x | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Tennessee | 62-0211340 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Genesco Park, 1415 Murfreesboro Road Nashville, Tennessee | 37217-2895 | |
(Address of principal executive offices) | (Zip Code) |
Title of each class | Name of Exchange on which Registered | |
Common Stock, $1.00 par value Preferred Share Purchase Rights | New York and Chicago New York and Chicago |
Large accelerated filer | x | Accelerated filer | ¨ | |
Non-accelerated filer | ¨ (Do not check if smaller reporting company) | Smaller reporting company | ¨ |
Page | ||
Fiscal 2009 | Fiscal 2010 | Fiscal 2011 | Fiscal 2012 | Fiscal 2013 | ||||||||||
Retail Stores | ||||||||||||||
Beginning of year | 2,175 | 2,234 | 2,276 | 2,309 | 2,387 | |||||||||
Opened during year | 102 | 61 | 53 | 70 | 104 | |||||||||
Acquired during year | — | 38 | 58 | 85 | 33 | |||||||||
Closed during year | (43 | ) | (57 | ) | (78 | ) | (77 | ) | (65 | ) | ||||
End of year | 2,234 | 2,276 | 2,309 | 2,387 | 2,459 |
Location | Owned/Leased | Segment | Use | Approximate Area Square Feet | ||||||
Lebanon, TN | Owned | Journeys Group | Distribution warehouse | 320,000 | ||||||
Nashville, TN | Leased | Various | Executive & footwear operations offices | 295,000 | * | |||||
Indianapolis, IN | Leased | Lids Sports Group | Distribution warehouse and manufacturing | 271,825 | ||||||
Chapel Hill, TN | Owned | Licensed Brands | Distribution warehouse | 182,000 | ||||||
Fayetteville, TN | Owned | Johnston & Murphy Group | Distribution warehouse | 178,500 | ||||||
Indianapolis, IN | Leased | Lids Sports Group | Distribution warehouse | 152,158 | ||||||
Deans Industrial Estate, Livingston, Scotland | Owned | Schuh Group | Distribution warehouse and administrative offices | 106,813 | ||||||
Indianapolis, IN | Leased | Lids Sports Group | Distribution Warehouse | 77,281 | ||||||
Lake Katrine, NY | Leased | Lids Sports Group | Distribution warehouse and administrative offices | 68,300 | ||||||
Nashville, TN | Owned | Journeys Group | Distribution warehouse | 63,000 | ||||||
Houston Industrial Estate, Livingston, Scotland | Leased | Schuh Group | Distribution warehouse | 51,012 | ||||||
Indianapolis, IN | Leased | Lids Sports Group | Headwear operations offices | 43,000 | ||||||
Mississauga, Ontario, Canada | Leased | Lids Sports Group | Distribution warehouse | 28,392 | ||||||
Tigard, OR | Leased | Lids Sports Group | Administrative offices | 17,844 | ||||||
Indianapolis, IN | Leased | Lids Sports Group | Administrative offices | 13,000 | ||||||
Tampa, FL | Leased | Lids Sports Group | Distribution warehouse and administrative offices | 7,112 |
* | The Company occupies approximately 80% of the building and subleases the remainder of the building. |
• | denial by the United States of “most favored nation” trading status to or the imposition of quotas or other restriction on imports from a foreign country from which we purchase goods; |
• | our ability to negotiate favorable lease terms for new stores and renewals (including rent and other costs) with landlords; |
• | our ability to obtain governmental and other third-party consents, permits and licenses needed to construct and operate our stores; |
• | our ability to adapt our distribution and other operational and management systems to an expanded network of stores; and |
High | Low | ||||||
2012 1st Quarter | $ | 44.75 | $ | 35.76 | |||
2nd Quarter | 56.84 | 39.12 | |||||
3rd Quarter | 62.51 | 39.41 | |||||
4th Quarter | 64.93 | 54.32 |
High | Low | ||||||
2013 1st Quarter | $ | 78.97 | $ | 60.02 | |||
2nd Quarter | 78.78 | 55.65 | |||||
3rd Quarter | 74.93 | 55.40 | |||||
4th Quarter | 63.26 | 50.33 |
Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of shares Purchased as Part of Publicly announced Plans or Programs | Maximum Number (or Approximate Dollar Value) of shares that May Yet Be Purchased Under the Plans or Programs (in thousands) | ||||||
November 2012 | ||||||||||
10-28-12 to 11-24-12 | — | $ | — | — | $ | — | ||||
December 2012 | ||||||||||
11-25-12 to 12-29-12(1) | 151,989 | $ | 53.17 | 151,989 | $ | 58,323 | ||||
January 2013 | ||||||||||
12-30-12 to 2-2-13(1) | 2,804 | $ | 52.02 | 2,804 | $ | 58,177 |
(1) | During the fourth quarter of Fiscal 2013, the Company repurchased shares of common stock under an existing $75.0 million authorization from the board of directors announced in the third quarter of Fiscal 2011. As of February 2, 2013, the Company had repurchased 299,506 shares at a cost of $16.8 million. |
In Thousands except per common share data, | Fiscal Year End | ||||||||||||||||||
financial statistics and other data | 2013 | 2012 | 2011 | 2010 | 2009 | ||||||||||||||
Results of Operations Data | |||||||||||||||||||
Net sales | $ | 2,604,817 | $ | 2,291,987 | $ | 1,789,839 | $ | 1,574,352 | $ | 1,551,562 | |||||||||
Depreciation and amortization | 63,697 | 53,737 | 47,738 | 47,462 | 46,833 | ||||||||||||||
Earnings from operations | 167,970 | 143,870 | 86,083 | 60,422 | 259,626 | ||||||||||||||
Earnings from continuing operations before income taxes | 162,939 | 138,778 | 84,961 | 50,488 | 250,714 | ||||||||||||||
Earnings from continuing operations | 110,998 | 82,984 | 54,547 | 29,086 | 156,219 | ||||||||||||||
Provision for discontinued operations, net | (462 | ) | (1,025 | ) | (1,336 | ) | (273 | ) | (5,463 | ) | |||||||||
Net earnings | $ | 110,536 | $ | 81,959 | $ | 53,211 | $ | 28,813 | $ | 150,756 | |||||||||
Per Common Share Data | |||||||||||||||||||
Earnings from continuing operations | |||||||||||||||||||
Basic | $ | 4.70 | $ | 3.56 | $ | 2.34 | $ | 1.35 | $ | 8.11 | |||||||||
Diluted | 4.62 | 3.48 | 2.29 | 1.31 | 6.72 | ||||||||||||||
Discontinued operations | |||||||||||||||||||
Basic | (0.02 | ) | (0.04 | ) | (0.06 | ) | (0.02 | ) | (0.28 | ) | |||||||||
Diluted | (0.02 | ) | (0.05 | ) | (0.05 | ) | (0.01 | ) | (0.23 | ) | |||||||||
Net earnings | |||||||||||||||||||
Basic | 4.68 | 3.52 | 2.28 | 1.33 | 7.83 | ||||||||||||||
Diluted | 4.60 | 3.43 | 2.24 | 1.30 | 6.49 | ||||||||||||||
Balance Sheet Data | |||||||||||||||||||
Total assets | $ | 1,333,789 | $ | 1,237,265 | $ | 961,082 | $ | 863,652 | $ | 816,063 | |||||||||
Long-term debt | 50,682 | 40,704 | — | — | 113,735 | ||||||||||||||
Non-redeemable preferred stock | 3,924 | 4,957 | 5,183 | 5,220 | 5,203 | ||||||||||||||
Common equity | 804,667 | 710,404 | 619,135 | 577,093 | 444,552 | ||||||||||||||
Capital expenditures | 71,737 | 49,456 | 29,299 | 33,825 | 49,420 | ||||||||||||||
Financial Statistics | |||||||||||||||||||
Earnings from operations as a percent of net sales | 6.4 | % | 6.3 | % | 4.8 | % | 3.8 | % | 16.7 | % | |||||||||
Book value per share (common equity divided by common shares outstanding) | $ | 33.53 | $ | 29.27 | $ | 26.15 | $ | 23.97 | $ | 23.10 | |||||||||
Working capital (in thousands) | $ | 406,217 | $ | 290,850 | $ | 278,692 | $ | 280,415 | $ | 259,137 | |||||||||
Current ratio | 2.5 | 2.0 | 2.2 | 2.7 | 2.9 | ||||||||||||||
Percent long-term debt to total capitalization | 5.9 | % | 5.4 | % | — | % | — | % | 20.2 | % | |||||||||
Other Data (End of Year) | |||||||||||||||||||
Number of retail outlets* | 2,459 | 2,387 | 2,309 | 2,276 | 2,234 | ||||||||||||||
Number of employees | 22,700 | 21,475 | 15,200 | 13,925 | 13,775 |
* | Includes 75 Schuh stores and concessions in Fiscal 2012 acquired June 23, 2011, 48 Sports Avenue stores in Fiscal 2011 acquired October 8, 2010, and 37 Sports Fan Attic stores in Fiscal 2010 acquired November 3, 2009. See Note 2 to the Consolidated Financial Statements. |
Fiscal Year Ended | % Change | |||||||||
2013 | 2012 | |||||||||
(dollars in thousands) | ||||||||||
Net sales | $ | 1,111,490 | $ | 1,020,116 | 9.0 | % | ||||
Earnings from operations | $ | 106,929 | $ | 82,452 | 29.7 | % | ||||
Operating margin | 9.6 | % | 8.1 | % |
Fiscal Year Ended | % Change | ||||||||
2013 | 2012 | ||||||||
(dollars in thousands) | |||||||||
Net sales | $ | 370,480 | $ | 212,262 | 74.5% | ||||
Earnings from operations | $ | 7,875 | $ | 11,711 | (32.8%) | ||||
Operating margin | 2.1 | % | 5.5 | % |
Fiscal Year Ended | % Change | |||||||||
2013 | 2012 | |||||||||
(dollars in thousands) | ||||||||||
Net sales | $ | 791,255 | $ | 759,324 | 4.2 | % | ||||
Earnings from operations | $ | 85,794 | $ | 82,349 | 4.2 | % | ||||
Operating margin | 10.8 | % | 10.8 | % |
Fiscal Year Ended | % Change | |||||||||
2013 | 2012 | |||||||||
(dollars in thousands) | ||||||||||
Net sales | $ | 221,860 | $ | 201,725 | 10.0 | % | ||||
Earnings from operations | $ | 15,737 | $ | 13,682 | 15.0 | % | ||||
Operating margin | 7.1 | % | 6.8 | % |
Fiscal Year Ended | % Change | |||||||||
2013 | 2012 | |||||||||
(dollars in thousands) | ||||||||||
Net sales | $ | 108,498 | $ | 97,444 | 11.3 | % | ||||
Earnings from operations | $ | 10,064 | $ | 9,456 | 6.4 | % | ||||
Operating margin | 9.3 | % | 9.7 | % |
Fiscal Year Ended | % Change | |||||||||
2012 | 2011 | |||||||||
(dollars in thousands) | ||||||||||
Net sales | $ | 1,020,116 | $ | 898,500 | 13.5 | % | ||||
Earnings from operations | $ | 82,452 | $ | 49,642 | 66.1 | % | ||||
Operating margin | 8.1 | % | 5.5 | % |
Fiscal Year Ended | % Change | ||||||||
2012 | 2011 | ||||||||
(dollars in thousands) | |||||||||
Net sales | $ | 212,262 | $ | — | NM | ||||
Earnings from operations | $ | 11,711 | $ | — | NM | ||||
Operating margin | 5.5 | % | — |
Fiscal Year Ended | % Change | |||||||||
2012 | 2011 | |||||||||
(dollars in thousands) | ||||||||||
Net sales | $ | 759,324 | $ | 603,345 | 25.9 | % | ||||
Earnings from operations | $ | 82,349 | $ | 56,026 | 47.0 | % | ||||
Operating margin | 10.8 | % | 9.3 | % |
Fiscal Year Ended | % Change | |||||||||
2012 | 2011 | |||||||||
(dollars in thousands) | ||||||||||
Net sales | $ | 201,725 | $ | 185,011 | 9.0 | % | ||||
Earnings from operations | $ | 13,682 | $ | 7,595 | 80.1 | % | ||||
Operating margin | 6.8 | % | 4.1 | % |
Fiscal Year Ended | % Change | |||||||||
2012 | 2011 | |||||||||
(dollars in thousands) | ||||||||||
Net sales | $ | 97,444 | $ | 101,644 | (4.1 | )% | ||||
Earnings from operations | $ | 9,456 | $ | 12,359 | (23.5 | )% | ||||
Operating margin | 9.7 | % | 12.2 | % |
Feb. 2, 2013 | Jan. 28, 2012 | Jan. 29, 2011 | |||||||||
(dollars in millions) | |||||||||||
Cash and cash equivalents | $ | 59.8 | $ | 53.8 | $ | 55.9 | |||||
Working capital | $ | 406.2 | $ | 290.9 | $ | 278.7 | |||||
Long-term debt (includes current maturities) | $ | 50.7 | $ | 40.7 | $ | 0.0 |
(in thousands) | Payments Due by Period | ||||||||||||||||||
Contractual Obligations | Total | Less than 1 year | 1 - 3 years | 3 - 5 years | More than 5 years | ||||||||||||||
Capital Lease Obligations | $ | 13 | $ | 1 | $ | 3 | $ | 3 | $ | 6 | |||||||||
Long-Term Debt Obligations(1) | 50,682 | 5,675 | 45,007 | 0 | 0 | ||||||||||||||
Operating Lease Obligations | 1,255,160 | 223,495 | 401,661 | 287,470 | 342,534 | ||||||||||||||
Purchase Obligations(2) | 546,995 | 546,995 | 0 | 0 | 0 | ||||||||||||||
Long-Term Obligations – Schuh(3) | 60,108 | 8,622 | 51,486 | 0 | 0 | ||||||||||||||
Other Long-Term Liabilities | 1,337 | 176 | 350 | 350 | 461 | ||||||||||||||
Total Contractual Obligations(4) | $ | 1,914,295 | $ | 784,964 | $ | 498,507 | $ | 287,823 | $ | 343,001 |
(in thousands) | Amount of Commitment Expiration Per Period | ||||||||||||||||||
Commercial Commitments | Total Amounts Committed | Less than 1 year | 1 - 3 years | 3 - 5 years | More than 5 years | ||||||||||||||
Letters of Credit | $ | 12,288 | $ | 12,288 | $ | 0 | $ | 0 | $ | 0 | |||||||||
Total Commercial Commitments | $ | 12,288 | $ | 12,288 | $ | 0 | $ | 0 | $ | 0 |
Page | |
/s/ Ernst & Young LLP | |
Nashville, Tennessee | |
April 3, 2013 |
/s/ Ernst & Young LLP | |
Nashville, Tennessee | |
April 3, 2013 |
As of Fiscal Year End | |||||||
Assets | 2013 | 2012 | |||||
Current Assets: | |||||||
Cash and cash equivalents | $ | 59,795 | $ | 53,790 | |||
Accounts receivable, net of allowances of $6,082 at February 2, | |||||||
2013 and $6,900 at January 28, 2012 | 48,214 | 43,713 | |||||
Inventories | 505,344 | 435,113 | |||||
Deferred income taxes | 23,725 | 22,541 | |||||
Prepaids and other current assets | 45,193 | 40,155 | |||||
Total current assets | 682,271 | 595,312 | |||||
Property and equipment: | |||||||
Land | 6,128 | 6,118 | |||||
Buildings and building equipment | 20,390 | 20,260 | |||||
Computer hardware, software and equipment | 120,757 | 116,920 | |||||
Furniture and fixtures | 148,903 | 127,949 | |||||
Construction in progress | 8,702 | 7,158 | |||||
Improvements to leased property | 318,376 | 299,775 | |||||
Property and equipment, at cost | 623,256 | 578,180 | |||||
Accumulated depreciation | (381,587 | ) | (350,491 | ) | |||
Property and equipment, net | 241,669 | 227,689 | |||||
Deferred income taxes | 26,448 | 28,152 | |||||
Goodwill | 273,827 | 259,759 | |||||
Trademarks, net of accumulated amortization of $3,350 at | |||||||
February 2, 2013 and $2,246 at January 28, 2012 | 77,408 | 78,276 | |||||
Other intangibles, net of accumulated amortization of $17,220 at | |||||||
February 2, 2013 and $13,645 at January 28, 2012 | 11,598 | 14,808 | |||||
Other noncurrent assets | 20,568 | 33,269 | |||||
Total Assets | $ | 1,333,789 | $ | 1,237,265 |
As of Fiscal Year End | |||||||
Liabilities and Equity | 2013 | 2012 | |||||
Current Liabilities: | |||||||
Accounts payable | $ | 118,350 | $ | 138,938 | |||
Accrued employee compensation | 55,078 | 53,029 | |||||
Accrued other taxes | 27,004 | 26,293 | |||||
Accrued income taxes | 2,096 | 16,390 | |||||
Current portion – long-term debt | 5,675 | 8,773 | |||||
Other accrued liabilities | 60,659 | 52,789 | |||||
Provision for discontinued operations | 7,192 | 8,250 | |||||
Total current liabilities | 276,054 | 304,462 | |||||
Long-term debt | 45,007 | 31,931 | |||||
Pension liability | 20,514 | 22,201 | |||||
Deferred rent and other long-term liabilities | 177,537 | 156,794 | |||||
Provision for discontinued operations | 4,159 | 4,267 | |||||
Total liabilities | 523,271 | 519,655 | |||||
Commitments and contingent liabilities | |||||||
Equity | |||||||
Non-redeemable preferred stock | 3,924 | 4,957 | |||||
Common equity: | |||||||
Common stock, $1 par value: | |||||||
Authorized: 80,000,000 shares | |||||||
Issued/Outstanding: | |||||||
February 2, 2013 – 24,484,915/23,996,451 | |||||||
January 28, 2012 – 24,757,826/24,269,362 | 24,485 | 24,758 | |||||
Additional paid-in capital | 170,360 | 149,479 | |||||
Retained earnings | 655,920 | 586,990 | |||||
Accumulated other comprehensive loss | (28,241 | ) | (32,966 | ) | |||
Treasury shares, at cost (488,464 shares) | (17,857 | ) | (17,857 | ) | |||
Total Genesco equity | 808,591 | 715,361 | |||||
Noncontrolling interest – non-redeemable | 1,927 | 2,249 | |||||
Total equity | 810,518 | 717,610 | |||||
Total Liabilities and Equity | $ | 1,333,789 | $ | 1,237,265 |
Fiscal Year | ||||||||||
2013 | 2012 | 2011 | ||||||||
Net sales | $ | 2,604,817 | $ | 2,291,987 | $ | 1,789,839 | ||||
Cost of sales | 1,306,470 | 1,144,281 | 891,764 | |||||||
Selling and administrative expenses | 1,113,340 | 1,001,159 | 803,425 | |||||||
Asset impairments and other, net | 17,037 | 2,677 | 8,567 | |||||||
Earnings from operations | 167,970 | 143,870 | 86,083 | |||||||
Interest expense, net: | ||||||||||
Interest expense | 5,126 | 5,157 | 1,130 | |||||||
Interest income | (95 | ) | (65 | ) | (8 | ) | ||||
Total interest expense, net | 5,031 | 5,092 | 1,122 | |||||||
Earnings from continuing operations before income taxes | 162,939 | 138,778 | 84,961 | |||||||
Income tax expense | 51,941 | 55,794 | 30,414 | |||||||
Earnings from continuing operations | 110,998 | 82,984 | 54,547 | |||||||
Provision for discontinued operations, net | (462 | ) | (1,025 | ) | (1,336 | ) | ||||
Net Earnings | $ | 110,536 | $ | 81,959 | $ | 53,211 | ||||
Basic earnings per common share: | ||||||||||
Continuing operations | $ | 4.70 | $ | 3.56 | $ | 2.34 | ||||
Discontinued operations | (0.02 | ) | (0.04 | ) | (0.06 | ) | ||||
Net earnings | $ | 4.68 | $ | 3.52 | $ | 2.28 | ||||
Diluted earnings per common share: | ||||||||||
Continuing operations | $ | 4.62 | $ | 3.48 | $ | 2.29 | ||||
Discontinued operations | (0.02 | ) | (0.05 | ) | (0.05 | ) | ||||
Net earnings | $ | 4.60 | $ | 3.43 | $ | 2.24 |
Fiscal Year | |||||||||
2013 | 2012 | 2011 | |||||||
Net earnings | $ | 110,536 | $ | 81,959 | $ | 53,211 | |||
Other comprehensive income (loss): | |||||||||
Gain (loss) on foreign currency forward contract, | |||||||||
net of tax of $0.0 million for 2013 and 2012 | |||||||||
and $0.1 million for 2011 | 42 | (35 | ) | 166 | |||||
Pension liability adjustment net of tax of $2.4 million | |||||||||
and $2.7 million for 2013 and 2011, respectively, and | |||||||||
net of tax benefit of $3.1 million for 2012 | 3,657 | (4,670 | ) | 3,921 | |||||
Postretirement liability adjustment net of tax | |||||||||
benefit of $0.1 million for each period | (79 | ) | (109 | ) | (131 | ) | |||
Foreign currency translation adjustments | 1,105 | (3,847 | ) | 543 | |||||
Total other comprehensive income (loss) | 4,725 | (8,661 | ) | 4,499 | |||||
Comprehensive Income | $ | 115,261 | $ | 73,298 | $ | 57,710 |
Fiscal Year | |||||||||
2013 | 2012 | 2011 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||
Net earnings | $ | 110,536 | $ | 81,959 | $ | 53,211 | |||
Adjustments to reconcile net earnings to net cash | |||||||||
provided by operating activities: | |||||||||
Depreciation and amortization | 63,697 | 53,737 | 47,738 | ||||||
Amortization of deferred note expense and debt discount | 792 | 708 | 370 | ||||||
Deferred income taxes | (17,831 | ) | 2,732 | (11,866 | ) | ||||
Provision for losses on accounts receivable | 1,325 | 2,004 | 1,081 | ||||||
Impairment of long-lived assets | 1,396 | 1,119 | 7,155 | ||||||
Restricted stock and share-based compensation | 10,508 | 7,660 | 8,006 | ||||||
Provision for discontinued operations | 796 | 1,692 | 2,203 | ||||||
Tax benefit of stock options and restricted stock exercised | (4,820 | ) | (4,744 | ) | (1,448 | ) | |||
Other | 1,327 | 1,005 | 1,328 | ||||||
Effect on cash from changes in working capital and other | |||||||||
assets and liabilities, before acquisitions: | |||||||||
Accounts receivable | (5,821 | ) | 3,011 | (12,085 | ) | ||||
Inventories | (61,049 | ) | (42,324 | ) | (44,345 | ) | |||
Prepaids and other current assets | (4,524 | ) | 5,286 | (167 | ) | ||||
Accounts payable | (17,953 | ) | (1,201 | ) | 13,641 | ||||
Other accrued liabilities | (6,908 | ) | 9,046 | 41,597 | |||||
Other assets and liabilities | 51,739 | 23,270 | (3,811 | ) | |||||
Net cash provided by operating activities | 123,210 | 144,960 | 102,608 | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||
Capital expenditures | (71,737 | ) | (49,456 | ) | (29,299 | ) | |||
Acquisitions, net of cash acquired | (23,818 | ) | (92,985 | ) | (75,500 | ) | |||
Proceeds from asset sales | 81 | 27 | 11 | ||||||
Net cash used in investing activities | (95,474 | ) | (142,414 | ) | (104,788 | ) | |||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||
Payments of capital leases | (2 | ) | (22 | ) | (104 | ) | |||
Payments of long-term debt | (13,581 | ) | (25,321 | ) | (1,918 | ) | |||
Borrowings under revolving credit facility | 439,600 | 299,800 | 107,400 | ||||||
Payments on revolving credit facility | (416,900 | ) | (294,800 | ) | (107,400 | ) | |||
Tax benefit of stock options and restricted stock exercised | 4,820 | 4,744 | 1,448 | ||||||
Shares repurchased | (37,650 | ) | — | (26,851 | ) | ||||
Change in overdraft balances | (2,925 | ) | 2,931 | 4,160 | |||||
Dividends paid on non-redeemable preferred stock | (147 | ) | (193 | ) | (197 | ) | |||
Exercise of stock options and issue shares - Employee Stock | |||||||||
Purchase Plan | 4,965 | 9,820 | 2,343 | ||||||
Other | 4 | (939 | ) | (2,915 | ) | ||||
Net cash used in financing activities | (21,816 | ) | (3,980 | ) | (24,034 | ) | |||
Effect of foreign exchange rate fluctuations on cash | 85 | (710 | ) | — | |||||
Net Increase (Decrease) in Cash and Cash Equivalents | 6,005 | (2,144 | ) | (26,214 | ) | ||||
Cash and cash equivalents at beginning of period | 53,790 | 55,934 | 82,148 | ||||||
Cash and cash equivalents at end of period | $ | 59,795 | $ | 53,790 | $ | 55,934 | |||
Supplemental Cash Flow Information: | |||||||||
Net cash paid for: | |||||||||
Interest | $ | 4,391 | $ | 4,789 | $ | 748 | |||
Income taxes | 81,607 | 50,254 | 24,079 |
Total Non-Redeemable Preferred Stock | Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Treasury Shares | Non Controlling Interest Non-Redeemable | Total Equity | ||||||||||||||||||||||||
Balance January 30, 2010 | $ | 5,220 | $ | 24,563 | $ | 146,981 | $ | 452,210 | $ | (28,804 | ) | $ | (17,857 | ) | $ | — | $ | 582,313 | |||||||||||||
Net earnings | — | — | — | 53,211 | — | — | — | 53,211 | |||||||||||||||||||||||
Other comprehensive loss | — | — | — | — | 4,499 | — | — | 4,499 | |||||||||||||||||||||||
Dividends paid on non-redeemable preferred stock | — | — | — | (197 | ) | — | — | — | (197 | ) | |||||||||||||||||||||
Exercise of stock options | — | 118 | 2,105 | — | — | — | — | 2,223 | |||||||||||||||||||||||
Issue shares – Employee Stock Purchase Plan | — | 4 | 116 | — | — | — | — | 120 | |||||||||||||||||||||||
Employee and non-employee restricted stock | — | — | 7,796 | — | — | — | — | 7,796 | |||||||||||||||||||||||
Share-based compensation | — | — | 210 | — | — | — | — | 210 | |||||||||||||||||||||||
Restricted stock issuance | — | 423 | (423 | ) | — | — | — | — | — | ||||||||||||||||||||||
Restricted shares withheld for taxes | — | (82 | ) | (2,293 | ) | — | — | — | — | (2,375 | ) | ||||||||||||||||||||
Tax benefit of stock options and restricted | |||||||||||||||||||||||||||||||
stock exercises | — | — | 1,342 | — | — | — | — | 1,342 | |||||||||||||||||||||||
Shares repurchased | — | (864 | ) | (23,961 | ) | — | — | — | — | (24,825 | ) | ||||||||||||||||||||
Other | (37 | ) | 1 | 37 | — | — | — | — | 1 | ||||||||||||||||||||||
Noncontrolling interest – loss | — | — | — | — | — | — | 2,503 | 2,503 | |||||||||||||||||||||||
Balance January 29, 2011 | 5,183 | 24,163 | 131,910 | 505,224 | (24,305 | ) | (17,857 | ) | 2,503 | 626,821 | |||||||||||||||||||||
Net earnings | — | — | — | 81,959 | — | — | — | 81,959 | |||||||||||||||||||||||
Other comprehensive loss | — | — | — | — | (8,661 | ) | — | — | (8,661 | ) | |||||||||||||||||||||
Dividends paid on non-redeemable preferred stock | — | — | — | (193 | ) | — | — | — | (193 | ) | |||||||||||||||||||||
Exercise of stock options | — | 390 | 9,297 | — | — | — | — | 9,687 | |||||||||||||||||||||||
Issue shares – Employee Stock Purchase Plan | — | 3 | 130 | — | — | — | — | 133 | |||||||||||||||||||||||
Employee and non-employee restricted stock | — | — | 7,659 | — | — | — | — | 7,659 | |||||||||||||||||||||||
Share-based compensation | — | — | 1 | — | — | — | — | 1 | |||||||||||||||||||||||
Restricted stock issuance | — | 304 | (304 | ) | — | — | — | — | — | ||||||||||||||||||||||
Restricted shares withheld for taxes | — | (93 | ) | (4,034 | ) | — | — | — | — | (4,127 | ) | ||||||||||||||||||||
Tax benefit of stock options and | |||||||||||||||||||||||||||||||
restricted stock exercises | — | — | 4,585 | — | — | — | — | 4,585 | |||||||||||||||||||||||
Other | (226 | ) | (9 | ) | 235 | — | — | — | — | — | |||||||||||||||||||||
Noncontrolling interest – loss | — | — | — | — | — | — | (254 | ) | (254 | ) | |||||||||||||||||||||
Balance January 28, 2012 | 4,957 | 24,758 | 149,479 | 586,990 | (32,966 | ) | (17,857 | ) | 2,249 | 717,610 | |||||||||||||||||||||
Net earnings | — | — | — | 110,536 | — | — | — | 110,536 | |||||||||||||||||||||||
Other comprehensive income | — | — | — | — | 4,725 | — | — | 4,725 | |||||||||||||||||||||||
Dividends paid on non-redeemable preferred stock | — | — | — | (147 | ) | — | — | — | (147 | ) | |||||||||||||||||||||
Exercise of stock options | — | 224 | 4,584 | — | — | — | — | 4,808 | |||||||||||||||||||||||
Issue shares - Employee Stock Purchase Plan | — | 2 | 155 | — | — | — | — | 157 | |||||||||||||||||||||||
Employee and non-employee restricted stock | — | — | 10,508 | — | — | — | — | 10,508 | |||||||||||||||||||||||
Restricted stock issuance | — | 194 | (194 | ) | — | — | — | — | — | ||||||||||||||||||||||
Restricted shares withheld for taxes | — | (76 | ) | — | (4,455 | ) | — | — | — | (4,531 | ) | ||||||||||||||||||||
Tax benefit of stock options and | |||||||||||||||||||||||||||||||
restricted stock exercised | — | — | 4,820 | — | — | — | — | 4,820 | |||||||||||||||||||||||
Shares repurchased | — | (646 | ) | — | (37,004 | ) | — | — | — | (37,650 | ) | ||||||||||||||||||||
Other | (1,033 | ) | 29 | 1,008 | — | — | — | — | 4 | ||||||||||||||||||||||
Noncontrolling interest – loss | — | — | — | — | — | — | (322 | ) | (322 | ) | |||||||||||||||||||||
Balance February 2, 2013 | $ | 3,924 | $ | 24,485 | $ | 170,360 | $ | 655,920 | $ | (28,241 | ) | $ | (17,857 | ) | $ | 1,927 | $ | 810,518 |
Buildings and building equipment | 20-45 years |
Computer hardware, software and equipment | 3-10 years |
Furniture and fixtures | 10 years |
In thousands | February 2, 2013 | January 28, 2012 | ||||||||||
Carrying Amount | Fair Value | Carrying Amount | Fair Value | |||||||||
U.S. Revolver Borrowings | 27,700 | 27,742 | $ | 5,000 | 5,021 | |||||||
UK Term Loans | 22,982 | 22,982 | 35,704 | 35,387 |
At June 23, 2011 | |||
Cash | $ | 24,836 | |
Accounts receivable | 4,673 | ||
Inventories | 32,179 | ||
Other current assets | 7,565 | ||
Property and equipment | 30,314 | ||
Other non-current assets | 6,977 | ||
Deferred taxes | 4,197 | ||
Trademarks | 27,224 | ||
Other intangibles | 4,995 | ||
Goodwill | 102,907 | ||
Accounts payable | (16,196 | ) | |
Other current liabilities | (24,718 | ) | |
Long-term debt (includes current portion) | (62,562 | ) | |
Other non-current liabilities | (26,637 | ) | |
Net Assets Acquired | $ | 115,754 |
Twelve Months Ended - Pro forma | Twelve Months Ended - Pro forma | ||||||
In thousands, except per share data | January 28, 2012 | January 29, 2011 | |||||
Net sales | $ | 2,384,267 | 2,045,473 | ||||
Earnings from continuing operations | 86,378 | 57,897 | |||||
Earnings per share: | |||||||
Basic | $ | 3.71 | $ | 2.49 | |||
Diluted | $ | 3.62 | $ | 2.44 |
Leases | Customer Lists | Other* | Total | |||||||||||||||||||||
In thousands | Feb. 2, 2013 | Jan. 28, 2012 | Feb. 2, 2013 | Jan. 28, 2012 | Feb. 2, 2013 | Jan. 28, 2012 | Feb. 2, 2013 | Jan. 28, 2012 | ||||||||||||||||
Gross other intangibles | $ | 12,584 | $ | 12,390 | $ | 14,116 | $ | 14,062 | $ | 2,118 | $ | 2,001 | $ | 28,818 | $ | 28,453 | ||||||||
Accumulated amortization | (10,800 | ) | (9,477 | ) | (5,312 | ) | (3,292 | ) | (1,108 | ) | (876 | ) | (17,220 | ) | (13,645 | ) | ||||||||
Net Other Intangibles | $ | 1,784 | $ | 2,913 | $ | 8,804 | $ | 10,770 | $ | 1,010 | $ | 1,125 | $ | 11,598 | $ | 14,808 |
Accrued Provision for Discontinued Operations | |||
In thousands | Facility Shutdown Costs | ||
Balance January 29, 2011 | $ | 15,035 | |
Additional provision Fiscal 2012 | 1,692 | ||
Charges and adjustments, net | (4,210 | ) | |
Balance January 28, 2012 | 12,517 | ||
Additional provision Fiscal 2013 | 796 | ||
Charges and adjustments, net | (1,962 | ) | |
Balance February 2, 2013* | 11,351 | ||
Current provision for discontinued operations | 7,192 | ||
Total Noncurrent Provision for Discontinued Operations | $ | 4,159 |
In thousands | February 2, 2013 | January 28, 2012 | |||||
Raw materials | $ | 24,223 | $ | 30,636 | |||
Wholesale finished goods | 57,161 | 53,453 | |||||
Retail merchandise | 423,960 | 351,024 | |||||
Total Inventories | $ | 505,344 | $ | 435,113 |
Long-Lived Assets Held and Used | Level 1 | Level 2 | Level 3 | Impairment Charges | |||||||||||||||
Measured as of April 28, 2012 | $ | 47 | $ | — | $ | — | $ | 47 | $ | 46 | |||||||||
Measured as of July 28, 2012 | $ | 54 | $ | — | $ | — | $ | 54 | $ | 391 | |||||||||
Measured as of October 27, 2012 | $ | 211 | $ | — | $ | — | $ | 211 | $ | 283 | |||||||||
Measured as of February 2, 2013 | $ | 131 | $ | — | $ | — | $ | 131 | $ | 676 |
In thousands | February 2, 2013 | January 28, 2012 | |||||
Revolver borrowings | $ | 27,700 | $ | 5,000 | |||
UK term loans | 22,982 | 35,704 | |||||
Total long-term debt | 50,682 | 40,704 | |||||
Current portion | 5,675 | 8,773 | |||||
Total Noncurrent Portion of Long-Term Debt | $ | 45,007 | $ | 31,931 |
In thousands | 2013 | 2012 | 2011 | ||||||||
Minimum rentals | $ | 215,516 | $ | 192,175 | $ | 167,558 | |||||
Contingent rentals | 14,786 | 12,918 | 5,827 | ||||||||
Sublease rentals | (667 | ) | (686 | ) | (642 | ) | |||||
Total Rental Expense | $ | 229,635 | $ | 204,407 | $ | 172,743 |
Fiscal Years | In thousands | ||
2014 | $ | 223,495 | |
2015 | 210,019 | ||
2016 | 191,642 | ||
2017 | 159,488 | ||
2018 | 127,982 | ||
Later years | 342,534 | ||
Total Minimum Rental Commitments | $ | 1,255,160 |
Shares Authorized | Number of Shares | Amounts in Thousands | Common Convertible Ratio | No. of Votes per share | ||||||||||||||||||||
Class (In order of preference)* | 2013 | 2012 | 2011 | 2013 | 2012 | 2011 | ||||||||||||||||||
Subordinated Serial Preferred (Cumulative) | ||||||||||||||||||||||||
Aggregate | 3,000,000 | ** | 0 | 0 | 0 | — | — | — | N/A | N/A | ||||||||||||||
$2.30 Series 1 | 64,368 | 16,203 | 30,368 | 33,497 | $ | 648 | $ | 1,215 | $ | 1,340 | .83 | 1 | ||||||||||||
$4.75 Series 3 | 40,449 | 7,398 | 11,643 | 12,163 | 740 | 1,164 | 1,216 | 2.11 | 2 | |||||||||||||||
$4.75 Series 4 | 53,764 | 3,247 | 3,397 | 3,579 | 325 | 340 | 358 | 1.52 | 1 | |||||||||||||||
Series 6 | 800,000 | 0 | 0 | 0 | 0 | 0 | 0 | 100 | ||||||||||||||||
$1.50 Subordinated Cumulative Preferred | 5,000,000 | 30,067 | 30,067 | 30,067 | 902 | 902 | 902 | 1 | ||||||||||||||||
56,915 | 75,475 | 79,306 | 2,615 | 3,621 | 3,816 | |||||||||||||||||||
Employees’ Subordinated Convertible Preferred | 5,000,000 | 46,852 | 47,922 | 49,192 | 1,405 | 1,437 | 1,476 | 1.00 | *** | 1 | ||||||||||||||
Stated Value of Issued Shares | 4,020 | 5,058 | 5,292 | |||||||||||||||||||||
Employees’ Preferred Stock Purchase Accounts | (96 | ) | (101 | ) | (109 | ) | ||||||||||||||||||
Total Non-Redeemable Preferred Stock | $ | 3,924 | $ | 4,957 | $ | 5,183 |
** | The Company’s charter permits the board of directors to issue Subordinated Serial Preferred Stock in as many series, each with as many shares and such rights and preferences as the board may designate. |
In thousands | Non-Redeemable Preferred Stock | Non-Redeemable Employees’ Preferred Stock | Employees’ Preferred Stock Purchase Accounts | Total Non-Redeemable Preferred Stock | |||||||||||
Balance January 30, 2010 | $ | 3,833 | $ | 1,510 | $ | (123 | ) | $ | 5,220 | ||||||
Other | (17 | ) | (34 | ) | 14 | (37 | ) | ||||||||
Balance January 29, 2011 | 3,816 | 1,476 | (109 | ) | 5,183 | ||||||||||
Other | (195 | ) | (39 | ) | 8 | (226 | ) | ||||||||
Balance January 28, 2012 | 3,621 | 1,437 | (101 | ) | 4,957 | ||||||||||
Other | (1,006 | ) | (32 | ) | 5 | (1,033 | ) | ||||||||
Balance February 2, 2013 | $ | 2,615 | $ | 1,405 | $ | (96 | ) | $ | 3,924 |
Common Stock | Non- Redeemable Preferred Stock | Employees’ Preferred Stock | ||||||
Issued at January 30, 2010 | 24,562,693 | 79,469 | 50,350 | |||||
Exercise of options | 118,450 | 0 | 0 | |||||
Issue restricted stock | 422,833 | 0 | 0 | |||||
Issue shares—Employee Stock Purchase Plan | 4,230 | 0 | 0 | |||||
Shares repurchased | (863,767 | ) | 0 | 0 | ||||
Other | (81,805 | ) | (163 | ) | (1,158 | ) | ||
Issued at January 29, 2011 | 24,162,634 | 79,306 | 49,192 | |||||
Exercise of options | 390,357 | 0 | 0 | |||||
Issue restricted stock | 304,050 | 0 | 0 | |||||
Issue shares—Employee Stock Purchase Plan | 2,717 | 0 | 0 | |||||
Other | (101,932 | ) | (3,831 | ) | (1,270 | ) | ||
Issued at January 28, 2012 | 24,757,826 | 75,475 | 47,922 | |||||
Exercise of options | 223,618 | 0 | 0 | |||||
Issue restricted stock | 204,456 | 0 | 0 | |||||
Issue shares—Employee Stock Purchase Plan | 2,463 | 0 | 0 | |||||
Shares repurchased | (645,904 | ) | 0 | 0 | ||||
Other | (57,544 | ) | (18,560 | ) | (1,070 | ) | ||
Issued at February 2, 2013 | 24,484,915 | 56,915 | 46,852 | |||||
Less shares repurchased and held in treasury | 488,464 | 0 | 0 | |||||
Outstanding at February 2, 2013 | 23,996,451 | 56,915 | 46,852 |
In thousands | 2013 | 2012 | 2011 | ||||||||
Current | |||||||||||
U.S. federal | $ | 50,859 | $ | 42,103 | $ | 35,103 | |||||
International | 10,072 | 2,007 | 1,474 | ||||||||
State | 8,841 | 8,952 | 5,703 | ||||||||
Total Current Income Tax Expense | 69,772 | 53,062 | 42,280 | ||||||||
Deferred | |||||||||||
U.S. federal | (7,445 | ) | (175 | ) | (8,165 | ) | |||||
International | (7,148 | ) | 4,370 | — | |||||||
State | (3,238 | ) | (1,463 | ) | (3,701 | ) | |||||
Total Deferred Income Tax Expense (Benefit) | (17,831 | ) | 2,732 | (11,866 | ) | ||||||
Total Income Tax Expense – Continuing Operations | $ | 51,941 | $ | 55,794 | $ | 30,414 |
February 2, | January 28, | ||||||
In thousands | 2013 | 2012 | |||||
Identified intangibles | $ | (28,076 | ) | $ | (28,125 | ) | |
Prepaids | (2,943 | ) | (2,814 | ) | |||
Convertible bonds | (3,001 | ) | (3,001 | ) | |||
Total deferred tax liabilities | (34,020 | ) | (33,940 | ) | |||
Options | 965 | 1,289 | |||||
Deferred rent | 5,847 | 7,043 | |||||
Pensions | 8,321 | 8,936 | |||||
Expense accruals | 24,483 | 17,146 | |||||
Uniform capitalization costs | 12,539 | 9,893 | |||||
Book over tax depreciation | 13,783 | 11,756 | |||||
Provisions for discontinued operations and restructurings | 4,745 | 5,201 | |||||
Inventory valuation | 2,015 | 2,397 | |||||
Tax net operating loss and credit carryforwards | 3,535 | 8,306 | |||||
Allowances for bad debts and notes | 1,598 | 1,641 | |||||
Deferred compensation and restricted stock | 6,382 | 5,174 | |||||
Other | 3,500 | 5,460 | |||||
Gross deferred tax assets | 87,713 | 84,242 | |||||
Deferred tax asset valuation allowance | (3,541 | ) | (3,790 | ) | |||
Deferred tax asset net of valuation allowance | 84,172 | 80,452 | |||||
Net Deferred Tax Assets | $ | 50,152 | $ | 46,512 |
2013 | 2012 | ||||||
Net current asset | $ | 23,725 | $ | 22,541 | |||
Net non-current asset | 26,448 | 28,152 | |||||
Net non-current liability | (21 | ) | (4,181 | ) | |||
Net Deferred Tax Assets | $ | 50,152 | $ | 46,512 |
2013 | 2012 | 2011 | ||||||
U. S. federal statutory rate of tax | 35.00 | % | 35.00 | % | 35.00 | % | ||
State taxes (net of federal tax benefit) | 3.17 | 3.53 | 2.59 | |||||
Foreign rate differential | (1.78 | ) | (1.92 | ) | — | |||
Change in valuation allowance | (0.17 | ) | 0.71 | — | ||||
Permanent items | 2.00 | 2.35 | (0.83 | ) | ||||
Uncertain tax positions | (5.80 | ) | — | (1.56 | ) | |||
Other | (0.54 | ) | 0.53 | 0.60 | ||||
Effective Tax Rate | 31.88 | % | 40.20 | % | 35.80 | % |
In thousands | 2013 | 2012 | 2011 | ||||||||
Unrecognized Tax Benefit – Beginning of Period | $ | 20,467 | $ | 14,167 | $ | 17,004 | |||||
Gross Increases (Decreases) – Tax Positions in a Prior Period | (2,464 | ) | (29 | ) | (517 | ) | |||||
Gross Increases – Tax Positions in a Current Period | 133 | 6,986 | 473 | ||||||||
Settlements | (449 | ) | (533 | ) | (2,605 | ) | |||||
Lapse of Statutes of Limitations | (7,250 | ) | (124 | ) | (188 | ) | |||||
Unrecognized Tax Benefit – End of Period | $ | 10,437 | $ | 20,467 | $ | 14,167 |
Pension Benefits | Other Benefits | ||||||||||||||
In thousands | 2013 | 2012 | 2013 | 2012 | |||||||||||
Benefit obligation at beginning of year | $ | 118,644 | $ | 110,793 | $ | 3,908 | $ | 3,480 | |||||||
Service cost | 350 | 250 | 356 | 166 | |||||||||||
Interest cost | 4,961 | 5,597 | 157 | 174 | |||||||||||
Plan participants’ contributions | 0 | 0 | 74 | 71 | |||||||||||
Benefits paid | (9,038 | ) | (8,805 | ) | (221 | ) | (242 | ) | |||||||
Actuarial loss | 4,209 | 10,809 | 213 | 259 | |||||||||||
Benefit Obligation at End of Year | $ | 119,126 | $ | 118,644 | $ | 4,487 | $ | 3,908 |
Pension Benefits | Other Benefits | ||||||||||||||
In thousands | 2013 | 2012 | 2013 | 2012 | |||||||||||
Fair value of plan assets at beginning of year | $ | 96,443 | $ | 98,887 | $ | 0 | $ | 0 | |||||||
Actual gain on plan assets | 11,207 | 6,111 | 0 | 0 | |||||||||||
Employer contributions | 0 | 250 | 147 | 171 | |||||||||||
Plan participants’ contributions | 0 | 0 | 74 | 71 | |||||||||||
Benefits paid | (9,038 | ) | (8,805 | ) | (221 | ) | (242 | ) | |||||||
Fair Value of Plan Assets at End of Year | $ | 98,612 | $ | 96,443 | $ | 0 | $ | 0 | |||||||
Funded Status at End of Year | $ | (20,514 | ) | $ | (22,201 | ) | $ | (4,487 | ) | $ | (3,908 | ) |
Pension Benefits | Other Benefits | ||||||||||||||
In thousands | 2013 | 2012 | 2013 | 2012 | |||||||||||
Noncurrent assets | $ | 0 | $ | 0 | $ | 0 | $ | 0 | |||||||
Current liabilities | 0 | 0 | (160 | ) | (160 | ) | |||||||||
Noncurrent liabilities | (20,514 | ) | (22,201 | ) | (4,327 | ) | (3,748 | ) | |||||||
Net Amount Recognized | $ | (20,514 | ) | $ | (22,201 | ) | $ | (4,487 | ) | $ | (3,908 | ) |
Pension Benefits | Other Benefits | ||||||||||||||
In thousands | 2013 | 2012 | 2013 | 2012 | |||||||||||
Prior service cost | $ | 0 | $ | 4 | $ | 0 | $ | 0 | |||||||
Net loss | 42,879 | 48,906 | 566 | 437 | |||||||||||
Total Recognized in Accumulated Other Comprehensive Loss | $ | 42,879 | $ | 48,910 | $ | 566 | $ | 437 |
In thousands | |||||||
Pension Benefits | February 2, 2013 | January 28, 2012 | |||||
Projected benefit obligation | $ | 119,126 | $ | 118,644 | |||
Accumulated benefit obligation | 119,126 | 118,644 | |||||
Fair value of plan assets | 98,612 | 96,443 |
Pension Benefits | Other Benefits | ||||||||||||||||||||||
In thousands | 2013 | 2012 | 2011 | 2013 | 2012 | 2011 | |||||||||||||||||
Service cost | $ | 350 | $ | 250 | $ | 250 | $ | 356 | $ | 166 | $ | 144 | |||||||||||
Interest cost | 4,961 | 5,597 | 5,897 | 157 | 174 | 170 | |||||||||||||||||
Expected return on plan assets | (7,003 | ) | (7,807 | ) | (8,089 | ) | — | — | — | ||||||||||||||
Amortization: | |||||||||||||||||||||||
Prior service cost | 4 | 4 | 4 | — | — | — | |||||||||||||||||
Losses | 6,032 | 4,728 | 4,235 | 84 | 79 | 59 | |||||||||||||||||
Net amortization | $ | 6,036 | $ | 4,732 | $ | 4,239 | $ | 84 | $ | 79 | $ | 59 | |||||||||||
Net Periodic Benefit Cost | $ | 4,344 | $ | 2,772 | $ | 2,297 | $ | 597 | $ | 419 | $ | 373 |
Pension Benefits | Other Benefits | ||||||
In thousands | 2013 | 2013 | |||||
Net loss (gain) | $ | 5 | $ | (84 | ) | ||
Amortization of prior service cost | (4 | ) | — | ||||
Amortization of net actuarial (loss) gain | (6,032 | ) | 213 | ||||
Total Recognized in Other Comprehensive Income | $ | (6,031 | ) | $ | 129 | ||
Total Recognized in Net Periodic Benefit Cost and Other Comprehensive Income | $ | (1,687 | ) | $ | 726 |
Pension Benefits | Other Benefits | ||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||
Discount rate | 4.00 | % | 4.35 | % | 4.01 | % | 4.17 | % | |||
Rate of compensation increase | NA | NA | — | — |
Pension Benefits | Other Benefits | ||||||||||||||||
2013 | 2012 | 2011 | 2013 | 2012 | 2011 | ||||||||||||
Discount rate | 4.35 | % | 5.25 | % | 5.625 | % | 4.17 | % | 5.25 | % | 5.50 | % | |||||
Expected long-term rate of return on plan assets | 7.75 | % | 8.25 | % | 8.25 | % | — | — | — | ||||||||
Rate of compensation increase | NA | NA | NA | — | — | — |
2013 | 2012 | ||||
Health care cost trend rate assumed for next year | 7.0 | % | 7.5 | % | |
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate) | 5 | % | 5 | % | |
Year that the rate reaches the ultimate trend rate | 2017 | 2017 |
In thousands | 1% Increase in Rates | 1% Decrease in Rates | |||||
Aggregated service and interest cost | $ | 153 | $ | 70 | |||
Accumulated postretirement benefit obligation | $ | 735 | $ | 578 |
Plan Assets | |||||
February 2, 2013 | January 28, 2012 | ||||
Asset Category | |||||
Equity securities | 66 | % | 63 | % | |
Debt securities | 34 | % | 37 | % | |
Other | 0 | % | 0 | % | |
Total | 100 | % | 100 | % |
February 2, 2013 | Level 1 | Level 2 | Level 3 | Total | |||||||||||
Equity Securities: | |||||||||||||||
International securities | $ | 13,757 | $ | — | $ | — | $ | 13,757 | |||||||
U.S. securities | 51,011 | — | — | 51,011 | |||||||||||
Fixed Income Securities | 33,633 | — | — | 33,633 | |||||||||||
Other: | |||||||||||||||
Cash Equivalents | 235 | — | — | 235 | |||||||||||
Other (includes receivables and payables) | (24 | ) | — | — | (24 | ) | |||||||||
Total Pension Plan Assets | $ | 98,612 | $ | — | $ | — | $ | 98,612 |
January 28, 2012 | Level 1 | Level 2 | Level 3 | Total | |||||||||||
Equity Securities: | |||||||||||||||
International securities | $ | 11,754 | $ | — | $ | — | $ | 11,754 | |||||||
U.S. securities | 49,321 | — | — | 49,321 | |||||||||||
Fixed Income Securities | 35,164 | — | — | 35,164 | |||||||||||
Other: | |||||||||||||||
Cash Equivalents | 267 | — | — | 267 | |||||||||||
Other (includes receivables and payables) | (63 | ) | — | — | (63 | ) | |||||||||
Total Pension Plan Assets | $ | 96,443 | $ | — | $ | — | $ | 96,443 |
Estimated future payments | Pension Benefits ($ in millions) | Other benefits ($ in millions) | |||||
2013 | $ | 8.7 | $ | 0.2 | |||
2014 | 8.7 | 0.2 | |||||
2015 | 8.4 | 0.2 | |||||
2016 | 8.3 | 0.2 | |||||
2017 | 8.1 | 0.2 | |||||
2018 – 2022 | 38.1 | 1.3 |
For the Year Ended February 2, 2013 | For the Year Ended January 28, 2012 | For the Year Ended January 29, 2011 | ||||||||||||||||||||||||||||||
(In thousands, except per share amounts) | Income (Numerator) | Shares (Denominator) | Per-Share Amount | Income (Numerator) | Shares (Denominator) | Per-Share Amount | Income (Numerator) | Shares (Denominator) | Per-Share Amount | |||||||||||||||||||||||
Earnings from continuing operations | $ | 110,998 | $ | 82,984 | $ | 54,547 | ||||||||||||||||||||||||||
Less: Preferred stock dividends | (147 | ) | (193 | ) | (197 | ) | ||||||||||||||||||||||||||
Basic EPS from continuing operations | ||||||||||||||||||||||||||||||||
Income available to common shareholders | 110,851 | 23,584 | $ | 4.70 | 82,791 | 23,234 | $ | 3.56 | 54,350 | 23,209 | $ | 2.34 | ||||||||||||||||||||
Effect of Dilutive Securities from continuing operations | ||||||||||||||||||||||||||||||||
Options and restricted stock | 372 | 511 | 431 | |||||||||||||||||||||||||||||
Convertible preferred stock(1) | 88 | 34 | 141 | 55 | 58 | 26 | ||||||||||||||||||||||||||
Employees’ preferred stock(2) | 47 | 48 | 50 | |||||||||||||||||||||||||||||
Diluted EPS | ||||||||||||||||||||||||||||||||
Income available to common shareholders plus assumed conversions | $ | 110,939 | 24,037 | $ | 4.62 | $ | 82,932 | 23,848 | $ | 3.48 | $ | 54,408 | 23,716 | $ | 2.29 |
(1) | The amount of the dividend on the convertible preferred stock per common share obtainable on conversion of the convertible preferred stock was less than basic earnings per share for Series 1, 3 and 4 preferred stocks for Fiscal 2013 and 2012. Therefore, conversion of these convertible preferred stocks were included in diluted earnings per share for Fiscal 2013 and 2012. The amount of the dividend on Series 3 convertible preferred stock per common share obtainable on conversion of the convertible preferred stock was less than basic earnings for Fiscal 2011. Therefore, conversion of Series 3 preferred shares were included in diluted earnings per share for Fiscal 2011. The amount of the dividend on Series 1 and Series 4 convertible preferred stock per common share obtainable on conversion of the preferred stock was higher than basic earnings for Fiscal 2011. Therefore, conversion of Series 1 and Series 4 preferred shares were not reflected in diluted earnings per share for Fiscal 2011 because it would have been antidilutive. The shares convertible to common stock for Series 1, 3 and 4 preferred stock would have been 13,502 and 15,575 and 4,920, respectively, as of February 2, 2013. |
(2) | The Company’s Employees’ Subordinated Convertible Preferred Stock is convertible one for one to the Company’s common stock. Because there are no dividends paid on this stock, these shares are assumed to be converted. |
Shares | Weighted-Average Exercise Price | Weighted-Average Remaining Contractual Term | Aggregate Intrinsic Value (in thousands)(1) | |||||||||
Outstanding, January 30, 2010 | 995,580 | $ | 24.04 | |||||||||
Granted | 0 | — | ||||||||||
Exercised | (118,450 | ) | 18.77 | |||||||||
Forfeited | 0 | — | ||||||||||
Outstanding, January 29, 2011 | 877,130 | $ | 24.75 | |||||||||
Granted | 0 | — | ||||||||||
Exercised | (390,357 | ) | 24.82 | |||||||||
Forfeited | 0 | — | ||||||||||
Outstanding, January 28, 2012 | 486,773 | $ | 24.70 | |||||||||
Granted | 0 | — | ||||||||||
Exercised | (223,618 | ) | 21.50 | |||||||||
Forfeited | 0 | — | ||||||||||
Outstanding, February 2, 2013 | 263,155 | $ | 27.43 | 1.98 | $ | 9,317 | ||||||
Exercisable, February 2, 2013 | 263,155 | $ | 27.43 | 1.98 | $ | 9,317 |
(1) | Based upon the difference between the closing market price of the Company’s common stock on the last trading day of the year and the grant price of in-the-money options. |
Nonvested Restricted Shares | Shares | Weighted-Average Grant-Date Fair Value | ||||
Nonvested at January 30, 2010 | 676,114 | $ | 20.94 | |||
Granted | 404,995 | 28.41 | ||||
Vested | (179,684 | ) | 23.09 | |||
Withheld for federal taxes | (81,731 | ) | 23.15 | |||
Forfeited | (1,575 | ) | 19.40 | |||
Nonvested at January 29, 2011 | 818,119 | 23.95 | ||||
Granted | 289,407 | 45.14 | ||||
Vested | (227,691 | ) | 22.58 | |||
Withheld for federal taxes | (93,089 | ) | 22.42 | |||
Forfeited | (14,081 | ) | 27.38 | |||
Nonvested at January 28, 2012 | 772,665 | 32.41 | ||||
Granted | 194,232 | 57.58 | ||||
Vested | (195,203 | ) | 29.95 | |||
Withheld for federal taxes | (75,552 | ) | 29.97 | |||
Forfeited | (3,360 | ) | 38.96 | |||
Nonvested at February 2, 2013 | 692,782 | $ | 40.59 |
Fiscal 2013 | ||||||||||||||||||||||||||||
Journeys Group | Schuh Group | Lids Sports Group | Johnston & Murphy Group | Licensed Brands | Corporate & Other | Consolidated | ||||||||||||||||||||||
In thousands | ||||||||||||||||||||||||||||
Sales | $ | 1,111,490 | $ | 370,480 | $ | 793,016 | $ | 221,870 | $ | 108,808 | $ | 1,234 | $ | 2,606,898 | ||||||||||||||
Intercompany sales | — | — | — | (1,761 | ) | (10 | ) | (310 | ) | — | (2,081 | ) | ||||||||||||||||
Net sales to external customers | $ | 1,111,490 | $ | 370,480 | $ | 791,255 | $ | 221,860 | $ | 108,498 | $ | 1,234 | $ | 2,604,817 | ||||||||||||||
Segment operating income (loss) | $ | 106,929 | $ | 7,875 | $ | 85,794 | $ | 15,737 | $ | 10,064 | $ | (41,392 | ) | $ | 185,007 | |||||||||||||
Asset Impairments and other* | — | — | — | — | — | (17,037 | ) | (17,037 | ) | |||||||||||||||||||
Earnings (loss) from operations | 106,929 | 7,875 | 85,794 | 15,737 | 10,064 | (58,429 | ) | 167,970 | ||||||||||||||||||||
Interest expense | — | — | — | — | — | (5,126 | ) | (5,126 | ) | |||||||||||||||||||
Interest income | — | — | — | — | — | 95 | 95 | |||||||||||||||||||||
Earnings (loss) from continuing operations before income taxes | $ | 106,929 | $ | 7,875 | $ | 85,794 | $ | 15,737 | $ | 10,064 | $ | (63,460 | ) | $ | 162,939 | |||||||||||||
Total assets** | $ | 280,396 | $ | 231,323 | $ | 519,006 | $ | 89,505 | $ | 43,212 | $ | 170,347 | $ | 1,333,789 | ||||||||||||||
Depreciation and amortization | 20,190 | 10,040 | 26,892 | 3,738 | 366 | 2,471 | 63,697 | |||||||||||||||||||||
Capital expenditures | 21,852 | 16,873 | 21,448 | 6,680 | 1,255 | 3,629 | 71,737 |
Fiscal 2012 | |||||||||||||||||||||||||||
Journeys Group | Schuh Group | Lids Sports Group | Johnston & Murphy Group | Licensed Brands | Corporate & Other | Consolidated | |||||||||||||||||||||
In thousands | |||||||||||||||||||||||||||
Sales | $ | 1,020,116 | 212,262 | $ | 759,671 | $ | 201,725 | $ | 97,721 | $ | 1,116 | $ | 2,292,611 | ||||||||||||||
Intercompany sales | — | — | (347 | ) | — | (277 | ) | — | (624 | ) | |||||||||||||||||
Net sales to external customers | $ | 1,020,116 | $ | 212,262 | $ | 759,324 | $ | 201,725 | $ | 97,444 | $ | 1,116 | $ | 2,291,987 | |||||||||||||
Segment operating income (loss) | $ | 82,452 | $ | 11,711 | $ | 82,349 | $ | 13,682 | $ | 9,456 | $ | (53,103 | ) | $ | 146,547 | ||||||||||||
Asset Impairments and other* | — | — | — | — | — | (2,677 | ) | (2,677 | ) | ||||||||||||||||||
Earnings (loss) from operations | 82,452 | 11,711 | 82,349 | 13,682 | 9,456 | (55,780 | ) | 143,870 | |||||||||||||||||||
Interest expense | — | — | — | — | — | (5,157 | ) | (5,157 | ) | ||||||||||||||||||
Interest income | — | — | — | — | — | 65 | 65 | ||||||||||||||||||||
Earnings (loss) from continuing operations before income taxes | $ | 82,452 | $ | 11,711 | $ | 82,349 | $ | 13,682 | $ | 9,456 | $ | (60,872 | ) | $ | 138,778 | ||||||||||||
Total assets** | $ | 259,331 | 205,313 | $ | 489,512 | $ | 79,321 | $ | 34,974 | $ | 168,814 | $ | 1,237,265 | ||||||||||||||
Depreciation and amortization | 20,742 | 4,602 | 22,541 | 3,538 | 285 | 2,029 | 53,737 | ||||||||||||||||||||
Capital expenditures | 11,125 | 7,406 | 24,497 | 1,894 | 718 | 3,816 | 49,456 |
Fiscal 2011 | |||||||||||||||||||||||
Journeys Group | Lids Sports Group | Johnston & Murphy Group | Licensed Brands | Corporate & Other | Consolidated | ||||||||||||||||||
In thousands | |||||||||||||||||||||||
Sales | $ | 898,500 | $ | 603,533 | $ | 185,012 | $ | 101,839 | $ | 1,339 | $ | 1,790,223 | |||||||||||
Intercompany sales | — | (188 | ) | (1 | ) | (195 | ) | — | (384 | ) | |||||||||||||
Net sales to external customers | $ | 898,500 | $ | 603,345 | $ | 185,011 | $ | 101,644 | $ | 1,339 | $ | 1,789,839 | |||||||||||
Segment operating income (loss) | $ | 49,642 | $ | 56,026 | $ | 7,595 | $ | 12,359 | $ | (30,972 | ) | $ | 94,650 | ||||||||||
Asset Impairments and other* | — | — | — | — | (8,567 | ) | (8,567 | ) | |||||||||||||||
Earnings (loss) from operations | 49,642 | 56,026 | 7,595 | 12,359 | (39,539 | ) | 86,083 | ||||||||||||||||
Interest expense | — | — | — | — | (1,130 | ) | (1,130 | ) | |||||||||||||||
Interest income | — | — | — | — | 8 | 8 | |||||||||||||||||
Earnings (loss) from continuing operations before income taxes | $ | 49,642 | $ | 56,026 | $ | 7,595 | $ | 12,359 | $ | (40,661 | ) | $ | 84,961 | ||||||||||
Total assets** | $ | 268,335 | $ | 435,016 | $ | 72,393 | $ | 38,152 | $ | 147,186 | $ | 961,082 | |||||||||||
Depreciation and amortization | 23,005 | 18,627 | 3,754 | 217 | 2,135 | 47,738 | |||||||||||||||||
Capital expenditures | 7,754 | 17,908 | 1,687 | 27 | 1,923 | 29,299 |
(In thousands, | 1st Quarter | 2nd Quarter | 3rd Quarter | 4th Quarter | Fiscal Year | |||||||||||||||||||||||||||||||||||
except per share amounts) | 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | 2013(a) | 2012 | 2013(b) | 2012 | ||||||||||||||||||||||||||||||
Net sales | $ | 600,144 | $ | 481,502 | $ | 543,522 | $ | 470,591 | $ | 664,458 | $ | 616,525 | $ | 796,693 | $ | 723,369 | $ | 2,604,817 | $ | 2,291,987 | ||||||||||||||||||||
Gross margin | 306,664 | 246,786 | 273,022 | 235,771 | 334,348 | 310,457 | 384,313 | 354,692 | 1,298,347 | 1,147,706 | ||||||||||||||||||||||||||||||
Earnings from continuing operations before income taxes | 34,890 | (1) | 25,011 | (3) | 15,748 | (5) | 570 | (6) | 51,077 | (8) | 44,043 | (10) | 61,224 | (12) | 69,154 | (14) | 162,939 | 138,778 | ||||||||||||||||||||||
Earnings from continuing operations | 20,791 | 14,975 | 10,561 | 350 | 40,969 | 26,161 | 38,677 | 41,498 | 110,998 | 82,984 | ||||||||||||||||||||||||||||||
Net earnings (loss) | 20,614 | (2) | 14,793 | (4) | 10,520 | (392 | ) | (7) | 40,875 | (9) | 26,088 | (11) | 38,527 | (13) | 41,470 | 110,536 | 81,959 | |||||||||||||||||||||||
Diluted earnings (loss) per common share: | ||||||||||||||||||||||||||||||||||||||||
Continuing operations | 0.86 | 0.63 | 0.44 | 0.01 | 1.71 | 1.09 | 1.63 | 1.72 | 4.62 | 3.48 | ||||||||||||||||||||||||||||||
Net earnings (loss) | 0.85 | 0.63 | 0.43 | (0.02 | ) | 1.70 | 1.09 | 1.62 | 1.72 | 4.60 | 3.43 |
(1) | Includes a net asset impairment and other charge of $0.1 million (see Note 3). (a) 14 week period vs. 13 |
(2) | Includes a loss of $0.2 million, net of tax, from discontinued operations (see Note 3). weeks in prior period. |
(3) | Includes a net asset impairment and other charge of $1.2 million (see Note 3). (b) 53 week period vs. 52 |
(4) | Includes a loss of $0.2 million, net of tax, from discontinued operations (see Note 3). weeks in prior period. |
(5) | Includes a net asset impairment and other charge of $0.4 million (see Note 3). |
(6) | Includes a net asset impairment and other charge of $0.4 million (see Note 3). |
(7) | Includes a loss of $0.7 million, net of tax, from discontinued operations (see Note 3). |
(8) | Includes a net asset impairment and other charge of $0.4 million (see Note 3). |
(9) | Includes a loss of $0.1 million, net of tax, from discontinued operations (see Note 3). |
(10) | Includes a net asset impairment and other charge of $0.3 million (see Note 3). |
(11) | Includes a loss of $0.1 million, net of tax, from discontinued operations (see Note 3). |
(12) | Includes a net asset impairment and other charge of $16.1 million (see Note 3). |
(13) | Includes a loss of $0.2 million, net of tax, from discontinued operations (see Note 3). |
(14) | Includes a net asset impairment and other charge of $0.8 million (see Note 3). |
(a) Number of securities to be issued upon exercise of outstanding options, warrants and rights | (b) Weighted-average exercise price of outstanding options, warrants and rights | (c) Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (1) | |||||||
Equity compensation plans approved by security holders | 263,155 | $ | 27.43 | 1,898,881 | |||||
Equity compensation plans not approved by security holders | — | — | — | ||||||
Total | 263,155 | $ | 27.43 | 1,898,881 |
(1) | Such shares may be issued as restricted shares or other forms of stock-based compensation pursuant to our stock incentive plans. |
* | For additional information concerning our equity compensation plans, see the discussion in Note 1 in the Notes to Consolidated Financial Statements—Summary of Significant Accounting Policies – Share-Based Compensation and Note 12 Share-Based Compensation Plans. |
(2) | a. | Agreement and Plan of Merger, dated as of February 5, 2004, by and among Genesco Inc., HWC Merger Sub, Inc. and Hat World Corporation. Incorporated by reference to Exhibit (2)a to the current report on Form 8-K filed April 9, 2004 (File No. 1—3083). | |
b. | Stock Purchase Agreement, dated December 9, 2006, by and among Hat World, Inc., Hat Shack, Inc. and all the shareholders of Hat Shack, Inc. Incorporated by reference to Exhibit 10.1 to the current report on Form 8-K filed December 12, 2006 (File No. 1-3083). | ||
c. | Sale and Purchase Agreement, dated as of June 23, 2011, by and among Genesco Inc., Schuh Group Limited, Genesco (UK) Limited and the persons listed on Schedule 1 thereto. (Pursuant to Item 601(b)(2) of Regulation S-K, the schedules and exhibits from this agreement are omitted, but will be provided supplementally to the Commission upon request.) Incorporated by reference to Exhibit 2.1 to the current report on Form 8-K filed June 28, 2011 (File No. 1-3083). | ||
d. | £25 million Loan Note Instrument of Genesco (UK) Limited dated June 23, 2011. Incorporated by reference to Exhibit 2.2 to the current report on Form 8-K filed June 28, 2011 (File No. 1-3083). | ||
(3) | a. | Amended and Restated Bylaws of Genesco Inc. Incorporated by reference to Exhibit 3.1 to the current report on Form 8-K filed December 19, 2007 (File No. 1-3083). | |
b. | Restated Charter of Genesco Inc., as amended. Incorporated by reference to Exhibit 1 to the Genesco Inc. Registration Statement on Form 8-A/A filed with the SEC on May 1, 2003 (File No.1-3083). | ||
(4) | a. | Second Amended and Restated Rights Agreement dated as of April 18, 2010. Incorporated by reference to Exhibit 4.1 to the current report on Form 8-K filed April 9, 2010 (File No. 1-3083). | |
b. | Form of Certificate for the Common Stock. Incorporated by reference to Exhibit 3 to the Genesco Inc. Registration Statement on Form 8-A/A filed with the SEC on May 1, 2003 (File No.1-3083). |
(10) | a. | Second Amended and Restated Credit Agreement, dated as of January 21, 2011, by and among the Genesco Inc., certain subsidiaries of the Genesco Inc.party thereto, as other domestic borrowers and GCO Canada Inc., the lenders party thereto and Bank of America, N.A., as administrative agent and collateral agent. Incorporated by reference to Exhibit 10.1 to the current report on Form 8-K filed January 26, 2011 (File No. 1-3083). First Amendment to Second Amended and Restated Credit Agreement, dated June 23, 2011, by and among Genesco Inc., certain subsidiaries of Genesco Inc. party thereto, as other domestic borrowers and GCO Canada Inc., the lenders party thereto and Bank of America, N.A., as administrative agent and collateral agent. Incorporated by reference to Exhibit 10.1 to the current report on Form 8-K filed June 28, 2011 (File No. 1-3083). | |
b. | Form of Split-Dollar Insurance Agreement with Executive Officers. Incorporated by reference to Exhibit (10)a to the Company’s Annual Report on Form 10-K for the fiscal year ended February 1, 1997 (File No.1-3083). | ||
c. | 1996 Stock Incentive Plan Amended and Restated as of October 24, 2007. Form of Option Agreement. Incorporated by reference to Exhibit (10)c to the Company’s Annual Report on Form 10-K for the fiscal year ended February 3, 2007 (File No.1-3083). | ||
d. | Genesco Inc. 2005 Equity Incentive Plan Amended and Restated as of October 24, 2007. Incorporated by reference to Exhibit (10)d to the Company’s Annual Report on Form 10-K for the fiscal year ended February 2, 2008 (File No.1-3083). | ||
e. | Genesco Inc. 2009 Equity Incentive Plan. Incorporated by reference to Exhibit A to the Company’s definitive proxy statement dated May 15, 2009. Amended and Restated Genesco Inc. 2009 Equity Incentive Plan. Incorporated by reference to Exhibit A to the Company’s definitive proxy statement dated May 13, 2011. | ||
f. | Amended and Restated EVA Incentive Compensation Plan. Incorporated by reference to Exhibit (10)a to the Company’s Quarterly Report on Form 10-Q for the quarter ended April 30, 2011. Genesco Inc. Supplemental EVA Incentive Compensation Plan for the Period July 31, 2011 – January 28, 2012. | ||
g. | Amended and Restated EVA Incentive Compensation Plan. Incorporated by reference to Exhibit (10)a to the Company’s Quarterly Report on Form 10-Q for the quarter ended April 28, 2012. | ||
h. | Form of Incentive Stock Option Agreement. Incorporated by reference to Exhibit (10)c to the Company’s Quarterly Report on Form 10-Q for the quarter ended October 29, 2005 (File No.1-3083). | ||
i. | Form of Non-Qualified Stock Option Agreement. Incorporated by reference to Exhibit (10)d to the Company’s Quarterly Report on Form 10-Q for the quarter ended October 29, 2005 (File No.1-3083). | ||
j. | Form of Restricted Share Award Agreement for Executive Officers. Incorporated by reference to Exhibit (10)e to the Company’s Quarterly Report on Form 10-Q for the quarter ended October 29, 2005 (File No.1-3083). | ||
k. | Form of Restricted Share Award Agreement for Officers and Employees. Incorporated by reference to Exhibit (10)f to the Company’s Quarterly Report on Form 10-Q for the quarter ended October 29, 2005 (File No.1-3083). | ||
l. | Form of Restricted Share Award Agreement. Incorporated by reference to Exhibit (10)a to the Company’s Quarterly Report on Form 10-Q for the quarter ended August 1, 2009. | ||
m. | Form of Indemnification Agreement For Directors. Incorporated by reference to Exhibit (10)m to the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, 1993 (File No.1-3083). | ||
n. | Form of Non-Executive Director Indemnification Agreement. Incorporated by reference to Exhibit (10.1) to the current report on Form 8-K filed November 3, 2008 (File No. 1-3083). | ||
o. | Form of Officer Indemnification Agreement. Incorporated by reference to Exhibit (10.2) to the Company’s Quarterly Report on Form 10-Q for the quarter ended November 1, 2008 (File No.1-3083). | ||
p. | Supplemental Pension Agreement dated as of October 18, 1988 between the Company and William S. Wire II, as amended January 9, 1993. Incorporated by reference to Exhibit (10)p to the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, 1993 (File No.1-3083). | ||
q. | Deferred Compensation Trust Agreement dated as of February 27, 1991 between the Company and NationsBank of Tennessee for the benefit of William S. Wire, II, as amended January 9, 1993. Incorporated by reference to Exhibit (10)q to the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, 1993 (File No.1-3083). |
r. | Form of Employment Protection Agreement between the Company and certain executive officers dated as of February 26, 1997. Incorporated by reference to Exhibit (10)p to the Company’s Annual Report on Form 10-K for the fiscal year ended February 1, 1997 (File No.1-3083). | ||
s. | First Amendment to Form of Employment Protection Agreement. Incorporated by reference to Exhibit (10)s to the Company’s Annual Report on Form 10-K for the fiscal year ended January 30, 2010. | ||
t. | Employment Agreement dated as of March 29, 2010 between the Company and Hal N. Pennington. Incorporated by reference to Exhibit (10)t to the Company’s Annual Report on Form 10-K for the fiscal year ended January 30, 2010. | ||
u. | Trademark License Agreement, dated August 9, 2000, between Levi Strauss & Co. and Genesco Inc. Incorporated by reference to Exhibit (10.1) to the Company’s Quarterly Report on Form 10-Q for the quarter ended October 30, 2004 (File No.1-3083).* | ||
v. | Amendment No. 1 (Renewal) to Trademark License Agreement, dated October 18, 2004, between Levi Strauss & Co. and Genesco Inc. Incorporated by reference to Exhibit (10.2) to the Company’s Quarterly Report on Form 10-Q for the quarter ended October 30, 2004 (File No.1-3083).* | ||
w. | Amendment No. 2 (Renewal) to Trademark License Agreement, dated November 1, 2006, between Levi Strauss & Co. and Genesco. Inc. Incorporated by reference to Exhibit (10.1) to the Company’s Quarterly Report on Form 10-Q for the quarter ended October 28, 2006 (File No.1-3083).* | ||
x. | Amendment No. 4 (Renewal) to Trademark License Agreement, dated May 15, 2009, between Levi Strauss & Co. and Genesco Inc. Incorporated by reference to Exhibit (10)b to the Company’s Quarterly Report on Form 10-Q for the quarter ended August 1, 2009.* | ||
y. | Amendment No. 5 (Renewal) to Trademark License Agreement, dated July 23, 2012, between Levi Strauss & Co. and Genesco Inc. Incorporated by reference to Exhibit (10.1) to the Company’s Current Report on Form 8-K filed July 25, 2012 (File No. 1-3083).* | ||
z. | Genesco Inc. Deferred Income Plan dated as of July 1, 2000. Incorporated by reference to Exhibit (10)p to the Company’s Annual Report on Form 10-K for the fiscal year ended January 29, 2005. Amended and Restated Deferred Income Plan dated August 22, 2007. Incorporated by reference to Exhibit (10)r to the Company’s Annual Report on Form 10-K for the fiscal year ended February 2, 2008 (File No.1-3083). | ||
aa. | Non-Employee Director and Named Executive Officer Compensation. Incorporated by reference to Exhibit (10)b to the Company’s Quarterly Report on Form 10-Q for the quarter ended October 29, 2005 (File No.1-3083). | ||
bb. | The Schuh Group Limited 2015 Management Bonus Scheme. Incorporated by reference to Exhibit (10)a to the Company’s Quarterly Report on Form 10-Q for the quarter ended July 30, 2011. | ||
cc. | 1996 Employee Stock Purchase Plan. Incorporated by reference to Registration Statement on Form S-8 filed September 14, 1995 (File No. 333-62653). | ||
dd. | Amended and Restated Genesco Employee Stock Purchase Plan dated August 22, 2007. Incorporated by reference to Exhibit (10)u to the Company’s Annual Report on Form 10-K for the fiscal year ended February 2, 2008 (File No.1-3083). | ||
ee. | Basic Form of Exchange Agreement (Restricted Stock). Incorporated by reference to Exhibit 10.1 to the current report on Form 8-K filed April 29, 2009 (File No. 1-3083). | ||
ff. | Basic Form of Exchange Agreement (Unrestricted Stock). Incorporated by reference to Exhibit 10.2 to the current report on Form 8-K filed April 29, 2009 (File No. 1-3083). | ||
gg. | Form of Conversion Agreement. Incorporated by reference to Exhibit 10.1 to the current report on Form 8-K filed November 2, 2009 (File No. 1-3083). | ||
hh. | Form of Conversion Agreement. Incorporated by reference to Exhibit 10.1 to the current report on Form 8-K filed November 6, 2009 (File No. 1-3083). | ||
ii. | Settlement Agreement, dated as of March 3, 2008, by and among UBS Securities LLC and UBS Loan Finance LLC, The Finish Line, Inc. and Headwind, Inc. and Genesco Inc. Incorporated by reference to Exhibit 10.1 to the current report on Form 8-K filed March 4, 2008 (File No. 1-3083). | ||
(21) | Subsidiaries of the Company. | ||
(23) | Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm included on page 107. | ||
(24) | Power of Attorney |
(31.1) | Certification of the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | ||
(31.2) | Certification of the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | ||
(32.1) | Certification of the Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | ||
(32.2) | Certification of the Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | ||
(99) | Financial Statements and Report of Independent Registered Public Accounting Firm with respect to the Genesco Employee Stock Purchase Plan being filed herein in lieu of filing Form 11-K pursuant to Rule 15d-21. | ||
101.INS | XBRL Instance Document | ||
101.SCH | XBRL Schema Document | ||
101.CAL | XBRL Calculation Linkbase Document | ||
101.DEF | XBRL Definition Linkbase Document | ||
101.LAB | XBRL Label Linkbase Document | ||
101.PRE | XBRL Presentation Linkbase Document |
* | Certain information has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portion. |
/s/ Ernst & Young LLP | |
Nashville, Tennessee | |
April 3, 2013 |
GENESCO INC. | ||
By: | /s/James S. Gulmi | |
James S. Gulmi | ||
Senior Vice President – Finance and | ||
Chief Financial Officer |
/s/Robert J. Dennis | Chairman, President, Chief Executive Officer | |
Robert J. Dennis | and a Director | |
/s/James S. Gulmi | Senior Vice President – Finance and | |
James S. Gulmi | Chief Financial Officer | |
(Principal Financial Officer) | ||
/s/Paul D. Williams | Vice President and Chief Accounting Officer | |
Paul D. Williams | ||
Directors: | ||
James S. Beard* | Matthew C. Diamond * | |
Leonard L. Berry * | Marty G. Dickens * | |
William F. Blaufuss, Jr.* | Thurgood Marshall, Jr. * | |
James W. Bradford* | Kathleen Mason * | |
*By | /s/Roger G. Sisson |
Roger G. Sisson | |
Attorney-In-Fact |
In Thousands | Beginning Balance | Charged to Profit and Loss | Increases (Decreases) | Ending Balance | |||||||||||
Reserves deducted from assets in the balance sheet: | |||||||||||||||
Accounts Receivable Allowances | $ | 6,900 | $ | 1,325 | $ | (2,143 | ) | $ | 6,082 |
In Thousands | Beginning Balance | Charged to Profit and Loss | Increases (Decreases) | Ending Balance | |||||||||||
Reserves deducted from assets in the balance sheet: | |||||||||||||||
Accounts Receivable Allowances | $ | 3,301 | $ | 2,004 | $ | 1,595 | $ | 6,900 |
In Thousands | Beginning Balance | Charged to Profit and Loss | Increases (Decreases) | Ending Balance | |||||||||||
Reserves deducted from assets in the balance sheet: | |||||||||||||||
Accounts Receivable Allowances | $ | 3,232 | $ | 1,081 | $ | (1,012 | ) | $ | 3,301 |
/s/ Robert J. Dennis |
Robert J. Dennis |
Chief Executive Officer |
/s/ James S. Gulmi |
James S. Gulmi |
Chief Financial Officer |
/s/ Robert J. Dennis |
Robert J. Dennis |
Chief Executive Officer |
April 3, 2013 |
/s/ James S. Gulmi |
James S. Gulmi |
Chief Financial Officer |
April 3, 2013 |
Report of Independent Registered Public Accounting Firm | 1 | |
Audited Financial Statements: | ||
Statements of Financial Condition | 2 | |
Statements of Changes in Plan Equity | 3 | |
Notes to Financial Statements | 4 |
Assets | February 2, 2013 | January 28, 2012 | |||||
Due from Genesco Inc. | $ | 87,427 | $ | 71,385 | |||
Total Assets | $ | 87,427 | $ | 71,385 | |||
Liabilities and Plan Equity | |||||||
Plan equity | $ | 87,427 | $ | 71,385 | |||
Total Liabilities and Plan Equity | $ | 87,427 | $ | 71,385 | |||
For the Fiscal Year Ended | |||||||||||
February 2, 2013 | January 28, 2012 | January 29, 2011 | |||||||||
Employee contributions | $ | 210,090 | $ | 175,363 | $ | 153,424 | |||||
Options exercised | (157,242 | ) | (132,997 | ) | (120,073 | ) | |||||
Distributions to withdrawn participants | (36,806 | ) | (32,128 | ) | (28,852 | ) | |||||
Net increase in plan equity | 16,042 | 10,238 | 4,499 | ||||||||
Plan equity at beginning of year | 71,385 | 61,147 | 56,648 | ||||||||
Plan Equity at End of Year | $ | 87,427 | $ | 71,385 | $ | 61,147 |
Option Period | |||||||||||
Options to Purchase Common Stock | Total | 10/01/12 to 09/30/13 | 10/01/11 to 09/30/12 | 10/01/10 to 09/30/11 | |||||||
Estimated options to be granted, January 29, 2011 | 4,664 | 0 | 0 | 4,664 | |||||||
Estimated options to be granted - October 1, 2011 | 3,655 | 0 | 3,655 | 0 | |||||||
Adjustment to estimated options to be granted | (943 | ) | 0 | 0 | (943 | ) | |||||
Options exercised | (2,717 | ) | 0 | 0 | (2,717 | ) | |||||
Options withdrawn | (1,054 | ) | 0 | (50 | ) | (1,004 | ) | ||||
Estimated options to be granted, January 28, 2012 | 3,605 | 0 | 3,605 | 0 | |||||||
Estimated options to be granted - October 1, 2012 | 3,972 | 3,972 | 0 | 0 | |||||||
Adjustment to estimated options to be granted | (318 | ) | 0 | (318 | ) | 0 | |||||
Options exercised | (2,463 | ) | 0 | (2,463 | ) | 0 | |||||
Options withdrawn | (901 | ) | (77 | ) | (824 | ) | 0 | ||||
Estimated options to be granted, February 2, 2013 | 3,895 | 3,895 | 0 | 0 |
Option Period | |||||
10/01/12 to 09/30/13 | 10/01/11 to 09/30/12 | 10/01/10 to 09/30/11 | |||
Enrollment date | 10/01/12 | 10/01/11 | 10/01/10 | ||
Exercise date | 09/30/13 | 09/30/12 | 09/30/11 | ||
95% of fair market value of stock at date of exercise | NA | $63.39 | $48.95 |
Option Period | |||||||||||
Number of Participants | Total | 10/01/12 to 09/30/13 | 10/01/11 to 09/30/12 | 10/01/10 to 09/30/11 | |||||||
Active, January 29, 2011 | 171 | 0 | 0 | 171 | |||||||
Enrollment - October 1, 2011 | 225 | 0 | 225 | 0 | |||||||
Exercised options | (140 | ) | 0 | 0 | (140 | ) | |||||
Withdrawn | (33 | ) | 0 | (2 | ) | (31 | ) | ||||
Active, January 28, 2012 | 223 | 0 | 223 | 0 | |||||||
Enrollment - October 1, 2012 | 280 | 280 | 0 | 0 | |||||||
Exercised options | (172 | ) | 0 | (172 | ) | 0 | |||||
Withdrawn | (56 | ) | (5 | ) | (51 | ) | 0 | ||||
Active, February 2, 2013 | 275 | 275 | 0 | 0 |
Quarterly Financial Information (Unaudited) (Tables)
|
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Feb. 02, 2013
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Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Details of quarterly financial information |
|
Fair Value (Details Textual) (USD $)
In Thousands, unless otherwise specified |
12 Months Ended | ||
---|---|---|---|
Feb. 02, 2013
|
Jan. 28, 2012
|
Jan. 29, 2011
|
|
Fair Value (Textual) [Abstract] | |||
Impairment of long-lived assets | $ 1,396 | $ 1,119 | $ 7,155 |
Acquisitions and Intangible Assets (Details 2) (USD $)
In Thousands, unless otherwise specified |
Feb. 02, 2013
|
Jan. 28, 2012
|
||||
---|---|---|---|---|---|---|
Other intangibles by major classes | ||||||
Gross other intangibles | $ 28,818 | $ 28,453 | ||||
Accumulated amortization | (17,220) | (13,645) | ||||
Net Other Intangibles | 11,598 | 14,808 | ||||
Leases [Member]
|
||||||
Other intangibles by major classes | ||||||
Gross other intangibles | 12,584 | 12,390 | ||||
Accumulated amortization | (10,800) | (9,477) | ||||
Net Other Intangibles | 1,784 | 2,913 | ||||
Customer Lists [Member]
|
||||||
Other intangibles by major classes | ||||||
Gross other intangibles | 14,116 | 14,062 | ||||
Accumulated amortization | (5,312) | (3,292) | ||||
Net Other Intangibles | 8,804 | 10,770 | ||||
Other Intangible Assets [Member]
|
||||||
Other intangibles by major classes | ||||||
Gross other intangibles | 2,118 | [1] | 2,001 | [1] | ||
Accumulated amortization | (1,108) | [1] | (876) | [1] | ||
Net Other Intangibles | $ 1,010 | [1] | $ 1,125 | [1] | ||
|
Defined Benefit Pension Plans and Other Benefit Plans Defined Benefit Pension Plans and Other Postretirement Benefit Plans (Details 1) (Details) (USD $)
In Thousands, unless otherwise specified |
Feb. 02, 2013
|
Jan. 28, 2012
|
---|---|---|
Other Benefits
|
||
Defined Benefit Plan Disclosure [Line Items] | ||
Noncurrent assets | $ 0 | $ 0 |
Current liabilities | (160) | (160) |
Noncurrent liabilities | (4,327) | (3,748) |
Net Amount Recognized | (4,487) | (3,908) |
Pension Benefits
|
||
Defined Benefit Plan Disclosure [Line Items] | ||
Noncurrent assets | 0 | 0 |
Current liabilities | 0 | 0 |
Noncurrent liabilities | (20,514) | (22,201) |
Net Amount Recognized | $ (20,514) | $ (22,201) |
Long-Term Debt (Details) (USD $)
In Thousands, unless otherwise specified |
Feb. 02, 2013
|
Jan. 28, 2012
|
---|---|---|
Long-Term Debt | ||
Total long-term debt | $ 50,682 | $ 40,704 |
Current portion | 5,675 | 8,773 |
Total Noncurrent Portion of Long-Term Debt | 45,007 | 31,931 |
Revolver Borrowings [Member]
|
||
Long-Term Debt | ||
Total long-term debt | 27,700 | 5,000 |
UK Term Loans [Member]
|
||
Long-Term Debt | ||
Total long-term debt | $ 22,982 | $ 35,704 |
Defined Benefit Pension Plans and Other Benefit Plans Defined Benefit Pension Plans and Other Postretirement Benefit Plans (Details 9) (Details) (USD $)
In Thousands, unless otherwise specified |
12 Months Ended |
---|---|
Feb. 02, 2013
|
|
Defined Benefit Plan, Effect of One-Percentage Point Change in Assumed Health Care Cost Trend Rates [Abstract] | |
Aggregated service and interest cost, 1% increase in rates | $ 153 |
Aggregated service and interest cost, 1% decrease in rates | 70 |
Accumulated postretirement benefit obligation, 1% increase in rates | 735 |
Accumulated postretirement benefit obligation, 1% decrease in rates | $ 578 |
Acquisitions and Intangible Assets (Details) (Schuh [Member])
In Thousands, unless otherwise specified |
Jun. 23, 2011
USD ($)
|
Jun. 23, 2011
GBP (£)
|
---|---|---|
Estimated fair values of assets and liabilities at acquisition | ||
Cash | $ 24,836 | £ 6,200 |
Accounts receivable | 4,673 | |
Inventories | 32,179 | |
Other current assets | 7,565 | |
Property and equipment | 30,314 | |
Other non-current assets | 6,977 | |
Deferred taxes | 4,197 | |
Trademarks | 27,224 | |
Other intangibles | 4,995 | |
Goodwill | 102,907 | |
Accounts payable | (16,196) | |
Other current liabilities | (24,718) | |
Long-term debt (includes current portion) | (62,562) | |
Other non-current liabilities | (26,637) | |
Net Assets Acquired | $ 115,754 |
Equity (Tables)
|
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Feb. 02, 2013
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Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Non redeemable preferred stock |
* In order of preference for liquidation and dividends.
*** Also convertible into one share of $1.50 Subordinated Cumulative Preferred Stock. |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Preferred stock transactions | Preferred Stock Transactions
|
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Changes in shares of company's capital stock | Changes in the Shares of the Company’s Capital Stock
|
Defined Benefit Pension Plans and Other Benefit Plans Defined Benefit Pension Plans and Other Postretirement Benefit Plans (Details 10) (Details)
|
12 Months Ended | |
---|---|---|
Feb. 02, 2013
|
Jan. 28, 2012
|
|
Defined Benefit Plan Disclosure [Line Items] | ||
Target asset allocation | 100.00% | 100.00% |
Equity Securities [Member]
|
||
Defined Benefit Plan Disclosure [Line Items] | ||
Target asset allocation | 66.00% | 63.00% |
Debt Securities [Member]
|
||
Defined Benefit Plan Disclosure [Line Items] | ||
Target asset allocation | 34.00% | 37.00% |
Other [Member]
|
||
Defined Benefit Plan Disclosure [Line Items] | ||
Target asset allocation | 0.00% | 0.00% |
Defined Benefit Pension Plans and Other Benefit Plans Defined Benefit Pension Plans and Other Postretirement Benefit Plans (Details 4) (Details) (USD $)
In Thousands, unless otherwise specified |
12 Months Ended | ||
---|---|---|---|
Feb. 02, 2013
|
Jan. 28, 2012
|
Jan. 29, 2011
|
|
Pension Benefits
|
|||
Defined Benefit Plan Disclosure [Line Items] | |||
Service cost | $ 350 | $ 250 | $ 250 |
Interest cost | 4,961 | 5,597 | 5,897 |
Expected return on plan assets | (7,003) | (7,807) | (8,089) |
Prior service cost | 4 | 4 | 4 |
Losses | 6,032 | 4,728 | 4,235 |
Net amortization | 6,036 | 4,732 | 4,239 |
Net Periodic Benefit Cost | 4,344 | 2,772 | 2,297 |
Other Benefits
|
|||
Defined Benefit Plan Disclosure [Line Items] | |||
Service cost | 356 | 166 | 144 |
Interest cost | 157 | 174 | 170 |
Expected return on plan assets | 0 | 0 | 0 |
Prior service cost | 0 | 0 | 0 |
Losses | 84 | 79 | 59 |
Net amortization | 84 | 79 | 59 |
Net Periodic Benefit Cost | $ 597 | $ 419 | $ 373 |
Commitments Under Long-Term Leases (Details) (USD $)
In Thousands, unless otherwise specified |
12 Months Ended | ||
---|---|---|---|
Feb. 02, 2013
|
Jan. 28, 2012
|
Jan. 29, 2011
|
|
Rental expense under operating leases | |||
Minimum rentals | $ 215,516 | $ 192,175 | $ 167,558 |
Contingent rentals | 14,786 | 12,918 | 5,827 |
Sublease rentals | (667) | (686) | (642) |
Total Rental Expense | 229,635 | 204,407 | 172,743 |
Minimum rental commitments payable in future years | |||
2014 | 223,495 | ||
2015 | 210,019 | ||
2016 | 191,642 | ||
2017 | 159,488 | ||
2018 | 127,982 | ||
Later years | 342,534 | ||
Total Minimum Rental Commitments | $ 1,255,160 |
Defined Benefit Pension Plans and Other Benefit Plans Defined Benefit Pension Plans and Other Postretirement Benefit Plans (Details 7) (Details)
|
12 Months Ended | ||
---|---|---|---|
Feb. 02, 2013
|
Jan. 28, 2012
|
Jan. 29, 2011
|
|
Pension Benefits
|
|||
Defined Benefit Plan Disclosure [Line Items] | |||
Discount rate | 4.35% | 5.25% | 5.625% |
Expected long-term rate of return on plan assets | 7.75% | 8.25% | 8.25% |
Other Benefits
|
|||
Defined Benefit Plan Disclosure [Line Items] | |||
Discount rate | 4.17% | 5.25% | 5.50% |
Expected long-term rate of return on plan assets | 0.00% | 0.00% | 0.00% |
Rate of compensation increase | 0.00% | 0.00% | 0.00% |
Defined Benefit Pension Plans and Other Benefit Plans Defined Benefit Pension Plans and Other Postretirement Benefit Plans (Details 12) (Details) (USD $)
In Millions, unless otherwise specified |
Feb. 02, 2013
|
---|---|
Pension Benefits
|
|
Defined Benefit Plan, Estimated Future Benefit Payments [Abstract] | |
2013 | $ 8.7 |
2014 | 8.7 |
2015 | 8.4 |
2016 | 8.3 |
2017 | 8.1 |
2018 – 2022 | 38.1 |
Other Benefits
|
|
Defined Benefit Plan, Estimated Future Benefit Payments [Abstract] | |
2013 | 0.2 |
2014 | 0.2 |
2015 | 0.2 |
2016 | 0.2 |
2017 | 0.2 |
2018 – 2022 | $ 1.3 |
Share-Based Compensation Plans (Details Textual) (USD $)
|
12 Months Ended | 12 Months Ended | 12 Months Ended | |||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Feb. 02, 2013
Plan
|
Jan. 28, 2012
|
Jan. 29, 2011
|
Jan. 28, 2012
Maximum [Member]
|
Feb. 02, 2013
Stock Options [Member]
|
Feb. 02, 2013
Stock Options [Member]
Maximum [Member]
|
Feb. 02, 2013
Nonvested Restricted Shares [Member]
|
Jan. 28, 2012
Nonvested Restricted Shares [Member]
|
Jan. 29, 2011
Nonvested Restricted Shares [Member]
|
Feb. 02, 2013
Director [Member]
|
Jan. 28, 2012
Director [Member]
|
Jan. 29, 2011
Director [Member]
|
Feb. 02, 2013
Director [Member]
Nonvested Restricted Shares [Member]
|
Jan. 28, 2012
Director [Member]
Nonvested Restricted Shares [Member]
|
Jan. 29, 2011
Director [Member]
Nonvested Restricted Shares [Member]
|
Jun. 22, 2011
2009 Equity Incentive Plan [Member]
|
Feb. 02, 2013
2009 Equity Incentive Plan [Member]
Nonvested Restricted Shares [Member]
|
Jan. 28, 2012
2009 Equity Incentive Plan [Member]
Nonvested Restricted Shares [Member]
|
Jan. 29, 2011
2009 Equity Incentive Plan [Member]
Nonvested Restricted Shares [Member]
|
Feb. 02, 2013
2009 Equity Incentive Plan [Member]
Director [Member]
|
Jan. 28, 2012
2009 Equity Incentive Plan [Member]
Director [Member]
|
Feb. 02, 2013
2005 Equity Incentive Plan [Member]
|
Jan. 29, 2011
2005 Equity Incentive Plan [Member]
Director [Member]
|
Feb. 02, 2013
2005 Equity Incentive Plan [Member]
Director [Member]
Nonvested Restricted Shares [Member]
|
|
Share-Based Compensation Plans (Textual) [Abstract] | ||||||||||||||||||||||||
Number of fixed stock compensation plans | 2 | |||||||||||||||||||||||
Share-based compensation, shares issued | 2,500,000 | 2,500,000 | ||||||||||||||||||||||
Stock option's maximum term | 10 years | |||||||||||||||||||||||
Vesting term | 4 years | 4 years | ||||||||||||||||||||||
Annual vesting percentage | 25.00% | 25.00% | 33.33% | |||||||||||||||||||||
Share-based compensation cost | $ 0 | $ 1,000 | $ 200,000 | $ 1,000 | $ 9,600,000 | $ 6,900,000 | $ 7,300,000 | $ 900,000 | $ 800,000 | $ 500,000 | ||||||||||||||
Share based compensation tax benefit realized from exercise of stock option | 4,800,000 | 4,700,000 | 1,400,000 | |||||||||||||||||||||
Total intrinsic value, of options exercised | 11,500,000 | 10,300,000 | 2,300,000 | |||||||||||||||||||||
Cash received from option exercises under all share-based payment | 4,800,000 | 9,700,000 | 2,200,000 | |||||||||||||||||||||
Granted, Shares | 194,232 | 289,407 | 404,995 | 336 | 0 | 0 | ||||||||||||||||||
Share-based compensation for restricted stock value grant in period | 80,000 | 70,000 | 60,000 | |||||||||||||||||||||
Share-based compensation, shares issued | 9,888 | 14,643 | 17,838 | 194,232 | 289,407 | 404,995 | ||||||||||||||||||
Unrecognized share-based compensation cost | $ 21,700,000 | |||||||||||||||||||||||
Weighted average expected period nonvested share-based compensation | 2 years 3 months 7 days |
Defined Benefit Pension Plans and Other Benefit Plans Defined Benefit Pension Plans and Other Postretirement Benefit Plans (Details 8) (Details)
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12 Months Ended | |
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Feb. 02, 2013
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Jan. 28, 2012
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Defined Benefit Plan, Assumed Health Care Cost Trend Rates [Abstract] | ||
Health care cost trend rate assumed for next year | 7.00% | 7.50% |
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate) | 5.00% | 5.00% |
Year that the rate reaches the ultimate trend rate | 2017 | 2017 |
Defined Benefit Pension Plans and Other Benefit Plans Defined Benefit Pension Plans and Other Postretirment Benefit Plans (Details 2) (Details) (USD $)
In Thousands, unless otherwise specified |
Feb. 02, 2013
|
Jan. 28, 2012
|
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Pension Benefits
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Defined Benefit Plan Disclosure [Line Items] | ||
Prior service cost | $ 0 | $ 4 |
Net loss | 42,879 | 48,906 |
Total Recognized in Accumulated Other Comprehensive Loss | 42,879 | 48,910 |
Other Benefits
|
||
Defined Benefit Plan Disclosure [Line Items] | ||
Prior service cost | 0 | 0 |
Net loss | 566 | 437 |
Total Recognized in Accumulated Other Comprehensive Loss | $ 566 | $ 437 |
Summary of Significant Accounting Policies (Policies)
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12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Feb. 02, 2013
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Nature of Operations | Nature of Operations The Company's business includes the design and sourcing, marketing and distribution of footwear and accessories through retail stores in the U.S., Puerto Rico and Canada primarily under the Journeys, Journeys Kidz, Shi by Journeys, Underground by Journeys and Johnston & Murphy banners and under the Schuh banner in the United Kingdom and the Republic of Ireland; through e-commerce websites including journeys.com, journeyskidz.com, shibyjourneys.com, undergroundbyjourneys.com, schuh.co.uk and johnstonmurphy.com and catalogs, and at wholesale, primarily under the Company's Johnston & Murphy brand, the licensed Dockers brand and other brands that the Company licenses for men's footwear. The Company's business also includes Lids Sports Group, which operates headwear and accessory stores in the U.S. and Canada primarily under the Lids, Hat World and Hat Shack banners; the Lids Locker Room business, consisting of sports-oriented fan shops featuring a broad array of licensed merchandise such as apparel, hats and accessories, sports decor and novelty products, operating primarily under the Lids Locker Room, Sports Fan-Attic and Sports Avenue banners; certain e-commerce operations and an athletic team dealer business operating as Lids Team Sports. |
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Principles of Consolidation | Principles of Consolidation All subsidiaries are consolidated in the consolidated financial statements. All significant intercompany transactions and accounts have been eliminated. |
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Fiscal Year | Fiscal Year The Company’s fiscal year ends on the Saturday closest to January 31. As a result, Fiscal 2013 was a 53-week year with 371 days and each of Fiscal 2012 and Fiscal 2011 was a 52-week year with 364 days. Fiscal 2013 ended on February 2, 2013, Fiscal 2012 ended on January 28, 2012 and Fiscal 2011 ended on January 29, 201l. |
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Financial Statement Reclassifications | Financial Statement Reclassifications Certain reclassifications have been made to conform prior years' data to the current year presentation with respect to segments. The Company integrated the Underground Station operations into the Journeys Group in the first quarter of Fiscal 2013. The former Underground Station stores are a Note 1 Summary of Significant Accounting Policies, Continued subset of Journeys Group under the brand "Underground by Journeys." Journeys Group segment net sales, operating income, total assets, depreciation and amortization and capital expenditures have been restated by $92.4 million, $(0.3) million, $25.2 million, $1.8 million and $0.2 million, respectively, for Fiscal 2012 and by $94.4 million, $(3.0) million, $27.8 million, $2.2 million and $1.3 million, respectively, for Fiscal 2011 as a result of combining Underground Station Group with the Journeys Group segment to conform to current year presentation (See Note 14). Certain shipping and warehouse expenses have been reclassed from selling and administrative expenses to cost of sales in Fiscal 2012 and 2011 to conform to the current year presentation. The reclass to cost of sales from selling and administrative expense for Fiscal 2012 and 2011 was $6.3 million and $3.8 million, respectively. |
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Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant areas requiring management estimates or judgments include the following key financial areas: Inventory Valuation The Company values its inventories at the lower of cost or market. In its footwear wholesale operations, its Schuh Group segment and its Lids Sports Group wholesale operations, except for the Anaconda Sports wholesale division, cost is determined using the first-in, first-out (“FIFO”) method. Market value is determined using a system of analysis which evaluates inventory at the stock number level based on factors such as inventory turn, average selling price, inventory level, and selling prices reflected in future orders. The Company provides reserves when the inventory has not been marked down to market value based on current selling prices or when the inventory is not turning and is not expected to turn at levels satisfactory to the Company. The Lids Sports Group retail segment and its Anaconda Sports wholesale division employ the moving average cost method for valuing inventories and apply freight using an allocation method. The Company provides a valuation allowance for slow-moving inventory based on negative margins and estimated shrink based on historical experience and specific analysis, where appropriate. In its retail operations, other than the Schuh Group and Lids Sports Group retail segments, the Company employs the retail inventory method, applying average cost-to-retail ratios to the retail value of inventories. Under the retail inventory method, valuing inventory at the lower of cost or market is achieved as markdowns are taken or accrued as a reduction of the retail value of inventories. Inherent in the retail inventory method are subjective judgments and estimates, including merchandise mark-on, markups, markdowns, and shrinkage. These judgments and estimates, coupled with the Note 1 Summary of Significant Accounting Policies, Continued fact that the retail inventory method is an averaging process, could produce a range of cost figures. To reduce the risk of inaccuracy and to ensure consistent presentation, the Company employs the retail inventory method in multiple subclasses of inventory with similar gross margins, and analyzes markdown requirements at the stock number level based on factors such as inventory turn, average selling price, and inventory age. In addition, the Company accrues markdowns as necessary. These additional markdown accruals reflect all of the above factors as well as current agreements to return products to vendors and vendor agreements to provide markdown support. In addition to markdown provisions, the Company maintains provisions for shrinkage and damaged goods based on historical rates. Inherent in the analysis of both wholesale and retail inventory valuation are subjective judgments about current market conditions, fashion trends, and overall economic conditions. Failure to make appropriate conclusions regarding these factors may result in an overstatement or understatement of inventory value. Impairment of Long-Lived Assets The Company periodically assesses the realizability of its long-lived assets, other than goodwill, and evaluates such assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Asset impairment is determined to exist if estimated future cash flows, undiscounted and without interest charges, are less than the carrying amount. Inherent in the analysis of impairment are subjective judgments about future cash flows. Failure to make appropriate conclusions regarding these judgments may result in an overstatement or understatement of the value of long-lived assets. See also Notes 3 and 5. The goodwill impairment test involves performing a qualitative assessment, on a reporting unit level, based on current circumstances. If the results of the qualitative assessment indicate that it is more likely than not that the fair value of a reporting unit is greater than its carrying amount, a two-step impairment test will not be performed. However, if the results of the qualitative assessment indicate that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then a two-step impairment test is performed. Alternatively, the Company may elect to bypass the qualitative assessment and proceed directly to the two-step impairment test, on a reporting unit level. The first step is a comparison of the fair value and carrying value of the business unit with which the goodwill is associated. The Company estimates fair value using the best information available, and computes the fair value derived by an income approach utilizing discounted cash flow projections. The income approach uses a projection of a reporting unit’s estimated operating results and cash flows that is discounted using a weighted-average cost of capital that reflects current market conditions. A key assumption in the Company’s fair value estimate is the weighted average cost of capital utilized for discounting its cash flow projections in its income approach. The Company believes the rate it used in its latest annual test, which was completed in the fourth quarter, was consistent with the risks inherent in its business and with industry discount rates. The projection uses management’s best estimates of economic and market conditions over the projected period including growth rates in sales, costs, estimates of future expected changes in operating margins and cash Note 1 Summary of Significant Accounting Policies, Continued expenditures. Other significant estimates and assumptions include terminal value growth rates, future estimates of capital expenditures and changes in future working capital requirements. If the carrying value of the reporting unit is higher than its fair value, there is an indication that impairment may exist and the second step must be performed to measure the amount of impairment loss. The amount of impairment is determined by comparing the implied fair value of reporting unit goodwill to the carrying value of the goodwill in the same manner as if the reporting unit was being acquired in a business combination. Specifically, the Company would allocate the fair value to all of the assets and liabilities of the reporting unit, including any unrecognized intangible assets, in a hypothetical analysis that would calculate the implied fair value of goodwill. If the implied fair value of goodwill is less than the recorded goodwill, the Company would record an impairment charge for the difference. Environmental and Other Contingencies The Company is subject to certain loss contingencies related to environmental proceedings and other legal matters. The Company has made pretax accruals for certain of these contingencies, including approximately $0.8 million in Fiscal 2013, $1.8 million in Fiscal 2012 and $2.9 million in Fiscal 2011. These charges are included in provision for discontinued operations, net in the Consolidated Statements of Operations because they relate to former facilities operated by the Company. The Company monitors these matters on an ongoing basis and, on a quarterly basis, management reviews the Company’s reserves and accruals, adjusting provisions as management deems necessary in view of changes in available information. Changes in estimates of liability are reported in the periods when they occur. Consequently, management believes that its reserve in relation to each proceeding is a best estimate of probable loss connected to the proceeding, or in cases in which no best estimate is possible, the minimum amount in the range of estimated losses, based upon its analysis of the facts and circumstances as of the close of the most recent fiscal quarter. However, because of uncertainties and risks inherent in litigation generally and in environmental proceedings in particular, there can be no assurance that future developments will not require additional reserves, that some or all reserves will be adequate or that the amounts of any such additional reserves or any such inadequacy will not have a material adverse effect upon the Company’s financial condition, cash flows, or results of operations. See also Notes 3 and 8. Revenue Recognition Retail sales are recorded at the point of sale and are net of estimated returns and exclude sales and value added taxes. Catalog and internet sales are recorded at estimated time of delivery to the customer and are net of estimated returns and exclude sales and value added taxes. Wholesale revenue is recorded net of estimated returns and allowances for markdowns, damages and miscellaneous claims when the related goods have been shipped and legal title has passed to the customer. Shipping and handling costs charged to customers are included in net sales. Estimated returns are based on historical returns and claims. Actual amounts of markdowns have not differed materially from estimates. Actual returns and claims in any future period may differ from historical experience. Note 1 Summary of Significant Accounting Policies, Continued Income Taxes As part of the process of preparing Consolidated Financial Statements, the Company is required to estimate its income taxes in each of the tax jurisdictions in which it operates. This process involves estimating actual current tax obligations together with assessing temporary differences resulting from differing treatment of certain items for tax and accounting purposes, such as depreciation of property and equipment and valuation of inventories. These temporary differences result in deferred tax assets and liabilities, which are included within the Consolidated Balance Sheets. The Company then assesses the likelihood that its deferred tax assets will be recovered from future taxable income. Actual results could differ from this assessment if adequate taxable income is not generated in future periods. To the extent the Company believes that recovery of an asset is at risk, valuation allowances are established. To the extent valuation allowances are established or increased in a period, the Company includes an expense within the tax provision in the Consolidated Statements of Operations. These deferred tax valuation allowances may be released in future years when management considers that it is more likely than not that some portion or all of the deferred tax assets will be realized. In making such a determination, management will need to periodically evaluate whether or not all available evidence, such as future taxable income and reversal of temporary differences, tax planning strategies, and recent results of operations, provides sufficient positive evidence to offset any potential negative evidence that may exist at such time. In the event the deferred tax valuation allowance is released, the Company would record an income tax benefit for the portion or all of the deferred tax valuation allowance released. At February 2, 2013, the Company had a deferred tax valuation allowance of $3.5 million. Income tax reserves for uncertain tax positions are determined using the methodology required by the Income Tax Topic of the Accounting Standards Codification ("Codification"). This methodology requires companies to assess each income tax position taken using a two step process. A determination is first made as to whether it is more likely than not that the position will be sustained, based upon the technical merits, upon examination by the taxing authorities. If the tax position is expected to meet the more likely than not criteria, the benefit recorded for the tax position equals the largest amount that is greater than 50% likely to be realized upon ultimate settlement of the respective tax position. Uncertain tax positions require determinations and estimated liabilities to be made based on provisions of the tax law which may be subject to change or varying interpretation. If the Company’s determinations and estimates prove to be inaccurate, the resulting adjustments could be material to its future financial results. The Company recorded an effective income tax rate of 31.9% for Fiscal 2013 compared to 40.2% for 2012. This year's tax rate is lower primarily due to the reversal of charges previously recorded related to uncertain tax positions due to the expiration of the applicable statutes of limitations and a settlement with a state tax authority more favorable than anticipated related to other uncertain tax positions. The Company recorded an effective federal income tax rate of 40.2% for Fiscal 2012 compared to 35.8% for Fiscal 2011. Fiscal 2012's higher effective tax rate of 40.2% reflects transaction costs and deferred purchase price related to the Schuh acquisition, which are considered permanent differences. Fiscal 2011's lower effective tax rate of 35.8% reflects the net reduction of the Company’s liability for uncertain tax positions of $1.3 million in Fiscal 2011. Note 1 Summary of Significant Accounting Policies, Continued Postretirement Benefits Plan Accounting Full-time employees who had at least 1,000 hours of service in calendar year 2004, except employees in the Lids Sports Group and Schuh Group segments, are covered by a defined benefit pension plan. The Company froze the defined benefit pension plan effective January 1, 2005. The Company also provides certain former employees with limited medical and life insurance benefits. The Company funds at least the minimum amount required by the Employee Retirement Income Security Act. As required by the Compensation – Retirement Benefits Topic of the Codification, the Company is required to recognize the overfunded or underfunded status of postretirement benefit plans as an asset or liability in their Consolidated Balance Sheets and to recognize changes in that funded status in accumulated other comprehensive loss, net of tax, in the year in which the changes occur. The Company accounts for the defined benefit pension plans using the Compensation-Retirement Benefits Topic of the Codification. As permitted under this topic, pension expense is recognized on an accrual basis over employees’ approximate service periods. The calculation of pension expense and the corresponding liability requires the use of a number of critical assumptions, including the expected long-term rate of return on plan assets and the assumed discount rate, as well as the recognition of actuarial gains and losses. Changes in these assumptions can result in different expense and liability amounts, and future actual experience can differ from these assumptions. Share-Based Compensation The Company has share-based compensation plans covering certain members of management and non-employee directors. The Company recognizes compensation expense for share-based payments based on the fair value of the awards as required by the Compensation – Stock Compensation Topic of the Codification. For Fiscal 2013, 2012 and 2011, share-based compensation expense was $0, less than $1,000 and $0.2 million, respectively. The Company has not issued any new stock option awards since the first quarter of Fiscal 2008. For Fiscal 2013, 2012 and 2011, restricted stock expense was $10.5 million, $7.7 million, and $7.8 million, respectively. The fair value of employee restricted stock is determined based on the closing price of the Company’s stock on the date of the grant. The benefits of tax deductions in excess of recognized compensation expense are reported as a financing cash flow. |
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Inventory Valuation | Inventory Valuation The Company values its inventories at the lower of cost or market. In its footwear wholesale operations, its Schuh Group segment and its Lids Sports Group wholesale operations, except for the Anaconda Sports wholesale division, cost is determined using the first-in, first-out (“FIFO”) method. Market value is determined using a system of analysis which evaluates inventory at the stock number level based on factors such as inventory turn, average selling price, inventory level, and selling prices reflected in future orders. The Company provides reserves when the inventory has not been marked down to market value based on current selling prices or when the inventory is not turning and is not expected to turn at levels satisfactory to the Company. The Lids Sports Group retail segment and its Anaconda Sports wholesale division employ the moving average cost method for valuing inventories and apply freight using an allocation method. The Company provides a valuation allowance for slow-moving inventory based on negative margins and estimated shrink based on historical experience and specific analysis, where appropriate. In its retail operations, other than the Schuh Group and Lids Sports Group retail segments, the Company employs the retail inventory method, applying average cost-to-retail ratios to the retail value of inventories. Under the retail inventory method, valuing inventory at the lower of cost or market is achieved as markdowns are taken or accrued as a reduction of the retail value of inventories. Inherent in the retail inventory method are subjective judgments and estimates, including merchandise mark-on, markups, markdowns, and shrinkage. These judgments and estimates, coupled with the Note 1 Summary of Significant Accounting Policies, Continued fact that the retail inventory method is an averaging process, could produce a range of cost figures. To reduce the risk of inaccuracy and to ensure consistent presentation, the Company employs the retail inventory method in multiple subclasses of inventory with similar gross margins, and analyzes markdown requirements at the stock number level based on factors such as inventory turn, average selling price, and inventory age. In addition, the Company accrues markdowns as necessary. These additional markdown accruals reflect all of the above factors as well as current agreements to return products to vendors and vendor agreements to provide markdown support. In addition to markdown provisions, the Company maintains provisions for shrinkage and damaged goods based on historical rates. Inherent in the analysis of both wholesale and retail inventory valuation are subjective judgments about current market conditions, fashion trends, and overall economic conditions. Failure to make appropriate conclusions regarding these factors may result in an overstatement or understatement of inventory value. |
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Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The Company periodically assesses the realizability of its long-lived assets, other than goodwill, and evaluates such assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Asset impairment is determined to exist if estimated future cash flows, undiscounted and without interest charges, are less than the carrying amount. Inherent in the analysis of impairment are subjective judgments about future cash flows. Failure to make appropriate conclusions regarding these judgments may result in an overstatement or understatement of the value of long-lived assets. See also Notes 3 and 5. The goodwill impairment test involves performing a qualitative assessment, on a reporting unit level, based on current circumstances. If the results of the qualitative assessment indicate that it is more likely than not that the fair value of a reporting unit is greater than its carrying amount, a two-step impairment test will not be performed. However, if the results of the qualitative assessment indicate that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then a two-step impairment test is performed. Alternatively, the Company may elect to bypass the qualitative assessment and proceed directly to the two-step impairment test, on a reporting unit level. The first step is a comparison of the fair value and carrying value of the business unit with which the goodwill is associated. The Company estimates fair value using the best information available, and computes the fair value derived by an income approach utilizing discounted cash flow projections. The income approach uses a projection of a reporting unit’s estimated operating results and cash flows that is discounted using a weighted-average cost of capital that reflects current market conditions. A key assumption in the Company’s fair value estimate is the weighted average cost of capital utilized for discounting its cash flow projections in its income approach. The Company believes the rate it used in its latest annual test, which was completed in the fourth quarter, was consistent with the risks inherent in its business and with industry discount rates. The projection uses management’s best estimates of economic and market conditions over the projected period including growth rates in sales, costs, estimates of future expected changes in operating margins and cash Note 1 Summary of Significant Accounting Policies, Continued expenditures. Other significant estimates and assumptions include terminal value growth rates, future estimates of capital expenditures and changes in future working capital requirements. If the carrying value of the reporting unit is higher than its fair value, there is an indication that impairment may exist and the second step must be performed to measure the amount of impairment loss. The amount of impairment is determined by comparing the implied fair value of reporting unit goodwill to the carrying value of the goodwill in the same manner as if the reporting unit was being acquired in a business combination. Specifically, the Company would allocate the fair value to all of the assets and liabilities of the reporting unit, including any unrecognized intangible assets, in a hypothetical analysis that would calculate the implied fair value of goodwill. If the implied fair value of goodwill is less than the recorded goodwill, the Company would record an impairment charge for the difference. |
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Enviornmental and Other Contingencies | Environmental and Other Contingencies The Company is subject to certain loss contingencies related to environmental proceedings and other legal matters. The Company has made pretax accruals for certain of these contingencies, including approximately $0.8 million in Fiscal 2013, $1.8 million in Fiscal 2012 and $2.9 million in Fiscal 2011. These charges are included in provision for discontinued operations, net in the Consolidated Statements of Operations because they relate to former facilities operated by the Company. The Company monitors these matters on an ongoing basis and, on a quarterly basis, management reviews the Company’s reserves and accruals, adjusting provisions as management deems necessary in view of changes in available information. Changes in estimates of liability are reported in the periods when they occur. Consequently, management believes that its reserve in relation to each proceeding is a best estimate of probable loss connected to the proceeding, or in cases in which no best estimate is possible, the minimum amount in the range of estimated losses, based upon its analysis of the facts and circumstances as of the close of the most recent fiscal quarter. However, because of uncertainties and risks inherent in litigation generally and in environmental proceedings in particular, there can be no assurance that future developments will not require additional reserves, that some or all reserves will be adequate or that the amounts of any such additional reserves or any such inadequacy will not have a material adverse effect upon the Company’s financial condition, cash flows, or results of operations. |
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Revenue Recognition | Revenue Recognition Retail sales are recorded at the point of sale and are net of estimated returns and exclude sales and value added taxes. Catalog and internet sales are recorded at estimated time of delivery to the customer and are net of estimated returns and exclude sales and value added taxes. Wholesale revenue is recorded net of estimated returns and allowances for markdowns, damages and miscellaneous claims when the related goods have been shipped and legal title has passed to the customer. Shipping and handling costs charged to customers are included in net sales. Estimated returns are based on historical returns and claims. Actual amounts of markdowns have not differed materially from estimates. Actual returns and claims in any future period may differ from historical experience. |
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Income Taxes | Income Taxes As part of the process of preparing Consolidated Financial Statements, the Company is required to estimate its income taxes in each of the tax jurisdictions in which it operates. This process involves estimating actual current tax obligations together with assessing temporary differences resulting from differing treatment of certain items for tax and accounting purposes, such as depreciation of property and equipment and valuation of inventories. These temporary differences result in deferred tax assets and liabilities, which are included within the Consolidated Balance Sheets. The Company then assesses the likelihood that its deferred tax assets will be recovered from future taxable income. Actual results could differ from this assessment if adequate taxable income is not generated in future periods. To the extent the Company believes that recovery of an asset is at risk, valuation allowances are established. To the extent valuation allowances are established or increased in a period, the Company includes an expense within the tax provision in the Consolidated Statements of Operations. These deferred tax valuation allowances may be released in future years when management considers that it is more likely than not that some portion or all of the deferred tax assets will be realized. In making such a determination, management will need to periodically evaluate whether or not all available evidence, such as future taxable income and reversal of temporary differences, tax planning strategies, and recent results of operations, provides sufficient positive evidence to offset any potential negative evidence that may exist at such time. In the event the deferred tax valuation allowance is released, the Company would record an income tax benefit for the portion or all of the deferred tax valuation allowance released. At February 2, 2013, the Company had a deferred tax valuation allowance of $3.5 million. Income tax reserves for uncertain tax positions are determined using the methodology required by the Income Tax Topic of the Accounting Standards Codification ("Codification"). This methodology requires companies to assess each income tax position taken using a two step process. A determination is first made as to whether it is more likely than not that the position will be sustained, based upon the technical merits, upon examination by the taxing authorities. If the tax position is expected to meet the more likely than not criteria, the benefit recorded for the tax position equals the largest amount that is greater than 50% likely to be realized upon ultimate settlement of the respective tax position. Uncertain tax positions require determinations and estimated liabilities to be made based on provisions of the tax law which may be subject to change or varying interpretation. If the Company’s determinations and estimates prove to be inaccurate, the resulting adjustments could be material to its future financial results. |
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Pension and Other Postretirement Plans, Policy [Policy Text Block] | Postretirement Benefits Plan Accounting Full-time employees who had at least 1,000 hours of service in calendar year 2004, except employees in the Lids Sports Group and Schuh Group segments, are covered by a defined benefit pension plan. The Company froze the defined benefit pension plan effective January 1, 2005. The Company also provides certain former employees with limited medical and life insurance benefits. The Company funds at least the minimum amount required by the Employee Retirement Income Security Act. As required by the Compensation – Retirement Benefits Topic of the Codification, the Company is required to recognize the overfunded or underfunded status of postretirement benefit plans as an asset or liability in their Consolidated Balance Sheets and to recognize changes in that funded status in accumulated other comprehensive loss, net of tax, in the year in which the changes occur. The Company accounts for the defined benefit pension plans using the Compensation-Retirement Benefits Topic of the Codification. As permitted under this topic, pension expense is recognized on an accrual basis over employees’ approximate service periods. The calculation of pension expense and the corresponding liability requires the use of a number of critical assumptions, including the expected long-term rate of return on plan assets and the assumed discount rate, as well as the recognition of actuarial gains and losses. Changes in these assumptions can result in different expense and liability amounts, and future actual experience can differ from these assumptions. |
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Share-Based Compensation | Share-Based Compensation The Company has share-based compensation plans covering certain members of management and non-employee directors. The Company recognizes compensation expense for share-based payments based on the fair value of the awards as required by the Compensation – Stock Compensation Topic of the Codification. For Fiscal 2013, 2012 and 2011, share-based compensation expense was $0, less than $1,000 and $0.2 million, respectively. The Company has not issued any new stock option awards since the first quarter of Fiscal 2008. For Fiscal 2013, 2012 and 2011, restricted stock expense was $10.5 million, $7.7 million, and $7.8 million, respectively. The fair value of employee restricted stock is determined based on the closing price of the Company’s stock on the date of the grant. The benefits of tax deductions in excess of recognized compensation expense are reported as a financing cash flow. |
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Cash and Cash Equivalents | Cash and Cash Equivalents Included in cash and cash equivalents at February 2, 2013 and January 28, 2012 are cash equivalents of $0.2 million for each year. Cash equivalents are highly-liquid financial instruments having an original maturity of three months or less. At February 2, 2013, substantially all of the Company’s domestic cash was invested in deposit accounts at FDIC-insured banks. The majority of payments due from banks for domestic customer credit card transactions process within 24 - 48 hours and are accordingly classified as cash and cash equivalents. Note 1 Summary of Significant Accounting Policies, Continued At February 2, 2013 and January 28, 2012, outstanding checks drawn on zero-balance accounts at certain domestic banks exceeded book cash balances at those banks by approximately $36.1 million and $39.0 million, respectively. These amounts are included in accounts payable. |
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Concentration of Credit Risk and Allowances on Accounts Receivable | Concentration of Credit Risk and Allowances on Accounts Receivable The Company’s footwear wholesale businesses sell primarily to independent retailers and department stores across the United States. Receivables arising from these sales are not collateralized. Customer credit risk is affected by conditions or occurrences within the economy and the retail industry as well as by customer specific factors. The Company’s Lids Team Sports wholesale business sells primarily to colleges and high school athletic teams and their fan bases. Including both footwear wholesale and Lids Team Sports wholesale business receivables, two customers each accounted for 7% of the Company’s total trade receivables balance, while no other customer accounted for more than 6% of the Company’s total trade receivables balance as of February 2, 2013. The Company establishes an allowance for doubtful accounts based upon factors surrounding the credit risk of specific customers, historical trends and other information, as well as customer specific factors. The Company also establishes allowances for sales returns, customer deductions and co-op advertising based on specific circumstances, historical trends and projected probable outcomes. |
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Property and Equipment | Property and Equipment Property and equipment are recorded at cost and depreciated or amortized over the estimated useful life of related assets. Depreciation and amortization expense are computed principally by the straight-line method over the following estimated useful lives:
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Leases | Leases Leasehold improvements and properties under capital leases are amortized on the straight-line method over the shorter of their useful lives or their related lease terms and the charge to earnings is included in selling and administrative expenses in the Consolidated Statements of Operations. Certain leases include rent increases during the initial lease term. For these leases, the Company recognizes the related rental expense on a straight-line basis over the term of the lease (which includes any rent holidays and the pre-opening period of construction, renovation, fixturing and merchandise placement) and records the difference between the amounts charged to operations and amounts paid as deferred rent. The Company occasionally receives reimbursements from landlords to be used towards construction of the store the Company intends to lease. Leasehold improvements are recorded at their gross costs including items reimbursed by landlords. The reimbursements are amortized as a reduction of rent expense over the initial lease term. |
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Goodwill and Other Intangibles | Goodwill and Other Intangibles Under the provisions of the Intangibles – Goodwill and Other Topic of the Codification, goodwill and intangible assets with indefinite lives are not amortized, but are tested at least annually, during the fourth quarter, for impairment. The Company will update the tests between annual tests if events or circumstances occur that would more likely than not reduce the fair value of the business unit with which the goodwill is associated below its carrying amount. It is also required that intangible assets with finite lives be amortized over their respective lives to their estimated residual values, and reviewed for impairment in accordance with the Property, Plant and Equipment Topic of the Codification. Intangible assets of the Company with indefinite lives are primarily goodwill and identifiable trademarks, net of amortization, acquired in connection with the acquisition of Schuh Group Ltd. in June 2011 and Hat World Corporation in April 2004. The Consolidated Balance Sheets include goodwill of $172.3 million for the Lids Sports Group, $100.7 million for the Schuh Group and $0.8 million for Licensed Brands at February 2, 2013 and $159.1 million for the Lids Sports Group, $99.9 million for the Schuh Group and $0.8 million for Licensed Brands at January 28, 2012. The Company tests for impairment of intangible assets with an indefinite life, relying on a number of factors including operating results, business plans, projected future cash flows and observable market data. The impairment test for identifiable assets not subject to amortization consists of a comparison of the fair value of the intangible asset with its carrying amount. The Company has not recorded an impairment charge for intangible assets. In connection with acquisitions, the Company records goodwill on its Consolidated Financial Statements. This asset is not amortized but is subject to an impairment test at least annually, based on projected future cash flows from the acquired business discounted at a rate commensurate with the risk the Company considers to be inherent in its current business model. The Company performs the impairment test annually as of the close of its fiscal year, or more frequently if events or circumstances indicate that the value of the asset might be impaired. As a result of the various acquisitions comprising the Lids Team Sports team dealer business, the Company carries goodwill at a value of $14.0 million on its Consolidated Balance Sheets related to such acquisitions. The Company found that the result of its annual impairment test, which valued the business at approximately $2.8 million in excess of its carrying value, indicated no impairment at that time. The Company may determine in future impairment tests that some or all of the carrying value of the goodwill may not be recoverable. Such a finding would require a write-off of the amount of the carrying value that is impaired, which would reduce the Company's profitability in the period of the impairment charge. Holding all other assumptions constant as of the measurement date, the Company noted that an increase in the weighted average cost of capital of 100 basis points would reduce the fair value of the Lids Team Sports business by $7.4 million. Furthermore, the Company noted that a decrease in projected annual revenue growth by one percent would reduce the fair value of the Lids Team Sports business by $0.4 million. However, if other assumptions do not remain constant, the fair value of the Lids Team Sports business may decrease by a greater amount. Note 1 Summary of Significant Accounting Policies, Continued Identifiable intangible assets of the Company with finite lives are trademarks, customer lists, in-place leases, non-compete agreements and a vendor contract. They are subject to amortization based upon their estimated useful lives. Finite-lived intangible assets are evaluated for impairment using a process similar to that used to evaluate other definite-lived long-lived assets, a comparison of the fair value of the intangible asset with its carrying amount. An impairment loss is recognized for the amount by which the carrying value exceeds the fair value of the asset. |
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Fair Value of Financial Instruments | Fair Value of Financial Instruments The carrying amounts and fair values of the Company’s financial instruments at February 2, 2013 and January 28, 2012 are:
Debt fair values were determined using a discounted cash flow analysis based on current market interest rates for similar types of financial instruments and would be classified in Level 2 as defined in Note 5. Carrying amounts reported on the Consolidated Balance Sheets for cash, cash equivalents, receivables and accounts payable approximate fair value due to the short-term maturity of these instruments. |
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Cost of Sales | Cost of Sales For the Company’s retail operations, the cost of sales includes actual product cost, the cost of transportation to the Company’s warehouses from suppliers and the cost of transportation from the Company’s warehouses to the stores. Additionally, the cost of its distribution facilities allocated to its retail operations is included in cost of sales. For the Company’s wholesale operations, the cost of sales includes the actual product cost and the cost of transportation to the Company’s warehouses from suppliers. |
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Selling and Administrative Expenses | Selling and Administrative Expenses Selling and administrative expenses include all operating costs of the Company excluding (i) those related to the transportation of products from the supplier to the warehouse, (ii) for its retail operations, those related to the transportation of products from the warehouse to the store and (iii) costs of its distribution facilities which are allocated to its retail operations. Wholesale and unallocated retail costs of distribution are included in selling and administrative expenses in the amounts of $8.2 million, $9.2 million and $5.9 million for Fiscal 2013, 2012 and 2011, respectively. |
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Gift Cards | Gift Cards The Company has a gift card program that began in calendar 1999 for its Lids Sports operations and calendar 2000 for its footwear operations. The gift cards issued to date do not expire. As such, the Company recognizes income when: (i) the gift card is redeemed by the customer; or (ii) the likelihood of the gift card being redeemed by the customer for the purchase of goods in the future is remote and there are no related escheat laws (referred to as “breakage”). The gift card breakage rate is based upon historical redemption patterns and income is recognized for unredeemed gift cards in proportion to those historical redemption patterns. Gift card breakage is recognized in revenues each period. Gift card breakage recognized as revenue was $0.7 million, $0.6 million and $0.7 million for Fiscal 2013, 2012 and 2011, respectively. The Consolidated Balance Sheets include an accrued liability for gift cards of $13.1 million and $10.4 million at February 2, 2013 and January 28, 2012, respectively. |
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Buying, Merchandising and Occupancy Costs | Buying, Merchandising and Occupancy Costs The Company records buying, merchandising and occupancy costs in selling and administrative expense. Because the Company does not include these costs in cost of sales, the Company’s gross margin may not be comparable to other retailers that include these costs in the calculation of gross margin. |
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Shipping and Handling Costs | Shipping and Handling Costs Shipping and handling costs related to inventory purchased from suppliers are included in the cost of inventory and are charged to cost of sales in the period that the inventory is sold. All other shipping and handling costs are charged to cost of sales in the period incurred except for wholesale and unallocated retail costs of distribution, which are included in selling and administrative expenses. |
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Preopening Costs | Preopening Costs Costs associated with the opening of new stores are expensed as incurred, and are included in selling and administrative expenses on the accompanying Consolidated Statements of Operations. |
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Store Closings and Exit Costs | Store Closings and Exit Costs From time to time, the Company makes strategic decisions to close stores or exit locations or activities. If stores or operating activities to be closed or exited constitute components, as defined by the Property, Plant and Equipment Topic of the Codification, and will not result in a migration of customers and cash flows, these closures will be considered discontinued operations when the related assets meet the criteria to be classified as held for sale, or at the cease-use date, whichever occurs first. The results of operations of discontinued operations are presented retroactively, net of tax, as a separate component on the Consolidated Statements of Operations, if material individually or cumulatively. In Fiscal 2013, no store closings meeting the discontinued operations criteria have been material individually or cumulatively. Note 1 Summary of Significant Accounting Policies, Continued Assets related to planned store closures or other exit activities are reflected as assets held for sale and recorded at the lower of carrying value or fair value less costs to sell when the required criteria, as defined by the Property, Plant and Equipment Topic of the Codification, are satisfied. Depreciation ceases on the date that the held for sale criteria are met. Assets related to planned store closures or other exit activities that do not meet the criteria to be classified as held for sale are evaluated for impairment in accordance with the Company’s normal impairment policy, but with consideration given to revised estimates of future cash flows. In any event, the remaining depreciable useful lives are evaluated and adjusted as necessary. Exit costs related to anticipated lease termination costs, severance benefits and other expected charges are accrued for and recognized in accordance with the Exit or Disposal Cost Obligations Topic of the Codification. |
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Advertising Costs | Advertising Costs Advertising costs are predominantly expensed as incurred. Advertising costs were $48.3 million, $42.5 million and $35.1 million for Fiscal 2013, 2012 and 2011, respectively. Direct response advertising costs for catalogs are capitalized in accordance with the Other Assets and Deferred Costs Topic for Capitalized Advertising Costs of the Codification. Such costs are amortized over the estimated future period as revenues are realized from such advertising, not to exceed six months. The Consolidated Balance Sheets include prepaid assets for direct response advertising costs of $1.4 million and $1.1 million at February 2, 2013 and January 28, 2012. |
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Consideration to Resellers | Consideration to Resellers The Company does not have any written buy-down programs with retailers, but the Company has provided certain retailers with markdown allowances for obsolete and slow moving products that are in the retailer’s inventory. The Company estimates these allowances and provides for them as reductions to revenues at the time revenues are recorded. Markdowns are negotiated with retailers and changes are made to the estimates as agreements are reached. Actual amounts for markdowns have not differed materially from estimates. |
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Cooperative Advertising | Cooperative Advertising Cooperative advertising funds are made available to most of the Company’s wholesale footwear customers. In order for retailers to receive reimbursement under such programs, the retailer must meet specified advertising guidelines and provide appropriate documentation of expenses to be reimbursed. The Company’s cooperative advertising agreements require that wholesale customers present documentation or other evidence of specific advertisements or display materials used for the Company’s products by submitting the actual print advertisements presented in catalogs, newspaper inserts or other advertising circulars, or by permitting physical inspection of displays. Additionally, the Company’s cooperative advertising agreements require that the amount of reimbursement requested for such advertising or materials be supported by invoices or other evidence of the actual costs incurred by the Note 1 Summary of Significant Accounting Policies, Continued retailer. The Company accounts for these cooperative advertising costs as selling and administrative expenses, in accordance with the Revenue Recognition Topic for Customer Payments and Incentives of the Codification. Cooperative advertising costs recognized in selling and administrative expenses were $3.5 million, $3.3 million and $3.2 million for Fiscal 2013, 2012 and 2011, respectively. During Fiscal 2013, 2012 and 2011, the Company’s cooperative advertising reimbursements paid did not exceed the fair value of the benefits received under those agreements. |
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Vendor Allowances | Vendor Allowances From time to time, the Company negotiates allowances from its vendors for markdowns taken or expected to be taken. These markdowns are typically negotiated on specific merchandise and for specific amounts. These specific allowances are recognized as a reduction in cost of sales in the period in which the markdowns are taken. Markdown allowances not attached to specific inventory on hand or already sold are applied to concurrent or future purchases from each respective vendor. The Company receives support from some of its vendors in the form of reimbursements for cooperative advertising and catalog costs for the launch and promotion of certain products. The reimbursements are agreed upon with vendors and represent specific, incremental, identifiable costs incurred by the Company in selling the vendor’s specific products. Such costs and the related reimbursements are accumulated and monitored on an individual vendor basis, pursuant to the respective cooperative advertising agreements with vendors. Such cooperative advertising reimbursements are recorded as a reduction of selling and administrative expenses in the same period in which the associated expense is incurred. If the amount of cash consideration received exceeds the costs being reimbursed, such excess amount would be recorded as a reduction of cost of sales. Vendor reimbursements of cooperative advertising costs recognized as a reduction of selling and administrative expenses were $3.8 million, $3.0 million and $3.1 million for Fiscal 2013, 2012 and 2011, respectively. During Fiscal 2013, 2012 and 2011, the Company’s cooperative advertising reimbursements received were not in excess of the costs incurred. |
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Environmental Costs | Environmental Costs Environmental expenditures relating to current operations are expensed or capitalized as appropriate. Expenditures relating to an existing condition caused by past operations, and which do not contribute to current or future revenue generation, are expensed. Liabilities are recorded when environmental assessments and/or remedial efforts are probable and the costs can be reasonably estimated and are evaluated independently of any future claims for recovery. Generally, the timing of these accruals coincides with completion of a feasibility study or the Company's commitment to a formal plan of action. Costs of future expenditures for environmental remediation obligations are not discounted to their present value. |
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Earnings Per Common Share | Earnings Per Common Share Basic earnings per share excludes dilution and is computed by dividing income available to common shareholders by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflects the potential dilution that could occur if securities to issue common stock were exercised or converted to common stock (see Note 11). |
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Other Comprehensive Income | Other Comprehensive Income The Comprehensive Income Topic of the Codification requires, among other things, the Company’s pension liability adjustment, postretirement liability adjustment, unrealized gains or losses on foreign currency forward contracts and foreign currency translation adjustments to be included in other comprehensive income net of tax. Accumulated other comprehensive loss at February 2, 2013 consisted of $26.0 million of cumulative pension liability adjustment, net of tax, a cumulative post retirement liability adjustment of $0.3 million, net of tax, and a cumulative foreign currency translation adjustment of $1.9 million. |
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Business Segments | Business Segments The Segment Reporting Topic of the Codification requires that companies disclose “operating segments” based on the way management disaggregates the Company’s operations for making internal operating decisions (see Note 14). |
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Derivative Instruments and Hedging Activities | Derivative Instruments and Hedging Activities The Derivatives and Hedging Topic of the Codification requires an entity to recognize all derivatives as either assets or liabilities in the Consolidated Balance Sheet and to measure those instruments at fair value. Under certain conditions, a derivative may be specifically designated as a fair value hedge or a cash flow hedge. The accounting for changes in the fair value of a derivative are recorded each period in current earnings or in other comprehensive income depending on the intended use of the derivative and the resulting designation. In prior periods, the Company entered into a small amount of foreign currency forward exchange contracts in order to reduce exposure to foreign currency exchange rate fluctuations in connection with inventory purchase commitments for its Johnston & Murphy Group. There were no such contracts outstanding at February 2, 2013 or January 28, 2012. For the year ended February 2, 2013, the Company recorded an unrealized gain on foreign currency forward contracts of less than $0.1 million in accumulated other comprehensive loss, before taxes. The Company monitors the credit quality of the major international, national and regional financial institutions with which it enters into such contracts. |
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New Accounting Principles | New Accounting Principles In June 2011, FASB issued Accounting Standards Update No. 2011-05, an update to the FASB Codification Comprehensive Income Topic, which amends the existing accounting standards related to the presentation of comprehensive income in a company's financial statements. This update requires that all non-owner changes in shareholders' equity be presented in either a single continuous statement of comprehensive income or in two separate but consecutive statements. In the two statement approach, the first statement would present total net earnings and its components followed consecutively by a second statement that should present total other comprehensive income, the components of other comprehensive income and the total of comprehensive income. The update does not change the items that must be reported in other comprehensive income and must be applied retrospectively for all periods presented in the Consolidated Financial Statements. The Company adopted this update in the first quarter of Fiscal 2013 and has included a separate statement of comprehensive income in its Consolidated Financial Statements. The adoption did not have a significant impact on the Company’s results of operations or financial position. |
Asset Impairments and Other Charges and Discontinued Operations (Details ) (USD $)
In Thousands, unless otherwise specified |
12 Months Ended | |||||
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Feb. 02, 2013
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Jan. 28, 2012
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Jan. 29, 2011
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Accrued Provision for Discontinued Operations | ||||||
Additional provision | $ 796 | $ 1,692 | $ 2,203 | |||
Current provision for discontinued operations | 7,192 | 8,250 | ||||
Total Noncurrent Provision for Discontinued Operations | 4,159 | 4,267 | ||||
Facility Shutdown Costs [Member]
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Accrued Provision for Discontinued Operations | ||||||
Balance at beginning of period | 12,517 | 15,035 | ||||
Additional provision | 796 | 1,692 | ||||
Charges and adjustments, net | (1,962) | (4,210) | ||||
Balance at end of period | 11,351 | [1] | 12,517 | |||
Current provision for discontinued operations | 7,192 | |||||
Total Noncurrent Provision for Discontinued Operations | $ 4,159 | |||||
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Defined Benefit Pension Plans and Other Benefit Plans Defined Benefit Pension Plans and Other Postretirement Benefit Plans (Details 6) (Details)
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Feb. 02, 2013
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Jan. 28, 2012
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Jan. 29, 2011
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Pension Benefits
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Defined Benefit Plan Disclosure [Line Items] | |||
Discount rate | 4.00% | 4.35% | 5.25% |
Other Benefits
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Defined Benefit Plan Disclosure [Line Items] | |||
Discount rate | 4.01% | 4.17% | |
Rate of compensation increase | 0.00% | 0.00% |
Share-Based Compensation Plans (Tables)
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Feb. 02, 2013
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of stock option activity | A summary of fixed stock option activity and changes for Fiscal 2013, 2012 and 2011 is presented below:
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Summary of the status of the Company's nonvested shares of its employee restricted stock | A summary of the status of the Company’s nonvested shares of its employee restricted stock as of February 2, 2013 is presented below:
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Inventories (Details) (USD $)
In Thousands, unless otherwise specified |
Feb. 02, 2013
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Jan. 28, 2012
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Inventories | ||
Raw materials | $ 24,223 | $ 30,636 |
Wholesale finished goods | 57,161 | 53,453 |
Retail merchandise | 423,960 | 351,024 |
Total Inventories | $ 505,344 | $ 435,113 |
Income Taxes (Details 4) (USD $)
In Thousands, unless otherwise specified |
12 Months Ended | ||
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Feb. 02, 2013
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Jan. 28, 2012
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Jan. 29, 2011
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Reconciliation of the total amounts of unrecognized tax benefits | |||
Unrecognized Tax Benefit - Beginning of Period | $ 20,467 | $ 14,167 | $ 17,004 |
Gross Increases (Decreases) - Tax Positions in a Prior Period | (2,464) | (29) | (517) |
Gross Increases - Tax Positions in a Current Period | 133 | 6,986 | 473 |
Settlements | (449) | (533) | (2,605) |
Lapse of Statutes of Limitations | (7,250) | (124) | (188) |
Unrecognized Tax Benefit - End of Period | $ 10,437 | $ 20,467 | $ 14,167 |
Acquisitions and Intangible Assets (Details 1) (Schuh Group [Member], USD $)
In Thousands, except Per Share data, unless otherwise specified |
12 Months Ended | |
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Jan. 28, 2012
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Jan. 29, 2011
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Schuh Group [Member]
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Summary of results of earnings from operations | ||
Net sales | $ 2,384,267 | $ 2,045,473 |
Earnings from continuing operations | $ 86,378 | $ 57,897 |
Earnings per share: | ||
Basic (USD per share) | $ 3.71 | $ 2.49 |
Diluted (USD per share) | $ 3.62 | $ 2.44 |
Summary of Significant Accounting Policies
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12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Feb. 02, 2013
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Nature of Operations The Company's business includes the design and sourcing, marketing and distribution of footwear and accessories through retail stores in the U.S., Puerto Rico and Canada primarily under the Journeys, Journeys Kidz, Shi by Journeys, Underground by Journeys and Johnston & Murphy banners and under the Schuh banner in the United Kingdom and the Republic of Ireland; through e-commerce websites including journeys.com, journeyskidz.com, shibyjourneys.com, undergroundbyjourneys.com, schuh.co.uk and johnstonmurphy.com and catalogs, and at wholesale, primarily under the Company's Johnston & Murphy brand, the licensed Dockers brand and other brands that the Company licenses for men's footwear. The Company's business also includes Lids Sports Group, which operates headwear and accessory stores in the U.S. and Canada primarily under the Lids, Hat World and Hat Shack banners; the Lids Locker Room business, consisting of sports-oriented fan shops featuring a broad array of licensed merchandise such as apparel, hats and accessories, sports decor and novelty products, operating primarily under the Lids Locker Room, Sports Fan-Attic and Sports Avenue banners; certain e-commerce operations and an athletic team dealer business operating as Lids Team Sports. Including both the footwear businesses and the Lids Sports Group business, at February 2, 2013, the Company operated 2,459 retail stores in the U.S., Puerto Rico, Canada, the United Kingdom and the Republic of Ireland. During Fiscal 2013, the Company operated five reportable business segments (not including corporate): (i) Journeys Group, comprised of the Journeys, Journeys Kidz, Shi by Journeys and Underground by Journeys retail footwear chains, catalog and e-commerce operations; (ii) Schuh Group, acquired in June 2011, comprised of the Schuh retail footwear chain and e-commerce operations; (iii) Lids Sports Group, comprised as described in the preceding paragraph; (iv) Johnston & Murphy Group, comprised of Johnston & Murphy retail operations, e-commerce and catalog operations and wholesale distribution; and (v) Licensed Brands, comprised of Dockers® Footwear, sourced and marketed under a license from Levi Strauss & Company; SureGrip®Footwear, occupational footwear primarily sold directly to consumers; and other footwear brands. Principles of Consolidation All subsidiaries are consolidated in the consolidated financial statements. All significant intercompany transactions and accounts have been eliminated. Fiscal Year The Company’s fiscal year ends on the Saturday closest to January 31. As a result, Fiscal 2013 was a 53-week year with 371 days and each of Fiscal 2012 and Fiscal 2011 was a 52-week year with 364 days. Fiscal 2013 ended on February 2, 2013, Fiscal 2012 ended on January 28, 2012 and Fiscal 2011 ended on January 29, 201l. Financial Statement Reclassifications Certain reclassifications have been made to conform prior years' data to the current year presentation with respect to segments. The Company integrated the Underground Station operations into the Journeys Group in the first quarter of Fiscal 2013. The former Underground Station stores are a Note 1 Summary of Significant Accounting Policies, Continued subset of Journeys Group under the brand "Underground by Journeys." Journeys Group segment net sales, operating income, total assets, depreciation and amortization and capital expenditures have been restated by $92.4 million, $(0.3) million, $25.2 million, $1.8 million and $0.2 million, respectively, for Fiscal 2012 and by $94.4 million, $(3.0) million, $27.8 million, $2.2 million and $1.3 million, respectively, for Fiscal 2011 as a result of combining Underground Station Group with the Journeys Group segment to conform to current year presentation (See Note 14). Certain shipping and warehouse expenses have been reclassed from selling and administrative expenses to cost of sales in Fiscal 2012 and 2011 to conform to the current year presentation. The reclass to cost of sales from selling and administrative expense for Fiscal 2012 and 2011 was $6.3 million and $3.8 million, respectively. Use of Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant areas requiring management estimates or judgments include the following key financial areas: Inventory Valuation The Company values its inventories at the lower of cost or market. In its footwear wholesale operations, its Schuh Group segment and its Lids Sports Group wholesale operations, except for the Anaconda Sports wholesale division, cost is determined using the first-in, first-out (“FIFO”) method. Market value is determined using a system of analysis which evaluates inventory at the stock number level based on factors such as inventory turn, average selling price, inventory level, and selling prices reflected in future orders. The Company provides reserves when the inventory has not been marked down to market value based on current selling prices or when the inventory is not turning and is not expected to turn at levels satisfactory to the Company. The Lids Sports Group retail segment and its Anaconda Sports wholesale division employ the moving average cost method for valuing inventories and apply freight using an allocation method. The Company provides a valuation allowance for slow-moving inventory based on negative margins and estimated shrink based on historical experience and specific analysis, where appropriate. In its retail operations, other than the Schuh Group and Lids Sports Group retail segments, the Company employs the retail inventory method, applying average cost-to-retail ratios to the retail value of inventories. Under the retail inventory method, valuing inventory at the lower of cost or market is achieved as markdowns are taken or accrued as a reduction of the retail value of inventories. Inherent in the retail inventory method are subjective judgments and estimates, including merchandise mark-on, markups, markdowns, and shrinkage. These judgments and estimates, coupled with the Note 1 Summary of Significant Accounting Policies, Continued fact that the retail inventory method is an averaging process, could produce a range of cost figures. To reduce the risk of inaccuracy and to ensure consistent presentation, the Company employs the retail inventory method in multiple subclasses of inventory with similar gross margins, and analyzes markdown requirements at the stock number level based on factors such as inventory turn, average selling price, and inventory age. In addition, the Company accrues markdowns as necessary. These additional markdown accruals reflect all of the above factors as well as current agreements to return products to vendors and vendor agreements to provide markdown support. In addition to markdown provisions, the Company maintains provisions for shrinkage and damaged goods based on historical rates. Inherent in the analysis of both wholesale and retail inventory valuation are subjective judgments about current market conditions, fashion trends, and overall economic conditions. Failure to make appropriate conclusions regarding these factors may result in an overstatement or understatement of inventory value. Impairment of Long-Lived Assets The Company periodically assesses the realizability of its long-lived assets, other than goodwill, and evaluates such assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Asset impairment is determined to exist if estimated future cash flows, undiscounted and without interest charges, are less than the carrying amount. Inherent in the analysis of impairment are subjective judgments about future cash flows. Failure to make appropriate conclusions regarding these judgments may result in an overstatement or understatement of the value of long-lived assets. See also Notes 3 and 5. The goodwill impairment test involves performing a qualitative assessment, on a reporting unit level, based on current circumstances. If the results of the qualitative assessment indicate that it is more likely than not that the fair value of a reporting unit is greater than its carrying amount, a two-step impairment test will not be performed. However, if the results of the qualitative assessment indicate that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then a two-step impairment test is performed. Alternatively, the Company may elect to bypass the qualitative assessment and proceed directly to the two-step impairment test, on a reporting unit level. The first step is a comparison of the fair value and carrying value of the business unit with which the goodwill is associated. The Company estimates fair value using the best information available, and computes the fair value derived by an income approach utilizing discounted cash flow projections. The income approach uses a projection of a reporting unit’s estimated operating results and cash flows that is discounted using a weighted-average cost of capital that reflects current market conditions. A key assumption in the Company’s fair value estimate is the weighted average cost of capital utilized for discounting its cash flow projections in its income approach. The Company believes the rate it used in its latest annual test, which was completed in the fourth quarter, was consistent with the risks inherent in its business and with industry discount rates. The projection uses management’s best estimates of economic and market conditions over the projected period including growth rates in sales, costs, estimates of future expected changes in operating margins and cash Note 1 Summary of Significant Accounting Policies, Continued expenditures. Other significant estimates and assumptions include terminal value growth rates, future estimates of capital expenditures and changes in future working capital requirements. If the carrying value of the reporting unit is higher than its fair value, there is an indication that impairment may exist and the second step must be performed to measure the amount of impairment loss. The amount of impairment is determined by comparing the implied fair value of reporting unit goodwill to the carrying value of the goodwill in the same manner as if the reporting unit was being acquired in a business combination. Specifically, the Company would allocate the fair value to all of the assets and liabilities of the reporting unit, including any unrecognized intangible assets, in a hypothetical analysis that would calculate the implied fair value of goodwill. If the implied fair value of goodwill is less than the recorded goodwill, the Company would record an impairment charge for the difference. Environmental and Other Contingencies The Company is subject to certain loss contingencies related to environmental proceedings and other legal matters. The Company has made pretax accruals for certain of these contingencies, including approximately $0.8 million in Fiscal 2013, $1.8 million in Fiscal 2012 and $2.9 million in Fiscal 2011. These charges are included in provision for discontinued operations, net in the Consolidated Statements of Operations because they relate to former facilities operated by the Company. The Company monitors these matters on an ongoing basis and, on a quarterly basis, management reviews the Company’s reserves and accruals, adjusting provisions as management deems necessary in view of changes in available information. Changes in estimates of liability are reported in the periods when they occur. Consequently, management believes that its reserve in relation to each proceeding is a best estimate of probable loss connected to the proceeding, or in cases in which no best estimate is possible, the minimum amount in the range of estimated losses, based upon its analysis of the facts and circumstances as of the close of the most recent fiscal quarter. However, because of uncertainties and risks inherent in litigation generally and in environmental proceedings in particular, there can be no assurance that future developments will not require additional reserves, that some or all reserves will be adequate or that the amounts of any such additional reserves or any such inadequacy will not have a material adverse effect upon the Company’s financial condition, cash flows, or results of operations. See also Notes 3 and 8. Revenue Recognition Retail sales are recorded at the point of sale and are net of estimated returns and exclude sales and value added taxes. Catalog and internet sales are recorded at estimated time of delivery to the customer and are net of estimated returns and exclude sales and value added taxes. Wholesale revenue is recorded net of estimated returns and allowances for markdowns, damages and miscellaneous claims when the related goods have been shipped and legal title has passed to the customer. Shipping and handling costs charged to customers are included in net sales. Estimated returns are based on historical returns and claims. Actual amounts of markdowns have not differed materially from estimates. Actual returns and claims in any future period may differ from historical experience. Note 1 Summary of Significant Accounting Policies, Continued Income Taxes As part of the process of preparing Consolidated Financial Statements, the Company is required to estimate its income taxes in each of the tax jurisdictions in which it operates. This process involves estimating actual current tax obligations together with assessing temporary differences resulting from differing treatment of certain items for tax and accounting purposes, such as depreciation of property and equipment and valuation of inventories. These temporary differences result in deferred tax assets and liabilities, which are included within the Consolidated Balance Sheets. The Company then assesses the likelihood that its deferred tax assets will be recovered from future taxable income. Actual results could differ from this assessment if adequate taxable income is not generated in future periods. To the extent the Company believes that recovery of an asset is at risk, valuation allowances are established. To the extent valuation allowances are established or increased in a period, the Company includes an expense within the tax provision in the Consolidated Statements of Operations. These deferred tax valuation allowances may be released in future years when management considers that it is more likely than not that some portion or all of the deferred tax assets will be realized. In making such a determination, management will need to periodically evaluate whether or not all available evidence, such as future taxable income and reversal of temporary differences, tax planning strategies, and recent results of operations, provides sufficient positive evidence to offset any potential negative evidence that may exist at such time. In the event the deferred tax valuation allowance is released, the Company would record an income tax benefit for the portion or all of the deferred tax valuation allowance released. At February 2, 2013, the Company had a deferred tax valuation allowance of $3.5 million. Income tax reserves for uncertain tax positions are determined using the methodology required by the Income Tax Topic of the Accounting Standards Codification ("Codification"). This methodology requires companies to assess each income tax position taken using a two step process. A determination is first made as to whether it is more likely than not that the position will be sustained, based upon the technical merits, upon examination by the taxing authorities. If the tax position is expected to meet the more likely than not criteria, the benefit recorded for the tax position equals the largest amount that is greater than 50% likely to be realized upon ultimate settlement of the respective tax position. Uncertain tax positions require determinations and estimated liabilities to be made based on provisions of the tax law which may be subject to change or varying interpretation. If the Company’s determinations and estimates prove to be inaccurate, the resulting adjustments could be material to its future financial results. The Company recorded an effective income tax rate of 31.9% for Fiscal 2013 compared to 40.2% for 2012. This year's tax rate is lower primarily due to the reversal of charges previously recorded related to uncertain tax positions due to the expiration of the applicable statutes of limitations and a settlement with a state tax authority more favorable than anticipated related to other uncertain tax positions. The Company recorded an effective federal income tax rate of 40.2% for Fiscal 2012 compared to 35.8% for Fiscal 2011. Fiscal 2012's higher effective tax rate of 40.2% reflects transaction costs and deferred purchase price related to the Schuh acquisition, which are considered permanent differences. Fiscal 2011's lower effective tax rate of 35.8% reflects the net reduction of the Company’s liability for uncertain tax positions of $1.3 million in Fiscal 2011. Note 1 Summary of Significant Accounting Policies, Continued Postretirement Benefits Plan Accounting Full-time employees who had at least 1,000 hours of service in calendar year 2004, except employees in the Lids Sports Group and Schuh Group segments, are covered by a defined benefit pension plan. The Company froze the defined benefit pension plan effective January 1, 2005. The Company also provides certain former employees with limited medical and life insurance benefits. The Company funds at least the minimum amount required by the Employee Retirement Income Security Act. As required by the Compensation – Retirement Benefits Topic of the Codification, the Company is required to recognize the overfunded or underfunded status of postretirement benefit plans as an asset or liability in their Consolidated Balance Sheets and to recognize changes in that funded status in accumulated other comprehensive loss, net of tax, in the year in which the changes occur. The Company accounts for the defined benefit pension plans using the Compensation-Retirement Benefits Topic of the Codification. As permitted under this topic, pension expense is recognized on an accrual basis over employees’ approximate service periods. The calculation of pension expense and the corresponding liability requires the use of a number of critical assumptions, including the expected long-term rate of return on plan assets and the assumed discount rate, as well as the recognition of actuarial gains and losses. Changes in these assumptions can result in different expense and liability amounts, and future actual experience can differ from these assumptions. Share-Based Compensation The Company has share-based compensation plans covering certain members of management and non-employee directors. The Company recognizes compensation expense for share-based payments based on the fair value of the awards as required by the Compensation – Stock Compensation Topic of the Codification. For Fiscal 2013, 2012 and 2011, share-based compensation expense was $0, less than $1,000 and $0.2 million, respectively. The Company has not issued any new stock option awards since the first quarter of Fiscal 2008. For Fiscal 2013, 2012 and 2011, restricted stock expense was $10.5 million, $7.7 million, and $7.8 million, respectively. The fair value of employee restricted stock is determined based on the closing price of the Company’s stock on the date of the grant. The benefits of tax deductions in excess of recognized compensation expense are reported as a financing cash flow. Cash and Cash Equivalents Included in cash and cash equivalents at February 2, 2013 and January 28, 2012 are cash equivalents of $0.2 million for each year. Cash equivalents are highly-liquid financial instruments having an original maturity of three months or less. At February 2, 2013, substantially all of the Company’s domestic cash was invested in deposit accounts at FDIC-insured banks. The majority of payments due from banks for domestic customer credit card transactions process within 24 - 48 hours and are accordingly classified as cash and cash equivalents. Note 1 Summary of Significant Accounting Policies, Continued At February 2, 2013 and January 28, 2012, outstanding checks drawn on zero-balance accounts at certain domestic banks exceeded book cash balances at those banks by approximately $36.1 million and $39.0 million, respectively. These amounts are included in accounts payable. Concentration of Credit Risk and Allowances on Accounts Receivable The Company’s footwear wholesale businesses sell primarily to independent retailers and department stores across the United States. Receivables arising from these sales are not collateralized. Customer credit risk is affected by conditions or occurrences within the economy and the retail industry as well as by customer specific factors. The Company’s Lids Team Sports wholesale business sells primarily to colleges and high school athletic teams and their fan bases. Including both footwear wholesale and Lids Team Sports wholesale business receivables, two customers each accounted for 7% of the Company’s total trade receivables balance, while no other customer accounted for more than 6% of the Company’s total trade receivables balance as of February 2, 2013. The Company establishes an allowance for doubtful accounts based upon factors surrounding the credit risk of specific customers, historical trends and other information, as well as customer specific factors. The Company also establishes allowances for sales returns, customer deductions and co-op advertising based on specific circumstances, historical trends and projected probable outcomes. Property and Equipment Property and equipment are recorded at cost and depreciated or amortized over the estimated useful life of related assets. Depreciation and amortization expense are computed principally by the straight-line method over the following estimated useful lives:
Leases Leasehold improvements and properties under capital leases are amortized on the straight-line method over the shorter of their useful lives or their related lease terms and the charge to earnings is included in selling and administrative expenses in the Consolidated Statements of Operations. Certain leases include rent increases during the initial lease term. For these leases, the Company recognizes the related rental expense on a straight-line basis over the term of the lease (which includes any rent holidays and the pre-opening period of construction, renovation, fixturing and merchandise placement) and records the difference between the amounts charged to operations and amounts paid as deferred rent. The Company occasionally receives reimbursements from landlords to be used towards construction of the store the Company intends to lease. Leasehold improvements are recorded at their gross costs including items reimbursed by landlords. The reimbursements are amortized as a reduction of rent expense over the initial lease term. Note 1 Summary of Significant Accounting Policies, Continued Goodwill and Other Intangibles Under the provisions of the Intangibles – Goodwill and Other Topic of the Codification, goodwill and intangible assets with indefinite lives are not amortized, but are tested at least annually, during the fourth quarter, for impairment. The Company will update the tests between annual tests if events or circumstances occur that would more likely than not reduce the fair value of the business unit with which the goodwill is associated below its carrying amount. It is also required that intangible assets with finite lives be amortized over their respective lives to their estimated residual values, and reviewed for impairment in accordance with the Property, Plant and Equipment Topic of the Codification. Intangible assets of the Company with indefinite lives are primarily goodwill and identifiable trademarks, net of amortization, acquired in connection with the acquisition of Schuh Group Ltd. in June 2011 and Hat World Corporation in April 2004. The Consolidated Balance Sheets include goodwill of $172.3 million for the Lids Sports Group, $100.7 million for the Schuh Group and $0.8 million for Licensed Brands at February 2, 2013 and $159.1 million for the Lids Sports Group, $99.9 million for the Schuh Group and $0.8 million for Licensed Brands at January 28, 2012. The Company tests for impairment of intangible assets with an indefinite life, relying on a number of factors including operating results, business plans, projected future cash flows and observable market data. The impairment test for identifiable assets not subject to amortization consists of a comparison of the fair value of the intangible asset with its carrying amount. The Company has not recorded an impairment charge for intangible assets. In connection with acquisitions, the Company records goodwill on its Consolidated Financial Statements. This asset is not amortized but is subject to an impairment test at least annually, based on projected future cash flows from the acquired business discounted at a rate commensurate with the risk the Company considers to be inherent in its current business model. The Company performs the impairment test annually as of the close of its fiscal year, or more frequently if events or circumstances indicate that the value of the asset might be impaired. As a result of the various acquisitions comprising the Lids Team Sports team dealer business, the Company carries goodwill at a value of $14.0 million on its Consolidated Balance Sheets related to such acquisitions. The Company found that the result of its annual impairment test, which valued the business at approximately $2.8 million in excess of its carrying value, indicated no impairment at that time. The Company may determine in future impairment tests that some or all of the carrying value of the goodwill may not be recoverable. Such a finding would require a write-off of the amount of the carrying value that is impaired, which would reduce the Company's profitability in the period of the impairment charge. Holding all other assumptions constant as of the measurement date, the Company noted that an increase in the weighted average cost of capital of 100 basis points would reduce the fair value of the Lids Team Sports business by $7.4 million. Furthermore, the Company noted that a decrease in projected annual revenue growth by one percent would reduce the fair value of the Lids Team Sports business by $0.4 million. However, if other assumptions do not remain constant, the fair value of the Lids Team Sports business may decrease by a greater amount. Note 1 Summary of Significant Accounting Policies, Continued Identifiable intangible assets of the Company with finite lives are trademarks, customer lists, in-place leases, non-compete agreements and a vendor contract. They are subject to amortization based upon their estimated useful lives. Finite-lived intangible assets are evaluated for impairment using a process similar to that used to evaluate other definite-lived long-lived assets, a comparison of the fair value of the intangible asset with its carrying amount. An impairment loss is recognized for the amount by which the carrying value exceeds the fair value of the asset. Fair Value of Financial Instruments The carrying amounts and fair values of the Company’s financial instruments at February 2, 2013 and January 28, 2012 are:
Debt fair values were determined using a discounted cash flow analysis based on current market interest rates for similar types of financial instruments and would be classified in Level 2 as defined in Note 5. Carrying amounts reported on the Consolidated Balance Sheets for cash, cash equivalents, receivables and accounts payable approximate fair value due to the short-term maturity of these instruments. Cost of Sales For the Company’s retail operations, the cost of sales includes actual product cost, the cost of transportation to the Company’s warehouses from suppliers and the cost of transportation from the Company’s warehouses to the stores. Additionally, the cost of its distribution facilities allocated to its retail operations is included in cost of sales. For the Company’s wholesale operations, the cost of sales includes the actual product cost and the cost of transportation to the Company’s warehouses from suppliers. Selling and Administrative Expenses Selling and administrative expenses include all operating costs of the Company excluding (i) those related to the transportation of products from the supplier to the warehouse, (ii) for its retail operations, those related to the transportation of products from the warehouse to the store and (iii) costs of its distribution facilities which are allocated to its retail operations. Wholesale and unallocated retail costs of distribution are included in selling and administrative expenses in the amounts of $8.2 million, $9.2 million and $5.9 million for Fiscal 2013, 2012 and 2011, respectively. Note 1 Summary of Significant Accounting Policies, Continued Gift Cards The Company has a gift card program that began in calendar 1999 for its Lids Sports operations and calendar 2000 for its footwear operations. The gift cards issued to date do not expire. As such, the Company recognizes income when: (i) the gift card is redeemed by the customer; or (ii) the likelihood of the gift card being redeemed by the customer for the purchase of goods in the future is remote and there are no related escheat laws (referred to as “breakage”). The gift card breakage rate is based upon historical redemption patterns and income is recognized for unredeemed gift cards in proportion to those historical redemption patterns. Gift card breakage is recognized in revenues each period. Gift card breakage recognized as revenue was $0.7 million, $0.6 million and $0.7 million for Fiscal 2013, 2012 and 2011, respectively. The Consolidated Balance Sheets include an accrued liability for gift cards of $13.1 million and $10.4 million at February 2, 2013 and January 28, 2012, respectively. Buying, Merchandising and Occupancy Costs The Company records buying, merchandising and occupancy costs in selling and administrative expense. Because the Company does not include these costs in cost of sales, the Company’s gross margin may not be comparable to other retailers that include these costs in the calculation of gross margin. Shipping and Handling Costs Shipping and handling costs related to inventory purchased from suppliers are included in the cost of inventory and are charged to cost of sales in the period that the inventory is sold. All other shipping and handling costs are charged to cost of sales in the period incurred except for wholesale and unallocated retail costs of distribution, which are included in selling and administrative expenses. Preopening Costs Costs associated with the opening of new stores are expensed as incurred, and are included in selling and administrative expenses on the accompanying Consolidated Statements of Operations. Store Closings and Exit Costs From time to time, the Company makes strategic decisions to close stores or exit locations or activities. If stores or operating activities to be closed or exited constitute components, as defined by the Property, Plant and Equipment Topic of the Codification, and will not result in a migration of customers and cash flows, these closures will be considered discontinued operations when the related assets meet the criteria to be classified as held for sale, or at the cease-use date, whichever occurs first. The results of operations of discontinued operations are presented retroactively, net of tax, as a separate component on the Consolidated Statements of Operations, if material individually or cumulatively. In Fiscal 2013, no store closings meeting the discontinued operations criteria have been material individually or cumulatively. Note 1 Summary of Significant Accounting Policies, Continued Assets related to planned store closures or other exit activities are reflected as assets held for sale and recorded at the lower of carrying value or fair value less costs to sell when the required criteria, as defined by the Property, Plant and Equipment Topic of the Codification, are satisfied. Depreciation ceases on the date that the held for sale criteria are met. Assets related to planned store closures or other exit activities that do not meet the criteria to be classified as held for sale are evaluated for impairment in accordance with the Company’s normal impairment policy, but with consideration given to revised estimates of future cash flows. In any event, the remaining depreciable useful lives are evaluated and adjusted as necessary. Exit costs related to anticipated lease termination costs, severance benefits and other expected charges are accrued for and recognized in accordance with the Exit or Disposal Cost Obligations Topic of the Codification. Advertising Costs Advertising costs are predominantly expensed as incurred. Advertising costs were $48.3 million, $42.5 million and $35.1 million for Fiscal 2013, 2012 and 2011, respectively. Direct response advertising costs for catalogs are capitalized in accordance with the Other Assets and Deferred Costs Topic for Capitalized Advertising Costs of the Codification. Such costs are amortized over the estimated future period as revenues are realized from such advertising, not to exceed six months. The Consolidated Balance Sheets include prepaid assets for direct response advertising costs of $1.4 million and $1.1 million at February 2, 2013 and January 28, 2012. Consideration to Resellers The Company does not have any written buy-down programs with retailers, but the Company has provided certain retailers with markdown allowances for obsolete and slow moving products that are in the retailer’s inventory. The Company estimates these allowances and provides for them as reductions to revenues at the time revenues are recorded. Markdowns are negotiated with retailers and changes are made to the estimates as agreements are reached. Actual amounts for markdowns have not differed materially from estimates. Cooperative Advertising Cooperative advertising funds are made available to most of the Company’s wholesale footwear customers. In order for retailers to receive reimbursement under such programs, the retailer must meet specified advertising guidelines and provide appropriate documentation of expenses to be reimbursed. The Company’s cooperative advertising agreements require that wholesale customers present documentation or other evidence of specific advertisements or display materials used for the Company’s products by submitting the actual print advertisements presented in catalogs, newspaper inserts or other advertising circulars, or by permitting physical inspection of displays. Additionally, the Company’s cooperative advertising agreements require that the amount of reimbursement requested for such advertising or materials be supported by invoices or other evidence of the actual costs incurred by the Note 1 Summary of Significant Accounting Policies, Continued retailer. The Company accounts for these cooperative advertising costs as selling and administrative expenses, in accordance with the Revenue Recognition Topic for Customer Payments and Incentives of the Codification. Cooperative advertising costs recognized in selling and administrative expenses were $3.5 million, $3.3 million and $3.2 million for Fiscal 2013, 2012 and 2011, respectively. During Fiscal 2013, 2012 and 2011, the Company’s cooperative advertising reimbursements paid did not exceed the fair value of the benefits received under those agreements. Vendor Allowances From time to time, the Company negotiates allowances from its vendors for markdowns taken or expected to be taken. These markdowns are typically negotiated on specific merchandise and for specific amounts. These specific allowances are recognized as a reduction in cost of sales in the period in which the markdowns are taken. Markdown allowances not attached to specific inventory on hand or already sold are applied to concurrent or future purchases from each respective vendor. The Company receives support from some of its vendors in the form of reimbursements for cooperative advertising and catalog costs for the launch and promotion of certain products. The reimbursements are agreed upon with vendors and represent specific, incremental, identifiable costs incurred by the Company in selling the vendor’s specific products. Such costs and the related reimbursements are accumulated and monitored on an individual vendor basis, pursuant to the respective cooperative advertising agreements with vendors. Such cooperative advertising reimbursements are recorded as a reduction of selling and administrative expenses in the same period in which the associated expense is incurred. If the amount of cash consideration received exceeds the costs being reimbursed, such excess amount would be recorded as a reduction of cost of sales. Vendor reimbursements of cooperative advertising costs recognized as a reduction of selling and administrative expenses were $3.8 million, $3.0 million and $3.1 million for Fiscal 2013, 2012 and 2011, respectively. During Fiscal 2013, 2012 and 2011, the Company’s cooperative advertising reimbursements received were not in excess of the costs incurred. Environmental Costs Environmental expenditures relating to current operations are expensed or capitalized as appropriate. Expenditures relating to an existing condition caused by past operations, and which do not contribute to current or future revenue generation, are expensed. Liabilities are recorded when environmental assessments and/or remedial efforts are probable and the costs can be reasonably estimated and are evaluated independently of any future claims for recovery. Generally, the timing of these accruals coincides with completion of a feasibility study or the Company's commitment to a formal plan of action. Costs of future expenditures for environmental remediation obligations are not discounted to their present value. Note 1 Summary of Significant Accounting Policies, Continued Earnings Per Common Share Basic earnings per share excludes dilution and is computed by dividing income available to common shareholders by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflects the potential dilution that could occur if securities to issue common stock were exercised or converted to common stock (see Note 11). Other Comprehensive Income The Comprehensive Income Topic of the Codification requires, among other things, the Company’s pension liability adjustment, postretirement liability adjustment, unrealized gains or losses on foreign currency forward contracts and foreign currency translation adjustments to be included in other comprehensive income net of tax. Accumulated other comprehensive loss at February 2, 2013 consisted of $26.0 million of cumulative pension liability adjustment, net of tax, a cumulative post retirement liability adjustment of $0.3 million, net of tax, and a cumulative foreign currency translation adjustment of $1.9 million. Business Segments The Segment Reporting Topic of the Codification requires that companies disclose “operating segments” based on the way management disaggregates the Company’s operations for making internal operating decisions (see Note 14). Derivative Instruments and Hedging Activities The Derivatives and Hedging Topic of the Codification requires an entity to recognize all derivatives as either assets or liabilities in the Consolidated Balance Sheet and to measure those instruments at fair value. Under certain conditions, a derivative may be specifically designated as a fair value hedge or a cash flow hedge. The accounting for changes in the fair value of a derivative are recorded each period in current earnings or in other comprehensive income depending on the intended use of the derivative and the resulting designation. In prior periods, the Company entered into a small amount of foreign currency forward exchange contracts in order to reduce exposure to foreign currency exchange rate fluctuations in connection with inventory purchase commitments for its Johnston & Murphy Group. There were no such contracts outstanding at February 2, 2013 or January 28, 2012. For the year ended February 2, 2013, the Company recorded an unrealized gain on foreign currency forward contracts of less than $0.1 million in accumulated other comprehensive loss, before taxes. The Company monitors the credit quality of the major international, national and regional financial institutions with which it enters into such contracts. Note 1 Summary of Significant Accounting Policies, Continued New Accounting Principles In June 2011, FASB issued Accounting Standards Update No. 2011-05, an update to the FASB Codification Comprehensive Income Topic, which amends the existing accounting standards related to the presentation of comprehensive income in a company's financial statements. This update requires that all non-owner changes in shareholders' equity be presented in either a single continuous statement of comprehensive income or in two separate but consecutive statements. In the two statement approach, the first statement would present total net earnings and its components followed consecutively by a second statement that should present total other comprehensive income, the components of other comprehensive income and the total of comprehensive income. The update does not change the items that must be reported in other comprehensive income and must be applied retrospectively for all periods presented in the Consolidated Financial Statements. The Company adopted this update in the first quarter of Fiscal 2013 and has included a separate statement of comprehensive income in its Consolidated Financial Statements. The adoption did not have a significant impact on the Company’s results of operations or financial position. |
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