reversals of existing taxable temporary differences, projected future taxable income, taxable income in any
carryback years, tax-planning strategies, and recent results of operations. Valuation allowances are established when we
determine that it is more 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 valuation allowances are appropriate. If we determine that we are more likely than not to realize
our deferred tax assets in the future in excess of their net recorded amount, we will reduce the deferred tax asset valuation
allowance, which will reduce income tax expense. As realization of deferred tax assets and liabilities is dependent upon
future taxable income in specific jurisdictions, changes in tax laws and rates and shifts in the amount of taxable income
among jurisdictions may have a significant impact on the amount of benefit ultimately realized for deferred tax assets and
liabilities.
We use a two-step approach for evaluating uncertain tax positions. Under the two-step method, recognition occurs
when we conclude that a tax position, based solely on technical merits, is more likely than not to be sustained upon
examination. The second step, measurement, is only addressed if step one has been satisfied. The tax benefit recorded is
measured as the largest amount of benefit determined on a cumulative probability basis that is more likely than not to be
realized upon ultimate settlement. Those tax positions failing to qualify for initial recognition are recognized in the first
subsequent interim period they meet the more likely than not threshold or are resolved through settlement or litigation with
the relevant taxing authority, upon expiration of the statute of limitations or otherwise. Alternatively, de-recognition of a
tax position that was previously recognized occurs when we subsequently determine that a tax position no longer meets the
more likely than not threshold of being sustained.
In the case of foreign subsidiaries, there are certain exceptions to the requirement that deferred tax liabilities be
recognized for the difference in the financial statement and tax bases of assets. When the financial statement basis of the
investment in a foreign subsidiary, excluding undistributed earnings, exceeds the tax basis in such investment, the deferred
tax liability is not recognized if management considers the investment to be essentially permanent in duration. Further,
deferred tax liabilities are not required to be recognized for undistributed earnings of foreign subsidiaries when
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management considers those earnings to be permanently reinvested outside the United States. The Tax Cuts and Jobs Act
("U.S. Tax Reform") as enacted on December 22, 2017 changed the way federal tax is applied to distributions of earnings
of foreign subsidiaries. While distributions of foreign subsidiary earnings are generally not subject to federal tax, there are
other possible tax impacts, including state taxes and foreign withholding tax, that must be considered if the earnings are not
considered to be permanently reinvested. Further, U.S. Tax Reform did not exempt from federal tax the gain realized upon
the sale of a foreign subsidiary and consideration must therefore be given to the impact of differences in the book and tax
basis of foreign subsidiaries not arising from earnings when determining whether a liability must be recorded if the
investment is not considered permanently reinvested.
U.S. Tax Reform made significant changes in the taxation of our domestic and foreign earnings, including a
reduction in the domestic corporate tax rate from 35% to 21%, the move to a territorial taxation system under which the
earnings of foreign subsidiaries will generally not be subject to U.S. federal income tax upon distribution, the increase in
bonus depreciation available for certain assets acquired, limitations on the deduction for certain expenses, including
executive compensation and interest incurred, a tax on global intangible low-taxed income (“GILTI”), disallowance of
deductions for certain payments (the base erosion anti-abuse tax, or “BEAT”) and certain deductions enacted for certain
foreign-derived intangible income (“FDII”). While the calculations for GILTI, BEAT and FDII are complex calculations,
the new provisions did not have a material impact on our effective tax rate in Fiscal 2020, Fiscal 2019 and Fiscal 2018. We
recognize the impact of GILTI as a period cost.
On March 27, 2020, the CARES Act was signed into law, with applicable provisions reflected in our financial
statements upon enactment. This law included several taxpayer favorable provisions which impact us, including allowing
the carryback of our Fiscal 2020 net operating losses to periods prior to U.S. Tax Reform resulting in an increased benefit
for those losses, accelerated depreciation of certain leasehold improvement costs, relaxed interest expense limitations and
certain non-income tax benefits including deferral of employer FICA payments and an employee retention credit.
In Fiscal 2018 we adopted certain guidance that requires an entity to recognize the income tax consequences of an
intra-entity transfer of an asset (other than inventory) when the transfer occurs. The impact of the adoption of this guidance
resulted in a $0.1 million reduction to retained earnings as of February 4, 2018.
We file income tax returns in the United States and various state, local and foreign jurisdictions. Our federal, state,
local and foreign income tax returns filed for years prior to Fiscal 2017, with limited exceptions, are no longer subject to
examination by tax authorities.
Earnings (Loss) Per Share
Basic net earnings per share amounts are calculated by dividing the net earnings amount by the weighted average
shares outstanding during the period. Shares repurchased, if any, are removed from the weighted average number of shares
outstanding upon repurchase and delivery.
Diluted net earnings per share amounts are calculated similarly to the amounts above, except that the weighted
average shares outstanding in the diluted net earnings per share calculation also include the potential dilution using the
treasury stock method that could occur if dilutive securities, including restricted share awards or other dilutive awards,
were converted to shares. The treasury stock method 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 proceeds received to repurchase shares at the average
market value of our shares for the respective period. For purposes of the treasury stock method, proceeds consist of cash to
be paid and future compensation expense to be recognized. Performance-based and market-based restricted share units are
included in the computation of diluted shares only to the extent that the underlying performance or market conditions (i)
have been satisfied as of the end of the reporting period or (ii) if the measurement criteria has been satisfied and the result
would be dilutive, even if the contingency period has not ended as of the end of the reporting period.
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In periods that we incur a loss, we exclude restricted shares or restricted share awards as including the awards
would be anti-dilutive. During Fiscal 2020, there were 0.4 million restricted shares and restricted share units outstanding
that were excluded from the diluted earnings (loss) per share calculation. No restricted shares or restricted share units were
excluded from the diluted earnings per share calculation for Fiscal 2019 or Fiscal 2018.
Use of Estimates
The preparation of our consolidated financial statements in conformity with GAAP requires us to make certain
estimates and assumptions that affect the amounts reported as assets, liabilities, revenues and expenses in the consolidated
financial statements and accompanying notes, Actual results could differ from those estimates, particularly given the
uncertainties associated with the ultimate impact of the COVID-19 pandemic, the Lanier Apparel exit or other factors.
Such changes could have a material impact on our consolidated financial statements in future periods.
Accounting Standards Adopted in Fiscal 2020
In June 2016, the FASB issued guidance, as amended, related to the measurement of credit losses on financial
instruments, which requires that companies use a forward-looking current expected loss approach to estimate credit losses
on certain financial instruments, including trade and other receivables, as well as other financial assets and instruments. We
estimate current expected credit losses based on our historical collection experience, the financial condition of our
customers, an evaluation of current economic conditions and anticipated trends. We adopted the guidance on the first day
of Fiscal 2020 resulting in a charge of less than $1 million to retained earnings, which is included in the shareholders’
equity statement for Fiscal 2020, and a reduction to various asset amounts included in our consolidated balance sheet.
In December 2019, the FASB amended its guidance related to accounting for income taxes, which simplified the
accounting for income taxes by removing certain exceptions in existing guidance to reduce complexity in certain areas. On
the first day of Fiscal 2020, we adopted the provisions related to classification of franchise taxes partially based on income
and changes in ownership of foreign equity method investments or foreign subsidiaries on a modified retrospective basis
while we adopted the other provisions on a prospective basis. The adoption of the new guidance did not have an impact on
our consolidated financial statements as of the first day of Fiscal 2020 or during Fiscal 2020.
Other recently issued guidance that was adopted in Fiscal 2020 did not have a material impact on our consolidated
financial statements upon adoption.
Recently Issued Accounting Standards Applicable to Future Years
Recent accounting pronouncements pending adoption are either not applicable or not expected to have a material
impact on our consolidated financial statements.
Note 2. Operating Groups
We identify our operating groups based on the way our management organizes the components of our business for
purposes of allocating resources and assessing performance. Our operating group structure reflects a brand-focused
management approach, emphasizing operational coordination and resource allocation across each brand’s direct to
consumer, wholesale and licensing operations, as applicable. Our business has historically been operated through our
Tommy Bahama, Lilly Pulitzer, Southern Tide and Lanier Apparel operating groups.
Tommy Bahama, Lilly Pulitzer and Southern Tide each design, source, market and distribute apparel and related
products bearing their respective trademarks and license their trademarks for other product categories, while Lanier
Apparel designs, sources and distributes branded and private label men’s tailored clothing, sportswear and other
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
products. In Fiscal 2020, we made the decision to exit our Lanier Apparel business, which is expected to be completed
during the second half of Fiscal 2021. Corporate and Other is a reconciling category for reporting purposes and includes
our corporate offices, substantially all financing activities, the elimination of any inter-segment sales and any other items
that are not allocated to the operating groups including LIFO inventory accounting adjustments. Because our LIFO
inventory pool does not correspond to our operating group definitions, LIFO inventory accounting adjustments are not
allocated to operating groups. Corporate and Other also includes the operations of other businesses which are not included
in our operating groups, including the operations of TBBC, Duck Head and our Lyons, Georgia distribution center. As a
result of certain organizational and management reporting changes in Fiscal 2020, our Duck Head operations, which were
previously included in Lanier Apparel, are considered part of and included in Corporate and Other. All prior period
amounts for Lanier Apparel and Corporate and Other have been restated to conform to the presentation in the current
period.
The tables below present certain financial information (in thousands) about our operating groups, as well as
Corporate and Other.
Net sales
Tommy Bahama
Lilly Pulitzer
Southern Tide
Lanier Apparel
Corporate and Other
Consolidated net sales
Depreciation and amortization
Tommy Bahama
Lilly Pulitzer
Southern Tide
Lanier Apparel
Corporate and Other
Consolidated depreciation and amortization
Operating income (loss)
Tommy Bahama
Lilly Pulitzer
Southern Tide (1)
Lanier Apparel
Corporate and Other (2)
Consolidated operating (loss) income
Interest expense, net
(Loss) earnings before income taxes
Fiscal
2020
Fiscal
2019
Fiscal
2018
$ 419,817
231,078
34,664
38,796
24,478
$ 748,833
$
676,652
284,700
46,409
95,200
19,829
$ 1,122,790
$
675,358
272,299
45,248
99,904
14,657
$ 1,107,466
$
$
46,698
9,965
676
1,239
1,336
59,914
$
$
27,852
10,106
549
422
1,358
40,287
$ (53,310) $
27,702
(64,801)
(26,654)
(6,786)
(123,849)
2,028
$ (125,877) $
53,207
51,795
5,554
1,953
(18,834)
93,675
1,245
92,430
$
$
$
$
29,549
10,605
528
415
1,393
42,490
53,139
47,239
5,663
6,000
(21,449)
90,592
2,283
88,309
(1) Southern Tide included a $60 million impairment charge for goodwill and intangible assets in Fiscal 2020, with no
such charges in Fiscal 2019 or Fiscal 2018.
(2) Corporate and Other included a LIFO accounting credit of $9 million, charge of $1 million and charge of $1 million in
Fiscal 2020, Fiscal 2019 and Fiscal 2018, respectively.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Purchases of Property and Equipment
Tommy Bahama
Lilly Pulitzer
Southern Tide
Lanier Apparel
Corporate and Other
Purchases of Property and Equipment
Total Assets
Tommy Bahama (1)
Lilly Pulitzer (2)
Southern Tide (3)
Lanier Apparel (4)
Corporate and Other (5)
Total Assets
Fiscal 2020 Fiscal 2019 Fiscal 2018
$
$
19,666
7,059
1,423
21
755
28,924
$
$
31,272
4,273
289
571
1,016
37,421
$
$
25,111
10,777
149
99
907
37,043
January 30,
2021
February 1,
2020
$
$
569,854
176,467
31,641
10,967
76,705
865,634
$
668,197
199,913
99,667
39,207
26,385
$ 1,033,369
(1) Decrease in Tommy Bahama total assets includes reductions in operating lease assets, property and equipment,
inventories and receivables.
(2) Decrease in Lilly Pulitzer total assets includes reductions in operating lease assets, receivables, inventories and
property and equipment.
(3) Decrease in Southern Tide total assets was primarily due to the $60 million impairment charge for goodwill and
intangible assets in the First Quarter of Fiscal 2020, as well as reductions in inventories and receivables.
(4) Decrease in Lanier Apparel total assets includes reductions in inventories, receivables, operating lease assets, prepaid
(5)
expenses and property and equipment.
Increase in Corporate and Other total assets includes increased income tax receivable, cash, inventories due to the
reversal of inventory markdowns as part of LIFO accounting and investments in unconsolidated entities.
Net book value of our property and equipment and net sales by geographic area are presented in the tables below
(in thousands). The other foreign amounts primarily relate to our Tommy Bahama operations in Canada and Australia.
Net Book Value of Property and Equipment
United States
Other foreign
Net Sales
United States
Other foreign
94
January 30,
2021
February 1,
2020
$
$
155,902
3,830
159,732
$
$
187,032
4,485
191,517
Fiscal 2020 Fiscal 2019 Fiscal 2018
$ 728,308
20,525
$ 748,833
$ 1,086,170
36,620
$ 1,122,790
$ 1,067,235
40,231
$ 1,107,466
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OXFORD INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The tables below quantify net sales, for each operating group and in total (in thousands), and the percentage of net
sales by distribution channel for each operating group and in total, for each period presented.
Tommy Bahama
Lilly Pulitzer
Southern Tide
Lanier Apparel
Corporate and Other
Consolidated net sales
Tommy Bahama
Lilly Pulitzer
Southern Tide
Lanier Apparel
Corporate and Other
Consolidated net sales
Tommy Bahama
Lilly Pulitzer
Southern Tide
Lanier Apparel
Corporate and Other
Consolidated net sales
Net Sales Retail
E‑commerce Restaurant Wholesale
Other
Fiscal 2020
$ 419,817
231,078
34,664
38,796
24,478
$ 748,833
37 %
20 %
4 %
— %
— %
27 %
11 %
— %
— %
— %
— %
7 %
16 %
16 %
64 %
100 %
33 %
23 %
— %
— %
— %
— %
4 %
— %
36 %
64 %
32 %
— %
63 %
43 %
Fiscal 2019
Net Sales
Retail
E‑commerce Restaurant Wholesale
Other
$
676,652
284,700
46,409
95,200
19,829
$ 1,122,790
48 %
41 %
— %
— %
— %
39 %
12 %
— %
— %
— %
— %
8 %
20 %
21 %
79 %
100 %
34 %
30 %
— %
— %
— %
— %
7 %
— %
20 %
38 %
21 %
— %
59 %
23 %
Fiscal 2018
Net Sales
Retail
E‑commerce Restaurant Wholesale
Other
$
675,358
272,299
45,248
99,904
14,657
$ 1,107,466
48 %
42 %
— %
— %
— %
40 %
18 %
36 %
18 %
— %
54 %
21 %
13 %
— %
— %
— %
— %
8 %
21 %
22 %
82 %
100 %
30 %
31 %
— %
— %
— %
— %
16 %
— %
Note 3. Property and Equipment, Net
Property and equipment, carried at cost, is summarized as follows (in thousands):
January 30,
2021
Land
Buildings and improvements
Furniture, fixtures, equipment and technology
Leasehold improvements
Less accumulated depreciation and amortization
Property and equipment, net
Note 4. Intangible Assets and Goodwill
$
$
3,166
39,559
231,493
237,360
511,578
(351,846)
159,732
February 1,
2020
3,166
39,563
240,527
231,089
514,345
(322,828)
191,517
$
$
As discussed in Note 1, the COVID-19 pandemic has had a significant negative impact on each of our operating
groups. Thus, certain goodwill and indefinite-lived intangible asset impairment testing was required in the First Quarter of
Fiscal 2020, which resulted in significant impairment charges in Southern Tide as shown in the tables below. Impairment of
goodwill and intangible assets are included in impairment of goodwill and intangible assets in our consolidated statements
of operations. No additional tests were required in the Second Quarter of Fiscal 2020 or the
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Third Quarter of Fiscal 2020. Further, no impairment was required based on our annual tests for impairment of goodwill
and intangible assets with indefinite lives performed as of the first day of the Fourth Quarter of Fiscal 2020.
Intangible assets by category are summarized below (in thousands):
Intangible assets with finite lives
Accumulated amortization and impairment
Total intangible assets with finite lives, net
Intangible assets with indefinite lives:
Tommy Bahama Trademarks
Lilly Pulitzer Trademarks
Southern Tide Trademarks
Total intangible assets, net
$
$
$
February 1,
January 30,
2021
51,929 $
(43,242)
8,687
2020
51,929
(41,924)
10,005
110,700 $
27,500
9,300
156,187 $
110,700
27,500
26,800
175,005
Intangible assets, by operating group and in total, for Fiscal 2018, Fiscal 2019 and Fiscal 2020 are as follows (in
thousands):
Balance, February 3, 2018
Impairment
Amortization
Other, including foreign currency
Balance February 2, 2019
Impairment
Amortization
Other, including foreign currency
Balance, February 1, 2020
Impairment
Amortization
Other, including foreign currency
Balance, January 30, 2021
Tommy
Bahama
$ 112,157
Lilly
Pulitzer
29,749
Southern
Tide
29,689
Lanier
Apparel
Corporate
and Other
6,986
$ 29,216
$ 29,401
—
(1,385)
(72)
$ 110,700
—
(533)
—
—
—
—
—
(475)
—
110,700
28,741
—
—
—
—
(424)
—
—
(288)
—
$
—
(291)
—
29,110
(17,500)
(288)
—
$
$ 110,700
$ 28,317
$ 11,322
277
—
(31)
—
246
$
—
(31)
—
215
(207)
(8)
—
— $
Total
$ 178,858
—
(2,610)
(72)
$ 176,176
—
(1,171)
—
175,005
(17,707)
(1,111)
—
$ 156,187
—
(373)
—
6,613
—
(374)
—
6,239
—
(391)
—
5,848
Based on the current estimated useful lives assigned to our intangible assets, amortization expense for each of the
next five years is expected to be $1 million per year.
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OXFORD INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Goodwill, by operating group and in total, for Fiscal 2018, Fiscal 2019 and Fiscal 2020 is as follows (in
thousands):
Balance, February 3, 2018
Impairment
Other, including foreign currency
Balance February 2, 2019
Impairment
Other, including foreign currency
Balance, February 1, 2020
Impairment
Other, including foreign currency
Balance, January 30, 2021
Note 5. Debt
Tommy
Bahama
821
—
(67)
$
754
—
(43)
711
—
77
788
$
$
$
$
Lilly
Pulitzer
19,522
Southern
Tide
42,745
Corporate
and Other
3,615
19,522
—
—
$
—
—
19,522
—
—
$
19,522
42,745
—
—
$
—
—
42,745
(42,745)
—
— $
$
—
(15)
3,600
$
—
—
3,600
—
—
$
3,600
Total
66,703
—
(82)
66,621
—
(43)
66,578
(42,745)
77
23,910
As of January 30, 2021 and February 1, 2020, we had no amounts outstanding under our $325 million Fourth
Amended and Restated Credit Agreement (as amended, the “U.S. Revolving Credit Agreement”). In July 2019, we
amended the U.S. Revolving Credit Agreement by entering into the First Amendment to the Fourth Amended and Restated
Credit Agreement to (1) extend the maturity of the facility to July 2024 and (2) modify certain provisions including a
reduction of interest rates on certain borrowings and a reduction in unused line fees. The U.S. Revolving Credit Agreement
generally (1) is limited to a borrowing base consisting of specified percentages of eligible categories of assets, (2) accrues
variable-rate interest, unused line fees and letter of credit fees based upon average unused availability or utilization,
(3) requires periodic interest payments with principal due at maturity (July 2024) and (4) is secured by a first priority
security interest in substantially all of the assets of Oxford Industries, Inc. and its domestic subsidiaries, including accounts
receivable, books and records, chattel paper, deposit accounts, equipment, certain general intangibles, inventory,
investment property (including the equity interests of certain subsidiaries), negotiable collateral, life insurance policies,
supporting obligations, commercial tort claims, cash and cash equivalents, eligible trademarks, proceeds and other personal
property.
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 Credit Agreement to provide funding for operating activities, capital expenditures and
acquisitions, if any. Our U.S. Revolving Credit Agreement is also used to establish collateral for certain insurance
programs and leases and to finance trade letters of credit for product purchases, which reduce the amounts available under
our line of credit when issued. As of January 30, 2021, $3 million of letters of credit were 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 30, 2021, we had $301 million in unused availability under the U.S. Revolving Credit
Agreement, subject to certain limitations on borrowings.
Covenants, Other Restrictions and Prepayment Penalties
The U.S. Revolving Credit Agreement is subject to a number of affirmative covenants regarding the delivery of
financial information, compliance with law, maintenance of property, insurance requirements and conduct of business.
Also, the U.S. Revolving Credit Agreement is subject to certain negative covenants or other restrictions including, among
other things, limitations on our ability to (1) incur debt, (2) guaranty certain obligations, (3) incur liens, (4) pay dividends
to shareholders, (5) repurchase shares of our common stock, (6) make investments, (7) sell assets or stock of subsidiaries,
(8) acquire assets or businesses, (9) merge or consolidate with other companies or (10) prepay, retire, repurchase or redeem
debt.
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Additionally, the U.S. Revolving Credit Agreement contains a financial covenant that applies only if excess
availability under the agreement for three consecutive business days is less than the greater of (1) $23.5 million or (2) 10%
of availability. In such case, our fixed charge coverage ratio as defined in the U.S. Revolving Credit Agreement must not
be less than 1.0 to 1.0 for the immediately preceding 12 fiscal months for which financial statements have been delivered.
This financial covenant continues to apply until we have maintained excess availability under the U.S. Revolving Credit
Agreement of more than the greater of (1) $23.5 million or (2) 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 Agreement are customary for those included in similar facilities entered into at the time we amended
the U.S. Revolving Credit Agreement. During Fiscal 2020 and as of January 30, 2021, no financial covenant testing was
required pursuant to our U.S. Revolving Credit Agreement as the minimum availability threshold was met at all times. As
of January 30, 2021, we were compliant with all covenants related to the U.S. Revolving Credit Agreement.
Note 6. Leases
For Fiscal 2020, operating lease expense, which includes amounts used in determining the operating lease liability
and operating lease asset, was $64 million and variable lease expense was $30 million, resulting in total lease expense of
$93 million. For Fiscal 2019, operating lease expense, which includes amounts used in determining the operating lease
liability and operating lease asset, was $66 million and variable lease expense was $34 million, resulting in total lease
expense of $99 million. As of January 30, 2021 and February 1, 2020, the weighted-average remaining operating lease
term was six years and seven years, respectively, and the weighted-average discount rate for operating leases was 4.1% and
4.0%, respectively. Cash paid for lease amounts included in the measurement of operating lease liabilities in Fiscal 2020
and Fiscal 2019 was $63 million and $70 million, respectively.
As of January 30, 2021, the required lease liability payments, which include base rent amounts but excludes
payments for real estate taxes, sales taxes, insurance, other operating expenses and contingent rents incurred under
operating lease agreements, for the fiscal years specified below were as follows (in thousands):
2021
2022
2023
2024
2025
After 2025
Total lease payments
Less: Difference between discounted and undiscounted lease payments
Present value of lease liabilities
Operating lease
70,338
64,553
57,655
45,826
32,719
68,247
339,338
38,489
300,849
$
$
Disclosures related to periods prior to adoption of revised accounting guidance
Total rent expense in Fiscal 2018 was $96 million, which includes base rent amounts, real estate taxes, sales taxes,
insurance, other operating expenses and contingent rents incurred under all leases. Payments for real estate taxes, sales
taxes, insurance, other operating expenses and contingent percentage rent are included in rent expense, but are generally
not included in the aggregate minimum rental commitments, as, in most cases, the amounts payable in future periods are
not quantified in the lease agreement or may be dependent on future events. The total amount of such charges included in
total rent expense above were $28 million in Fiscal 2018.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 7. Commitments and Contingencies
As of January 30, 2021, we are a party to certain apparel license and design agreements, primarily within our
Lanier Apparel operating group, which contemplate minimum royalty and advertising payments of $4 million in respect of
Fiscal 2021.
In connection with our Fiscal 2017 acquisition of TBBC, we entered into a contingent consideration agreement
which requires us to make cash payments to the sellers of up to $4 million in the aggregate subject to TBBC’s achievement
of certain earnings targets over a four year period subsequent to the acquisition. Pursuant to this contingent consideration
agreement, as of January 30, 2021, $1 million, in the aggregate, was earned related to Fiscal 2018 and Fiscal 2019 and has
been paid to the sellers, and $1 million was earned related to Fiscal 2020 and is payable in Fiscal 2021. One of the sellers
of TBBC is an employee and continues to manage the operations of TBBC.
During the 1990s, we discovered the presence of hazardous waste on one of our properties. We believe that
remedial or other activities may be required, including continued investigation and monitoring of groundwater and soil,
although the timing and extent of such activities is uncertain. As of both January 30, 2021 and February 1, 2020, the
reserve for the remediation of this site was less than $1 million, which is included in other non-current liabilities in our
consolidated balance sheets. The amount recorded represents our estimate of the costs, on an undiscounted basis, to clean
up and monitor the site as well as any associated legal and consulting fees, based on currently available information. This
estimate may change in future periods as more information on the activities required and timing of those activities become
known.
Note 8. Shareholders’ Equity and Equity Compensation
Common Stock
We had 60 million shares of $1.00 par value per share common stock authorized for issuance as of January 30,
2021 and February 1, 2020. We had 17 million shares of common stock issued and outstanding as of January 30, 2021 and
February 1, 2020. During the First Quarter of Fiscal 2020, we repurchased 0.3 million shares of our common stock under
an open market stock repurchase program (Rule 10b5-1 plan).
Long-Term Stock Incentive Plan and Equity Compensation Expense
As of January 30, 2021, less than 1 million shares were available for issuance under our Long-Term Stock
Incentive Plan (the "Long-Term Stock Incentive Plan"). The Long-Term Stock Incentive Plan allows us to grant 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 shares are available under any predecessor plans.
Restricted share awards granted to officers and other key employees generally vest three or four years from the
date of grant if (1) the performance or market threshold, if any, was met and (2) the employee is still employed by us on the
vesting date. At the time that restricted shares are issued, the shareholder is generally, subject to the terms of the respective
agreement, entitled to the same dividend and voting rights as other holders of our common stock as long as the restricted
shares are outstanding. The employee generally is restricted from transferring or selling any restricted shares or restricted
share units and generally forfeits the awards upon the termination of employment prior to the end of the vesting period.
The specific provisions of the awards, including exercisability and term of the award, are evidenced by agreements with the
employee as determined by the compensation committee of our Board of Directors. Restricted share units pursuant to
performance-based awards and market-based awards are not issued until approved by our compensation committee
following completion of the specified performance period.
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OXFORD INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The table below summarizes the restricted share award activity for officers and other key employees (in shares)
during Fiscal 2020, Fiscal 2019, and Fiscal 2018:
Fiscal 2020
Weighted-
Fiscal 2019
Weighted-
Fiscal 2018
Weighted-
Number of
Shares
average
grant date
fair value
Restricted shares outstanding at beginning
of fiscal year
Service-based restricted shares
granted/issued
Performance-based restricted shares issued
related to prior year performance awards
Restricted shares vested, including
restricted shares repurchased from
employees for employees’ tax liability
Restricted shares forfeited
Restricted shares outstanding at end of
fiscal year
251,924
131,425
42,438
$
$
$
(114,003) $
(3,415)
308,369
$
68
40
76
56
62
61
Number of
Shares
257,890
42,573
43,152
$
$
$
(87,252) $
(4,439)
251,924
$
average
grant date
fair value
66
76
79
71
69
68
Number of
Shares
211,045
49,726
72,427
$
$
$
(73,408) $
(1,900)
257,890
$
average
grant date
fair value
63
79
57
58
62
66
Additionally, during the Second Quarter of Fiscal 2020, we granted 0.1 million restricted share units at target
subject to (1) our achievement of specified total shareholder return (“TSR”) ranking by Oxford relative to a comparator
group for the three year period ending in July 2023 and (2) the recipient remaining an employee through July 2023. The
ultimate number of shares earned will be between 0% and 200% of the restricted share units at target. These TSR-based
restricted share units are entitled to dividend equivalents for dividends declared on our common stock during the
performance period, which are payable after vesting of the restricted shares, for the number of shares ultimately earned.
These TSR-based restricted share units do not have any voting rights during the performance period. These TSR-based
restricted performance units are not included in the table above.
The following table summarizes information about unvested restricted share awards as of January 30, 2021. The
unvested restricted share awards will be settled in shares of our common stock on the vesting date, subject to the employee
still being an employee at that time. All awards are subject to the employee remaining employed with us through the
vesting date, and the TSR-based restricted share units are subject to us meeting the specified TSR relative to the
comparator group
Description
Service-based & Performance-based Restricted Shares Vesting in April 2021
Service-based & Performance-based Restricted Shares Vesting in April 2022
Service-based Restricted Shares Vesting in July 2023
Total Restricted Shares Outstanding
TSR-based Restricted Share Units (at target), with a July 2023 vesting date
Total
Number of
Unvested
Share/Unit
Awards
82,513
95,861
129,995
308,369
83,345
391,714
Average
Fair Value
on
Date of Grant
77
$
77
$
40
$
61
50
59
$
As of January 30, 2021, there was $11 million of unrecognized compensation expense related to the unvested
restricted shares and restricted share units included in the table above, which have been granted to employees but have not
yet vested. As of January 30, 2021, the weighted average remaining life of the outstanding awards was two years.
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OXFORD INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
In addition, we grant restricted shares to our non-employee directors for a portion of each non-employee director’s
annual compensation. The non-employee directors must complete certain service requirements; otherwise, the restricted
shares are subject to forfeiture. On the date of issuance, the non-employee directors are entitled to the same dividend and
voting rights as other holders of our common stock. The non-employee directors are restricted from transferring or selling
the restricted shares prior to the end of the vesting period.
Employee Stock Purchase Plan
There were less than 1 million shares of our common stock authorized for issuance under our Employee Stock
Purchase Plan ("ESPP") as of January 30, 2021. The ESPP allows qualified employees to purchase shares of our common
stock on a quarterly basis, based on certain limitations, through payroll deductions. The shares purchased pursuant to the
ESPP are not subject to any vesting or other restrictions. On the last day of each calendar quarter, the accumulated payroll
deductions are applied toward the purchase of our common stock at a price equal to 85% of the closing market price on that
date. Equity compensation expense related to the employee stock purchase plan recognized was less than $1 million in
each of Fiscal 2020, Fiscal 2019 and Fiscal 2018.
Preferred Stock
We had 30 million shares of $1.00 par value preferred stock authorized for issuance as of January 30, 2021 and
February 1, 2020. No preferred shares were issued or outstanding as of January 30, 2021 or February 1, 2020.
Note 9. Income Taxes
The following table summarizes our distribution between domestic and foreign earnings (loss) before income
taxes and the provision (benefit) for income taxes (in thousands):
Earnings from continuing operations before income taxes:
Domestic
Foreign
Earnings from continuing operations before income taxes
Income taxes:
Current:
Federal
State
Foreign
Deferred—Domestic
Deferred—Foreign
Income taxes
101
Fiscal
2020
Fiscal
2019
Fiscal
2018
$ (129,129) $
3,252
$ (125,877) $
86,528
5,902
92,430
$ (11,498) $
(1,060)
735
(11,823)
(17,780)
(582)
$ (30,185) $
18,565
5,459
1,650
25,674
(1,870)
133
23,937
$
$
$
$
85,050
3,259
88,309
12,543
4,474
1,979
18,996
3,141
(119)
22,018
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OXFORD INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Reconciliations of the United States federal statutory income tax rates and our effective tax rates are summarized
as follows:
Statutory federal income tax rate
State income taxes—net of federal income tax benefit
Impact of foreign operations rate differential
Impairment of non-deductible Southern Tide goodwill
Change in reserve for uncertain tax positions
Rate benefit from NOL carryback to pre-U.S. Tax Reform periods due to the
CARES Act
Other, net
Effective tax rate for continuing operations
Fiscal
2020
Fiscal
2019
Fiscal
2018
21.0 %
3.6 %
(0.2)%
(3.7)%
(2.5)%
5.5 %
0.3 %
24.0 %
21.0 %
4.4 %
0.2 %
— %
— %
— %
0.3 %
25.9 %
21.0 %
4.6 %
0.7 %
— %
— %
— %
(1.4)%
24.9 %
Deferred tax assets and liabilities included in our consolidated balance sheets are comprised of the following (in
thousands):
Deferred Tax Assets:
Inventories
Accrued compensation and benefits
Receivable allowances and reserves
Operating lease liabilities
Operating loss and other carry-forwards
Other, net
Deferred tax assets
Deferred Tax Liabilities:
Operating lease assets
Depreciation and amortization
Acquired intangible assets
Deferred tax liabilities
Valuation allowance
Net deferred tax asset (liability)
January 30,
2021
February 1,
2020
$
$
16,338
8,759
2,109
73,917
4,617
3,686
109,426
(66,341)
(9,682)
(25,047)
(101,070)
(5,668)
2,688
$
$
13,067
8,977
993
85,969
3,171
1,546
113,723
(82,186)
(8,076)
(34,019)
(124,281)
(5,213)
(15,771)
As of January 30, 2021 and February 1, 2020, our operating loss and other carry-forwards primarily relate to our
operations in Canada and Hong Kong, as well as certain states. The majority of these operating loss carry-forwards allow
for carry-forward of at least 20 years and in some cases, indefinitely. The substantial majority of our valuation allowance of
$6 million and $5 million as of January 30, 2021 and February 1, 2020, respectively, relates to these foreign and state
operating loss carry-forwards and the deferred tax assets in those jurisdictions. The recent history of operating losses in
certain jurisdictions is considered significant negative evidence against the future realizability of these tax benefits. The
amount of the valuation allowance could change in the future if our operating results or estimates of future taxable
operating results changes.
U.S. Tax Reform made significant changes to how foreign earnings are taxed. Certain amounts of foreign earnings
are subject to U.S. federal tax currently pursuant to the GILTI rules regardless of whether those earnings are distributed,
and actual distributions of foreign earnings are generally no longer subject to U.S. federal tax. We continue to assert that
our investments in foreign subsidiaries and substantially all of the related earnings are permanently reinvested outside the
United States. We believe that any other taxes such as foreign withholding or U.S. state tax payable would be immaterial if
we were to repatriate the foreign earnings. Therefore, we have not recorded any deferred
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OXFORD INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
tax liabilities related to investments and earnings in our consolidated balance sheets as of January 30, 2021 and February 1,
2020.
Accounting for income taxes requires that we offset deferred tax liabilities and assets within each tax jurisdiction
and present the net deferred tax amount for each jurisdiction as a net deferred tax amount in our consolidated balance
sheets. The amounts of deferred income taxes included in our consolidated balance sheets are as follows (in thousands):
Assets:
Deferred tax assets
Liabilities:
Deferred tax liabilities
Net deferred tax asset (liability)
January 30,
2021
February 1,
2020
$
$
2,688
$
769
—
$
2,688
(16,540)
(15,771)
A reconciliation of the changes in the gross amount of unrecognized tax benefits, which are included in other non-
current liabilities, is as follows (in thousands):
Fiscal 2020
Fiscal 2019
Fiscal 2018
Balance of unrecognized tax benefits at beginning of year
Increase related to prior period tax positions
Decrease related to prior period tax positions
Increase related to current period tax positions
Decrease related to settlements with taxing authorities
Decrease related to lapse of statute of limitations
Balance of unrecognized tax benefits at end of year
$
$
1,212
303
(1)
3,960
—
(213)
5,261
$
$
975
—
(27)
287
—
(23)
1,212
$
$
335
206
—
440
—
(6)
975
Substantially all of our uncertain tax positions as of January 30, 2021, if recognized, would reduce the future
effective tax rate in the period settled. The total amount of unrecognized tax benefits relating to our tax positions is subject
to change based on future events including, but not limited to, settlements of ongoing audits and assessments and the
expiration of applicable statutes of limitation. We expect that the balance of gross unrecognized tax benefits will decrease
by approximately $3 million during Fiscal 2021. However, changes in the expected occurrence, outcomes, and timing of
such events could cause our current estimate to change materially in the future. Interest and penalties associated with
unrecognized tax positions are recorded within income tax expense in our consolidated statements of operations. During
each of Fiscal 2020, Fiscal 2019 and Fiscal 2018, we recognized less than $1 million of interest and penalties associated
with unrecognized tax positions in our consolidated statements of operations.
Note 10. Defined Contribution Plans
We have a tax-qualified voluntary retirement savings plan covering substantially all United States employees. If a
participant elects to contribute, a portion of the contribution may be matched by us. Additionally, we incur certain charges
related to our non-qualified deferred compensation plan as discussed in Note 1. Realized and unrealized gains and losses
on the deferred compensation plan investments are recorded in SG&A in our consolidated statements of operations and
substantially offset the changes in deferred compensation liabilities to participants resulting from changes in market values.
Our aggregate expense under these defined contribution and non-qualified deferred compensation plans in Fiscal 2020,
Fiscal 2019 and Fiscal 2018 was $1 million, $5 million and $5 million, respectively. The decrease in Fiscal 2020 was
primarily due to the suspension of the company match for our defined contribution plan during Fiscal 2020 to reduce our
expenses during the COVID-19 pandemic. A company match has been reinstated for Fiscal 2021.
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OXFORD INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 11. Lanier Apparel Exit
In Fiscal 2020, we made the decision to exit our Lanier Apparel business, which is expected to be completed
during the second half of Fiscal 2021. This decision is in line with our stated business strategy of developing and marketing
compelling lifestyle brands and takes into consideration the increased challenges faced by the Lanier Apparel business,
many of which were magnified by COVID-19 pandemic. The Lanier Apparel business was primarily focused on
moderately priced tailored clothes and related products.
In connection with the planned exit of the Lanier Apparel business, we recorded pre-tax charges of $13 million in
the Lanier Apparel operating group during Fiscal 2020. These charges consist of (1) $6 million of inventory markdowns,
the substantial majority of which were reversed in Corporate and Other as part of LIFO accounting as the inventory has not
been sold as of January 30, 2021, (2) $3 million of employee charges, including severance and employee retention costs,
(3) $3 million of operating lease asset impairment charges for leased office space, (4) $1 million of non-cash fixed asset
impairment charges, primarily related to leasehold improvements, and (5) $1 million of charges related to our Merida
manufacturing facility, which ceased operations in Fiscal 2020. The inventory markdowns and manufacturing facility
charges, which total $7 million in the aggregate, are included in cost of goods sold in Lanier Apparel, while the charges for
operating lease asset impairments, employee charges, and fixed asset impairments, which total $6 million in the aggregate,
are included in SG&A in Lanier Apparel. As of January 30, 2021, $1 million of the accrued charges have been paid for the
employee charges and the charges related to the Merida manufacturing facility. As of January 30, 2021, the remaining $2
million of accrued employee charges are recorded in accrued compensation in our consolidated balance sheet and are
expected to be paid during Fiscal 2021, and there are no significant remaining liabilities related to the Merida
manufacturing facility.
In addition to these charges incurred in Fiscal 2020, we currently expect to incur incremental Lanier Apparel exit
charges totaling approximately $3 million in Fiscal 2021, which are expected to consist of additional employee charges for
employees retained during the exit and the acceleration of certain post-exit contractual commitments.
Note 12. Tommy Bahama Japan Charges
During Fiscal 2019 and Fiscal 2018, we incurred certain charges related to the restructure of our Tommy Bahama
Japan operations, which we exited entirely in the first half of Fiscal 2020. In Fiscal 2018, we incurred charges related to the
lease termination and closure of the Tommy Bahama Ginza flagship retail-restaurant location, for which the lease was
previously scheduled to expire in 2022, as well as other charges associated with downsizing the business. In Fiscal 2019,
we incurred charges associated with the shutdown of our remaining retail and concession operations in Japan which was
completed in the first half of Fiscal 2020. The substantial majority of the charges in Fiscal 2019 and Fiscal 2018, which are
included in Tommy Bahama, were recognized in SG&A.
The charges in Fiscal 2018 totaled $4 million, including $2 million of lease termination and premises
reinstatement charges, $1 million of non-cash asset impairment charges and $1 million of inventory markdown, severance
and other charges related to the downsizing of the business. The charges in Fiscal 2019 totaled $3 million, including a $1
million non-cash foreign currency charge associated with our investment in Japan which was previously included in
accumulated other comprehensive income in our consolidated balance sheet, $1 million of lease termination, premises
reinstatement and operating lease asset impairment charges, and charges related to the revision to the estimated Ginza
reinstatement charge recognized in the prior year, as well as other items including severance and inventory markdowns
related to the shutdown of Tommy Bahama’s operations in Japan. No charges related to the exit of Tommy Bahama’s
operations in Japan were recognized in Fiscal 2020. As of both January 30, 2021 and February 1, 2020, there were no
significant liabilities related to these charges still outstanding.
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SCHEDULE II
Oxford Industries, Inc.
Valuation and Qualifying Accounts
Column A
Description
Fiscal 2020
Deducted from asset accounts:
Accounts receivable reserves (1)
Provision for credit losses (2)
Fiscal 2019
Deducted from asset accounts:
Accounts receivable reserves (1)
Provision for credit losses (2)
Fiscal 2018
Deducted from asset accounts:
Accounts receivable reserves (1)
Provision for credit losses (2)
Column B
Balance at
Beginning
of Period
Column C
Additions
Charged to
Costs and
Expenses
Charged
to Other
Accounts–
Describe
(In thousands)
Column D
Column E
Deductions
–
Describe
Balance at
End of
Period
$
$
$
$
$
$
8,766
555
6,646
661
6,485
1,659
$
$
$
$
$
$
5,629
4,052
15,802
88
9,599
225
— $
— $
(7,977)(3) $
(2,027)(4) $
6,418
2,580
— $
— $
(13,682)(3) $
(194)(4) $
8,766
555
— $
— $
(9,438)(3) $
(1,223)(4) $
6,646
661
(1) Accounts receivable reserves includes estimated reserves for allowances, returns and discounts related to our
wholesale operations as discussed in our significant accounting policy disclosure for "Revenue Recognition and
Receivables" in Note 1 of our consolidated financial statements.
(2) Provision for credit losses consists of amounts reserved for our estimate of a wholesale customer’s inability to meet its
financial obligations as discussed in our significant accounting policy disclosure for "Revenue Recognition and
Receivables" in Note 1 of our consolidated financial statements.
(3) Principally consists of amounts written off related to customer allowances, returns and discounts.
(4) Principally consists of accounts written off as uncollectible.
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Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors of Oxford Industries, Inc.
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated balance sheets of Oxford Industries, Inc. (the Company) as of January 30,
2021 and February 1, 2020, the related consolidated statements of operations, comprehensive income, shareholders’ equity
and cash flows for each of the three years in the period ended January 30, 2021, and the related notes and financial
statement schedule listed in the Index at Item 15(a) (collectively referred to as the “consolidated financial statements”). In
our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the
Company at January 30, 2021 and February 1, 2020, and the results of its operations and its cash flows for each of the three
years in the period ended January 30, 2021, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States) (PCAOB), the Company's internal control over financial reporting as of January 30, 2021, based on criteria
established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission (2013 framework) and our report dated March 29, 2021 expressed an unqualified opinion thereon.
Adoption of New Accounting Standards
As discussed in Note 1 to the consolidated financial statements, the Company has changed its method of accounting for
leases in fiscal year 2019 due to the adoption of the new leasing standard. The Company adopted the new leasing standard
using the modified retrospective approach.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to
express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting
firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the
U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the
PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material
misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material
misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that
respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and
disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and
significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial
statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements
that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or
disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex
judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated
financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a
separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
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Description of the
Matter
Interim Impairment of Goodwill and Indefinite-Lived Intangible Asset of the Southern Tide
Reporting Unit
As disclosed in Note 4 to the consolidated financial statements, at February 1, 2020, the Company’s
goodwill and trademark indefinite-lived intangible asset balances for the Southern Tide reporting
unit were approximately $43 million and $27 million, respectively. As disclosed in Note 1 to the
consolidated financial statements, goodwill and indefinite-lived intangible assets are tested for
impairment at least annually on the first day of the fourth quarter or whenever changes in
circumstances may indicate the carrying amounts may not be recoverable. Additionally, as disclosed
in Note 4 to the consolidated financial statements, as a result of the significant negative impact from
the COVID-19 pandemic, the Company performed an impairment test on Southern Tide goodwill
and indefinite-lived intangible assets during the First Quarter of Fiscal 2020, which resulted in
impairment charges recorded for goodwill in the amount of $43 million and the trademark
indefinite-lived intangible asset in the amount of $18 million. Subsequent to the impairment charges
recorded, the Company’s goodwill and trademark indefinite-lived intangible asset balances for the
Southern Tide reporting unit were approximately $0 and $9 million, respectively, at January 30,
2021.
Auditing management’s interim goodwill and indefinite-lived intangible asset impairment charge for
the Southern Tide reporting unit was complex and highly judgmental due to the significant
estimation required to determine the fair values of the Southern Tide reporting unit and indefinite-
lived intangible asset. In particular, the fair value estimate of the Southern Tide reporting unit for
purposes of assessing the amount of impairment was sensitive to significant assumptions such as
projected net sales, projected operating income, and the discount rate. In addition, the fair value
estimate of the Southern Tide indefinite-lived intangible asset was sensitive to significant
assumptions such as projected net sales, royalty rate for the trademark, and the discount rate. These
significant assumptions are affected by expectations about future market and economic conditions.
How We
Addressed the
Matter in Our
Audit
We obtained an understanding, evaluated the design and tested the operating effectiveness of the
Company’s controls over the Southern Tide goodwill and indefinite-lived intangible asset
impairment process. For example, we tested controls over management’s review of the significant
assumptions described above.
To test the estimated fair value of the Southern Tide reporting unit and indefinite-lived intangible
asset, we performed audit procedures that included, among others, assessing methodologies used by
the Company, testing the significant assumptions discussed above, and evaluating the completeness
and accuracy of the underlying data used by the Company in its analyses. For example, we
compared the significant assumptions described above to current market and economic trends; the
assumptions used to value similar assets in acquisitions; historical results of the business; and other
guidelines used by companies in the same industry. We involved our valuation specialists to assist in
our evaluation of the Company's valuation methodology and certain significant assumptions,
including the discount rates and trademark royalty rate. In addition, we assessed the historical
accuracy of management’s prospective financial information and performed sensitivity analyses on
significant assumptions to evaluate the potential changes in the fair value of the Southern Tide
reporting unit and indefinite-lived intangible asset that would result from changes in the
assumptions.
/s/ Ernst & Young LLP
We have served as the Company's auditor since 2002.
Atlanta, GA
March 29, 2021
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Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
None.
Item 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our company, under the supervision and with the participation of our management, including our principal
executive officer and principal financial officer, have evaluated the effectiveness of our disclosure controls and procedures
as of the end of the period covered by this report. Based upon that evaluation, our principal executive officer and principal
financial officer concluded that, as of the end of the period covered by this report, our disclosure controls and procedures
were effective.
Changes in and Evaluation of Internal Control over Financial Reporting
There have not been any changes in our internal control over financial reporting during the fourth quarter of Fiscal
2020 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 Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting
(as such term is defined in Rules 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 provide reasonable assurance regarding the reliability of financial
reporting and the preparation of our consolidated financial statements for external purposes in accordance with accounting
principles generally accepted in the United States. Our internal control over financial reporting is supported by a program
of appropriate 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 30, 2021. In making
this assessment, management used the updated 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 30, 2021.
Ernst & Young LLP, our independent registered public accounting firm, has audited our internal control over
financial reporting as of January 30, 2021, and its report thereon is included herein.
and
/s/ THOMAS C. CHUBB III
Thomas C. Chubb III
Chairman, Chief Executive Officer and President
(Principal Executive Officer)
/s/ K. SCOTT GRASSMYER
K. Scott Grassmyer
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
March 29, 2021
March 29, 2021
Limitations on the Effectiveness of Controls
Because of their inherent limitations, our disclosure controls and procedures and our internal controls over
financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness for future
periods are subject to the risks that controls may become inadequate because of changes in conditions, or that the degree of
compliance with the policies or procedures may deteriorate. A control system, no matter how well designed and operated,
can provide only reasonable, not absolute, assurance that a control system’s objectives will be met.
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Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors of Oxford Industries, Inc.
Opinion on Internal Control over Financial Reporting
We have audited Oxford Industries, Inc.’s internal control over financial reporting as of January 30, 2021, 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). In our opinion, Oxford Industries, Inc. (the Company)
maintained, in all material respects, effective internal control over financial reporting as of January 30, 2021, based on the
COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States) (PCAOB), the consolidated balance sheets of the Company as of January 30, 2021 and February 1, 2020, the related
consolidated statements of operations, comprehensive income, shareholders’ equity and cash flows for each of the three
years in the period ended January 30, 2021, and the related notes and financial statement schedule listed in the Index at
Item 15(a) (collectively referred to as the “consolidated financial statements”) and our report dated March 29, 2021
expressed an unqualified opinion thereon.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its
assessment of the effectiveness of internal control over financial reporting included in the accompanying Report of
Management on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s
internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB
and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the
applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in
all material respects.
Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material
weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk,
and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides
a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with
generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and
procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the
transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded
as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and
that receipts and expenditures of the company are being made only in accordance with authorizations of management and
directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
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Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ Ernst & Young LLP
Atlanta, Georgia
March 29, 2021
Item 9B. Other Information
None.
Item 10. Directors, Executive Officers and Corporate Governance
PART III
The information required by this Item 10 of Part III will appear in our definitive proxy statement under the
headings "Corporate Governance and Board Matters—Directors," "Executive Officers," "Common Stock Ownership by
Management and Certain Beneficial Owners—Section 16(a) Beneficial Ownership Reporting Compliance," "Corporate
Governance and Board Matters—Website Information," "Additional Information—Submission of Director Candidates by
Shareholders," and "Corporate Governance and Board Matters—Board Meetings and Committees of our Board of
Directors," and is incorporated herein by reference.
Item 11. Executive Compensation
The information required by this Item 11 of Part III will appear in our definitive proxy statement under the
headings "Corporate Governance and Board Matters—Director Compensation," "Executive Compensation," "Nominating,
Compensation & Governance Committee Report" and "Compensation Committee Interlocks and Insider Participation" and
is incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The information required by this Item 12 of Part III will appear in our definitive proxy statement under the
headings "Equity Compensation Plan Information" 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 Independence
The information required by this Item 13 of Part III will appear in our definitive proxy statement under the
headings "Certain Relationships and Related Transactions" and "Corporate Governance and Board Matters—Director
Independence" and is incorporated herein by reference.
Item 14. Principal Accounting Fees and Services
The information required by this Item 14 of Part III will appear in our definitive proxy statement under the
heading "Audit-Related Matters—Fees Paid to Independent Registered Public Accounting Firm" and "Audit-Related
Matters—Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Auditors" and is
incorporated herein by reference.
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Item 15. Exhibits, Financial Statement Schedules
(a) 1. Financial Statements
PART IV
The following consolidated financial statements are included in Part II, Item 8 of this report:
● Consolidated Balance Sheets as of January 30, 2021 and February 1, 2020.
● Consolidated Statements of Operations for Fiscal 2020, Fiscal 2019 and Fiscal 2018.
● Consolidated Statements of Comprehensive Income for Fiscal 2020, Fiscal 2019 and Fiscal 2018.
● Consolidated Statements of Shareholders’ Equity for Fiscal 2020, Fiscal 2019 and Fiscal 2018.
● Consolidated Statements of Cash Flows for Fiscal 2020, Fiscal 2019 and Fiscal 2018.
● Notes to Consolidated Financial Statements for Fiscal 2020, Fiscal 2019 and Fiscal 2018.
2. Financial Statement Schedules
● Schedule II—Valuation and Qualifying Accounts
All other schedules for which provisions are made in the applicable accounting regulation of the SEC are not
required under the related instructions or are inapplicable and, therefore, have been omitted.
(b) Exhibits
3.1
3.2
4.1
10.1
10.2
10.3
Restated Articles of Incorporation of Oxford Industries, Inc. (filed as Exhibit 3.1 to the Company’s Form 10-Q
for the fiscal quarter ended July 29, 2017)
Bylaws of Oxford Industries, Inc., as amended (filed as Exhibit 3.2 to the Company’s Form 8-K filed on
August 18, 2020)
Description of Securities Registered under Section 12 of the Securities Exchange Act of 1934 (filed as Exhibit
4.1 to the Company’s Form 10-K for the fiscal year ended February 1, 2020)
Oxford Industries, Inc. Deferred Compensation Plan (as amended and rested effective June 13, 2012) (filed as
Exhibit 10.1 to the Company’s Form 10-Q for the fiscal quarter ended October 27, 2012)†
First Amendment to Oxford Industries, Inc. Deferred Compensation Plan dated July 1, 2016 (filed as Exhibit
10.3 to the Company’s Form 10-Q/A for the fiscal quarter ended on July 30, 2016)†
Fourth 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
institutions party thereto as lenders, the financial institutions party thereto as Exhibit 2.1: Issuing Banks; and
SunTrust Robinson Humphrey, Inc. as a Joint Lead Arranger and a Joint Bookrunner; JPMorgan Chase Bank,
N.A. as a Joint Lead Arranger, a Joint Bookrunner, and the Syndication Agent; and Bank of America, N.A. and
KeyBank National Association, as the Co-Documentation Agents (filed as Exhibit 10.1 to the Company’s
Form 8-K filed on May 24, 2016)
10.4
Fourth Amended and Restated Pledge and Security Agreement, dated as of May 24, 2016, among Oxford
Industries, Inc.; Tommy Bahama Group, Inc.; the additional entities grantor thereto, as Grantors, and SunTrust
Bank, as administrative agent (filed as Exhibit 10.2 to the Company’s Form 8-K filed on May 24, 2016)
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10.5
10.6
10.7
10.8
21
23
24
31.1
31.2
32
First Amendment to Fourth Amended and Restated Credit Agreement, dated as of July 31, 2019, by and
among Oxford Industries, Inc., Tommy Bahama Group, Inc., the Persons party thereto from time to time as
guarantors, the financial institutions party thereto from time to time as lenders, and SunTrust Bank, as
administrative agent (filed as Exhibit 10.1 to the Company’s Form 8-K filed on August 1, 2019)
Form of Oxford Industries, Inc. Restricted Stock Award Agreement (filed as Exhibit 10.1 to the Company’s
Form 8-K filed on June 29, 2020)†
Form of Oxford Industries, Inc. Performance-Based Restricted Share Unit Award Agreement (filed as Exhibit
10.2 to the Company’s Form 8-K filed on June 29, 2020)†
Oxford Industries, Inc. Amended and Restated Long-Term Stock Incentive Plan (filed as Exhibit 10.3 to the
Company’s Form 8-K filed on June 29, 2020)†
Subsidiaries of Oxford Industries, Inc.*
Consent of Independent Registered Public Accounting Firm*
Power of Attorney*
Certification by Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*
Certification by Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*
Certification by Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-
Oxley Act of 2002*
101INS XBRL Instance Document – the instance document does not appear in the Interactive Data File because its
XBRL tags are embedded within the Inline XBRL Document
101SCH XBRL Taxonomy Extension Schema Document
101CAL XBRL Taxonomy Extension Calculation Linkbase Document
101DEF XBRL Taxonomy Extension Definition Linkbase Document
101LAB XBRL Taxonomy Extension Label Linkbase Document
101PRE XBRL Taxonomy Extension Presentation Linkbase Document
104
Cover Page Interactive Data File – the cover page interactive data file does not appear in the Interactive Data
File because its XBRL tags are embedded within the Inline XBRL Document
* Filed herewith
† Management contract or compensation plan or arrangement required to be filed as an exhibit to this form pursuant to
Item 15(b) of this report.
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) of Regulation S-K.
Item 16. Form 10-K Summary
None.
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Pursuant 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 its behalf by the undersigned, hereunto duly authorized.
SIGNATURES
Oxford Industries, Inc.
By:
/s/ THOMAS C. CHUBB III
Thomas C. Chubb III
Chairman, Chief Executive Officer and President
Date: March 29, 2021
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the dates indicated.
Signature
Capacity
Date
/s/ THOMAS C. CHUBB III
Thomas C. Chubb III
/s/ K. SCOTT GRASSMYER
K. Scott Grassmyer
Chairman of the Board of Directors, Chief Executive
Officer and President (Principal Executive Officer)
March 29, 2021
Executive Vice President and Chief Financial Officer
(Principal Financial Officer and Principal Accounting
Officer)
March 29, 2021
*
Helen Ballard
*
Thomas C. Gallagher
*
Virginia A. Hepner
*
John R. Holder
*
Stephen S. Lanier
*
Dennis M. Love
*
Milford W. McGuirt
*
Clarence H. Smith
Clyde C. Tuggle
*
E. Jenner Wood III
Director
Director
Director
Director
Director
Director
Director
Director
Director
Director
*By
/s/ SURAJ A. PALAKSHAPPA
Suraj A. Palakshappa
as Attorney-in-Fact
113
March 29, 2021
March 29, 2021
March 29, 2021
March 29, 2021
March 29, 2021
March 29, 2021
March 29, 2021
March 29, 2021
March 29, 2021
SUBSIDIARIES OF OXFORD INDUSTRIES, INC.
Exhibit 21
The following table lists each subsidiary of Oxford Industries, Inc. indented under the name of its immediate
parent, the percentage of each subsidiary’s voting securities beneficially owned by its immediate parent and the jurisdiction
under the laws of which each subsidiary was organized:
Name
Oxford Industries, Inc.
Camisas Bahia Kino S.A. de C.V.
Industrias Lanier de Honduras S. de R.L.
Manufacturera de Sonora, S.A. de CV
Oxford Caribbean, Inc.
Oxford de Colon, S.A.
Oxford Garment, Inc.
Oxford International, Inc.
Oxford of South Carolina, Inc.
Oxford Products (International) Limited
Servicios de Manufactura de Mérida, S. de R.L. de C.V.
Sugartown Worldwide LLC
The Beaufort Bonnet Company, LLC
Tommy Bahama Group, Inc.
Viewpoint Marketing, Inc.
Oxford Caribbean, Inc.
Q.R. Fashions S. de R.L.
Oxford Products (International) Limited
Industrias Oxford de Merida, S.A. de CV
Oxford Industries (UK2) Limited
Oxford Philippines, Inc.
Tommy Bahama Global Sourcing Limited
Oxford of South Carolina, Inc.
GCP Southern Tide Coinvest, Inc.
S/T Group Blocker, Inc.
S/T Group Blocker, Inc.
S/T Group Holdings, LLC
S/T Group Holdings, LLC
Southern Tide, LLC
Tommy Bahama Beverages, LLC
Tommy Bahama Texas Beverages, LLC
Tommy Bahama Global Sourcing Limited
Tommy Bahama Australia Pty Ltd
Tommy Bahama Canada ULC
Tommy Bahama K. K.
Tommy Bahama Limited
Tommy Bahama Trading (Shenzhen) Co., Ltd.
Tommy Bahama Group, Inc.
Tommy Bahama R&R Holdings, Inc.
Tommy Bahama R&R Holdings, Inc.
Tommy Bahama Beverages, LLC
% of Voting Securities
Jurisdiction of Incorporation or
Organization
100
50(1)
99(2)
100
100
100
100
100
99.99(3)
99.9(4)
100
100
100
100
Mexico
Honduras
Mexico
Delaware
Costa Rica
Delaware
Georgia
South Carolina
Hong Kong
Mexico
Delaware
Kentucky
Delaware
Florida
100
Honduras
99(5)
75(6)
96.25(7)
100
Mexico
United Kingdom
Philippines
Hong Kong
100
100
Delaware
Delaware
50(8)
Delaware
100
South Carolina
100
Texas
100
100
100
100
100
Australia
Canada
Japan
Hong Kong
China
100
Delaware
100
Delaware
50% of the voting securities of Industrias Lanier de Honduras S. de R.L. is owned by Oxford Caribbean, Inc.
1% of the voting securities of Manufacturera de Sonora, S.A. de CV is owned by Oxford International, Inc.
(1)
(2)
(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.
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.
1% of the voting securities of Industrias Oxford de Merida, S.A. de CV is owned by Oxford Industries, Inc.
(4)
(5)
(6) Approximately 25% of the voting securities of Oxford Industries (UK2) Limited is owned by Oxford Industries, Inc.
(7)
3.74% of the voting securities of Oxford Philippines, Inc. is owned by Oxford Industries, Inc. Nominal ownership interests of certain of the voting
securities of Oxford Philippines, Inc. are owned by various individuals.
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 Group
Holdings, LLC is owned by GCP Southern Tide Coinvest, Inc.
(8)
Exhibit 23
We consent to the incorporation by reference in the following Registration Statements:
Consent of Independent Registered Public Accounting Firm
(1)
(2)
Registration Statements (Form S-8 Nos. 333-121538 and 333-161902) pertaining to the Oxford Industries, Inc. Long-Term
Stock Incentive Plan,
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 29, 2021, with respect to the consolidated financial statements and schedule of Oxford Industries, Inc. and the
effectiveness of internal control over financial reporting of Oxford Industries, Inc. included in this Annual Report (Form 10-K) of Oxford
Industries, Inc. for the year ended January 30, 2021.
/s/ Ernst & Young LLP
Atlanta, Georgia
March 29, 2021
POWER OF ATTORNEY
Exhibit 24
The undersigned, a director of Oxford Industries, Inc. (the “Company”), does hereby constitute and appoint each of Mary
Margaret Heaton, Suraj A. Palakshappa and Caroline Wood, or any one of them, my true and lawful attorneys-in-fact for me and in my
name for the purpose of executing on my behalf in any and all capacities the Company’s Annual Report on Form 10-K for the fiscal year
ended January 30, 2021, or any amendment or supplement thereto, and causing such Annual Report or any such amendment or
supplement to be filed with the U.S. Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended
(the “Act”). In addition, each such attorney-in-fact shall have full power and authority to execute on my behalf in my capacity as 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 such attorney-in-fact
shall have full power and authority to do and perform any and all acts on my behalf which may be necessary or desirable to complete,
execute and timely file any such Forms with the U.S. Securities and Exchange Commission and any stock exchange or similar authority.
/s/ Helen Ballard
Helen Ballard
Date: March 24, 2021
POWER OF ATTORNEY
The undersigned, a director of Oxford Industries, Inc. (the “Company”), does hereby constitute and appoint each of Mary
Margaret Heaton, Suraj A. Palakshappa and Caroline Wood, or any one of them, my true and lawful attorneys-in-fact for me and in my
name for the purpose of executing on my behalf in any and all capacities the Company’s Annual Report on Form 10-K for the fiscal year
ended January 30, 2021, or any amendment or supplement thereto, and causing such Annual Report or any such amendment or
supplement to be filed with the U.S. Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended
(the “Act”). In addition, each such attorney-in-fact shall have full power and authority to execute on my behalf in my capacity as 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 such attorney-in-fact
shall have full power and authority to do and perform any and all acts on my behalf which may be necessary or desirable to complete,
execute and timely file any such Forms with the U.S. Securities and Exchange Commission and any stock exchange or similar authority.
/s/ Thomas C. Gallagher
Thomas C. Gallagher
Date: March 24, 2021
POWER OF ATTORNEY
The undersigned, a director of Oxford Industries, Inc. (the “Company”), does hereby constitute and appoint each of Mary
Margaret Heaton, Suraj A. Palakshappa and Caroline Wood, or any one of them, my true and lawful attorneys-in-fact for me and in my
name for the purpose of executing on my behalf in any and all capacities the Company’s Annual Report on Form 10-K for the fiscal year
ended January 30, 2021, or any amendment or supplement thereto, and causing such Annual Report or any such amendment or
supplement to be filed with the U.S. Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended
(the “Act”). In addition, each such attorney-in-fact shall have full power and authority to execute on my behalf in my capacity as 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 such attorney-in-fact
shall have full power and authority to do and perform any and all acts on my behalf which may be necessary or desirable to complete,
execute and timely file any such Forms with the U.S. Securities and Exchange Commission and any stock exchange or similar authority.
/s/ Virginia A. Hepner
Virginia A. Hepner
Date: March 24, 2021
POWER OF ATTORNEY
The undersigned, a director of Oxford Industries, Inc. (the “Company”), does hereby constitute and appoint each of Mary
Margaret Heaton, Suraj A. Palakshappa and Caroline Wood, or any one of them, my true and lawful attorneys-in-fact for me and in my
name for the purpose of executing on my behalf in any and all capacities the Company’s Annual Report on Form 10-K for the fiscal year
ended January 30, 2021, or any amendment or supplement thereto, and causing such Annual Report or any such amendment or
supplement to be filed with the U.S. Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended
(the “Act”). In addition, each such attorney-in-fact shall have full power and authority to execute on my behalf in my capacity as 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 such attorney-in-fact
shall have full power and authority to do and perform any and all acts on my behalf which may be necessary or desirable to complete,
execute and timely file any such Forms with the U.S. Securities and Exchange Commission and any stock exchange or similar authority.
/s/ John R. Holder
John R. Holder
Date: March 24, 2021
POWER OF ATTORNEY
The undersigned, a director of Oxford Industries, Inc. (the “Company”), does hereby constitute and appoint each of Mary
Margaret Heaton, Suraj A. Palakshappa and Caroline Wood, or any one of them, my true and lawful attorneys-in-fact for me and in my
name for the purpose of executing on my behalf in any and all capacities the Company’s Annual Report on Form 10-K for the fiscal year
ended January 30, 2021, or any amendment or supplement thereto, and causing such Annual Report or any such amendment or
supplement to be filed with the U.S. Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended
(the “Act”). In addition, each such attorney-in-fact shall have full power and authority to execute on my behalf in my capacity as 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 such attorney-in-fact
shall have full power and authority to do and perform any and all acts on my behalf which may be necessary or desirable to complete,
execute and timely file any such Forms with the U.S. Securities and Exchange Commission and any stock exchange or similar authority.
/s/ Stephen S. Lanier
Stephen S. Lanier
Date: March 24, 2021
POWER OF ATTORNEY
The undersigned, a director of Oxford Industries, Inc. (the “Company”), does hereby constitute and appoint each of Mary
Margaret Heaton, Suraj A. Palakshappa and Caroline Wood, or any one of them, my true and lawful attorneys-in-fact for me and in my
name for the purpose of executing on my behalf in any and all capacities the Company’s Annual Report on Form 10-K for the fiscal year
ended January 30, 2021, or any amendment or supplement thereto, and causing such Annual Report or any such amendment or
supplement to be filed with the U.S. Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended
(the “Act”). In addition, each such attorney-in-fact shall have full power and authority to execute on my behalf in my capacity as 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 such attorney-in-fact
shall have full power and authority to do and perform any and all acts on my behalf which may be necessary or desirable to complete,
execute and timely file any such Forms with the U.S. Securities and Exchange Commission and any stock exchange or similar authority.
/s/ Dennis M. Love
Dennis M. Love
Date: March 24, 2021
POWER OF ATTORNEY
The undersigned, a director of Oxford Industries, Inc. (the “Company”), does hereby constitute and appoint each of Mary
Margaret Heaton, Suraj A. Palakshappa and Caroline Wood, or any one of them, my true and lawful attorneys-in-fact for me and in my
name for the purpose of executing on my behalf in any and all capacities the Company’s Annual Report on Form 10-K for the fiscal year
ended January 30, 2021, or any amendment or supplement thereto, and causing such Annual Report or any such amendment or
supplement to be filed with the U.S. Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended
(the “Act”). In addition, each such attorney-in-fact shall have full power and authority to execute on my behalf in my capacity as 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 such attorney-in-fact
shall have full power and authority to do and perform any and all acts on my behalf which may be necessary or desirable to complete,
execute and timely file any such Forms with the U.S. Securities and Exchange Commission and any stock exchange or similar authority.
/s/ Milford W. McGuirt
Milford W. McGuirt
Date: March 24, 2021
POWER OF ATTORNEY
The undersigned, a director of Oxford Industries, Inc. (the “Company”), does hereby constitute and appoint each of Mary
Margaret Heaton, Suraj A. Palakshappa and Caroline Wood, or any one of them, my true and lawful attorneys-in-fact for me and in my
name for the purpose of executing on my behalf in any and all capacities the Company’s Annual Report on Form 10-K for the fiscal year
ended January 30, 2021, or any amendment or supplement thereto, and causing such Annual Report or any such amendment or
supplement to be filed with the U.S. Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended
(the “Act”). In addition, each such attorney-in-fact shall have full power and authority to execute on my behalf in my capacity as 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 such attorney-in-fact
shall have full power and authority to do and perform any and all acts on my behalf which may be necessary or desirable to complete,
execute and timely file any such Forms with the U.S. Securities and Exchange Commission and any stock exchange or similar authority.
/s/ Clarence H. Smith
Clarence H. Smith
Date: March 24, 2021
POWER OF ATTORNEY
The undersigned, a director of Oxford Industries, Inc. (the “Company”), does hereby constitute and appoint each of Mary
Margaret Heaton, Suraj A. Palakshappa and Caroline Wood, or any one of them, my true and lawful attorneys-in-fact for me and in my
name for the purpose of executing on my behalf in any and all capacities the Company’s Annual Report on Form 10-K for the fiscal year
ended January 30, 2021, or any amendment or supplement thereto, and causing such Annual Report or any such amendment or
supplement to be filed with the U.S. Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended
(the “Act”). In addition, each such attorney-in-fact shall have full power and authority to execute on my behalf in my capacity as 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 such attorney-in-fact
shall have full power and authority to do and perform any and all acts on my behalf which may be necessary or desirable to complete,
execute and timely file any such Forms with the U.S. Securities and Exchange Commission and any stock exchange or similar authority.
/s/ E. Jenner Wood III
E. Jenner Wood III
Date: March 29, 2021
Exhibit 31.1
CERTIFICATION PURSUANT TO RULE 13a-14(a) AND SECTION 302 OF
THE SARBANES-OXLEY ACT OF 2002
I, 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 the statements made, in light of the circumstances under which such statements were made, not misleading
with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all
material respects the financial 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 in Exchange 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 within those 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 our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our
conclusions about the effectiveness 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 most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has
materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting;
and
5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over
financial reporting, to the 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 are reasonably 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 internal control over financial reporting.
Date: March 29, 2021
/s/ THOMAS C. CHUBB III
Thomas C. Chubb III
Chairman, Chief Executive Officer and President
(Principal Executive Officer)
Exhibit 31.2
CERTIFICATION PURSUANT TO RULE 13a-14(a) AND SECTION 302 OF
THE SARBANES-OXLEY ACT OF 2002
I, 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 the statements made, in light of the circumstances under which such statements were made, not misleading
with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all
material respects the financial 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 in Exchange 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 within those 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 our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our
conclusions about the effectiveness 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 most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has
materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting;
and
5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over
financial reporting, to the 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 are reasonably 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 internal control over financial reporting.
Date: March 29, 2021
/s/ K. SCOTT GRASSMYER
K. Scott Grassmyer
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
Exhibit 32
In connection with the annual report of Oxford Industries, Inc. (the "Company") on Form 10-K ("Form 10-K") for the fiscal year
ended January 30, 2021 as filed with the Securities and Exchange Commission on the date hereof, I, Thomas C. Chubb III, Chairman,
Chief Executive Officer and President of the Company, and I, K. Scott Grassmyer, Executive Vice President and Chief Financial Officer
of the Company, each certify, pursuant to 18 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 the Company.
/s/ THOMAS C. CHUBB III
Thomas C. Chubb III
Chairman, Chief Executive Officer and President
(Principal Executive Officer)
March 29, 2021
/s/ K. SCOTT GRASSMYER
K. Scott Grassmyer
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
March 29, 2021