Fair Value Measurements

12 Months Ended

Jan. 31, 2012

Fair Value Measurements [Abstract]

Fair Value Measurements

(7) Fair Value Measurements

We account for certain assets and liabilities at fair value on either a recurring or non-recurring basis. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The hierarchy below lists three levels of fair value based on the extent to which inputs used in measuring fair value are observable in the market. These levels are:

• Level 1 – Observable Inputs – quoted prices in active markets for identical assets and liabilities;

• Level 2 – Observable inputs other than the quoted prices in active markets for identical assets and liabilities – includes quoted prices for similar instruments, quoted prices for identical or similar instruments in inactive markets, and amounts derived from valuation models where all significant inputs are observable in active markets; and

• Level 3 – Unobservable inputs – includes amounts derived from valuation models where one or more significant inputs are unobservable and require us to develop relevant assumptions.

At January 31, 2012 and 2011, we had approximately $1.6 million and $1.4 million, respectively, in assets that are carried at fair value on a recurring basis. These assets consist of available-for-sale investments related to our non-qualified supplemental executive retirement plan (“SERP”). The fair value of these investments was determined using Level 1 inputs.

During fiscal 2011 and 2010, we recognized charges for non-financial assets measured at fair value on a non-recurring basis, related to our store asset impairments. No such charges were recognized during fiscal 2009. The store asset impairment calculation compared the carrying amount of property and equipment to the individual stores’ fair values based on projected cash flows that we estimated would be used by a market participant in valuing these assets, a Level 3 input.

During fiscal 2011, we also recognized charges for non-financial liabilities measured at fair value on a non-recurring basis, related to our store closing reserve. No such charges were recognized during fiscal 2010 or fiscal 2009. Amounts recognized included accruals for the net present value of minimum lease payments, net of estimated sublease income, attributable to closed or relocated stores. The evaluation of store closing reserves include consideration of, among other factors, current and future expected profitability, market trends, age of store and lease status. These inputs are classified as Level 3 inputs.

Our long-term debt approximates fair value as of January 31, 2012 and 2011, due to the instrument bearing interest at variable rates that are comparable to what is currently available to us. We entered into the Amended Agreement with Bank of America on July 22, 2010, and specifically entered into the First Amendment on July 21, 2011, at which time our current interest rates were determined. See Note 6 on Debt for a more detailed discussion of the Amended Agreement.