Segment Reporting

6 Months Ended

Jul. 28, 2012

Segment Reporting [Abstract]

Segment Reporting

NOTE 7 – 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 26 weeks ended July 28, 2012, and July 30, 2011, for the two reportable segments is set forth below (in thousands, except percentages):

13 Weeks Ended July 28, 2012	Wet Seal			Arden B			Corporate and Unallocated			Total
Net sales	$	113,739		$	21,522		$	—		$	135,261
Percentage of consolidated net sales		84	%		16	%		—			100	%
Operating loss	$	(8,579	)	$	(1,578	)	$	(9,386	)	$	(19,543	)
Depreciation and amortization expense	$	3,723		$	456		$	391		$	4,570
Interest income	$	—		$	—		$	38		$	38
Interest expense	$	—		$	—		$	(46	)	$	(46	)
Loss before benefit for income taxes	$	(8,579	)	$	(1,578	)	$	(9,394	)	$	(19,551	)

13 Weeks Ended July 30, 2011	Wet Seal			Arden B			Corporate and Unallocated			Total
Net sales	$	125,033		$	23,737		$	—		$	148,770
Percentage of consolidated net sales		84	%		16	%		—			100	%
Operating income (loss)	$	10,280		$	1,449		$	(8,404	)	$	3,325
Depreciation and amortization expense	$	3,929		$	504		$	381		$	4,814
Interest income	$	—		$	—		$	66		$	66
Interest expense	$	—		$	—		$	(44	)	$	(44	)
Income (loss) before provision for income taxes	$	10,280		$	1,449		$	(8,382	)	$	3,347

26 Weeks Ended July 28, 2012	Wet Seal			Arden B			Corporate and Unallocated			Total
Net sales	$	239,914		$	43,292		$	—		$	283,206
Percentage of consolidated net sales		85	%		15	%		—			100	%
Operating income (loss)	$	745		$	(2,882	)	$	(17,847	)	$	(19,984	)
Depreciation and amortization expense	$	7,577		$	911		$	773		$	9,261
Interest income	$	—		$	—		$	76		$	76
Interest expense	$	—		$	—		$	(94	)	$	(94	)
Income (loss) before benefit for income taxes	$	745		$	(2,882	)	$	(17,865	)	$	(20,002	)

26 Weeks Ended July 30, 2011	Wet Seal			Arden B			Corporate and Unallocated			Total
Net sales	$	256,086		$	48,724		$	—		$	304,810
Percentage of consolidated net sales		84	%		16	%		—			100	%
Operating income (loss)	$	29,094		$	4,014		$	(16,457	)	$	16,651
Depreciation and amortization expense	$	7,713		$	1,044		$	724		$	9,481
Interest income	$	—		$	—		$	138		$	138
Interest expense	$	—		$	—		$	(87	)	$	(87	)
Income (loss) before provision for income taxes	$	29,094		$	4,014		$	(16,406	)	$	16,702

The “Corporate and Unallocated” column is presented solely to allow for reconciliation of segment contribution to consolidated operating (loss) income, interest income, interest expense and (loss) income before (benefit) provision 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.

Corporate expenses during the 13 and 26 weeks ended July 28, 2012, include $1.9 million of potential severance costs resulting from the departure of the Company’s previous chief executive officer (no severance agreement has yet been entered into).

Wet Seal operating (loss) income during the 13 and 26 weeks ended July 28, 2012, and July 30, 2011, includes $7.9 million, $10.6 million, $0.6 million and $0.8 million, respectively, of asset impairment charges.

Arden B operating (loss) income during the 13 and 26 weeks ended July 28, 2012, and July 30, 2011, includes $1.1 million, $2.0 million, $0.5 million and $0.5 million, respectively, of asset impairment charges.