Property and Equipment

6 Months Ended

Jun. 30, 2013

3. PROPERTY & EQUIPMENT

The following table summarizes property and equipment by major classification as of June 30, 2013 and December 31, 2012:


	June 30,		December 31,
($ thousands)	2013		2012
Machinery and equipment	$	70,704	$	68,713
Leasehold improvements		96,530		88,653
Furniture, fixtures and other		23,872		20,827
Construction-in-progress		9,465		8,766
Property and equipment, gross ⁽¹⁾		200,571		186,959
Less: Accumulated depreciation ⁽²⁾		(111,801)		(104,718)
Property and equipment, net	$	88,770	$	82,241

⁽¹⁾ Includes $0.2 million and $0.1 million of certain equipment held under capital leases and classified as equipment as of June 30, 2013 and December 31, 2012, respectively.

⁽²⁾ Includes $0.1 million and $0.1 million of accumulated depreciation related to certain equipment held under capital leases as of June 30, 2013 and December 31, 2012, respectively, which are depreciated using the straight-line method over the lease term.

During the three months ended June 30, 2013 and 2012, we recorded $5.9 million and $6.0 million, respectively, in depreciation expense of which $0.8 million and $1.1 million, respectively, was recorded in ‘Cost of sales’, with the remaining amounts recorded in ‘Selling, general and administrative expenses’ in the condensed consolidated statements of income. During the six months ended June 30, 2013 and 2012, we recorded $12.0 million and $11.5 million, respectively, in depreciation expense of which $1.6 million and $2.6 million, respectively, was recorded in ‘Cost of sales’, with the remaining amounts recorded in ‘Selling, general and administrative expenses’ in the condensed consolidated statements of income.

We periodically evaluate all of our long-lived assets for impairment when events or circumstances would indicate the carrying value of a long-lived asset may not be fully recoverable. During the three and six months ended June 30, 2013, we recorded $0.2 million of asset impairment charges related to certain underperforming domestic stores in the Americas segment that were unlikely to generate sufficient cash flows to fully recover the carrying value of the stores' assets over the remaining economic life of those assets. During the three and six months ended June 30, 2012, we recorded $0.1 million and $0.8 million, respectively, of asset impairment charges related to certain underperforming domestic stores in the Americas segment that were unlikely to generate sufficient cash flows to fully recover the carrying value of the stores' assets over the remaining economic life of those assets.

- Definition

The entire disclosure for long-lived, physical assets that are used in the normal conduct of business to produce goods and services and not intended for resale. Examples include land, buildings, machinery and equipment, and other types of furniture and equipment including, but not limited to, office equipment, furniture and fixtures, and computer equipment and software. This disclosure may include property plant and equipment accounting policies and methodology, a schedule of property, plant and equipment gross, additions, deletions, transfers and other changes, depreciation, depletion and amortization expense, net, accumulated depreciation, depletion and amortization expense and useful lives, income statement disclosures, assets held for sale and public utility disclosures.

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