RESULTS OF OPERATIONS
   The following tables set forth the specified line items in our unaudited
condensed consolidated statements of operations both in dollars (in thousands)
and as a percentage of net sales. The tables also set forth the percentage
change of the data as compared to the same period of the prior year. 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
statement of operations classification of certain expenses may vary by company.

                                         First Quarter       First Quarter      Percent
                                          Fiscal 2009         Fiscal 2008        Change

 Net sales                              $       216,731     $       272,942        (20.6 )%
 Cost of goods sold                             126,960             156,633        (18.9 )%

 Gross profit                                    89,771             116,309        (22.8 )%
 SG&A                                            78,683              99,634        (21.0 )%
 Amortization of intangible assets                  308                 788        (60.9 )%
 Royalties and other operating income             2,469               4,188        (41.0 )%

 Operating income                                13,249              20,075        (34.0 )%
 Interest expense, net                            4,565               6,332        (27.9 )%

 Earnings before income taxes                     8,684              13,743        (36.8 )%
 Income taxes                                     2,172               4,226        (48.6 )%

 Net earnings                           $         6,512     $         9,517        (31.6 )%

                                                     Percent of Net Sales
                                               First Quarter       First Quarter
                                                Fiscal 2009         Fiscal 2008
       Net sales                                      100.0 %             100.0 %
       Cost of goods sold                              58.6 %              57.4 %

       Gross profit                                    41.4 %              42.6 %
       SG&A                                            36.3 %              36.5 %
       Amortization of intangible assets                0.1 %               0.3 %
       Royalties and other operating income             1.1 %               1.5 %

       Operating income                                 6.1 %               7.4 %
       Interest expense, net                            2.1 %               2.3 %

       Earnings before income taxes                     4.0 %               5.0 %
       Income taxes                                     1.0 %               1.5 %

       Net earnings                                     3.0 %               3.5 %

OPERATING GROUP INFORMATION
Our business is operated through our four operating groups: Tommy Bahama, Ben Sherman, Lanier Clothes and Oxford Apparel. 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. The leader of each operating group reports directly to our Chief Executive Officer.
Tommy Bahama designs, sources and markets collections of men's and women's sportswear and related products. Tommy Bahama® products can be found in our owned and licensed Tommy Bahama retail stores and on our e-commerce website as well as in certain department stores and independent specialty stores throughout the United States. The target consumers of Tommy Bahama are affluent men and women age 35 and older who embrace a relaxed and casual approach to daily living. We also license the Tommy Bahama name for a wide variety of product categories and operate Tommy Bahama restaurants.
Ben Sherman is a London-based designer, marketer and distributor of branded sportswear and related products. Ben Sherman was established in 1963 as an edgy, young men's, "Mod"-inspired shirt brand and has evolved into a British lifestyle brand of apparel targeted at youthful-thinking men and women ages 19 to 35 throughout the world. We offer a full Ben Sherman sportswear collection as well as tailored clothing and accessories. Our Ben Sherman products can be found in certain department stores and a variety of independent specialty stores, as well as in our owned and licensed Ben Sherman retail stores and on our e-commerce websites. We also license the Ben Sherman name for various product categories.
Lanier Clothes designs and markets branded and private label men's suits, sportcoats, suit separates and dress slacks across a wide range of price points. Certain Lanier Clothes products are sold using trademarks licensed to us by third parties, including Kenneth Cole®, Dockers®, and Geoffrey Beene®. We also offer branded tailored clothing products under owned Arnold Brant® and Billy London® trademarks. In addition to our branded businesses, we design and source certain private label tailored clothing products, which are products sold exclusively to one customer under a brand name that is owned by or licensed by such customer. Significant private label brands include Stafford®, Alfani®, Tasso Elba® and Lands' End®. Our Lanier Clothes products are sold to national chains, department stores, mass merchants, specialty stores, specialty catalog retailers and discount retailers throughout the United States.
Oxford Apparel produces branded and private label dress shirts, suited separates, sport shirts, casual slacks, outerwear, sweaters, jeans, swimwear, westernwear and golf apparel. We design and source certain private label programs for several customers, including programs for Men's Wearhouse, Lands' End, Target, Macy's and Sears. Significant owned brands of Oxford Apparel include Oxford Golf®, Ely®, Cattleman® and Cumberland Outfitters®. Oxford Apparel also owns a two-thirds interest in the entity that owns the Hathaway® trademark in the United States and several other countries. Additionally, Oxford Apparel also licenses from third parties the right to use certain trademarks including Dockers and United States Polo Association® for certain apparel products. Our Oxford Apparel products are sold to a variety of department stores, mass merchants, specialty catalog retailers, discount retailers, specialty stores, "green grass" golf merchants and Internet retailers throughout the United States.
Corporate and Other is a reconciling category for reporting purposes and includes our corporate office, substantially all financing activities, LIFO inventory accounting adjustments and other costs that are not allocated to

the operating groups. LIFO inventory calculations are made on a legal entity basis which does not correspond to our operating group definitions, as portions of Lanier Clothes and Oxford Apparel are on the LIFO basis of accounting. Therefore, LIFO inventory accounting adjustments are not allocated to operating groups.
The tables below present certain information about our operating groups (in thousands):

                                  First Quarter       First Quarter      Percent
                                   Fiscal 2009         Fiscal 2008        Change
       Net Sales
       Tommy Bahama              $        98,420     $       129,258        (23.9 )%
       Ben Sherman                        24,219              36,587        (33.8 )%
       Lanier Clothes                     31,507              38,687        (18.6 )%
       Oxford Apparel                     63,204              68,684         (8.0 )%
       Corporate and Other                  (619 )              (274 )     (125.9 )%

       Total                     $       216,731     $       272,942        (20.6 )%


       Operating Income (loss)
       Tommy Bahama              $        12,250     $        19,483        (37.1 )%
       Ben Sherman                        (1,976 )               255         NM
       Lanier Clothes                      2,737                 (21 )       NM
       Oxford Apparel                      5,193               5,325         (2.5 )%
       Corporate and Other                (4,955 )            (4,967 )        0.2 %

       Total                     $        13,249     $        20,075        (34.0 )%

For further information regarding our operating groups, see Note 4 to our unaudited condensed consolidated financial statements included in this report and Part I, Item 1, Business in our Annual Report on Form 10-K for fiscal 2008.
FIRST QUARTER FISCAL 2009 COMPARED TO FIRST QUARTER OF FISCAL 2008 The discussion below compares our operating results for the first quarter of fiscal 2009 to the first quarter of fiscal 2008. Each percentage change provided below reflects the change between these periods unless indicated otherwise.
Net sales decreased $56.2 million, or 20.6%, in the first quarter of fiscal 2009 compared to the first quarter of fiscal 2008 primarily as a result of the changes discussed below.
Tommy Bahama's net sales decreased $30.8 million, or 23.9%. The decrease was primarily due to a reduction in net sales at wholesale and in our existing owned retail stores resulting from the difficult retail environment. This decrease in wholesale sales and existing store retail sales was partially offset by sales at our retail stores opened after the beginning of the first quarter of fiscal 2008. Unit sales decreased 32.2% due to the difficult retail environment. The average selling price per unit increased by 9.6%, as sales at our retail stores and our e-commerce sales, both of which have higher sales prices than wholesale sales, represented a greater proportion of total Tommy Bahama sales. As of May 2, 2009 and May 3, 2008, we operated 84 and 77 Tommy Bahama retail stores, respectively.
Ben Sherman's net sales decreased $12.4 million, or 33.8%. The decrease in net sales was primarily due to the 26% reduction in the average exchange rate of the British pound sterling versus the United States dollar in the first quarter of fiscal 2009 compared to the first quarter of fiscal 2008, as well as the impact of the challenging economic environment on our United Kingdom business. During the first quarter, unit sales for Ben Sherman declined by 20.5% due primarily to the decline in the United Kingdom business. The average selling price per unit decreased 16.8%, resulting primarily from the impact of the weaker British pound which was partially offset by a larger percentage of total Ben Sherman sales being sales at our own retail stores, which generally have a higher sales price than wholesale sales.
Lanier Clothes' net sales decreased $7.2 million, or 18.6%. The decrease was primarily due to (1) the general economic conditions, (2) our exit from the Oscar de la Renta® and Nautica® licensed businesses, with fiscal 2009 sales consisting of close out sales, and (3) the restructuring of the Arnold Brant business in fiscal 2008. These factors resulted in a decrease in unit sales of 15.0% and a decrease in the average selling price per unit of 4.2% for Lanier Clothes.

Oxford Apparel's net sales decreased $5.5 million, or 8.0%. The decrease in net sales was generally anticipated in connection with our strategy to focus on key product categories and exit underperforming lines of business, but was also impacted by the difficult economic conditions. Unit sales decreased by 8.6% as a result of our exit from certain lines of business and economic conditions, and the average selling price per unit increased by 0.7% due to changes in product mix.
Gross profit decreased $26.5 million, or 22.8%, in the first quarter of fiscal 2009. The decrease was primarily due to lower sales in each operating group, as described above. Gross margins decreased to 41.4% of net sales during the first quarter of fiscal 2009 from 42.6% in the first quarter of fiscal 2008. The decrease in gross margin was primarily due to sales mix as our Tommy Bahama and Ben Sherman businesses, which generally have higher margins than our Lanier Clothes and Oxford Apparel businesses, represented a lower percentage of our overall sales for the quarter as the economic conditions had a greater impact on our Tommy Bahama and Ben Sherman branded businesses. Additionally, the first quarter of fiscal 2009 included a LIFO accounting charge of $1.6 million compared to a LIFO accounting charge of $0.5 million in the first quarter of fiscal 2008. Our gross profit may not be directly comparable to those of our competitors, as statement of operations classification of certain expenses may vary by company.
SG&A decreased $21.0 million, or 21.0%, in the first quarter of fiscal 2009. SG&A was 36.3% of net sales in the first quarter of fiscal 2009 and 36.5% in the first quarter of fiscal 2008. The decrease in SG&A was primarily due to significant reductions in our overhead cost structure, cost reductions associated with our exit from certain businesses, the impact on Ben Sherman of the 26% reduction in the average value of the British pound sterling versus the United States dollar, reductions in pre-opening expenses for Tommy Bahama stores and restaurants and reductions in advertising expenses. These cost savings were partially offset by expenses associated with the operation of additional retail stores which opened subsequent to the beginning of the first quarter of fiscal 2008.
Amortization of intangible assets decreased $0.5 million to $0.3 million in the first quarter of fiscal 2009. The decrease was primarily the result of amortization typically being greater in the earlier periods following an acquisition. Amortization of intangible assets is expected to be approximately $1.2 million in fiscal 2009, including the $0.3 million recognized in the first quarter.
Royalties and other operating income decreased $1.7 million, or 41.0%, in the first quarter of fiscal 2009. The decrease was primarily due to the termination of the license agreement for footwear in Tommy Bahama, the 26% decline in the average value of the British pound versus the United States dollar, which impacted Ben Sherman royalty income, and the difficult economic conditions.
Operating income decreased to $13.2 million in the first quarter of fiscal 2009 from $20.1 million in the first quarter of fiscal 2008. The $6.8 million decrease in operating income was primarily due to the decreases in sales and royalty income, which was partially offset by decreases in SG&A.
Tommy Bahama's operating income decreased $7.2 million. The decrease was primarily due to the sales reduction discussed above and decreased royalty income due to the termination of the footwear license agreement. These items were partially offset by higher gross margins and decreased employment, advertising, store pre-opening and other variable operating costs.
Ben Sherman's operating income (loss) decreased $2.2 million to a loss of $2.0 million. The decrease was primarily due to lower sales in our United Kingdom wholesale business as discussed above, the unfavorable impact on inventory purchases denominated in United States dollars but sold in other currencies due to the decline in the average value of the British pound versus the United States dollar and lower royalty income. These items were partially offset by reduced SG&A.
Lanier Clothes' operating income increased $2.8 million despite the $7.2 million reduction in net sales discussed above. The increase in operating income was primarily due to reduced SG&A as a result of our exit from the Nautica and Oscar de la Renta licensed businesses and restructuring of our Arnold Brant business during fiscal 2008 and other initiatives to reduce overhead.
Oxford Apparel's operating income was relatively flat compared to the first quarter of fiscal 2008, despite the $5.5 million reduction in net sales discussed above. The decrease in net sales and corresponding decrease in gross profit were offset by decreased SG&A in the form of reduced employment costs and variable operating expenses. The operating results of Oxford Apparel reflect the impact of our decision to exit the Solitude business and certain other

private label programs in fiscal 2008 as we continue to focus on our businesses that provide an opportunity for a higher return.
The Corporate and Other operating loss was flat compared with the first quarter of fiscal 2008. The first quarter of fiscal 2009 included a charge of $1.6 million related to LIFO accounting adjustments compared to a charge of $0.5 million in the first quarter of fiscal 2008. This additional LIFO charge was offset by decreased SG&A, primarily consisting of reduced employment costs.
Interest expense, net decreased $1.8 million, or 27.9%, in the first quarter of fiscal 2009. The decrease in interest expense was primarily due to lower average daily borrowings and lower effective interest rates in the first quarter of fiscal 2009.
Income taxes had an effective rate of 25.0% and 30.8% for the first quarter of fiscal 2009 and 2008, respectively. The lower effective tax rate for fiscal 2009 resulted from lower estimated earnings for fiscal 2009 compared to fiscal 2008 based on projections made at the end of the first quarter of each fiscal year. Certain permanent differences do not necessarily fluctuate with earnings and therefore have a greater impact on income tax expense at lower earnings levels.
Diluted net earnings per common share decreased to $0.42 in the first quarter of fiscal 2009 from $0.59 in the first quarter of fiscal 2008. This change was primarily due to the sales declines resulting from the current economic conditions, partially offset by the reductions in operating expenses, as discussed above. Weighted average shares outstanding for the first quarter of fiscal 2009 were also less than the first quarter of fiscal 2008 as we received the final 0.6 million shares repurchased under our $60 million accelerated share repurchase program initiated in November 2007 in May 2008.
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES Our primary source of revenue and cash flow is our operating activities in the United States and, to a lesser extent, the United Kingdom. When cash inflows are less than cash outflows, subject to their terms, we also have access to amounts under our U.S. Revolving Credit Agreement and U.K. Revolving Credit Agreement, each of which is described below. We may seek to finance future capital investment programs through various methods, including, but not limited to, cash flow from operations, borrowings under our current or additional credit facilities and sales of debt or equity securities.
Our liquidity requirements arise from the funding of our working capital needs, which include inventory and accounts receivable, other operating expenses, funding of capital expenditures, payment of quarterly dividends, periodic interest payments related to our financing arrangements and repayment of our indebtedness. Our product purchases are often facilitated by trade letters of credit which are drawn against our lines of credit at the time of shipment of the products and which reduce the amounts available under our lines of credit when issued.
The table below provides summary cash flow information (in thousands).

                                     First Quarter      First Quarter
                                      Fiscal 2009        Fiscal 2008

                 Net cash
                 provided by
                 operating
                 activities          $      2,530       $      36,246
                 Net cash used
                 in investing
                 activities                (3,771 )            (8,944 )
                 Net cash
                 provided by
                 (used in)
                 financing
                 activities                 6,209             (35,919 )

Cash and cash equivalents on hand was $8.4 million and $6.1 million at May 2, 2009 and May 3, 2008, respectively.
Operating Activities
During the first quarter of fiscal 2009 and the first quarter of fiscal 2008, our operations generated $2.5 million and $36.2 million of cash, respectively. The operating cash flows for both periods were primarily the result of earnings for the period, adjusted for non-cash activities such as depreciation, amortization and stock compensation expense as well as changes in our working capital accounts. In the first quarter of fiscal 2009, the significant changes in working capital from January 31, 2009 were a decrease in current liabilities and an increase in accounts receivable which were partially offset by a decrease in inventory, each of which is discussed below. In the first quarter of fiscal 2008, the

significant changes in working capital from February 2, 2008 included a decrease in inventory, partially offset by an increase in accounts receivable, each as discussed below.
Our working capital ratio, which is calculated by dividing total current assets by total current liabilities, was 2.06:1, 2.14:1 and 2.07:1 at May 2, 2009, January 31, 2009 and May 3, 2008, respectively.
Receivables were $93.8 million and $123.1 million at May 2, 2009 and May 3, 2008, respectively, representing a decrease of 23.8% which was primarily due to lower wholesale sales in the last two months of the first quarter of fiscal 2009 compared to the last two months of the first quarter of fiscal 2008.
Inventories were $103.3 million and $122.7 million at May 2, 2009 and May 3, 2008, respectively, representing a decrease of 15.8%. Inventory levels in Ben Sherman, Lanier Clothes and Oxford Apparel have each decreased as we have focused on mitigating inventory markdown risk and promotional pressure and have exited certain lines of businesses. Inventory levels in Tommy Bahama increased slightly in order to support the additional retail stores we are operating at May 2, 2009. Our days' supply of inventory on hand, using a FIFO basis, was 106 days and 103 days as of May 2, 2009 and May 3, 2008, respectively.
Prepaid expenses were $17.8 million and $18.0 million at May 2, 2009 and May 3, 2008, respectively.
Current liabilities were $108.4 million and $130.5 million at May 2, 2009 and May 3, 2008, respectively. The decrease in current liabilities was primarily due to reductions in payables related to inventory due to lower inventory levels, reductions in payables related to employment and other overhead costs and a reduction in interest payable due to our reduced debt levels at May 2, 2009, partially offset by an increase in current maturities of long-term debt.
Other non-current liabilities, which primarily consist of deferred rent and deferred compensation amounts, were $46.3 million and $54.2 million at May 2, 2009 and May 3, 2008, respectively. The decrease was primarily due to the decline in the market values of deferred compensation investments.
Non-current deferred income taxes were $31.4 million and $60.6 million at May 2, 2009 and May 3, 2008, respectively. The change primarily resulted from
(1) the impact of the impairment and amortization of certain intangible assets recognized in the fourth quarter of fiscal 2008, (2) the change in foreign currency exchange rates subsequent to May 3, 2008 and (3) changes in book to tax differences for depreciation and deferred compensation subsequent to May 3, 2008.
Investing Activities
During the first quarter of fiscal 2009, investing activities used $3.8 million of cash, consisting of capital expenditures related to new retail stores and costs associated with our implementation of a new integrated financial system, which is currently in process. During the first quarter of fiscal 2008, investing activities used $8.9 million of cash. These investing activities included $8.7 million of capital expenditures primarily related to new retail stores and restaurants.
Non-current assets, including property, plant and equipment, goodwill, intangible assets and other non-current assets, decreased from May 3, 2008 to May 2, 2009 primarily due to (1) the fiscal 2008 impairment and amortization of certain goodwill, intangible assets and investment in joint venture amounts,
(2) depreciation related to our property, plant and equipment, (3) decreases in the market values of deferred compensation investments and (4) amortization of deferred financing costs. These decreases were partially offset by capital expenditures subsequent to May 3, 2008, as discussed above. Financing Activities
During the first quarter of fiscal 2009, financing activities provided $6.2 million of cash. As cash flow from investing activities and the payment of the dividend for the first quarter of fiscal 2009 exceeded cash flow generated . . .