8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC  20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of

the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): September 8, 2010

CHEROKEE INC.

(Exact name of registrant as specified in its charter)

Delaware	1-18640	95-4182437
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(I.R.S. Employer Identification Number)

6835 Valjean

Van Nuys, California 91406

(Address of Principal Executive Offices) (Zip Code)

(818) 908-9868

(Registrant’s telephone number, including area code)

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition.

On September 8, 2010, Cherokee Inc. issued a press release announcing its financial results for the fiscal quarter and six months ended July 31, 2010.  A copy of the press release is attached hereto as Exhibit 99.1.

In accordance with General Instruction B.2 of Form 8-K, the information in this Item 2.02, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.

Item 9.01 Financial Statements and Exhibits.

(d)           Exhibits.

Exhibit No.	Description
99.1	Press release of Cherokee Inc., dated September 8, 2010.

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.

	CHEROKEE INC.
Dated:  September 8, 2010	By:	/s/ Russell J. Riopelle
		Russell J. Riopelle
		Chief Financial Officer

EX-99.1

Exhibit 99.1

Cherokee Inc.	ADDO Communications, Inc.
6835 Valjean Ave.	2120 Colorado Ave. Suite 160
Van Nuys, CA  91406	Santa Monica, CA  90405
(818) 908-9868	(310) 829-5400
Contact:  Russell J. Riopelle, Chief Financial Officer	Contact:  Andrew Greenebaum

Cherokee Inc. Announces 2nd Quarter Fiscal 2011 Financial Results

VAN NUYS, CA (September 8, 2010) —  Cherokee Inc. (NASDAQ:  CHKE), a leading global licensor and brand management company, today reported total royalty revenues for the second quarter ended July 31, 2010 (the “Second Quarter”) of $7.5 million, as compared to $8.1 million in the comparable period last year.  Cherokee’s operating expenses for the Second Quarter totaled $3.36 million, which was slightly greater than the $3.34 million in the comparable period last year.  Cherokee’s net income for the Second Quarter decreased by a total of $0.4 million to $2.5 million or $0.28 per diluted share, as compared to $2.9 million, or $0.32 per diluted share in the comparable period last year.  The Company ended the quarter with cash and cash equivalents of $7.3 million, net receivables of $6.7 million and no debt.

Russell J. Riopelle, Chief Financial Officer, commented, “We finished the quarter in another strong cash position and a debt-free balance sheet.  During our Second Quarter we paid a $0.38 per share dividend in June, and announced our September dividend of $0.38 per share.”

Howard Siegel, Chief Operating Officer of Cherokee, stated, “Slight increases in our U.S. royalties were offset by less favorable exchange rates and lower royalties from certain international accounts.”

About Cherokee Inc.

Cherokee Inc., is a worldwide marketer and manager of brands it owns (Cherokee, Sideout, Carole Little and others) and represents.  Currently, Cherokee has licensing agreements in a number of categories, including family apparel, fashion accessories and footwear, as well as home furnishings and recreational products.  Premier clients for the Cherokee brand around the world include Target Stores (U.S.), Tesco (U.K., Ireland and certain Central European countries), Zellers (Canada), Pick ‘n Pay (South Africa), Falabella (Chile, Peru and Colombia), Arvind Mills (India and certain Middle Eastern countries), Shufersal LTD. (Israel), Comercial Mexicana (Mexico), Eroski (Spain) and RT-Mart (Peoples Republic of China). Premiere clients for Cherokee’s other brands include the TJX Companies (U.S., Canada and Europe) for the Carole Little brands, and Shanghai Bolderway (China) and for the Sideout Brand.  Cherokee also placed the Laila Ali brand with IBB for beauty and personal care.

Statements included within this news release that are not historical in nature constitute forward-looking statements for the purposes of the safe harbor provided by the Private Securities Litigation Reform Act of 1995.  When used, the words “anticipates”, “believes”, “expects”, “may”, “should” and similar expressions are intended to identify such forward-looking statements.  Forward-looking statements included in this press release (including, without limitation, express or implied statements regarding the transition of Mr. Margolis’ role and potential future business development) involve known and unknown risk and uncertainties that may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.  Such risks and uncertainties, include, but are not limited to, the outcome of the vote at the upcoming stockholder meeting, the effect of national, international and regional economic conditions, the financial condition of the apparel industry and the retail industry, the overall level of consumer spending domestically and internationally, the effect of intense competition in the industry in which the Company operates, adverse changes in licensee or consumer acceptance of products bearing the Company’s brands as a result of fashion trends or otherwise, the ability and/or commitment of the Company’s licensees to design, manufacture and market Cherokee, Sideout and Carole Little branded products, the Company’s dependence on a select group of licensees for most of the Company’s revenues, the Company’s dependence on its key management personnel and adverse determinations of claims, liabilities or litigations.  A further list and description of these risk, uncertainties and other matters can be found in the Company’s Annual Report on Form 10-K for Fiscal Year 2010, and in its periodic reports on Forms 10-Q and 8-K (if any).  Undue reliance should not be placed on the forward-looking statements contained herein because some or all of them may turn out to be wrong.  The Company disclaims any intent or obligation to update any of the forward-looking statements contained herein to reflect future events and developments.

CHEROKEE INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

Unaudited

	Three months ended				Six months ended
	July 31, 2010		August 1, 2009		July 31, 2010		August 1, 2009
Royalty revenues	$	7,496,000	$	8,091,000	$	15,735,000	$	16,974,000
Selling, general and administrative expenses		3,363,000		3,346,000		6,731,000		6,460,000
Operating income		4,133,000		4,745,000		9,004,000		10,514,000
Other income:
Investment and interest income		3,000		6,000		7,000		13,000
Total other income		3,000		6,000		7,000		13,000
Income before income taxes		4,136,000		4,751,000		9,011,000		10,527,000
Income tax provision		1,655,000		1,888,000		3,617,000		3,837,000
Net income	$	2,481,000	$	2,863,000	$	5,394,000	$	6,690,000
Basic earnings per share	$	0.28	$	0.32	$	0.61	$	0.76
Diluted earnings per share	$	0.28	$	0.32	$	0.61	$	0.76
Weighted average shares outstanding
Basic		8,814,187		8,814,187		8,814,187		8,814,187
Diluted		8,855,957		8,814,187		8,848,696		8,814,187
Effective Tax Rate		40.0%		39.7%		40.1%		36.4%

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CHEROKEE INC.

CONSOLIDATED BALANCE SHEETS

Unaudited

	July 31,		January 30,
	2010		2010
Assets
Current assets:
Cash and cash equivalents	$	7,292,000	$	9,419,000
Receivables		6,694,000		6,939,000
Prepaid expenses and other current assets		148,000		101,000
Income taxes receivable		1,273,000		1,271,000
Deferred tax asset		567,000		740,000
Total current assets		15,974,000		18,470,000
Deferred tax asset		667,000		630,000
Property and equipment, net		164,000		185,000
Trademarks, net		7,299,000		7,866,000
Other assets		14,000		14,000
Total assets	$	24,118,000	$	27,165,000
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	1,306,000	$	967,000
Accrued compensation payable		1,008,000		2,536,000
Income taxes payable		437,000		1,260,000
Accrued dividends payable		3,349,000		3,349,000
Total current liabilities		6,100,000		8,112,000
Stockholders' Equity:
Preferred stock, $.02 par value, 1,000,000 shares authorized
None issued and outstanding		-		-
Common stock, $.02 par value, 20,000,000 shares authorized,
8,814,187 and 8,814,187 shares issued and outstanding at July 31, 2010 and January 30, 2010, respectively		176,000		176,000
Additional paid-in capital		15,456,000		15,187,000
Retained earnings		2,386,000		3,690,000
Stockholders' equity		18,018,000		19,053,000
Total liabilities and stockholders' equity	$	24,118,000	$	27,165,000

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