WARRANTY RESERVE

3 Months Ended

May 03, 2014

NOTE 4—WARRANTY RESERVE

The Company provides warranties for both its merchandise sales and service labor. Warranties for merchandise are generally covered by the respective suppliers, with the Company covering any costs above the supplier’s stipulated allowance. Service labor is warranted in full by the Company for a limited specific time period. The Company establishes its warranty reserves based on historical experiences. These costs are included in either costs of merchandise sales or costs of service revenues in the consolidated statements of operations.

The reserve for warranty cost activity for the thirteen weeks ended May 3, 2014 and the fifty-two weeks ended February 1, 2014 is as follows:

(dollar amounts in thousands)	May 3, 2014			February 1, 2014
Beginning balance	$	682		$	864

Additions related to current period sales	3,210			13,748

Warranty costs incurred in current period	(3,210		)	(13,930		)

Ending balance	$	682		$	682