Accrued Store Closure And Lease Exit Costs

6 Months Ended

Jul. 30, 2011

Accrued Store Closure and Lease Exit Costs

Accrued Store Closure and Lease Exit Costs

2. ACCRUED STORE CLOSURE AND LEASE EXIT COSTS

When stores under long-term leases close, the Company records a liability for the future minimum lease payments and related ancillary costs, net of estimated sublease income and discounted using a risk-adjusted rate of interest. This liability is recorded at the time the store is closed and at the end of each quarter, the Company adjusts the estimated liability balance based on actual sublease income and lease settlement agreements that occurred during the period. Accrued store closure and lease exit costs also include costs related to closing the stores and relocating and terminating employees. Additional charges or recoveries related to the planned disposition of stores may be incurred as a result of changes to management's current estimates and assumptions. The timing of future transactions and charges related to these store closures are subject to significant uncertainty, including the variability in future vacancy periods, sublease income or negotiations with landlords regarding buy-out payments on leases.

Following is a year-to-date summary of the accrued store closure and lease exit costs as of the six months ended July 30, 2011, the 12 months ended January 29, 2011 and the six months ended July 31, 2010, respectively:

(In thousands)	July 30, 2011			January 29, 2011			July 31, 2010
Beginning Balance	$	6,575		$	10,220		$	10,220
Lease exit costs, net of estimated sublease income		670			4,245			2,835
Severance and closure costs		455			416			257
Payments for leases and settlements		(2,892	)		(7,827	)		(5,562	)
Payments for severance and closure costs		(541	)		(479	)		(375	)
Ending Balance1	$	4,267		$	6,575		$	7,375

1. At July 30, 2011, January 29, 2011 and July 31, 2010, the reserve for store closures includes $0.9 million, $1.6 million and $1.9 million, respectively, for stores that are classified within continuing operations and includes $3.4 million, $5.0 million and $5.5 million, respectively, for stores that are classified within discontinued operations.