Discontinued Operations:

6 Months Ended

Aug. 01, 2015

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations:

Discontinued Operations: On July 17, 2015, we entered into a sale and purchase agreement with an unrelated party, Ben Sherman UK Acquisition Limited, pursuant to which we sold 100% of the equity interests of our Ben Sherman business, consisting of Ben Sherman Limited and its subsidiaries and Ben Sherman Clothing LLC, for £40.8 million. The final purchase price received by us is subject to adjustment based on, among other things, the actual debt and net working capital of the Ben Sherman business on the closing date, which is expected to be finalized during the Third Quarter of Fiscal 2015. The loss on our sale of the Ben Sherman business was estimated for purposes of our August 1, 2015 consolidated financial statements. We do not anticipate significant operations or earnings related to the discontinued operations subsequent to the Second Quarter of Fiscal 2015, with cash flow attributable to discontinued operations in future periods primarily limited to the post-closing purchase price adjustments and amounts associated with a lease obligation of the Ben Sherman business which we retained in connection with the transaction. Changes to the estimates included in our loss on sale of discontinued operations and liabilities related to discontinued operations as of August 1, 2015, including actual amounts payable in connection with the retained lease obligation, the estimated post-closing purchase price adjustment or accrued expenses related to the transaction, may result in an adjustment to our loss on the sale transaction.

In connection with the Ben Sherman disposal transaction we, among other things, entered into a transitional services agreement with the purchaser pursuant to which we and our subsidiaries are providing, in exchange for various fees, certain transitional support services (primarily in the United States) to the purchaser in connection with its operation of the Ben Sherman business following the transaction. The duration of the transitional services vary but may continue for a period of up to 12 months following the date of the transaction.

We have not classified as discontinued operations any corporate or shared service expenses historically charged to Ben Sherman which we determined may not be eliminated as a result of its disposal. Recognizing these expenses as continuing operations in Corporate and Other reflects the uncertainty of whether there will be a reduction in such corporate or shared service expenses in the future as a result of the sale of Ben Sherman. Interest expense under our prior U.K. revolving credit agreement, which was satisfied in connection with the transaction, is the only interest expense included in discontinued operations in our consolidated financial statements as this represents the interest expense directly attributable to the discontinued operations.

The following represents major classes of assets and liabilities related to the discontinued operations included in our consolidated balance sheets as of the following dates (in thousands):

	August 1, 2015			January 31, 2015		August 2, 2014
Receivables, net	$	—		$	14,517	$	11,334
Inventories, net	—			27,602		33,469
Other current assets, net	49			6,004		4,110
Property and equipment, net	—			9,037		7,788
Intangible assets, net	—			21,635		24,311
Other non-current assets, net	—			1,075		1,213
Total assets	$	49		$	79,870	$	82,225
Accounts payable and other accrued expenses	$	6,868		$	13,253	$	12,923
Short-term debt	—			4,126		1,963
Non-current liabilities	—			1,826		1,610
Deferred income taxes	—			3,745		4,252
Total liabilities	$	6,868		$	22,950	$	20,748
Net (liabilities) assets	$	(6,819	)	$	56,920	$	61,477

Operating results of the discontinued operations are shown below (in thousands):

	Second Quarter Fiscal 2015			Second Quarter Fiscal 2014			First Half Fiscal 2015			First Half Fiscal 2014
Net sales	$	13,105		$	18,696		$	28,081		$	33,779
Cost of goods sold	8,824			9,552			17,414			17,679
Gross profit	4,281			9,144			10,667			16,100
SG&A	8,370			12,454			20,106			24,845
Royalties and other operating income	789			576			1,919			1,747
Operating loss	(3,300		)	(2,734		)	(7,520		)	(6,998		)
Interest expense, net	(27		)	33			45			136
Loss from discontinued operations before income taxes	(3,273		)	(2,767		)	(7,565		)	(7,134		)
Income taxes	(640		)	(547		)	(864		)	(825		)
Loss from discontinued operations, net of taxes	(2,633		)	(2,220		)	(6,701		)	(6,309		)
Loss on sale of discontinued operations, net of taxes	(20,437		)	—			(20,437		)	—
Net loss from discontinued operations, net of taxes	$	(23,070	)	$	(2,220	)	$	(27,138	)	$	(6,309	)

Certain information pertaining to depreciation and amortization as well as capital expenditures associated with our discontinued operations has been included below (in thousands):

	Second Quarter Fiscal 2015		Second Quarter Fiscal 2014		First Half Fiscal 2015		First Half Fiscal 2014
Depreciation and amortization (1)	$	—	$	750	$	667	$	1,476
Capital expenditures	$	233	$	438	$	660	$	796

(1) For Fiscal 2015, amounts reflect expense recognized prior to classification as held for sale, which occurred on March 24, 2015. No expense for depreciation or amortization was recognized in our consolidated statements of operations subsequent to qualifying as held for sale.