Fair Value Measurements

12 Months Ended

Aug. 03, 2012

Fair Value Measurements [Abstract]

Fair Value Measurements

3.  Fair Value Measurements

Fair value for certain of the Company's assets and liabilities 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.  In determining fair value, a three level hierarchy for inputs is used.  These levels are:

· Quoted Prices in Active Markets for Identical Assets ("Level 1") – quoted prices (unadjusted) for an identical asset or liability in an active market.

· Significant Other Observable Inputs ("Level 2") – quoted prices for a similar asset or liability in an active market or model-derived valuations in which all significant inputs are observable for substantially the full term of the asset or liability.

· Significant Unobservable Inputs ("Level 3") – unobservable and significant to the fair value measurement of the asset or liability.

The Company's assets and liabilities measured at fair value on a recurring basis at August 3, 2012 were as follows:

	Level 1		Level 2		Level 3		Fair Value as of August 3, 2012
Cash equivalents*	$	104,531	$	--	$	--	$	104,531
Deferred compensation plan assets**		29,443		--		--		29,443
Total assets at fair value	$	133,974	$	--	$	--	$	133,974
Interest rate swap liability (see Note 6)	$	--	$	34,381	$	--	$	34,381
Total liabilities at fair value	$	--	$	34,381	$	--	$	34,381

The Company's assets and liabilities measured at fair value on a recurring basis at July 29, 2011 were as follows:

	Level 1		Level 2		Level 3		Fair Value as of  July 29, 2011
Cash equivalents*	$	29,548	$	--	$	--	$	29,548
Deferred compensation plan assets**		29,665		--		--		29,665
Total assets at fair value	$	59,213	$	--	$	--	$	59,213
Interest rate swap liability (see Note 6)	$	--	$	51,604	$	--	$	51,604
Total liabilities at fair value	$	--	$	51,604	$	--	$	51,604

* Consists of money market fund investments.

** Represents plan assets invested in mutual funds established under a Rabbi Trust for the Company's non-qualified savings plan and is included in the Consolidated Balance Sheets as other assets (see Note 13).

The Company's money market fund investments and deferred compensation plan assets are measured at fair value using quoted market prices.  The fair value of the Company's interest rate swap liability is determined based on the present value of expected future cash flows.  Since the Company's interest rate swap values are based on the LIBOR forward curve, which is observable at commonly quoted intervals for the full terms of the swaps, it is considered a Level 2 input.  Nonperformance risk is reflected in determining the fair value of the interest rate swaps by using the Company's credit spread less the risk-free interest rate, both of which are observable at commonly quoted intervals for the terms of the swaps.  Thus, the adjustment for nonperformance risk is also considered a Level 2 input.

The fair values of accounts receivable and accounts payable at August 3, 2012 and July 29, 2011, approximate their carrying amounts because of their short duration.  The fair value of the Company's variable rate debt, based on quoted market prices, which are considered Level 1 inputs, approximates its carrying amounts at August 3, 2012 and July 29, 2011, respectively.

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

During 2011, the Company recorded an impairment charge on office space classified as property held for sale.  The fair value of the office space was determined to be $1,000 based upon market comparables, which are considered Level 2 inputs.  Additionally, during 2011, one leased store was determined to be impaired.  Fair value of the leased store was determined by using a cash flow model.  Assumptions used in the cash flow model included projected annual revenue growth rates and projected cash flows, which can be affected by economic conditions and management's expectations.  The Company has determined that the majority of the inputs used to value its long-lived assets held and used are unobservable inputs, and thus, are considered Level 3 inputs.  Based on its analysis, the Company reduced the leased store's carrying value to zero.  See Note 9 for further information on the impairment of these long-lived assets.