DERIVATIVE FINANCIAL INSTRUMENTS

12 Months Ended

Jan. 29, 2012

Derivative Instruments and Hedging Activities Disclosure [Abstract]

DERIVATIVE FINANCIAL INSTRUMENTS

 DERIVATIVE FINANCIAL INSTRUMENTS

The Company has exposure to changes in foreign currency exchange rates related to certain anticipated cash flows associated with certain international inventory purchases. To help manage this exposure, the Company periodically uses foreign currency forward exchange contracts.

The Company also has exposure to interest rate volatility related to its senior secured term loan facilities. The Company has entered into an interest rate swap agreement and an interest rate cap agreement to hedge against this exposure. Please see Note 6, “Debt,” for a further discussion of these agreements.

The Company entered into foreign currency forward exchange contracts with respect to €1,550,000 during 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 settled the foreign currency forward exchange contracts at a loss of $140,490 on May 6, 2010 in connection with the Company’s completion of the Tommy Hilfiger acquisition. Such loss is reflected in other loss in the Company’s Consolidated Income Statements.

The Company records the foreign currency forward exchange contracts, interest rate swap agreement and interest rate cap agreement (collectively referred to as “cash flow hedges”) at fair value in its Consolidated Balance Sheets. Changes in fair value of cash flow hedges that are designated as effective hedging instruments are deferred in equity as a component of AOCI. The cash flows from such hedges are presented in the same category on the Consolidated Statements of Cash Flows as the items being hedged. Any ineffectiveness in such cash flow hedges is immediately recognized in earnings and no contracts were excluded from effectiveness testing. In addition, changes in the fair value of hedges that are not designated as effective hedging instruments are immediately recognized in earnings. The Company does not use derivative financial instruments for trading or speculative purposes.

The following table summarizes the fair value and presentation in the Consolidated Balance Sheets for the Company’s derivative financial instruments:

	Asset Derivatives (Classified in Other Current Assets and Other Assets)				Liability Derivatives (Classified in Accrued  Expenses and Other Liabilities)
	1/29/2012		1/30/2011		1/29/2012		1/30/2011
Contracts designated as hedges:
Foreign currency forward exchange contracts	$	13,581	$	417	$	1,590	$	12,572
Interest rate contracts	211		—		7,907		—
Total contracts designated as hedges	13,792		417		9,497		12,572
Undesignated contracts:
Foreign currency forward exchange contracts	—		—		1,265		2,940
Total undesignated contracts	—		—		1,265		2,940
Total	$	13,792	$	417	$	10,762	$	15,512

At January 29, 2012, the notional amount of foreign currency forward exchange contracts outstanding was approximately $404,000. Such contracts expire principally between January 31, 2012 and January 31, 2013.

The following table summarizes the effect of the Company’s cash flow hedges designated as hedging instruments:

	Loss Recognized in Other Comprehensive Income (Effective Portion)						Loss Reclassified from AOCI into Expense  (Effective Portion)
														Loss Recognized in  Income  (Ineffective Portion)
							Location	Amount						Location	Amount
	2011			2010				2011			2010				2011		2010
Foreign currency forward exchange contracts	$	(6,033	)	$	(17,883	)	Cost of goods sold	$	(29,729	)	$	(5,580	)	Selling, general and administrative expenses	$	—	$	(1,922	)
Interest rate contracts	(11,333		)	—			Interest expense	(3,426		)	—				—		—
Total	$	(17,366	)	$	(17,883	)		$	(33,155	)	$	(5,580	)		$	—	$	(1,922	)

A gain in AOCI on foreign currency forward exchange contracts at January 29, 2012 of $10,225 is estimated to be reclassified in the next 12 months in the Consolidated Income Statements to costs of goods sold as the underlying inventory is purchased and sold. In addition, a loss in AOCI for interest rate contracts at January 29, 2012 of $4,164 is estimated to be reclassified to interest expense within the next 12 months.

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
	2011		2010
Selling, general and administrative expenses	$	1,223	$	(2,868	)

The Company had no derivative financial instruments with credit risk related contingent features underlying the related contracts as of January 29, 2012.