Discontinued Operations

12 Months Ended

Feb. 02, 2013

Discontinued Operations

Discontinued Operations

Note 14. Discontinued Operations

        On January 3, 2011, we sold to LF USA Inc. ("LF") substantially all of the operations and assets of our former Oxford Apparel operating group (other than accounts receivable associated with the businesses that were sold and the assets and operations relating to our Oxford Golf business and our distribution center in Lyons, Georgia). The purchase price paid by LF was equal to $121.7 million, less an adjustment based on net working capital on the closing date of the transaction. After giving effect to a preliminary net working capital adjustment, the purchase price paid by LF at the closing of the transaction was $108.2 million, of which $5.4 million was held in escrow pending completion of the final working capital adjustment and other requirements. The net working capital deficit resulted from our retention of accounts receivable and goods in transit as of the closing date, partially offset by our retention of certain accounts payable, as of the closing date, associated with Oxford Apparel. During fiscal 2011, we finalized the net working capital adjustment, which resulted in a change in estimate to the gain on sale as recognized in the fourth quarter of fiscal 2010, whereby we received $3.7 million of the $5.4 million of cash held in escrow. This change in estimate which resulted in a reduction to the gain on sale of $1.0 million, net of income taxes and was recorded in fiscal 2011, resulted in a revised after-tax gain on the sale of the Oxford Apparel operations of $48.5 million compared to $49.5 million, as previously recognized in fiscal 2010.

        In connection with the consummation of the transaction described above, we, among other things, entered into (1) license agreements with LF to grant licenses (subject to the limitations set forth in the applicable license agreements) to LF to use the trade name "Oxford Apparel" perpetually in connection with its business, as well as to use certain other trademarks in connection with the manufacture, sale and distribution of men's dress shirts for certain periods of time in the applicable territory; (2) a services agreement with LF pursuant to which, in exchange for various fees, we provided certain transitional support services to LF in its operation of the transferred assets; and (3) a limited non-competition agreement with LF pursuant to which we agreed (subject to the exceptions set forth in the non-competition agreement) not to engage in certain activities for a period of three years following the completion of the transaction.

        As of January 29, 2011, we owned $57.7 million of assets, which primarily consisted of receivables, including the escrow receivable, and inventories, associated with the discontinued operations and were obligated to pay $40.8 million of liabilities, including trade accounts payable, other accrued expenses, accrued compensation and income taxes payable associated with the discontinued operations and gain on sale. The assets and liabilities related to discontinued operations were converted to cash and paid, respectively, during fiscal 2011 with no remaining assets or liabilities associated with the discontinued operations remaining as of January 28, 2012 or thereafter.

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

	Fiscal 2012		Fiscal 2011			Fiscal 2010
Net sales	$	—	$	2,414		$	200,636
Earnings from discontinued operations before income taxes	$	—	$	1,764		$	20,610
Earnings from discontinued operations, net of taxes	$	—	$	1,154		$	12,877
Gain (loss) on sale of discontinued operations, net of taxes	$	—	$	(1,017	)	$	49,546
Net earnings from discontinued operations, net of taxes	$	—	$	137		$	62,423