Note 2 — Asset Impairment

If an indicator of impairment exists, the Company reviews property and equipment on a store-by-store basis to determine whether the carrying amount of the asset exceeds its fair value. The Company models estimated future cash flows on a store-by-store basis and compares the present value, using an appropriate discount rate, of these cash flows to the carrying amount of the assets to determine if impairment exists. The underlying estimates of cash flows include estimates of future revenues, gross margin rates and store expenses as well as any potential for changes related to occupancy costs, store closures and transfer sales. These assumptions are based upon the stores' past and expected future performance. To the extent the estimates for revenue growth, gross margin rates, and store expense projections are not realized, the Company could record an impairment charge.

In the second quarter of 2011, due to underperformance in certain retail businesses, the Company revised its projections used in determining whether its store assets were impaired. This impairment test indicated that $44.7 million of the Company's assets had a fair value of $10.6 million and, as such, the Company recorded a $34.1 million impairment charge. The following table summarizes the asset impairment charges by reporting segment:


	13 Weeks Ended						26 Weeks Ended
	July 30,		July 31,		Increase		July 30,		July 31,		Increase
(dollars in millions)	2011		2010		(Decrease)		2011		2010		(Decrease)

Payless Domestic	$	27.3	$	1.1	$	26.2	$	28.6	$	1.1	$	27.5
Payless International		2.8		0.3		2.5		2.8		0.3		2.5
PLG Wholesale		0.7		—		0.7		0.7		—		0.7
PLG Retail		3.3		0.2		3.1		3.3		0.2		3.1

Total	$	34.1	$	1.6	$	32.5	$	35.4	$	1.6	$	33.8