RELATED PARTY TRANSACTIONS	6 Months Ended
Jun. 30, 2016
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS	NOTE 9 — RELATED PARTY TRANSACTIONS Peter Kim We entered into several agreements, including a stock purchase agreement, a convertible note, a registration rights agreement, an employment agreement and a non-competition agreement with Peter Kim, the Chief Executive Officer of our subsidiary, Hudson, in connection with the acquisition of Hudson. Additionally, in connection with the RG Merger, we entered into a Rollover Agreement pursuant to which the convertible notes were exchanged for a combination of cash, stock and Modified Convertible Notes, and a new employment and non-competition agreement with Mr. Kim. Mr. Kim also has rights under the Registration Rights Agreement described below with respect to shares of our common stock issuable upon conversion of his Modified Convertible Notes. Under the new non-competition agreement with us and Hudson, which became effective as of the closing date of the RG Merger, Mr. Kim has agreed not to engage in, compete with or permit his name to be used by or in connection with any premium denim apparel business outside his role with Hudson that is competitive to us, Hudson or our respective subsidiaries for a period of up to three years from January 28, 2016. See “Note 15 – Debt and Preferred Stock.” Registration Rights Agreement On the closing date of the RG Merger, we entered into a registration rights agreement (the “Registration Rights Agreement”) with TCP Denim, LLC and certain of its affiliates, who are our major stockholders, the noteholder party to the Rollover Agreement and Michael Buckley, our Chief Executive Officer. Pursuant to the Registration Rights Agreement, and subject to certain limitations described therein, we are required to provide certain demand and piggyback registration rights to the parties to the Registration Rights Agreement. In particular, we are required to prepare and file a registration statement on Form S-1 or S-3 (or any similar form or successor thereto) for the registration under the Securities Act of shares of our common stock (i) issued to the parties to the Registration Rights Agreement in connection with the RG Merger Agreement and the Rollover Agreement and (ii) issuable upon conversion of the Series A Preferred Stock and the Modified Convertible Notes. Prior to the closing date of the RG Merger, we had a substantially similar registration rights agreement with the holders of the original convertible notes, which included Mr. Kim. Employment Agreements with Officers We have entered into employment agreements with Mr. Buckley, Mr. Kim and Hamish Sandhu, our Chief Financial Officer. The agreements have varying initial terms, but all contain automatic one-year renewals, unless terminated by either party, and provide for minimum base salaries adjusted for annual increases, incentive bonuses based upon the attainment of specified goals, and severance payments in the event of termination of employment, as defined in the employment contracts. RG Purchases We purchase orders from Texport Industries PVT Ltd, an entity affiliated with certain of our stockholders. RG purchased from the affiliated entity merchandise for resale amounting to approximately $1,398,000 and $2,080,000, respectively, representing approximately 9% and 33%, respectively, of costs of goods sold during the three months ended June 30, 2016 and 2015 and $5,210,000 and $5,945,000, respectively, representing approximately 18% and 44%, respectively, during the six months ended June 30, 2016 and 2015. As of June 30, 2016 and December 31, 2015, approximately $2,248,000 and $4,600,000, respectively, were due to the affiliated entity and were included in accounts payable and accrued expenses on the accompanying condensed consolidated balance sheets. Warehousing and Shipping We utilize warehousing and shipping services from Creative Logistics Services, LLC, an entity affiliated with certain of our stockholders, under an agreement expiring in October 2017. Under the agreement, RG is charged a percentage of monthly net amounts invoiced. Warehousing and shipping services provided by the affiliated entity and charged to us amounted to approximately $337,000 and $325,000, respectively, during the three months ended June 30, 2016 and 2015 and $753,000 and $764,000, respectively, during the six months ended June 30, 2016 and 2015. As of June 30, 2016 and December 31, 2015, approximately $294,000 and $283,000, respectively, were due to the affiliated entity and were included in accounts payable and accrued expenses on the accompanying condensed consolidated balance sheets. License Fees We pay licensing fees to Robert Stock, one of our stockholders and a consultant, based on net wholesale sales and royalty income from certain licenses as defined in his employment agreement. We did not make any payments to Mr. Stock in the three months ended June 30, 2016 and 2015. For the six months ended June 30, 2016 and 2015, licensing fees incurred to Mr. Stock were $46,000 and $52,000, respectively. Payments to Tengram Capital Partners, LP From time to time, we expect to reimburse Tengram Capital Partners, LP, an entity that is one of our stockholders, for certain travel and other related expenses of its employees related to services performed on our behalf and at our request. For the three months ended June 30, 2016, we have recorded expenses of $84,000. For the six months ended June 30, 2016, we recorded expense of $875,000, which included (i) $750,000 of reimbursement for legal fees incurred by TCP Denim, LLC, in connection with the purchase of the Series A Preferred Stock and RG Merger; and (ii) $41,000 of pre-RG Merger management fees that were paid by RG that are non-recurring as a result of the RG Merger. For the three months and six months ended June 30, 2015, RG paid $125,000 and $250,000, respectively, related to annual management fees and expenses that are non-recurring as a result of the RG Merger. SWIMS® Transaction In connection with the acquisition of SWIMS® in July 2016, we entered into certain financing arrangements with Tengram Partners Fund II, L.P., an entity affiliated with the holder of our Series A Preferred Stock, TCP Denim, LLC. See “Note 18 – Subsequent Events.”

NOTE 9 — RELATED PARTY TRANSACTIONS

Peter Kim

We entered into several agreements, including a stock purchase agreement, a convertible note, a registration rights agreement, an employment agreement and a non-competition agreement with Peter Kim, the Chief Executive Officer of our subsidiary, Hudson, in connection with the acquisition of Hudson. Additionally, in connection with the RG Merger, we entered into a Rollover Agreement pursuant to which the convertible notes were exchanged for a combination of cash, stock and Modified Convertible Notes, and a new employment and non-competition agreement with Mr. Kim. Mr. Kim also has rights under the Registration Rights Agreement described below with respect to shares of our common stock issuable upon conversion of his Modified Convertible Notes.

Under the new non-competition agreement with us and Hudson, which became effective as of the closing date of the RG Merger, Mr. Kim has agreed not to engage in, compete with or permit his name to be used by or in connection with any premium denim apparel business outside his role with Hudson that is competitive to us, Hudson or our respective subsidiaries for a period of up to three years from January 28, 2016. See “Note 15 – Debt and Preferred Stock.”

Registration Rights Agreement

On the closing date of the RG Merger, we entered into a registration rights agreement (the “Registration Rights Agreement”) with TCP Denim, LLC and certain of its affiliates, who are our major stockholders, the noteholder party to the Rollover Agreement and Michael Buckley, our Chief Executive Officer. Pursuant to the Registration Rights Agreement, and subject to certain limitations described therein, we are required to provide certain demand and piggyback registration rights to the parties to the Registration Rights Agreement. In particular, we are required to prepare and file a registration statement on Form S-1 or S-3 (or any similar form or successor thereto) for the registration under the Securities Act of shares of our common stock (i) issued to the parties to the Registration Rights Agreement in connection with the RG Merger Agreement and the Rollover Agreement and (ii) issuable upon conversion of the Series A Preferred Stock and the Modified Convertible Notes. Prior to the closing date of the RG Merger, we had a substantially similar registration rights agreement with the holders of the original convertible notes, which included Mr. Kim.

Employment Agreements with Officers

We have entered into employment agreements with Mr. Buckley, Mr. Kim and Hamish Sandhu, our Chief Financial Officer. The agreements have varying initial terms, but all contain automatic one-year renewals, unless terminated by either party, and provide for minimum base salaries adjusted for annual increases, incentive bonuses based upon the attainment of specified goals, and severance payments in the event of termination of employment, as defined in the employment contracts.

RG Purchases

We purchase orders from Texport Industries PVT Ltd, an entity affiliated with certain of our stockholders. RG purchased from the affiliated entity merchandise for resale amounting to approximately $1,398,000 and $2,080,000, respectively, representing approximately 9% and 33%, respectively, of costs of goods sold during the three months ended June 30, 2016 and 2015 and $5,210,000 and $5,945,000, respectively, representing approximately 18% and 44%, respectively, during the six months ended June 30, 2016 and 2015. As of June 30, 2016 and December 31, 2015, approximately $2,248,000 and $4,600,000, respectively, were due to the affiliated entity and were included in accounts payable and accrued expenses on the accompanying condensed consolidated balance sheets.

Warehousing and Shipping

We utilize warehousing and shipping services from Creative Logistics Services, LLC, an entity affiliated with certain of our stockholders, under an agreement expiring in October 2017. Under the agreement, RG is charged a percentage of monthly net amounts invoiced. Warehousing and shipping services provided by the affiliated entity and charged to us amounted to approximately $337,000 and $325,000, respectively, during the three months ended June 30, 2016 and 2015 and $753,000 and $764,000, respectively, during the six months ended June 30, 2016 and 2015. As of June 30, 2016 and December 31, 2015, approximately $294,000 and $283,000, respectively, were due to the affiliated entity and were included in accounts payable and accrued expenses on the accompanying condensed consolidated balance sheets.

License Fees

We pay licensing fees to Robert Stock, one of our stockholders and a consultant, based on net wholesale sales and royalty income from certain licenses as defined in his employment agreement. We did not make any payments to Mr. Stock in the three months ended June 30, 2016 and 2015. For the six months ended June 30, 2016 and 2015, licensing fees incurred to Mr. Stock were $46,000 and $52,000, respectively.

Payments to Tengram Capital Partners, LP

From time to time, we expect to reimburse Tengram Capital Partners, LP, an entity that is one of our stockholders, for certain travel and other related expenses of its employees related to services performed on our behalf and at our request. For the three months ended June 30, 2016, we have recorded expenses of $84,000. For the six months ended June 30, 2016, we recorded expense of $875,000, which included (i) $750,000 of reimbursement for legal fees incurred by TCP Denim, LLC, in connection with the purchase of the Series A Preferred Stock and RG Merger; and (ii) $41,000 of pre-RG Merger management fees that were paid by RG that are non-recurring as a result of the RG Merger. For the three months and six months ended June 30, 2015, RG paid $125,000 and $250,000, respectively, related to annual management fees and expenses that are non-recurring as a result of the RG Merger.

SWIMS® Transaction

In connection with the acquisition of SWIMS® in July 2016, we entered into certain financing arrangements with Tengram Partners Fund II, L.P., an entity affiliated with the holder of our Series A Preferred Stock, TCP Denim, LLC. See “Note 18 – Subsequent Events.”