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CHEROKEE ANNOUNCES SIX-MONTH OPERATING RESULTS

 SUNLAND, Calif., Jan. 15 /PRNewswire/ -- Cherokee Inc. (NASDAQ: CHKE) reported today sales of $73,134,000, operating income of $357,000 and net loss applicable to common stock of $9,328,000, or $1.07 per share, for the six months ended Nov. 28, 1992. During the six months ended Nov. 30, 1991, sales were $97,369,000, operating income was $11,667,000 and net loss applicable to common stock was $1,362,000, or $.16 per share.
 For its second quarter which ended Nov. 28, 1992, sales were $32,150,000, the operating loss was $747,000 and the loss applicable to common stock was $5,045,000, or $.58 per share. This compares with sales of $43,524,000, operating income of $4,215,000 and a loss applicable to common stock of $1,426,000, or $.16 per share, for the second quarter of fiscal 1992.
 Robert Margolis, co-chairman and chief executive officer, said that "We believe our business will improve in our February and May quarters. In addition, we are optimistic that we will be able to complete the previously announced restructuring of our balance sheet. This will provide the company with a strong financial base and will dramatically reduce our interest expense."
 As previously announced, Cherokee has reached an agreement in principle with a majority of the holders of its Senior Subordinated Reset Notes due 1999 ("notes") to restructure their debt, pursuant to which the note holders would exchange their claim of $113.4 million of principal and accrued interest for approximately $52.5 million of new senior subordinated notes and more than a majority of the common stock of The Cherokee Group. The restructuring contemplates that the holders of the company's other subordinated debt and preferred stocks will also exchange their holdings for equity in the restructured company.
 Cherokee is a designer, manufacturer and marketer of casual apparel and footwear under the Cherokee brand other brand names. The company also licenses its brand names to 24 domestic and international licensees for a variety of apparel, footwear, accessories and other products.
 CHEROKEE INC.
 Financial Summary
 (In thousands except per share data)
 Three months ended Six months ended
 Nov. 28, Nov. 30, Nov. 28, Nov. 30,
 1992 1991 1992 1991
 Net sales $32,150 $43,524 $73,134 $97,369
 Operating income
 (loss)(A) (747) 4,215 357 11,667
 Other expenses(B) 6,493 6,695 12,868 13,423
 Loss before income
 tax benefit (7,240) (2,480) (12,511) (1,756)
 Income tax benefit (2,463) (1,297) (3,715) (878)
 Net loss applicable
 to common stock(C) (5,045) (1,426) (9,328) (1,362)
 Net loss per share(C) ($.58) ($.16) ($1.07) ($.16)
 Average shares
 outstanding 8,743,013 8,732,922 8,699,747 8,581,823
 (A) After the non-cash charge for amortization of trademarks and goodwill of $632,000 and $634,000 in the three months ended Nov. 28, 1992, and Nov. 30, 1991, respectively, and $1,265,000 in the six months ended Nov. 28, 1992 and Nov. 30, 1991.
 (B) Primarily interest, except in the three and six months ended Nov. 28, 1992, which includes $327,000 of expenses related to the proposed restructuring of the company.
 (C) After preferred dividends of $268,000 and $243,000 in the three months ended Nov. 28, 1992, and Nov. 30, 1991, respectively, and of $532,000 and $484,000 in the six months ended Nov. 28, 1992, and Nov. 30, 1991, respectively.
 Balance Sheet Data
 (In thousands)
 Nov. 28, 1992
 Assets
 Cash and cash equivalents $5,307
 Receivables, net 17,757
 Inventories 36,746
 Other current assets 2,730
 Property, plant & equipment, net 20,313
 Intangibles 112,899
 Other assets 2,234
 Total assets $197,986
 Liabilities and
 Stockholders' Deficit
 Short-term revolving credit $2,249
 Current maturities of
 long-term debt 467
 Accounts payable and accrued
 expenses and liabilities 17,433
 Bank borrowings 20,976
 Senior subordinated reset notes 105,250
 Senior subordinated debentures 26,462
 Long-term debt net of
 current maturities 4,278
 Other liabilities 13,593
 Total liabilities 190,708
 Redeemable preferred stock 15,418
 Common stockholders' deficit (8,140)
 Total liabilities and
 common stockholders' deficit $197,986
 -0- 1/15/93
 /CONTACT: Cary Cooper, CFO of Cherokee, 818-951-1002, ext. 200/
 (CHKE)


CO: Cherokee Inc. ST: California IN: TEX SU: ERN

JL-KJ -- LA002 -- 5218 01/15/93 08:46 EST
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Date:Jan 15, 1993
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