10-Q/A

UNITED STATES

 SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q/A

(Mark One)

[ X ]           QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

for the quarterly period ended August 27, 2011

OR

[    ]           TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

for the transition period from_____________ to _____________

Commission File Number 1-8546

SYMS CORP

(Exact Name of Registrant as Specified in Its Charter)

NEW JERSEY	22-2465228
(State or Other Jurisdiction of	(I.R.S. Employer Identification No.)
Incorporation or Organization)
One Syms Way, Secaucus, New Jersey	07094
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s Telephone Number, Including Area Code: (201) 902-9600

Indicate by check mark whether the registrant:  (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes  ¨                                No  þ

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or shorter period that the registrant was required to submit and post such files).

Yes  ¨                        No  ¨     Not applicable to the registrant

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company.  See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.(Check One):

Large Accelerated Filer  ¨     Accelerated Filer  þ     Non-Accelerated Filer ¨     Smaller Reporting Company  ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes  ¨                                No  þ

At September 23, 2011 the latest practicable date, there were 14,448,188 shares outstanding of Common Stock, par value $0.05 per share.

Explanatory Note

The purpose of this Amendment No. 1 to Syms Corp’s Quarterly Report on Form 10-Q for the quarterly period ended August 27, 2011, filed with the Securities and Exchange Commission on October 6, 2011 (the “Form 10-Q”), is solely to furnish Exhibit 101 to the Form 10-Q in accordance with Rule 405 of Regulation S-T. Exhibit 101 to this report provides the consolidated financial statements and related notes from the Form 10-Q formatted in XBRL (eXtensible Business Reporting Language).

No other changes have been made to the Form 10-Q. This Amendment No. 1 to the Form 10-Q speaks as of the original filing date of the Form 10-Q, does not reflect events that may have occurred subsequent to the original filing date, and does not modify or update in any way disclosures made in the original Form 10-Q.

Pursuant to Rule 406T of Regulation S-T, the interactive data files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.

Item 6.	Exhibits.
31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange  Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
32.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(b) under the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
32.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(b) under the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

*         These exhibits were previously included or incorporated by reference in Syms Corp’s Quarterly Report on Form 10-Q for the quarterly period ended August 27, 2011, filed with the Securities and Exchange Commission on October 6, 2011.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	SYMS CORP
Date:    November 7, 2011	By  /s/ Marcy Syms
	MARCY SYMS
	CHIEF EXECUTIVE OFFICER
	(Principal Executive Officer)
Date:    November 7, 2011	By­­­­­­­­­­­­­­­­­­­­­­  /s/ Gary Binkoski
	GARY BINKOSKI
	CHIEF FINANCIAL OFFICER
	(Principal Financial and Accounting Officer)

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Consolidated Condensed Balance Sheets (Parenthetical) (USD $) In Thousands, except Per Share data	Aug. 27, 2011	Feb. 26, 2011		Aug. 28, 2010
Preferred stock, par value	$ 100	$ 100	[1]	$ 100
Preferred stock, Authorized	1,000	1,000	[1]	1,000
Preferred stock, outstanding	0	0	[1]	0
Common stock, par value	$ 0.05	$ 0.05	[1]	$ 0.05
Common stock, Authorized	30,000	30,000	[1]	30,000
Common stock, shares outstanding	14,448	14,448	[1]	14,448
Common stock, treasury shares	4,448	4,448	[1]	4,448

[1] The balance sheet at February 26, 2011 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.

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Consolidated Condensed Statements of Operations (USD $) In Thousands, except Per Share data	3 Months Ended		6 Months Ended
	Aug. 27, 2011	Aug. 28, 2010	Aug. 27, 2011	Aug. 28, 2010
Net sales	$ 86,319	$ 102,073	$ 191,674	$ 223,518
Cost of goods sold	54,519	64,950	115,232	132,652
Gross profit	31,800	37,123	76,442	90,866
Expenses:
Selling, general and administrative	27,232	32,520	54,291	65,216
Advertising	746	1,703	2,014	4,244
Occupancy, net	17,133	16,664	33,332	32,273
Depreciation and amortization	3,744	3,446	7,292	6,855
Other expense (income)	1,500		1,500	(34)
(Gain) loss on disposition of assets	364	14	(6,077)	(47)
Restructuring charges		471		1,302
Total Operating Expenses	50,719	54,818	92,352	109,809
Loss from operations	(18,919)	(17,695)	(15,910)	(18,943)
Interest expense, net	325	448	780	648
Loss before income taxes	(19,244)	(18,143)	(16,690)	(19,591)
Income tax benefit	(7,698)	(7,213)	(6,618)	(7,852)
Net loss	$ (11,546)	$ (10,930)	$ (10,072)	$ (11,739)
Net loss per share - basic and diluted	$ (0.80)	$ (0.76)	$ (0.70)	$ (0.81)
Weighted average shares outstanding - basic and diluted	14,448	14,448	14,448	14,463

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Document and Entity Information	6 Months Ended
	Aug. 27, 2011	Sep. 23, 2011
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Aug. 27, 2011
Document Fiscal Year Focus	2011
Document Fiscal Period Focus	Q2
Trading Symbol	SYMS
Entity Registrant Name	SYMS CORP
Entity Central Index Key	0000724742
Current Fiscal Year End Date	--02-25
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		14,448,188

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Share Based Compensation

6 Months Ended

Aug. 27, 2011

Share Based Compensation

Note 7 – Share Based Compensation

The Company’s Amended and Restated Stock Option and Appreciation Plan allows for the granting of incentive stock options, as defined in Section 422A of the Internal Revenue Code of 1986 (as amended), non-qualified stock options and stock appreciation rights.  The plan requires that incentive stock options be granted at an exercise price not less than the fair market value of the Common Stock on the date the option is granted.  The exercise price of incentive stock options for holders of more than 10% of the voting rights of the Company must be not less than 110% of the fair market value of the Common Stock on the date of grant.  Non-qualified options and stock appreciation rights may be granted at any exercise price, subject to applicable laws.  The Company has reserved 1,500,000 shares of common stock for such issuance.  The Company is no longer granting options under its Amended and Restated Incentive Stock Option and Appreciation Plan.

No option or stock appreciation rights may be granted under the Amended and Restated Incentive Stock Option Plan after July 28, 2013.  The maximum exercise period for any option or stock appreciation right under the plan is ten years from the date the option is granted (five years for any optionee who holds more than 10% of the voting rights of the Company).

The Company’s 2005 Stock Option Plan (the "2005 Plan") permits the grant of options, share appreciation rights, restricted shares, restricted share units, performance units, performance shares, cash-based awards and other share-based awards.  Key employees, non-employee directors, and third party service providers of the Company who are selected by a committee designated by the Board of Directors of the Company are eligible to participate in the 2005 Plan. The maximum number of shares issuable under the Plan is 850,000, subject to certain adjustments in the event of changes to the Company’s capital structure.

Consistent with ASC 718 “Share-Based Payments”, share-based compensation cost is measured at grant date, based on the estimated fair value of the award, and is recognized as expense over the requisite service period. The fair value of each option award is estimated on the date of grant using a Black-Scholes option valuation model.  Expected volatility is based on the historical volatility of the price of the Company’s stock.  The risk-free interest rate is based on U.S. Treasury issues with a term equal to the expected life of the option.  The Company uses historical data to estimate expected dividend yield, expected life and forfeiture rates.  There were no options granted during the twenty-six weeks ended August 27, 2011, and all options previously issued are fully vested.

Stock option activity during the twenty-six weeks ended August 27, 2011 is as follows:

(In thousands, except per share amounts)

					Weighted
			Weighted		Average
			Average		Remaining		Aggregate
	Number		Exercise		Contracted		Intricate
	of Options		Price		Term (years)		Value
Outstanding  February 27, 2011		98	$	15.01		4.4		-
Options granted		-		-		-		-
Options exercised		-		-		-		-
Options forfeited		-		-		-		-
Options outstanding at August 27, 2011		98	$	15.01		3.8		-
Options exercisable at August 27, 2011		98	$	15.01		3.8		-

As of August 27, 2011, there was no unrecognized stock-based compensation cost related to options granted under the Company’s plans that will be recognized in future periods.

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Related Party Transaction

6 Months Ended

Aug. 27, 2011

Related Party Transaction

Note 12 – Related Party Transaction

On March 9, 2010, the Company purchased 150,196 shares of the Company’s Common Stock from the Sy Syms Revocable Living Trust at a price of $8.04 per share.  The purchase was approved by a committee of the Board consisting solely of the independent members of the Board.  The price approved by the committee, after consultation with a financial consultant and counsel, represented a 5% discount to a thirty day volume weighted average price.

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Other Assets

6 Months Ended

Aug. 27, 2011

Other Assets

Note 3 - Other Assets

The Company has historically recorded the cash surrender value of officers’ life insurance policies on the balance sheet as a non-current asset. Such amounts were $2.3 million, $2.2 million and $2.0 million at August 27, 2011, February 26, 2011 and August 28, 2010, respectively.

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Fair Value Measurements

6 Months Ended

Aug. 27, 2011

Fair Value Measurements

Note 9 – Fair Value Measurements

ASC Subtopic 820-10, Fair Value Measurements, defines fair value, establishes a framework for measuring fair value and requires additional disclosure about the use of fair value to measure assets and liabilities.  The statement indicates, among other things, that a fair value measurement assumes a transaction to sell an asset or transfer a liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market for the asset or liability. The Company does not have any non-financial assets or liabilities that are required to be measured at fair value on a recurring basis.

In order to increase consistency and comparability in fair value measurements, ASC 820-10 establishes a hierarchy for observable and unobservable inputs used to measure fair value into three broad levels, which are described below:

· Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs.

· Level 2: Observable prices that are based on inputs not quoted on active markets, but corroborated by market data.

· Level 3: Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs.

In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible as well as considers counterparty credit risk in its assessment of fair value.

Assets measured at fair value on a recurring basis include the following as of August 27, 2011, February 26, 2011 and August 28, 2010:

Fair Value Measurement at August 27, 2011 Using
	Quoted Prices In Active Markets		Significant Other Observable Inputs		Significant Unobservable Inputs		Total Carrying Value at
(In thousands)	(Level 1)		(Level 2)		(Level 3)		August 27, 2011
Cash and cash equivalents	$	2,412	$	-	$	-	$	2,412
Cash surrender value – Officers’ Life Insurance	$	-	$	2,259	$	-	$	2,259

Fair Value Measurement at February 26, 2011 Using
	Quoted Prices In Active Markets		Significant Other Observable Inputs		Significant Unobservable Inputs		Total Carrying Value at
(In thousands)	(Level 1)		(Level 2)		(Level 3)		February 26, 2011
Cash and cash equivalents	$	2,298	$	-	$	-	$	2,298
Cash surrender value – Officers’ Life Insurance	$	-	$	2,192	$	-	$	2,192

Fair Value Measurement at August 28, 2010 Using
	Quoted Prices In Active Markets		Significant Other Observable Inputs		Significant Unobservable Inputs		Total Carrying Value at
(In thousands)	(Level 1)		(Level 2)		(Level 3)		August 28, 2010
Cash and cash equivalents	$	2,885	$	-	$	-	$	2,885
Cash surrender value – Officers’ Life Insurance	$	-	$	1,951	$	-	$	1,951

On an annual recurring basis, the Company is required to use fair value measures when measuring plan assets of the Company's pension plans. As the Company elected to adopt the measurement date provisions of ASC 715, "Employers' Accounting for Defined Benefit Pension and Other Postretirement Plans," as of  March 4, 2007, the Company was required to determine the fair value of the Company's pension plan assets as of February 26, 2011. The fair value of pension plan assets was $7.9 million at February 26, 2011. As of August 27, 2011, the fair value of pension plan assets was $7.4 million. These assets are valued in active liquid markets.

Additionally, on a nonrecurring basis, the Company uses fair value measures when analyzing asset impairment. Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If it is determined such indicators are present and the review indicates that the assets will not be fully recoverable, based on undiscounted estimated cash flows over the remaining amortization periods, their carrying values are reduced to estimated fair value. Measurements based on undiscounted cash flows are considered to be level 3 inputs.

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Subsequent Event

6 Months Ended

Aug. 27, 2011

Subsequent Event

Note 14 – Subsequent Event

On September 26, 2011, the Company entered into a sale / lease back of the Tampa, Florida store.  The net proceeds for the sale were $3,814,953.  The Company will lease back the location through December 31, 2011 with the ability to extend for one-year.  There are no rent obligations through the remaining portion of 2011.  The Company is responsible for a pro-rata share of CAM and Real Estate Taxes through 2011.

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Disposition of Assets and Other Expense

6 Months Ended

Aug. 27, 2011

Disposition of Assets and Other Expense

Note 10 –Disposition of Assets and Other Expense

Loss on disposition of assets for the thirteen weeks ended August 27, 2011 was $0.4 million.  The loss in the quarter was primarily from the sale of the North Randall location.  The Company reported a gain on disposition of assets for the twenty-six weeks ended August 27, 2011 of $6.1 million, primarily attributable to the sale of assets in Rockville, MD and to a lesser degree the proceeds from a partial condemnation of property adjacent to our Marietta, GA store.  The $1.5 million in other expense is an estimate of costs associated with the required retro-fit of the Park Avenue store in New York City, in connection with the exit from this location which closed in September 2011.

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Income Taxes

6 Months Ended

Aug. 27, 2011

Income Taxes

Note 8 – Income Taxes

For the thirteen week period ended August 27, 2011 the effective income tax rate was 40.0% as compared to 39.8% for the comparable period a year ago. For the twenty-six week period ended August 27, 2011, the effective income tax rate was 39.7% as compared to 40.0% for the comparable period a year ago.  The difference between the effective income tax rate and the federal statutory rate for the current period is largely attributable to non deductibility of certain operating expenses.

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The Company

6 Months Ended

Aug. 27, 2011

The Company

Note 1 - The Company

Syms Corp (“Syms” or the “Company”) and its wholly-owned subsidiary Filene’s Basement, LLC (“Filene’s”, “Filene’s, LLC” or “Filene’s Basement”) collectively own and operate a chain of 47 “off-price” retail stores under the “Syms” name (which are owned and operated by the Company) and “Filene’s Basement” name (which are owned and operated by Filene’s, LLC).  The stores are located in the United States throughout the Northeastern and Middle Atlantic regions and in the Midwest, Southeast and Southwest.  Each Syms store offers a broad range of first quality, in-season merchandise, bearing nationally recognized designer or brand-name labels for men, women and children at prices substantially lower than those generally found in department and specialty stores.  On June 18, 2009, the Company’s wholly-owned subsidiary, SYL, LLC now known as Filene’s Basement, LLC acquired certain real property leases, inventory, equipment and other assets of Filene’s Basement Inc. (“Filene’s Inc.” or “Filene’s Basement Inc.”), a retail clothing chain, pursuant to an auction conducted in accordance with § 363 of the Federal Bankruptcy Code.  As a result, Filene’s, LLC owns and operates 21 Filene’s Basement stores that are located in the Northeastern, Middle Atlantic, Midwest and Southeast regions.  Filene’s Basement also offers a broad range of first quality brand name and designer clothing for men, women and children.  In addition, Syms owns and operates 5 co-branded Syms/Filene’s Basement stores.  Syms and Filene’s, LLC operate in a single operating segment – the “off-price” retail stores segment.

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Merchandise Inventories

6 Months Ended

Aug. 27, 2011

Merchandise Inventories

Note 4 - Merchandise Inventories

Merchandise inventories are stated at the lower of cost or market on a first-in, first-out (FIFO) basis, as determined by the retail inventory method.  Prior to October 4, 2009, all of the Company’s inventories were determined by the retail inventory method.  For a brief period, from October 4, 2009 through October 2, 2010, the Syms stores utilized a different method, the moving weighted average cost method.  As part of the integration plan for the Company, the Syms stores converted their merchandise systems over to that used by Filene’s, effective October 3, 2010 and thus reverted back to the retail inventory method.  The change in the method of recording Syms inventory in the third quarter of fiscal 2009 and in the third quarter of fiscal 2010 did not have a material impact on reported results of operations.  The Company maintains a reserve for inventory obsolescence, which is a reduction to merchandise inventories.  The reserve for inventory obsolescence was $8.1 million, $10.6 million and $3.4 million as of August 27, 2011, February 26, 2011 and August 28, 2010, respectively.

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Bank Credit Facilities

6 Months Ended

Aug. 27, 2011

Bank Credit Facilities

Note 5 - Bank Credit Facilities

On August 27, 2009, the Company entered into a secured $75 million revolving Credit Agreement which expires on August 27, 2012.  That Credit Agreement, which has been amended as of January 7, 2011, March 8, 2011 and June 16, 2011, is among Syms Corp, as Lead Borrower, Filene’s Basement, LLC (together with the Lead Borrower, collectively the “Borrowers”), the guarantors named therein, the lenders party thereto and Bank of America, N.A., as Administrative Agent and Collateral Agent.  Availability thereunder is based on a borrowing base consisting generally of certain inventory, credit card receivables, mortgaged real estate and cash collateral (the “Borrowing Base”).  In connection with the Bank of America facility, the Company recognized approximately $1.1 million of deferred financing costs, which are being amortized over the term of the agreement.  This facility bears interest at various rates depending on availability under a formula set forth in the Credit Agreement.  As of August 27, 2011, the interest rate on the facility was Prime +2.50% or LIBOR +3.50%.  In addition, the Borrowers are subject to certain negative covenants customary for credit facilities of this size, type and purpose.  These covenants restrict or limit, among other things, their ability to incur additional indebtedness, grant liens on their assets, dispose of assets, make acquisitions and investments, merge, dissolve or consolidate and pay dividends, redeem equity and make other restricted payments.

The Credit Agreement sets forth financial conditions which must be fulfilled in order for a Borrower (i) to (a) acquire a controlling interest in another entity, all or substantially all of the assets of another entity or a business unit of another entity; (b) enter into a merger or consolidation having the same effect; or (c) acquire additional store locations from another entity; (ii) to purchase, redeem or otherwise acquire equity interests issued by it or (iii) to make a voluntary prepayment, repurchase, redemption or defeasance of indebtedness permitted by the Credit Agreement (other than indebtedness subordinated to the indebtedness under the Credit Agreement).  These conditions require that:

(i) No default exists under the Credit Agreement;

(ii) After giving effect to the contemplated transaction, Average Daily Availability for each month during the 12 months following such transaction be at least equal to 30% of the Loan Cap; and

(iii) The consolidated fixed charge coverage ratio, after giving pro forma effect to such transaction for the 12 months prior to such transaction be at least 1.2:1.0.

 “Average Daily Availability” is computed for each month as follows:  (a) for each day during such month the excess of the Loan Cap at the close of business over the outstanding principal amount of the loans and letter of credit obligations at the close of business is determined, (b) the sum of the figures resulting from the computations in clause (a) is determined and (c) such sum is divided by the number of days in such month.  The “Loan Cap” for each day is an amount equal to the lesser of $75 million and the Borrowing Base (as described above) for such day, plus, in each case, the outstanding principal amount of the term loan for such day.  Determination of whether the second or third condition described above is satisfied requires the Company to give effect to the contemplated transaction.  Thus, unless and until a specific transaction is proposed, no calculation is required or can be made with respect to these conditions.  No transactions giving rise to this calculation occurred during the fiscal quarter ended August 27, 2011.

In addition, the restriction on indebtedness provides for an availability of up to $5,000,000 at any time outstanding for indebtedness incurred to acquire fixed or capital assets, as well as customary carve-outs for existing debt, intercompany debt, guaranties in favor of suppliers and the like.  As of August 27, 2011, the Borrowers have no such indebtedness outstanding.

The Credit Agreement contains a financial covenant which requires that the Borrowers maintain at all times unutilized borrowing capacity under the Credit Agreement in an amount of not less than 10% of the Borrowing Base described above (or $7.5 million, whichever is less).  As of August 27, 2011, the Borrowing Base was $48.0 million, which means that the Company was required to maintain unutilized borrowing capacity of not less than $4.8 million.

As of August 27, 2011, $20.3 million is outstanding under this facility. The Credit Agreement has sub-limits for letters of credit which when utilized, reduce availability under the facility.  At August 27, 2011, February 26, 2011 and August 28, 2010, the Company had outstanding letters of credit of $11.4 million, $10.1 million and $6.6 million, respectively.  Total interest charges incurred for the thirteen weeks ended August 27, 2011 and August 28, 2010 were $0.3 million and $0.4 million respectively. There was no capitalized interest for the thirteen or twenty-six weeks ended August 27, 2011 and August 28, 2010.

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Restructuring Charges

6 Months Ended

Aug. 27, 2011

Restructuring Charges

Note 13 – Restructuring Charges

Since the acquisition of Filene’s in June 2009, the Company has continued to assess the most effective manner in which to integrate the operations of Filene’s and Syms to maximize the synergies of the two businesses.  This plan included the integration of the two IT systems into one common platform, the consolidation of distribution center functions, the co-branding of several stores, the closing of Filene’s Massachusetts office and related reductions in staffing levels.  In addition, the Company closed four under-performing stores in fiscal 2010.  The Company is required to continue to make lease payments on two of these closed stores, one through May 2012 and the other through September 2017.  The Company recorded the present value of these payments (net of estimated sub-lease income) in fiscal 2010 as a restructuring charge, totaling $7,171,000.

The consolidation of distribution center functions involved a shift of most merchandise processing to the Company’s Massachusetts distribution center.  The New Jersey distribution center now serves to replenish the high volume New York City stores, and continues to house the adjoining retail store and corporate offices.  Severance costs associated with staffing level reductions for approximately 200 employees, including store, distribution center and corporate support staff, totaled $1,082,000 in fiscal 2010.  In addition, $793,000 in professional fees related to the integration of the two IT systems and $260,000 of legal costs were incurred in fiscal 2010, and recorded as restructuring charges in fiscal 2010.

For the thirteen weeks ended August 27, 2011, there were no restructuring charges recorded.  In the prior year period, $471,000 of restructuring charges were recorded, consisting of $193,000 in professional fees, $147,000 in severance costs and $131,000 of legal fees.

The details of the restructuring accruals are as follows:

(In thousands)	Lease obligations			One-time termination benefits			Total
Balance, February 26, 2011	$	7,208		$	106		$	7,314
Payments and other adjustments		(1,067	)		(106	)		(1,173	)
Balance, August 27, 2011	$	6,141		$	-		$	6,141

The net accrual of $6,141 at August 27, 2011 is reported as $2,110 in accrued expenses and $4,031 in other long-term liabilities.

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Net Income (Loss) per Share

6 Months Ended

Aug. 27, 2011

Net Income (Loss) per Share

Note 6 - Net Income (Loss) per Share

Basic net income (loss) per share has been computed based upon the weighted average common shares outstanding. Diluted net income (loss) per share gives effect to the potential dilution that would have occurred if options were exercised. The following table sets forth basic and diluted average shares and the related net loss per share:

	Thirteen Weeks Ended						Twenty-Six Weeks Ended
	August 27, 2011			August 28, 2010			August 27, 2011			August 28, 2010
	(in thousands except per share amounts)
Basic and diluted net loss per share:
Net loss	$	(11,546	)	$	(10,930	)	$	(10,072	)	$	(11,739	)
Average shares outstanding – basic and diluted		14,448			14,448			14,448			14,463
Basic and diluted net loss per share	$	(0.80	)	$	(0.76	)	$	(0.70	)	$	(0.81	)

For periods with losses, options are excluded from the computations of diluted net loss per share because the effect would be anti-dilutive. Options to purchase 97,500 shares of common stock at $15.01 per share were outstanding at August 27, 2011 and August 28, 2010.

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Consolidated Condensed Statements of Cash Flows (USD $) In Thousands	6 Months Ended
	Aug. 27, 2011		Aug. 28, 2010
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$ (10,072)		$ (11,739)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation and amortization	7,292		6,855
Deferred income taxes	(6,618)		(7,859)
(Gain) loss on disposition of assets	(6,077)		(47)
(Increase) decrease in operating assets:
Receivables	167		83
Merchandise inventories	11,153		(17,195)
Prepaid expenses and other current assets	3,560		(646)
Other assets	(405)		290
Increase (decrease) in operating liabilities:
Accounts payable	(9,398)		12,026
Accrued expenses	1,560		2,121
Obligations to customers	(61)		(48)
Other long term liabilities	1,731		2,283
Net cash (used in) provided by operating activities	(7,168)		(13,876)
CASH FLOWS FROM INVESTING ACTIVITIES:
Expenditures for property and equipment	(1,062)		(8,036)
Proceeds from sale of land, building and other assets	18,209		6,406
Net cash (used in) provided by investing activities	17,147		(1,630)
CASH FLOWS FROM FINANCING ACTIVITIES:
Purchase of Treasury shares			(1,207)
Borrowings/Repayment on revolving credit facility (net)	(9,865)		17,549
Net cash (used in) provided by financing activities	(9,865)		16,342
NET INCREASE IN CASH AND CASH EQUIVALENTS	114		836
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD	2,298	[1]	2,049
CASH AND CASH EQUIVALENTS, END OF PERIOD	2,412		2,885
Cash paid during the period for:
Interest	817		346
Income taxes (net of refunds)	$ (111)		$ (427)

[1] The balance sheet at February 26, 2011 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.

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Basis of Presentation

6 Months Ended

Aug. 27, 2011

Basis of Presentation

Note 2 - Basis of Presentation

The accompanying unaudited consolidated condensed financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). As applicable under such rules and regulations, certain information and footnote disclosures have been condensed or omitted. We believe that all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.  Operating results for the thirteen and twenty-six week periods ended August 27, 2011 are not necessarily indicative of the results that may be expected for the entire fiscal year ending February 25, 2012 or any other period.  For further information, refer to the financial statements and footnotes thereto included in the Company’s annual report on Form 10-K for the fiscal year ended February 26, 2011.

Occupancy expenses for the thirteen and twenty-six week periods ended August 27, 2011 and August 28, 2010 have been reduced by net rental income of $0.5 million, $0.5 million, $1.1 million and $1.1 million, respectively, from real estate holdings incidental to the Company’s retail operations.

The preparation of these consolidated condensed financial statements in conformity with generally accepted accounting principles in the United States, of necessity requires management to make estimates and assumptions that may affect the reported amounts and related disclosures.  Actual amounts could differ from such estimates.

The Company’s fiscal year ends the Saturday nearest to the end of February.  The fiscal year ended February 26, 2011 (“fiscal 2010”) was comprised of 52 weeks.  The fiscal year ending February 25, 2012 (“fiscal 2011”) will also be comprised of 52 weeks.

Fair Value of Financial Instruments – As of August 27, 2011, February 26, 2011 and August 28, 2010, management estimates that the fair value of cash and cash equivalents, receivables, accounts payable, accrued expenses and other current liabilities and long-term debt are carried at amounts that reasonably approximate their fair value. Refer to Note 9 for ASC 820, “Fair Value Measurements” (“ASC 820”) disclosures.

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Recent Accounting Pronouncements

6 Months Ended

Aug. 27, 2011

Recent Accounting Pronouncements

Note 11 – Recent Accounting Pronouncements

In June 2011, FASB issued ASU 2011-05, "Comprehensive Income (Topic 220): Presentation of Comprehensive Income."  ASU 2011-05 eliminates the option that permits the presentation of other comprehensive income in the statement of changes in equity and requires presenting components of net income and comprehensive income in either a one-statement approach with totals for both net income and comprehensive income, or a two-statement approach where a statement presenting the components of net income and total net income must be immediately followed by a financial statement that presents the components of other comprehensive income, a total for other comprehensive income, and a total for comprehensive income.  For public companies, the amendments are effective for fiscal years, and interim periods within those years, beginning after December 15, 2011 and should be applied retrospectively.  Early adoption is permitted.

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Consolidated Condensed Balance Sheets (USD $) In Thousands	Aug. 27, 2011	Feb. 26, 2011		Aug. 28, 2010
CURRENT ASSETS
Cash and cash equivalents	$ 2,412	$ 2,298	[1]	$ 2,885
Receivables	2,452	2,619	[1]	3,112
Merchandise inventories	65,442	76,595	[1]	99,429
Deferred income taxes	9,180	9,180	[1]	5,912
Assets held for sale		1,900	[1]	8,618
Prepaid expenses and other current assets	3,785	7,345	[1]	8,290
TOTAL CURRENT ASSETS	83,271	99,937	[1]	128,246
PROPERTY AND EQUIPMENT - Net	101,114	117,200	[1]	119,309
DEFERRED INCOME TAXES	43,704	37,086	[1]	25,972
BUILDING AND AIR RIGHTS	9,134	9,134	[1]	9,134
OTHER ASSETS	7,445	7,417	[1]	7,403
TOTAL ASSETS	244,668	270,774	[1]	290,064
CURRENT LIABILITIES:
Accounts payable	32,303	41,701	[1]	59,382
Accrued expenses	22,669	21,114	[1]	12,066
Obligations to customers	5,498	5,559	[1]	5,280
TOTAL CURRENT LIABILITIES	60,470	68,374	[1]	76,728
LONG TERM DEBT	20,327	30,192	[1]	25,951
OTHER LONG TERM LIABILITIES	12,960	11,229	[1]	5,299
SHAREHOLDERS EQUITY
Preferred stock, par value $100 per share. Authorized 1,000 shares; none outstanding. Common stock, par value $0.05 per share. Authorized 30,000 shares; 14,448 shares outstanding (net of 4,448 in treasury shares) on August 27, 2011, February 26, 2011 and August 28, 2010	800	800	[1]	800
Additional paid-in capital	21,605	21,605	[1]	21,605
Treasury stock	(47,110)	(47,110)	[1]	(47,110)
Accumulated other comprehensive loss	(1,476)	(1,480)	[1]	(1,491)
Retained earnings	177,092	187,164	[1]	208,282
TOTAL SHAREHOLDERS' EQUITY	150,911	160,979	[1]	182,086
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$ 244,668	$ 270,774	[1]	$ 290,064

[1] The balance sheet at February 26, 2011 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.