IMPAIRMENTS

9 Months Ended

Oct. 27, 2012

IMPAIRMENTS

IMPAIRMENTS

NOTE 10—IMPAIRMENTS

During the third quarter of fiscal 2012, the Company recorded a $8.8 million impairment charge related to 35 stores classified as held and used. Of the $8.8 million impairment charge, $4.2 million was charged to costs of merchandise sales, and $4.6 million was charged to costs of service revenue.  In the second quarter of fiscal 2011, the Company recorded a $0.4 million impairment charge related to stores classified as held and used. Of the $0.4 million impairment charge, $0.1 million was charged to costs of merchandise sales, and $0.3 million was charged to costs of service revenue. In both periods, 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 remaining fair value of the impaired stores is approximately $1.5 million and is classified as a Level 2 or 3 measure within the fair value hierarchy.