DERIVATIVE FINANCIAL INSTRUMENTS

3 Months Ended

May 01, 2011

Notes to Financial Statements [Abstract]

9. DERIVATIVE FINANCIAL INSTRUMENTS

The Company entered into foreign currency forward exchange contracts with respect to €1,300,000 during the first quarter of 2010 in connection with the acquisition of Tommy Hilfiger to hedge against its exposure to changes in the exchange rate for the Euro, as a portion of the acquisition purchase price was payable in cash and denominated in Euros. Such foreign currency forward exchange contracts were not designated as hedging instruments. The Company recorded these foreign currency forward exchange contracts at their fair value of $52,390 in Accrued Expenses in its Consolidated Balance Sheet at May 2, 2010 with the corresponding loss from the contract date through May 2, 2010 recorded in Other Loss in its Consolidated Statement of Operations.

The Company has exposure to changes in foreign currency exchange rates related to certain anticipated cash flows associated with international inventory purchases of Tommy Hilfiger. To help manage this exposure, the Company periodically uses foreign currency forward exchange contracts. The Company does not use derivative financial instruments for trading or speculative purposes.

The Company records the foreign currency forward exchange contracts at fair value in its Consolidated Balance Sheets. Changes in fair value of foreign currency forward exchange contracts that are designated as effective hedging instruments are deferred in equity as a component of Accumulated Other Comprehensive Income (Loss). No contracts were excluded from effectiveness testing. Changes in the fair value of foreign currency forward exchange contracts that are not designated as effective hedging instruments are immediately recognized in earnings.

The following table summarizes the fair value and presentation in the Consolidated Balance Sheets for the Company’s foreign currency forward exchange contracts related to inventory purchases:

	Asset Derivatives (Classified in Other Current Assets)				Liability Derivatives (Classified in Accrued Expenses)
	5/1/11		5/2/10		5/1/11		5/2/10

Designated hedges	$	1,755	$	-	$	42,637	$	-
Undesignated hedges		58		-		-		-
	$	1,813	$	-	$	42,637	$	-

At May 1, 2011, the notional amount of foreign currency forward exchange contracts outstanding was approximately $475,000. Such contracts expire between May 2011 and October 2012.

The following table summarizes the effect of the Company’s derivatives designated as hedging instruments, which consist of the foreign currency forward exchange contracts for inventory purchases:

			Loss Reclassified from
	Amount of Loss Recognized		Accumulated Other Comprehensive			Loss Recognized in
	in Other Comprehensive		Income into Expense			Income on Derivatives
	Income on Derivatives		(Effective Portion)			(Ineffective Portion)
	(Effective Portion)		Location	Amount		Location	Amount
	5/1/11	5/2/10		5/1/11	5/2/10		5/1/11	5/2/10
Thirteen Weeks Ended	$ (24,866)	$ -	Cost of goods sold	$(9,599)	$ -	Selling, general and administrative expenses	$ -	$ -

The balance in Accumulated Other Comprehensive Income on foreign currency forward exchange contracts at May 1, 2011 will be recognized principally in the next 18 months in the Consolidated Statements of Operations as costs of goods sold as the underlying inventory is purchased and sold.

The following table summarizes the effect of the Company’s foreign currency forward exchange contracts for inventory purchases that were not designated as hedging instruments:

	Gain (Loss) Recognized in Income (Expense)
	Location	Amount
		5/1/11		5/2/10

Thirteen Weeks Ended	Selling general and administrative expenses	$	56	$	-

Please refer to Note 10 “Fair Value Measurements,” for disclosures on fair value measurements of the Company’s derivative financial instruments. The Company had no derivative financial instruments with credit risk related contingent features underlying the related contracts as of May 1, 2011.