Cherokee Enters Into Sideout Licensing Agreement With Gart Sports/Sportmart.

VAN NUYS, Calif.--(BUSINESS WIRE)--July 23, 1998--Cherokee Inc. (Nasdaq:CHKE) Thursday announced that it has entered into a licensing agreement with Denver-based Gart Sports Co. for Cherokee's Sideout brand.

The multiyear agreement is for both Gart Sports and Sportmart stores and covers a wide range of categories for all genders and ages.

"The Sideout brand will be a great addition to our stores, and it gives us the ability to offer a quality brand with strong national recognition to our expanding customer base," said Tom Nelson, senior vice president of development and administration, Gart Sports.

"We are very pleased to have Gart Sports as a partner," said Stephen Ascher, founder of Sideout and executive vice president of Cherokee. "With their dominance in the sporting goods channel of distribution and their management and sourcing expertise, the Sideout brand will continue to expand its strong heritage as an actively inspired lifestyle brand."

"This agreement gives us an entree into a new channel of distribution with the Sideout brand and fits into our strategy of maximizing brands with limited partners," said Robert Margolis, chairman and chief executive officer of Cherokee. "The Sideout brand will be in over 1,000 stores across the United States.

"Adding this agreement and our other retail agreements with Mervyn's and Upton's, and our existing wholesale agreements, the foundation for the brand has been solidified while we continue to pursue new agreements both in the United States and internationally."

Gart Sports is the second largest full-line sporting goods retailer in the United States and the leading full-line sporting goods retailer in the Rocky Mountain region, with 1997 proforma combined revenues of approximately $700 million.

The company offers a comprehensive, high-quality assortment of brand name sporting apparel and equipment at competitive prices, and operates 122 stores in 16 states under the Gart Sports and Sportmart names.

Cherokee, based in Van Nuys, a marketer and licenser of Cherokee and Sideout brand products, is continuing its negotiations for licensing contracts covering multiple categories of merchandise. Cherokee currently has licensing agreements in several categories, including family apparel, fashion accessories, home textiles including linens, as well as luggage, cosmetics and footwear.

For more information on Cherokee by facsimile at no cost, call 800/PRO-INFO and enter dial code "CHKE."

This release contains certain forward-looking statements regarding the development of the Sideout brand, present and future licensing agreements relating to the Sideout brand and international expansion.

Such statements are subject to risks and uncertainties, including but not limited to, a downturn in the apparel industry or national or international economies, the failure of the company's licensees to successfully design, manufacture and sell products bearing the company's brands and to respond to ever changing consumer demands, and the effectiveness of the company's efforts to develop and market the Sideout brand and to attract additional licensees.

Actual results could vary materially from these statements or current trends. Investors should refer to Cherokee's filings with the Securities and Exchange Commission, including forms 10-K and 10-Q, for a fuller description of risk factors.

    CONTACT: Cherokee Inc., Van Nuys
              Carol Gratzke, 818/908-9868
                        or
              Financial Relations Board, Los Angeles
              Haris Tajyar, 310/442-0599