3.	Termination of Burberry License:

Burberry exercised its option to buy-out the license rights effective December 31, 2012. On October 11, 2012 the Company and Burberry entered into a transition agreement that provided for certain license rights and obligations to continue through March 31, 2013. The Company continued to operate certain aspects of the business for the brand including product development, testing, and distribution. The transition agreement provided for non-exclusivity for manufacturing, a cap on sales of Burberry products, a reduced advertising requirement and no minimum royalty amounts.

Accounts receivables and accounts payables will be collected and paid in the ordinary course of business. The transition agreement provided that Burberry inventories at March 31, 2013 should be less than $20.0 million in the aggregate. Actual Burberry inventory as of March 31, 2013 aggregated approximately $18 million. Burberry also agreed to purchase, at cost, Burberry Beauty finished goods subject to a $4.0 million maximum, and all or part of Burberry fragrance and Burberry Beauty raw materials and components subject to a $6.5 million maximum. The Company and Burberry initiated discussions regarding inventory to be purchased by Burberry in April 2013. The Company has until June 30, 2013 to sell-off any remaining inventory not purchased by Burberry as of March 31, 2013. The Company believes that its inventory reserves are adequate to cover any remaining inventory at June 30, 2013. As of December 31, 2012, the Company reported a gain of $198.8 million from the termination of the license and tax on the gain at approximately 36% was paid in April 2013.