Income Tax

The effective income tax rate for the Current Quarter and the Prior Year Quarter from continuing operations was approximately 70% and 4%, respectively, resulting in a $208,000 income tax benefit and $90,000 income tax provision, respectively.

The effective income tax rate for the Current Six Months and the Prior Year Six Months was approximately 66% and (1)%, respectively, resulting in a $259,000 income tax benefit and $16,000 income tax benefit, respectively.

During the Current Quarter and the Current Six Months, the respective effective tax rates were attributable to recurring permanent differences. Based on the amount of loss from continuing operations before income taxes compared to the permanent differences, the effective rate increased by 29% and 25% for the Current Quarter and the Current Six Months, respectively.

For the Prior Year Quarter and the Prior Year Six Months, the Company recorded a $3.00 million gain on the reduction of contingent obligations related to the acquisition of the Isaac Mizrahi Brand, partially offset by recurring permanent differences. This gain was not subject to tax and was therefore treated as a discrete item (permanent difference) occurring in the Prior Year Quarter and the Prior Year Six Months. Based on the amount of income from continuing operations before income taxes compared to the permanent differences, the effective rate decreased by 37% and 42% for the Prior Year Quarter and the Prior Year Six Months, respectively.