PerryEllis

We are one of the leading apparel companies in the United States. We control a portfolio of major men’s and women’s brands, some of which were established over 100 years ago. We design, source, market and license our products nationally and internationally at multiple price points and across all major levels of retail distribution in up to 15,000 doors. Our portfolio of highly recognized brands includes Perry Ellis and Perry Ellis Portfolio, which we believe together generate over $1 billion in annual retail sales, Axis, Tricots St. Raphael, Jantzen, John Henry, Cubavera, the Havanera Co., Natural Issue, Munsingwear, Grand Slam, Original Penguin, Mondo di Marco, Redsand, Pro Player, Manhattan, Axist, Savane, Farah, Gotcha, Girl Star and MCD. We also (i) license the Nike brand for swimwear and swimwear accessories, (ii) are the worldwide master licensee for PING golf apparel, and (iii) license the PGA Tour brand for golf apparel.
We distribute our products primarily to wholesale customers that represent all major levels of retail distribution including department stores, national and regional chain stores, mass merchants, specialty stores, sporting goods stores, green grass golf shops, the corporate wear market, as well as clubs and independent retailers in the United States, Canada and the United Kingdom. Our largest customers include
Federated/May Department Stores, Inc., Dillard’s Inc., Wal-Mart Stores, Inc., J.C. Penney Company, Kohl’s Corporation, and Sam’s Wholesale Club. As of April 1, 2006, we also operated 32 Perry Ellis retail outlet stores located primarily in upscale retail outlet malls across the United States as well as 3 Original Penguin retail stores located in upscale demographic markets. In addition, we leverage our design, sourcing and
logistics expertise by offering a limited number of private label programs to retailers. In order to maximize the worldwide exposure of our brands and generate high margin royalty income, we license our brands through approximately 56 domestic and approximately 101 international license agreements.
Our wholesale business, which is comprised of men’s sportswear and women’s and men’s swimwear and swimwear accessories, accounted for 97% of our total revenues in fiscal 2006, and our licensing business accounted for 3% of our total revenues in fiscal 2006. We have traditionally focused on the men’s sportswear market, which represented approximately 93% of our total wholesale revenues in fiscal 2006,
while our women’s and men’s swimwear market represented approximately 7% of our total wholesale revenues in fiscal 2006.
Our licensing business is a significant contributor to our operating income. We license the brands we own to third parties for the manufacturing and marketing of various products in distribution channels and countries in which we do not distribute those brands, including men’s and women’s apparel and footwear, men’s suits, underwear, loungewear, outerwear, fragrances, eyewear and accessories. These licensing
arrangements raise the overall awareness of our brands without requiring us to make capital investments or incur additional operating expenses.
On February 26, 2005, we acquired certain domestic operating assets of Tropical Sportswear Int’l Corporation and its subsidiaries and Tropical’s United Kingdom subsidiary. Tropical was a leading designer, marketer and distributor of men’s branded and private label bottoms to all channels of distribution.
With the Tropical acquisition, we have become one of the largest suppliers of men’s bottoms in the United States, added significant revenues, further strengthened and balanced our product mix, and added to our portfolio of brands. The Tropical acquisition also provided us with a state-of-the-art distribution facility in Tampa, Florida and a strong platform to expand our existing brands into Europe as a result of the acquired
U.K. subsidiary.
We employ a three-dimensional strategy in the design, sourcing, marketing and licensing of our products that focuses on diversity of brands, products and distribution channels. Through this strategy, we provide our products to a broad range of customers, which reduces our reliance on any single distribution channel,
customer, or demographic group and minimizes competition among our brands.
page 4 Diversity of Brands. We maintain a portfolio of 25 highly recognized brands that we either own or license.
We are focused on brands that appeal to fashion conscious consumers across all income levels. We design, source, market and license most of our products on a brand-by-brand basis targeting distinct consumer demographic and lifestyle profiles. For example, we market the Perry Ellis and Original Penguin brands to higher-income consumers and market the Grand Slam, John Henry and the Havanera Co. brands
to middle-income consumers. In addition, we market brands that appeal to women through our Jantzen family of swimwear products as well as through Original Penguin products.
Diversity of Product Categories. We design and market apparel in a broad range of men’s product categories and select women’s product categories, which increases the stability of our business. Our menswear offerings include casual sportswear and bottoms, dress shirts and pants, jeans wear, golf apparel, sweaters, sports apparel, swimwear and swim accessories, active wear, and leather accessories.
Our women’s wear offerings include swimwear, swim accessories and sportswear. We believe that our product diversity decreases our dependence on any one product or fashion trend and has contributed
substantially to our growth.
Diversity of Distribution Channels. We market our products through all major levels of retail distribution, which allows us to reach a broad range of consumers in the United States, Canada and the United Kingdom. We distribute through department stores, national and regional chain stores, mass merchants, specialty stores, sporting goods stores, green grass golf shops, the corporate wear market, as well as clubs
and other independent retailers in the United States, Canada and the United Kingdom. Our products are distributed through up to 15,000 doors at some of the nation’s leading retailers, including Federated/May, Dillard’s, Wal-Mart Stores, Inc., J.C. Penney Company, Kohl’s Corporation, and Sam’s Wholesale Club.

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