Costs Associated With Wholesale Business Wind Down

9 Months Ended

Nov. 02, 2013

Restructuring and Related Activities [Abstract]

COSTS ASSOCIATED WITH WHOLESALE BUSINESS WIND DOWN

COSTS ASSOCIATED WITH WHOLESALE BUSINESS WIND DOWN

During the third quarter of 2013, we announced our intention to wind down the operations of our wholesale business, within our U.S. segment, during the fourth quarter of 2013. In conjunction with our decision to wind down the operations of our wholesale business, we reviewed the valuation of the inventory associated with the wholesale business and based on the composition of the merchandise, we recorded an impairment of $3.7 million, which reduces the value of the inventory to our estimate of its market value. The inventory impairment charge was recorded in our cost of sales. We also recorded a severance charge during the third quarter of 2013 for this exit activity of approximately $1.1 million, based on our schedule for the wind down, in our selling and administrative expenses. We do not anticipate an additional severance charge associated with this exit activity during the fourth quarter of 2013. As the operations of the wholesale business had not ceased as of November 2, 2013, we did not record a charge for contract termination costs associated with the facilities operated by our wholesale business. Contract termination costs will be recorded upon the cessation of our wholesale business’s operations.