FORM 10-Q
Table of Contents

 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
     
þ   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended MAY 2, 2009
or
     
o   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                      to                     
Commission File Number: 1-4365
OXFORD INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
     
Georgia   58-0831862
     
(State or other jurisdiction of incorporation or organization)   (I.R.S. Employer Identification No.)
222 Piedmont Avenue, N.E., Atlanta, Georgia 30308
(Address of principal executive offices) (Zip Code)
(404) 659-2424
(Registrant’s telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
     Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No ¨
     Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ¨ No ¨
     Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
     Large accelerated filer o Accelerated filer þ  Non-accelerated filer o
(Do not check if a smaller reporting company)
Smaller reporting company o
     Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No þ
     Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
         
    Number of shares outstanding  
Title of each class   as of June 5, 2009  
Common Stock, $1 par value
    16,053,414  
 
 

 


 

OXFORD INDUSTRIES, INC.
INDEX TO FORM 10-Q
For the first quarter of fiscal 2009
         
    Page
       
 
       
       
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    22  
    22  
    23  
 EX-31.1
 EX-31.2
 EX-32

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CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING STATEMENTS
     Our SEC filings and public announcements may include forward-looking statements about future events. Generally, the words “believe,” “expect,” “intend,” “estimate,” “anticipate,” “project,” “will” and similar expressions identify forward-looking statements, which generally are not historical in nature. We intend for all forward-looking statements contained herein, in our press releases or on our website, and all subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf, to be covered by the safe harbor provisions for forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and the provisions of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 (which Sections were adopted as part of the Private Securities Litigation Reform Act of 1995). Important assumptions relating to these forward-looking statements include, among others, assumptions regarding the duration and severity of the current economic conditions and the impact on consumer demand and spending, access to capital and/or credit markets, particularly in light of recent conditions in those markets, demand for our products, timing of shipments requested by our wholesale customers, expected pricing levels, competitive conditions, the timing and cost of planned capital expenditures, expected synergies in connection with acquisitions and joint ventures, costs of products and raw materials we purchase, expected outcomes of pending or potential litigation and regulatory actions and disciplined execution by key management. Forward-looking statements reflect our current expectations, based on currently available information, and are not guarantees of performance. Although we believe that the expectations reflected in such forward-looking statements are reasonable, these expectations could prove inaccurate as such statements involve risks and uncertainties, many of which are beyond our ability to control or predict. Should one or more of these risks or uncertainties, or other risks or uncertainties not currently known to us or that we currently deem to be immaterial, materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated or projected. Important factors relating to these risks and uncertainties include, but are not limited to, those described in Part I, Item 1A. Risk Factors contained in our Annual Report on Form 10-K for fiscal 2008, as updated by Part II, Item 1A. Risk Factors in this report and those described from time to time in our future reports filed with the SEC.
     We caution that one should not place undue reliance on forward-looking statements, which speak only as of the date on which they are made. We disclaim any intention, obligation or duty to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
DEFINITIONS
     Unless the context requires otherwise, the following terms have the following meanings:
Our, us or we: Oxford Industries, Inc. and its consolidated subsidiaries
SG&A: Selling, general and administrative expenses
SEC: U.S. Securities and Exchange Commission
FASB: Financial Accounting Standards Board
SFAS: Statement of Financial Accounting Standards
EITF: Emerging Issues Task Force
     
Fiscal 2010
  52 weeks ending January 29, 2011
Fiscal 2009
  52 weeks ending January 30, 2010
Fiscal 2008
  52 weeks ended January 31, 2009
Fourth quarter fiscal 2009
  13 weeks ending January 30, 2010
Third quarter fiscal 2009
  13 weeks ending October 31, 2009
Second quarter fiscal 2009
  13 weeks ending August 1, 2009
First quarter fiscal 2009
  13 weeks ended May 2, 2009
Fourth quarter fiscal 2008
  13 weeks ended January 31, 2009
Third quarter fiscal 2008
  13 weeks ended November 1, 2008
Second quarter fiscal 2008
  13 weeks ended August 2, 2008
First quarter fiscal 2008
  13 weeks ended May 3, 2008

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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
OXFORD INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(in thousands, except per share amounts)
                 
    First Quarter     First Quarter  
    Fiscal 2009     Fiscal 2008  
     
Net sales
  $ 216,731     $ 272,942  
Cost of goods sold
    126,960       156,633  
 
           
Gross profit
    89,771       116,309  
SG&A
    78,683       99,634  
Amortization of intangible assets
    308       788  
 
           
 
    78,991       100,422  
 
               
Royalties and other operating income
    2,469       4,188  
 
           
Operating income
    13,249       20,075  
Interest expense, net
    4,565       6,332  
 
           
Earnings before income taxes
    8,684       13,743  
Income taxes
    2,172       4,226  
 
           
Net earnings
  $ 6,512     $ 9,517  
 
           
 
               
Net earnings per common share:
               
Basic
  $ 0.42     $ 0.60  
Diluted
  $ 0.42     $ 0.59  
Weighted average common shares outstanding:
               
Basic
    15,519       15,981  
Dilution
    26       104  
 
           
Diluted
    15,545       16,085  
 
           
 
               
Dividends declared per common share
  $ 0.09     $ 0.18  
See accompanying notes.

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OXFORD INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(in thousands, except par amounts)
                         
    May 2,     January 31,     May 3,  
    2009     2009     2008  
     
ASSETS
                       
Current Assets:
                       
Cash and cash equivalents
  $ 8,386     $ 3,290     $ 6,095  
Receivables, net
    93,795       78,567       123,121  
Inventories, net
    103,255       129,159       122,688  
Prepaid expenses
    17,761       17,273       18,002  
 
                 
Total current assets
    223,197       228,289       269,906  
Property, plant and equipment, net
    88,311       89,026       96,255  
Goodwill, net
                257,926  
Intangible assets, net
    136,454       135,999       230,149  
Other non-current assets, net
    19,970       20,180       30,492  
 
                 
Total Assets
  $ 467,932     $ 473,494     $ 884,728  
 
                 
LIABILITIES AND SHAREHOLDERS’ EQUITY
                       
Current Liabilities:
                       
Trade accounts payable and other accrued expenses
  $ 70,685     $ 87,723     $ 94,312  
Accrued compensation
    9,907       14,027       14,501  
Dividends payable
                2,954  
Income taxes payable
    2,351             4,081  
Short-term debt and current maturities of long-term debt
    25,479       5,083       14,614  
 
                 
Total current liabilities
    108,422       106,833       130,462  
Long-term debt, less current maturities
    181,501       194,187       224,459  
Other non-current liabilities
    46,304       47,244       54,213  
Non-current deferred income taxes
    31,423       32,111       60,570  
Commitments and contingencies
                       
Shareholders’ Equity:
                       
Common stock, $1.00 par value; 60,000 authorized and 16,057 issued and outstanding at May 2, 2009; 15,866 issued and outstanding at January 31, 2009; and 16,410 issued and outstanding at May 3, 2008
    16,057       15,866       16,410  
Additional paid-in capital
    89,041       88,425       85,760  
Retained earnings
    21,516       16,433       299,773  
Accumulated other comprehensive income (loss)
    (26,332 )     (27,605 )     13,081  
 
                 
Total shareholders’ equity
    100,282       93,119       415,024  
 
                 
Total Liabilities and Shareholders’ Equity
  $ 467,932     $ 473,494     $ 884,728  
 
                 
See accompanying notes.

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OXFORD INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(in thousands)
                 
    First Quarter     First Quarter  
    Fiscal 2009     Fiscal 2008  
Cash Flows From Operating Activities:
               
Net earnings
  $ 6,512     $ 9,517  
Adjustments to reconcile net earnings to net cash provided by operating activities:
               
Depreciation
    4,623       4,786  
Amortization of intangible assets
    308       788  
Amortization of deferred financing costs and bond discount
    335       654  
Stock compensation expense
    671       639  
Loss on sale of property, plant and equipment
    28       184  
Equity method investment income
    (202 )     (324 )
Deferred income taxes
    (594 )     (597 )
Changes in working capital:
               
Receivables
    (14,759 )     (17,366 )
Inventories
    26,359       36,257  
Prepaid expenses
    (678 )     879  
Current liabilities
    (19,255 )     (2,515 )
Other non-current assets
    111       41  
Other non-current liabilities
    (929 )     3,303  
 
           
Net cash provided by operating activities
    2,530       36,246  
Cash Flows From Investing Activities:
               
Investments in unconsolidated entities
          (222 )
Purchases of property, plant and equipment
    (3,771 )     (8,722 )
 
           
Net cash used in investing activities
    (3,771 )     (8,944 )
Cash Flows From Financing Activities:
               
Repayment of financing arrangements
    (63,373 )     (76,228 )
Proceeds from financing arrangements
    70,875       42,941  
Proceeds from issuance of common stock
    137       257  
Dividends on common stock
    (1,430 )     (2,889 )
 
           
Net cash provided by (used in) financing activities
    6,209       (35,919 )
 
           
Net change in cash and cash equivalents
    4,968       (8,617 )
Effect of foreign currency translation on cash and cash equivalents
    128       (200 )
Cash and cash equivalents at the beginning of year
    3,290       14,912  
 
           
Cash and cash equivalents at the end of period
  $ 8,386     $ 6,095  
 
           
Supplemental disclosure of cash flow information:
               
Cash paid for interest, net
  $ 514     $ 1,525  
Cash paid for income taxes
  $ 580     $ 734  
See accompanying notes.

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OXFORD INDUSTRIES, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FIRST QUARTER OF FISCAL 2009
1.   Basis of Presentation: The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial reporting and the instructions of Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States. We believe the accompanying unaudited condensed consolidated financial statements reflect all normal, recurring adjustments that are necessary for a fair presentation of our financial position and results of operations as of the date and for the periods presented. Results of operations for the interim periods presented are not necessarily indicative of results to be expected for our fiscal year. The accounting policies applied during the interim periods presented are consistent with the significant accounting policies described in our Annual Report on Form 10-K for fiscal 2008.
 
    Recently Adopted Standards:
 
    In December 2007, the FASB issued SFAS No. 141(Revised), “Business Combinations” (“SFAS 141R”). SFAS 141R is required to be adopted in fiscal 2009. SFAS 141R provides guidance for accounting for acquisitions subsequent to the date of adoption. SFAS 141R requires that (1) 100% of the fair value of acquired assets and liabilities, with limited exceptions, be recognized even if the acquiror has not acquired 100% of the acquired entity, (2) contingent consideration is recorded at estimated fair value on the date of acquisition rather than being recognized as earned, (3) transaction costs are expensed as incurred rather than being capitalized as part of the fair value of the acquired entity, (4) pre-acquisition contingencies be recorded at the estimated fair value on the date of acquisition, (5) the criteria for accruing for a restructuring plan must be met as of the date of acquisition and (6) acquired research and development value is not expensed but instead is capitalized as an indefinite-lived intangible asset, subject to periodic impairment testing. We adopted SFAS 141R in the first quarter of fiscal 2009. As we did not complete any business combinations in the first quarter of fiscal 2009, there was no impact on the financial statements for that period. We expect that SFAS 141R will have an impact on our accounting for future business combinations.
 
    In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements” (“SFAS 157”), which defines fair value, establishes a framework for measuring fair value in accordance with accounting principles generally accepted in the United States, and expands disclosures about fair value measurements. SFAS 157, as amended, was effective for us on February 3, 2008 for all financial assets and liabilities and for nonfinancial assets and liabilities recognized or disclosed at fair value in our condensed consolidated financial statements on a recurring basis (at least annually). For all other nonfinancial assets and liabilities, SFAS 157 was effective for us on February 1, 2009. The adoption of SFAS 157 in the first quarter of fiscal 2009 did not have a material impact on our condensed consolidated financial statements.
 
    In June 2008, the FASB issued FSP Emerging Issues Task Force (EITF) 03-6-1, “Determining Whether Instruments Granted in Share-Based Payment Transactions are Participating Securities” (“FSP EITF 03-6-1”). FSP EITF 03-6-1 clarifies that unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and are to be included in the computation of earnings per share under the two-class method described in SFAS No. 128, “Earnings Per Share.” FSP EITF 03-6-1 was effective for us on February 1, 2009 and requires all prior-period earnings per share data that is presented to be adjusted retrospectively. The adoption of FSP EITF 03-6-1 did not have a material impact on our condensed consolidated financial statements in the first quarter of fiscal 2009. Less than $0.1 million of dividends related to unvested shares were paid in the first quarter of fiscal 2009 and the first quarter of fiscal 2008.
 
2.   Inventories: The components of inventories as of the dates specified are summarized as follows (in thousands):
                         
    May 2,   January 31,   May 3,
    2009   2009   2008
     
Finished goods
  $ 124,651     $ 146,200     $ 139,671  
Work in process
    4,283       6,440       8,322  
Fabric, trim and supplies
    6,719       8,917       14,509  
LIFO reserve
    (32,398 )     (32,398 )     (39,814 )
     
Total
  $ 103,255     $ 129,159     $ 122,688  
     

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3.   Comprehensive Income: Comprehensive income, which reflects the effects of foreign currency translation adjustments, is calculated as follows for the periods presented (in thousands):
                 
    First Quarter   First Quarter
    Fiscal 2009   Fiscal 2008
     
Net earnings
  $ 6,512     $ 9,517  
Gain on foreign currency translation, net of tax
    1,273       18  
     
Comprehensive income
  $ 7,785     $ 9,535  
     
4.   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. Corporate and Other is a reconciling category for reporting purposes and includes our corporate offices, substantially all financing activities, LIFO inventory accounting adjustments and other costs that are not allocated to the operating groups. Corporate and Other includes a LIFO reserve of $32.4 million, $32.4 million and $39.8 million as of May 2, 2009, January 31, 2009 and May 3, 2008, respectively.
 
         The table below presents certain information about our operating groups (in thousands).
                 
    First Quarter Fiscal 2009   First Quarter Fiscal 2008
     
Net Sales
               
Tommy Bahama
  $ 98,420     $ 129,258  
Ben Sherman
    24,219       36,587  
Lanier Clothes
    31,507       38,687  
Oxford Apparel
    63,204       68,684  
Corporate and Other
    (619 )     (274 )
     
Total
  $ 216,731     $ 272,942  
     
 
               
Depreciation
               
Tommy Bahama
  $ 3,662     $ 3,724  
Ben Sherman
    555       592  
Lanier Clothes
    145       189  
Oxford Apparel
    204       227  
Corporate and Other
    57       54  
     
Total
  $ 4,623     $ 4,786  
     
 
               
Amortization of Intangible Assets
               
Tommy Bahama
  $ 222     $ 355  
Ben Sherman
    76       361  
Lanier Clothes
          30  
Oxford Apparel
    10       42  
     
Total
  $ 308     $ 788  
     
 
               
Operating Income (loss)
               
Tommy Bahama
  $ 12,250     $ 19,483  
Ben Sherman
    (1,976 )     255  
Lanier Clothes
    2,737       (21 )
Oxford Apparel
    5,193       5,325  
Corporate and Other
    (4,955 )     (4,967 )
     
Total Operating Income (loss)
  $ 13,249     $ 20,075  
Interest Expense, net
    4,565       6,332  
     
Earnings Before Income Taxes
  $ 8,684     $ 13,743  
     

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    May 2, 2009   January 31, 2009   May 3, 2008
     
Assets
                       
Tommy Bahama
  $ 282,586     $ 283,427     $ 525,343  
Ben Sherman
    72,052       74,114       202,511  
Lanier Clothes
    48,938       49,988       80,016  
Oxford Apparel
    74,568       72,731       92,363  
Corporate and Other
    (10,212 )     (6,766 )     (15,505 )
     
Total
  $ 467,932     $ 473,494     $ 884,728  
     
5.   Consolidating Financial Data of Subsidiary Guarantors: Our Senior Unsecured Notes are guaranteed by substantially all of our wholly-owned domestic subsidiaries (“Subsidiary Guarantors”). All guarantees are full and unconditional. For consolidated financial reporting purposes, non-guarantors consist of our subsidiaries which are organized outside the United States and certain domestic subsidiaries. We use the equity method of accounting with respect to investment in subsidiaries included in other non-current assets in our condensed consolidating financial statements. Set forth below are our condensed consolidating balance sheets as of May 2, 2009, January 31, 2009 and May 3, 2008 (in thousands) as well as our condensed consolidating statements of operations and statements of cash flows for the first quarter of fiscal 2009 and the first quarter of fiscal 2008 (in thousands).
OXFORD INDUSTRIES, INC.
UNAUDITED CONDENSED CONSOLIDATING BALANCE SHEETS
May 2, 2009
                                         
    Oxford                
    Industries   Subsidiary   Subsidiary   Consolidating   Consolidated
    (Parent)   Guarantors   Non-Guarantors   Adjustments   Total
     
ASSETS
Cash and cash equivalents
  $ 2,034     $ 2,070     $ 4,282     $     $ 8,386  
Receivables, net
    45,608       22,950       33,594       (8,357 )     93,795  
Inventories
    27,351       67,411       10,471       (1,978 )     103,255  
Prepaid expenses
    5,101       8,121       4,691       (152 )     17,761  
     
Total current assets
    80,094       100,552       53,038       (10,487 )     223,197  
Property, plant and equipment, net
    9,486       72,953       5,872             88,311  
Intangible assets, net
    57       113,838       22,559             136,454  
Other non-current assets, net
    461,904       145,896       35,271       (623,101 )     19,970  
     
Total Assets
  $ 551,541     $ 433,239     $ 116,740     $ (633,588 )   $ 467,932  
     
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
  $ 49,353     $ 32,550     $ 34,877     $ (8,358 )   $ 108,422  
Long-term debt, less current portion
    181,501                         181,501  
Non-current liabilities
    223,892       (176,134 )     107,701       (109,155 )     46,304  
Non-current deferred income taxes
    (3,487 )     28,563       6,347             31,423  
Total shareholders’/invested equity
    100,282       548,260       (32,185 )     (516,075 )     100,282  
     
Total Liabilities and Shareholders’ Equity
  $ 551,541     $ 433,239     $ 116,740     $ (633,588 )   $ 467,932  
     

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OXFORD INDUSTRIES, INC.
CONDENSED CONSOLIDATING BALANCE SHEETS
January 31, 2009
                                         
    Oxford                          
    Industries     Subsidiary     Subsidiary     Consolidating     Consolidated  
    (Parent)     Guarantors     Non-Guarantors     Adjustments     Total  
ASSETS
Cash and cash equivalents
  $ 1,527     $ 104     $ 1,659     $     $ 3,290  
Receivables, net
    28,842       11,407       45,529       (7,211 )     78,567  
Inventories
    44,469       71,509       15,475       (2,294 )     129,159  
Prepaid expenses
    6,009       8,735       2,529             17,273  
     
Total current assets
    80,847       91,755       65,192       (9,505 )     228,289  
Property, plant and equipment, net
    9,025       74,804       5,197             89,026  
Intangible assets, net
    67       114,060       21,872             135,999  
Other non-current assets, net
    453,615       145,954       35,275       (614,664 )     20,180  
     
Total Assets
  $ 543,554     $ 426,573     $ 127,536     $ (624,169 )   $ 473,494  
     
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
    41,793       23,027       49,185       (7,172 )     106,833  
Long-term debt, less current portion
    194,187                         194,187  
Non-current liabilities
    218,200       (167,950 )     106,144       (109,150 )     47,244  
Deferred income taxes
    (3,745 )     29,607       6,249             32,111  
Total shareholders’/invested equity
    93,119       541,889       (34,042 )     (507,847 )     93,119  
     
Total Liabilities and Shareholders’ Equity
  $ 543,554     $ 426,573     $ 127,536     $ (624,169 )   $ 473,494  
     
OXFORD INDUSTRIES, INC.
CONDENSED CONSOLIDATING BALANCE SHEETS
May 3, 2008
                                         
    Oxford                
    Industries   Subsidiary   Subsidiary   Consolidating   Consolidated
    (Parent)   Guarantors   Non-Guarantors   Adjustments   Total
     
ASSETS
Cash and cash equivalents
  $ 759     $ 1,229     $ 4,108     $ (1 )   $ 6,095
Receivables, net
    55,847       51,387       24,800       (8,913 )     123,121
Inventories
    46,103       64,861       13,054       (1,330 )     122,688
Prepaid expenses
    5,702       7,578       4,722             18,002
     
Total current assets
    108,411       125,055       46,684       (10,244 )     269,906
Property, plant and equipment, net
    8,569       80,991       6,695             96,255
Goodwill, net
    1,847       168,932       87,147             257,926
Intangible assets, net
    1,195       134,461       94,493             230,149
Other non-current assets, net
    831,972       150,244       70,663       (1,022,387 )     30,492
     
Total Assets
  $ 951,994     $ 659,683     $ 305,682     $ (1,032,631 )   $ 884,728
     
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
  $ 55,737     $ 58,621     $ 24,643     $ (8,539 )   $ 130,462
Long-term debt, less current portion
    224,459                         224,459
Non-current liabilities
    261,129       (208,542 )     111,061       (109,435 )     54,213
Non-current deferred income taxes
    (4,355 )     38,378       26,259       288       60,570
Total shareholders’/invested equity
    415,024       771,226       143,719       (914,945 )     415,024
     
Total Liabilities and Shareholders’ Equity
  $ 951,994     $ 659,683     $ 305,682     $ (1,032,631 )   $ 884,728
     

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OXFORD INDUSTRIES, INC.
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
First Quarter Fiscal 2009
                                         
    Oxford                          
    Industries     Subsidiary     Subsidiary     Consolidating     Consolidated  
    (Parent)     Guarantors     Non-Guarantors     Adjustments     Total  
Net sales
  $ 92,793     $ 108,065     $ 25,285     $ (9,412 )   $ 216,731  
Cost of goods sold
    74,669       45,964       10,788       (4,461 )     126,960  
     
Gross profit
    18,124       62,101       14,497       (4,951 )     89,771  
SG&A including amortization of intangible assets
    13,987       57,034       13,979       (6,009 )     78,991  
Royalties and other income
    13       2,219       980       (743 )     2,469  
     
Operating income
    4,150       7,286       1,498       315       13,249  
Interest (income) expense, net
    4,956       (1,347 )     956             4,565  
Income (loss) from equity investment
    6,956                   (6,956 )      
     
Earnings (loss) before income taxes
    6,150       8,633       542       (6,641 )     8,684  
Income taxes (benefit)
    (159 )     2,263       (42 )     110       2,172  
     
Net earnings (loss)
  $ 6,309     $ 6,370     $ 584     $ (6,751 )   $ 6,512  
     
OXFORD INDUSTRIES, INC.
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
First Quarter Fiscal 2008
                                         
    Oxford                
    Industries   Subsidiary   Subsidiary   Consolidating   Consolidated
    (Parent)   Guarantors   Non-Guarantors   Adjustments   Total
     
Net sales
  $ 105,376     $ 138,777     $ 40,406     $ (11,617 )   $ 272,942
Cost of goods sold
    83,262       61,930       16,550       (5,109 )     156,633
     
Gross profit
    22,114       76,847       23,856       (6,508 )     116,309
SG&A including amortization of intangible assets
    19,999       66,740       20,585       (6,902 )     100,422
Royalties and other income
    29       2,911       1,710       (462 )     4,188
     
Operating income
    2,144       13,018       4,981       (68 )     20,075
Interest (income) expense, net
    7,016       (3,009 )     2,325             6,332
Income (loss) from equity investment
    13,126                   (13,126 )    
     
Earnings (loss) before income taxes
    8,254       16,027       2,656       (13,194 )     13,743
Income taxes (benefit)
    (1,306 )     4,983       573       (24 )     4,226
     
Net earnings (loss)
  $ 9,560     $ 11,044     $ 2,083     $ (13,170 )   $ 9,517
     

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OXFORD INDUSTRIES, INC.
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
First Quarter Fiscal 2009
                                         
    Oxford                          
    Industries     Subsidiary     Subsidiary     Consolidating     Consolidated  
    (Parent)     Guarantors     Non-Guarantors     Adjustments     Total  
Cash Flows From Operating Activities:
                                       
Net cash (used in) provided by operating activities
  $ (11,894 )   $ 12,187     $ 2,241     $ (4 )   $ 2,530  
Cash Flows from Investing Activities:
                                       
Purchases of property, plant and equipment
    (835 )     (2,007 )     (929 )           (3,771 )
     
Net cash (used in) provided by investing activities
    (835 )     (2,007 )     (929 )           (3,771 )
Cash Flows from Financing Activities:
                                       
Change in debt
    7,793             (291 )           7,502  
Proceeds from issuance of common stock
    137                         137  
Change in intercompany payable
    6,736       (8,214 )     1,474       4        
Dividends on common stock
    (1,430 )                       (1,430 )
     
Net cash (used in) provided by financing activities
    13,236       (8,214 )     1,183       4       6,209  
     
Net change in Cash and Cash Equivalents
    507       1,966       2,495             4,968  
Effect of foreign currency translation
                128             128  
Cash and Cash Equivalents at the Beginning of Year
    1,527       104       1,659             3,290  
     
Cash and Cash Equivalents at the End of Period
  $ 2,034     $ 2,070     $ 4,282     $     $ 8,386  
     
First Quarter Fiscal 2008
                                         
    Oxford                
    Industries   Subsidiary   Subsidiary   Consolidating   Consolidated
    (Parent)   Guarantors   Non-Guarantors   Adjustments   Total
     
Cash Flows From Operating Activities:
                                       
Net cash (used in) provided by operating activities
  $ 15,096     $ 21,851     $ (984 )   $ 283     $ 36,246  
Cash Flows from Investing Activities:
                                       
Investment in unconsolidated entity
          (222 )                 (222 )
Purchases of property, plant and equipment
    (1,043 )     (7,446 )     (233 )           (8,722 )
     
Net cash (used in) provided by investing activities
    (1,043 )     (7,668 )     (233 )           (8,944 )
Cash Flows from Financing Activities:
                                       
Change in debt
    (33,399 )     (1 )     113             (33,287 )
Proceeds from issuance of common stock
    257                         257  
Change in inter-company payable
    14,679       (14,003 )     (392 )     (284 )      
Dividends on common stock
    3,069             (5,958 )           (2,889 )
     
Net cash (used in) provided by financing activities
    (15,394 )     (14,004 )     (6,237 )     (284 )     (35,919 )
     
Net change in Cash and Cash Equivalents
    (1,341 )     179       (7,454 )     (1 )     (8,617 )
Effect of foreign currency translation
                (200 )           (200 )
Cash and Cash Equivalents at the Beginning of Period
    2,100       1,050       11,762             14,912  
     
Cash and Cash Equivalents at the End of Period
  $ 759     $ 1,229     $ 4,108     $ (1 )   $ 6,095  
     

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
     The following discussion and analysis should be read in conjunction with our unaudited condensed consolidated financial statements and the notes to the unaudited condensed consolidated financial statements contained in this report and the consolidated financial statements, notes to consolidated financial statements and Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our Annual Report on Form 10-K for fiscal 2008.
     We generate revenues and cash flow primarily through the design, production, sale and distribution of branded and private label consumer apparel for men, women and children and the licensing of company-owned trademarks. Our principal markets and customers are located in the United States and, to a lesser extent, the United Kingdom. We source substantially all of our products through third-party producers located outside of the United States and United Kingdom. We distribute the majority of our products through our wholesale customers, which include chain stores, department stores, specialty stores, specialty catalog retailers, mass merchants and Internet retailers. We also sell products of certain owned brands through our owned and licensed retail stores and e-commerce websites.
     As we anticipated, the challenging conditions impacting the retail and apparel industry in fiscal 2008 have continued into fiscal 2009. We expect that these challenging economic conditions will continue to impact each of our operating groups through fiscal 2009 and perhaps beyond. In the current economic environment, we believe it is important that we continue to focus on maintaining a healthy balance sheet and sufficient liquidity by reducing working capital requirements, moderating our capital expenditures for future retail stores and reducing our overhead.
     Diluted net earnings per common share were $0.42 in the first quarter of fiscal 2009 compared to diluted net earnings per common share of $0.59 in the first quarter of fiscal 2008. Net sales across all operating groups declined from the first quarter of fiscal 2008 primarily due to the impact of the current economic conditions. Additionally, for Ben Sherman, net sales were impacted by the change in the average exchange rate between the British pound sterling and the United States dollar and, for Lanier Clothes and Oxford Apparel, net sales were impacted by our exit from certain businesses in the second half of fiscal 2008. The decrease in net sales was partially offset by reductions in SG&A in all operating groups as we continue to focus on streamlining our ongoing operations in all operating groups. See the discussion below for net sales and operating income results for each operating group.
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 )%
 
                 

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    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

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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.

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     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

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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

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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 from operating activities, it was necessary to borrow additional funds under our revolving credit agreements during the first quarter of 2009.
     During the first quarter of fiscal 2008, financing activities used $35.9 million of cash as excess cash flow from operations was used to repay amounts outstanding under our credit facilities. Additionally, $2.9 million of dividends were paid during the first quarter of fiscal 2008.

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     Debt, including short-term debt, was $207.0 million and $239.1 million as of May 2, 2009 and May 3, 2008, respectively. The decrease in debt from the prior year was primarily due to cash flow from operating activities resulting from lower working capital positions subsequent to May 3, 2008, which exceeded cash requirements for investing and financing activities.
Liquidity and Capital Resources
     The table below provides a description of our significant financing arrangements and the amounts outstanding under these financing arrangements (in thousands) as of May 2, 2009:
         
    May 2, 2009  
$175 million U.S. Secured Revolving Credit Facility (“U.S. Revolving Credit Agreement”), which is limited to a borrowing base consisting of specified percentages of eligible categories of assets, accrues interest (2.57% at May 2, 2009), unused line fees and letter of credit fees based upon a pricing grid which is tied to average unused availability, requires interest payments monthly with principal due at maturity (August 2013) and is secured by a first priority security interest in the accounts receivable (other than royalty payments in respect of trademark licenses), inventory, investment property (including the equity interests of certain subsidiaries), general intangibles (other than trademarks, trade names and related rights), deposit accounts, intercompany obligations, equipment, goods, documents, contracts, books and records and other personal property of Oxford Industries, Inc. and its consolidated domestic subsidiaries (1)(2)
  $ 35,515  
£12 million Senior Secured Revolving Credit Facility (“U.K. Revolving Credit Agreement”), which accrues interest at the bank’s base rate plus 1.35% (1.85% at May 2, 2009), requires interest payments monthly with principal payable on demand and is collateralized by substantially all of the United Kingdom assets of Ben Sherman
    4,964  
Senior Unsecured Notes (“Senior Unsecured Notes”), which accrue interest at 8.875% (effective interest rate of 9.0%) and require interest payments semi-annually on June 1 and December 1 of each year, require payment of principal at maturity (June 2011), are subject to certain prepayment penalties as discussed below and are guaranteed by certain of our domestic subsidiaries
    166,805  
Unamortized discount on Senior Unsecured Notes
    (304 )
 
     
Total debt
    206,980  
Short-term debt and current maturities of long-term debt
    (25,479 )
 
     
Long-term debt, less current maturities
  $ 181,501  
 
     
 
(1)   $15.0 million of the $35.5 million outstanding under the U.S. Revolving Credit Agreement at May 2, 2009 was classified as long-term debt as this amount represents the minimum amount we anticipate to be outstanding under the U.S. Revolving Credit Agreement during fiscal 2009.
 
(2)   The U.S. Revolving Credit Agreement generally is scheduled to mature on August 15, 2013, unless the Senior Unsecured Notes are not paid or refinanced in full on or prior to November 16, 2010, in which case the U.S. Revolving Credit Agreement will be due and payable in December 2010.
     Our credit facilities are used to finance trade letters of credit, as well to provide funding for other operating activities, capital expenditures and acquisitions. As of May 2, 2009, approximately $19.5 million of trade letters of credit and other limitations on availability in aggregate were outstanding against the U.S. Revolving Credit Agreement and the U.K. Revolving Credit Agreement. On May 2, 2009 we had approximately $122.8 million and $9.1 million in unused availability under the U.S. Revolving Credit Agreement and the U.K. Revolving Credit Agreement, respectively, subject to the respective limitations on borrowings set forth in the U.S. Revolving Credit Agreement, U.K. Revolving Credit Agreement and the indenture for the Senior Unsecured Notes.
Covenants and Other Restrictions
     Our credit facilities and Senior Unsecured Notes are subject to a number of affirmative covenants regarding the delivery of financial information, compliance with law, maintenance of property, insurance and conduct of business. Also, our credit facilities and Senior Unsecured Notes are subject to certain negative covenants or other restrictions including, among other things, limitations on our ability to (i) incur debt, (ii) guaranty certain obligations, (iii) incur liens, (iv) pay dividends to shareholders, (v) repurchase shares of our common stock, (vi) make investments, (vii) sell assets or stock of subsidiaries, (viii) acquire assets or businesses, (ix) merge or consolidate with other companies, or (x) prepay, retire, repurchase or redeem debt.
     Pursuant to the indenture governing the Senior Unsecured Notes, our ability to incur certain indebtedness or to make certain restricted payments, as defined in the indenture, is subject to our meeting certain conditions, including in each case the condition that our fixed charge coverage ratio, as defined in the indenture, not be less than 2.25 to 1.0

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for the preceding four fiscal quarters on a pro forma basis after giving effect to the proposed indebtedness or restricted payment and, in the case of a restricted payment, the condition that the aggregate total of all restricted payments not exceed a certain allowable amount calculated pursuant to a formula set forth in the indenture. Restricted payments under the indenture include, without limitation, cash dividends to shareholders, repurchases of our capital stock, and certain investments.
     Additionally, the U.S. Revolving Credit Agreement contains a financial covenant that applies only if unused availability under the U.S. Revolving Credit Agreement is less than the greater of (i) $26.25 million or (ii) 15% of the total revolving commitments for three consecutive business days. In such case, our fixed charge coverage ratio must not be less than 1.0 to 1.0 for the immediately preceding 12 fiscal months for which financial statements have been delivered. This financial covenant continues to apply until we have maintained unused availability under the U.S. Revolving Credit Agreement of more than the greater of (i) $26.25 million or (ii) 15% of the total revolving commitments for thirty consecutive days.
     We believe that the affirmative covenants, negative covenants, financial covenants and other restrictions are customary for, or more favorable than, those included in similar facilities and notes. As of May 2, 2009, no financial covenant testing was required pursuant to our U.S. Revolving Credit Agreement as the minimum availability threshold was met during the quarter. As of May 2, 2009, we were compliant with all covenants related to our credit facilities and Senior Unsecured Notes.
Other Liquidity Items
     Our debt-to-total-capitalization ratio was 67%, 68% and 37% at May 2, 2009, January 31, 2009 and May 3, 2008, respectively. The change in this ratio from May 3, 2008 to May 2, 2009 is primarily a result of impairment of certain goodwill and intangible assets during fiscal 2008 which reduced equity by a significant amount. Our debt levels and ratio of debt-to-total-capitalization in future periods may not be comparable to historical amounts as we continuously assess and periodically make changes to our capital structure. In the future, we may (1) make additional investments, (2) make changes to our debt facilities, (3) repurchase shares, (4) repurchase or refinance Senior Unsecured Notes or (5) make other changes impacting our capital structure. Such transactions, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. The amounts involved may be material.
     We anticipate that we will be able to satisfy our ongoing cash requirements, which generally consist of working capital needs, capital expenditures (primarily for the opening of additional retail stores and the implementation of a new integrated financial system) and interest payments on our debt during fiscal 2009, primarily from positive cash flow from operations supplemented by borrowings under our lines of credit, if necessary. Our need for working capital is typically seasonal with the greatest requirements generally existing in the fall and spring of each year. Our capital needs will depend on many factors including our growth rate, the need to finance inventory levels and the success of our various products. At maturity of the U.S. Revolving Credit Agreement and the Senior Unsecured Notes or if the U.K. Revolving Credit Agreement was required to be paid, we anticipate that we will be able to refinance the facilities and debt with terms available in the market at that time, which may not be as favorable as the terms of the current agreements.
     Our contractual obligations as of May 2, 2009 have not changed significantly from the contractual obligations outstanding at January 31, 2009 other than changes in the amounts outstanding under our credit facilities and amounts outstanding pursuant to letters of credit (each as discussed above), none of which occurred outside the ordinary course of business.
     Our anticipated capital expenditures for fiscal 2009, including $3.8 million incurred during the first quarter of fiscal 2009, are expected to be approximately $12 million. These expenditures will consist primarily of additional Tommy Bahama and Ben Sherman retail stores and the cost associated with the implementation of a new integrated financial system.
Off Balance Sheet Arrangements
     We have not entered into agreements which meet the SEC’s definition of an off balance sheet financing arrangement, other than operating leases, and have made no financial commitments to or guarantees with respect to any unconsolidated subsidiaries or special purpose entities.

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CRITICAL ACCOUNTING POLICIES AND ESTIMATES
     The discussion and analysis of our financial condition and results of operations are based upon our unaudited condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, and expenses and related disclosures of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates, including those related to bad debts, inventories, intangible assets, income taxes, stock compensation expense, contingencies and litigation and certain other accrued expenses. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. Our critical accounting policies and estimates are discussed in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for fiscal 2008. There have not been any significant changes to the application of our critical accounting policies and estimates during the first quarter of fiscal 2009, except that we no longer have any goodwill recognized in our balance sheet after the impairment charge which was recognized in the fourth quarter of fiscal 2008.
     A detailed summary of significant accounting policies is included in Note 1 to our consolidated financial statements contained in our Annual Report on Form 10-K for fiscal 2008.
SEASONALITY
     Although our various product lines are sold on a year-round basis, the demand for specific products or styles may be seasonal. For example, the demand for Tommy Bahama and golf products is higher in the spring and summer seasons. Generally, our wholesale products are sold prior to each of the retail selling seasons, including spring, summer, fall and holiday. As the timing of product shipments and other events affecting the retail business may vary, results for any particular quarter may not be indicative of results for the full year. The percentage of net sales by quarter (unaudited) for fiscal 2008 was 29%, 24%, 26% and 21%, respectively, and the percentage of earnings (loss) before income taxes by quarter (unaudited) for fiscal 2008 was 5%, 1%, 2% and (108%), respectively. We do not believe the fiscal 2008 distribution of earnings (loss) before income taxes is indicative of the distribution in future years, in particular because certain of the quarters in fiscal 2008 were impacted to varying degrees by restructuring charges, asset impairment charges, other unusual items, a gain on the repurchase of a portion of our Senior Unsecured Notes and the difficult economic environment.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
     We are exposed to certain trade policy, interest rate, foreign currency, commodity and inflation risks as discussed in Part II, Item 7A, Quantitative and Qualitative Disclosures About Market Risk in our Annual Report on Form 10-K for fiscal 2008. There have not been any significant changes in our exposure to these risks during fiscal 2009.
ITEM 4. CONTROLS AND PROCEDURES
     Our Principal Executive Officer and Principal Financial Officer have evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act) as of the end of the period covered by this report. Based upon that evaluation, our Principal Executive Officer and Principal Financial Officer concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective in ensuring that information required to be disclosed by us in our Securities Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Principal Executive Officer and Principal Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
     There have not been any changes in our internal control over financial reporting (as such term is defined in Rule 13a-15(f) and 15d-15(f) under the Securities Exchange Act) during the first quarter of fiscal 2009 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
     In the ordinary course of business, we may become subject to litigation or claims. We are not currently a party to any litigation or regulatory action that we believe could reasonably be expected to have a material adverse effect on our financial position, results of operations or cash flows.
ITEM 1A. RISK FACTORS
     We believe that an investor should carefully consider the factors discussed in Part I, Item 1A, Risk Factors in our Annual Report on Form 10-K for fiscal 2008, which are not the only risks facing our company. We do not believe there have been any material changes to the risk factors described in our Annual Report on Form 10-K for fiscal 2008. If any of the risks described in our Annual Report on Form 10-K, or other risks or uncertainties not currently known to us or that we currently deem to be immaterial, actually occur, our business, financial condition or operating results could suffer.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
  (a)   During the first quarter of fiscal 2009, we did not make any unregistered sales of our securities.
 
  (c)   We have certain stock incentive plans as described in Note 7 to our consolidated financial statements included in our Annual Report on Form 10-K for fiscal 2008, all of which are publicly announced plans. Under the plans, we can repurchase shares from employees to cover employee tax liabilities related to the exercise of stock options or the vesting of previously restricted shares. We did not repurchase any shares of our common stock pursuant to these plans during the first quarter of fiscal 2009.
     On September 8, 2008, our Board of Directors authorized the repurchase by us of up to 0.5 million shares of our common stock. As of May 2, 2009, no shares had been repurchased pursuant to this authorization.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
     None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
     None
ITEM 5. OTHER INFORMATION
     None
ITEM 6. EXHIBITS
  3(a)   Restated Articles of Incorporation of Oxford Industries, Inc. Incorporated by reference to Exhibit 3.1 to the Oxford Industries, Inc. Form 10-Q for the fiscal quarter ended August 29, 2003.
 
  3(b)   Bylaws of Oxford Industries, Inc., as amended. Incorporated by reference to Exhibit 3(b) to the Oxford Industries, Inc. Form 10-Q for the fiscal quarter ended November 1, 2008.
 
  31.1   Section 302 Certification by Principal Executive Officer.*
 
  31.2   Section 302 Certification by Principal Financial Officer.*
 
  32   Section 906 Certification by Principal Executive Officer and Principal Financial Officer.*
 
*   Filed herewith.

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SIGNATURES
     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
         
June 10, 2009   OXFORD INDUSTRIES, INC.
(Registrant)
 
 
  /s/ K. Scott Grassmyer    
  K. Scott Grassmyer   
  Senior Vice President, Chief Financial Officer and Controller
(Authorized Signatory and Principal Financial Officer) 
 

23

EX-31.1
         
Exhibit 31.1
CERTIFICATION
I, J. Hicks Lanier, certify that:
1.   I have reviewed this report on Form 10-Q of Oxford Industries, Inc.;
 
2.   Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
 
3.   Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
 
4.   The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
  a)   Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
 
  b)   Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
 
  c)   Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
 
  d)   Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.   The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
  a)   All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
 
  b)   Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
         
     
Date: June 10, 2009  /s/ J. Hicks Lanier    
  J. Hicks Lanier   
  Chairman and Chief Executive Officer
(Principal Executive Officer) 
 

 

EX-31.2
         
Exhibit 31.2
CERTIFICATION
I, K. Scott Grassmyer, certify that:
1.   I have reviewed this report on Form 10-Q of Oxford Industries, Inc.;
 
2.   Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
 
3.   Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
 
4.   The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
  a)   Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
 
  b)   Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
 
  c)   Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
 
  d)   Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.   The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
  a)   All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
 
  b)   Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
         
     
Date: June 10, 2009  /s/ K. Scott Grassmyer    
  K. Scott Grassmyer   
  Senior Vice President, Chief Financial Officer and
Controller
(Principal Financial Officer) 
 

 

EX-32
         
Exhibit 32
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Oxford Industries, Inc. (the “Company”) on Form 10-Q (“Form 10-Q”) for the quarter ended May 2, 2009 as filed with the Securities and Exchange Commission on the date hereof, I, J. Hicks Lanier, Chairman and Chief Executive Officer of the Company, and I, K. Scott Grassmyer, Senior Vice President, Chief Financial Officer and Controller of the Company, each certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:
(1)   The Form 10-Q fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
 
(2)   The information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.
         
     
/s/ J. Hicks Lanier    
J. Hicks Lanier   
Chairman and Chief Executive Officer
(Principal Executive Officer) 
 
June 10, 2009     
 
     
/s/ K. Scott Grassmyer    
K. Scott Grassmyer   
Senior Vice President, Chief Financial Officer
and Controller
(Principal Financial Officer) 
 
June 10, 2009