Cherokee Inc. Hires UBS Investment Bank to Explore Strategic Alternatives.

VAN NUYS, Calif. -- Cherokee Inc. (NASDAQ:CHKE), a leading licensor and global brand management company, announced today that it has retained UBS Investment Bank to assist its Board of Directors in considering possible strategic alternatives.

Robert Margolis, the Company's Chairman and Chief Executive Officer, said, "Our Board believes that this is an opportune time for us to explore alternatives for enhancing stockholder value and building upon our accomplishments in our businesses. As we participate in this process, we will continue to focus on ways of strengthening these businesses."

No decision has been made as to whether the Company will engage in a transaction or transactions resulting from the Board's consideration of strategic alternatives, and there can be no assurance that any transaction or transactions will occur or, if undertaken, the terms or timing thereof.

About Cherokee Inc.

Cherokee Inc., based in Van Nuys, California, is a marketer, licensor and manager of a variety of brands it owns and represents. Currently, Cherokee has licensing agreements in a number of categories, including family apparel, fashion accessories and footwear, as well as home furnishings and recreational products. Some of Cherokee's premiere clients around the world include Target Stores, May Department Stores, Sears Roebuck and Company, Mervyn's, TJX Companies, Hearst Publications and Solera Capital (U.S.), Zellers (Canada), Carrefour (selected countries in Europe and South America), Tesco (U.K., Ireland and selected other European and Asian countries), Grupo Aviara (Mexico) and Shanghai Bolderway (China).

Statements included within this news release that are not historical in nature constitute forward-looking statements for the purposes of the safe harbor provided by the Private Securities Litigation Reform Act of 1995. When used, the words "anticipates," "believes," "expects," "may," "should" and similar expressions are intended to identify such forward-looking statements. Forward-looking statements involve known and unknown risk and uncertainties that may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such risks and uncertainties, include, but are not limited to, the effect of national and regional economic conditions, the financial condition of the apparel industry and the retail industry, the overall level of consumer spending, the effect of intense competition in the industry in which the Company operates, adverse changes in licensee or consumer acceptance of products bearing the Company's brands as a result of fashion trends or otherwise, the ability and/or commitment of the Company's licensees to design, manufacture and market Cherokee and Sideout branded products, the Company's dependence on a single licensee for most of the Company's revenues, the Company's dependence on its key management personnel, and adverse determinations of claims, liabilities or litigations and the effect of a breach or termination by the Company of the management agreement with the Company's CEO. A further list and description of these risk, uncertainties and other matters can be found in the Company's Annual Report on Form 10-K for Fiscal Year 2004, and in its periodic reports on Forms 10-Q and 8-K (if any). Undue reliance should not be placed on the forward-looking statements contained herein because some or all of them may turn out to be wrong. The Company disclaims any intent or obligation to update any of the forward-looking statements contained herein to reflect future events and developments.