Cherokee Inc. Signs Exclusive Licensing Agreement With Genender International for Sideout Watches.

VAN NUYS, Calif.--(BUSINESS WIRE)--Aug. 31, 1998--Cherokee Inc. (Nasdaq:CHKE) Monday announced that it has entered into an exclusive three-year licensing agreement with Chicago-based Genender International Inc. to design, manufacture and sell products bearing the company's Sideout label on watches and related time products in the United States. Additional terms of the agreement were not disclosed.

Genender Vice President of Sales and Marketing Michael Pucci said Monday that he is pleased to add Sideout to his portfolio of diversified licenses. "Our strategy is for Sideout watches to be market specific," said Pucci. "Distribution will be focused and limited. This targeted strategy will enable Genender to introduce focused collections of special designs at reasonable price points.

"Each collection will be unique and created to meet the needs of designated retailers. Sideout is a versatile brand, and we see great opportunity for meeting the needs of major retailers with quality product, value pricing, and cross marketing opportunities," concluded Pucci. Genender expects to launch the Sideout brand in its stores in Spring 1999.

Howard Siegel, president of operations for Cherokee, said: "I am excited that Genender has become a partner with us in the development of the Sideout franchise. We expect their keen understanding of the watch industry coupled with their great fashion acumen to significantly enhance the Sideout brand."

"We are pleased to add Genender as a wholesale licensee to supplement our successful retail direct strategy," said Robert Margolis, chairman and chief executive officer of Cherokee. "We believe that retailers and consumers will all benefit by Genender's strong management team and acute understanding of the watch business.

"Our continued success with the Cherokee brand has proven that licensing certain specialized categories to wholesalers augments our retail direct strategy and is a formula for success," Margolis concluded.

Genender International is a privately owned, 59-year-old watch manufacturer and marketer, with headquarters in Chicago, and offices and showrooms in New York, the Far East and Switzerland.

Cherokee, based in Van Nuys, Calif., 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 and present and future licensing agreements relating to the Sideout brand. 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
               The Financial Relations Board, Los Angeles
               Haris Tajyar, General Information
               Moira Conlon, Investor Contact
               Michaelle Burstin, Media Contact
               310/442-0599