Cherokee Inc. Facilitates License Agreement with Home Goods Stores and Hearst Publications for its Country Living Brand

Business Wire, Jan 8, 2007

VAN NUYS, Calif. -- Cherokee Inc. (Nasdaq: CHKE) announced today the completion of a license agreement between Home Goods Stores and Hearst Magazines. Terms of the agreement were not disclosed; however, under the agreement, Hearst Magazines has licensed its Country Living brand to Home Goods Stores for use in the company's home, decor, and lifestyles departments.

Glen Ellen Brown, Vice President for Hearst Brand Development said, "Cherokee has been a terrific resource with the leadership ability to match brands to appropriate retailers with great success. Through this partnership with Home Goods, we look forward to serving consumers with uniquely designed and sourced products for home decor across a wide range of categories."

"We are thrilled to have paired these two powerhouses together. With Home Goods rapid expansion and Country Living Magazine's leadership reach and loyal following, consumers will have the ability to replicate the unique style found in the pages of the magazine in their home," said Sandi Stuart, Executive Vice President of Licensing, Cherokee Inc. "In addition, we will continue to leverage our vast network both in the U.S. and internationally to facilitate relationships for brands we represent on a selective basis," Stuart continued.

About Hearst Brand Development

Hearst Brand Development is a division of Hearst Magazines, one of the world's largest publishers of monthly magazines with 18 consumer titles including Cosmopolitan, CosmoGIRL!, Country Living, Esquire, House Beautiful, Redbook, and Seventeen. Hearst Brand Development is responsible for expanding the company's magazine title brand franchises across multiple product categories and distribution channels.

About Cherokee Inc.

Cherokee Inc., based in Van Nuys, is a marketer, licensor and manager of a variety of brands it owns (Cherokee, Sideout, Carole Little and others) and a consultant to brands it represents. Currently, Cherokee Inc. 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 Cherokee Inc. include Target Stores, TJX Companies, Mervyn's, Hearst Publications, Tesco, Hbc/Zellers, Pick 'n Pay, Grupo Aviara, Fawaz Al Hokair, and Shanghai Bolderway.

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 future revenue and net income growth 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 effect of national and regional economic conditions, the financial condition of the apparel industry and the retail industry, the overall level of consumer spending, 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 and Sideout 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 Forms 10-K for Fiscal Year 2006, 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.