Warranty reserve

9 Months Ended

Oct. 31, 2015

Other Liabilities Disclosure [Abstract]

Sterling Jewelers and Zale Jewelry segments 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)	October 31, 2015			November 1, 2014			October 31, 2015			November 1, 2014
Warranty reserve, beginning of period	$	43.1		$	48.1		$	44.9		$	19.1
Warranty obligations acquired	—			—			—			28.8
Warranty expense⁽¹⁾	3.0			1.2			7.9			5.2
Utilized	(3.6		)	(2.6		)	(10.3		)	(6.4		)
Warranty reserve, end of period	$	42.5		$	46.7		$	42.5		$	46.7

⁽¹⁾Includes impact of acquisition accounting adjustment related to warranty obligations acquired in the Zale Acquisition.



(in millions)	October 31, 2015		January 31, 2015		November 1, 2014
Disclosed as:
Current liabilities	$	17.8	$	17.2	$	17.6
Non-current liabilities	24.7		27.7		29.1
At end of period	$	42.5	$	44.9	$	46.7