XML 63 R15.htm IDEA: XBRL DOCUMENT v2.4.0.6
Inventory
3 Months Ended
Apr. 28, 2012
Inventory Disclosure [Abstract]  
Inventory Disclosure [Text Block]

8. INVENTORIES

 

Inventories are principally valued at the lower of average cost or market utilizing the retail method. The Company determines market value as the anticipated future selling price of the merchandise less a normal margin. An initial markup is applied to inventory at cost in order to establish a cost-to-retail ratio. Permanent markdowns, when taken, reduce both the retail and cost components of inventory on-hand so as to maintain the already established cost-to-retail relationship. At first and third fiscal quarter end, the Company reduces inventory value by recording a valuation reserve that represents the expected future markdowns on current season inventory. At second and fourth fiscal quarter end, the Company reduces inventory value by recording a valuation reserve that represents the expected future markdowns on any remaining carryover inventory from the season then ending. The valuation reserve was $34.7 million, $72.3 million and $39.2 million at April 28, 2012, January 28, 2012 and April 30, 2011, respectively.

 

Additionally, as part of inventory valuation, inventory shrinkage estimates based on historical trends from actual physical inventories are made 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. The shrink reserve was $7.1 million, $9.3 million and $5.6 million at April 28, 2012, January 28, 2012 and April 30, 2011, respectively.

 

The inventory balance, net of the above-mentioned reserves, was $517.6 million, $569.8 million and $358.4 million at April 28, 2012, January 28, 2012 and April 30, 2011, respectively.