Segment Reporting

9 Months Ended

Nov. 02, 2013

Segment Reporting [Abstract]

Segment Reporting

Segment Reporting

The Company operates exclusively in the retail apparel industry in which it sells apparel and accessory items, primarily through mall-based chains of retail stores, to female consumers with a young, active lifestyle. The Company has identified two operating segments (“Wet Seal” and “Arden B”). E-commerce operations for Wet Seal and Arden B are included in their respective operating segments.

Information for the 13 and 39 weeks ended November 2, 2013, and October 27, 2012, for the two reportable segments is set forth below (in thousands, except percentages):

13 Weeks Ended November 2, 2013	Wet Seal			Arden B			Corporate and Unallocated			Total
Net sales	$	114,878		$	12,786		$	—		$	127,664
Percentage of consolidated net sales	90		%	10		%	—		%	100		%
Operating loss	$	(4,575	)	$	(2,427	)	$	(7,853	)	$	(14,855	)
Depreciation and amortization expense	$	2,615		$	304		$	504		$	3,423
Interest income	$	—		$	—		$	49		$	49
Interest expense	$	—		$	—		$	(55	)	$	(55	)
Loss before provision for income taxes	$	(4,575	)	$	(2,427	)	$	(7,859	)	$	(14,861	)

13 Weeks Ended October 27, 2012	Wet Seal			Arden B			Corporate and Unallocated			Total
Net sales	$	117,892		$	17,645		$	—		$	135,537
Percentage of consolidated net sales	87		%	13		%	—		%	100		%
Operating loss	$	(8,747	)	$	(3,733	)	$	(12,336	)	$	(24,816	)
Depreciation and amortization expense	$	3,442		$	404		$	422		$	4,268
Interest income	$	—		$	—		$	35		$	35
Interest expense	$	—		$	—		$	(45	)	$	(45	)
Loss before benefit for income taxes	$	(8,747	)	$	(3,733	)	$	(12,346	)	$	(24,826	)

39 Weeks Ended November 2, 2013	Wet Seal			Arden B			Corporate and Unallocated			Total
Net sales	$	358,245		$	47,113		$	—		$	405,358
Percentage of consolidated net sales	88		%	12		%	—		%	100		%
Operating income (loss)	$	13,928		$	(1,380	)	$	(23,227	)	$	(10,679	)
Depreciation and amortization expense	$	7,934		$	882		$	1,382		$	10,198
Interest income	$	—		$	—		$	150		$	150
Interest expense	$	—		$	—		$	(163	)	$	(163	)
Income (loss) before provision for income taxes	$	13,928		$	(1,380	)	$	(23,240	)	$	(10,692	)

39 Weeks Ended October 27, 2012	Wet Seal			Arden B			Corporate and Unallocated			Total
Net sales	$	357,806		$	60,937		$	—		$	418,743
Percentage of consolidated net sales	85		%	15		%	—		%	100		%
Operating loss	$	(8,003	)	$	(6,614	)	$	(30,183	)	$	(44,800	)
Depreciation and amortization expense	$	11,022		$	1,314		$	1,195		$	13,531
Interest income	$	—		$	—		$	108		$	108
Interest expense	$	—		$	—		$	(136	)	$	(136	)
Loss before benefit for income taxes	$	(8,003	)	$	(6,614	)	$	(30,211	)	$	(44,828	)

The “Corporate and Unallocated” column is presented to allow for reconciliation of segment contribution to consolidated operating income (loss), interest income, interest expense and income (loss) before provision (benefit) for income taxes. Wet Seal and Arden B segment results include net sales, cost of sales, asset impairment and other direct store and field management expenses, with no allocation of corporate overhead or interest income and expense. The application of accounting policies for segment reporting is consistent with the application of accounting policies for corporate reporting.

Wet Seal operating income (loss) during the 13 and 39 weeks ended November 2, 2013, and October 27, 2012, includes $4.8 million, $6.1 million, $5.8 million and $16.3 million, respectively, of asset impairment charges.

Arden B operating loss during the 13 and 39 weeks ended November 2, 2013, and October 27, 2012, includes $0.3 million, $0.8 million, $0.7 million and $2.7 million, respectively, of asset impairment charges.

Corporate expenses during the 39 weeks ended November 2, 2013, include a $3.5 million benefit to adjust loss contingency charges for several legal matters. Corporate expenses during the 13 and 39 weeks ended October 27, 2012, include $0.1 million and $2.0 million, respectively, of severance costs resulting from the departure of the Company's previous chief executive officer. Corporate expenses during the 13 and 39 weeks ended October 27, 2012, included $2.1 million in professional fees to defend against a shareholder proxy solicitation to replace a majority of the Company’s board members. The proxy solicitation ultimately led to an agreement to replace four of the Company’s seven board members during October 2012.