SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended January 31, 1998
Commission File No. 1-11722
CHIC BY H.I.S, INC.
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(Exact name of registrant as specified in its charter)
Delaware 13-3494627
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(State of Incorporation) (I.R.S. Employer
Identification No.)
1372 Broadway, New York, New York 10018
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(Address of principal executive offices) (Zip Code)
(212) 302-6400
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Registrant's telephone number,
including area code
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No____
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Shares
Date Class Outstanding
- ---------------- ____________________________ ___________
March 5, 1998 Common Stock, $.01 Par Value 9,787,868
CHIC BY H.I.S, INC.
INDEX
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Page
Part I. Financial Information
Item 1: Financial Statements
(unaudited, except as noted):
Consolidated Balance Sheets at
January 31, 1998 and November
1, 1997 (audited) 3
Consolidated Statements of Operations
for the thirteen weeks ended January 31,
1998 and February 1, 1997 4
Consolidated Statements of Cash Flows
for the thirteen weeks ended January 31,
1998 and February 1, 1997 5
Consolidated Statements of Stockholders'
Equity for the thirteen weeks ended
January 31, 1998 and February 1, 1997 6
Notes to Consolidated Financial Statements 7-8
Item 2: Management's Discussion and
Analysis of Financial Condition
and Results of Operations 9-12
Part II. Other Information
Item 5: Special Note Regarding Forward-
Looking Statements 13-14
Item 6: Exhibits and Reports on Form 8-K 15
Signature Page 16
CHIC BY H.I.S., INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
Jan. 31, 1998 Nov. 1, 1997
(In thousands) (Unaudited) (Audited)
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Assets
Current:
Cash and cash equivalents 7,480 $ 7,395
Accounts receivable - net of
reserve for possible losses 35,561 32,926
Inventories 71,753 71,368
Deferred income taxes 2,767 3,020
Prepaid expenses and other
current assets 4,588 3,560
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Total Current Assets 122,149 118,269
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Property, Plant and Equipment,
at cost less accumulated
depreciation and amortization 70,801 67,998
Other Assets 3,106 2,436
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$ 196,056 $ 188,703
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Liabilities and Stockholders' Equity
Current:
Revolving bank loan $ 23,500 $ 15,000
Foreign bank debt 888 -
Current maturities of
long-term debt 1,934 1,997
Obligations under capital leases 757 701
Accounts payable 13,836 17,032
Accrued liabilities:
Payroll, payroll taxes and
commissions 2,837 5,492
Income taxes 6,630 4,802
Other 5,877 5,731
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Total current liabilities 56,259 50,755
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Non-current:
Long-term debt 25,921 25,989
Pension liability 10,654 10,654
Deferred income taxes 2,713 2,713
Obligations under capital leases 1,105 660
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Total non-current liabilities 40,393 40,016
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Minority interest 9,264 8,864
Stockholders' Equity
Preferred stock, $.01 par value
shares authorized 10,000,000;
none issued - -
Common stock, $.01 par value -
25,000,000 shares authorized;
9,787,868 and 9,764,968 issued
and outstanding 99 99
Paid-in capital 105,724 105,590
Retained earnings (deficit) (4,783) (6,299)
Foreign currency translation
adjustment (246) 332
Excess of additional pension liability
over intangible pension asset (10,654) (10,654)
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Stockholders' Equity 90,140 89,068
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$ 196,056 $ 188,703
See notes to consolidated financial statements.
CHIC BY H.I.S. INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except share) Thirteen weeks Thirteen weeks
and per share amount) ended January ended February
31, 1998 1, 1997
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Net sales 64,245 56,031
Cost of goods sold 47,680 41,220
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Gross profit 16,565 14,811
Licensing revenues 597 538
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17,162 15,349
Selling, general and administrative
expenses 11,907 14,339
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Operating income 5,255 1,010
Interest and finance costs (883) (1,187)
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Income (loss) before provision for
income taxes, minority interest
and extraordinary item 2,440 (394)
Provision for income taxes 1,932 217
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Income (loss) before minority
interest and extraordinary
item 2,440 (394)
Minority interest 924 -
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Income (loss) before
extraordinary item 1,516 (394)
Extraordinary loss from extinguishment
of debt - (330)
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Net income (loss) $ 1,516 $(724)
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Earnings (loss) per common share:
Basic:
Income (loss) before extraordinary
item $.15 ($.04)
Net income (loss) $.15 ($.07)
Diluted:
Income (loss) before extraordinary
item $.15 ($.04)
Net income (loss) $.15 ($.07)
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Weighted average number of common shares
and share equivalents outstanding
Basic 9,787,868 9,753,868
Diluted 9,895,017 9,753,868
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See notes to consolidated financial statements.
CHIC BY H.I.S., INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Thirteen Weeks Ended
--------------------
January 31, February 1,
(In thousands) 1998 1997
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Cash flows from operating activities:
Net income (loss) $ 1,516 ($ 724)
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Adjustments to reconcile net income (loss)
to net cash used in operating activities:
Minority interest 924 -
Depreciation and amortization 1,266 976
Deferred income taxes 253 (1,525)
Decrease (increase) in:
Accounts receivable (2,635) 6,949
Inventories (385) (13,105)
Prepaid expenses and other
current assets (1,028) (3,053)
Other assets (670) (1,329)
Increase (decrease) in:
Accounts payable (3,196) 5,587
Accrued liabilities (680) (1,746)
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Total adjustments (6,151) (7,246)
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Net cash used in operating
activities (4,635) (7,970)
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Cash flows from investing activities:
Purchase of property, plant
and equipment (3,259) (1,216)
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Cash flows from financing activities:
Increase in loans under revolving
line of credit 8,500 25,900
Increase in foreign bank debt 888 4,113
Repayment of long-term debt - (43,000)
Proceeds from the issuance of
common stock 134 -
Increase in deferred financing costs - (150)
Principal payments under capitalized
lease obligations (202) (221)
Retirement of capitalized lease
obligation (175) -
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Net cash provided by (used in)
financing activities 9,145 (13,358)
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Increase (decrease) in cash and cash
equivalents 1,251 (22,544)
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Effect of exchange rates on cash (1,166) (1,491)
Cash and cash equivalents, beginning
of period 7,395 27,178
Cash and cash equivalents, end of
period $ 7,480 $ 3,143
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See notes to consolidated financial statements.
CHIC BY H.I.S., INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(Unaudited)
(In Thousands) Total Common stock Paid-in capital
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Balance, November
2, 1996 $80,878 $ 98 $105,526
Net loss (724) - -
Foreign currency
Translation
adjustment (1,360) - -
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Balance February 1,
1997 $78,794 $98 $105,526
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Excess of
additional
Foreign pension
Retained currency liability over
earnings translation intangible
(deficit) adjustment pension asset
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Balance, November
2, 1996 ($16,764) $1,645 ($9,627)
Net loss (724) - -
Foreign currency
translation
adjustment - (1,360) -
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Balance, February
1, 1997 (17,488) $285 ($9,627)
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Total Common stock Paid-in capital
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Balance, November
1, 1997 $89,068 $99 $105,590
Net income 1,516 - -
Foreign currency
translation
adjustment (578) - -
Stock options
exercised 134 - 134
Balance, January 31,
31, 1998 $90,140 $ 99 $105,724
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Excess of
additional
Foreign pension
Retained currency liability over
earnings translation intangible
(deficit) adjustment pension asset
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Balance, November
1, 1997 ($6,299) $332 ($10,654)
Net income 1,516 - -
Foreign currency
translation
adjustment - (578) -
Stock options
exercised - - -
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Balance, January
31, 1998 $(4,783) $(246) $(10,654)
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See notes to consolidated financial statements.
CHIC BY H.I.S., INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
1. Basis of Presentation
The accompanying unaudited consolidated financial statements
have been prepared in accordance with generally accepted
accounting principles for interim financial information and with
the instructions to Form 10-Q and Article 10 of Regulation S-X.
Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management,
all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been included.
2. Inventories
Inventories consist of the following:
(In Thousands) January 31, 1998 November 1, 1997
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Raw Materials $ 8,037 $ 8,138
Work-in-process 18,138 16,461
Finished goods 45,578 46,769
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$ 71,753 $ 71,368
3. Recent Accounting Standards
In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 128, "Earnings
per Share," which provides for the calculation of "basic" and
"diluted" earnings per share. Basic earnings per share includes
no dilution and is computed by dividing income available to
common shareholders by the weighted average number of common
shares outstanding for the period. Diluted earnings per share
reflects the potential dilution from the assumed exercise of
stock options in a manner similar to fully diluted earnings per
share, except that the use of the market price at the end of the
period, when that price is higher than the average market price
for the period, has been eliminated. This standard is effective
for period ending after December 15, 1997. The adoption of this
standard did not have a significant effect on the Company's
earnings per share calculation.
In June 1997, the Financial Accounting Standards Board issued two
new disclosure standards. Results of operations and financial
position will be unaffected by implementation of these new
standards.
SFAS No. 130, "Reporting Comprehensive Income," established
standards for reporting and display of comprehensive income, its
components and accumulated balances. Comprehensive income is
defined to include all changes in equity except those resulting
from investments by owners and distributions to owners. Among
other disclosures, SFAS No. 130 requires that all items that are
required to be recognized under current accounting standards as
components of comprehensive income be reported in a financial
statement that is displayed with the same prominence as other
financial statements.
SFAS No. 131, "Disclosure about Segments of an Enterprise and
Related Information," which supersedes SFAS No. 14, "Financial
Reporting for Segments of a Business Enterprise," establishes
standards for the way that public enterprises report information
about operating segments in annual financial statements and
requires reporting of selected information about operating
segments in interim financial statements issued to the public.
It also establishes standards for disclosures regarding products
and services, geographic areas and major customers. SFAS No. 131
defines operating segments as components of and enterprises about
which separate financial information is available that is
evaluated regularly by management in deciding how to allocate
resources and in assessing performance.
Both SFAS Nos. 130 and 131 are effective for financial statements
for periods beginning after December 15, 1997 and require
comparative information for earlier years to be restated.
Item 2: Management's discussion and
analysis of financial condition
and results of operations
General
As a designer, manufacturer and marketer of moderately priced,
basic style male and female denim jeans, casual pants and shorts,
Chic by H.I.S, Inc. (the "Company") believes that its products
constitute basic apparel and, as such, generally do not depend
upon impulse buying or high fashion trends. The Company
distributes its products primarily through mass merchandisers
which constitute the Company's traditional channel of
distribution.
The following table sets forth selected operating data as a
percentage of net sales for the periods indicated.
Thirteen Weeks Ended
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January 31, February 1
1998 1997
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Net sales
United States 63.7 54.0
Europe 36.3 46.0
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Consolidated 100.0 100.0
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Gross margin
United States 15.8 13.8
Europe 43.3 41.2
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Consolidated 25.8 26.4
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Licensing revenues .9 1.0
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Selling, general and administrative
expenses 18.5 25.6
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Operating income 8.2 1.8
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Interest and finance costs 1.4 2.1
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Income (loss) before provision for
income taxes, minority interest
and extraordinary item 6.8 (.3)
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Provision for income taxes 3.0 .4
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Minority interest 1.4 -
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Extraordinary item - (.6)
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Net income (loss) 2.4 (1.3)
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CHIC BY H.I.S., INC. AND SUBSIDIARIES
The following discussion provides information and analysis of the
results of operations of the Company for the thirteen weeks ended
January 31, 1998 and February 1, 1997 and its liquidity and
capital resources.
Thirteen Weeks ended January 31, 1998 (the "1998 First Quarter")
Compared to Thirteen Weeks ended February 1, 1997 (the "1997
First Quarter")
Net Sales. Net sales for the 1998 First Quarter
increased $8.2 million, or 14.7%, from $56.0 million for the 1997
First Quarter to $64.2 million. United States sales increased by
$10.7 million, or 35.3%, to $40.9 million primarily due to an
increase in unit sales volume. As of January 31, 1998, the
Company had a total backlog of confirmed domestic purchase orders
of $76.4 million, an increase of 64.9% compared to $46.3 million
as of February 1, 1997. In the 1998 First Quarter, European
sales increased by 1.1 million deutsche marks, or 1.7%, to 41.4
million deutsche marks. When converted using the prevailing
currency exchange rate, the European sales translated into a
decrease of $2.4 million, or 9.5%, to $23.3 million for the 1998
First Quarter. As of January 31, 1998, the Company had a total
backlog of confirmed European purchase orders of 62.9 million
deutsche marks, a decrease of 3.3% compared to 65.0 million
deutsche marks as of February 1, 1997. The confirmed European
backlog, when converted into U.S. currency at the then prevailing
rate, was $36.5 million, a decrease of 8.1% compared to $39.7
million on February 1, 1997.
The Company's backlog consists of confirmed purchase
contracts. Substantially all of the unfilled orders are expected
to be shipped within 12 months. The Company believes that in the
past it has shipped at least 95% of its confirmed purchase
contracts. The Company has not generally experienced difficulty
in filling orders on a timely basis.
Gross Profit. Gross profit for the 1998 First Quarter
increased $1.8 million, or 11.8%, from $14.8 million in the 1997
First Quarter to $16.6 million, although gross margin decreased
from 26.4% to 25.8%. United States gross profit increased $2.3
million from $4.2 million for the 1997 First Quarter to $6.5
million. The increase in gross profit and as a percentage of net
sales in the United States was primarily due to the increase in
sales volume, as well as the increase in production at the
CHIC BY H.I.S., INC. AND SUBSIDIARIES
Company's Mexican production facility. European gross margin
increased from 41.2% in the 1997 First Quarter to 43.3% primarily
due to product mix.
Licensing Revenues. Licensing revenues remained
relatively flat for the 1998 First Quarter at $.6 million, as
compared to $.5 million for the 1997 First Quarter.
SG&A Expenses. Selling, general and administrative
expenses decreased $2.4 million, or 17.0%, to $11.9 million for
the 1998 First Quarter primarily due to decreased advertising and
sales promotion costs.
Operating Income. Operating income for the 1998 First
Quarter increased $4.3 million from $1.0 million in the 1997
First Quarter to $5.3 million, primarily due to the increase in
sales and the decrease in selling, general and administrative
expenses.
Interest and Finance Costs. Interest and finance costs
decreased $.3 million or 25.6%, from $1.2 million for the 1997
First Quarter to $.9 for the 1998 First Quarter. The decrease in
interest cost was due to lower outstanding borrowings for the
period.
Income Taxes. The provision for income taxes for the
1998 First Quarter was $1.9 million as compared to $.2 million
for the 1997 First Quarter as a result of an increase in income.
The domestic tax provision reflects the utilization of the
deferred tax asset and the Company's state and local tax
obligation.
CHIC BY H.I.S., INC. AND SUBSIDIARIES
Liquidity and Capital Resources
The Company's principal capital requirements have been
to fund working capital needs and capital expenditures. The
Company has historically relied primarily on internally generated
funds, trade credit, bank borrowings and other debt offerings to
finance these needs.
In the 1998 First Quarter, net cash of $4.6 million was
used in operations, as compared to $8.0 million in the1997 First
Quarter. The net cash used in operations was primarily
attributable to the increases in accounts receivables,
inventories, and prepaid and other assets of $2.6 million, $.4
million and $1.7 million, respectively, as well as the decrease
in accounts payable and accrued expenses of $3.9 million, which
were partially offset by the income for the period. The changes
in accounts receivable, inventories and accounts payable are
primarily attributable to the increase in sales and order
backlog. The decrease in accrued expenses is primarily due to
the payment of vacation and other employee benefits accrued at
the year end during the first quarter.
Net cash of $3.3 million was used in investing
activities in the 1998 First Quarter, as compared to $1.2 million
in the 1997 First Quarter. Cash used in investing activities was
primarily attributable to the acquisition and renovation of
manufacturing facilities and equipment. The Company has acquired
additional property in Mexico that is being developed into a
manufacturing complex that was placed in service early in the
second quarter of fiscal 1998, with continued plans for
expansion. As the productive capacity of such facilities
increases, the Company will evaluate whether to close additional
manufacturing facilities in the United States. Such a decision
may result in temporary production losses and the revaluation of
related property and equipment. In addition, the downsizing
associated with such plant closings may affect the accounting,
disclosure and funding of the Company's pension benefit
obligation.
CHIC BY H.I.S., INC. AND SUBSIDIARIES
Net cash provided by financing activities was $9.1
million in the 1998 First Quarter, as compared to $13.4 million
used in financing activities in the 1997 First Quarter. The cash
provided by financing activities in the 1998 First Quarter was
primarily attributable to the increase in borrowings against the
Company's credit facilities. The cash used in financing
activities in the 1997 First Quarter was primarily attributable
to the repayment of the $43 million in senior notes payable,
which was partially offset by increased borrowings against the
Company's revolving credit facilities.
As of January 31, 1998, the Company had domestic credit
agreements providing a $35 million revolving line of credit, of
which $23.5 million was outstanding. In addition, the Company
had $25.5 million of IRBs outstanding at January 31, 1998. The
Company also has foreign financing agreements with three banks
providing term loans aggregating 4,450,000 deutsche marks
(approximately $2.4 million, based on the January 31, 1998
foreign currency exchange rate) and lines of credit aggregating
38 million deutsche marks (approximately $20.9 million, based on
the January 31, 1998 foreign currency exchange rate).
Approximately $.9 million was outstanding against the foreign
lines of credit as of January 31, 1998.
In recent years, certain retail customers have
experienced significant financial difficulties. The Company
attempts to minimize its credit risk associated with these
customers by closely monitoring its accounts receivable balances
and their ongoing financial performance and credit status.
Historically, the Company has not experienced material adverse
effects from transactions with these customers. However,
considering the customer concentration of the Company's net
sales, any material financial difficulty experienced by a
significant customer could have an adverse effect on the
Company's financial position or results of operations.
The Company is a holding company, and is dependent upon
the receipt of dividends or other payments from its subsidiaries.
The Company expects that cash generated from operations and the
credit agreements will provide the financial resources sufficient
to meet its foreseeable working capital and capital expenditure
requirements. There can be no assurance, however, that the
Company will not need to borrow from other sources during future
periods.
CHIC BY H.I.S., INC. AND SUBSIDIARIES
Part II OTHER INFORMATION
Item 5: Special Note Regarding Forward-looking Statements
The Private Securities Litigation Reform Act of 1995
provides a "safe harbor" for forward-looking statements. Except
for the historical information contained or incorporated by
reference in this filing, the matters discussed or incorporated
by reference herein are forward-looking statements. Such
forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause the actual
results, performance, or achievements of the Company, or industry
results, to be materially different from any future results,
performance, or achievements expressed or implied by such
forward-looking statements. Such factors include, among others,
those set forth below under the heading "Additional Cautionary
Statements" as well as the following: general economic and
business conditions; industry capacity; fashion, apparel and
other industry trends; competition; overseas expansion; the loss
of major customers; changes in demand for the Company's products;
cost and availability of raw materials; changes in business
strategy or development plans; quality of management; and
availability, terms and deployment of capital.
Additional Cautionary Statements
Dependence on Major Customers. The Company's two largest
customers, Kmart Corporation ("K-Mart") and Target, a division of
Dayton Hudson Corporation ("Target"), together accounted for
approximately 38% and 30% of the Company's consolidated net sales
during fiscal 1996 and fiscal 1997, respectively. Each of these
customers accounted for more than ten percent of the Company's
consolidated net sales in fiscal 1996, while only K-Mart
represented more than ten percent of the Company's consolidated
net sales in fiscal 1997. The loss of either K-Mart or Target as
a customer could have an adverse effect on the results of the
Company's operations. In addition, several of the Company's
licensees sell products bearing the Company's trademarks to the
same retailers, including K-Mart. The Company has no long-term
commitments or long-term contracts with any of its customers.
CHIC BY H.I.S., INC. AND SUBSIDIARIES
Recent Apparel Industry Trends. Competition in the apparel
industry has been exacerbated by the recent consolidations and
closings of major stores. Like many of its competitors, the
Company sells to certain retailers who have recently experienced
financial difficulties and some of whom are currently operating
under the protection of the federal bankruptcy laws. Although
the Company monitors the financial condition of its customers,
the Company cannot predict what effect, if any, the financial
condition of such customers will have on the Company. The
Company believes that developments to date within these companies
have not had a material adverse effect on the Company's financial
position or results of operations.
Nature of Industry; Dependence on Jeans. The apparel
industry is highly competitive and characterized generally by
ease of entry. Many of the Company's competitors are
substantially larger and have greater financial, marketing and
other resources than the Company. The Company's revenues are
derived principally from sales of jeans products. Although the
Company's products for the domestic market have historically been
less sensitive to fashion trends than higher fashion lines, the
apparel industry is subject to rapidly changing consumer
preferences, which may have an adverse effect on the results of
the Company's operations if the Company materially misjudges such
preferences.
Dependence on Key Personnel. The Company depends on the
services of certain key personnel, including Mr. Burton M.
Rosenberg, the Chairman of the Board and Chief Executive Officer
of the Company. The Company believes that the loss of the
services of any of these key personnel could have an adverse
effect on the results of the Company's operations.
CHIC BY H.I.S., INC. AND SUBSIDIARIES
Risks of Doing Business Overseas. In general, the Company
believes that the demand for jeans in foreign markets is more
susceptible to changes in fashion preferences than in the
domestic market. In addition, it is not possible to predict
accurately the effect that the continued elimination of trade
barriers among members of the European Union will have on the
Company's operations in Europe. The Company is also expanding
its activities in Eastern Europe, where economic, political and
financial conditions are changing rapidly, and commenced
manufacturing operations in Mexico during fiscal 1997. In
general, there can be no assurance that the results of the
Company's European operations or the operations in Mexico will
not be adversely affected by factors such as restrictions on
transfer of funds, political instability, competition, the
relative strength of the U.S. dollar, changes in fashion
preferences and general economic conditions.
Absence of Dividends. The Company has not, in recent years,
paid any cash or other dividends on its Common Stock, and there
can be no assurance that the Company will pay cash dividends in
the foreseeable future. As a holding company, the ability of the
Company to pay dividends is dependent upon the receipt of
dividends or other payments from its subsidiaries. The Company's
domestic credit agreements (the "Loan Agreements") contain
certain limitations on the Company's ability to pay dividends.
Leverage and Financial Covenants. Although the Company's
initial public offering in February 1993 and the other components
of its refinancing plan (the "Refinancing Plan") improved the
Company's operating and financial flexibility, the Company
continues to have indebtedness that could adversely affect its
ability to respond to changing business and economic conditions.
At January 31, 1998, the Company had an aggregate of
approximately $54.1 million of indebtedness (including capital
leases) outstanding and the Company's stockholders' equity was
approximately $90.1 million. The Company's credit agreements
contain covenants that impose certain operating and financial
restrictions on the Company. Such restrictions affect, and in
many respects limit or prohibit, among other things, the ability
of the Company to incur additional indebtedness, create liens,
sell assets, engage in mergers or acquisitions and pay dividends.
CHIC BY H.I.S., INC. AND SUBSIDIARIES
The Year 2000
The Company is currently evaluating the impact of the year 2000
on its management and information systems. At this time,
management does not believe the impact of the year 2000 will have
a material effect on its operations or financial results.
CHIC BY H.I.S., INC. AND SUBSIDIARIES
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
None
(b) Reports on Form 8-K
None
SIGNATURE
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 thereunto duly authorized.
CHIC BY H.I.S, INC.
Dated: March 6, 1998 By: /s/ Burton M. Rosenberg
_____________________________
Burton M. Rosenberg
Chief Executive Officer
Dated: March 6, 1998 By: /s/ Christine A. Hadjigeorge
_____________________________
Christine A. Hadjigeorge
Chief Financial Officer
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This Schedule contains summary financial information extracted from the
consolidated balance sheet and the consolidated statement of operations as filed
as part of the quarterly report on Form 10-Q and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> NOV-1-1997
<PERIOD-END> JAN-31-1998
<CASH> 7,480
<SECURITIES> 0
<RECEIVABLES> 35,783
<ALLOWANCES> 222
<INVENTORY> 71,753
<CURRENT-ASSETS> 122,149
<PP&E> 101,427
<DEPRECIATION> 30,626
<TOTAL-ASSETS> 196,056
<CURRENT-LIABILITIES> 56,259
<BONDS> 27,026
0
0
<COMMON> 99
<OTHER-SE> 90,041
<TOTAL-LIABILITY-AND-EQUITY> 196,056
<SALES> 64,245
<TOTAL-REVENUES> 64,842
<CGS> 47,680
<TOTAL-COSTS> 11,864
<OTHER-EXPENSES> -
<LOSS-PROVISION> 43
<INTEREST-EXPENSE> 883
<INCOME-PRETAX> 4,372
<INCOME-TAX> 1,932
<INCOME-CONTINUING> 1,516
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,516
<EPS-PRIMARY> 0.15
<EPS-DILUTED> 0.15
</TABLE>
