Note 5 - Inventories

12 Months Ended

Nov. 26, 2011

5. Inventories

Inventories consist of the following:

	November 26, 2011			November 27, 2010
Wholesale finished goods	$	26,873		$	24,934
Work in process		222			244
Raw materials and supplies		5,660			6,100
Retail merchandise		20,504			18,810
Total inventories on first-in, first-out method		53,259			50,088
LIFO adjustment		(6,955	)		(6,550	)
Reserve for excess and obsolete inventory		(1,175	)		(1,728	)
	$	45,129		$	41,810

During 2009, we liquidated certain LIFO inventories, which decreased cost of sales by $1,232. We source a significant amount of our wholesale product from other countries. During 2011, 2010 and 2009, purchases from our two largest vendors located in China and Vietnam were $24,996, $24,229 and $19,021 respectively.

We estimate an inventory reserve for excess quantities and obsolete items based on specific identification and historical write-offs, taking into account future demand, market conditions and the respective valuations at LIFO. The need for these reserves is primarily driven by the normal product life cycle. As products mature and sales volumes decline, we rationalize our product offerings to respond to consumer tastes and keep our product lines fresh. If actual demand or market conditions in the future are less favorable than those estimated, additional inventory write-downs may be required. In determining reserves, we calculate separate reserves on our wholesale and retail inventories. Our wholesale inventories tend to carry the majority of the reserves for excess quantities and obsolete inventory due to the nature of our distribution model. These wholesale reserves primarily represent design and/or style obsolescence. Typically, product is not shipped to our retail warehouses until a consumer has ordered and paid a deposit for the product. We do not typically hold retail inventory for stock purposes. Consequently, floor sample inventory and inventory for delivery to customers account for the majority of our inventory at retail. Retail reserves are based on accessory and clearance floor sample inventory in our stores and any inventory that is not associated with a specific customer order in our retail warehouses.

Activity in the reserves for excess quantities and obsolete inventory by segment are as follows:

	Wholesale Segment			Retail Segment			Total
Balance at November 28, 2009	$	1,465		$	389		$	1,854
Additions charged to expense		1,588			226			1,814
Write-offs		(1,534	)		(406	)		(1,940	)
Balance at November 27, 2010		1,519			209			1,728
Additions charged to expense		688			272			960
Write-offs		(1,220	)		(293	)		(1,513	)
Balance at November 26, 2011	$	987		$	188		$	1,175

- Definition

The entire disclosure for inventory. This may include, but is not limited to, the basis of stating inventory, the method of determining inventory cost, the major classes of inventory, and the nature of the cost elements included in inventory. If inventory is stated above cost, accrued net losses on firm purchase commitments for inventory and losses resulting from valuing inventory at the lower-of-cost-or-market may also be included. For LIFO inventory, may disclose the amount and basis for determining the excess of replacement or current cost over stated LIFO value and the effects of a LIFO quantities liquidation that impacts net income.

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