During the quarter, the Company undertook restructuring initiatives within its Ben Sherman operating group including the exit from, and subsequent licensing of, its footwear operations, as well as other cost-saving initiatives. As a result, the Company noted that its earnings included restructuring charges of $0.06 per diluted share in the second quarter of fiscal 2009. Results also included a $0.13 per diluted share charge due to LIFO accounting and an $0.08 per diluted share charge for the write off of unamortized deferred financing costs associated with the retirement of its senior unsecured notes in June 2009.

Excluding the impact of these charges, adjusted diluted net earnings per share in the second quarter of fiscal 2009 were $0.30 compared to adjusted diluted net earnings per share of $0.37 in the second quarter of fiscal 2008. For reference, a table reconciling GAAP net earnings per share to adjusted net earnings per share for the second quarter and first half of fiscal 2009 and fiscal 2008 is included at the end of this release.

J. Hicks Lanier, Chairman and Chief Executive Officer of Oxford Industries, Inc., commented, "Our people have risen to the occasion in these challenging times. This quarter's operating results, which exceeded our original plan, reflect solid performances by our Tommy Bahama, Lanier Clothes and Oxford Apparel businesses. Our results have been enhanced through carefully managed inventories and comprehensive cost reduction efforts. We are confident that we have the right team and the right strategies to deliver value to our customers and shareholders."

Operating Results

Tommy Bahama reported net sales of $94.4 million for the second quarter of fiscal 2009 compared to $112.0 million in the second quarter of fiscal 2008. The sales decrease was due to the difficult economic environment partially offset by sales in stores opened after the beginning of the second quarter of fiscal 2008 and increased e-commerce sales. Tommy Bahama's operating income for the second quarter of fiscal 2009 was $13.4 million compared to $18.1 million in the second quarter of fiscal 2008. The decrease in operating income was primarily due to the sales reduction and decreased royalty income partially offset by reductions in SG&A and higher gross margins. At the end of the second quarter, Tommy Bahama operated 84 retail stores compared to 78 on August 2, 2008.

Ben Sherman reported net sales of $23.6 million for the second quarter of fiscal 2009 compared to $32.5 million in the second quarter of fiscal 2008. The reduction in sales was primarily due to the 18% reduction in the average exchange rate of the British pound versus the United States dollar as well as reduced wholesale shipments due to the challenging market conditions. Ben Sherman reported an operating loss of $6.3 million in the second quarter of fiscal 2009 compared to an operating loss of $2.0 million in the second quarter of fiscal 2008. The increased loss was primarily due to the lower sales, the unfavorable impact on cost of goods sold related to inventory purchases denominated in U.S. dollars but sold in other currencies, $1.4 million of restructuring charges and lower royalty income. These items were partially offset by reductions in SG&A.

Net sales for Lanier Clothes were $25.2 million in the second quarter of fiscal 2009 compared to $28.2 million reported in the second quarter of fiscal 2008. Lanier Clothes reported a material improvement in operating results due to improved gross margins and reductions in SG&A. Operating income in the second quarter of fiscal 2009 was $2.7 million compared to an $11.4 million operating loss in the second quarter of fiscal 2008. The second quarter of fiscal 2008 included $9.5 million of restructuring charges and certain other unusual items.

Oxford Apparel reported net sales of $49.5 million for the second quarter of fiscal 2009 compared to $58.0 million in the second quarter of fiscal 2008. Despite the decrease in net sales, operating income for Oxford Apparel improved to $4.1 million for the second quarter of fiscal 2009 compared to $3.7 million in the second quarter of fiscal 2008. The impact of decreased sales was offset by reductions in SG&A related to reduced employment costs and variable operating expenses. The second quarter of fiscal 2008 included a net charge of $0.3 million related to impairment and other charges partially offset by gains from the resolution of a contingent liability and sale of a trademark.

The Corporate and Other operating loss increased to $6.4 million for the second quarter of fiscal 2009 from $0.5 million in the second quarter of fiscal 2008. The increased loss was due primarily to a LIFO accounting charge of $2.9 million in the second quarter of fiscal 2009 compared to a LIFO accounting credit of $3.3 million in the second quarter of fiscal 2008.

Consolidated gross margins for the second quarter of fiscal 2009 were 40.7% compared to 41.9% in the second quarter of fiscal 2008. The decrease in gross margin was primarily due to the impact of LIFO accounting adjustments and the negative impact on Ben Sherman's gross margins related to inventory purchases denominated in United States dollars but sold in other currencies. The second quarter of fiscal 2008 included $5.3 million of restructuring charges, which impacted cost of goods sold in Lanier Clothes and Oxford Apparel.

SG&A for the second quarter of fiscal 2009 decreased to $73.6 million, or 38.2% of net sales, compared to $89.0 million, or 38.6% of net sales, in the second quarter of fiscal 2008. The decrease in SG&A was primarily due to significant reductions in the Company's overhead cost structure, cost reductions associated with the exit from certain businesses, the impact of the decline in the British pound versus the United States dollar and reductions in advertising expense. The second quarter of fiscal 2009 and the second quarter of fiscal 2008 included net charges of $1.4 million and $1.6 million respectively, related to restructuring charges and other unusual items.

Royalties and other operating income for the second quarter of fiscal 2009 were $2.9 million compared to $4.4 million in the second quarter of fiscal 2008. The decrease was primarily due to the Company's termination of the license agreement for footwear in Tommy Bahama, the decline in the British pound versus the United States dollar, which impacted Ben Sherman royalty income, and the generally difficult economic conditions. The Company noted that the second quarter of fiscal 2008 included a gain on the sale of a trademark by Oxford Apparel.

Interest expense for the second quarter of fiscal 2009 was $6.2 million, which includes the write off of $1.8 million of unamortized deferred financing costs, compared to $6.0 million in the second quarter of fiscal 2008. The Company expects to incur approximately $5.3 million of interest expense in each of the third and fourth quarters of fiscal 2009.

For the first half of fiscal 2009 consolidated net sales decreased to $409.6 million from $503.5 million in the first half of fiscal 2008. Excluding the impact of restructuring charges and other unusual items, adjusted diluted net earnings per share in the first half of fiscal 2009 decreased to $0.79 from adjusted diluted net earnings per share of $0.99 in the first half of fiscal 2008. Including the restructuring charges and other unusual items, in the first half of fiscal 2009, earnings per diluted share were $0.45 compared to $0.69 in the first half of fiscal 2008.

Balance Sheet and Liquidity

Total inventories at the close of the second quarter of fiscal 2009 were $97.4 million, down 25% from the close of the second quarter of fiscal 2008. Inventory levels at Ben Sherman, Lanier Clothes and Oxford Apparel have each decreased as the Company focused on mitigating inventory markdown risk and promotional pressure, as well as exiting certain lines of business. Inventory levels increased slightly year over year at Tommy Bahama to support additional retail stores.