Fair Value Measurements and Disclosures

6 Months Ended

Aug. 03, 2013

Fair Value Disclosures [Abstract]

Fair Value Measurements and Disclosures

Fair Value Measurements and Disclosures

Fair value is defined as the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date and in the principal or most advantageous market for that asset or liability. The fair value should be calculated based on assumptions that market participants would use in pricing the asset or liability, not on assumptions specific to the entity. In addition, the fair value of liabilities should include consideration of non-performance risk, including the Company's own credit risk.

Inputs used in measuring fair value are prioritized into a three-level hierarchy based on whether the inputs to those measurements are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company's market assumptions. The fair-value hierarchy requires the use of observable market data when available and consists of the following levels:

• Level 1 – Quoted prices for identical instruments in active markets;

• Level 2 – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs are observable in active markets; and

• Level 3 – Valuations derived from valuation techniques in which one or more significant inputs are unobservable.

The following tables present information on the Company’s financial instruments (in thousands):

	Carrying Amount as of August 3, 2013		Fair Value Measurements at Reporting Date Using
			Level 1		Level 2		Level 3
Financial assets:
Cash	$	18,540	$	18,540	$	—	$	—
Money market funds	9,233		—		9,233		—
Cash and cash equivalents	27,773
Certificates of deposit	7,613		—		7,596		—
US treasury securities	9,991		—		9,999		—
US government securities	34,344		—		34,319		—
Short-term investments	51,948
Long-term tenant allowances receivable	1,005		—		—		1,005

	Carrying Amount as of February 2, 2013		Fair Value Measurements at Reporting Date Using
			Level 1		Level 2		Level 3
Financial assets:
Cash	$	5,612	$	5,612	$	—	$	—
Money market funds	36,667		—		36,667		—
Cash and cash equivalents	42,279
Certificates of deposit	5,053		—		5,047		—
US treasury securities	19,991		—		19,991		—
US government securities	42,650		—		42,592		—
Short-term investments	67,694		—		—		—
Long-term tenant allowances receivable	960		—		—		960

	Carrying Amount as of July 28, 2012		Fair Value Measurements at Reporting Date Using
			Level 1		Level 2		Level 3
Financial assets:
Cash	$	32,134	$	32,134	$	—	$	—
Money market funds	114,336		—		114,336		—
Cash and cash equivalents	146,470
Long-term tenant allowances receivable	917		—		—		917

Cash and cash equivalents are carried at either cost or amortized cost, which approximates fair value, due to their short term maturities. The Company's money market funds are valued at $1, which is generally the net asset value of these funds and are represented at Level 2. Units are redeemable on a daily basis and redemption requests generally can be received the same day as the effective date. The Company’s short-term investments consist of interest-bearing bonds of various U.S. Government agencies and certificates of deposit, have maturities that are less than one year and are carried at amortized cost plus accrued income. Short-term investments are carried at amortized cost due to the Company’s intent to hold to maturity. The fair value of the Company’s short-term investments was determined based on quoted prices for similar instruments in active markets. The Company believes the carrying amounts of other receivables and accounts payable approximate fair value. The fair value of the long-term tenant allowances receivable was determined by discounting them to present value using an incremental borrowing rate of 9.26%, at the time of recording, over their five year collection period. They are included in other assets within the condensed consolidated balance sheet.

On a non-recurring basis, the Company measures certain of its long-lived assets at fair value based on Level 3 inputs consisting of, but not limited to, projected sales growth, estimated gross margins, projected operating costs and an estimated weighted-average cost of capital rate. During the 13 and 26 weeks endedAugust 3, 2013, and July 28, 2012, the Company recorded $0.3 million, $1.9 million, $9.0 million and $12.6 million of impairment charges, respectively, in the accompanying condensed consolidated statements of operations. Refer to Note 1, “Summary of Significant Accounting Policies.”