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Cherokee is strictly a brand licensor. It owns the Cherokee, Sideout, and Carole Little brands, which it licenses to selected retailers. The company does no product design, no production sourcing, and no marketing - this is left to the licensees. In effect, Cherokee replaces private label brands for these licensees. This is what's known as a "light" business model, requiring next to no capital investment and little expenses save for paying the few employees and maintaining the brand trademarks in various countries. Every dollar invested into capital spending returns several hundred percent in earnings (return on tangible capital).
There is 24 million in cash on the balance sheet, and no debt. Free cash flow margin has averaged an outstanding 50% or higher for the last 5 years. The company doesn't horde this cash... it pays out 65% of it, to the tune of a 9% dividend yield.
Cherokee has some avenues for growth, as well. The company's deal with UK retailer Tesco has been advantageous, as Tesco has moved the brand into Eastern Europe, Asia (including China), and parts of Africa. The company also has a deal with Zellers in Canada and potential deals in China for the Sideout brand and Mexico for the Cherokee brand.