By  on April 18, 2008

Apparel maker Cherokee Inc. reported fourth-quarter earnings plummeted 86.4 percent, because of a onetime payment that boosted last year’s results.

For the three months ended Feb. 2, earnings fell to $2.8 million, or 31 cents a diluted share, from $20.7 million, or $2.33, in the year-ago period. Last year’s results were helped by a $33 million payment in connection with a so-called finders agreement. In that transaction, Iconix Brand Group Inc. agreed to pay the $33 million to Cherokee in exchange for Cherokee dropping its offer to purchase Mossimo. That paved the way for Iconix to later acquire Mossimo. Total revenues, which predominantly come from royalties, fell 79 percent to $8.7 million from $42.2 million.

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