NOTE 11—STORE CLOSURES AND ASSET IMPAIRMENTS

During fiscal 2013, the Company recorded a $7.7 million impairment charge related to 47 stores, four of which were classified as held for disposal and 43 of which were classified as held and used as of February 1, 2014. Of the $7.7 million impairment charge, $2.4 million was charged to merchandise cost of sales, and $5.3 million was charged to service cost of sales. In fiscal 2012, the Company recorded a $10.6 million impairment charge related to 49 stores classified as held and used. Of the $10.6 million impairment charge, $5.1 million was charged to merchandise cost of sales, and $5.5 million was charged to service cost of sales. In both years the Company used a probability-weighted approach and estimates of expected future cash flows to determine the fair value of these stores. Discount and growth rate assumptions were derived from current economic conditions, management's expectations and projected trends of current operating results. The fair market value estimates are classified as a Level 2 or Level 3 measure within the fair value hierarchy. The remaining fair value of the impaired assets was $4.2 million and $2.3 million at February 1, 2014 and February 2, 2013, respectively.

A store is classified as held for disposal when (i) the Company has committed to a plan to sell, (ii) the building is vacant and the property is available for sale, (iii) the Company is actively marketing the property for sale, (iv) the sale price is reasonable in relation to its current fair value and (v) the Company expects to complete the sale within one year. Assets held for disposal have been valued at the lower of their carrying amount or their estimated fair value, net of disposal costs. The fair value of these assets is estimated using readily available market data for comparable properties and is classified as a Level 2 (as described in Note 16, "Fair Value Measurements") measure within the fair value hierarchy. No depreciation expense is recognized during the period the asset is held for disposal. During fiscal 2013, the Company had four stores classified as assets held for disposal, which are as follows:

	Year Ended

(dollar amounts in thousands)	February 1, 2014
Land	$	1,348
Building and improvements		3,946
Accumulated depreciation		(3,281	)


Property and equipment—net	$	2,013




Number of properties		4

The Company classifies the four properties as held for disposal as the Company continues to actively market the properties at prices the Company believes reasonable given current market conditions and expects to sell these properties within the next twelve months. In addition, during fiscal 2013, the Company recorded $0.9 million of impairment charges related to four stores classified as held for disposal of which $0.7 million was charged to merchandise cost of sales and $0.2 was charged to service cost of sales. There were no stores classified as held for disposal in fiscal 2012.

The following schedule details activity in the reserve for closed locations for the three years in the period ended February 1, 2014. The reserve balance includes remaining rent on leases net of sublease income.

(dollar amounts in thousands)

Balance, January 29, 2011	$	1,241
Accretion of present value of liabilities		53
Change in assumptions about future sublease income, lease termination		310
Cash payments		674


Balance, January 28, 2012		(477	)
Accretion of present value of liabilities		1,801
Provision for closed locations		137
Change in assumptions about future sublease income, lease termination		367
Cash payments		(664	)


Balance, February 2, 2013		1,641
Accretion of present value of liabilities		36
Change in assumptions about future sublease income, lease termination		322
Cash payments		(1,449	)


Balance, February 1, 2014	$	550