Derivative Financial Instruments

6 Months Ended

Jul. 30, 2011

Derivative Financial Instruments [Abstract]

Derivative Financial Instruments

12. Derivative Financial Instruments

     We are exposed to market risk associated with foreign currency exchange rate fluctuations as a result of our direct sourcing programs and our operations in foreign countries. In connection with our direct sourcing programs, we may enter into merchandise purchase commitments that are denominated in a currency different from the functional currency of the operating entity. Our risk management policy is to hedge a significant portion of forecasted merchandise purchases for our direct sourcing programs that bear foreign exchange risk using foreign exchange forward contracts. During the second quarter of fiscal 2010, we had designated as and accounted for our foreign exchange forward contracts as cash flow hedges. Beginning in the third quarter of fiscal 2010, the Company no longer designates and accounts for foreign exchange forward contracts as cash flow hedges and has not elected to apply hedge accounting to these transactions denominated in a foreign currency.

     Our derivative financial instruments are recorded in the condensed consolidated balance sheet at fair value determined by comparing the cost of the foreign currency to be purchased under the contracts using the exchange rates obtained under the contracts (adjusted for forward points) to the hypothetical cost using the spot rate at period end.

     The tables below disclose the fair value of the derivative financial instruments included in the condensed consolidated balance sheets as of July 30, 2011, January 29, 2011 and July 31, 2010.

	July 30, 2011
	Asset Derivatives			Liability Derivatives
	Balance Sheet			Balance Sheet
(in thousands)	Location	Fair Value		Location	Fair Value
Derivatives not designated as hedging instruments:
Foreign exchange forward contracts	Other current assets	$	89	Accrued expenses and other current liabilities	$	362

	January 29, 2011
	Asset Derivatives			Liability Derivatives
	Balance Sheet			Balance Sheet
(in thousands)	Location	Fair Value		Location	Fair Value
Derivatives not designated as hedging instruments:
Foreign exchange forward contracts	Other current assets	$	361	Accrued expenses and other current liabilities	$	35

	July 31, 2010
	Asset Derivatives			Liability Derivatives
	Balance Sheet			Balance Sheet
(in thousands)	Location	Fair Value		Location	Fair Value
Derivatives designated as hedging instruments:
Foreign exchange forward contracts designated as cash flow hedges	Other current assets	$	155	Accrued expenses and other current liabilities	$	60

     At July 30, 2011, we had two contracts to purchase euros for an aggregate notional amount of US$1.0 million maturing in various increments at various dates through October 2011, six contracts to purchase United States dollars (“USD”) for an aggregate notional amount of Canadian dollars (“CAD”) $6.1 million maturing in various increments at various dates through December 2011 and 34 contracts to purchase USD for an aggregate notional amount of pounds Sterling (“GBP”) £11.9 million maturing in various increments at various dates through November 2011. For the three and six months ended July 30, 2011, we recognized a net pretax loss of $0.8 million and $1.5 million, respectively, in cost of sales in the condensed consolidated statement of earnings for our derivative financial instruments not designated as hedging instruments.

     At January 29, 2011, we had six contracts to purchase euros for an aggregate notional amount of US$3.8 million maturing in various increments at various dates through October 2011, 10 contracts to purchase USD for an aggregate notional amount of CAD $5.8 million maturing in various increments at various dates through May 2011 and 70 contracts to purchase USD for an aggregate notional amount of GBP £27.6 million maturing in various increments at various dates through September 2011.

     At July 31, 2010, we had three contracts maturing in varying increments to purchase an aggregate notional amount of $2.9 million in foreign currency, maturing at various dates through March 2011. No amounts were recorded in our results of operations for the six months ended July 31, 2010 as a result of hedge ineffectiveness, hedge components excluded from the assessment of effectiveness or the discontinuance of cash flow hedges because the forecasted transactions were no longer probable. As of July 31, 2010, accumulated other comprehensive income included an unrealized gain of approximately $0.1 million, net of tax, which was subsequently recognized in the third quarter of fiscal 2010 as a reduction to cost of sales. No amounts were reclassified from accumulated other comprehensive income to earnings for the six months ended July 31, 2010.

     We had no derivative financial instruments with credit-risk-related contingent features underlying the agreements as of July 30, 2011, January 29, 2011 or July 31, 2010, respectively.