Business Segment Information

12 Months Ended

Jan. 28, 2012

Business Segment Information [Abstract]

Business Segment Information

8. BUSINESS SEGMENT INFORMATION

The Company's reportable segments include Famous Footwear, Wholesale Operations, Specialty Retail and Other.

Famous Footwear, which represents the Company's largest division, operated 1,089 stores at the end of 2011, primarily selling branded footwear for the entire family.

The Wholesale Operations segment sources and markets licensed, branded and private-label footwear primarily to national chains, mass merchandisers and department stores as well as Company-owned Famous Footwear and Specialty Retail segments.

The Specialty Retail segment included 105 stores in the United States, 106 stores in Canada and 23 stores in China at the end of 2011, selling primarily Naturalizer brand footwear in regional malls and outlet centers as well as other e-commerce businesses.

The Other segment includes corporate assets and administrative expenses and other costs and recoveries that are not allocated to the operating units.

The Company's reportable segments are operating units that market to different customers and are each managed separately as they distribute their products on a retail or wholesale basis. An operating segment's performance is evaluated and resources are allocated based on operating earnings (loss). Operating earnings (loss) represent gross profit, less selling and administrative expenses and restructuring and other special charges, net. The accounting policies of the reportable segments are the same as those described in Note 1. Intersegment sales are generally recorded at a profit to the selling segment. All intersegment earnings related to inventory on hand at the purchasing segment are eliminated against the earnings of the selling segment.

($ thousands)	Famous Footwear		Wholesale Operations		Specialty Retail			Other			Total
Fiscal 2011
External sales	$	1,456,314	$	870,873	$	255,637		$	-		$	2,582,824
Intersegment sales		2,156		211,631		-			-			213,787
Depreciation and amortization		26,116		15,521		3,517			16,295			61,449
Operating earnings (loss)		62,515		16,739		(7,627	)		(36,077	)		35,550
Operating segment assets		435,344		595,355		56,151			140,626			1,227,476
Purchases of property and equipment		16,272		5,991		3,901			1,693			27,857
Capitalized software		273		15		-			10,419			10,707
Fiscal 2010
External sales	$	1,486,538	$	754,389	$	263,164		$	-		$	2,504,091
Intersegment sales		1,939		192,157		-			-			194,096
Depreciation and amortization		26,017		9,410		3,852			13,238			52,517
Operating earnings (loss)		90,419		32,227		(5,970	)		(44,012	)		72,664
Operating segment assets		473,098		401,700		56,941			216,304			1,148,043
Purchases of property and equipment		22,066		2,619		2,730			3,366			30,781
Capitalized software		253		-		-			23,793			24,046
Fiscal 2009
External sales	$	1,363,617	$	631,785	$	246,566		$	-		$	2,241,968
Intersegment sales		2,186		193,114		-			-			195,300
Depreciation and amortization		29,405		9,908		4,476			9,506			53,295
Operating earnings (loss)		44,617		41,129		(14,246	)		(39,977	)		31,523
Operating segment assets		453,927		292,052		62,154			232,017			1,040,150
Purchases of property and equipment		19,129		1,888		1,931			1,932			24,880
Capitalized software		1,127		48		-			23,923			25,098

Following is a reconciliation of operating earnings to earnings before income taxes from continuing operations:

($ thousands)	2011			2010			2009
Operating earnings	$	35,550		$	72,664		$	31,523
Interest expense		(26,141	)		(19,647	)		(20,195	)
Loss on early extinguishment of debt		(1,003	)		-			-
Interest income		644			203			374
Earnings before income taxes from continuing operations	$	9,050		$	53,220		$	11,702

In 2011, the impact of restructuring and other special charges, net included in operating earnings was as follows:

·   Wholesale – $10.5 million of charges related to the Company's portfolio realignment and $2.5 million related to integration costs of ASG.

·   Other – $4.0 million of charges related to the Company's acquisition and integration costs of ASG and $3.3 million of charges related to portfolio realignment.

·   Famous Footwear – $2.8 million of charges related to the Company's portfolio realignment.

·   Specialty Retail – $0.6 million of charges related to the Company's portfolio realignment.

In 2010, the impact of restructuring and other special charges, net, included in operating earnings was as follows:

·   Other – $6.1 million of charges related to the Company's information technology initiatives and $1.1 million of charges related to the acquisition of ASG.

·   Wholesale Operations – $0.7 million of charges related to the Company's information technology initiatives.

In 2009, the impact of restructuring and other special charges, net included in operating earnings was as follows:

·   Other – $8.9 million of charges related to the Company's information technology initiatives and $4.6 million of charges related to the Company's organizational changes, partially offset by $1.9 million of income related to the Company's headquarters consolidation.

·   Wholesale Operations – $0.3 million of charges related to the Company's information technology initiatives.

For geographic purposes, the domestic operations include the wholesale distribution of licensed, branded and private-label footwear to a variety of retail customers, including the Company's Famous Footwear and Specialty Retail stores and e-commerce business.

The Company's foreign operations primarily consist of wholesale operations in the Far East and retail operations in Canada, China and Guam. The Far East operations include the manufacture of footwear at facilities owned by the Company and first-cost transactions, where footwear is sold at foreign ports to customers who then import the footwear into the United States and other countries.

A summary of the Company's net sales and long-lived assets by geographic area were as follows:

($ thousands)	2011		2010		2009
Net Sales
United States	$	2,259,907	$	2,179,658	$	1,978,656
Far East		215,263		217,346		190,750
Canada		107,654		107,087		72,562
Total net sales	$	2,582,824	$	2,504,091	$	2,241,968
Long-Lived Assets
United States	$	396,412	$	331,092	$	321,494
Far East		10,632		3,749		4,159
Canada		5,223		4,888		6,007
Latin America, Europe and other		71		33		241
Total long-lived assets	$	412,338	$	339,762	$	331,901

Long-lived assets consisted primarily of property and equipment, goodwill and intangible assets, prepaid pension costs and other noncurrent assets.