Clothing Maker Cherokee Secures Lines of Credit

Cherokee Inc., a Sunland-based clothing maker, said it has secured a $4-million credit line available through August, and a $2-million credit line available from September through January.

The credit was made available to Cherokee by the company’s lender, CIT Group/Business Credit Inc., after a group of outside investors agreed to guarantee the loans. The investors also bought warrants held by CIT that can be used to purchase 550,000 shares of Cherokee at two cents per share.

Cherokee also said it has entered an agreement to sell its uniform division to a company being formed by the president of that division, Michael Singer. The transaction is expected to close before July 31, and Cherokee officials declined to discuss terms of the sale.

Cary Cooper, chief financial officer at Cherokee, said the additional credit lines and proceeds from the sale of the uniform division will be used to shore up the finances of the company, which has undergone two bankruptcy proceedings in recent years.