Discontinued Operations

9 Months Ended

Oct. 31, 2015

Discontinued Operations and Disposal Groups [Abstract]

DISCONTINUED OPERATIONS

DISCONTINUED OPERATIONS

Our discontinued operations for the third quarter and year-to-date of 2015 and 2014 were comprised of the following:

	Third Quarter						Year-to-Date
(In thousands)	2015			2014			2015			2014
Canadian operations	$	344		$	(475	)	$	173		$	(35,629	)
Other	(31		)	(58		)	(138		)	(207		)
Total income (loss) from discontinued operations, pretax	$	313		$	(533	)	$	35		$	(35,836	)

Canadian Operations

During the fourth quarter of 2013, we announced our intention to wind down our Canadian operations. We began the wind down activities during the fourth quarter of 2013, which included the closing of our Canadian distribution centers. We completed the wind down activities during the first quarter of 2014, which included the closure of our Canadian stores and corporate offices. Therefore, we determined the results of our Canadian operations should be reported as discontinued operations. The results of our Canadian operations historically consisted of sales of product to retail customers, the costs associated with those products, and selling and administrative expenses, including personnel, purchasing, warehousing, distribution, occupancy and overhead costs. In the first quarter of 2014, the results of our Canadian operations also included significant contract termination costs of $23.0 million, severance charges of $2.2 million and a loss on the realization of our cumulative translation adjustment on our investment in our Canadian operations of $5.1 million.

In addition to the costs associated with our Canadian operations, we reclassified to discontinued operations the direct expenses incurred by our U.S. operations to facilitate the wind down. These costs primarily consist of professional fees. We also reclassified the income tax benefit that we expect our U.S. operations to generate as a result of the wind down of our Canadian operations, based on our ability to recover a worthless stock deduction in the foreseeable future. During the third quarter of 2014 and the year-to-date 2014, the amount of this income tax benefit that we recognized was approximately $0.2 million and $12.9 million, respectively.

The income (loss) from discontinued Canadian operations presented in our consolidated statements of operations was comprised of the following:

	Third Quarter						Year-to-Date
(In thousands)	2015			2014			2015			2014
Net sales	$	—		$	—		$	—		$	6,040
Cost of sales (exclusive of depreciation expense shown separately below)	—			(18		)	3			3,362
Gross margin	—			18			(3		)	2,678
Selling and administrative expenses	(342		)	364			(172		)	33,237
Depreciation expense	—			17			—			34
Operating income (loss)	342			(363		)	169			(30,593		)
Interest expense	—			9			—			(18		)
Other income (expense)	2			(121		)	4			(5,018		)
Income (loss) from discontinued operations before income taxes	344			(475		)	173			(35,629		)
Income tax expense (benefit)	115			(191		)	50			(12,924		)
Income (loss) income from discontinued operations	$	229		$	(284	)	$	123		$	(22,705	)