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Warranty reserve
9 Months Ended
Nov. 01, 2014
Warranty reserve

13. Warranty reserve

Sterling Jewelers and Zale provide a product lifetime diamond guarantee as long as six-month inspections are performed and certified by an authorized store representative. Provided the customer has complied with the six-month inspection policy, the Company will replace, at no cost to the customer, any stone that chips, breaks or is lost from its original setting during normal wear. Management estimates the warranty accrual based on the lag of actual claims experience and the costs of such claims, inclusive of labor and material. Sterling Jewelers also provides a similar product lifetime guarantee on color gemstones. The warranty reserve for diamond and gemstone guarantee, included in accrued expenses and other current liabilities, and other non-current liabilities, is as follows:

 

     13 weeks ended     39 weeks ended  
(in millions)    November 1,
2014
    November 2,
2013
    November 1,
2014
    November 2,
2013
 

Warranty reserve, beginning of period

   $ 48.1      $ 18.6      $ 19.1      $ 18.5   

Warranty obligations acquired

     —          —          28.8        —     

Warranty expense

     1.2        1.8        5.2        5.3   

Utilized

     (2.6     (1.6 )     (6.4     (5.0 )
  

 

 

   

 

 

   

 

 

   

 

 

 

Warranty reserve, end of period

   $ 46.7      $ 18.8      $ 46.7      $ 18.8   
  

 

 

   

 

 

   

 

 

   

 

 

 

 

(in millions)    November 1,
2014
     February 1,
2014
     November 2,
2013
 

Presented as:

        

Current liabilities

   $ 17.6       $ 6.7       $ 6.6   

Non-current liabilities

     29.1         12.4         12.2   
  

 

 

    

 

 

    

 

 

 

Total warranty reserve

   $ 46.7       $ 19.1       $ 18.8