Inventories, Net

9 Months Ended

Oct. 31, 2015

Inventories, net consisted of:



(in thousands)	October 31, 2015			January 31, 2015
Inventories	$	635,967		$	484,865
Less: Lower of cost or market reserve	(29,303		)	(12,707		)
Less: Shrink reserve	(5,123		)	(11,364		)
Inventories, net	$	601,541		$	460,794

Inventories are valued at the lower of cost or market on a weighted-average cost basis. The Company reduces the carrying value of inventory through a lower of cost or market adjustment, the impact of which is reflected in cost of goods sold on the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). The lower of cost or market reserve is based on an analysis of historical experience, composition and aging of the inventory and management's judgment regarding future demand and market conditions.

Additionally, as part of inventory valuation, inventory shrinkage estimates based on historical trends from actual physical inventories are made each period that reduce the inventory value for lost or stolen items. The Company performs physical inventories on a periodic basis and adjusts the shrink reserve accordingly.