IMPAIRMENT OF LONG-LIVED ASSETS

The Company assesses long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying value of such assets (or asset group) may not be recoverable. Based on management’s review of the historical operating performance, including sales trends, gross margin rates, current cash flows from operations and the projected outlook for each of the Company’s stores, the Company determined that certain stores would not be able to generate sufficient cash flows over the remaining term of the related leases to recover the Company’s investment in the respective stores. In the event that management determines it is more likely than not a store will be closed, the Company evaluates whether it is necessary to change the depreciation estimates of the related store assets. Any changes to depreciation estimates as a result of that assessment are considered for the purposes of projecting the undiscounted cash flows in conjunction with testing the related assets for recoverability. The Company recorded the following non-cash impairment charges related to its retail stores within the accompanying Consolidated Statements of Operations and Comprehensive Operations, to write-down the carrying value of its long-lived store assets to their estimated fair values.



	Fourth Quarter Ended				Fiscal Year Ended
	(Unaudited)
	(In thousands)
	January 31, 2015		February 1, 2014		January 31, 2015		February 1, 2014		February 2, 2013
Impairment charges from continuing operations	$	204	$	1,168	$	2,244	$	3,190	$	5,174
Impairment charges from discontinued operations	—		5		—		14		167
Total impairment charges	$	204	$	1,173	$	2,244	$	3,204	$	5,341



	January 31, 2015		February 1, 2014
	(In thousands, except number of stores)
Carrying value of assets tested for impairment	$	1,115	$	3,661
Carrying value of assets with impairment	$	291	$	1,500
Fair value of assets impaired	$	87	$	327
Number of stores tested for impairment	41		56
Number of stores with impairment	8		12

The long-lived assets disclosed above that were written down to their respective fair values consisted primarily of leasehold improvements, furniture, fixtures and equipment. The Company recognized impairment charges of $0.2 million and $1.2 million, respectively, during the fourth fiscal quarters ended January 31, 2015 and February 1, 2014, respectively, and $2.2 million, $3.2 million and $5.3 million, during the fiscal years ended January 31, 2015, February 1, 2014 and February 2, 2013, respectively.

The decrease in the number of stores tested for impairment year-over-year was primarily related to the Company’s recent closure of certain underperforming stores and the improved financial performance of the remaining store base. Based on historical operating performance and the projected outlook for a subset of the stores tested for impairment as of January 31, 2015, the Company believes that the remaining asset value of approximately $0.1 million, is recoverable.

During the third quarter of fiscal 2014, the Company determined that certain software previously capitalized for internal use was abandoned. As a result, the Company recorded an impairment charge of $1.1 million and accrued approximately $0.4 million related to future software maintenance costs.