Good day, and welcome to the Oxford Industries Fourth Quarter and Fiscal Year 2012 Earnings Conference Call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Ms. Anne Shoemaker, Treasurer. Please go ahead, ma'am.

Thank you, Stephanie, and good afternoon, everyone. Before we begin, I would like to remind participants that certain statements made on today's call and in the Q&A session may constitute forward-looking statements within the meaning of the federal securities laws. Forward-looking statements are not guarantees, and actual results may differ materially from those expressed or implied in the forward-looking statements. Important factors that could cause actual results of operations or our financial condition to differ are discussed in the documents filed by us with the SEC. We undertake no duty to update any forward-looking statements. During this call, we will be discussing certain non-GAAP financial measures. You can find a reconciliation of these non-GAAP financial measures to GAAP financial measures in our press release issued earlier today, which is posted under the Investor Relations tab of our website at oxfordinc.com. At the outset, I'd like to make you aware of a change we made this quarter in how we report comp store sales. Historically, our disclosures about comp store sales have only included sales at our full-price retail stores. Beginning with the fourth quarter of fiscal 2012, our disclosures will include sales from our full-price stores and e-commerce site. We will exclude sales associated with sales from our outlook stores, our e-commerce/clearance sales and sales from our restaurants. We believe that this change better aligns our disclosures with other companies in our sector and better reflects the way we view our business. Also for comparative purposes, please keep in mind that fiscal 2012 was a 53-week year and fiscal 2011 was a 52-week year, and the fourth quarter fiscal 2012 was a 14-week quarter compared to a 13-week quarter in fiscal 2011. However, comp store sales information provided on this call is on a 52 to 52-week basis for the year, and a 13 to 13-week basis for the fourth quarter. And now I'd like to introduce today's call participants. With me today are Tom Chubb, CEO and President; Scott Grassmyer, CFO; Terry Pillow, CEO of Tommy Bahama; and Doug Wood, President of Tommy Bahama. Thank you for your attention. And now I'd like to turn the call over to Tom Chubb.

Good afternoon, and thank you for joining us. 2012 was another solid year for Oxford. We grew sales by 13% to $856 million, and we grew earnings on an adjusted basis to $2.61 from $2.41 per share in fiscal 2011. We achieved these results while making substantial investments in our future, particularly those related to developing the infrastructure needed to support our Tommy Bahama international effort. For the fourth quarter of fiscal 2012, sales rose 18% to $236 million compared to just under $200 million in the fourth quarter of fiscal 2011. Fourth quarter 2012 adjusted earnings came in at $0.65 compared to $0.61 in the fourth quarter of 2011, with very poor results at Ben Sherman and an uptick in the tax rate somewhat dampening strong performances at Tommy Bahama, Lilly Pulitzer and Lanier Clothes. 2012 was a big year for Tommy Bahama. We added 12 new domestic stores, including our beautiful flagship on Fifth Avenue. We plan to open another 12 stores in the U.S. in 2013. Fiscal 2012 also marked the arrival of Tommy Bahama on the international stage. We are now operating 9 stores in the Asia Pacific region, including our newest in Yokohama, Japan, which opened this past week. Late next week, we will open our store in the Ginza district that will include a bar and restaurant. We believe Japan is a huge opportunity for us, with its large, well-developed consumer market and the enthusiasm for American brands there. We believe that building Tommy Bahama's international platform is an excellent long-term investment for Oxford, and the runway it creates for us is substantial. Terry Pillow will have more to say about what is happening at Tommy Bahama in a few minutes. Lilly Pulitzer also had a year of extraordinary growth, with the top line expanding 30% in 2012. We are really focused on new store openings at Lilly. In 2012, we opened 4 stores, the first new stores since 2009. These new stores are performing very well, and we would like to see 4 to 6 new carefully placed stores each year for the foreseeable future. For both of these brands, our e-commerce business also continues to grow rapidly, and now represents over 10% of Tommy's sales, and over 20% of Lilly's sales. Growth in e-commerce, together with changes in the way the consumer is shopping, present an opportunity for brands that can provide the consumer with a seamless omni-channel experience. We are making significant investments in the people, systems and infrastructure to fully leverage this opportunity. Scott will provide you details in a few moments, but at a high level, looking ahead to 2013, we are expecting sales to increase to a range of $930 million to $945 million in 2013, compared to $856 million in 2012, and earnings per share to increase to a range of $3 to $3.15 in 2013 compared to adjusted earnings of $2.61 in fiscal 2012. I should note that while we were expecting a very nice increase in both sales and earnings in 2013, our guidance does take into account the fact that like many of our peers, we have experienced a relatively soft March. I'd now like to turn the call over to Terry Pillow. Terry?

Thank you, Tom. In fiscal 2012, we increased net sales at Tommy Bahama by 17% to $529 million and grew our operating income for the year by 8% to $69.5 million. We are pleased with the growth in operating income for fiscal 2012, particularly given the significant P&L impact from our investments in our international expansion at our New York flagship store. We achieved 4 very important milestones in fiscal 2012, including our first year to achieve $500 million in net sales, operating over 100 domestic stores, generating over $100 million in women sales and the rollout of our retail stores into 4 Asian Pacific markets. In fiscal 2012, we increased our marketing efforts, particularly those communications directly with customers in our data -- guest database. We did this through direct mail, loyalty cards and e-mail blast. We believe these communications helped increase the frequency with which our guests shop in our retail store and online. We believe these marketing efforts and the relationship development actions were very important in driving a mid-teen percentage increase in comparable store sales during 2012. Another highlight for 2012 was the opening of the Tommy Bahama New York Island, which was the first of 4 major flagship opening around the globe. While the Sandy-related delay in completing the opening of New York Island in December prevented us from fully capturing holiday, we were very excited about this unique store, which is delivering fantastic visibility of the brand, both domestically and internationally. In addition to New York flagship store, we opened a wonderful street-level store in the very hip Wan Chai District of Hong Kong in January, and this location is exceeding our expectations. Our investment in these flagship stores continues into fiscal 2013 with an Island in the Ginza district of Tokyo opening next week and Chicago, Michigan Avenue store scheduled to open in the second quarter. In addition to these 4 flagship stores, we will also open stores in the important Sydney and Miami markets, as well as a number of other locations throughout fiscal 2013. As I mentioned earlier, we had a great year in women's, which has continued to grow in both sportswear and swimwear. For the first time in fiscal 2012, our women's business generated over $100 million in net sales, predominantly in our direct to consumer channels. In our own full-price stores, women's represented over 28% of sales in fiscal 2012. For the holiday season, we once again saw strength in both our men's and women's business with our heavy knit programs driving our holiday men's business and dresses driving the holiday women's business. Our post-Christmas, full-price business was particularly strong, especially in our resort locations. As a result, we saw a low-teen comparable store sales increase for the fourth quarter of fiscal 2012. Now I'll turn the call back over to Tom Chubb to discuss results of other operating [indiscernible].

Thanks, Terry. I'll pick back up with Lilly Pulitzer. We drove great top line growth and rapid expansion of our adjusted operating margins at Lilly during fiscal 2012. Sales increased 30% to $123 million, adjusted operating income rose 50% to $26.6 million and adjusted operating margins finished at 21.6%. Like Tommy Bahama, we achieved some important milestones in 2012. Sales catapulted well beyond the $100 million mark, and the direct to consumer business has now more than half of Lilly's sales at 54%. e-commerce led the way and now represents over 20% of Lilly's sales. After significant growth during 2012, our database of customer e-mail addresses grew over 50% and now stands at over 750,000 names. Our new stores have performed very well, and we plan to continue to open stores with the next 3 scheduled to open in the first half of fiscal 2013 in Cincinnati, Raleigh-Durham and the Shops at Riverside in New Jersey. We also hope to open a couple more later in the year. Lilly's largest product category historically has been dresses. This continued to be the case in 2012, and we also had great success and very nice growth in sportswear, supported by a number of strong key items. Lilly will continue to carefully select targeted items to expand the breadth of its product offering and support a stronger, wider assortment of product. This is clearly a lifestyle brand with a wide avenue for growth. After back-to-back years of 30% top line increases, it is important that we continue to invest to support Lilly's growth opportunities. We are particularly focused on adding depth to our talent pool in key areas such as retail, e-commerce, marketing and information systems and technology. We are very pleased with the key hires and promotions we made in these areas in 2012, and we plan to do more in 2013. We expect Lilly to continue to deliver strong operating margins, comparable to those of 2012 even with the investments planned for 2013. Now turning to Lanier Clothes. We captured an operating margin of just over 10% in fiscal 2012 on sales of $107 million. We are pleased to continue to run this business on a small capital base, consisting mostly of working capital and minimal capital expenditures. This provides for a very good cash return on our cash invested. As you know, Lanier designs and markets branded and private label tailored clothing under a variety of labels with a customer base covering a very broad spectrum from leading off-price retailers to iconic luxury stores such as Saks Fifth Avenue. While tailored clothing has been a softer category, we believe we are well positioned and continue to see and pursue opportunities to grow this business profitably. We believe opportunities exist to grow our trouser business, expand into new channels of distribution, and offer more tailored clothing at higher price points. In fiscal 2012, net sales for Ben Sherman fell 10% to $82 million from $91 million, and operating losses increased to $10.9 million in fiscal 2012 from $2.5 million in fiscal 2011. This was largely the result of poor execution of our strategy. That said, with 69% of our business outside the U.S., predominantly in the U.K. and Europe, we also can't overlook the significant negative impact of the economy on the Ben Sherman business. We are very focused on getting this business on a firmer footing in fiscal 2013. To achieve this stabilization, we are working on the following key areas: First, expense reduction. We have evaluated every line of the P&L and have made reductions across the board, particularly meaningful are planned reductions in our distribution cost and marketing expenses, the benefits of which will be most significant in the second half of the year. Second, distribution control. We are exiting from customer relationships that are not profitable. While this will put an additional strain on the top line, we need to direct our resources on the areas where Ben Sherman has the most potential to be profitable such as e-commerce. Finally, we have augmented our management team with a new Head of Retail, which we expect will help us improve results in our existing stores. Our plan for fiscal 2013, which incorporates these actions, along with more disciplined inventory management, targets a 50% reduction in our operating loss compared to 2012 and the Ben Sherman business breaking even from a cash flow perspective. We are confident that we can achieve the expense reductions that we have planned. The biggest risk to achieving our financial goals for Ben Sherman in fiscal 2013 is the performance of our own retail stores. I'll now hand the call over to Scott Grassmyer to discuss our financial results and the outlook in greater detail. K. Grassmyer: Thank you, Tom. I'll walk through a selection of highlights from our consolidated results for fiscal 2012 and our guidance for 2013. Please refer to our press release issued earlier today for the complete results for the fourth quarter and fiscal year 2012 and additional detailed information about our outlook for fiscal 2013. For fiscal 2012, the 13% increase in consolidated net sales was driven by increased sales at Tommy Bahama and Lilly Pulitzer. Consolidated gross margins in fiscal 2012 increased 50 basis points to 54.9%, primarily due to the impact of LIFO accounting. Gross profit for the year increased 14% to $470 million. SG&A in fiscal 2012 was $411 million or 48% of sales compared to $359 million or 47.2% of sales. The increase in SG&A was primarily due to the operation of additional retail stores, including the Tommy Bahama New York location, expenses associated with Tommy Bahama's international expansion, other expenses to support the growing Tommy Bahama and Lilly Pulitzer businesses, and the impact of the 53rd week in fiscal 2012. In fiscal 2012, royalties and other income decreased slightly to $16.4 million compared to $16.8 million in fiscal 2011. Our consolidated operating income in fiscal 2012, as adjusted, increased to $79 million from $77 million in fiscal 2011. For fiscal 2012, our interest expense declined 45% to $9 million. The improvement was primarily due to repurchases in fiscal 2011 and the redemption in full of our senior secured notes in fiscal 2012. For fiscal 2012, our effective tax rate rose to 38.5% compared to 32.8% in fiscal 2011. Our tax rate increased primarily due to our inability to recognize the income tax benefit of certain losses in foreign jurisdictions, as well as having a greater proportion of our 2012 earnings in higher tax jurisdictions, which offsets certain favorable items. In fiscal 2011, we were able to recognize the income tax benefit of foreign jurisdiction losses and also had certain favorable discrete items. Total inventories at February 2, 2013, were $110 million compared to $103 million at January 28, 2012. We believe our inventory levels are generally in good shape. The increase was made primarily to support sales growth and to support our new Tommy Bahama and Lilly Pulitzer stores. I'd also note that, appropriately, inventory levels at both Lanier Clothes and Ben Sherman decreased from January 28, 2012. As of February 2, 2013, we had $117 million of borrowings outstanding, and approximately $106 million of unused availability under our U.S. and U.K. revolving credit facilities. We believe our capital structure positions us well to support our existing operations. Our capital expenditures for fiscal 2012 were $61 million. We opened new retail stores including our flagship in New York and made investments in information technology, retail store remodeling and distribution center enhancements. In fiscal 2013, we expect to decrease our CapEx to approximately $45 million. This will fund the continued retail store expansion at Tommy Bahama and Lilly Pulitzer, enhance our information technology and maintain our retail store remodeling schedule. Our cash flow from operations increased 51% to $67 million from $45 million in fiscal 2011, primarily due to more efficient working capital management and higher earnings. We expect to utilize cash flow to continue to invest in growth opportunities and reduce our borrowings during fiscal 2013. Now I'd like to walk you through some of the key points in our projections for fiscal 2013. Overall, we expect to deliver strong results in fiscal 2013 with solid sales and earnings improvements. As Tom mentioned earlier, for the year, we expect earnings per share to be between $3 and $3.15. This compares with adjusted earnings per share of $2.61 and GAAP earnings per share of $1.89 in fiscal 2012. We currently expect net sales of $930 million to $945 million in fiscal 2013 compared to $856 million in fiscal 2012. For the year, Tommy Bahama and Lilly Pulitzer should grow nicely, with percentage sales increases in the low teens, driven primarily from the direct to consumer businesses. We are projecting Lanier Clothes sales for the year to be approximately flat with the 2012 level. We're anticipating Ben Sherman sales to decrease in the high-single digits for the year. With regard to seasonality, we expect our second and fourth quarters to be our strongest quarters in fiscal 2013, driven by direct to consumer demand. Conversely, with the direct to consumer demand for our brands being smallest in the third quarter, we expect that our sales and earnings will again be markedly lower in the third quarter compared to other quarters. On a consolidated basis, we expect gross margins to increase approximately 150 basis points in fiscal 2013. Two changes are driving this increase. First, Tommy Bahama and Lilly Pulitzer, which have higher gross margins, are growing at a faster pace than our other businesses. Secondly, our direct to consumer channels generally carry higher gross margins. As both Tommy and Lilly sales mix continues to shift towards direct to consumer, gross margin should benefit. Lanier Clothes is expected to feel some gross margin pressures in 2013 as competitive pricing in cost pressures continue. Modest gross margin improvements are anticipated in Ben Sherman in fiscal 2013 as fewer markdowns are expected with better inventory management. SG&A for the year ahead is expected to rise at a pace slightly higher than the planned increase in net sales. This reflects the investments in people, systems and infrastructure at Tommy Bahama and Lilly Pulitzer to support their growth, not only this year, but in the years ahead. The expected increase in SG&A is also partially attributable to higher depreciation expense. Depreciation and amortization of intangible assets is expected to increase to approximately $33 million in fiscal 2013 compared to $26 million in fiscal 2012. These increases are expected to be partially offset by decreases in SG&A at Ben Sherman, particularly in the second half of the year. For fiscal 2013, royalty income is expected to be comparable to 2012 at approximately $16 million. On a consolidated basis, adjusted operating margins are expected to improve slightly in fiscal 2013. By segment for fiscal 2013, operating margins for Tommy Bahama is expected to increase modestly. The operating loss in its international business is expected to continue at a level comparable to the fiscal 2012 amount of $10.4 million. However, we expect the phasing of this loss across the quarters to be significantly different than 2012. In 2012, the loss was lowest in the first quarter and increased during the year as we build the international infrastructure. For 2013, we expect the loss to be highest in the first quarter and decrease the remainder of the year as we began to generate a more meaningful four-wall contribution from stores. Operating margin at Lilly Pulitzer is expected to remain comparable to last year's adjusted operating margin, which was slightly above 20%. Lanier Clothes is expected to have a slight reduction in operating margin due to gross margin pressures described above. While the company expects lower sales at Ben Sherman, reductions in SG&A and gross margin improvements are expected to reduce operating losses in fiscal 2013. With regard to interest expense, we redeemed our senior secured notes using our new revolving credit facility this past summer, which created a partial year impact in 2012. The full annual benefit of this refinancing will be realized in fiscal 2013 with interest expense estimated for the year at approximately $4.5 million. Our effective tax rate is anticipated to rise to approximately 40.5% compared to an effective tax rate of 38.5% in fiscal 2012. The impact of foreign losses in fiscal 2012 was offset by certain discrete items, which are not anticipated to be available to us in 2013. Now with respect to the first quarter. We expect sales to be in the range of $230 million to $240 million, compared to net sales of $231 million in the first quarter of fiscal 2012. Earnings per share for the first quarter of 2013 are expected to be in the range of $0.72 to $0.82 compared to adjusted earnings per share of $1.12 in the first quarter of fiscal 2012. Our first quarter sales and earnings are expected to be impacted by several factors. For Tommy Bahama's first quarter, we're expecting a percentage sales increase in the mid- to high-single digits. The quarter will include the preopening comps for the Tokyo and Chicago stores, as well as the full load of international and other infrastructure expenses that were added throughout fiscal 2012, and this will pull operating income below the year ago level. For Lilly Pulitzer, we're expecting a low teens percentage sales increase in the first quarter with a more modest operating income increase due to higher infrastructure and preopening expenses. Lanier Clothes is expecting a shift in the distribution of sales among quarters with a mid-teens percentage sales decrease planned for the first quarter. In the first quarter, Ben Sherman's expecting a sales decrease of approximately $6 million with declines in both wholesale and at our retail stores. This sales decrease is expected to drive a larger operating loss in the first quarter of '12 as -- first quarter '13 as compared to the first quarter of fiscal 2012. As Tom mentioned earlier, our direct to consumer businesses have felt the impact of general softness seen among many of our peers in March. And finally, our effective tax rate is currently estimated at approximately 45% for the quarter compared to 38.3% in the first quarter of fiscal 2012. Our foreign losses, which are recognized in the quarter they occur, are projected to be highest in the first quarter of fiscal 2013. Recall the rate for the year is projected to be 40.5%. Thanks for your attention. And now I'll turn the call back over to Tom.

Thank you, Scott. In general, I'll note that the first quarter is by far our toughest comparison versus last year. As we look to the other periods of the year, again, particularly the second and fourth quarters, we are looking forward to solid growth versus 2012. As our new stores begin to drive revenue and leverage the expenses required for preopening, as we push forward with Ben Sherman's expense reduction plan and with the lower capital cost we'll have this year, we're positioned to overcome the first quarter year-over-year reduction and deliver a strong financial year with excellent cash flow and double-digit consolidated growth both at the top and bottom line. We are proud of what we accomplished in fiscal 2012 and excited about the upcoming year with Tommy Bahama and Lilly Pulitzer leading the way. Both of these brands clearly demonstrate a powerful ability to drive our consolidated revenue and profitability. We expect our continued investment in their direct to consumer initiatives, including people, systems and the infrastructure to deliver long-term, sustainable growth for our shareholders in the years to come. Before we take questions, I also want to mention that our Board has declared a cash dividend of $0.18 per share, representing a 20% increase from the dividend paid in the fourth quarter last year. With that, I'll wrap up and turn it back over to Stephanie. We're now ready for questions.

[Operator Instructions] And we will take our first question from Edward Yruma with KeyBanc.

I guess, first on Tommy Bahama. I know you've been pretty explicit that sales trends had weakened in March, and obviously it seems like the first quarter guidance reflects that. Does this effectively then imply that, Tommy comped negative in March and kind of what kind of volatility do you see intra month?

No -- this is Terry. No, I mean, we came out, we had, as we said on the call, a great 2012. And then we saw some softness as we came into the first quarter. And we're seeing it be very regional. We're still having some regions that are reporting very, very strong comps. So it's -- we just saw a few bumps in the first quarter. We plan on delivering a strong comp store increase in the first quarter of the year.

Got you. So then does the Tommy Bahama sales guidance for 1Q reflect negative trends within the wholesale business or...

We didn't plan our wholesale business for an increase in 2013. We planned it flat. But our wholesale business had been very strong. And we just didn't see the expanding distribution. We want to try to be better in the stores that we're currently doing business with versus growing our business. But, no.

Got it. And I know you guys have indicated that the loss from international will be roughly flat year-to-year. I guess, what kind of insight can you give us into maybe some of the stores in Asia earlier in '12? Are those beginning to ramp for profitability? And then sort of linking onto that, any kind of financial performance metrics you can give us around the New York store will be very helpful.

On international, we're very optimistic about what we've seen. The first store we opened was Macau. We've seen the health there increase, increase every month. We had a great Chinese New Year through there. We've seen the same thing in Singapore. The businesses have been very, very promising. Wan Chai is in the prepared remarks. When we came out, I think, it's got us all surprised because that's basically a mainland Hong Kong, Chinese customer there, and they've accepted the brand better than we had expected. And it's quite, quite impressive, the numbers we've got there. As Tom mentioned, we just opened Yokohama. I was in Japan last week. It's a beautiful store. It's a suburban mall in Yokohama. We wanted to open a suburban mall and an urban store and we're opening the urban one in Tokyo next week, and it's absolutely a beautiful store. But based on the Yokohama's weekend, Saturday and Sunday, they opened on Saturday, it was very promising. Very little marketing. We opened a store where we had no presence and to do the kind of business we did. It's very, very encouraging. As far as New York, we're very pleased with New York. We said we opened it in a tough time, in first of the year where the weather hasn't been that friendly to us. But we're very positive about the numbers that we're seeing in New York, and we feel that it's going to be a great store for us. The restaurant is continually gaining strength daily. Our lunches are very busy. As a matter of fact, we have a wait almost everyday for lunch. The bar business is picking up and the dinner business is increasing. So for all the things that we built in New York, far ahead, we're very, very pleased with how it's going so far. And we're looking forward to spring and seeing why we didn't have any idea what any sort of plan that -- on New York when we opened that store, we're going to get a year under our belt. But we're expecting much increased business as we move into the warmer months. So go by and take a look -- go by and have a look and have a meal. I think you'll be very impressed. It's a very impressive store.

Super. And one final question. Tom, you guys have shown an openness in the past for investing in businesses that were noncore, not meeting return profiles; obviously, Ben Sherman has struggled for some period of time, despite, obviously, a weaker macro there. I guess, what's your openness to considering more strategic alternatives for the business in light of the underwhelming performance?

Well, Ed, thanks for being on the call today, and I think we'd all love a quick fix for Ben Sherman. But I don't think a quick fix is necessarily forthcoming and our focus is really on, as we said, stabilizing and improving the business. There's some very specific things that we're doing to make that happen. First and foremost, among them, cutting expenses, exiting some unprofitable customer relationships, and then building with profitable customers in our own retail and e-commerce. And I think if we stay focused on these things, as we mentioned in the call, we should be able to cut the operating loss significantly and get the cash flow into a neutral or slightly positive position by the end of the year, which would really be a meaningful improvement and reduce the drag that it's placing on the business.

And we'll go to our next question from Eric Beder with Brean Capital.

Could you talk -- by the way, the New York store is amazing. It looks good. Could you talk about Chicago? I see that is now back on the roster. Can we get an update on that?

Yes, Eric. We, as you know, we talked about in the last call we had some issues there with some taking possession of the space with the landlord. That has been rectified. We got back in there last month. We're working, we're trying to get it opened as soon as we can, but it's going to be a terrific location. We couldn't get to be more '50 yard line' than Michigan Avenue, where that store is going to be. So we're trying to get it opened. Doug, I haven't heard the latest numbers. So, Doug, might -- Doug would -- maybe have a better number for me on here.

Right now, we're targeting for the first week of May.

Great, that's great. That's going to be a really impressive opening. When you look at this -- I assume the Japan openings are the only Asian openings for this year in Tommy Bahama. When you look at the next -- and excuse me, in Sydney. And when you look at the next round, where is the learning process going to start to take hold? Where are you going to kind of like make tweaks and kind of other pieces here in Asia?

That's a good question, Eric. As I said, I just got back from over there last week, so I'm pretty close to this one. What I said, we opened an urban and suburban stores, we want to take a look and see what the numbers look like in both of those. But, as you know, we chose to go into that market, which is a very, very important market ourselves and do it the right way. And I'm more convinced, after being over there last week, that we did exactly the right thing just to start this brand in Japan the right way and tell our story. We had over 100 press people as a precedent, last week, and I can't tell you the excitement that has been generated with the press and what these stores look like. And the comments go around Wow! That you guys are coming into this market, doing it right. You're building a flagship and we talk about -- but from that, there's been a lot of conversation, people are coming to us, liking what they're seeing, talk about other possibilities. Plus, the landlords, which we were having to just talk to them about what our concept look like in America. Now we can show them an actual store, which we did, and all of them are knocking on our door now. So, but we want to evaluate the launch and to try to figure out the next stage in the strategy, but you're right. Right now in Japan, Yokohama and Tokyo are the only ones on the docket, but we'll look in to the success and evaluate that and figure out what our next move is. But I think we've got a tremendous opportunity in Japan. It's a fantastic market. And they love, as Tom said, American brands. No, I said it's -- sorry, a crawl, walk, run. We'll take it one step at a time.

Great. And just finally, on Lilly Pulitzer. The Cincinnati stores, I guess, a big test, and when we look at this brand, what are you learning now? It's the first round of openings, and kind of what are the tweaks going forward in 2013 and beyond in terms of store -- in terms of what you want to see with the stores now that you have a year of opening stores under your belt?

Thanks, Eric, and yes, we're very excited about store openings in Lilly Pulitzer. As we mentioned, we opened 4 in 2012. Those were the first stores that the business had opened since 2009, which was actually before we bought them. So there are a lot of implications from that. The stores have been very successful. They are smaller than our average in Lilly Pulitzer. I think our average is around 3,100 feet. The new stores are all in the 2,400, 2,500 square foot range. That's definitely a learning. We like that size. It works well for Lilly Pulitzer. We're driving some very strong productivity in the whole financial model and the store works very well. I will tell you it is teaching us that in a store that size, you can only hold so much inventory on the floor and your replenishing skills need to be very good and we're developing those and a lot of the investments that we're talking about are, in part, dedicated to developing those skills. I think other things that we learned during 2012, Eric, is that we need to develop a store opening team and process. We did a good job with the openings in '12, but fundamentally, we kind of muscled through that by having a lot of people wearing multiple hats and working very long hours to get those stores opened. As we move forward, part of our investment in people, systems and infrastructure is really about developing more of a store opening team so that we can more effortlessly open stores and do it efficiently. So those are some of the key learnings, but we're very excited about stores. And like we said, we like the sort of 2,400, 2,500 square foot size. Good mall locations, of course, are very good for Lilly, particularly where there are strong female brand adjacencies. So in other words, a lot of female-oriented brands as neighbors makes for good Lilly location.

We'll go to our next question from Mitch Van Zelfden and with SunTrust.

Staying on Lilly. I know it's very early in your expansion initiatives, but have you given any thought to how big the domestic store base can grow to?

We haven't gotten very crisp with that. At the rate we're going, Mitch. With 4 to 6 a year, I think you got a very long runway before you run out. We're only at 19 right now. We've got, in addition to those, as you know, we've got 65 or 70 signature stores which are franchised or licensed stores. Those tend to be in smaller markets in our smaller stores, but our retail footprint is bigger than just the owned stores.

Okay. And I wanted get a sense of how Ben's comps are running in your U.S. locations versus your international stores. Is there a material difference?

I would say that the U.S. stores are running about in the same range as the international stores. I think that our executional missteps going back to the way we bought the merchandise for the -- or for the stores have been more pronounced in the U.S. than in the other markets. So while the market conditions are better here, I think some of the execution issues have been worse here. And those are decisions that were made, at this point, quite a long time ago. As you know, the lead times in this industry are quite long. And so these are mistakes that were made 9 months, a year ago, in many cases, that we're still sort of having to work through.

Okay. And one more, if I may. Scott, is the gross margin guidance for this year on a GAAP or an adjusted basis? K. Grassmyer: It's on a GAAP. But right now, we don't have any adjustments built into the current year guidance. So they're one in the same.

And we'll go to Mike Richardson with Sidoti.

I just have a couple of quick ones here. With regard to Tommy Bahama, it sounds like the mix of men's and women's is still about 70%, 30%. I'm wondering if there are any new sales initiatives this year to try and close the gap on that. I know obviously it's a little bit difficult with men's performing so well.

You're absolutely right, Mike. As much as we try, I've stated many times, my goal -- or our goal is to get this to 50%. It's a hard when men's keeps growing, but we have a number of initiatives and product introduction that we're capitalizing on that we saw in the fourth quarter of last year that are going to be big, big ideas for us. But as we continue to develop great product and position it in the stores prominently, we're getting the growth that we've been looking for in women's, and this over $100 million in women's products is very, very encouraging, very encouraging for us. And we talked about earlier these Asian markets, where -- that we get into that market as predominately men's brand. We're seeing some stores in 50% women's in those markets. So very encouraging across-the-board both domestic and for international. But we're going to get there. We're going to continue to focus and concentrate. If you've seen any of our marketing materials recently, we've got one coming out for Mother's Day that's exclusively a women's marketing piece, which we haven't previously done. So we're not only developing great product, but we're also marketing that product to the guests and we're seeing the results for it.

Okay, great. And just one more, just on the sourcing environment. Any general comments on sourcing, what you're seeing in terms of pricing and what and how we should be thinking about that going forward?

Yes. I'll make a general comment on that, and then let Terry and Doug add onto it. For us, the only area where that tends to be a material factor is in Lanier Clothes, which is a much lower margin business, so the impact of the cost of goods increase is more and they're also in a much more price-competitive market. So their ability to raise prices is much lower. And so in Lanier Clothes, that's the one part of the business that we tend to get some impact, and we are feeling some impact. We did in '12, and that will continue into '13. But, of course, it's fully accounted for in our guidance. Doug, do you want to comment?

Yes. The only thing I would add, and especially for Tommy, as we look at '13 and beyond, as we diversify more and more away from China, we're finding some great opportunities in South America right now. And that goes from a quality as well as the price. We're getting some amazing product out through. And it's actually helping to offset any labor issues or labor increases we're seeing out of China.

What percentage of your business is merchandised and sourced in China right now?

We're down. I mean, we used to be, gosh, I used to answer this question and say 98%, and now we're probably in the mid-80s, and going south of that. And it's really looking at sourcing more cotton product out of South America.

And in Lanier, where it's probably the most impactful, they've actually decreased their China exposure pretty dramatically over the last couple of years. They were probably 2/3 China 2 years ago and a have dropped down to 1/3 China last year. And that's because it matters a lot to them. They're very price sensitive.

[Operator Instructions] We'll now go to our next question from Susan Sansbury with Miller Tabak.

Tom, with respect to this infrastructure spend for Lilly Pulitzer, can you share with us what the actual -- or what the numbers or how large these numbers should be?

Well, I think you can kind of you can sort of back in to them by looking at the fact that we're going to grow top line pretty dramatically in the operating margin. We said it's going to be more or less flat for the year. So that means we're not getting a lot of operating leverage on the sales growth, and you could pretty easily back into an estimate of what you think it is. But, Susan, I would say and I hope we conveyed this message adequately, this is expense growth that we're happy about because we believe that it truly is an investment in future growth and as we said, since we bought Lilly Pulitzer, we've had 2 years of back to back 30% growth. And frankly, the size of the business got a little bit ahead of the size of the team and we need to get that team and the systems that support the team a little bit caught up with the business. That -- you started to see some of that impact in the fourth quarter of 2012 and then it will carry into 2013. But again, these are expenses that I think truly are investments in being able to sustain growth for the long term in Lilly.

And I'm not arguing that it's anything less than that. But I'm just wondering though, how long do you expect to spend at this level? Or tell me again exactly what you're spending money for this in 2013.

Well, the key things that we mentioned are people, systems and infrastructure. And I think there's a lot of additional expense in the people arena and in the systems arena. We're also upping our marketing spend in Lilly Pulitzer a bit, but we're doing that because we, again, because we think it will support long-term growth. I think in subsequent years, while it's way too early for us to get into much detail about those, I do think we'll start to see some operating leverage come back into this business. But you know 20% is -- or 21.6%, which was our operating margin for 2012, that's a pretty good number.

Yes, absolutely. Okay. Now just on the people, not to bang away at this.

Yes.

Is this design, marketing, merchandising or is it sourcing? You mentioned you need a new store opening team.

Well, I tell you, it's a little bit in all parts of business because the business is growing rapidly. But I would say that we're particularly focused on developing the retail and the e-com teams, the IT and systems teams and the marketing team is another area that we're particularly focused on. But I don't think there's any area of the business that we're not doing some hiring in. Because again, we've grown at a very rapid rate. By the end of '13, if you just do the math based on what we're saying we expect to grow. We're going to have a business that at the end of its third full year of our ownership, it is going to be roughly twice what it was when we bought it. Maybe not quite there, but it's a much bigger business than it was. So we're sort of adding in all areas. But again, we're particularly focused on those that I identified.

Okay. Now I was interested in your commentary about smallest footprint for Lilly. So I shouldn't look for a category expansion to perhaps handbags or small other goods?

Well, some of those items don't take up a tremendous amount of space. As we mentioned in the prepared part of the call today, the way Lilly is looking to expand the product categories is on a very select and targeted basis, and add items incrementally and do them extremely well, and you saw a couple of examples of where they did that very, very well in fiscal 2012. I would draw your attention to 2 that you might have seen in the fourth quarter with our holiday offering. We did a puffer vest and a zip-front fleece cardigan, that both performed extremely well. These are items that are common in the marketplace, but we did these in such a differentiated way that they were truly Lilly Pulitzer and completely lifted themselves out of the sort of commodity morass in those 2 sectors. But we did a lot of business on those 2 items. And that's the way we're sort of approaching it in Lilly Pulitzer, is on a very select and targeted basis. But that said, these things have had a meaningful impact and have been a significant part of the growth in Lilly Pulitzer. We had a handful of items in Lilly this year that were new items, but just that single handful accounted for a significant portion of the growth that we were able to generate. And they worked in all channels, frankly, not just our stores, but e-com and also in the wholesale.

They were eye-catching. I bought the puffer vest as a gift for someone.

Yes. Yes. You could buy somebody else's and look like the Michelin Man or you could buy Lilly Pulitzer and look like a lady.

Let me switch to Ben Sherman, and then I only have one other question. This 50% -- this goal of reducing losses by 50% this year, is this just solely related to expense reduction and exiting unprofitable accounts?

Let me walk you through the way it works. As we mentioned, I think in Scott's section, we expect about a $6 million sales decline in the first quarter. That's really the entire sales decline for the year. The rest of the quarters are relatively flat. And what's happening there is first quarter is fundamentally Spring/Summer '13 shipping in wholesale. And for Spring/Summer '13, that's where some of the exits show up and hit hard. We also did not book as well for Spring/Summer '13 as we had hoped to, and that impacted both fourth quarter and the first quarter. That, again, was largely the result of poor execution. For Autumn/Winter '13, which ships primarily in the second and third quarters of the year with some going into the fourth quarter. We're actually pleased with our bookings. We grew nicely in almost all the places that we had hoped to grow nicely. There were a few of other European markets, particularly in Southern Europe, that didn't do us well as we had hoped. But overall, we're very pleased with our bookings for Autumn/Winter '13, and those carry us sort of through third quarter and into the fourth quarter. So we've got a pretty good visibility of that piece. The expense reduction is a major part of the turnaround effort, and that's one that if we're doing our job, we should be able to control that. The expense reductions fall in areas that we believe we can do without impacting our ability to do business. So we're not cutting into muscle, we're just cutting into fat. And the biggest one is really switching our distribution arrangement from one 3PL to a different 3PL under much more favorable terms. And then the last piece of the puzzle, of course, is retail. We have what we think are pretty modest assumptions about any improvement in retail. We think they're pretty realistic. But that said, retail is going to be the wildcard for the year because you just never know until you get there, unlike wholesale where you have some forward visibility. With retail, the people got to show up and they got to put something up on the counter. So while we think our assumptions there are very reasonable, we've got to deliver on those. And so I would say that's the biggest wildcard to me because we got pretty good visibility over wholesale and we got good bookings for the quarters beyond quarter 1. And then, the expense control, we should be able to manage that pretty well. And then if we can deliver on retail, we should meet our goal, which as we said is cutting the operating loss in about half and getting cash flow back to neutral or slightly positive.

Well, it's encouraging to hear that the bookings are up for the Autumn/Winter.

Yes, we were -- Scott and I spent some time just a week or 2 ago going through in detail with the sales team, the bookings. And it wasn't all roses, but I would say, overall, we were very pleased with the bookings.

A question for Scott. 53rd-week sales contribution and an EPS contribution? K. Grassmyer: We haven't quantified that because, a lot of a wholesale shipping, it's really hard to tell if you could -- if you would have gotten that in the 52-week by pushing out -- by pushing good to get the goods out or not, so we really...

I'm not talking about Ben Sherman, I'm really talking about Tommy Bahama and Lilly. K. Grassmyer: Yes. And that's what I'm talking about also. Yes, yes. So I'd rather not give a number on that.

But was -- did it have a positive sales, as well as an EPS, or were the challenges just changes? K. Grassmyer: It had a positive sales impact. In our direct-to-consumer business, it definitely has a positive sales impact. But you also -- you have another week of expenses that go with it. On the wholesale side, it's -- whether you would have gotten those mainly 125 orders. Whether the count would have -- you could have gotten to take, basically a year end a week early or not. We had a little bit of pool in, especially maybe at Lanier, where I think that we probably helped them a little bit. And but they're going to feel it a little bit in the first quarter in the opposite way.

And at this time, there are no further questions. I'd like to turn the call back over to Tom Chubb.

Thank you very much for your interest in Oxford and your interest in being on today's call. We think we've got a great story here, and we look forward to presenting our first quarter results to you in June.

And this does conclude today's conference. Thank you for your participation.