Segment Reporting

12 Months Ended

Feb. 02, 2013

Segment Reporting [Abstract]

SEGMENT REPORTING

SEGMENT REPORTING

The Company determines its segments on the same basis that it uses to allocate resources and assess performance. All of the Company’s segments sell a similar group of products—casual sportswear apparel, personal care products and accessories for men, women and kids and bras, underwear and sleepwear for girls. The Company has three reportable segments: U.S. Stores, International Stores, and Direct-to-Consumer. Corporate functions, interest income and expense, and other income and expense are evaluated on a consolidated basis and are not allocated to the Company’s segments, and therefore are included in Other.

The U.S. Stores reportable segment includes the results of store operations in the United States and Puerto Rico, including outlet stores. The International Stores reportable segment includes the results of store operations in Canada, Europe and Asia and sell-off of merchandise to authorized third-party resellers. The Direct-to-Consumer reportable segment includes the results of operations directly associated with on-line operations, both domestic and international.

Operating income is the primary measure of profit the Company uses to make decisions regarding the allocation of resources to its operating segments. For the U.S. Stores and International Stores reportable segments, operating income is defined as aggregate income directly attributable to individual stores on a four-wall basis. Four-wall expense includes all expenses contained “within the four walls of the stores.” The four-wall expense includes: cost of merchandise, selling payroll and related costs, rent, utilities, depreciation, repairs and maintenance, supplies and packaging and other store sales-related expenses including credit card and bank fees and taxes. Operating income also reflects pre-opening charges related to stores not yet in operation. For the Direct-to-Consumer reportable segment, operating income is defined as aggregate income attributable to the direct-to-consumer business, less call center, fulfillment and shipping expense, charge card fees and direct-to-consumer operations management and support expenses. The U.S. Stores, International Stores and Direct-to-Consumer segments exclude marketing, general and administrative expense; store management and support functions such as regional and district management and other functions not dedicated to an individual store; and distribution center costs. All costs excluded from the three reportable segments are included in Other.

Reportable segment assets include those used directly in or resulting from the operations of each reportable segment. Total assets for the U.S. Stores and International Stores reportable segments primarily consist of store cash, credit card receivables, prepaid rent, store packaging and supplies, lease deposits, merchandise inventory, leasehold acquisition costs, restricted cash and the net book value of store long-lived assets. Total assets for International Stores also include VAT receivables. Total assets for the Direct-to-Consumer reportable segment primarily consist of credit card receivables, merchandise inventory, and the net book value of long-lived assets. Total assets for Other include cash, investments, distribution center inventory, the net book value of home office and distribution center long-lived assets, foreign currency hedge assets and tax-related assets. Reportable segment capital expenditures are direct purchases of property and equipment for that segment.

The following table provides the Company’s segment information as of, and for the fiscal years ended February 2, 2013, January 28, 2012 and January 29, 2011. All results reported below have been adjusted based on the change in accounting principle as noted in Note 4.

	U.S. Stores		International Stores		Direct-to- Consumer Operations		Segment Total		Other(1)		Total
	(in thousands):
February 2, 2013
Net Sales	$	2,615,138	$	1,195,016	$	700,651	$	4,510,805	—		$	4,510,805
Depreciation and Amortization	94,367		67,972		5,198		167,537		56,708		224,245
Operating Income(2)	432,040		350,871		269,479		1,052,390		(678,157	)	374,233
Total Assets	587,334		840,317		63,063		1,490,714		1,496,687		2,987,401
Capital Expenditures	3,016		218,933		22,567		244,516		95,346		339,862
January 28, 2012
Net Sales	2,710,842		894,616		552,600		4,158,058		—		4,158,058
Depreciation and Amortization	125,827		35,844		2,876		164,547		68,409		232,956
Operating Income(3)	362,760		282,462		224,759		869,981		(648,597	)	221,384
Total Assets	755,330		661,680		90,922		1,507,932		1,609,100		3,117,032
Capital Expenditures	1,105		229,959		8,367		239,431		79,167		318,598
January 29, 2011
Net Sales	2,546,798		517,005		404,974		3,468,777		—		3,468,777
Depreciation and Amortization	149,533		17,680		3,154		170,367		58,786		229,153
Operating Income(4)	392,626		192,583		197,809		783,018		(545,838	)	237,180
Total Assets	898,157		370,209		46,331		1,314,697		1,679,325		2,994,022
Capital Expenditures	24,706		85,435		816		110,957		49,978		160,935

⁽¹⁾  Includes corporate functions such as Design, Merchandising, Sourcing, Planning, Allocation, Store Management and Support, Marketing, Distribution Center Operations, Information Technology, Real Estate, Finance, Legal, Human Resources and other corporate overhead. Operating Income includes: marketing, general and administrative expense; store management and support functions such as regional and district management and other functions not dedicated to an individual store; and distribution center costs.

⁽²⁾  Includes charges for asset impairments of $7.4 million for U.S. Stores.

⁽³⁾  Includes charges for asset impairments and write-down of store-related long-lived assets of $52.1 million and $15.9 million for U.S. Stores and International Stores, respectively.

⁽⁴⁾  Includes charges for asset impairments of $50.6 million for U.S. Stores.

Geographic Information

Financial information relating to the Company’s operations by geographic area is as follows:

Net Sales:

Net sales includes net merchandise sales through stores and direct-to-consumer operations, including shipping and handling revenue. Net sales are reported by geographic area based on the location of the customer.

	Fiscal 2012		Fiscal 2011		Fiscal 2010
	(in thousands):
United States	$	3,087,205	$	3,108,380	$	2,821,993
Europe	1,137,664		822,473		443,836
Other International	285,936		227,205		202,948
Total	$	4,510,805	$	4,158,058	$	3,468,777

Long-Lived Assets:

	February 2, 2013		January 28, 2012
	(in thousands):
United States	$	742,926	$	794,723
Europe	496,960		366,647
Other International	177,780		156,361
Total	$	1,417,666	$	1,317,731

Long-lived assets included in the table above include primarily property and equipment (net), store supplies and lease deposits.