BASIS OF PRESENTATION

9 Months Ended

Oct. 27, 2012

BASIS OF PRESENTATION

BASIS OF PRESENTATION

NOTE 1 — BASIS OF PRESENTATION

The unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q have been prepared by Christopher & Banks Corporation and its subsidiaries (collectively referred to as “Christopher & Banks”, “the Company”, “we” or “us”) pursuant to the current rules and regulations of the United States Securities and Exchange Commission.  Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed, or omitted, pursuant to such rules and regulations. These unaudited condensed consolidated financial statements should be read in conjunction with the audited financial statements and related notes included in our Transition Report on Form 10-K for the eleven-month transition period ended January 28, 2012.

In January 2012, our Board of Directors amended and restated our By-Laws to provide that our fiscal year ends at the close of business on that Saturday which falls closest to the last day of January.  Prior to this change, our fiscal year ended at the close of business on that Saturday which fell closest to the last day of February.  In order to transition to our new fiscal calendar, our last fiscal year was shortened from twelve months to eleven months, resulting in an eleven-month transition period ended January 28, 2012 (the “transition period”).  In this Quarterly Report on Form 10-Q, our current fiscal year, the 53-week period ending February 2, 2013, is referred to as fiscal 2012.

The results of operations for the interim periods shown in this report are not necessarily indicative of results to be expected for the full fiscal year.  In the opinion of management, the information contained herein reflects all adjustments, consisting only of normal adjustments, except as otherwise stated in these notes, necessary to present fairly our financial position as of October 27, 2012 and January 28, 2012, our results of operations for the thirteen and thirty-nine-week periods ended October 27, 2012 and November 26, 2011 and our cash flows for the thirty-nine-week periods ended October 27, 2012 and November 26, 2011.

Private Label Credit Card Program

Duringthefirstquarteroffiscal2012,welaunchedaprivatelabelcreditcardprogramwithasponsoringbankwhichprovidesfortheissuanceofcreditcardsbearingtheChristopher&BanksandC.J.Banksbrands.Thesponsoringbankmanagesandextendscredittoourcustomersandisthesoleowneroftheaccountsreceivablegeneratedundertheprogram.Aspartoftheprogram,wereceivedasigningbonusof$0.5millionfromthesponsoringbankandalsoearnrevenuebasedoncardusagebyourcustomers.Thedeferredsigningbonusisincludedinotherliabilitiesandisbeingrecognizedinnetsalesratablyoverthetermofthecontract.Theotherrevenuebasedoncustomerusageofthecardisrecognizedinnetsalesintheperiodsinwhichtherelatedcustomertransactionoccurs.Inaddition,thesponsoringbankreimbursesusforcertainmarketingexpendituresrelatedtotheprogram,subjecttoanannualcapontheamountofreimbursableexpenses.Theamountsrelatedtotheprivatelabelcreditcardprogrampertainingtothethirteenandthirty-nineweeksendedOctober27,2012werenotmaterialtotheconsolidatedfinancialstatements.

Recently Adopted Accounting Pronouncements

In May 2011, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2011-04, “Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in US GAAP and IFRS.”  ASU 2011-04 amends ASC 820, “Fair Value Measurement,” by expanding existing disclosure requirements for fair value measurements and modifying certain definitions in the guidance, which may change how the fair value measurement guidance of ASC 820 is applied.  The Company adopted ASU 2011-04 effective January 29, 2012.  The adoption of this pronouncement has not had a significant impact on our condensed consolidated financial statements and these changes are not expected to impact the consolidated financial statements in the future.

In June 2011, the FASB issued ASU 2011-05, “Presentation of Comprehensive Income.”  ASU 2011-05 amends Accounting Standards Codification (“ASC”) 220-10, “Comprehensive Income,” and requires that all changes in comprehensive income be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements and also requires the presentation of reclassification adjustments on the face of the financial statements from other comprehensive income to net income.  The Company adopted ASU 2011-05 effective January 29, 2012.  This pronouncement requires changes in presentation only and thus did not have any impact on our financial position or results of operations.

Immaterial Correction of an Error

In connection with the preparation of our financial statements for the transition period, we determined that purchases and redemptions of available-for-sale securities, as presented within the investing activities section of our consolidated statement of cash flows, incorrectly included activity related to cash equivalents for the year-to-date periods ended May 28, 2011, August 27, 2011 and November 26, 2011.  We have revised our statement of cash flows for the thirty-nine weeks ended November 26, 2011 presented within this quarterly report on Form 10-Q to accurately reflect purchases and redemptions of available-for-sale securities.  The effect of this revision was a decrease of purchases of available-for-sale securities by $45.6 million and a corresponding decrease of redemptions of available-for-sale securities by $45.6 million. There was no impact on net cash provided by investing activities or cash and cash equivalents or available-for-sale securities, as previously reported.  We have concluded this correction is immaterial to the financial statements taken as a whole.

Reclassifications

Certain prior year amounts included in other accrued liabilities on the consolidated balance sheets have been reclassified to accounts payable to conform to the current year presentation.  Corresponding reclassifications were made within the operating section of the consolidated statement of cash flows.  These reclassifications have no impact on previously reported net loss, current liabilities or net cash flows from operating activities.  We believe the changes related to merchandise deliveries received, but not yet invoiced, will provide enhanced transparency.

In addition, beginning in the second quarter of fiscal 2012, we have classified the change in certain deferred lease-related liabilities (deferred lease incentives and deferred rent obligations) as an adjustment to reconcile net loss to net cash used in operating activities on the consolidated statement of cash flows.  Prior year amounts previously reported as a change in operating assets and liabilities within the operating activities section of the consolidated statement of cash flows have been reclassified to conform to the current year presentation.  The reclassification has no impact on previously reported net cash flows from operating activities.