Cherokee Marks Increase in 2nd-Quarter Profits

Cherokee Group, a Sunland apparel and shoe company, reported a 73% increase in fiscal second-quarter profit compared with a year earlier, and a 33% jump in sales.

The company’s net income for the three months ended May 28 rose to $4.67 million, or 38 cents a share, from $2.70 million, or 22 cents a share, a year earlier. Sales climbed to $44.7 million from $33.7 million.

Cherokee said the latest earnings included $5.34 million in insurance proceeds, stemming from a fire last Dec. 2 that destroyed the facilities, equipment and inventory of Priority Finishing, an apparel dyeing and finishing company that is 80% owned by Cherokee. Cherokee also lost about 1 million yards of fabric in the fire.

For the first half of its fiscal year, Cherokee’s profit rose 46% to $7.52 million, or 61 cents a share, from $5.16 million, or 44 cents a share, a year earlier. Six-month sales increased 23% to $87.3 million from $70.7 million.

An investor group that includes some Cherokee executives has offered to buy the company for $13 a share, or $161 million. But on Monday, a panel of Cherokee directors said they rejected the offer as inadequate.