OTHER CHARGES (GAINS)

9 Months Ended

Apr. 30, 2014

OTHER CHARGES (GAINS)

OTHER CHARGES (GAINS)

5. OTHER CHARGES (GAINS)

        During the second quarter of fiscal years 2014 and 2013, we recorded charges related to the impairment of long-lived assets for underperforming stores, primarily in Fine Jewelry, totaling $0.5 million and $0.9 million, respectively. The impairment of long-lived assets is based on the amount that the carrying value exceeds the estimated fair value of the assets. The fair value is based on future cash flow projections over the remaining lease term using a discount rate that we believe is commensurate with the risk inherent in our current business model. If actual results are not consistent with our cash flow projections, we may be required to record additional impairments.

        Beginning in June 2004, various class-action lawsuits were filed alleging that the De Beers group violated U.S. state and federal antitrust, consumer protection and unjust enrichment laws. During the three and nine months ended April 30, 2013, we received proceeds totaling $0.3 million and $2.2 million, respectively, as a result of a settlement reached in the lawsuit.