Property and Equipment

12 Months Ended

Dec. 31, 2012

3. PROPERTY AND EQUIPMENT

The following table summarizes property and equipment by major classification as of December 31, 2012 and 2011:


	December 31,
($ thousands)	2012		2011
Machinery and equipment	$	68,713	$	68,005
Leasehold improvements		88,653		65,338
Furniture, fixtures and other		20,827		16,196
Construction-in-progress		8,766		7,902
Property and equipment, gross ⁽¹⁾		186,959		157,441
Less: Accumulated depreciation ⁽²⁾		(104,718)		(89,757)
Property and equipment, net	$	82,241	$	67,684

⁽¹⁾ Includes $0.1 million and $0.3 million of certain equipment held under capital leases and classified as equipment as of December 31, 2012 and 2011, respectively.

⁽²⁾ Includes $0.1 million and $0.3 million of accumulated depreciation related to certain equipment held under capital leases, as of December 31, 2012 and 2011, respectively, which are depreciated using the straight-line method over the lease term.

During the years ended December 31, 2012, 2011 and 2010, we recorded $23.1 million, $27.5 million and $29.5 million, respectively, in depreciation expense of which $4.6 million, $11.5 million and $14.7 million, respectively, was recorded in cost of sales, with the remaining amounts recorded in selling, general and administrative expenses on the consolidated statements of operations.

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 year ended December 31, 2012, we recorded $1.4 million in 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 years ended December 31, 2011 and 2010, we recorded $0.5 million and $0.1 million, respectively, in impairment charges which primarily related to obsolete molds which were previously depreciated to costs of sales.

- 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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