RESTRUCTURING AND OTHER CHARGES

The following table summarizes our restructuring and other charges:



	Costs Incurred as of		Costs Incurred for Fiscal Year Ended			Estimated Remaining Costs			Total Estimated/ Actual Costs as of
(In thousands)	January 29, 2011		January 28, 2012			To be Incurred			January 28, 2012
Fiscal 2011 Announcements
Transformational initiatives	$	—	$	6,194		$	3,813	⁽¹⁾	$	10,007
Store impairment charges	—		654			—			654
Store lease termination charges	—		2,254			—			2,254

Fiscal 2010 Announcements
Closing of under-performing stores:
Non-cash impairment charge for CATHERINES^® stores in outlet locations	3,210		—			—			3,210
Store lease termination and other charges	—		208			4,200			4,408
Severance for departure of former CEO	2,898		—			—			2,898

Fiscal 2009 Announcements
Closing of PETITE SOPHISTICATE OUTLET® stores:
Non-cash accelerated depreciation	612		—			—			612
Store lease termination charges	1,070		—			—			1,070
Other non-cash costs	195		—			—			195
Closing of under-performing stores:
Store lease termination charges	2,691		1,932			300			4,923

Fiscal 2007 and Fiscal 2008 Announcements
Lease termination and accretion charges	11,575		(18		)	1,555		⁽²⁾	13,112
Severance, retention, and other costs	5,123		14			—			5,137
Closing of under-performing stores:
Store lease termination charges	8,305		—			—			8,305
Total	$	35,679	$	11,238		$	9,868		$	56,785


(1)	We cannot estimate all remaining costs related to our plans to divest FASHION BUG and to undertake a comprehensive strategic review at this time as we cannot assure the implementation of the divestiture or any additional courses of action that may result from the review.


(2)	Accretion charges related to lease termination liability for assets retained from the sale of our Crosstown Traders apparel catalogs.

The following table summarizes our accrued restructuring and other charges:



	Accrued		Year Ended						Accrued
	as of		January 28, 2012						as of
(In thousands)	January 29, 2011⁽¹⁾		Costs Incurred			Payments/ Settlements			January 28, 2012⁽¹⁾
Fiscal 2011 Announcements
Transformational initiatives	$	—	$	6,194		$	(3,980	)	$	2,214
Store lease termination charges	—		2,345			(1,002		)	1,343

Fiscal 2010 Announcements
Severance for departure of former CEO	1,910		—			(1,122		)	788
Closing of under-performing stores:
Store lease termination charges	619		1,465			(1,423		)	661

Fiscal 2009 Announcements
Closing of PETITE SOPHISTICATE OUTLET stores:
Store lease termination charges	599		—			(436		)	163
Closing of under-performing stores:
Store lease termination charges	485		2,249			(983		)	1,751

Fiscal 2007 and Fiscal 2008 Announcements
Non-core misses apparel assets:
Lease termination charges	7,074		(18		)	(2,900		)	4,156
Other costs	153		—			—			153
Transformational initiatives:
Severance and retention costs	117		14			(131		)	—
Closing of under-performing stores:
Store lease termination charges	798		—			(333		)	465
Total	$	11,755	$	12,249		$	(12,310	)	$	11,694


(1)	Included in “Accrued expenses” in the accompanying condensed consolidated balance sheets.

Fiscal 2011 Announcements

Fiscal 2011 Transformational Initiatives

In December 2011 we announced that we are undertaking a comprehensive strategic and financial review of our operations to determine how best to enhance shareholder value. As part of these efforts, we announced plans to divest our FASHION BUG business and focus on the growth of our LANE BRYANT brand. This review is expected to focus on optimizing the use of our cash position to drive the potential of the LANE BRYANT brand, as well as evaluating other alternatives to further enhance shareholder value. A time frame for the divestiture of FASHION BUG or the completion of the strategic review has not yet been determined. During the year ended January 28, 2012 we recognized professional fees and retention costs of $6,194,000 related to our plans to divest our FASHION BUG business and to undertake our comprehensive strategic review. The results of operations of our FASHION BUG business are not reported as discontinued operations as the requirements for treating the business as held-for-sale were not met as of January 28, 2012.

Fiscal 2011 Store Impairment Charges

During the Fiscal 2011 Third Quarter we performed an impairment review of long-lived assets for FASHION BUG and identified 18 stores with asset carrying values in excess of such stores' respective forecasted undiscounted cash flows. Accordingly, during the year ended January 28, 2012 we recognized non-cash impairment charges of $654,000 to write down the long-lived assets (primarily leasehold improvements) at these stores to their respective fair values. Due to the nature of the assets being written down and our past history of abandoning such assets, we have determined the fair value of the assets to be minimal.

Fiscal 2011 Closure of Under-performing Stores

During the Fiscal 2011 Fourth Quarter we approved the planned closing of 18 under-performing FASHION BUG stores and closed all of these under-performing stores by the end of the Fiscal 2011 Fourth Quarter.

Fiscal 2010 Announcements

Fiscal 2010 Closure of Under-performing Stores

During the Fiscal 2010 Fourth Quarter we announced the planned closing of approximately 215 under-performing stores, of which a majority are FASHION BUG stores. We closed 200 of these under-performing stores in Fiscal 2011. Included in the 215 under-performing store closures are 30 CATHERINES stores in outlet locations that did not meet our profitability objectives and therefore will be closed by the end of Fiscal 2012. As a result of the decision to close the CATHERINES stores in outlet locations, we recognized a non-cash impairment charge of $3,210,000. We expect to incur approximately $4,200,000 for lease termination and other costs primarily related to the closing of the CATHERINES stores in outlet locations over the next year to complete the above closures.

Fiscal 2010 Departure of Former CEO

As a result of the resignation of our former chief executive officer during the Fiscal 2010 Third Quarter we recognized severance and related costs, including accelerated stock compensation costs, in accordance with the severance agreement. The liability as of January 28, 2012 represents the remaining severance obligation that is scheduled to be paid to him through the end of the Fiscal 2012 Third Quarter.

Fiscal 2009 Announcements

Fiscal 2009 Closure of Under-performing Stores

During the Fiscal 2009 Fourth Quarter we performed an impairment review of long-lived assets and identified 89 stores with asset carrying values in excess of such stores’ respective forecasted undiscounted cash flows (see “NOTE 10. IMPAIRMENT OF STORE ASSETS” above). In conjunction with that review we announced a store closing program for approximately 40 – 50 of those impaired stores. As a result of the decision to close these stores we incurred lease termination charges and expect to close approximately 26 stores that remained open as of January 28, 2012 by the end of Fiscal 2012.

Closing of PETITE SOPHISTICATE OUTLET Stores

To further focus on our core brands, we closed our PETITE SOPHISTICATE OUTLET stores during Fiscal 2009 and converted a majority of the space to CATHERINES stores in outlet locations during Fiscal 2010. As a result of the decision to close and convert these stores, we recognized non-cash depreciation, lease termination costs, and other closure costs.

Fiscal 2007 and Fiscal 2008 Announcements

Fiscal 2008 Departure of Former CEO

As a result of the resignation of our former chief executive officer, during Fiscal 2008 we recognized severance and related costs, including accelerated stock compensation costs, in accordance with the employment agreement. The liability for the severance obligation was paid during Fiscal 2009 and Fiscal 2010 in accordance with her separation agreement.

Non-core Misses Apparel Assets

As part of the September 18, 2008 definitive agreement for the sale of the Crosstown Traders apparel catalogs, we retained certain components of the infrastructure of the Crosstown Traders apparel catalogs. Accordingly, we entered into transitional service agreements with an affiliate of Orchard Brands (the purchaser) to provide certain services, including information technology, use of existing facilities, and financial services. Subsequent to the transitional period, which ended during the Fiscal 2009 Third Quarter, we were responsible for the remaining lease liabilities for the retained facilities. Additionally, we recognized non-cash accelerated depreciation related to the retained fixed assets over the transitional services period. We recognized a lease termination liability of approximately $11,141,000 as a result of the termination of the transitional service agreements when we ceased to use the retained leased facilities. The lease termination liability represents the present value of the remaining lease liability, less estimated sub-lease rental income, discounted using a credit-adjusted risk-free rate, and was initially recorded at fair value using a “Level 3” fair value measurement (based on unobservable inputs that are not corroborated by market data).

Transformational Costs

We began to execute on a multi-year strategy in Fiscal 2008 with the assistance of experienced third-party retail consultants to ensure the viability of the Company and our brands, enhance our competitive position, and to improve our financial results over time. The strategy encompassed refocusing on our core retail brands; simplifying the business by eliminating distractions and divesting non-core assets; substantially reducing operating expenses and streamlining operations; and maintaining and protecting our strong balance sheet and liquidity position.

Shutdown of LANE BRYANT WOMAN Catalog

During Fiscal 2008 we decided to discontinue our LANE BRYANT WOMAN catalog. As a result of this decision we recognized a markdown allowance of $4,220,000 to properly state inventory at the lower of cost or market. Additionally, we recognized severance and retention costs for the elimination of approximately 100 positions and non-cash accelerated depreciation related to fixed assets that we ceased to use after the closure of the catalog. We completed the shutdown of LANE BRYANT WOMAN catalog during Fiscal 2009.

Fiscal 2008 Elimination of Positions

In Fiscal 2008 we announced a workforce reduction of approximately 225 positions, which represented both terminations and elimination of open positions. Accordingly, we recognized severance costs related to the terminated employees. We completed the payment of severance for the terminated employees in Fiscal 2009.

Fiscal 2008 Closure of Under-performing Stores

In Fiscal 2008 we announced a store closing program for approximately 100 under-performing stores. As a result of the decision to close these stores we incurred non-cash accelerated depreciation in Fiscal 2009. We completed the under-performing store closing program in Fiscal 2009.

figure Magazine Shutdown Costs

In Fiscal 2008 we decided to shutdown our figure magazine operation. As a result of this decision, we incurred contract termination costs in accordance with the terms of our third-party agreement. We completed the shutdown of the figure magazine in Fiscal 2009.