ASSETS HELD FOR SALE

During the third quarter of 2013, the Company entered into an agreement to sell substantially all of the assets of its G.H. Bass & Co. (“Bass”) business. The decision to sell these assets was based on the Company’s strategy to drive growth through its higher-margin Calvin Klein and Tommy Hilfiger businesses. The Company recorded a net pre-tax loss of $19.5 million during the third quarter of 2013 in connection the sale, the details of which are discussed below.

The Company classified the Bass assets as held for sale and recorded a loss of $16.0 million during the third quarter of 2013 to reflect these assets in the Consolidated Balance Sheet as of November 3, 2013 at $47.5 million, representing their fair value, less estimated costs to sell. This loss was principally included in selling, general and administrative expenses in the Company’s Consolidated Income Statements for the thirteen and thirty-nine weeks ended November 3, 2013. On November 4, 2013, the Company completed the sale of these assets for net proceeds of $47.5 million. The sale price, net of costs to sell, was equal to the carrying value of the assets as of November 3, 2013.

The assets classified as held for sale in the Company’s Consolidated Balance Sheet as of November 3, 2013 were included in the Heritage Brands Retail segment and consisted of the following:



(In millions)
Other receivables	$	0.2
Inventories, net	49.0
Other current assets	0.2
Property, plant and equipment, net	14.0
Other noncurrent assets	0.1
Allowance for reduction of assets held for sale	(16.0		)
Total assets held for sale	$	47.5

A small number of the Company’s Bass stores were excluded from the sale and were deemed to be impaired as of November 3, 2013. The Company recorded a loss of $1.2 million during the third quarter of 2013 related to the impaired stores. Please see Note 12, “Fair Value Measurements,” for a further discussion. In addition, during the third quarter of 2013, the Company recorded a gain of $3.3 million as a result of writing off certain liabilities in connection with the transaction. The Company also recognized costs during the third quarter of 2013 related to severance and termination benefits for certain Bass employees, which totaled $1.2 million. The above-mentioned items were included in selling, general and administrative expenses in the Company’s Consolidated Income Statements for the thirteen and thirty-nine weeks ended November 3, 2013 and were included in the Heritage Brands Retail segment.

In connection with the sale, the Company guaranteed lease payments for substantially all Bass retail stores included in the sale pursuant to the terms of noncancelable leases expiring on various dates through 2022. The estimated fair value of these guarantee obligations as of November 3, 2013 was $4.4 million, which was recorded in the Heritage Brands retail segment and was included in selling, general and administrative expenses in the Company’s Consolidated Income Statements for the thirteen and thirty-nine weeks ended November 3, 2013 and accrued expenses and other liabilities in the Company’s Consolidated Balance Sheet as of November 3, 2013. The estimated fair value of these guarantee obligations as of November 2, 2014 is $3.2 million, which is included in accrued expenses and other liabilities in the Company’s Consolidated Balance Sheet. Please see Note 20, “Guarantees,” for a further discussion.