e10vq

0000950123-11-082415.txt : 20110902 0000950123-11-082415.hdr.sgml : 20110902 20110902152439 ACCESSION NUMBER: 0000950123-11-082415 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 10 CONFORMED PERIOD OF REPORT: 20110730 FILED AS OF DATE: 20110902 DATE AS OF CHANGE: 20110902 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CLAIRES STORES INC CENTRAL INDEX KEY: 0000034115 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-APPAREL & ACCESSORY STORES [5600] IRS NUMBER: 590940416 STATE OF INCORPORATION: DE FISCAL YEAR END: 0203 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 333-148108 FILM NUMBER: 111073521 BUSINESS ADDRESS: STREET 1: 2400 WEST CENTRAL RD CITY: HOFFMAN ESTATES STATE: IL ZIP: 60192 BUSINESS PHONE: 9544333900 MAIL ADDRESS: STREET 1: 2400 WEST CENTRAL RD CITY: HOFFMAN ESTATES STATE: IL ZIP: 30192 FORMER COMPANY: FORMER CONFORMED NAME: FT INDUSTRIES INC DATE OF NAME CHANGE: 19831006 FORMER COMPANY: FORMER CONFORMED NAME: FASHION TRESS INC DATE OF NAME CHANGE: 19750923 10-Q 1 g27469e10vq.htm FORM 10-Q e10vq

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


þ		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended July 30, 2011


o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Nos. 1-8899 and 333-148108

Claire’s Stores, Inc.

(Exact name of registrant as specified in its charter)


Florida		59-0940416

(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)


2400 West Central Road, Hoffman Estates, Illinois		60192

(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (847) 765-1100

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark whether registrant has submitted electronically and posted on its corporate web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files ) Yes þ No o

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “large accelerated filer”, “accelerated filer”, and “smaller reporting company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer o	Accelerated filer o	Non-accelerated filer þ	Smaller reporting company o
		(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

As of September 1, 2011, 100 shares of the Registrant’s common stock, $0.001 par value, were outstanding.

CLAIRE’S STORES, INC. AND SUBSIDIARIES
INDEX


	PAGE NO.
PART I. FINANCIAL INFORMATION

Item 1. Financial Statements		3

Unaudited Condensed Consolidated Balance Sheets as of July 30, 2011 and January 29, 2011		3

Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for the Three and Six Months Ended July 30, 2011 and July 31, 2010		4

Unaudited Condensed Consolidated Statements of Cash Flows for the Six Months Ended July 30, 2011 and July 31, 2010		5

Notes to Unaudited Condensed Consolidated Financial Statements		6

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		22

Item 3. Quantitative and Qualitative Disclosures About Market Risk		34

Item 4. Controls and Procedures		35

PART II. OTHER INFORMATION

Item 1. Legal Proceedings		36

Item 1A. Risk Factors		36

Item 6. Exhibits		36

SIGNATURE PAGE		37
EX-31.1
EX-31.2
EX-32.1
EX-32.2
EX-101 INSTANCE DOCUMENT
EX-101 SCHEMA DOCUMENT
EX-101 CALCULATION LINKBASE DOCUMENT
EX-101 LABELS LINKBASE DOCUMENT
EX-101 PRESENTATION LINKBASE DOCUMENT

PART I. FINANCIAL INFORMATION
CLAIRE’S STORES, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS


	July 30, 2011			January 29, 2011
	(In thousands, except share and per share amounts)
ASSETS
Current assets:
Cash and cash equivalents and restricted cash of $26,725 and $23,864, respectively	$	211,127		$	279,766
Inventories		147,665			136,148
Prepaid expenses		33,828			21,449
Other current assets		27,189			24,658

Total current assets		419,809			462,021

Property and equipment:
Furniture, fixtures and equipment		203,516			186,514
Leasehold improvements		271,986			248,030

		475,502			434,544
Less accumulated depreciation and amortization		(265,314	)		(233,511	)

		210,188			201,033

Leased property under capital lease:
Land and building		18,055			18,055
Less accumulated depreciation and amortization		(1,354	)		(903	)

		16,701			17,152


Goodwill		1,550,056			1,550,056
Intangible assets, net of accumulated amortization of $45,495 and $38,747, respectively		558,030			557,466
Deferred financing costs, net of accumulated amortization of $50,811 and $41,659, respectively		37,826			36,434
Other assets		45,907			42,287

		2,191,819			2,186,243


Total assets	$	2,838,517		$	2,866,449


LIABILITIES AND STOCKHOLDER’S DEFICIT
Current liabilities:
Short-term debt and current portion of long-term debt	$	61,042		$	76,154
Trade accounts payable		64,870			54,355
Income taxes payable		10,486			11,744
Accrued interest payable		32,282			16,783
Accrued expenses and other current liabilities		91,613			107,115

Total current liabilities		260,293			266,151


Long-term debt		2,425,589			2,236,842
Revolving credit facility		—			194,000
Obligation under capital lease		17,290			17,290
Deferred tax liability		121,112			121,776
Deferred rent expense		27,805			26,637
Unfavorable lease obligations and other long-term liabilities		27,236			30,268

		2,619,032			2,626,813


Commitments and contingencies

Stockholder’s deficit:
Common stock par value $0.001 per share; authorized 1,000 shares; issued and outstanding 100 shares		—			—
Additional paid-in capital		623,241			621,099
Accumulated other comprehensive income, net of tax		14,721			1,416
Accumulated deficit		(678,770	)		(649,030	)

		(40,808	)		(26,515	)


Total liabilities and stockholder’s deficit	$	2,838,517		$	2,866,449

See Accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

CLAIRE’S STORES, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE INCOME (LOSS)
(in thousands)


	Three Months			Three Months			Six Months			Six Months
	Ended			Ended			Ended			Ended
	July 30, 2011			July 31, 2010			July 30, 2011			July 31, 2010
Net sales	$	358,547		$	334,233		$	704,993		$	656,310
Cost of sales, occupancy and buying expenses		175,382			159,220			346,741			317,971

Gross profit		183,165			175,013			358,252			338,339

Other expenses:
Selling, general and administrative		130,209			121,747			256,931			239,766
Depreciation and amortization		16,352			15,856			33,406			32,222
Severance and transaction-related costs		426			212			769			314
Other (income) expense, net		(1,181	)		3,582			4,130			4,812

		145,806			141,397			295,236			277,114

Operating income		37,359			33,616			63,016			61,225
Gain on early debt extinguishment		233			6,249			482			10,736
Impairment of equity investment		—			6,030			—			6,030
Interest expense, net		44,335			40,573			90,570			83,336

Loss before income tax expense		(6,743	)		(6,738	)		(27,072	)		(17,405	)
Income tax expense		3,400			1,607			2,668			3,240

Net loss	$	(10,143	)	$	(8,345	)	$	(29,740	)	$	(20,645	)


Net loss	$	(10,143	)	$	(8,345	)	$	(29,740	)	$	(20,645	)
Foreign currency translation and interest rate swap adjustments, net of tax		(5,125	)		2,513			13,305			(9	)
Reclassification of foreign currency translation adjustments into net loss		—			(9,572	)		—			(9,572	)

Comprehensive loss	$	(15,268	)	$	(15,404	)	$	(16,435	)	$	(30,226	)

See Accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

CLAIRE’S STORES, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)


	Six Months			Six Months
	Ended			Ended
	July 30, 2011			July 31, 2010
Cash flows from operating activities:
Net loss	$	(29,740	)	$	(20,645	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		33,406			32,222
Impairment		—			6,030
Amortization of lease rights and other assets		1,600			1,610
Amortization of debt issuance costs		8,535			5,038
Payment of in kind interest expense		11,831			19,003
Foreign currency exchange net loss on Euro Loan		2,158			—
Net unfavorable accretion of lease obligations		(382	)		(786	)
Loss on sale/retirement of property and equipment, net		58			366
Gain on early debt extinguishment		(482	)		(10,736	)
Stock compensation expense		2,142			2,541
(Increase) decrease in:
Inventories		(8,694	)		(18,501	)
Prepaid expenses		(10,930	)		917
Other assets		(1,912	)		3,945
Increase (decrease) in:
Trade accounts payable		6,899			10,074
Income taxes payable		(5,814	)		(2,590	)
Accrued interest payable		15,462			(5,612	)
Accrued expenses and other liabilities		(19,246	)		8,974
Deferred income taxes		(1,349	)		(352	)
Deferred rent expense		647			1,878

Net cash provided by operating activities		4,189			33,376

Cash flows from investing activities:
Acquisition of property and equipment, net		(32,202	)		(19,556	)
Acquisition of intangible assets/lease rights		(1,873	)		(524	)
Proceeds from sale of property		—			16,765
Changes in restricted cash		(1,680	)		—

Net cash used in investing activities		(35,755	)		(3,315	)

Cash flows from financing activities:
Payments of Credit facility		(438,940	)		(7,250	)
Proceeds from Note		450,000			—
Repurchases of Notes		(45,497	)		(59,112	)
Payment of debt issuance costs		(10,544	)		—
Principal payments of capital leases		—			(765	)

Net cash used in financing activities		(44,981	)		(67,127	)

Effect of foreign currency exchange rate changes on cash and cash equivalents		5,047			(1,510	)

Net decrease in cash and cash equivalents		(71,500	)		(38,576	)
Cash and cash equivalents, at beginning of period		255,902			198,708

Cash and cash equivalents, at end of period		184,402			160,132
Restricted cash, at end of period		26,725			—

Cash and cash equivalents and restricted cash, at end of period	$	211,127		$	160,132


Supplemental disclosure of cash flow information:
Income taxes paid	$	10,123		$	5,829
Interest paid		54,766			65,232

Non-cash investing and financing activities:
Property acquired under capital lease		—			18,055

See Accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

CLAIRE’S STORES, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. Basis of Presentation

The accompanying Unaudited Condensed Consolidated Financial Statements have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair statement of the results for the interim periods presented have been included. These statements should be read in conjunction with the Consolidated Financial Statements and notes thereto included in the Annual Report on Form 10-K for the year ended January 29, 2011 filed with the Securities and Exchange Commission, including Note 2 to the Consolidated Financial Statements included therein which discusses principles of consolidation and summary of significant accounting policies.

The Unaudited Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions about future events. These estimates and the underlying assumptions affect the amounts of assets and liabilities reported, disclosures regarding contingent assets and liabilities and reported amounts of revenues and expenses. Such estimates include, but are not limited to, the value of inventories, goodwill, intangible assets and other long-lived assets, legal contingencies and assumptions used in the calculation of income taxes, retirement and other post-retirement benefits, stock-based compensation, derivative and hedging activities, residual values and other items. These estimates and assumptions are based on management’s best estimates and judgment. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, which management believes to be reasonable under the circumstances. Management adjusts such estimates and assumptions when facts and circumstances dictate. Illiquid credit markets, volatile equity, foreign currency, energy markets and declines in consumer spending have combined to increase the uncertainty inherent in such estimates and assumptions. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. Changes in those estimates will be reflected in the financial statements in those future periods when the changes occur.

Due to the seasonal nature of the retail industry and the Company’s business, the results of operations for interim periods of the year are not necessarily indicative of the results of operations on an annualized basis.

The Unaudited Condensed Consolidated Financial Statements include certain reclassifications of prior period amounts in order to conform to current period presentation.

2. Recent Accounting Pronouncements

In May 2011, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) 2011-04, Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and International Financial Reporting Standards (“IFRSs”) to provide a consistent definition of fair value and ensure that fair value measurements and disclosure requirements are similar between U.S. GAAP and IFRSs. This guidance changes certain fair value measurement principles and enhances the disclosure requirements for fair value measurements. The amendments in this ASU are effective for interim and annual fiscal periods beginning after December 15, 2011 and are applied prospectively. Early adoption by public entities is not permitted. The Company does not expect adoption of ASU 2011-04 will have a material impact on the Company’s financial position, results of operations or cash flows.

3. Fair Value Measurements

ASC 820, Fair Value Measurement Disclosures defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. Disclosures of the fair value of certain financial instruments are required, whether or not recognized in the Unaudited Condensed Consolidated Balance Sheets. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date and in the principal or most advantageous market for that asset or liability. There is a three-level valuation hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Observable inputs are inputs market participants would use in valuing the asset or liability and are developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the factors market participants would use in valuing the asset or liability.

Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following tables summarize the Company’s assets (liabilities) measured at fair value on a recurring basis segregated among the appropriate levels within the fair value hierarchy (in thousands):

Fair Value Measurements at July 30, 2011 Using

Quoted Prices in

Active Markets for

Significant

Identical Assets

Other Observable

Unobservable

(Liabilities)

Inputs

Carrying Value

(Level 1)

(Level 2)

(Level 3)

Interest rate swap

(2,541

)

—

(2,541

)

—

Fair Value Measurements at January 29, 2011 Using

Quoted Prices in

Active Markets for

Significant

Identical Assets

Other Observable

Unobservable

(Liabilities)

Inputs

Carrying Value

(Level 1)

(Level 2)

(Level 3)

Interest rate swaps

(1,165

)

—

(1,165

)

—

The fair value of the Company’s interest rate swaps represent the estimated amounts the Company would receive or pay to terminate those contracts at the reporting date based upon pricing or valuation models applied to current market information. The interest rate swaps are valued using the market standard methodology of netting the discounted future fixed cash payments and the discounted expected variable cash receipts. The variable cash receipts are based on an expectation of future interest rates derived from observed market interest rate curves. The Swap entered into on July 28, 2010 is collateralized by cash and thus the Company does not make any credit-related valuation adjustments. The Company mitigates derivative credit risk by transacting with highly rated counterparties. The Company does not enter into derivative financial instruments for trading or speculative purposes.

Non-Financial Assets Measured at Fair Value on a Non-Recurring Basis

The Company’s non-financial assets, which include goodwill, intangible assets, and long-lived tangible assets, are not adjusted to fair value on a recurring basis. Fair value measures of non-financial assets are primarily used in the impairment analysis of these assets. Any resulting asset impairment would require that the non-financial asset be recorded at its fair value. The Company reviews goodwill and indefinite-lived intangible assets for impairment annually, during the fourth quarter of each fiscal year, or as circumstances indicate the possibility of impairment. The Company monitors the carrying value of definite-lived intangible assets and long-lived tangible assets for impairment whenever events or changes in circumstances indicate its carrying amount may not be recoverable.

Financial Instruments Not Measured at Fair Value

The Company’s financial instruments consist primarily of cash and cash equivalents, restricted cash, accounts receivable, current liabilities, short-term debt, long-term debt, and the revolving credit facility. Cash and cash equivalents, restricted cash, accounts receivable, short-term debt and current liabilities approximate fair market value due to the relatively short maturity of these financial instruments.

The Company considers all investments with a maturity of three months or less when acquired to be cash equivalents. The Company’s cash equivalent instruments are valued using quoted market prices and are primarily U.S. Treasury securities. The estimated fair value of the Company’s long-term debt was approximately $2.29 billion at July 30, 2011, compared to a carrying value of $2.43 billion at that date. The estimated fair value of the Company’s long-term debt, including the current portion, and the revolving credit facility was approximately $2.36 billion at January 29, 2011, compared to a carrying value of $2.45 billion at that date. For publicly-traded debt, the fair value (estimated market value) is based on market prices. For non-publicly-traded debt, fair value is estimated based on quoted prices for similar instruments.

4. Debt

Debt as of July 30, 2011 and January 29, 2011 included the following components (in thousands):


	July 30, 2011		January 29, 2011
Short-term debt and current portion of long-term debt:
Note payable to bank due 2012	$	61,042	$	57,703
Current portion of long-term debt		—		18,451

Total short-term debt and current portion of long-term debt	$	61,042	$	76,154


Long-term debt:
Senior secured term loan facility due 2014	$	1,154,310	$	1,399,250
Senior notes due 2015		223,000		236,000
Senior toggle notes due 2015		338,667		360,431
Senior subordinated notes due 2017		259,612		259,612
Senior secured second lien notes due 2019		450,000		—

		2,425,589		2,255,293
Less: current portion of long-term debt		—		(18,451	)

Long-term debt	$	2,425,589	$	2,236,842


Senior secured revolving credit facility due 2013	$	—	$	194,000


Obligations under capital leases	$	17,290	$	17,290

See Note 3 for related fair value disclosure on debt.

Short-term Debt

In January 2011, we entered into a Euro (“€”) denominated loan (the “Euro Loan”) in the amount of €42.4 million that is due on January 24, 2012. The Euro Loan bears interest at the three month Euro Interbank Offered Rate (“EURIBOR”) rate plus 8.00% per year and is payable quarterly. As of July 30, 2011, there was €42.4 million, or the equivalent of $61.0 million, outstanding under the Euro Loan. The net proceeds of the borrowing were used for general corporate purposes.

The obligations under the Euro Loan are secured by a cash deposit in the amount of €15.1 million, or the equivalent of $21.7 million at July 30, 2011, and a perfected first lien security interest in all of the issued and outstanding equity interest of one of our international subsidiaries, Claire’s Holdings S.a.r.l. The cash deposit is classified as “Cash and cash equivalents and restricted cash” in our Unaudited Condensed Consolidated Balance Sheets.

Senior Secured Second Lien Notes

On March 4, 2011, the Company issued $450.0 million aggregate principal amount of 8.875% senior secured second lien notes that mature on March 15, 2019 (the “Senior Secured Second Lien Notes”). Interest on the Senior Secured Second Lien Notes is payable semi-annually to holders of record at the close of business on March 1 or September 1 immediately preceding the interest payment date on March 15 and September 15 of each year, commencing on September 15, 2011. The Senior Secured Second Lien Notes are guaranteed on a second-priority senior secured basis by all of the Company’s existing and future direct or indirect wholly-owned domestic subsidiaries that guarantee the Company’s senior secured credit facility. The Senior Secured Second Lien Notes and related guarantees are secured by a second-priority lien on substantially all of the assets that secure the Company’s and its subsidiary guarantors’ obligations under the Company’s senior secured credit facility. The Company used the proceeds of the offering of the Senior Secured Second Lien Notes to reduce the entire $194.0 million outstanding under the Company’s revolving credit facility (without terminating the commitment), to repay $244.9 million of indebtedness under the Company’s senior secured term loan, and to pay $10.4 million in financing costs which have been recorded as Deferred Financing Costs, Net in the accompanying Unaudited Condensed Consolidated Balance Sheets. As a result of our prepayment under the senior secured term loan facility, we are no longer required to make any quarterly payments and have a final payment due May 29, 2014.

Note Repurchases

The following is a summary of the Company’s debt repurchase activity for the three and six months ended July 30, 2011 and July 31, 2010 (in thousands):


	Three Months Ended July 30, 2011						Six Months Ended July 30, 2011
	Principal		Repurchases		Recognized		Principal		Repurchase		Recognized
Notes Repurchased	Amount		Price		Gain (1)		Amount		Price		Gain (Loss) (2)
Senior Notes	$	3,000	$	2,940	$	12	$	13,000	$	12,870	$	(86	)
Senior Toggle Notes		18,986		18,543		221		33,140		32,627		568

	$	21,986	$	21,483	$	233	$	46,140	$	45,497	$	482


(1)		Net of deferred issuance cost write-offs of $48 for the Senior Notes and $222 for the Senior Toggle Notes.

(2)		Net of deferred issuance cost write-offs of $216 for the Senior Notes and $400 for the Senior Toggle Notes, and accrued interest write-off of $455 for the Senior Toggle Notes.


	Three Months Ended July 31, 2010						Six Months Ended July 31, 2010
	Principal		Repurchases		Recognized		Principal		Repurchase		Recognized
Notes Repurchased	Amount		Price		Gain (1)		Amount		Price		Gain (2)
Senior Toggle Notes	$	41,623	$	36,328	$	5,340	$	47,623	$	41,313	$	6,427
Senior Subordinated Notes		7,000		5,935		909		22,625		17,799		4,309

	$	48,623	$	42,263	$	6,249	$	70,248	$	59,112	$	10,736


(1)		Net of deferred issuance cost write-offs of $673 for the Senior Toggle Notes and $156 for the Senior Subordinated Notes, and accrued interest write-off of $718 for the Senior Toggle Notes.

(2)		Net of deferred issuance cost write-offs of $777 for the Senior Toggle Notes and $517 for the Senior Subordinated Notes, and accrued interest write-off of $894 for the Senior Toggle Notes.

The Company elected to pay interest in kind on its Senior Toggle Notes for the interest periods beginning June 2, 2008 through June 1, 2011. This election, net of reductions for note repurchases, increased the principal amount on the Senior Toggle Notes by $109.5 million and $98.1 million as of July 30, 2011 and January 29, 2011, respectively. The accrued payment in kind interest is included in “Long-term debt” in the Unaudited Condensed Consolidated Balance Sheets. Effective June 2, 2011, the Company began paying interest in cash.

Covenants

Our Senior Notes, Senior Toggle Notes, Senior Subordinated Notes and Senior Secured Second Lien Notes (collectively, the “Notes”), Credit Facility and Euro Loan contain certain covenants that, among other things, and subject to certain exceptions and other basket amounts, restrict our ability and the ability of our subsidiaries to:

	•		incur additional indebtedness;

	•		pay dividends or distributions on our capital stock, repurchase or retire our capital stock and redeem, repurchase or defease any subordinated indebtedness;

	•		make certain investments;

	•		create or incur certain liens;

	•		create restrictions on the payment of dividends or other distributions to us from our subsidiaries;

	•		transfer or sell assets;

	•		engage in certain transactions with our affiliates; and

	•		merge or consolidate with other companies or transfer all or substantially all of our assets.

None of these covenants, however, require the Company to maintain any particular financial ratio or other measure of financial performance. As of July 30, 2011, we were in compliance with the covenants under our Credit Facility, Notes and Euro Loan.

5. Derivatives and Hedging Activities

The Company formally designates and documents the financial instrument as a hedge of a specific underlying exposure, as well as the risk management objectives and strategies for undertaking the hedge transaction. The Company formally assesses both at inception and at least quarterly thereafter, whether the financial instruments that are used in hedging transactions are effective at offsetting changes in cash flows of the related underlying exposure. The Company measures the effectiveness of its cash flow hedges by evaluating the following criteria: (i) the re-pricing dates of the derivative instrument match those of the debt obligation; (ii) the interest rates of the derivative instrument and the debt obligation are based on the same interest rate index and tenor; (iii) the variable interest rate of the derivative instrument does not contain a floor or cap, or other provisions that cause a basis difference with the debt obligation; and (iv) the likelihood of the counterparty not defaulting is assessed as being probable.

The Company primarily employs derivative financial instruments to manage its exposure to interest rate changes and to limit the volatility and impact of interest rate changes on earnings and cash flows. The Company does not enter into derivative financial instruments for trading or speculative purposes. The Company faces credit risk if the counterparties to the financial instruments are unable to perform their obligations. However, the Company seeks to mitigate derivative credit risk by entering into transactions with counterparties that are significant and creditworthy financial institutions. The Company monitors the credit ratings of the counterparties.

For derivatives that qualify as cash flow hedges, the Company reports the effective portion of the change in fair value as a component of “Accumulated other comprehensive income (loss), net of tax” in the Unaudited Condensed Consolidated Balance Sheets and reclassifies it into earnings in the same periods in which the hedged item affects earnings, and within the same income statement line item as the impact of the hedged item. The ineffective portion of the change in fair value of a cash flow hedge is recognized in income immediately. No ineffective portion was recorded to earnings during the three and six months ended July 30, 2011 and July 31, 2010, respectively, and all components of the derivative gain or loss were included in the assessment of hedge effectiveness. For derivative financial instruments which do not qualify as cash flow hedges, any changes in fair value would be recorded in the Consolidated Statements of Operations and Comprehensive Income (Loss).

The Company may at its discretion change the designation of any such hedging instrument agreements prior to maturity. At that time, any gains or losses previously reported in accumulated other comprehensive income (loss) on termination would amortize into interest expense or interest income to correspond to the recognition of interest expense or interest income on the hedged debt. If such debt instrument was also terminated, the gain or loss associated with the terminated derivative included in accumulated other comprehensive income (loss) at the time of termination of the debt would be recognized in the Consolidated Statements of Operations and Comprehensive Income (Loss) at that time.

On July 28, 2010, the Company entered into an interest rate swap agreement (the “Swap”) to manage exposure to fluctuations in interest rate changes related to the senior secured term loan facility. The Swap has been designated and accounted for as a cash flow hedge and expires on July 30, 2013. The Swap represents a contract to exchange floating rate for fixed interest payments periodically over the life of the Swap without exchange of the underlying notional amount. The Swap covers an aggregate notional amount of $200.0 million of the outstanding principal balance of the senior secured term loan facility and has a fixed rate of 1.2235%. The interest rate Swap results in the Company paying a fixed rate plus the applicable margin then in effect for LIBOR borrowings resulting in an interest rate of 3.97% at July 30, 2011, on a notional amount of $200.0 million of the senior secured term loan.

The Company entered into three interest rate swap agreements in July 2007 (the “2007 Swaps”) to manage exposure to interest rate changes related to the senior secured term loan facility. The 2007 Swaps were designated and accounted for as cash flow hedges. Those 2007 Swaps expired on June 30, 2010. The 2007 Swaps covered an aggregate notional amount of $435.0 million of the outstanding principal balance of the senior secured term loan facility. The fixed rates of the 2007 Swaps ranged from 4.96% to 5.25%.

The Company does not make any credit-related valuation adjustments to the Swap entered into on July 28, 2010 because it is collateralized by cash, the balance of which is $5.0 million at July 30, 2011. The collateral requirement increases for declines in the three year LIBOR rate below 1.2235%. As of July 30, 2011, the three year LIBOR rate was 0.58% and each further 10 basis point decline in rate would result in an additional collateral requirement of $0.6 million. Any subsequent increases in the three year LIBOR rate will result in a release of the collateral. The Company included credit-related valuation adjustments in the calculation of fair value for the 2007 Swaps.

At July 30, 2011 and January 29, 2011, the estimated fair values of the Company’s derivative financial instruments designated as interest rate cash flow hedges were liabilities of approximately $2.5 million and $1.2 million, respectively, which were recorded in “Accrued expenses and other current liabilities” in the Unaudited Condensed Consolidated Balance Sheets. These amounts were also recorded, net of tax of approximately $5.7 million and $5.7 million, respectively, as a component in “Accumulated other comprehensive income (loss), net of tax” in the Unaudited Condensed Consolidated Balance Sheets. See Note 3 — Fair Value Measurements for fair value measurement of interest rate swaps.

The following tables provide a summary of the financial statement effect of the Company’s derivative financial instruments designated as interest rate cash flow hedges during the three and six months ended July 30, 2011 and July 31, 2010 (in thousands):

Location of Gain or

(Loss) Reclassified

Amount of Gain or (Loss)

Derivatives in

Amount of Gain or (Loss)

from Accumulated

Reclassified from Accumulated

Cash Flow Hedging

Recognized in OCI on Derivative

OCI into Income

Relationships

(Effective Portion)

(Effective Portion) (1)

Three months ended

July 30, 2011

July 31, 2010

July 30, 2011

July 31, 2010

Interest rate swaps

(1,079

)

2,590

Interest expense, net

(481

)

(3,447

)


(1)		Represents reclassification of amounts from accumulated other comprehensive income (loss) to earnings as interest expense is recognized on the senior secured term loan facility. No ineffectiveness is associated with these interest rate cash flow hedges.

Location of Gain or

(Loss) Reclassified

Amount of Gain or (Loss)

Derivatives in Cash

Amount of Gain or (Loss)

from Accumulated

Reclassified from Accumulated

Flow Hedging

Recognized in OCI on Derivative

OCI into Income

Relationships

(Effective Portion)

(Effective Portion) (1)

Six months ended

July 30, 2011

July 31, 2010

July 30, 2011

July 31, 2010

Interest rate swaps

(1,376

)

7,749

Interest expense, net

(946

)

(8,779

)


(1)		Represents reclassification of amounts from accumulated other comprehensive income (loss) to earnings as interest expense is recognized on the senior secured term loan facility. No ineffectiveness is associated with these interest rate cash flow hedges.

Over the next twelve months, the Company expects to reclassify net losses on the Company’s interest rate swaps recognized within “Accumulated other comprehensive income (loss), net of tax” of $1.9 million to interest expense.

6. Commitments and Contingencies

The Company is, from time to time, involved in litigation incidental to the conduct of its business, including personal injury litigation, litigation regarding merchandise sold, including product and safety concerns regarding heavy metal and chemical content in merchandise, litigation with respect to various employment matters, including litigation with present and former employees, wage and hour litigation, and litigation to protect trademark rights.

The Company believes that current pending litigation will not have a material adverse effect on its consolidated financial position, results of operations or cash flows.

7. Stock Options and Stock-Based Compensation

The following is a summary of activity in the Company’s stock option plan for the six months ended July 30, 2011:


						Weighted-
				Weighted-		Average
				Average		Remaining
	Number of			Exercise		Contractual
	Shares			Price		Term (Years)
Outstanding at January 29, 2011		6,860,014		$	10.00
Options granted		375,000		$	10.00
Options exercised		—
Options forfeited or expired		(67,406	)	$	10.00

Outstanding at July 30, 2011		7,167,608		$	10.00		4.0


Options vested and expected to vest at July 30, 2011		6,867,260		$	10.00		4.0


Exercisable at July 30, 2011		2,692,445		$	10.00		3.3

The weighted average grant date fair value of options granted during the six months ended July 30, 2011 and July 31, 2010 was $2.86 and $3.00, respectively.

During the three and six months ended July 30, 2011 and July 31, 2010, the Company recorded stock-based compensation expense and additional paid-in capital relating to stock-based compensation of approximately $1.2 million, $2.1 million, $1.3 million and $2.5 million, respectively. Stock-based compensation expense is recorded in “Selling, general and administrative” expenses in the accompanying Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss).

Incentive Plan Modifications

On May 20, 2011, the Compensation Committee of the Company approved amendments to the Company’s Stock Incentive Plan (the “Incentive Plan”), the form of option grant letter and certain outstanding options (the “Outstanding Options”) held by various employees (collectively, the “Plan Amendments”).

The Plan Amendments (which will apply to Outstanding Options and, unless otherwise specified at the time of grant, any future option grants under the Amended Incentive Plan, and, where applicable, any shares held by employees) generally provide for the following:

	•		Eliminated the holding period after vesting for Performance and Stretch Performance options;

	•		Changed the definition of “Qualified IPO”;

	•		Eliminated certain restrictions on transfer of shares in the event of a Qualified IPO;

	•		Provided each optionee the right to satisfy the exercise price and any withholding tax obligation triggered by such exercise by any combination of cash and/or shares (including both previously owned shares and shares otherwise to be delivered upon exercise of the option); and

	•		Added two additional vesting events applicable to Performance Options and to certain Stretch Performance Options if they occur prior to or concurrent with the end of the Company’s fiscal 2012 year.

The modifications to the Company’s Incentive Plan resulted in $2.2 million in total incremental compensation cost, of which $0.2 million was recognized in the second fiscal quarter 2011. The

remaining unrecognized compensation cost will be amortized over the remaining vesting period. The plan modification affected approximately 155 employees.

Buy-One-Get-One (“BOGO”) Option Offer

On May 20, 2011, the Compensation Committee of the Company also approved an offer pursuant to the amended Incentive Plan to certain employees to purchase a specified number of shares of the common stock of the parent of the Company at a price per share of $10.00 (the “Offer”). For each share purchased, the employee received an option to purchase an additional share at $10.00 (a “BOGO Option”). The Offer was made available to employees who had not previously accepted similar offers from the parent of the Company. The Company granted 179,000 BOGO Options and recognized stock-based compensation expense of approximately $0.1 million in the second fiscal quarter 2011 related to these options.

8. Income Taxes

The effective income tax rate was (50.4)% and (9.9)% for the three and six months ended July 30, 2011. This effective income tax rate differed from the statutory federal tax rate of 35% primarily from increases in the valuation allowance recorded for additional deferred tax assets generated in the three and six months ended July 30, 2011 by the Company’s U.S. operations.

The effective income tax rate was (23.8)% and (18.6)% for the three and six months ended July 31, 2010. This effective income tax rate differed from the statutory federal tax rate of 35% primarily from increases in the valuation allowance recorded for additional deferred tax assets generated in the three and six months ended July 31, 2010 by the Company’s U.S. operations.

In April 2011, the Company received from the Canada Revenue Agency withholding tax assessments for 2003 through 2007 of approximately $5.0 million, including penalties and interest. In conjunction with these assessments, a security deposit will be required in the amount of approximately $5.0 million until such time a final decision is made by the tax authority. The Company is objecting to these assessments and believes it will prevail at the appeals level; therefore, an accrual has not been recorded for this item. In February 2011, the Internal Revenue Service concluded its tax examination of our U.S. Federal income tax return for Fiscal 2007 and did not assess any additional tax liability. The Company’s U.S. Federal income tax returns for Fiscal 2008 and 2009 are currently under review by the Internal Revenue Service.

9. Related Party Transactions

The Company paid store planning and retail design fees to a Company owned by a family member of one of the Company’s executive officers. These fees are included in “Furniture, fixtures and equipment” in the Company’s Unaudited Condensed Consolidated Balance Sheets and “Selling, general and administrative” expenses in the Company’s Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). For the three months ended July 30, 2011 and July 31, 2010, the Company paid fees of approximately $0.4 million and $0.4 million, respectively. For the six months ended July 30, 2011 and July 31, 2010, the Company paid fees of approximately $0.9 million and $0.6 million, respectively. This arrangement was approved by the Audit Committee of the Board of Directors.

The initial purchasers of the Senior Secured Second Lien Notes were Credit Suisse Securities (USA) LLC, J.P. Morgan Securities LLC, Goldman Sachs & Co., and Morgan Joseph TriArtisan LLC. Apollo Management, LLC, an affiliate of Apollo Management VI, L.P., the Company’s controlling shareholder, has a non-controlling interest in Morgan Joseph TriArtisan LLC and its affiliates. Additionally, a member of the Company’s Board of Directors is an executive of Morgan Joseph TriArtisan Inc., an affiliate of Morgan Joseph TriArtisan LLC. In connection with the issuance of the Senior Secured Second Lien Notes, the Company paid a fee of approximately $0.3 million to Morgan Joseph TriArtisan LLC.

10. Segment Information

The Company is organized based on the geographic markets in which it operates. Under this structure, the Company currently has two reportable segments: North America and Europe. The Company accounts for the goods it sells to third parties under franchising and licensing agreements within “Net sales” and “Cost of sales, occupancy and buying expenses” in the Company’s Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) within its North American division. The franchise fees the Company charges under the franchising agreements are reported in “Other expense (income), net” in the Company’s Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) within its European division. Until September 2, 2010, the Company accounted for the results of operations of Claire’s Nippon under the equity method and included the results within “Other expense (income), net” in the Company’s Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) within the Company’s North American division. After September 2, 2010, these former joint venture stores began to operate as licensed stores. Substantially all of the interest expense on the Company’s outstanding debt is recorded in the Company’s North American division.

Net sales and operating income for the three and six months ended July 30, 2011 and July 31, 2010 are as follows (in thousands):


	Three Months			Three Months			Six Months			Six Months
	Ended			Ended			Ended			Ended
	July 30, 2011			July 31, 2010			July 30, 2011			July 31, 2010
Net sales:
North America	$	217,057		$	210,087		$	441,245		$	422,686
Europe		141,490			124,146			263,748			233,624

Total net sales		358,547			334,233			704,993			656,310


Depreciation and amortization:
North America		10,121			10,402			20,526			20,909
Europe		6,231			5,454			12,880			11,313

Total depreciation and amortization		16,352			15,856			33,406			32,222


Operating income for reportable segments:
North America		23,944			19,368			54,568			43,771
Europe		13,841			14,460			9,217			17,768

Total operating income for reportable segments		37,785			33,828			63,785			61,539
Severance and transaction-related costs		426			212			769			314

Net consolidated operating income		37,359			33,616			63,016			61,225
Gain on early debt extinguishment		233			6,249			482			10,736
Impairment of equity investment		—			6,030			—			6,030
Interest expense, net		44,335			40,573			90,570			83,336


Net consolidated loss before income tax expense	$	(6,743	)	$	(6,738	)	$	(27,072	)	$	(17,405	)

Excluded from operating income for the North American segment are severance and transaction-related costs of approximately $0.2 million and $0.2 million for the three months ended July 30, 2011 and July 31, 2010, respectively, and $0.3 million and $0.3 million for the six months ended July 30, 2011 and July 31, 2010, respectively.

Excluded from operating income for the European segment are severance and transaction-related costs of approximately $0.2 million and $0 for the three months ended July 30, 2011 and July 31, 2010, respectively, and $0.5 million and $0 for the six months ended July 30, 2011 and July 31, 2010, respectively.

11. Supplemental Financial Information

On May 29, 2007, Claire’s Stores, Inc. (the “Issuer”), issued $935.0 million in Senior Notes, Senior Toggle Notes and Senior Subordinated Notes, and on March 4, 2011, issued $450.0 million aggregate principal amount of Senior Secured Second Lien Notes. These Notes are irrevocably and unconditionally guaranteed, jointly and severally, by all wholly-owned domestic current and future subsidiaries of Claire’s Stores, Inc. that guarantee the Company’s Credit Facility (the “Guarantors”). The Company’s other subsidiaries, principally its international subsidiaries including its European, Canadian and Asian subsidiaries (the “Non-Guarantors”), are not guarantors of these Notes.

The tables in the following pages present the condensed consolidating financial information for the Issuer, the Guarantors and the Non-Guarantors, together with eliminations, as of and for the periods indicated. The consolidating financial information may not necessarily be indicative of the financial position, results of operations or cash flows had the Issuer, Guarantors and Non-Guarantors operated as independent entities.

Condensed Consolidating Balance Sheet
July 30, 2011
(in thousands)


							Non-
	Issuer			Guarantors			Guarantors			Eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents and restricted cash (1)	$	109,920		$	12,491		$	88,716		$	—		$	211,127
Inventories		—			89,075			58,590			—			147,665
Prepaid expenses		1,069			15,189			17,570			—			33,828
Other current assets		52			16,290			10,847			—			27,189

Total current assets		111,041			133,045			175,723			—			419,809

Property and equipment:
Furniture, fixtures and equipment		3,533			125,044			74,939			—			203,516
Leasehold improvements		1,071			146,890			124,025			—			271,986

		4,604			271,934			198,964			—			475,502
Less accumulated depreciation and amortization		(2,551	)		(164,170	)		(98,593	)		—			(265,314	)

		2,053			107,764			100,371			—			210,188

Leased property under capital lease:
Land and building		—			18,055			—			—			18,055
Less accumulated depreciation and amortization		—			(1,354	)		—			—			(1,354	)

		—			16,701			—			—			16,701

Intercompany receivables		—			410,510			—			(410,510	)		—
Investment in subsidiaries		2,331,088			(65,396	)		—			(2,265,692	)		—
Goodwill		—			1,235,651			314,405			—			1,550,056
Intangible assets, net		286,000			7,658			264,372			—			558,030
Deferred financing costs, net		37,579			—			247			—			37,826
Other assets		129			3,918			41,860			—			45,907

		2,654,796			1,592,341			620,884			(2,676,202	)		2,191,819

Total assets	$	2,767,890		$	1,849,851		$	896,978		$	(2,676,202	)	$	2,838,517


LIABILITIES AND STOCKHOLDER’S EQUITY (DEFICIT)
Current liabilities:
Short-term debt	$	—		$	—		$	61,042		$	—		$	61,042
Trade accounts payable		653			24,334			39,883			—			64,870
Income taxes payable		—			(321	)		10,807			—			10,486
Accrued interest payable		32,217			—			65			—			32,282
Accrued expenses and other current liabilities		14,091			36,220			41,302			—			91,613

Total current liabilities		46,961			60,233			153,099			—			260,293

Intercompany payables		336,148			—			74,362			(410,510	)		—
Long-term debt		2,425,589			—			—			—			2,425,589
Revolving credit facility		—			—			—			—			—
Obligation under capital lease		—			17,290			—			—			17,290
Deferred tax liability		—			106,267			14,845			—			121,112
Deferred rent expense		—			17,496			10,309			—			27,805
Unfavorable lease obligations and other long-term liabilities		—			26,126			1,110			—			27,236

		2,761,737			167,179			100,626			(410,510	)		2,619,032

Stockholder’s equity (deficit):
Common stock		—			367			2			(369	)		—
Additional paid in capital		623,241			1,435,909			815,866			(2,251,775	)		623,241
Accumulated other comprehensive income (loss), net of tax		14,721			4,930			4,696			(9,626	)		14,721
Retained earnings (accumulated deficit)		(678,770	)		181,233			(177,311	)		(3,922	)		(678,770	)

		(40,808	)		1,622,439			643,253			(2,265,692	)		(40,808	)

Total liabilities and stockholder’s equity (deficit)	$	2,767,890		$	1,849,851		$	896,978		$	(2,676,202	)	$	2,838,517


(1)		Cash and cash equivalents includes restricted cash of $5,000 for “Issuer” and $21,725 for “Non-Guarantors”

Condensed Consolidating Balance Sheet
January 29, 2011
(in thousands)


							Non-
	Issuer			Guarantors			Guarantors			Eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents and restricted cash (1)	$	179,529		$	3,587		$	96,650		$	—		$	279,766
Inventories		—			84,868			51,280			—			136,148
Prepaid expenses		851			1,680			18,918			—			21,449
Other current assets		—			16,547			8,111			—			24,658

Total current assets		180,380			106,682			174,959			—			462,021

Property and equipment:
Furniture, fixtures and equipment		3,276			119,228			64,010			—			186,514
Leasehold improvements		1,052			143,072			103,906			—			248,030

		4,328			262,300			167,916			—			434,544
Less accumulated depreciation and amortization		(2,205	)		(147,857	)		(83,449	)		—			(233,511	)

		2,123			114,443			84,467			—			201,033

Leased property under capital lease:
Land and building		—			18,055			—			—			18,055
Less accumulated depreciation and amortization		—			(903	)		—			—			(903	)

		—			17,152			—			—			17,152

Intercompany receivables		—			366,929			—			(366,929	)		—
Investment in subsidiaries		2,303,333			(63,535	)		—			(2,239,798	)		—
Goodwill		—			1,235,651			314,405			—			1,550,056
Intangible assets, net		286,000			9,294			262,172			—			557,466
Deferred financing costs, net		35,973			—			461			—			36,434
Other assets		130			3,842			38,315			—			42,287

		2,625,436			1,552,181			615,353			(2,606,727	)		2,186,243

Total assets	$	2,807,939		$	1,790,458		$	874,779		$	(2,606,727	)	$	2,866,449


LIABILITIES AND STOCKHOLDER’S EQUITY (DEFICIT)
Current liabilities:
Short-term debt and current portion of long-term debt	$	18,451		$	—		$	57,703		$	—		$	76,154
Trade accounts payable		1,199			24,545			28,611			—			54,355
Income taxes payable		—			644			11,100			—			11,744
Accrued interest payable		16,696			—			87			—			16,783
Accrued expenses and other current liabilities		20,630			37,910			48,575			—			107,115

Total current liabilities		56,976			63,099			146,076			—			266,151

Intercompany payables		346,636			—			20,293			(366,929	)		—
Long-term debt		2,236,842			—			—			—			2,236,842
Revolving credit facility		194,000			—			—			—			194,000
Obligation under capital lease		—			17,290			—			—			17,290
Deferred tax liability		—			106,797			14,979			—			121,776
Deferred rent expense		—			17,230			9,407			—			26,637
Unfavorable lease obligations and other long-term liabilities		—			28,889			1,379			—			30,268

		2,777,478			170,206			46,058			(366,929	)		2,626,813

Stockholder’s equity (deficit):
Common stock		—			367			2			(369	)		—
Additional paid in capital		621,099			1,435,909			815,866			(2,251,775	)		621,099
Accumulated other comprehensive income (loss), net of tax		1,416			3,663			(7,080	)		3,417			1,416
Retained earnings (accumulated deficit)		(649,030	)		117,214			(126,143	)		8,929			(649,030	)

		(26,515	)		1,557,153			682,645			(2,239,798	)		(26,515	)

Total liabilities and stockholder’s equity (deficit)	$	2,807,939		$	1,790,458		$	874,779		$	(2,606,727	)	$	2,866,449


(1)		Cash and cash equivalents includes restricted cash of $3,450 for “Issuer” and $20,414 for “Non-Guarantors”

Condensed Consolidating Statement of Operations and Comprehensive Income (Loss)
For The Three Months Ended July 30, 2011
(in thousands)


							Non-
	Issuer			Guarantors			Guarantors			Eliminations			Consolidated
Net sales	$	—		$	200,545		$	158,002		$	—		$	358,547
Cost of sales, occupancy and buying expenses		1,346			97,490			76,546			—			175,382

Gross profit (deficit)		(1,346	)		103,055			81,456			—			183,165

Other expenses:
Selling, general and administrative		7,722			65,662			56,825			—			130,209
Depreciation and amortization		184			9,277			6,891			—			16,352
Severance and transaction-related costs		164			—			262			—			426
Other (income) expense		(3,337	)		1,423			733			—			(1,181	)

		4,733			76,362			64,711			—			145,806

Operating income (loss)		(6,079	)		26,693			16,745			—			37,359
Gain on early debt extinguishment		233			—			—			—			233
Interest expense, net		42,283			541			1,511			—			44,335

Income (loss) before income taxes		(48,129	)		26,152			15,234			—			(6,743	)
Income tax expense		—			758			2,642			—			3,400

Income (loss) from continuing operations		(48,129	)		25,394			12,592			—			(10,143	)
Equity in earnings of subsidiaries		37,986			692			—			(38,678	)		—

Net income (loss)		(10,143	)		26,086			12,592			(38,678	)		(10,143	)
Foreign currency translation and interest rate swap adjustments, net of tax		(5,125	)		(480	)		(3,186	)		3,666			(5,125	)

Comprehensive income (loss)	$	(15,268	)	$	25,606		$	9,406		$	(35,012	)	$	(15,268	)

Condensed Consolidating Statement of Operations and Comprehensive Income (Loss)
For The Three Months Ended July 31, 2010
(in thousands)


							Non-
	Issuer			Guarantors			Guarantors			Eliminations			Consolidated
Net sales	$	—		$	194,832		$	139,401		$	—		$	334,233
Cost of sales, occupancy and buying expenses		1,382			93,947			63,891			—			159,220

Gross profit (deficit)		(1,382	)		100,885			75,510			—			175,013

Other expenses (income):
Selling, general and administrative		8,472			64,447			48,828			—			121,747
Depreciation and amortization		155			9,576			6,125			—			15,856
Severance and transaction-related costs		212			—			—			—			212
Other (income) expense		(6,740	)		6,029			4,293			—			3,582

		2,099			80,052			59,246			—			141,397

Operating income (loss)		(3,481	)		20,833			16,264			—			33,616
Gain on early debt extinguishment		6,249			—			—			—			6,249
Impairment of equity investment		—			6,030			—						6,030
Interest expense, net		40,418			175			(20	)		—			40,573

Income (loss) before income taxes		(37,650	)		14,628			16,284			—			(6,738	)
Income tax expense (benefit)		—			(932	)		2,539			—			1,607

Income (loss) from continuing operations		(37,650	)		15,560			13,745			—			(8,345	)
Equity in earnings of subsidiaries		29,305			282			—			(29,587	)		—

Net income (loss)		(8,345	)		15,842			13,745			(29,587	)		(8,345	)
Foreign currency translation and interest rate swap adjustments, net of tax		2,513			(8,521	)		(644	)		9,165			2,513
Reclassification of foreign currency translation adjustment into net income (loss)		(9,572	)		(9,572	)		—			9,572			(9,572	)

Comprehensive income (loss)	$	(15,404	)	$	(2,251	)	$	13,101		$	(10,850	)	$	(15,404	)

Condensed Consolidating Statement of Operations and Comprehensive Income (Loss)
For The Six Months Ended July 30, 2011
(in thousands)


							Non-
	Issuer			Guarantors			Guarantors		Eliminations			Consolidated
Net sales	$	—		$	409,569		$	295,424	$	—		$	704,993
Cost of sales, occupancy and buying expenses		2,941			195,939			147,861		—			346,741

Gross profit (deficit)		(2,941	)		213,630			147,563		—			358,252

Other expenses:
Selling, general and administrative		15,910			128,054			112,967		—			256,931
Depreciation and amortization		365			18,755			14,286		—			33,406
Severance and transaction-related costs		297			—			472		—			769
Other (income) expense		(6,985	)		1,859			9,256		—			4,130

		9,587			148,668			136,981		—			295,236

Operating income (loss)		(12,528	)		64,962			10,582		—			63,016
Gain on early debt extinguishment		482			—			—		—			482
Interest expense, net		86,513			1,072			2,985		—			90,570

Income (loss) before income taxes		(98,559	)		63,890			7,597		—			(27,072	)
Income tax expense (benefit)		—			(354	)		3,022		—			2,668

Income (loss) from continuing operations		(98,559	)		64,244			4,575		—			(29,740	)
Equity in earnings of subsidiaries		68,819			(225	)		—		(68,594	)		—

Net income (loss)		(29,740	)		64,019			4,575		(68,594	)		(29,740	)
Foreign currency translation and interest rate swap adjustments, net of tax		13,305			1,268			11,776		(13,044	)		13,305

Comprehensive income (loss)	$	(16,435	)	$	65,287		$	16,351	$	(81,638	)	$	(16,435	)

Condensed Consolidating Statement of Operations and Comprehensive Income (Loss)
For The Six Months Ended July 31, 2010
(in thousands)


							Non-
	Issuer			Guarantors			Guarantors			Eliminations			Consolidated
Net sales	$	—		$	393,424		$	262,886		$	—		$	656,310
Cost of sales, occupancy and buying expenses		2,657			189,934			125,380			—			317,971

Gross profit (deficit)		(2,657	)		203,490			137,506			—			338,339

Other expenses:
Selling, general and administrative		16,904			125,870			96,992			—			239,766
Depreciation and amortization		287			19,214			12,721			—			32,222
Severance and transaction-related costs		314			—			—			—			314
Other (income) expense		(12,615	)		8,283			9,144			—			4,812

		4,890			153,367			118,857			—			277,114

Operating income (loss)		(7,547	)		50,123			18,649			—			61,225
Gain on early debt extinguishment		10,736			—			—			—			10,736
Impairment of equity investment		—			6,030			—			—			6,030
Interest expense, net		83,163			182			(9	)		—			83,336

Income (loss) before income taxes		(79,974	)		43,911			18,658			—			(17,405	)
Income tax expense (benefit)		23			(316	)		3,533			—			3,240

Income (loss) from continuing operations		(79,997	)		44,227			15,125			—			(20,645	)
Equity in earnings of subsidiaries		59,352			235			—			(59,587	)		—

Net income (loss)		(20,645	)		44,462			15,125			(59,587	)		(20,645	)
Foreign currency translation and interest rate swap adjustments, net of tax		(9	)		911			(9,895	)		8,984			(9	)
Reclassification of foreign currency translation adjustment into net income (loss)		(9,572	)		(9,572	)		—			9,572			(9,572	)

Comprehensive income (loss)	$	(30,226	)	$	35,801		$	5,230		$	(41,031	)	$	(30,226	)

Condensed Consolidating Statement of Cash Flows
Six Months Ended July 30, 2011
(in thousands)


							Non-
	Issuer			Guarantors			Guarantors			Eliminations			Consolidated
Cash flows from operating activities:
Net income (loss)	$	(29,740	)	$	64,019		$	4,575		$	(68,594	)	$	(29,740	)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Equity in (earnings) loss of subsidiaries		(68,819	)		225			—			68,594			—
Depreciation and amortization		365			18,755			14,286			—			33,406
Amortization of lease rights and other assets		—			—			1,600			—			1,600
Amortization of debt issuance costs		8,231			—			304			—			8,535
Payment of in kind interest expense		11,831			—			—			—			11,831
Foreign currency exchange net loss on Euro Loan		—			—			2,158			—			2,158
Net accretion of favorable (unfavorable) lease obligations		—			(663	)		281			—			(382	)
Loss on sale/retirement of property and equipment, net		—			41			17			—			58
Gain on early debt extinguishment		(482	)		—			—			—			(482	)
Stock compensation expense		1,713			—			429			—			2,142
(Increase) decrease in:
Inventories		—			(4,207	)		(4,487	)		—			(8,694	)
Prepaid expenses		(218	)		(13,508	)		2,796			—			(10,930	)
Other assets		(52	)		(350	)		(1,510	)		—			(1,912	)
Increase (decrease) in:
Trade accounts payable		(547	)		(33	)		7,479			—			6,899
Income taxes payable		—			(965	)		(4,849	)		—			(5,814	)
Accrued interest payable		15,520			—			(58	)		—			15,462
Accrued expenses and other liabilities		(7,915	)		(1,689	)		(9,642	)		—			(19,246	)
Deferred income taxes		—			(902	)		(447	)		—			(1,349	)
Deferred rent expense		—			266			381			—			647

Net cash provided by (used in) operating activities		(70,113	)		60,989			13,313			—			4,189

Cash flows from investing activities:
Acquisition of property and equipment, net		(295	)		(11,793	)		(20,114	)		—			(32,202	)
Acquisition of intangible assets/lease rights		—			(20	)		(1,853	)		—			(1,873	)
Changes in restricted cash		(1,550	)		—			(130	)		—			(1,680	)

Net cash used in investing activities		(1,845	)		(11,813	)		(22,097	)		—			(35,755	)

Cash flows from financing activities:
Payments of Credit facility		(438,940	)		—			—			—			(438,940	)
Proceeds from Note		450,000			—			—			—			450,000
Repurchases of Notes		(45,497	)		—			—			—			(45,497	)
Payment of debt issuance costs		(10,453	)		—			(91	)		—			(10,544	)
Intercompany activity, net		45,689			(43,581	)		(2,108	)		—			—

Net cash provided by (used in) financing activities		799			(43,581	)		(2,199	)		—			(44,981	)

Effect of foreign currency exchange rate changes on cash and cash equivalents		—			3,309			1,738			—			5,047

Net increase (decrease) in cash and cash equivalents		(71,159	)		8,904			(9,245	)		—			(71,500	)
Cash and cash equivalents, at beginning of period		176,079			3,587			76,236			—			255,902

Cash and cash equivalents, at end of period		104,920			12,491			66,991			—			184,402
Restricted cash, at end of period		5,000			—			21,725			—			26,725

Cash and cash equivalents and restricted cash, at end of period	$	109,920		$	12,491		$	88,716		$	—		$	211,127

Condensed Consolidating Statement of Cash Flows
Six Months Ended July 31, 2010
(in thousands)


							Non-
	Issuer			Guarantors			Guarantors			Eliminations			Consolidated
Cash flows from operating activities:
Net income (loss)	$	(20,645	)	$	44,462		$	15,125		$	(59,587	)	$	(20,645	)
Adjustments to reconcile net income (loss) to net
cash provided by (used in) operating activities:
Equity in earnings of subsidiaries		(59,352	)		(235	)		—			59,587			—
Depreciation and amortization		287			19,214			12,721			—			32,222
Impairment		—			6,030			—			—			6,030
Amortization of lease rights and other assets		—			25			1,585			—			1,610
Amortization of debt issuance costs		5,038			—			—			—			5,038
Payment of in kind interest expense		19,003			—			—			—			19,003
Net accretion of favorable (unfavorable) lease obligations		—			(1,023	)		237			—			(786	)
Loss on sale/retirement of property and equipment, net		—			366			—			—			366
Gain on early debt extinguishment		(10,736	)		—			—			—			(10,736	)
Stock compensation expense		1,924			—			617			—			2,541
(Increase) decrease in:
Inventories		—			(11,003	)		(7,498	)		—			(18,501	)
Prepaid expenses		(561	)		133			1,345			—			917
Other assets		1,220			5,110			(2,385	)		—			3,945
Increase (decrease) in:
Trade accounts payable		374			5,867			3,833			—			10,074
Income taxes payable		—			(255	)		(2,335	)		—			(2,590	)
Accrued interest payable		(5,612	)		—			—			—			(5,612	)
Accrued expenses and other liabilities		1,556			2,298			5,120			—			8,974
Deferred income taxes		—			(407	)		55			—			(352	)
Deferred rent expense		(107	)		1,254			731			—			1,878

Net cash provided by (used in) operating activities		(67,611	)		71,836			29,151			—			33,376

Cash flows from investing activities:
Acquisition of property and equipment, net		(740	)		(7,394	)		(11,422	)		—			(19,556	)
Acquisition of intangible assets/lease rights		—			(63	)		(461	)		—			(524	)
Proceeds from sale of property		—			16,765			—			—			16,765

Net cash provided by (used in) investing activities		(740	)		9,308			(11,883	)		—			(3,315	)

Cash flows from financing activities:
Payments of Credit facility		(7,250	)		—			—			—			(7,250	)
Repurchases of Notes		(59,112	)		—			—			—			(59,112	)
Principal payments of capital leases		—			(765	)		—			—			(765	)
Intercompany activity, net		135,200			(77,080	)		(58,120	)		—			—

Net cash provided by (used in) financing activities		68,838			(77,845	)		(58,120	)		—			(67,127	)

Effect of foreign currency exchange rate changes on cash and cash equivalents		—			1,428			(2,938	)		—			(1,510	)

Net increase (decrease) in cash and cash equivalents		487			4,727			(43,790	)		—			(38,576	)
Cash and cash equivalents, at beginning of period		109,138			(10,604	)		100,174			—			198,708

Cash and cash equivalents, at end of period		109,625			(5,877	)		56,384			—			160,132
Restricted cash, at end of period		—			—			—			—			—

Cash and cash equivalents and restricted cash, at end of period	$	109,625		$	(5,877	)	$	56,384		$	—		$	160,132


Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations

Management’s Discussion and Analysis of Financial Condition and Results of Operations is designed to provide the reader of the financial statements with a narrative on our results of operations, financial position and liquidity, risk management activities, and significant accounting policies and critical estimates. Management’s Discussion and Analysis should be read in conjunction with the Unaudited Condensed Consolidated Financial Statements and related notes thereto contained elsewhere in this document.

We include a store in the calculation of same store sales once it has been in operation sixty weeks after its initial opening. A store which is temporarily closed, such as for remodeling, is removed from the same store sales computation if it is closed for nine consecutive weeks. The removal is effective prospectively upon the completion of the ninth consecutive week of closure. A store which is closed permanently, such as upon termination of the lease, is immediately removed from the same store sales computation. We compute same store sales on a local currency basis, which eliminates any impact for changes in foreign currency rates.

Business Overview

We are one of the world’s leading specialty retailers of fashionable accessories and jewelry at affordable prices for young women, teens, tweens, and girls ages 3 to 27. We are organized based on our geographic markets, which include our North American division and our European division. As of July 30, 2011, we operated a total of 3,020 stores, of which 1,959 were located in all 50 states of the United States, Puerto Rico, Canada, and the U.S. Virgin Islands (our North American division) and 1,061 stores were located in the United Kingdom, France, Switzerland, Spain, Ireland, Austria, Germany, Netherlands, Portugal, Belgium, Poland, Czech Republic and Hungary (our European division). We operate our stores under two brand names: Claire’s^®, on a global basis, and Icing^®, in North America.

As of July 30, 2011, we also franchised or licensed 387 stores in Japan, the Middle East, Turkey, Russia, Greece, Guatemala, Malta, Ukraine and South Africa. We account for the goods we sell to third parties under franchising agreements within “Net sales” and “Cost of sales, occupancy and buying expenses” in our Consolidated Statements of Operations and Comprehensive Income (Loss). The franchise fees we charge under the franchising agreements are reported in “Other expense (income), net” in our Consolidated Statements of Operations and Comprehensive Income (Loss).

Until September 2, 2010, we operated the stores in Japan through our former Claire’s Nippon 50:50 joint venture with Aeon Co., Ltd. We accounted for the results of operations of Claire’s Nippon under the equity method and included the results within “Other expense (income), net” in our Consolidated Statements of Operations and Comprehensive Income (Loss). Beginning September 2, 2010, these stores began to operate as licensed stores.

Our primary brand in North America and exclusively in Europe is Claire’s. Our Claire’s customers are predominantly teens (ages 13 to 18), tweens (ages 7 to 12) and kids (ages 3 to 6), or referred to as our Young, Younger and Youngest target customer groups.

Our second brand in North America is Icing, which targets a single edit point customer represented by a 23 year old young woman just graduating from college and entering the work force who dresses consistent with the current fashion influences. We believe this niche strategy enables us to create a well defined merchandise point of view and attract a broad group of customers from 19 to 27 years of age.

We believe that we are the leading accessories and jewelry destination for our target customers, which is embodied in our mission statement — to be a fashion authority and fun destination offering a compelling, focused assortment of value-priced accessories, jewelry and other emerging fashion categories targeted to the lifestyles of kids, tweens, teens and young women. In addition to age segmentation, we use multiple lifestyle aesthetics to further differentiate our merchandise assortments for our Young and Younger target customer groups.

We provide our target customer groups with a significant selection of fashionable merchandise across a wide range of categories, all with a compelling value proposition. Our major categories of business are:

	•		Accessories — includes fashion accessories for year-round use, including legwear, headwear, attitude glasses, scarves, armwear and belts, and seasonal use, including sunglasses, hats, fall footwear, sandals, scarves, gloves, boots, slippers and earmuffs; and other accessories, including hairgoods, handbags, and small leather goods, as well as cosmetics

	•		Jewelry — includes earrings, necklaces, bracelets, body jewelry and rings, as well as ear piercing

In North America, our stores are located primarily in shopping malls. The differentiation of our Claire’s and Icing brands allows us to operate multiple store locations within a single mall. In Europe our stores are located primarily on high streets, in shopping malls and in high traffic urban areas.

Current Market Conditions

Continued distress in the financial markets has resulted in declines in consumer confidence and spending, extreme volatility in securities prices, and has had a negative impact on credit availability and declining valuations of certain investments. We have assessed the implications of these factors on our current business and have responded with pursuit of cost reduction opportunities and are proceeding cautiously to support increased sales. If the national, or global, economies or credit market conditions in general were to deteriorate further in the future, it is possible that such deterioration could put additional negative pressure on consumer spending and negatively affect our cash flows or cause a tightening of trade credit that may negatively affect our liquidity.

Consolidated Results of Operations

A summary of our consolidated results of operations for the three and six months ended July 30, 2011 and July 31, 2010 are as follows (dollars in thousands):


	Three Months			Three Months
	Ended			Ended
	July 30, 2011			July 31, 2010
Net sales	$	358,547		$	334,233
(Decrease) increase in same store sales		(1.4	)%		8.9	%
Gross profit percentage		51.1	%		52.4	%
Selling, general and administrative expenses as a percentage of net sales		36.3	%		36.4	%
Depreciation and amortization as a percentage of net sales		4.6	%		4.7	%
Operating income	$	37,359		$	33,616
Gain on early debt extinguishment	$	233		$	6,249
Impairment of equity investment	$	—		$	6,030
Net loss	$	(10,143	)	$	(8,345	)
Number of stores at the end of the period (1)		3,020			2,954


(1)		Number of stores excludes stores operated under franchise and licensing agreements.


	Six Months			Six Months
	Ended			Ended
	July 30, 2011			July 31, 2010
Net sales	$	704,993		$	656,310
Increase in same store sales		0.8	%		8.2	%
Gross profit percentage		50.8	%		51.6	%
Selling, general and administrative expenses as a percentage of net sales		36.4	%		36.5	%
Depreciation and amortization as a percentage of net sales		4.7	%		4.9	%
Operating income	$	63,016		$	61,225
Gain on early debt extinguishment	$	482		$	10,736
Impairment of equity investment	$	—		$	6,030
Net loss	$	(29,740	)	$	(20,645	)
Number of stores at the end of the period (1)		3,020			2,954


(1)		Number of stores excludes stores operated under franchise and licensing agreements.

Net sales

Net sales for the three months ended July 30, 2011 increased $24.3 million, or 7.3%, from the three months ended July 31, 2010. This increase was attributable to favorable foreign currency translation effect of our foreign locations’ sales, new stores sales and an increase in shipments to franchisees, partially offset by a decrease in same store sales and the effect of store closures. Net sales would have increased 1.7% excluding the impact from foreign currency rate changes.

Net sales for the six months ended July 30, 2011 increased $48.7 million, or 7.4%, from the six months ended July 31, 2010. This increase was attributable to favorable foreign currency translation effect of our foreign locations’ sales, new stores sales, increase in same store sales and an increase in shipments to franchisees, partially offset by the effect of store closures. Net sales would have increased 3.4% excluding the impact from foreign currency rate changes.

For the three months ended July 30, 2011, the decrease in same store sales was primarily attributable to a decrease in average number of transactions per store of 5.1%, partially offset by an increase in average transaction value of 4.0%.

For the six months ended July 30, 2011, the increase in same store sales was primarily attributable to an increase in average transaction value of 4.7%, partially offset by a decrease in average number of transactions per store of 3.6%.

The following table compares our sales of each product category for each of the periods presented:


	Percentage of Total				Percentage of Total
	Three Months		Three Months		Six Months		Six Months
	Ended		Ended		Ended		Ended
Product Category	July 30, 2011		July 31, 2010		July 30, 2011		July 31, 2010
Accessories		50.8		51.8		52.1		51.9
Jewelry		49.2		48.2		47.9		48.1

		100.0		100.0		100.0		100.0

Gross profit

In calculating gross profit and gross profit percentages, we exclude the costs related to our distribution center. These costs are included instead in “Selling, general and administrative” expenses in our Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). Other retail companies may include these costs in cost of sales, so our gross profit percentages may not be comparable to those retailers.

During the three months ended July 30, 2011, gross profit percentage decreased 130 basis points to 51.1% compared to 52.4% during the three months ended July 31, 2010. The decrease in gross profit percentage consisted of a 90 basis point decrease in merchandise margin and a 60 basis point increase in occupancy costs, partially offset by a 20 basis point decrease in buying and buying-related costs. The decrease in merchandise margin resulted primarily from an increase in markdowns and a reduction in inventory shrink benefit partially offset by lower freight expense.

During the six months ended July 30, 2011, gross profit percentage decreased 80 basis points to 50.8% compared to 51.6% during the six months ended July 31, 2010. The decrease in gross profit percentage consisted of a 90 basis point decrease in merchandise margin, partially offset by a 10 basis point decrease in buying and buying-related costs. The decrease in merchandise margin resulted primarily from an increase in markdowns and a reduction in inventory shrink benefit.

Selling, general and administrative expenses

During the three months ended July 30, 2011, selling, general and administrative expenses increased $8.5 million, or 7.0%, compared to the three months ended July 31, 2010. As a percentage of net sales, selling, general and administrative expenses decreased 0.1% compared to the three months ended July 31, 2010. Excluding an unfavorable $6.4 million foreign currency translation effect, the net increase in selling, general and administrative expenses would have been $2.1 million, primarily for new store-related expenses.

During the six months ended July 30, 2011, selling, general and administrative expenses increased $17.2 million, or 7.2%, compared to the six months ended July 31, 2010. As a percentage of net sales, selling, general and administrative expenses decreased 0.1% compared to the six months ended July 31, 2010.

Excluding an unfavorable $9.1 million foreign currency translation effect, the net increase in selling, general and administrative expenses would have been $8.1 million, primarily for new store-related expenses.

Depreciation and amortization expense

During the three months ended July 30, 2011, depreciation and amortization expense increased $0.5 million to $16.4 million compared to $15.9 million for the three months ended July 31, 2010. The majority of this increase is due to the effect of asset additions during fiscal 2010 and the first half of fiscal 2011.

During the six months ended July 30, 2011, depreciation and amortization expense increased $1.2 million to $33.4 million compared to $32.2 million for the six months ended July 31, 2010. The majority of this increase is due to the effect of asset additions during fiscal 2010 and the first half of fiscal 2011.

Other expense (income), net

The following is a summary of other expense (income) activity for the three and six months ended July 30, 2011 and July 31, 2010 (in thousands):


	Three Months			Three Months			Six Months			Six Months
	Ended			Ended			Ended			Ended
	July 30, 2011			July 31, 2010			July 30, 2011			July 31, 2010
Foreign currency exchange (gain) loss, net	$	(584	)	$	2,510		$	5,365		$	3,295
Equity loss		—			1,413			—			2,529
Royalty income		(597	)		(341	)		(986	)		(532	)
Other income		—			—			(249	)		(480	)

	$	(1,181	)	$	3,582		$	4,130		$	4,812

During the three months ended July 30, 2011, foreign currency exchange loss, net decreased primarily from a $(1.1) million net gain to remeasure the Euro Loan at the period end foreign exchange rate. Equity loss decreased due to the Company converting its equity ownership interest in a former joint venture into a licensing agreement.

During the six months ended July 30, 2011, foreign currency exchange loss, net increased primarily from a $2.2 million net charge to remeasure the Euro Loan at the period end foreign exchange rate. Equity loss decreased due to the Company converting its equity ownership interest in a former joint venture into a licensing agreement.

Gain on early debt extinguishment

The following is a summary of the Company’s debt repurchase activity for the three and six months ended July 30, 2011 and July 31, 2010 (in thousands):


	Three Months Ended July 30, 2011						Six Months Ended July 30, 2011
	Principal		Repurchases		Recognized		Principal		Repurchase		Recognized
Notes Repurchased	Amount		Price		Gain (1)		Amount		Price		Gain (Loss) (2)
Senior Notes	$	3,000	$	2,940	$	12	$	13,000	$	12,870	$	(86	)
Senior Toggle Notes		18,986		18,543		221		33,140		32,627		568

	$	21,986	$	21,483	$	233	$	46,140	$	45,497	$	482


(1)		Net of deferred issuance cost write-offs of $48 for the Senior Notes and $222 for the Senior Toggle Notes.

(2)		Net of deferred issuance cost write-offs of $216 for the Senior Notes and $400 for the Senior Toggle Notes, and accrued interest write-off of $455 for the Senior Toggle Notes.


	Three Months Ended July 31, 2010						Six Months Ended July 31, 2010
	Principal		Repurchases		Recognized		Principal		Repurchase		Recognized
Notes Repurchased	Amount		Price		Gain (1)		Amount		Price		Gain (2)
Senior Toggle Notes	$	41,623	$	36,328	$	5,340	$	47,623	$	41,313	$	6,427
Senior Subordinated Notes		7,000		5,935		909		22,625		17,799		4,309

	$	48,623	$	42,263	$	6,249	$	70,248	$	59,112	$	10,736


(1)		Net of deferred issuance cost write-offs of $673 for the Senior Toggle Notes and $156 for the Senior Subordinated Notes, and accrued interest write-off of $718 for the Senior Toggle Notes.

(2)		Net of deferred issuance cost write-offs of $777 for the Senior Toggle Notes and $517 for the Senior Subordinated Notes, and accrued interest write-off of $894 for the Senior Toggle Notes.

Impairment Charge

During the six months ended July 30, 2010, we recorded a non-cash impairment charge of $6.0 million for our former investment in Claire’s Nippon. There were no other impairment charges recorded during the six months ended July 31, 2010. The joint venture’s continuing operating losses prompted us to perform a valuation of our investment in Claire’s Nippon.

Interest expense, net

During the three months ended July 30, 2011, net interest expense aggregated $44.3 million compared to $40.6 million for the three months ended July 31, 2010. The increase of $3.7 million is primarily due to interest on the $450.0 million Senior Secured Second Lien Notes and Euro Loan and an accelerated reduction of deferred financing costs, partially offset by lower outstanding balances under our Revolving Credit Facility and Senior Notes.

During the six months ended July 30, 2011, net interest expense aggregated $90.6 million compared to $83.3 million for the six months ended July 31, 2010. The increase of $7.3 million is primarily due to interest on the $450.0 million Senior Secured Second Lien Notes and Euro Loan and an accelerated reduction of deferred financing costs, partially offset by lower outstanding balances under our Revolving Credit Facility and Senior Notes.

Income taxes

The effective income tax rate for the three and six months ended July 30, 2011 was (50.4)% and (9.9)%, respectively, compared to (23.8)% and (18.6)% for the three and six months ended July 31, 2010. These effective income tax rates differed from the statutory federal tax rate of 35% primarily from increases in the valuation allowance recorded for additional deferred tax assets generated in the three and six months ended July 30, 2011 and July 31, 2010, respectively, by our U.S. operations.

Segment Operations

We are organized into two business segments — North America and Europe. The following is a discussion of results of operations by business segment.

North America

Key statistics and results of operations for our North American division are as follows (dollars in thousands):


	Three Months			Three Months			Six Months			Six Months
	Ended			Ended			Ended			Ended
	July 30, 2011			July 31, 2010			July 30, 2011			July 31, 2010
Net sales	$	217,057		$	210,087		$	441,245		$	422,686
Increase in same store sales		2.0	%		9.0	%		3.4	%		8.9	%
Gross profit percentage		51.7	%		52.0	%		52.1	%		51.8	%
Number of stores at the end of the period (1)		1,959			1,984			1,959			1,984


(1)		Number of stores excludes stores operated under franchise and licensing agreements.

During the three months ended July 30, 2011, net sales in North America increased $7.0 million, or 3.3%, from the three months ended July 31, 2010. This increase was attributable to an increase in same store sales, an increase in shipments to franchisees, new store sales and a favorable foreign currency translation effect of our Canadian operations’ sales, partially offset by the effect of store closures. Sales would have increased 2.7% excluding the impact from foreign currency rate changes.

During the six months ended July 30, 2011, net sales in North America increased $18.6 million, or 4.4%, from the six months ended July 31, 2010. This increase was attributable to an increase in same store sales, an increase in shipments to franchisees, new store sales and a favorable foreign currency translation effect of our Canadian operations’ sales, partially offset by the effect of store closures. Sales would have increased 3.9% excluding the impact from foreign currency rate changes.

For the three months ended July 30, 2011, the increase in same store sales was primarily attributable to an increase in average transaction value of 4.2%, partially offset by a decrease in average number of transactions per store of 1.6%.

For the six months ended July 30, 2011, the increase in same store sales was primarily attributable to an increase in average transaction value of 5.1%, partially offset by a decrease in average number of transactions per store of 1.2%.

During the three months ended July 30, 2011, gross profit percentage decreased 30 basis points to 51.7% compared to 52.0% during the three months ended July 31, 2010. The decrease in gross profit percentage consisted of an 80 basis point decrease in merchandise margin, partially offset by a 30 basis point decrease in occupancy costs and a 20 basis point decrease in buying and buying-related costs. The decrease in merchandise margin resulted primarily from a reduction in inventory shrink benefit and an increase in markdowns partially offset by lower freight expense. The improvement in occupancy rate is due to the leveraging effect of higher sales.

During the six months ended July 30, 2011, gross profit percentage increased 30 basis points to 52.1% compared to 51.8% during the six months ended July 31, 2010. The increase in gross profit percentage consisted of an 80 basis point decrease in occupancy costs, partially offset by a 50 basis point decrease in merchandise margin. The improvement in occupancy rate is due to the leveraging effect of higher sales. The decrease in merchandise margin resulted primarily from an increase in markdowns and a reduction in inventory shrink benefit partially offset by lower freight expense.

The following table compares our sales of each product category in North America for each of the periods presented:


	Percentage of Total				Percentage of Total
	Three Months		Three Months		Six Months		Six Months
	Ended		Ended		Ended		Ended
Product Category	July 30, 2011		July 31, 2010		July 30, 2011		July 31, 2010
Accessories		45.6		46.4		46.2		46.9
Jewelry		54.4		53.6		53.8		53.1

		100.0		100.0		100.0		100.0

Europe

Key statistics and results of operations for our European division are as follows (dollars in thousands):


	Three Months			Three Months			Six Months			Six Months
	Ended			Ended			Ended			Ended
	July 30, 2011			July 31, 2010			July 30, 2011			July 31, 2010
Net sales	$	141,490		$	124,146		$	263,748		$	233,624
(Decrease) increase in same store sales		(6.5	)%		8.7	%		(3.5	)%		7.0	%
Gross profit percentage		50.2	%		53.0	%		48.7	%		51.1	%
Number of stores at the end of the period (1)		1,061			970			1,061			970


(1)		Number of stores excludes stores operated under franchise and licensing agreements.

During the three months ended July 30, 2011, net sales in Europe increased $17.3 million, or 14.0%, from the three months ended July 31, 2010. This increase was attributable to favorable foreign currency translation of our European operations’ sales and new store sales, partially offset by a decrease in same store sales and the effect of store closures. Sales would have increased 0.2% excluding the impact from foreign currency rate changes.

During the six months ended July 30, 2011, net sales in Europe increased $30.1 million, or 12.9%, from the six months ended July 31, 2010. This increase was attributable to favorable foreign currency translation of our European operations’ sales and new store sales, partially offset by a decrease in same store sales and the effect of store closures. Sales would have increased 2.7% excluding the impact from foreign currency rate changes.

For the three months ended July 30, 2011, the decrease in same store sales was primarily attributable to a decrease in average number of transactions per store of 11.0%, partially offset by an increase in average transaction value of 3.5%.

For the six months ended July 30, 2011, the decrease in same store sales was primarily attributable to a decrease in average number of transactions per store of 8.2%, partially offset by an increase in average transaction value of 4.0%.

During the three months ended July 30, 2011, gross profit percentage decreased 280 basis points to 50.2% compared to 53.0% during the three months ended July 31, 2010. The decrease in gross profit percentage consisted of a 210 basis point increase in occupancy costs and a 100 basis point decrease in merchandise margin, partially offset by a 30 basis point decrease in buying and buying-related costs. The decrease in merchandise margin resulted primarily from a higher mix of clearance merchandise, markdowns and freight expense.

During the six months ended July 30, 2011, gross profit percentage decreased 240 basis points to 48.7% compared to 51.1% during the six months ended July 31, 2010. The decrease in gross profit percentage consisted of a 140 basis point decrease in merchandise margin and a 120 basis point increase in occupancy costs, partially offset by a 20 basis point decrease in buying and buying-related costs. The

decrease in merchandise margin resulted primarily from a higher mix of clearance merchandise, markdowns and freight expense.

The following table compares our sales of each product category in Europe for each of the periods presented:


	Percentage of Total				Percentage of Total
	Three Months		Three Months		Six Months		Six Months
	Ended		Ended		Ended		Ended
Product Category	July 30, 2011		July 31, 2010		July 30, 2011		July 31, 2010
Accessories		58.6		60.7		61.7		61.0
Jewelry		41.4		39.3		38.3		39.0

		100.0		100.0		100.0		100.0

Liquidity and Capital Resources

A summary of cash flows provided by (used in) operating, investing and financing activities for the six months ended July 30, 2011 and July 31, 2010 is outlined in the table below (in thousands):


	Six Months			Six Months
	Ended			Ended
	July 30, 2011			July 31, 2010
Operating activities	$	4,189		$	33,376
Investing activities		(35,755	)		(3,315	)
Financing activities		(44,981	)		(67,127	)

Cash flows from operating activities

Cash provided by operating activities decreased $29.2 million for the six months ended July 30, 2011 compared to the prior year period. The decrease was due to an unfavorable net change in working capital items primarily resulting from a decrease of $28.2 million in accrued expenses and other liabilities.

Cash flows from investing activities

Cash used in investing activities was $35.8 million for the six months ended July 30, 2011 and primarily consisted of capital expenditures for new store openings, the remodeling of existing stores, improvements to technology systems, acquisition of lease rights and, to a lesser extent, an increase in restricted cash. Cash used in investing activities was $3.3 million for the six months ended July 31, 2010 and primarily consisted of proceeds received from our sale-leaseback transaction partially offset by capital expenditures for the remodeling of existing stores, new store openings, improvements to technology systems and acquisition of lease rights. During the remainder of Fiscal 2011, we expect to fund between $43.0 million and $48.0 million of capital expenditures.

Cash flows from financing activities

Cash used in financing activities was $45.0 million for the six months ended July 30, 2011 which consisted of note repurchases of $45.5 million to retire $13.0 million of Senior Notes and $33.1 million of Senior Toggle Notes. Cash used in financing activities was $67.1 million for the six months ended July 31, 2010 which consisted primarily of note repurchases of $59.1 million to retire $47.6 million of Senior Toggle Notes and $22.6 million of Senior Subordinated Notes and scheduled principal payments of $7.3 million on our Credit Facility.

As discussed in our Annual Report on Form 10-K for the year ended January 29, 2011, we elected to pay interest in kind on our Senior Toggle Notes for the interest periods beginning June 2, 2008 through June 1, 2011. This election, net of reductions for note repurchases, increased the principal amount on the Senior Toggle Notes by $109.5 million and $98.1 million as of July 30, 2011 and January 29, 2011, respectively. The accrued payment in kind interest is included in “Long-term debt” in the Unaudited

Condensed Consolidated Balance Sheets. Effective June 2, 2011, the Company began paying interest in cash.

We or our affiliates have purchased and may, from time to time, purchase portions of our indebtedness. All of our purchases have been privately-negotiated, open market transactions.

Cash Position

As of July 30, 2011, we had cash and cash equivalents and restricted cash of $211.1 million and substantially all of the cash equivalents consisted of money market funds invested in U.S. Treasury Securities.

We anticipate that cash generated from operations will be sufficient to meet our future working capital requirements, capital expenditures, and debt service requirements for at least the next twelve months. However, our ability to fund future operating expenses and capital expenditures and our ability to make scheduled payments of interest on, to pay principal on, or refinance indebtedness and to satisfy any other present or future debt obligations will depend on future operating performance. Our future operating performance and liquidity may also be adversely affected by general economic, financial, and other factors beyond the Company’s control, including those disclosed in “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended January 29, 2011.

Short-term Debt

On January 24, 2011, we entered into a Euro (“€”) denominated loan (the “Euro Loan”) in the amount of €42.4 million that is due on January 24, 2012. The Euro Loan bears interest at the three month Euro Interbank Offered Rate (“EURIBOR”) rate plus 8.00% per year and is payable quarterly. As of July 30, 2011, there was €42.4 million, or the equivalent of $61.0 million, outstanding under the Euro Loan. The net proceeds of the borrowing were used for general corporate purposes.

Senior Secured Second Lien Notes

On March 4, 2011, we issued $450.0 million aggregate principal amount of 8.875% senior secured second lien notes that mature on March 15, 2019 (the “Senior Secured Second Lien Notes”). Interest on the Senior Secured Second Lien Notes is payable semi-annually to holders of record at the close of business on March 1 or September 1 immediately preceding the interest payment date on March 15 and September 15 of each year, commencing on September 15, 2011. The Senior Secured Second Lien Notes are guaranteed on a second-priority senior secured basis by all of our existing and future direct or indirect wholly-owned domestic subsidiaries that guarantee the Credit Facility. The Senior Secured Second Lien Notes and related guarantees are secured by a second-priority lien on substantially all of the assets that secure our and our subsidiary guarantors’ obligations under the Credit Facility. As noted above, we used the proceeds of the offering of the Senior Secured Second Lien Notes to reduce the entire $194.0 million outstanding under the Company’s revolving credit facility (without terminating the commitment), to repay $244.9 million of indebtedness under the Company’s senior secured term loan, and to pay $10.4 million in financing costs which have been recorded as Deferred Financing Costs, Net in the accompanying Unaudited Condensed Consolidated Balance Sheets.

Credit Facility

As mentioned above, we reduced the entire amount outstanding under our Revolver (without terminating the commitment) and indebtedness under our senior secured term loan. We can borrow up to $200.0 million under our Revolver that matures on May 29, 2013. At July 30, 2011, we had $4.8 million of

letters of credit outstanding against the Revolver and had available $195.2 million to fund operations under our Revolver, if needed. As a result of our prepayment under the senior secured term loan facility, we are no longer required to make any quarterly payments and have a final payment due May 29, 2014.

European Credit Facilities

Our non-U.S. subsidiaries have bank credit facilities totaling $3.0 million. These facilities are used for working capital requirements, letters of credit and various guarantees. These credit facilities have been arranged in accordance with customary lending practices in their respective countries of operation. At July 30, 2011, the entire amount of $3.0 million was available for borrowing by us, subject to a reduction of $2.9 million for outstanding bank guarantees.

Covenants

	•		incur additional indebtedness;

	•		pay dividends or distributions on our capital stock, repurchase or retire our capital stock and redeem, repurchase or defease any subordinated indebtedness;

	•		make certain investments;

	•		create or incur certain liens;

	•		create restrictions on the payment of dividends or other distributions to us from our subsidiaries;

	•		transfer or sell assets;

	•		engage in certain transactions with our affiliates; and

	•		merge or consolidate with other companies or transfer all or substantially all of our assets.

Critical Accounting Policies and Estimates

Our Unaudited Condensed Consolidated Financial Statements have been prepared in accordance with U.S. generally accepted accounting principles. Preparation of these statements requires management to make judgments and estimates. Some accounting policies have a significant impact on amounts reported in these financial statements. A summary of significant accounting policies and a description of accounting policies that are considered critical may be found in our Fiscal 2010 Annual Report on Form 10-K, filed on April 21, 2011, in the Notes to Consolidated Financial Statements, Note 2, and the Critical Accounting Policies and Estimates section contained in the Management’s Discussion and Analysis of Financial Condition and Results of Operations therein.

Recent Accounting Pronouncements

See Note 2 — Recent Accounting Pronouncements, in the Notes to the Unaudited Condensed Consolidated Financial Statements.

Cautionary Note Regarding Forward-Looking Statements and Risk Factors

We and our representatives may from time to time make written or oral forward-looking statements, including statements contained in this and other filings with the Securities and Exchange Commission and in our press releases and reports we issue publicly. All statements which address operating performance, events or developments that we expect or anticipate will occur in the future, including statements relating

to our future financial performance, business strategy, planned capital expenditures, ability to service our debt, and new store openings for future periods, are forward-looking statements. The forward-looking statements are and will be based on management’s then current views and assumptions regarding future events and operating performance, and we assume no obligation to update any forward-looking statement. Forward-looking statements involve known or unknown risks, uncertainties and other factors, including changes in estimates and judgments discussed under “Critical Accounting Policies and Estimates” which may cause our actual results, performance or achievements, or industry results to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The forward-looking statements may use the words “expect,” “anticipate,” “plan,” “intend,” “project,” “may,” “believe,” “forecasts” and similar expressions. Some of these risks, uncertainties and other factors are as follows: changes in consumer preferences and consumer spending; competition; our level of indebtedness; general economic conditions; general political and social conditions such as war, political unrest and terrorism; natural disasters or severe weather events; currency fluctuations and exchange rate adjustments; uncertainties generally associated with the specialty retailing business, such as decreases in mall traffic due to high gasoline prices or other general economic conditions; disruptions in our supply of inventory; inability to increase same store sales; inability to renew, replace or enter into new store leases on favorable terms; increases in the cost of our merchandise; significant increases in our merchandise markdowns; inability to grow our store base in Europe or expand our international franchising operations; inability to design and implement new information systems or disruptions in adapting our information systems to allow for e-commerce sales; delays in anticipated store openings or renovations; results from any future asset impairment analysis; changes in applicable laws, rules and regulations, including changes in federal, state or local regulations governing the sale of our products, particularly regulations relating to the content in our products, general employment laws, including laws relating to overtime pay and employee benefits, health care laws, tax laws and import laws; product recalls; loss of key members of management; increases in the cost of labor; labor disputes; unwillingness of vendors and service providers to supply goods or services pursuant to historical customary credit arrangements; increases in the cost of borrowings; unavailability of additional debt or equity capital; and the impact of our substantial indebtedness on our operating income and our ability to grow. The Company undertakes no obligation to update or revise any forward-looking statements to reflect subsequent events or circumstances. In addition, we typically earn a disproportionate share of our operating income in the fourth quarter due to seasonal buying patterns, which are difficult to forecast with certainty. Additional discussion of these and other risks and uncertainties is contained elsewhere in this Item 2, in Item 3, “Quantitative and Qualitative Disclosures About Market Risk” and in our Form 10-K for Fiscal 2010 under “Statement Regarding Forward-Looking Disclosures” and “Risk Factors.”

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Cash and Cash Equivalents

We have significant amounts of cash and cash equivalents, excluding restricted cash, at financial institutions that are in excess of federally insured limits. With the current financial environment and the instability of financial institutions, we cannot be assured that we will not experience losses on our deposits. We mitigate this risk by investing in money market funds that are invested exclusively in U.S. Treasury securities, maintaining bank accounts with a group of credit worthy financial institutions and limiting the cash balance in any one bank account. As of July 30, 2011, all cash equivalents, excluding restricted cash, were maintained in one money market fund that was invested exclusively in U.S. Treasury securities and our restricted cash was deposited with significant and credit worthy financial institutions.

Interest Rates

On July 28, 2010, we entered into an interest rate swap agreement (the “Swap”) to manage exposure to fluctuations in interest rates. The Swap expires on July 30, 2013. The Swap represents a contract to exchange floating rate for fixed interest payments periodically over the life of the Swap without exchange of the underlying notional amount. The Swap covers an aggregate notional amount of $200.0 million of the outstanding principal balance of the senior secured term loan facility. The fixed rate of the Swap is 1.2235% and has been designated and accounted for as a cash flow hedge. At July 30, 2011, the estimated fair value of the Swap was a liability of approximately $2.5 million and was recorded, net of tax, as a component of “Accumulated other comprehensive income (loss), net of tax” in our Unaudited Condensed Consolidated Balance Sheets.

We entered into three interest rate swap agreements in July 2007 (the “2007 Swaps”) to manage exposure to fluctuations in interest rates. Those 2007 Swaps expired on June 30, 2010. The 2007 Swaps represented contracts to exchange floating rate for fixed interest payments periodically over the lives of the 2007 Swaps without exchange of the underlying notional amount. The 2007 Swaps covered an aggregate notional amount of $435.0 million of the outstanding principal balance of the senior secured term loan facility. The fixed rates of the 2007 Swaps ranged from 4.96% to 5.25%. The 2007 Swaps were designated and accounted for as cash flow hedges.

At July 30, 2011, we had fixed rate debt of $1,288.6 million and variable rate debt of $1,215.4 million. Based on our variable rate debt balance (less $200.0 million for the interest rate swap) as of July 30, 2011, a 1% change in interest rates would increase or decrease our annual interest expense by approximately $10.2 million, net.

Foreign Currency

We are exposed to market risk from foreign currency exchange rate fluctuations on the United States dollar (“USD” or “dollar”) value of foreign currency denominated transactions and our investments in foreign subsidiaries. We manage this exposure to market risk through our regular operating and financing activities, and may from time to time, use foreign currency options. Exposure to market risk for changes in foreign currency exchange rates relates primarily to our foreign operations’ buying, selling, and financing activities in currencies other than local currencies and to the carrying value of our net investments in foreign subsidiaries. At July 30, 2011, we maintained no foreign currency options. We generally do not hedge the translation exposure related to our net investment in foreign subsidiaries. Included in “Comprehensive income (loss)” are $14.7 million and $(7.8) million, net of tax, reflecting the unrealized gain (loss) on foreign currency translations during the six months ended July 30, 2011 and July 31, 2010, respectively.

Certain of our subsidiaries make significant USD purchases from Asian suppliers, particularly in China. Until July 2005, the Chinese government pegged its currency, the yuan renminbi (“RMB”), to the USD, adjusting the relative value only slightly and on infrequent occasion. Many people viewed this practice as leading to a substantial undervaluation of the RMB relative to the USD and other major currencies,

providing China with a competitive advantage in international trade. China now allows the RMB to float to a limited degree against a basket of major international currencies, including the USD, the euro and the Japanese yen. The official exchange rate has historically remained stable; however, there are no assurances that this currency exchange rate will continue to be as stable in the future due to the Chinese government’s adoption of a floating rate with respect to the value of the RMB against foreign currencies. While the international reaction to the RMB revaluation has generally been positive, there remains significant international pressure on China to adopt an even more flexible and more market-oriented currency policy that allows a greater fluctuation in the exchange rate between the RMB and the USD. This floating exchange rate, and any appreciation of the RMB that may result from such rate, could have various effects on our business, which include making our purchases of Chinese products more expensive. If we are unable to negotiate commensurate price decreases from our Chinese suppliers, these higher prices would eventually translate into higher costs of sales, which could have a material adverse effect on our results of operations.

The results of operations of our foreign subsidiaries, when translated into U.S. dollars, reflect the average foreign currency exchange rates for the months that comprise the periods presented. As a result, if foreign currency exchange rates fluctuate significantly from one period to the next, results in local currency can vary significantly upon translation into U.S. dollars. Accordingly, fluctuations in foreign currency exchange rates, most notably the strengthening of the dollar against the euro, could have a material impact on our revenue growth in future periods.

General Market Risk

Our competitors include department stores, specialty stores, mass merchandisers, discount stores and other retail and internet channels. Our operations are impacted by consumer spending levels, which are affected by general economic conditions, consumer confidence, employment levels, availability of consumer credit and interest rates on credit, consumer debt levels, consumption of consumer staples including food and energy, consumption of other goods, adverse weather conditions and other factors over which the Company has little or no control. The increase in costs of such staple items has reduced the amount of discretionary funds that consumers are willing and able to spend for other goods, including our merchandise. Should there be continued volatility in food and energy costs, sustained recession in the U.S. and Europe, rising unemployment and continued declines in discretionary income, our revenue and margins could be significantly affected in the future. We can not predict whether, when or the manner in which the economic conditions described above will change.

Item 4. Controls and Procedures

Disclosure Controls and Procedures

We carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934), as of the end of the period covered by this Quarterly Report. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this Quarterly Report to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, including each of such officers as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

No changes in our internal control over financial reporting have been made during the quarter ended July 30, 2011, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

We are, from time to time, involved in routine litigation incidental to the conduct of our business, including litigation instituted by persons injured upon premises under our control; litigation regarding the merchandise that we sell, including product and safety concerns regarding content in our merchandise; litigation with respect to various employment matters, including wage and hour litigation; litigation with present and former employees; and litigation regarding intellectual property rights. Although litigation is routine and incidental to the conduct of our business, like any business of our size which employs a significant number of employees and sells a significant amount of merchandise, such litigation can result in large monetary awards when judges, juries or other finders of facts do not agree with management’s evaluation of possible liability or outcome of litigation. Accordingly, the consequences of these matters cannot be finally determined by management. However, in the opinion of management, we believe that current pending litigation will not have a material adverse effect on our financial results.

Item 1A. Risk Factors

There have been no material changes in our risk factors disclosed in our Annual Report on Form 10-K for the year ended January 29, 2011.

Item 6. Exhibits


31.1		Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a).

31.2		Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a).

32.1		Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2		Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS		XBRL Instance Document

101.SCH		XBRL Taxonomy Extension Schema

101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document

101.LAB		XBRL Taxonomy Extension Label Linkbase Document

101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document

Items 2, 3, 4 and 5 of Part II are not applicable and have been omitted.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	CLAIRE’S STORES, INC.
September 2, 2011	By:	/s/ Eugene S. Kahn
		Eugene S. Kahn, Chief Executive Officer
		(principal executive officer)


September 2, 2011	By:	/s/ J. Per Brodin
		J. Per Brodin, Executive Vice President and
		Chief Financial Officer (principal financial and accounting officer)

INDEX TO EXHIBITS


EXHIBIT NO.		DESCRIPTION
31.1		Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a).

31.2		Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a).

32.1		Certification of Chief Executive Officer pursuant to 18 USC Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2		Certification of Chief Financial Officer pursuant to 18 USC Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS		XBRL Instance Document

101.SCH		XBRL Taxonomy Extension Schema

101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document

101.LAB		XBRL Taxonomy Extension Label Linkbase Document

101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document

EX-31.1 2 g27469exv31w1.htm EX-31.1 exv31w1

Exhibit 31.1

CERTIFICATE PURSUANT TO
RULES 13a-14(a)/15d-14(a),
AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Eugene S. Kahn, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Claire’s Stores, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) and internal control over financial reporting (as defined in Exchange Act rules 13a-15(f) and 15d-15(f))) for the registrant and we have:

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.



September 2, 2011	/s/ Eugene S. Kahn
	Eugene S. Kahn
	Chief Executive Officer

EX-31.2 3 g27469exv31w2.htm EX-31.2 exv31w2

Exhibit 31.2

CERTIFICATE PURSUANT TO
RULES 13a-14(a)/15d-14(a),
AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, J. Per Brodin, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Claire’s Stores, Inc.;

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.



September 2, 2011	/s/ J. Per Brodin
	J. Per Brodin
	Chief Financial Officer

EX-32.1 4 g27469exv32w1.htm EX-32.1 exv32w1

Exhibit 32.1

CERTIFICATION PURSUANT TO
18 USC. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the report on Form 10-Q of Claire’s Stores, Inc. (the “Company”) for the quarterly period ended July 30, 2011 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Eugene S. Kahn, Chief Executive Officer of the Company, hereby certify, pursuant to 18 USC. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.



	/s/ Eugene S. Kahn
	Eugene S. Kahn
	Chief Executive Officer September 2, 2011

EX-32.2 5 g27469exv32w2.htm EX-32.2 exv32w2

Exhibit 32.2

CERTIFICATION PURSUANT TO
18 USC. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the report on Form 10-Q of Claire’s Stores, Inc. (the “Company”) for the quarterly period ended July 30, 2011 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, J. Per Brodin, Chief Financial Officer of the Company, hereby certify, pursuant to 18 USC. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.



	/s/ J. Per Brodin
	J. Per Brodin
	Chief Financial Officer September 2, 2011

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<div align="left" style="font-family: 'Times New Roman',Times,serif"> <div align="center" style="font-size: 10pt; margin-top: 0pt"><b></b> </div> <div align="left"> </div>   <div align="center" style="font-size: 10pt; margin-top: 0pt"><b></b> </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>1. Basis of Presentation</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The accompanying Unaudited Condensed Consolidated Financial Statements have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair statement of the results for the interim periods presented have been included. These statements should be read in conjunction with the Consolidated Financial Statements and notes thereto included in the Annual Report on Form 10-K for the year ended January 29, 2011 filed with the Securities and Exchange Commission, including Note 2 to the Consolidated Financial Statements included therein which discusses principles of consolidation and summary of significant accounting policies. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The Unaudited Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions about future events. These estimates and the underlying assumptions affect the amounts of assets and liabilities reported, disclosures regarding contingent assets and liabilities and reported amounts of revenues and expenses. Such estimates include, but are not limited to, the value of inventories, goodwill, intangible assets and other long-lived assets, legal contingencies and assumptions used in the calculation of income taxes, retirement and other post-retirement benefits, stock-based compensation, derivative and hedging activities, residual values and other items. These estimates and assumptions are based on management’s best estimates and judgment. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, which management believes to be reasonable under the circumstances. Management adjusts such estimates and assumptions when facts and circumstances dictate. Illiquid credit markets, volatile equity, foreign currency, energy markets and declines in consumer spending have combined to increase the uncertainty inherent in such estimates and assumptions. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. Changes in those estimates will be reflected in the financial statements in those future periods when the changes occur. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Due to the seasonal nature of the retail industry and the Company’s business, the results of operations for interim periods of the year are not necessarily indicative of the results of operations on an annualized basis. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The Unaudited Condensed Consolidated Financial Statements include certain reclassifications of prior period amounts in order to conform to current period presentation. </div> </div>

<div align="left" style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>2. Recent Accounting Pronouncements</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">In May 2011, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) 2011-04, <i>Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and International Financial Reporting Standards (“IFRSs”)</i> to provide a consistent definition of fair value and ensure that fair value measurements and disclosure requirements are similar between U.S. GAAP and IFRSs<i>. </i>This guidance changes certain fair value measurement principles and enhances the disclosure requirements for fair value measurements. The amendments in this ASU are effective for interim and annual fiscal periods beginning after December 15, 2011 and are applied prospectively. Early adoption by public entities is not permitted. The Company does not expect adoption of ASU 2011-04 will have a material impact on the Company’s financial position, results of operations or cash flows. </div>   </div>  <div style="font-family: 'Times New Roman',Times,serif"> </div>

<div style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>3. Fair Value Measurements</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">ASC 820, <i>Fair Value Measurement Disclosures </i>defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. Disclosures of the fair value of certain financial instruments are required, whether or not recognized in the Unaudited Condensed Consolidated Balance Sheets. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date and in the principal or most advantageous market for that asset or liability. There is a three-level valuation hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Observable inputs are inputs market participants would use in valuing the asset or liability and are developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the factors market participants would use in valuing the asset or liability. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt"><u>Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis</u> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The following tables summarize the Company’s assets (liabilities) measured at fair value on a recurring basis segregated among the appropriate levels within the fair value hierarchy (in thousands): </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="52%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="10" style="border-bottom: 1px solid #000000"><b>Fair Value Measurements at July 30, 2011 Using</b></td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Quoted Prices in</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"> </td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Active Markets for</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Significant</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Significant</b></td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Identical Assets</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Other Observable</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Unobservable</b></td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>(Liabilities)</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Inputs</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Inputs</b></td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Carrying Value</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>(Level 1)</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>(Level 2)</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>(Level 3)</b></td> <td> </td> </tr>   <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Interest rate swap </div></td> <td> </td> <td nowrap="nowrap" align="left">$</td> <td align="right">(2,541</td> <td nowrap="nowrap">)</td> <td> </td> <td align="left">$</td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left">$</td> <td align="right">(2,541</td> <td nowrap="nowrap">)</td> <td> </td> <td align="left">$</td> <td align="right">—</td> <td> </td> </tr>  </table> </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="52%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="10" style="border-bottom: 1px solid #000000"><b>Fair Value Measurements at January 29, 2011 Using</b></td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Quoted Prices in</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"> </td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Active Markets for</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Significant</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Significant</b></td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Identical Assets</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Other Observable</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Unobservable</b></td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>(Liabilities)</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Inputs</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Inputs</b></td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Carrying Value</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>(Level 1)</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>(Level 2)</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>(Level 3)</b></td> <td> </td> </tr>   <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Interest rate swaps </div></td> <td> </td> <td nowrap="nowrap" align="left">$</td> <td align="right">(1,165</td> <td nowrap="nowrap">)</td> <td> </td> <td align="left">$</td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left">$</td> <td align="right">(1,165</td> <td nowrap="nowrap">)</td> <td> </td> <td align="left">$</td> <td align="right">—</td> <td> </td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The fair value of the Company’s interest rate swaps represent the estimated amounts the Company would receive or pay to terminate those contracts at the reporting date based upon pricing or valuation models applied to current market information. The interest rate swaps are valued using the market standard methodology of netting the discounted future fixed cash payments and the discounted expected variable cash receipts. The variable cash receipts are based on an expectation of future interest rates derived from observed market interest rate curves. The Swap entered into on July 28, 2010 is collateralized by cash and thus the Company does not make any credit-related valuation adjustments. The Company mitigates derivative credit risk by transacting with highly rated counterparties. The Company does not enter into derivative financial instruments for trading or speculative purposes. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt"><u>Non-Financial Assets Measured at Fair Value on a Non-Recurring Basis</u> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The Company’s non-financial assets, which include goodwill, intangible assets, and long-lived tangible assets, are not adjusted to fair value on a recurring basis. Fair value measures of non-financial assets are primarily used in the impairment analysis of these assets. Any resulting asset impairment would require that the non-financial asset be recorded at its fair value. The Company reviews goodwill and indefinite-lived intangible assets for impairment annually, during the fourth quarter of each fiscal year, or as circumstances indicate the possibility of impairment. The Company monitors the carrying value of definite-lived intangible assets and long-lived tangible assets for impairment whenever events or changes in circumstances indicate its carrying amount may not be recoverable. </div>   </div>  <div style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 6pt"><u>Financial Instruments Not Measured at Fair Value</u> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The Company’s financial instruments consist primarily of cash and cash equivalents, restricted cash, accounts receivable, current liabilities, short-term debt, long-term debt, and the revolving credit facility. Cash and cash equivalents, restricted cash, accounts receivable, short-term debt and current liabilities approximate fair market value due to the relatively short maturity of these financial instruments. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The Company considers all investments with a maturity of three months or less when acquired to be cash equivalents. The Company’s cash equivalent instruments are valued using quoted market prices and are primarily U.S. Treasury securities. The estimated fair value of the Company’s long-term debt was approximately $2.29 billion at July 30, 2011, compared to a carrying value of $2.43 billion at that date. The estimated fair value of the Company’s long-term debt, including the current portion, and the revolving credit facility was approximately $2.36 billion at January 29, 2011, compared to a carrying value of $2.45 billion at that date. For publicly-traded debt, the fair value (estimated market value) is based on market prices. For non-publicly-traded debt, fair value is estimated based on quoted prices for similar instruments. </div> </div>

<div style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>4. Debt</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Debt as of July 30, 2011 and January 29, 2011 included the following components (in thousands): </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="76%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>July 30, 2011</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>January 29, 2011</b></td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Short-term debt and current portion of long-term debt: </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:45px; text-indent:-15px">Note payable to bank due 2012 </div></td> <td> </td> <td align="left">$</td> <td align="right">61,042</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">57,703</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:45px; text-indent:-15px">Current portion of long-term debt </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">18,451</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Total short-term debt and current portion of long-term debt </div></td> <td> </td> <td align="left">$</td> <td align="right">61,042</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">76,154</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Long-term debt: </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:45px; text-indent:-15px">Senior secured term loan facility due 2014 </div></td> <td> </td> <td align="left">$</td> <td align="right">1,154,310</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">1,399,250</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:45px; text-indent:-15px">Senior notes due 2015 </div></td> <td> </td> <td> </td> <td align="right">223,000</td> <td> </td> <td> </td> <td> </td> <td align="right">236,000</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:45px; text-indent:-15px">Senior toggle notes due 2015 </div></td> <td> </td> <td> </td> <td align="right">338,667</td> <td> </td> <td> </td> <td> </td> <td align="right">360,431</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:45px; text-indent:-15px">Senior subordinated notes due 2017 </div></td> <td> </td> <td> </td> <td align="right">259,612</td> <td> </td> <td> </td> <td> </td> <td align="right">259,612</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:45px; text-indent:-15px">Senior secured second lien notes due 2019 </div></td> <td> </td> <td> </td> <td align="right">450,000</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:45px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td> </td> <td align="right">2,425,589</td> <td> </td> <td> </td> <td> </td> <td align="right">2,255,293</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:45px; text-indent:-15px">Less: current portion of long-term debt </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(18,451</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:45px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Long-term debt </div></td> <td> </td> <td align="left">$</td> <td align="right">2,425,589</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">2,236,842</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Senior secured revolving credit facility due 2013 </div></td> <td> </td> <td align="left">$</td> <td align="right">—</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">194,000</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Obligations under capital leases </div></td> <td> </td> <td align="left">$</td> <td align="right">17,290</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">17,290</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">See Note 3 for related fair value disclosure on debt. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt"><u>Short-term Debt</u> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">In January 2011, we entered into a Euro (“€”) denominated loan (the “Euro Loan”) in the amount of €42.4 million that is due on January 24, 2012. The Euro Loan bears interest at the three month Euro Interbank Offered Rate (“EURIBOR”) rate plus 8.00% per year and is payable quarterly. As of July 30, 2011, there was €42.4 million, or the equivalent of $61.0 million, outstanding under the Euro Loan. The net proceeds of the borrowing were used for general corporate purposes. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The obligations under the Euro Loan are secured by a cash deposit in the amount of €15.1 million, or the equivalent of $21.7 million at July 30, 2011, and a perfected first lien security interest in all of the issued and outstanding equity interest of one of our international subsidiaries, Claire’s Holdings S.a.r.l. The cash deposit is classified as “Cash and cash equivalents and restricted cash” in our Unaudited Condensed Consolidated Balance Sheets. </div>   </div>  <div style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 6pt"><u>Senior Secured Second Lien Notes</u> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">On March 4, 2011, the Company issued $450.0 million aggregate principal amount of 8.875% senior secured second lien notes that mature on March 15, 2019 (the “Senior Secured Second Lien Notes”). Interest on the Senior Secured Second Lien Notes is payable semi-annually to holders of record at the close of business on March 1 or September 1 immediately preceding the interest payment date on March 15 and September 15 of each year, commencing on September 15, 2011. The Senior Secured Second Lien Notes are guaranteed on a second-priority senior secured basis by all of the Company’s existing and future direct or indirect wholly-owned domestic subsidiaries that guarantee the Company’s senior secured credit facility. The Senior Secured Second Lien Notes and related guarantees are secured by a second-priority lien on substantially all of the assets that secure the Company’s and its subsidiary guarantors’ obligations under the Company’s senior secured credit facility. The Company used the proceeds of the offering of the Senior Secured Second Lien Notes to reduce the entire $194.0 million outstanding under the Company’s revolving credit facility (without terminating the commitment), to repay $244.9 million of indebtedness under the Company’s senior secured term loan, and to pay $10.4 million in financing costs which have been recorded as Deferred Financing Costs, Net in the accompanying Unaudited Condensed Consolidated Balance Sheets. As a result of our prepayment under the senior secured term loan facility, we are no longer required to make any quarterly payments and have a final payment due May 29, 2014. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt"><u>Note Repurchases</u> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The following is a summary of the Company’s debt repurchase activity for the three and six months ended July 30, 2011 and July 31, 2010 (in thousands): </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="28%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="10" style="border-bottom: 1px solid #000000"><b>Three Months Ended July 30, 2011</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="10" style="border-bottom: 1px solid #000000"><b>Six Months Ended July 30, 2011</b></td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Principal</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Repurchases</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Recognized</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Principal</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Repurchase</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Recognized</b></td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td nowrap="nowrap" align="center" style="border-bottom: 1px solid #000000"><b>Notes Repurchased</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Amount</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Price</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Gain (1)</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Amount</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Price</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Gain (Loss) (2)</b></td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Senior Notes </div></td> <td> </td> <td align="left">$</td> <td align="right">3,000</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">2,940</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">12</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">13,000</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">12,870</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left">$</td> <td align="right">(86</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Senior Toggle Notes </div></td> <td> </td> <td> </td> <td align="right">18,986</td> <td> </td> <td> </td> <td> </td> <td align="right">18,543</td> <td> </td> <td> </td> <td> </td> <td align="right">221</td> <td> </td> <td> </td> <td> </td> <td align="right">33,140</td> <td> </td> <td> </td> <td> </td> <td align="right">32,627</td> <td> </td> <td> </td> <td> </td> <td align="right">568</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td align="left">$</td> <td align="right">21,986</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">21,483</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">233</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">46,140</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">45,497</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">482</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> </tr>  </table> </div> <div align="left"> <div style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">  </div> </div> <table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left"> <tr> <td width="3%"></td> <td width="1%"></td> <td width="96%"></td> </tr> <tr valign="top"> <td nowrap="nowrap" align="left">(1)</td> <td> </td> <td>Net of deferred issuance cost write-offs of $48 for the Senior Notes and $222 for the Senior Toggle Notes.</td> </tr> <tr style="font-size: 3pt"> <td> </td> </tr> <tr valign="top"> <td nowrap="nowrap" align="left">(2)</td> <td> </td> <td>Net of deferred issuance cost write-offs of $216 for the Senior Notes and $400 for the Senior Toggle Notes, and accrued interest write-off of $455 for the Senior Toggle Notes.</td> </tr> </table> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="28%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="10" style="border-bottom: 1px solid #000000"><b>Three Months Ended July 31, 2010</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="10" style="border-bottom: 1px solid #000000"><b>Six Months Ended July 31, 2010</b></td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Principal</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Repurchases</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Recognized</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Principal</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Repurchase</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Recognized</b></td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td nowrap="nowrap" align="center" style="border-bottom: 1px solid #000000"><b>Notes Repurchased</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Amount</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Price</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Gain (1)</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Amount</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Price</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Gain (2)</b></td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Senior Toggle Notes </div></td> <td> </td> <td align="left">$</td> <td align="right">41,623</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">36,328</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">5,340</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">47,623</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">41,313</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">6,427</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Senior Subordinated Notes </div></td> <td> </td> <td> </td> <td align="right">7,000</td> <td> </td> <td> </td> <td> </td> <td align="right">5,935</td> <td> </td> <td> </td> <td> </td> <td align="right">909</td> <td> </td> <td> </td> <td> </td> <td align="right">22,625</td> <td> </td> <td> </td> <td> </td> <td align="right">17,799</td> <td> </td> <td> </td> <td> </td> <td align="right">4,309</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td align="left">$</td> <td align="right">48,623</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">42,263</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">6,249</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">70,248</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">59,112</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">10,736</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> </tr>  </table> </div> <div align="left"> <div style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">  </div> </div> <table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left"> <tr> <td width="3%"></td> <td width="1%"></td> <td width="96%"></td> </tr> <tr valign="top"> <td nowrap="nowrap" align="left">(1)</td> <td> </td> <td>Net of deferred issuance cost write-offs of $673 for the Senior Toggle Notes and $156 for the Senior Subordinated Notes, and accrued interest write-off of $718 for the Senior Toggle Notes.</td> </tr> <tr style="font-size: 3pt"> <td> </td> </tr> <tr valign="top"> <td nowrap="nowrap" align="left">(2)</td> <td> </td> <td>Net of deferred issuance cost write-offs of $777 for the Senior Toggle Notes and $517 for the Senior Subordinated Notes, and accrued interest write-off of $894 for the Senior Toggle Notes.</td> </tr> </table> <div align="left" style="font-size: 10pt; margin-top: 6pt">The Company elected to pay interest in kind on its Senior Toggle Notes for the interest periods beginning June 2, 2008 through June 1, 2011. This election, net of reductions for note repurchases, increased the principal amount on the Senior Toggle Notes by $109.5 million and $98.1 million as of July 30, 2011 and January 29, 2011, respectively. The accrued payment in kind interest is included in “Long-term debt” in the Unaudited Condensed Consolidated Balance Sheets. Effective June 2, 2011, the Company began paying interest in cash. </div>   </div>  <div style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 6pt"><u>Covenants</u> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Our Senior Notes, Senior Toggle Notes, Senior Subordinated Notes and Senior Secured Second Lien Notes (collectively, the “Notes”), Credit Facility and Euro Loan contain certain covenants that, among other things, and subject to certain exceptions and other basket amounts, restrict our ability and the ability of our subsidiaries to: </div> <div style="margin-top: 6pt"> <table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="6%" style="background: transparent"> </td> <td width="2%" nowrap="nowrap" align="left"><b>•</b></td> <td width="1%"> </td> <td>incur additional indebtedness;</td> </tr> <tr> <td style="font-size: 6pt"> </td> </tr> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="6%" style="background: transparent"> </td> <td width="2%" nowrap="nowrap" align="left"><b>•</b></td> <td width="1%"> </td> <td>pay dividends or distributions on our capital stock, repurchase or retire our capital stock and redeem, repurchase or defease any subordinated indebtedness;</td> </tr> <tr> <td style="font-size: 6pt"> </td> </tr> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="6%" style="background: transparent"> </td> <td width="2%" nowrap="nowrap" align="left"><b>•</b></td> <td width="1%"> </td> <td>make certain investments;</td> </tr> <tr> <td style="font-size: 6pt"> </td> </tr> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="6%" style="background: transparent"> </td> <td width="2%" nowrap="nowrap" align="left"><b>•</b></td> <td width="1%"> </td> <td>create or incur certain liens;</td> </tr> <tr> <td style="font-size: 6pt"> </td> </tr> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="6%" style="background: transparent"> </td> <td width="2%" nowrap="nowrap" align="left"><b>•</b></td> <td width="1%"> </td> <td>create restrictions on the payment of dividends or other distributions to us from our subsidiaries;</td> </tr> <tr> <td style="font-size: 6pt"> </td> </tr> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="6%" style="background: transparent"> </td> <td width="2%" nowrap="nowrap" align="left"><b>•</b></td> <td width="1%"> </td> <td>transfer or sell assets;</td> </tr> <tr> <td style="font-size: 6pt"> </td> </tr> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="6%" style="background: transparent"> </td> <td width="2%" nowrap="nowrap" align="left"><b>•</b></td> <td width="1%"> </td> <td>engage in certain transactions with our affiliates; and</td> </tr> <tr> <td style="font-size: 6pt"> </td> </tr> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="6%" style="background: transparent"> </td> <td width="2%" nowrap="nowrap" align="left"><b>•</b></td> <td width="1%"> </td> <td>merge or consolidate with other companies or transfer all or substantially all of our assets.</td> </tr> </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">None of these covenants, however, require the Company to maintain any particular financial ratio or other measure of financial performance. As of July 30, 2011, we were in compliance with the covenants under our Credit Facility, Notes and Euro Loan. </div> </div>

<div style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>5. Derivatives and Hedging Activities</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The Company formally designates and documents the financial instrument as a hedge of a specific underlying exposure, as well as the risk management objectives and strategies for undertaking the hedge transaction. The Company formally assesses both at inception and at least quarterly thereafter, whether the financial instruments that are used in hedging transactions are effective at offsetting changes in cash flows of the related underlying exposure. The Company measures the effectiveness of its cash flow hedges by evaluating the following criteria: (i) the re-pricing dates of the derivative instrument match those of the debt obligation; (ii) the interest rates of the derivative instrument and the debt obligation are based on the same interest rate index and tenor; (iii) the variable interest rate of the derivative instrument does not contain a floor or cap, or other provisions that cause a basis difference with the debt obligation; and (iv) the likelihood of the counterparty not defaulting is assessed as being probable. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The Company primarily employs derivative financial instruments to manage its exposure to interest rate changes and to limit the volatility and impact of interest rate changes on earnings and cash flows. The Company does not enter into derivative financial instruments for trading or speculative purposes. The Company faces credit risk if the counterparties to the financial instruments are unable to perform their obligations. However, the Company seeks to mitigate derivative credit risk by entering into transactions with counterparties that are significant and creditworthy financial institutions. The Company monitors the credit ratings of the counterparties. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">For derivatives that qualify as cash flow hedges, the Company reports the effective portion of the change in fair value as a component of “Accumulated other comprehensive income (loss), net of tax” in the Unaudited Condensed Consolidated Balance Sheets and reclassifies it into earnings in the same periods in which the hedged item affects earnings, and within the same income statement line item as the impact of the hedged item. The ineffective portion of the change in fair value of a cash flow hedge is recognized in income immediately. No ineffective portion was recorded to earnings during the three and six months ended July 30, 2011 and July 31, 2010, respectively, and all components of the derivative gain or loss were included in the assessment of hedge effectiveness. For derivative financial instruments which do not qualify as cash flow hedges, any changes in fair value would be recorded in the Consolidated Statements of Operations and Comprehensive Income (Loss). </div>   </div>  <div style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 6pt">The Company may at its discretion change the designation of any such hedging instrument agreements prior to maturity. At that time, any gains or losses previously reported in accumulated other comprehensive income (loss) on termination would amortize into interest expense or interest income to correspond to the recognition of interest expense or interest income on the hedged debt. If such debt instrument was also terminated, the gain or loss associated with the terminated derivative included in accumulated other comprehensive income (loss) at the time of termination of the debt would be recognized in the Consolidated Statements of Operations and Comprehensive Income (Loss) at that time. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">On July 28, 2010, the Company entered into an interest rate swap agreement (the “Swap”) to manage exposure to fluctuations in interest rate changes related to the senior secured term loan facility. The Swap has been designated and accounted for as a cash flow hedge and expires on July 30, 2013. The Swap represents a contract to exchange floating rate for fixed interest payments periodically over the life of the Swap without exchange of the underlying notional amount. The Swap covers an aggregate notional amount of $200.0 million of the outstanding principal balance of the senior secured term loan facility and has a fixed rate of 1.2235%. The interest rate Swap results in the Company paying a fixed rate plus the applicable margin then in effect for LIBOR borrowings resulting in an interest rate of 3.97% at July 30, 2011, on a notional amount of $200.0 million of the senior secured term loan. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The Company entered into three interest rate swap agreements in July 2007 (the “2007 Swaps”) to manage exposure to interest rate changes related to the senior secured term loan facility. The 2007 Swaps were designated and accounted for as cash flow hedges. Those 2007 Swaps expired on June 30, 2010. The 2007 Swaps covered an aggregate notional amount of $435.0 million of the outstanding principal balance of the senior secured term loan facility. The fixed rates of the 2007 Swaps ranged from 4.96% to 5.25%. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The Company does not make any credit-related valuation adjustments to the Swap entered into on July 28, 2010 because it is collateralized by cash, the balance of which is $5.0 million at July 30, 2011. The collateral requirement increases for declines in the three year LIBOR rate below 1.2235%. As of July 30, 2011, the three year LIBOR rate was 0.58% and each further 10 basis point decline in rate would result in an additional collateral requirement of $0.6 million. Any subsequent increases in the three year LIBOR rate will result in a release of the collateral. The Company included credit-related valuation adjustments in the calculation of fair value for the 2007 Swaps. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">At July 30, 2011 and January 29, 2011, the estimated fair values of the Company’s derivative financial instruments designated as interest rate cash flow hedges were liabilities of approximately $2.5 million and $1.2 million, respectively, which were recorded in “Accrued expenses and other current liabilities” in the Unaudited Condensed Consolidated Balance Sheets. These amounts were also recorded, net of tax of approximately $5.7 million and $5.7 million, respectively, as a component in “Accumulated other comprehensive income (loss), net of tax” in the Unaudited Condensed Consolidated Balance Sheets. See Note 3 — Fair Value Measurements for fair value measurement of interest rate swaps. </div>   </div>  <div style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 6pt">The following tables provide a summary of the financial statement effect of the Company’s derivative financial instruments designated as interest rate cash flow hedges during the three and six months ended July 30, 2011 and July 31, 2010 (in thousands): </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="40%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Location of Gain or</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="6"> </td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>(Loss) Reclassified</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="6"><b>Amount of Gain or (Loss)</b></td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td nowrap="nowrap" align="center"><b>Derivatives in</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="6"><b>Amount of Gain or (Loss)</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>from Accumulated</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 0px solid #000000"><b>Reclassified from Accumulated</b></td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td nowrap="nowrap" align="center"><b>Cash Flow Hedging</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="6"><b>Recognized in OCI on Derivative</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>OCI into Income</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 0px solid #000000"><b>OCI into Income</b></td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td nowrap="nowrap" align="center" style="border-bottom: 1px solid #000000"><b>Relationships</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>(Effective Portion)</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>(Effective Portion)</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>(Effective Portion) (1)</b></td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 0px solid #000000"><b>Three months ended</b></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 0px solid #000000"><b>Three months ended</b></td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>July 30, 2011</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>July 31, 2010</b></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>July 30, 2011</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>July 31, 2010</b></td> <td> </td> </tr>   <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Interest rate swaps </div></td> <td> </td> <td nowrap="nowrap" align="left">$</td> <td align="right">(1,079</td> <td nowrap="nowrap">)</td> <td> </td> <td align="left">$</td> <td align="right">2,590</td> <td> </td> <td> </td> <td colspan="3" align="center">Interest expense, net</td> <td> </td> <td nowrap="nowrap" align="left">$</td> <td align="right">(481</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left">$</td> <td align="right">(3,447</td> <td nowrap="nowrap">)</td> </tr>  </table> </div> <div align="left"> <div style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">  </div> </div> <table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left"> <tr> <td width="3%"></td> <td width="1%"></td> <td width="96%"></td> </tr> <tr valign="top"> <td nowrap="nowrap" align="left"><i>(1)</i></td> <td> </td> <td><i>Represents reclassification of amounts from accumulated other comprehensive income (loss) to earnings as interest expense is recognized on the senior secured term loan facility. No ineffectiveness is associated with these interest rate cash flow hedges.</i></td> </tr> </table> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="40%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Location of Gain or</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="6"> </td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>(Loss) Reclassified</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="6"><b>Amount of Gain or (Loss)</b></td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td nowrap="nowrap" align="center"><b>Derivatives in Cash</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="6"><b>Amount of Gain or (Loss)</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>from Accumulated</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 0px solid #000000"><b>Reclassified from Accumulated</b></td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td nowrap="nowrap" align="center"><b>Flow Hedging</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="6"><b>Recognized in OCI on Derivative</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>OCI into Income</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 0px solid #000000"><b>OCI into Income</b></td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td nowrap="nowrap" align="center" style="border-bottom: 1px solid #000000"><b>Relationships</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>(Effective Portion)</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>(Effective Portion)</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>(Effective Portion) (1)</b></td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 0px solid #000000"><b>Six months ended</b></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 0px solid #000000"><b>Six months ended</b></td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>July 30, 2011</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>July 31, 2010</b></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>July 30, 2011</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>July 31, 2010</b></td> <td> </td> </tr>   <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Interest rate swaps </div></td> <td> </td> <td nowrap="nowrap" align="left">$</td> <td align="right">(1,376</td> <td nowrap="nowrap">)</td> <td> </td> <td align="left">$</td> <td align="right">7,749</td> <td> </td> <td> </td> <td colspan="3" align="center">Interest expense, net</td> <td> </td> <td nowrap="nowrap" align="left">$</td> <td align="right">(946</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left">$</td> <td align="right">(8,779</td> <td nowrap="nowrap">)</td> </tr>  </table> </div> <div align="left"> <div style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">  </div> </div> <table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left"> <tr> <td width="3%"></td> <td width="1%"></td> <td width="96%"></td> </tr> <tr valign="top"> <td nowrap="nowrap" align="left"><i>(1)</i></td> <td> </td> <td><i>Represents reclassification of amounts from accumulated other comprehensive income (loss) to earnings as interest expense is recognized on the senior secured term loan facility. No ineffectiveness is associated with these interest rate cash flow hedges.</i></td> </tr> </table> <div align="left" style="font-size: 10pt; margin-top: 6pt">Over the next twelve months, the Company expects to reclassify net losses on the Company’s interest rate swaps recognized within “Accumulated other comprehensive income (loss), net of tax” of $1.9 million to interest expense. </div> </div>

<div style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>6. Commitments and Contingencies</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The Company is, from time to time, involved in litigation incidental to the conduct of its business, including personal injury litigation, litigation regarding merchandise sold, including product and safety concerns regarding heavy metal and chemical content in merchandise, litigation with respect to various employment matters, including litigation with present and former employees, wage and hour litigation, and litigation to protect trademark rights. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The Company believes that current pending litigation will not have a material adverse effect on its consolidated financial position, results of operations or cash flows. </div>   </div>  <div style="font-family: 'Times New Roman',Times,serif"> </div>

<div style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>7. Stock Options and Stock-Based Compensation</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The following is a summary of activity in the Company’s stock option plan for the six months ended July 30, 2011: </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="64%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Weighted-</b></td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Weighted-</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Average</b></td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Average</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Remaining</b></td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Number of</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Exercise</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Contractual</b></td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Shares</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Price</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Term (Years)</b></td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Outstanding at January 29, 2011 </div></td> <td> </td> <td> </td> <td align="right">6,860,014</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">10.00</td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Options granted </div></td> <td> </td> <td> </td> <td align="right">375,000</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">10.00</td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Options exercised </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Options forfeited or expired </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(67,406</td> <td nowrap="nowrap">)</td> <td> </td> <td align="left">$</td> <td align="right">10.00</td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Outstanding at July 30, 2011 </div></td> <td> </td> <td> </td> <td align="right">7,167,608</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">10.00</td> <td> </td> <td> </td> <td> </td> <td align="right">4.0</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Options vested and expected to vest at July 30, 2011 </div></td> <td> </td> <td> </td> <td align="right">6,867,260</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">10.00</td> <td> </td> <td> </td> <td> </td> <td align="right">4.0</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Exercisable at July 30, 2011 </div></td> <td> </td> <td> </td> <td align="right">2,692,445</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">10.00</td> <td> </td> <td> </td> <td> </td> <td align="right">3.3</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The weighted average grant date fair value of options granted during the six months ended July 30, 2011 and July 31, 2010 was $2.86 and $3.00, respectively. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">During the three and six months ended July 30, 2011 and July 31, 2010, the Company recorded stock-based compensation expense and additional paid-in capital relating to stock-based compensation of approximately $1.2 million, $2.1 million, $1.3 million and $2.5 million, respectively. Stock-based compensation expense is recorded in “Selling, general and administrative” expenses in the accompanying Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). </div> <div align="left" style="font-size: 10pt; margin-top: 6pt"><u>Incentive Plan Modifications</u> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">On May 20, 2011, the Compensation Committee of the Company approved amendments to the Company’s Stock Incentive Plan (the “Incentive Plan”), the form of option grant letter and certain outstanding options (the “Outstanding Options”) held by various employees (collectively, the “Plan Amendments”). </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The Plan Amendments (which will apply to Outstanding Options and, unless otherwise specified at the time of grant, any future option grants under the Amended Incentive Plan, and, where applicable, any shares held by employees) generally provide for the following: </div> <div style="margin-top: 6pt"> <table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="3%" style="background: transparent"> </td> <td width="2%" nowrap="nowrap" align="left"><b>•</b></td> <td width="1%"> </td> <td>Eliminated the holding period after vesting for Performance and Stretch Performance options;</td> </tr> <tr> <td style="font-size: 6pt"> </td> </tr> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="3%" style="background: transparent"> </td> <td width="2%" nowrap="nowrap" align="left"><b>•</b></td> <td width="1%"> </td> <td>Changed the definition of “Qualified IPO”;</td> </tr> <tr> <td style="font-size: 6pt"> </td> </tr> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="3%" style="background: transparent"> </td> <td width="2%" nowrap="nowrap" align="left"><b>•</b></td> <td width="1%"> </td> <td>Eliminated certain restrictions on transfer of shares in the event of a Qualified IPO;</td> </tr> <tr> <td style="font-size: 6pt"> </td> </tr> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="3%" style="background: transparent"> </td> <td width="2%" nowrap="nowrap" align="left"><b>•</b></td> <td width="1%"> </td> <td>Provided each optionee the right to satisfy the exercise price and any withholding tax obligation triggered by such exercise by any combination of cash and/or shares (including both previously owned shares and shares otherwise to be delivered upon exercise of the option); and</td> </tr> <tr> <td style="font-size: 6pt"> </td> </tr> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="3%" style="background: transparent"> </td> <td width="2%" nowrap="nowrap" align="left"><b>•</b></td> <td width="1%"> </td> <td>Added two additional vesting events applicable to Performance Options and to certain Stretch Performance Options if they occur prior to or concurrent with the end of the Company’s fiscal 2012 year.</td> </tr> </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The modifications to the Company’s Incentive Plan resulted in $2.2 million in total incremental compensation cost, of which $0.2 million was recognized in the second fiscal quarter 2011. The remaining unrecognized compensation cost will be amortized over the remaining vesting period. The plan modification affected approximately 155 employees. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt"><u>Buy-One-Get-One (“BOGO”) Option Offer</u> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">On May 20, 2011, the Compensation Committee of the Company also approved an offer pursuant to the amended Incentive Plan to certain employees to purchase a specified number of shares of the common stock of the parent of the Company at a price per share of $10.00 (the “Offer”). For each share purchased, the employee received an option to purchase an additional share at $10.00 (a “BOGO Option”). The Offer was made available to employees who had not previously accepted similar offers from the parent of the Company. The Company granted 179,000 BOGO Options and recognized stock-based compensation expense of approximately $0.1 million in the second fiscal quarter 2011 related to these options. </div> </div>

<div style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>8. Income Taxes</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The effective income tax rate was (50.4)% and (9.9)% for the three and six months ended July 30, 2011. This effective income tax rate differed from the statutory federal tax rate of 35% primarily from increases in the valuation allowance recorded for additional deferred tax assets generated in the three and six months ended July 30, 2011 by the Company’s U.S. operations. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The effective income tax rate was (23.8)% and (18.6)% for the three and six months ended July 31, 2010. This effective income tax rate differed from the statutory federal tax rate of 35% primarily from increases in the valuation allowance recorded for additional deferred tax assets generated in the three and six months ended July 31, 2010 by the Company’s U.S. operations. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">In April 2011, the Company received from the Canada Revenue Agency withholding tax assessments for 2003 through 2007 of approximately $5.0 million, including penalties and interest. In conjunction with these assessments, a security deposit will be required in the amount of approximately $5.0 million until such time a final decision is made by the tax authority. The Company is objecting to these assessments and believes it will prevail at the appeals level; therefore, an accrual has not been recorded for this item. In February 2011, the Internal Revenue Service concluded its tax examination of our U.S. Federal income tax return for Fiscal 2007 and did not assess any additional tax liability. The Company’s U.S. Federal income tax returns for Fiscal 2008 and 2009 are currently under review by the Internal Revenue Service. </div> </div>

<div style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>9. Related Party Transactions</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The Company paid store planning and retail design fees to a Company owned by a family member of one of the Company’s executive officers. These fees are included in “Furniture, fixtures and equipment” in the Company’s Unaudited Condensed Consolidated Balance Sheets and “Selling, general and administrative” expenses in the Company’s Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). For the three months ended July 30, 2011 and July 31, 2010, the Company paid fees of approximately $0.4 million and $0.4 million, respectively. For the six months ended July 30, 2011 and July 31, 2010, the Company paid fees of approximately $0.9 million and $0.6 million, respectively. This arrangement was approved by the Audit Committee of the Board of Directors. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The initial purchasers of the Senior Secured Second Lien Notes were Credit Suisse Securities (USA) LLC, J.P. Morgan Securities LLC, Goldman Sachs & Co., and Morgan Joseph TriArtisan LLC. Apollo Management, LLC, an affiliate of Apollo Management VI, L.P., the Company’s controlling shareholder, has a non-controlling interest in Morgan Joseph TriArtisan LLC and its affiliates. Additionally, a member of the Company’s Board of Directors is an executive of Morgan Joseph TriArtisan Inc., an affiliate of Morgan Joseph TriArtisan LLC. In connection with the issuance of the Senior Secured Second Lien Notes, the Company paid a fee of approximately $0.3 million to Morgan Joseph TriArtisan LLC. </div>   </div>  <div style="font-family: 'Times New Roman',Times,serif"> </div>

<div style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>10. Segment Information</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The Company is organized based on the geographic markets in which it operates. Under this structure, the Company currently has two reportable segments: North America and Europe. The Company accounts for the goods it sells to third parties under franchising and licensing agreements within “Net sales” and “Cost of sales, occupancy and buying expenses” in the Company’s Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) within its North American division. The franchise fees the Company charges under the franchising agreements are reported in “Other expense (income), net” in the Company’s Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) within its European division. Until September 2, 2010, the Company accounted for the results of operations of Claire’s Nippon under the equity method and included the results within “Other expense (income), net” in the Company’s Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) within the Company’s North American division. After September 2, 2010, these former joint venture stores began to operate as licensed stores. Substantially all of the interest expense on the Company’s outstanding debt is recorded in the Company’s North American division. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Net sales and operating income for the three and six months ended July 30, 2011 and July 31, 2010 are as follows (in thousands): </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="52%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Three Months</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Three Months</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Six Months</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Six Months</b></td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Ended</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Ended</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Ended</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Ended</b></td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>July 30, 2011</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>July 31, 2010</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>July 30, 2011</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>July 31, 2010</b></td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Net sales: </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">North America </div></td> <td> </td> <td align="left">$</td> <td align="right">217,057</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">210,087</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">441,245</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">422,686</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Europe </div></td> <td> </td> <td> </td> <td align="right">141,490</td> <td> </td> <td> </td> <td> </td> <td align="right">124,146</td> <td> </td> <td> </td> <td> </td> <td align="right">263,748</td> <td> </td> <td> </td> <td> </td> <td align="right">233,624</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Total net sales </div></td> <td> </td> <td> </td> <td align="right">358,547</td> <td> </td> <td> </td> <td> </td> <td align="right">334,233</td> <td> </td> <td> </td> <td> </td> <td align="right">704,993</td> <td> </td> <td> </td> <td> </td> <td align="right">656,310</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Depreciation and amortization: </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">North America </div></td> <td> </td> <td> </td> <td align="right">10,121</td> <td> </td> <td> </td> <td> </td> <td align="right">10,402</td> <td> </td> <td> </td> <td> </td> <td align="right">20,526</td> <td> </td> <td> </td> <td> </td> <td align="right">20,909</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Europe </div></td> <td> </td> <td> </td> <td align="right">6,231</td> <td> </td> <td> </td> <td> </td> <td align="right">5,454</td> <td> </td> <td> </td> <td> </td> <td align="right">12,880</td> <td> </td> <td> </td> <td> </td> <td align="right">11,313</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Total depreciation and amortization </div></td> <td> </td> <td> </td> <td align="right">16,352</td> <td> </td> <td> </td> <td> </td> <td align="right">15,856</td> <td> </td> <td> </td> <td> </td> <td align="right">33,406</td> <td> </td> <td> </td> <td> </td> <td align="right">32,222</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Operating income for reportable segments: </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">North America </div></td> <td> </td> <td> </td> <td align="right">23,944</td> <td> </td> <td> </td> <td> </td> <td align="right">19,368</td> <td> </td> <td> </td> <td> </td> <td align="right">54,568</td> <td> </td> <td> </td> <td> </td> <td align="right">43,771</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Europe </div></td> <td> </td> <td> </td> <td align="right">13,841</td> <td> </td> <td> </td> <td> </td> <td align="right">14,460</td> <td> </td> <td> </td> <td> </td> <td align="right">9,217</td> <td> </td> <td> </td> <td> </td> <td align="right">17,768</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Total operating income for reportable segments </div></td> <td> </td> <td> </td> <td align="right">37,785</td> <td> </td> <td> </td> <td> </td> <td align="right">33,828</td> <td> </td> <td> </td> <td> </td> <td align="right">63,785</td> <td> </td> <td> </td> <td> </td> <td align="right">61,539</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Severance and transaction-related costs </div></td> <td> </td> <td> </td> <td align="right">426</td> <td> </td> <td> </td> <td> </td> <td align="right">212</td> <td> </td> <td> </td> <td> </td> <td align="right">769</td> <td> </td> <td> </td> <td> </td> <td align="right">314</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Net consolidated operating income </div></td> <td> </td> <td> </td> <td align="right">37,359</td> <td> </td> <td> </td> <td> </td> <td align="right">33,616</td> <td> </td> <td> </td> <td> </td> <td align="right">63,016</td> <td> </td> <td> </td> <td> </td> <td align="right">61,225</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Gain on early debt extinguishment </div></td> <td> </td> <td> </td> <td align="right">233</td> <td> </td> <td> </td> <td> </td> <td align="right">6,249</td> <td> </td> <td> </td> <td> </td> <td align="right">482</td> <td> </td> <td> </td> <td> </td> <td align="right">10,736</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Impairment of equity investment </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">6,030</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">6,030</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Interest expense, net </div></td> <td> </td> <td> </td> <td align="right">44,335</td> <td> </td> <td> </td> <td> </td> <td align="right">40,573</td> <td> </td> <td> </td> <td> </td> <td align="right">90,570</td> <td> </td> <td> </td> <td> </td> <td align="right">83,336</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Net consolidated loss before income tax expense </div></td> <td> </td> <td nowrap="nowrap" align="left">$</td> <td align="right">(6,743</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left">$</td> <td align="right">(6,738</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left">$</td> <td align="right">(27,072</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left">$</td> <td align="right">(17,405</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:30px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Excluded from operating income for the North American segment are severance and transaction-related costs of approximately $0.2 million and $0.2 million for the three months ended July 30, 2011 and July 31, 2010, respectively, and $0.3 million and $0.3 million for the six months ended July 30, 2011 and July 31, 2010, respectively. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Excluded from operating income for the European segment are severance and transaction-related costs of approximately $0.2 million and $0 for the three months ended July 30, 2011 and July 31, 2010, respectively, and $0.5 million and $0 for the six months ended July 30, 2011 and July 31, 2010, respectively. </div>   </div>  <div style="font-family: 'Times New Roman',Times,serif"> </div>

<div style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>11. Supplemental Financial Information</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">On May 29, 2007, Claire’s Stores, Inc. (the “Issuer”), issued $935.0 million in Senior Notes, Senior Toggle Notes and Senior Subordinated Notes, and on March 4, 2011, issued $450.0 million aggregate principal amount of Senior Secured Second Lien Notes. These Notes are irrevocably and unconditionally guaranteed, jointly and severally, by all wholly-owned domestic current and future subsidiaries of Claire’s Stores, Inc. that guarantee the Company’s Credit Facility (the “Guarantors”). The Company’s other subsidiaries, principally its international subsidiaries including its European, Canadian and Asian subsidiaries (the “Non-Guarantors”), are not guarantors of these Notes. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The tables in the following pages present the condensed consolidating financial information for the Issuer, the Guarantors and the Non-Guarantors, together with eliminations, as of and for the periods indicated. The consolidating financial information may not necessarily be indicative of the financial position, results of operations or cash flows had the Issuer, Guarantors and Non-Guarantors operated as independent entities. </div>   </div>  <div style="font-family: 'Times New Roman',Times,serif"> <div align="center" style="font-size: 10pt; margin-top: 18pt"><b>Condensed Consolidating Balance Sheet<br /> July 30, 2011<br /> (in thousands)</b> </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="40%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Non-</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"> </td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Issuer</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Guarantors</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Guarantors</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Eliminations</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Consolidated</b></td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px"><b>ASSETS</b> </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Current assets: </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Cash and cash equivalents and restricted cash (1) </div></td> <td> </td> <td align="left">$</td> <td align="right">109,920</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">12,491</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">88,716</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">—</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">211,127</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Inventories </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">89,075</td> <td> </td> <td> </td> <td> </td> <td align="right">58,590</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">147,665</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Prepaid expenses </div></td> <td> </td> <td> </td> <td align="right">1,069</td> <td> </td> <td> </td> <td> </td> <td align="right">15,189</td> <td> </td> <td> </td> <td> </td> <td align="right">17,570</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">33,828</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Other current assets </div></td> <td> </td> <td> </td> <td align="right">52</td> <td> </td> <td> </td> <td> </td> <td align="right">16,290</td> <td> </td> <td> </td> <td> </td> <td align="right">10,847</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">27,189</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:45px; text-indent:-15px">Total current assets </div></td> <td> </td> <td> </td> <td align="right">111,041</td> <td> </td> <td> </td> <td> </td> <td align="right">133,045</td> <td> </td> <td> </td> <td> </td> <td align="right">175,723</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">419,809</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Property and equipment: </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:45px; text-indent:-15px">Furniture, fixtures and equipment </div></td> <td> </td> <td> </td> <td align="right">3,533</td> <td> </td> <td> </td> <td> </td> <td align="right">125,044</td> <td> </td> <td> </td> <td> </td> <td align="right">74,939</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">203,516</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:45px; text-indent:-15px">Leasehold improvements </div></td> <td> </td> <td> </td> <td align="right">1,071</td> <td> </td> <td> </td> <td> </td> <td align="right">146,890</td> <td> </td> <td> </td> <td> </td> <td align="right">124,025</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">271,986</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td> </td> <td align="right">4,604</td> <td> </td> <td> </td> <td> </td> <td align="right">271,934</td> <td> </td> <td> </td> <td> </td> <td align="right">198,964</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">475,502</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Less accumulated depreciation and amortization </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(2,551</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(164,170</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(98,593</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(265,314</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td> </td> <td align="right">2,053</td> <td> </td> <td> </td> <td> </td> <td align="right">107,764</td> <td> </td> <td> </td> <td> </td> <td align="right">100,371</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">210,188</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Leased property under capital lease: </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:45px; text-indent:-15px">Land and building </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">18,055</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">18,055</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Less accumulated depreciation and amortization </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(1,354</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(1,354</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">16,701</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">16,701</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Intercompany receivables </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">410,510</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(410,510</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Investment in subsidiaries </div></td> <td> </td> <td> </td> <td align="right">2,331,088</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(65,396</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(2,265,692</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Goodwill </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">1,235,651</td> <td> </td> <td> </td> <td> </td> <td align="right">314,405</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">1,550,056</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Intangible assets, net </div></td> <td> </td> <td> </td> <td align="right">286,000</td> <td> </td> <td> </td> <td> </td> <td align="right">7,658</td> <td> </td> <td> </td> <td> </td> <td align="right">264,372</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">558,030</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Deferred financing costs, net </div></td> <td> </td> <td> </td> <td align="right">37,579</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">247</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">37,826</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Other assets </div></td> <td> </td> <td> </td> <td align="right">129</td> <td> </td> <td> </td> <td> </td> <td align="right">3,918</td> <td> </td> <td> </td> <td> </td> <td align="right">41,860</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">45,907</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td> </td> <td align="right">2,654,796</td> <td> </td> <td> </td> <td> </td> <td align="right">1,592,341</td> <td> </td> <td> </td> <td> </td> <td align="right">620,884</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(2,676,202</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">2,191,819</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Total assets </div></td> <td> </td> <td align="left">$</td> <td align="right">2,767,890</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">1,849,851</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">896,978</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left">$</td> <td align="right">(2,676,202</td> <td nowrap="nowrap">)</td> <td> </td> <td align="left">$</td> <td align="right">2,838,517</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px"><b>LIABILITIES AND STOCKHOLDER’S EQUITY (DEFICIT)</b> </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Current liabilities: </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Short-term debt </div></td> <td> </td> <td align="left">$</td> <td align="right">—</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">—</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">61,042</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">—</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">61,042</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Trade accounts payable </div></td> <td> </td> <td> </td> <td align="right">653</td> <td> </td> <td> </td> <td> </td> <td align="right">24,334</td> <td> </td> <td> </td> <td> </td> <td align="right">39,883</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">64,870</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Income taxes payable </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(321</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">10,807</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">10,486</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Accrued interest payable </div></td> <td> </td> <td> </td> <td align="right">32,217</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">65</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">32,282</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Accrued expenses and other current liabilities </div></td> <td> </td> <td> </td> <td align="right">14,091</td> <td> </td> <td> </td> <td> </td> <td align="right">36,220</td> <td> </td> <td> </td> <td> </td> <td align="right">41,302</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">91,613</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:45px; text-indent:-15px">Total current liabilities </div></td> <td> </td> <td> </td> <td align="right">46,961</td> <td> </td> <td> </td> <td> </td> <td align="right">60,233</td> <td> </td> <td> </td> <td> </td> <td align="right">153,099</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">260,293</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Intercompany payables </div></td> <td> </td> <td> </td> <td align="right">336,148</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">74,362</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(410,510</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Long-term debt </div></td> <td> </td> <td> </td> <td align="right">2,425,589</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">2,425,589</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Revolving credit facility </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Obligation under capital lease </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">17,290</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">17,290</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Deferred tax liability </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">106,267</td> <td> </td> <td> </td> <td> </td> <td align="right">14,845</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">121,112</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Deferred rent expense </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">17,496</td> <td> </td> <td> </td> <td> </td> <td align="right">10,309</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">27,805</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Unfavorable lease obligations and other long-term liabilities </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">26,126</td> <td> </td> <td> </td> <td> </td> <td align="right">1,110</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">27,236</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td> </td> <td align="right">2,761,737</td> <td> </td> <td> </td> <td> </td> <td align="right">167,179</td> <td> </td> <td> </td> <td> </td> <td align="right">100,626</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(410,510</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">2,619,032</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Stockholder’s equity (deficit): </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Common stock </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">367</td> <td> </td> <td> </td> <td> </td> <td align="right">2</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(369</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Additional paid in capital </div></td> <td> </td> <td> </td> <td align="right">623,241</td> <td> </td> <td> </td> <td> </td> <td align="right">1,435,909</td> <td> </td> <td> </td> <td> </td> <td align="right">815,866</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(2,251,775</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">623,241</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Accumulated other comprehensive income (loss), net of tax </div></td> <td> </td> <td> </td> <td align="right">14,721</td> <td> </td> <td> </td> <td> </td> <td align="right">4,930</td> <td> </td> <td> </td> <td> </td> <td align="right">4,696</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(9,626</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">14,721</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Retained earnings (accumulated deficit) </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(678,770</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">181,233</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(177,311</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(3,922</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(678,770</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(40,808</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">1,622,439</td> <td> </td> <td> </td> <td> </td> <td align="right">643,253</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(2,265,692</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(40,808</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Total liabilities and stockholder’s equity (deficit) </div></td> <td> </td> <td align="left">$</td> <td align="right">2,767,890</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">1,849,851</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">896,978</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left">$</td> <td align="right">(2,676,202</td> <td nowrap="nowrap">)</td> <td> </td> <td align="left">$</td> <td align="right">2,838,517</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> </tr>  </table> </div> <div align="left"> <div style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">  </div> </div> <table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left"> <tr> <td width="3%"></td> <td width="1%"></td> <td width="96%"></td> </tr> <tr valign="top"> <td nowrap="nowrap" align="left">(1)</td> <td> </td> <td>Cash and cash equivalents includes restricted cash of $5,000 for “Issuer” and $21,725 for “Non-Guarantors”</td> </tr> </table>   </div>  <div style="font-family: 'Times New Roman',Times,serif"> <div align="center" style="font-size: 10pt; margin-top: 18pt"><b>Condensed Consolidating Balance Sheet<br /> January 29, 2011<br /> (in thousands)</b> </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="40%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Non-</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"> </td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Issuer</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Guarantors</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Guarantors</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Eliminations</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Consolidated</b></td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px"><b>ASSETS</b> </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Current assets: </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Cash and cash equivalents and restricted cash (1) </div></td> <td> </td> <td align="left">$</td> <td align="right">179,529</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">3,587</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">96,650</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">—</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">279,766</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Inventories </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">84,868</td> <td> </td> <td> </td> <td> </td> <td align="right">51,280</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">136,148</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Prepaid expenses </div></td> <td> </td> <td> </td> <td align="right">851</td> <td> </td> <td> </td> <td> </td> <td align="right">1,680</td> <td> </td> <td> </td> <td> </td> <td align="right">18,918</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">21,449</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Other current assets </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">16,547</td> <td> </td> <td> </td> <td> </td> <td align="right">8,111</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">24,658</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:45px; text-indent:-15px">Total current assets </div></td> <td> </td> <td> </td> <td align="right">180,380</td> <td> </td> <td> </td> <td> </td> <td align="right">106,682</td> <td> </td> <td> </td> <td> </td> <td align="right">174,959</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">462,021</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Property and equipment: </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:45px; text-indent:-15px">Furniture, fixtures and equipment </div></td> <td> </td> <td> </td> <td align="right">3,276</td> <td> </td> <td> </td> <td> </td> <td align="right">119,228</td> <td> </td> <td> </td> <td> </td> <td align="right">64,010</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">186,514</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:45px; text-indent:-15px">Leasehold improvements </div></td> <td> </td> <td> </td> <td align="right">1,052</td> <td> </td> <td> </td> <td> </td> <td align="right">143,072</td> <td> </td> <td> </td> <td> </td> <td align="right">103,906</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">248,030</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td> </td> <td align="right">4,328</td> <td> </td> <td> </td> <td> </td> <td align="right">262,300</td> <td> </td> <td> </td> <td> </td> <td align="right">167,916</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">434,544</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Less accumulated depreciation and amortization </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(2,205</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(147,857</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(83,449</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(233,511</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td> </td> <td align="right">2,123</td> <td> </td> <td> </td> <td> </td> <td align="right">114,443</td> <td> </td> <td> </td> <td> </td> <td align="right">84,467</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">201,033</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Leased property under capital lease: </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:45px; text-indent:-15px">Land and building </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">18,055</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">18,055</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Less accumulated depreciation and amortization </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(903</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(903</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">17,152</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">17,152</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Intercompany receivables </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">366,929</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(366,929</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Investment in subsidiaries </div></td> <td> </td> <td> </td> <td align="right">2,303,333</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(63,535</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(2,239,798</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Goodwill </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">1,235,651</td> <td> </td> <td> </td> <td> </td> <td align="right">314,405</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">1,550,056</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Intangible assets, net </div></td> <td> </td> <td> </td> <td align="right">286,000</td> <td> </td> <td> </td> <td> </td> <td align="right">9,294</td> <td> </td> <td> </td> <td> </td> <td align="right">262,172</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">557,466</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Deferred financing costs, net </div></td> <td> </td> <td> </td> <td align="right">35,973</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">461</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">36,434</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Other assets </div></td> <td> </td> <td> </td> <td align="right">130</td> <td> </td> <td> </td> <td> </td> <td align="right">3,842</td> <td> </td> <td> </td> <td> </td> <td align="right">38,315</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">42,287</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td> </td> <td align="right">2,625,436</td> <td> </td> <td> </td> <td> </td> <td align="right">1,552,181</td> <td> </td> <td> </td> <td> </td> <td align="right">615,353</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(2,606,727</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">2,186,243</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Total assets </div></td> <td> </td> <td align="left">$</td> <td align="right">2,807,939</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">1,790,458</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">874,779</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left">$</td> <td align="right">(2,606,727</td> <td nowrap="nowrap">)</td> <td> </td> <td align="left">$</td> <td align="right">2,866,449</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px"><b>LIABILITIES AND STOCKHOLDER’S EQUITY (DEFICIT)</b> </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Current liabilities: </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Short-term debt and current portion of long-term debt </div></td> <td> </td> <td align="left">$</td> <td align="right">18,451</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">—</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">57,703</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">—</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">76,154</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Trade accounts payable </div></td> <td> </td> <td> </td> <td align="right">1,199</td> <td> </td> <td> </td> <td> </td> <td align="right">24,545</td> <td> </td> <td> </td> <td> </td> <td align="right">28,611</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">54,355</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Income taxes payable </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">644</td> <td> </td> <td> </td> <td> </td> <td align="right">11,100</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">11,744</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Accrued interest payable </div></td> <td> </td> <td> </td> <td align="right">16,696</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">87</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">16,783</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Accrued expenses and other current liabilities </div></td> <td> </td> <td> </td> <td align="right">20,630</td> <td> </td> <td> </td> <td> </td> <td align="right">37,910</td> <td> </td> <td> </td> <td> </td> <td align="right">48,575</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">107,115</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:45px; text-indent:-15px">Total current liabilities </div></td> <td> </td> <td> </td> <td align="right">56,976</td> <td> </td> <td> </td> <td> </td> <td align="right">63,099</td> <td> </td> <td> </td> <td> </td> <td align="right">146,076</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">266,151</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Intercompany payables </div></td> <td> </td> <td> </td> <td align="right">346,636</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">20,293</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(366,929</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Long-term debt </div></td> <td> </td> <td> </td> <td align="right">2,236,842</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">2,236,842</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Revolving credit facility </div></td> <td> </td> <td> </td> <td align="right">194,000</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">194,000</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Obligation under capital lease </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">17,290</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">17,290</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Deferred tax liability </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">106,797</td> <td> </td> <td> </td> <td> </td> <td align="right">14,979</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">121,776</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Deferred rent expense </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">17,230</td> <td> </td> <td> </td> <td> </td> <td align="right">9,407</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">26,637</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Unfavorable lease obligations and other long-term liabilities </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">28,889</td> <td> </td> <td> </td> <td> </td> <td align="right">1,379</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">30,268</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td> </td> <td align="right">2,777,478</td> <td> </td> <td> </td> <td> </td> <td align="right">170,206</td> <td> </td> <td> </td> <td> </td> <td align="right">46,058</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(366,929</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">2,626,813</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Stockholder’s equity (deficit): </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Common stock </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">367</td> <td> </td> <td> </td> <td> </td> <td align="right">2</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(369</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Additional paid in capital </div></td> <td> </td> <td> </td> <td align="right">621,099</td> <td> </td> <td> </td> <td> </td> <td align="right">1,435,909</td> <td> </td> <td> </td> <td> </td> <td align="right">815,866</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(2,251,775</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">621,099</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Accumulated other comprehensive income (loss), net of tax </div></td> <td> </td> <td> </td> <td align="right">1,416</td> <td> </td> <td> </td> <td> </td> <td align="right">3,663</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(7,080</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">3,417</td> <td> </td> <td> </td> <td> </td> <td align="right">1,416</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Retained earnings (accumulated deficit) </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(649,030</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">117,214</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(126,143</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">8,929</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(649,030</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(26,515</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">1,557,153</td> <td> </td> <td> </td> <td> </td> <td align="right">682,645</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(2,239,798</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(26,515</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Total liabilities and stockholder’s equity (deficit) </div></td> <td> </td> <td align="left">$</td> <td align="right">2,807,939</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">1,790,458</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">874,779</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left">$</td> <td align="right">(2,606,727</td> <td nowrap="nowrap">)</td> <td> </td> <td align="left">$</td> <td align="right">2,866,449</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> </tr>  </table> </div> <div align="left"> <div style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">  </div> </div> <table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left"> <tr> <td width="3%"></td> <td width="1%"></td> <td width="96%"></td> </tr> <tr valign="top"> <td nowrap="nowrap" align="left">(1)</td> <td> </td> <td>Cash and cash equivalents includes restricted cash of $3,450 for “Issuer” and $20,414 for “Non-Guarantors”</td> </tr> </table>   </div>  <div style="font-family: 'Times New Roman',Times,serif"> <div align="center" style="font-size: 10pt; margin-top: 18pt"><b>Condensed Consolidating Statement of Operations and Comprehensive Income (Loss)<br /> For The Three Months Ended July 30, 2011<br /> (in thousands)</b> </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="40%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 0px solid #000000"><b>Non-</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"> </td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Issuer</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Guarantors</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Guarantors</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Eliminations</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Consolidated</b></td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Net sales </div></td> <td> </td> <td align="left">$</td> <td align="right">—</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">200,545</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">158,002</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">—</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">358,547</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Cost of sales, occupancy and buying expenses </div></td> <td> </td> <td> </td> <td align="right">1,346</td> <td> </td> <td> </td> <td> </td> <td align="right">97,490</td> <td> </td> <td> </td> <td> </td> <td align="right">76,546</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">175,382</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Gross profit (deficit) </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(1,346</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">103,055</td> <td> </td> <td> </td> <td> </td> <td align="right">81,456</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">183,165</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Other expenses: </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Selling, general and administrative </div></td> <td> </td> <td> </td> <td align="right">7,722</td> <td> </td> <td> </td> <td> </td> <td align="right">65,662</td> <td> </td> <td> </td> <td> </td> <td align="right">56,825</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">130,209</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Depreciation and amortization </div></td> <td> </td> <td> </td> <td align="right">184</td> <td> </td> <td> </td> <td> </td> <td align="right">9,277</td> <td> </td> <td> </td> <td> </td> <td align="right">6,891</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">16,352</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Severance and transaction-related costs </div></td> <td> </td> <td> </td> <td align="right">164</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">262</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">426</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Other (income) expense </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(3,337</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">1,423</td> <td> </td> <td> </td> <td> </td> <td align="right">733</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(1,181</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td> </td> <td align="right">4,733</td> <td> </td> <td> </td> <td> </td> <td align="right">76,362</td> <td> </td> <td> </td> <td> </td> <td align="right">64,711</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">145,806</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Operating income (loss) </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(6,079</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">26,693</td> <td> </td> <td> </td> <td> </td> <td align="right">16,745</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">37,359</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Gain on early debt extinguishment </div></td> <td> </td> <td> </td> <td align="right">233</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">233</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Interest expense, net </div></td> <td> </td> <td> </td> <td align="right">42,283</td> <td> </td> <td> </td> <td> </td> <td align="right">541</td> <td> </td> <td> </td> <td> </td> <td align="right">1,511</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">44,335</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Income (loss) before income taxes </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(48,129</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">26,152</td> <td> </td> <td> </td> <td> </td> <td align="right">15,234</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(6,743</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Income tax expense </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">758</td> <td> </td> <td> </td> <td> </td> <td align="right">2,642</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">3,400</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Income (loss) from continuing operations </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(48,129</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">25,394</td> <td> </td> <td> </td> <td> </td> <td align="right">12,592</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(10,143</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Equity in earnings of subsidiaries </div></td> <td> </td> <td> </td> <td align="right">37,986</td> <td> </td> <td> </td> <td> </td> <td align="right">692</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(38,678</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Net income (loss) </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(10,143</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">26,086</td> <td> </td> <td> </td> <td> </td> <td align="right">12,592</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(38,678</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(10,143</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Foreign currency translation and interest rate swap adjustments, net of tax </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(5,125</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(480</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(3,186</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">3,666</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(5,125</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Comprehensive income (loss) </div></td> <td> </td> <td nowrap="nowrap" align="left">$</td> <td align="right">(15,268</td> <td nowrap="nowrap">)</td> <td> </td> <td align="left">$</td> <td align="right">25,606</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">9,406</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left">$</td> <td align="right">(35,012</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left">$</td> <td align="right">(15,268</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> </tr>  </table> </div> <div align="center" style="font-size: 10pt; margin-top: 18pt"><b>Condensed Consolidating Statement of Operations and Comprehensive Income (Loss)<br /> For The Three Months Ended July 31, 2010<br /> (in thousands)</b> </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="40%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Non-</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"> </td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Issuer</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Guarantors</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Guarantors</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Eliminations</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Consolidated</b></td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Net sales </div></td> <td> </td> <td align="left">$</td> <td align="right">—</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">194,832</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">139,401</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">—</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">334,233</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Cost of sales, occupancy and buying expenses </div></td> <td> </td> <td> </td> <td align="right">1,382</td> <td> </td> <td> </td> <td> </td> <td align="right">93,947</td> <td> </td> <td> </td> <td> </td> <td align="right">63,891</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">159,220</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Gross profit (deficit) </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(1,382</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">100,885</td> <td> </td> <td> </td> <td> </td> <td align="right">75,510</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">175,013</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Other expenses (income): </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Selling, general and administrative </div></td> <td> </td> <td> </td> <td align="right">8,472</td> <td> </td> <td> </td> <td> </td> <td align="right">64,447</td> <td> </td> <td> </td> <td> </td> <td align="right">48,828</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">121,747</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Depreciation and amortization </div></td> <td> </td> <td> </td> <td align="right">155</td> <td> </td> <td> </td> <td> </td> <td align="right">9,576</td> <td> </td> <td> </td> <td> </td> <td align="right">6,125</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">15,856</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Severance and transaction-related costs </div></td> <td> </td> <td> </td> <td align="right">212</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">212</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Other (income) expense </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(6,740</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">6,029</td> <td> </td> <td> </td> <td> </td> <td align="right">4,293</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">3,582</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td> </td> <td align="right">2,099</td> <td> </td> <td> </td> <td> </td> <td align="right">80,052</td> <td> </td> <td> </td> <td> </td> <td align="right">59,246</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">141,397</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Operating income (loss) </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(3,481</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">20,833</td> <td> </td> <td> </td> <td> </td> <td align="right">16,264</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">33,616</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Gain on early debt extinguishment </div></td> <td> </td> <td> </td> <td align="right">6,249</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">6,249</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Impairment of equity investment </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">6,030</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td align="right">6,030</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Interest expense, net </div></td> <td> </td> <td> </td> <td align="right">40,418</td> <td> </td> <td> </td> <td> </td> <td align="right">175</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(20</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">40,573</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Income (loss) before income taxes </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(37,650</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">14,628</td> <td> </td> <td> </td> <td> </td> <td align="right">16,284</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(6,738</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Income tax expense (benefit) </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(932</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">2,539</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">1,607</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Income (loss) from continuing operations </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(37,650</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">15,560</td> <td> </td> <td> </td> <td> </td> <td align="right">13,745</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(8,345</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Equity in earnings of subsidiaries </div></td> <td> </td> <td> </td> <td align="right">29,305</td> <td> </td> <td> </td> <td> </td> <td align="right">282</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(29,587</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Net income (loss) </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(8,345</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">15,842</td> <td> </td> <td> </td> <td> </td> <td align="right">13,745</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(29,587</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(8,345</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Foreign currency translation and interest rate swap adjustments, net of tax </div></td> <td> </td> <td> </td> <td align="right">2,513</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(8,521</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(644</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">9,165</td> <td> </td> <td> </td> <td> </td> <td align="right">2,513</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Reclassification of foreign currency translation adjustment into net income (loss) </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(9,572</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(9,572</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">9,572</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(9,572</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Comprehensive income (loss) </div></td> <td> </td> <td nowrap="nowrap" align="left">$</td> <td align="right">(15,404</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left">$</td> <td align="right">(2,251</td> <td nowrap="nowrap">)</td> <td> </td> <td align="left">$</td> <td align="right">13,101</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left">$</td> <td align="right">(10,850</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left">$</td> <td align="right">(15,404</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> </tr>  </table> </div>   </div>  <div style="font-family: 'Times New Roman',Times,serif"> <div align="center" style="font-size: 10pt; margin-top: 18pt"><b>Condensed Consolidating Statement of Operations and Comprehensive Income (Loss)<br /> For The Six Months Ended July 30, 2011<br /> (in thousands)</b> </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="40%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Non-</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"> </td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Issuer</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Guarantors</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Guarantors</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Eliminations</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Consolidated</b></td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Net sales </div></td> <td> </td> <td align="left">$</td> <td align="right">—</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">409,569</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">295,424</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">—</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">704,993</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Cost of sales, occupancy and buying expenses </div></td> <td> </td> <td> </td> <td align="right">2,941</td> <td> </td> <td> </td> <td> </td> <td align="right">195,939</td> <td> </td> <td> </td> <td> </td> <td align="right">147,861</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">346,741</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Gross profit (deficit) </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(2,941</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">213,630</td> <td> </td> <td> </td> <td> </td> <td align="right">147,563</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">358,252</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Other expenses: </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Selling, general and administrative </div></td> <td> </td> <td> </td> <td align="right">15,910</td> <td> </td> <td> </td> <td> </td> <td align="right">128,054</td> <td> </td> <td> </td> <td> </td> <td align="right">112,967</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">256,931</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Depreciation and amortization </div></td> <td> </td> <td> </td> <td align="right">365</td> <td> </td> <td> </td> <td> </td> <td align="right">18,755</td> <td> </td> <td> </td> <td> </td> <td align="right">14,286</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">33,406</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Severance and transaction-related costs </div></td> <td> </td> <td> </td> <td align="right">297</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">472</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">769</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Other (income) expense </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(6,985</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">1,859</td> <td> </td> <td> </td> <td> </td> <td align="right">9,256</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">4,130</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td> </td> <td align="right">9,587</td> <td> </td> <td> </td> <td> </td> <td align="right">148,668</td> <td> </td> <td> </td> <td> </td> <td align="right">136,981</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">295,236</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Operating income (loss) </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(12,528</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">64,962</td> <td> </td> <td> </td> <td> </td> <td align="right">10,582</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">63,016</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Gain on early debt extinguishment </div></td> <td> </td> <td> </td> <td align="right">482</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">482</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Interest expense, net </div></td> <td> </td> <td> </td> <td align="right">86,513</td> <td> </td> <td> </td> <td> </td> <td align="right">1,072</td> <td> </td> <td> </td> <td> </td> <td align="right">2,985</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">90,570</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Income (loss) before income taxes </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(98,559</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">63,890</td> <td> </td> <td> </td> <td> </td> <td align="right">7,597</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(27,072</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Income tax expense (benefit) </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(354</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">3,022</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">2,668</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Income (loss) from continuing operations </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(98,559</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">64,244</td> <td> </td> <td> </td> <td> </td> <td align="right">4,575</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(29,740</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Equity in earnings of subsidiaries </div></td> <td> </td> <td> </td> <td align="right">68,819</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(225</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(68,594</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Net income (loss) </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(29,740</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">64,019</td> <td> </td> <td> </td> <td> </td> <td align="right">4,575</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(68,594</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(29,740</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Foreign currency translation and interest rate swap adjustments, net of tax </div></td> <td> </td> <td> </td> <td align="right">13,305</td> <td> </td> <td> </td> <td> </td> <td align="right">1,268</td> <td> </td> <td> </td> <td> </td> <td align="right">11,776</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(13,044</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">13,305</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Comprehensive income (loss) </div></td> <td> </td> <td nowrap="nowrap" align="left">$</td> <td align="right">(16,435</td> <td nowrap="nowrap">)</td> <td> </td> <td align="left">$</td> <td align="right">65,287</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">16,351</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left">$</td> <td align="right">(81,638</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left">$</td> <td align="right">(16,435</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> </tr>  </table> </div> <div align="center" style="font-size: 10pt; margin-top: 18pt"><b>Condensed Consolidating Statement of Operations and Comprehensive Income (Loss)<br /> For The Six Months Ended July 31, 2010<br /> (in thousands)</b> </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="40%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 0px solid #000000"><b>Non-</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"> </td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Issuer</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Guarantors</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Guarantors</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Eliminations</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Consolidated</b></td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Net sales </div></td> <td> </td> <td align="left">$</td> <td align="right">—</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">393,424</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">262,886</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">—</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">656,310</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Cost of sales, occupancy and buying expenses </div></td> <td> </td> <td> </td> <td align="right">2,657</td> <td> </td> <td> </td> <td> </td> <td align="right">189,934</td> <td> </td> <td> </td> <td> </td> <td align="right">125,380</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">317,971</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Gross profit (deficit) </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(2,657</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">203,490</td> <td> </td> <td> </td> <td> </td> <td align="right">137,506</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">338,339</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Other expenses: </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Selling, general and administrative </div></td> <td> </td> <td> </td> <td align="right">16,904</td> <td> </td> <td> </td> <td> </td> <td align="right">125,870</td> <td> </td> <td> </td> <td> </td> <td align="right">96,992</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">239,766</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Depreciation and amortization </div></td> <td> </td> <td> </td> <td align="right">287</td> <td> </td> <td> </td> <td> </td> <td align="right">19,214</td> <td> </td> <td> </td> <td> </td> <td align="right">12,721</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">32,222</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Severance and transaction-related costs </div></td> <td> </td> <td> </td> <td align="right">314</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">314</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Other (income) expense </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(12,615</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">8,283</td> <td> </td> <td> </td> <td> </td> <td align="right">9,144</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">4,812</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td> </td> <td align="right">4,890</td> <td> </td> <td> </td> <td> </td> <td align="right">153,367</td> <td> </td> <td> </td> <td> </td> <td align="right">118,857</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">277,114</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Operating income (loss) </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(7,547</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">50,123</td> <td> </td> <td> </td> <td> </td> <td align="right">18,649</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">61,225</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Gain on early debt extinguishment </div></td> <td> </td> <td> </td> <td align="right">10,736</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">10,736</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Impairment of equity investment </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">6,030</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">6,030</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Interest expense, net </div></td> <td> </td> <td> </td> <td align="right">83,163</td> <td> </td> <td> </td> <td> </td> <td align="right">182</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(9</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">83,336</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Income (loss) before income taxes </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(79,974</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">43,911</td> <td> </td> <td> </td> <td> </td> <td align="right">18,658</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(17,405</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Income tax expense (benefit) </div></td> <td> </td> <td> </td> <td align="right">23</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(316</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">3,533</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">3,240</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Income (loss) from continuing operations </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(79,997</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">44,227</td> <td> </td> <td> </td> <td> </td> <td align="right">15,125</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(20,645</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Equity in earnings of subsidiaries </div></td> <td> </td> <td> </td> <td align="right">59,352</td> <td> </td> <td> </td> <td> </td> <td align="right">235</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(59,587</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Net income (loss) </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(20,645</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">44,462</td> <td> </td> <td> </td> <td> </td> <td align="right">15,125</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(59,587</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(20,645</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Foreign currency translation and interest rate swap adjustments, net of tax </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(9</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">911</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(9,895</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">8,984</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(9</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Reclassification of foreign currency translation adjustment into net income (loss) </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(9,572</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(9,572</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">9,572</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(9,572</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Comprehensive income (loss) </div></td> <td> </td> <td nowrap="nowrap" align="left">$</td> <td align="right">(30,226</td> <td nowrap="nowrap">)</td> <td> </td> <td align="left">$</td> <td align="right">35,801</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">5,230</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left">$</td> <td align="right">(41,031</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left">$</td> <td align="right">(30,226</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> </tr>  </table> </div>   </div>  <div style="font-family: 'Times New Roman',Times,serif"> <div align="center" style="font-size: 10pt; margin-top: 18pt"><b>Condensed Consolidating Statement of Cash Flows<br /> Six Months Ended July 30, 2011<br /> (in thousands)</b> </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="40%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Non-</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"> </td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Issuer</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Guarantors</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Guarantors</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Eliminations</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Consolidated</b></td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Cash flows from operating activities: </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Net income (loss) </div></td> <td> </td> <td nowrap="nowrap" align="left">$</td> <td align="right">(29,740</td> <td nowrap="nowrap">)</td> <td> </td> <td align="left">$</td> <td align="right">64,019</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">4,575</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left">$</td> <td align="right">(68,594</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left">$</td> <td align="right">(29,740</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:45px; text-indent:-15px">Equity in (earnings) loss of subsidiaries </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(68,819</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">225</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">68,594</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:45px; text-indent:-15px">Depreciation and amortization </div></td> <td> </td> <td> </td> <td align="right">365</td> <td> </td> <td> </td> <td> </td> <td align="right">18,755</td> <td> </td> <td> </td> <td> </td> <td align="right">14,286</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">33,406</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:45px; text-indent:-15px">Amortization of lease rights and other assets </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">1,600</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">1,600</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:45px; text-indent:-15px">Amortization of debt issuance costs </div></td> <td> </td> <td> </td> <td align="right">8,231</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">304</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">8,535</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:45px; text-indent:-15px">Payment of in kind interest expense </div></td> <td> </td> <td> </td> <td align="right">11,831</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">11,831</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:45px; text-indent:-15px">Foreign currency exchange net loss on Euro Loan </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">2,158</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">2,158</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:45px; text-indent:-15px">Net accretion of favorable (unfavorable) lease obligations </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(663</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">281</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(382</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:45px; text-indent:-15px">Loss on sale/retirement of property and equipment, net </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">41</td> <td> </td> <td> </td> <td> </td> <td align="right">17</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">58</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:45px; text-indent:-15px">Gain on early debt extinguishment </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(482</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(482</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:45px; text-indent:-15px">Stock compensation expense </div></td> <td> </td> <td> </td> <td align="right">1,713</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">429</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">2,142</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">(Increase) decrease in: </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:45px; text-indent:-15px">Inventories </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(4,207</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(4,487</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(8,694</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:45px; text-indent:-15px">Prepaid expenses </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(218</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(13,508</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">2,796</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(10,930</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:45px; text-indent:-15px">Other assets </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(52</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(350</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(1,510</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(1,912</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Increase (decrease) in: </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:45px; text-indent:-15px">Trade accounts payable </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(547</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(33</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">7,479</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">6,899</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:45px; text-indent:-15px">Income taxes payable </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(965</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(4,849</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(5,814</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:45px; text-indent:-15px">Accrued interest payable </div></td> <td> </td> <td> </td> <td align="right">15,520</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(58</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">15,462</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:45px; text-indent:-15px">Accrued expenses and other liabilities </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(7,915</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(1,689</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(9,642</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(19,246</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:45px; text-indent:-15px">Deferred income taxes </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(902</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(447</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(1,349</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:45px; text-indent:-15px">Deferred rent expense </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">266</td> <td> </td> <td> </td> <td> </td> <td align="right">381</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">647</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:30px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Net cash provided by (used in) operating activities </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(70,113</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">60,989</td> <td> </td> <td> </td> <td> </td> <td align="right">13,313</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">4,189</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Cash flows from investing activities: </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:45px; text-indent:-15px">Acquisition of property and equipment, net </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(295</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(11,793</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(20,114</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(32,202</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:45px; text-indent:-15px">Acquisition of intangible assets/lease rights </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(20</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(1,853</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(1,873</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:45px; text-indent:-15px">Changes in restricted cash </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(1,550</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(130</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(1,680</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Net cash used in investing activities </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(1,845</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(11,813</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(22,097</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(35,755</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Cash flows from financing activities: </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:45px; text-indent:-15px">Payments of Credit facility </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(438,940</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(438,940</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:45px; text-indent:-15px">Proceeds from Note </div></td> <td> </td> <td> </td> <td align="right">450,000</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">450,000</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:45px; text-indent:-15px">Repurchases of Notes </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(45,497</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(45,497</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:45px; text-indent:-15px">Payment of debt issuance costs </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(10,453</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(91</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(10,544</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:45px; text-indent:-15px">Intercompany activity, net </div></td> <td> </td> <td> </td> <td align="right">45,689</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(43,581</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(2,108</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Net cash provided by (used in) financing activities </div></td> <td> </td> <td> </td> <td align="right">799</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(43,581</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(2,199</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(44,981</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Effect of foreign currency exchange rate changes on cash and cash equivalents </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">3,309</td> <td> </td> <td> </td> <td> </td> <td align="right">1,738</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">5,047</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Net increase (decrease) in cash and cash equivalents </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(71,159</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">8,904</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(9,245</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(71,500</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Cash and cash equivalents, at beginning of period </div></td> <td> </td> <td> </td> <td align="right">176,079</td> <td> </td> <td> </td> <td> </td> <td align="right">3,587</td> <td> </td> <td> </td> <td> </td> <td align="right">76,236</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">255,902</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Cash and cash equivalents, at end of period </div></td> <td> </td> <td> </td> <td align="right">104,920</td> <td> </td> <td> </td> <td> </td> <td align="right">12,491</td> <td> </td> <td> </td> <td> </td> <td align="right">66,991</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">184,402</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Restricted cash, at end of period </div></td> <td> </td> <td> </td> <td align="right">5,000</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">21,725</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">26,725</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Cash and cash equivalents and restricted cash, at end of period </div></td> <td> </td> <td align="left">$</td> <td align="right">109,920</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">12,491</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">88,716</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">—</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">211,127</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> </tr>  </table> </div>   </div>  <div style="font-family: 'Times New Roman',Times,serif"> <div align="center" style="font-size: 10pt; margin-top: 18pt"><b>Condensed Consolidating Statement of Cash Flows<br /> Six Months Ended July 31, 2010<br /> (in thousands)</b> </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="40%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Non-</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"> </td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Issuer</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Guarantors</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Guarantors</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Eliminations</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Consolidated</b></td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Cash flows from operating activities: </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Net income (loss) </div></td> <td> </td> <td nowrap="nowrap" align="left">$</td> <td align="right">(20,645</td> <td nowrap="nowrap">)</td> <td> </td> <td align="left">$</td> <td align="right">44,462</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">15,125</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left">$</td> <td align="right">(59,587</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left">$</td> <td align="right">(20,645</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Adjustments to reconcile net income (loss) to net </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:45px; text-indent:-15px">cash provided by (used in) operating activities: </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:60px; text-indent:-15px">Equity in earnings of subsidiaries </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(59,352</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(235</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">59,587</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:60px; text-indent:-15px">Depreciation and amortization </div></td> <td> </td> <td> </td> <td align="right">287</td> <td> </td> <td> </td> <td> </td> <td align="right">19,214</td> <td> </td> <td> </td> <td> </td> <td align="right">12,721</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">32,222</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:60px; text-indent:-15px">Impairment </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">6,030</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">6,030</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:60px; text-indent:-15px">Amortization of lease rights and other assets </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">25</td> <td> </td> <td> </td> <td> </td> <td align="right">1,585</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">1,610</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:60px; text-indent:-15px">Amortization of debt issuance costs </div></td> <td> </td> <td> </td> <td align="right">5,038</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">5,038</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:60px; text-indent:-15px">Payment of in kind interest expense </div></td> <td> </td> <td> </td> <td align="right">19,003</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">19,003</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:60px; text-indent:-15px">Net accretion of favorable (unfavorable) lease obligations </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(1,023</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">237</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(786</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:60px; text-indent:-15px">Loss on sale/retirement of property and equipment, net </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">366</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">366</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:60px; text-indent:-15px">Gain on early debt extinguishment </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(10,736</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(10,736</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:60px; text-indent:-15px">Stock compensation expense </div></td> <td> </td> <td> </td> <td align="right">1,924</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">617</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">2,541</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">(Increase) decrease in: </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:60px; text-indent:-15px">Inventories </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(11,003</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(7,498</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(18,501</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:60px; text-indent:-15px">Prepaid expenses </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(561</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">133</td> <td> </td> <td> </td> <td> </td> <td align="right">1,345</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">917</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:60px; text-indent:-15px">Other assets </div></td> <td> </td> <td> </td> <td align="right">1,220</td> <td> </td> <td> </td> <td> </td> <td align="right">5,110</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(2,385</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">3,945</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Increase (decrease) in: </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:60px; text-indent:-15px">Trade accounts payable </div></td> <td> </td> <td> </td> <td align="right">374</td> <td> </td> <td> </td> <td> </td> <td align="right">5,867</td> <td> </td> <td> </td> <td> </td> <td align="right">3,833</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">10,074</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:60px; text-indent:-15px">Income taxes payable </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(255</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(2,335</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(2,590</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:60px; text-indent:-15px">Accrued interest payable </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(5,612</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(5,612</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:60px; text-indent:-15px">Accrued expenses and other liabilities </div></td> <td> </td> <td> </td> <td align="right">1,556</td> <td> </td> <td> </td> <td> </td> <td align="right">2,298</td> <td> </td> <td> </td> <td> </td> <td align="right">5,120</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">8,974</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:60px; text-indent:-15px">Deferred income taxes </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(407</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">55</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(352</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:60px; text-indent:-15px">Deferred rent expense </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(107</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">1,254</td> <td> </td> <td> </td> <td> </td> <td align="right">731</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">1,878</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:30px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Net cash provided by (used in) operating activities </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(67,611</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">71,836</td> <td> </td> <td> </td> <td> </td> <td align="right">29,151</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">33,376</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Cash flows from investing activities: </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:60px; text-indent:-15px">Acquisition of property and equipment, net </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(740</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(7,394</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(11,422</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(19,556</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:60px; text-indent:-15px">Acquisition of intangible assets/lease rights </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(63</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(461</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(524</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:60px; text-indent:-15px">Proceeds from sale of property </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">16,765</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">16,765</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Net cash provided by (used in) investing activities </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(740</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">9,308</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(11,883</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(3,315</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Cash flows from financing activities: </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:60px; text-indent:-15px">Payments of Credit facility </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(7,250</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(7,250</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:60px; text-indent:-15px">Repurchases of Notes </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(59,112</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(59,112</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:60px; text-indent:-15px">Principal payments of capital leases </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(765</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(765</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:60px; text-indent:-15px">Intercompany activity, net </div></td> <td> </td> <td> </td> <td align="right">135,200</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(77,080</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(58,120</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Net cash provided by (used in) financing activities </div></td> <td> </td> <td> </td> <td align="right">68,838</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(77,845</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(58,120</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(67,127</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Effect of foreign currency exchange rate changes on cash and cash equivalents </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">1,428</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(2,938</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(1,510</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Net increase (decrease) in cash and cash equivalents </div></td> <td> </td> <td> </td> <td align="right">487</td> <td> </td> <td> </td> <td> </td> <td align="right">4,727</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(43,790</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(38,576</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Cash and cash equivalents, at beginning of period </div></td> <td> </td> <td> </td> <td align="right">109,138</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(10,604</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">100,174</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">198,708</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Cash and cash equivalents, at end of period </div></td> <td> </td> <td> </td> <td align="right">109,625</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(5,877</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">56,384</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">160,132</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Restricted cash, at end of period </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Cash and cash equivalents and restricted cash, at end of period </div></td> <td> </td> <td align="left">$</td> <td align="right">109,625</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left">$</td> <td align="right">(5,877</td> <td nowrap="nowrap">)</td> <td> </td> <td align="left">$</td> <td align="right">56,384</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">—</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">160,132</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> </tr>  </table> </div> </div>

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Restricted cash Restricted Cash and Cash Equivalents Inventories Inventory, Net Prepaid expenses Prepaid Expense, Current Other current assets Other Assets, Current Total current assets Assets, Current, Total Total current assets Property and equipment: Property, Plant and Equipment, Net [Abstract] Furniture, fixtures and equipment Furniture and Fixtures, Gross Leasehold improvements Leasehold Improvements, Gross Total property and equipment Property, Plant and Equipment, Gross Total property and equipment, gross Less accumulated depreciation and amortization Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment Less accumulated depreciation and amortization Total property and equipment Property, Plant and Equipment, Net Total property and equipment, net Leased property under capital lease: Other Noncurrent Assets Abstract Leased property under capital lease: Land And Building On Leased Property Land and building Land and building Accumulated Depreciation And Amortization On Leased Property Less accumulated depreciation and amortization Less accumulated depreciation and amortization Less accumulated depreciation and amortization Leased Property Under Capital Lease Net Total leased property under capital lease Total leased property under capital lease Total leased property under capital lease Goodwill Goodwill Intangible assets, net of accumulated amortization of $45,495 and $38,747, respectively Intangible Assets, Net (Excluding Goodwill) Accumulated amortization on intangible assets Finite-Lived Intangible Assets, Accumulated Amortization Deferred financing costs, net of accumulated amortization of $50,811 and $41,659, respectively Deferred Finance Costs, Net Accumulated amortization on Deferred financing costs Accumulated Amortization, Deferred Finance Costs Other assets Other Assets, Noncurrent Other Noncurrent Assets Total leased property under capital lease Total other noncurrent assets. 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Total other expenses Operating Expenses Total Operating expense Operating income Operating Income (Loss) Operating income Gain on early debt extinguishment Gains (Losses) on Extinguishment of Debt Impairment of equity investment Equity Method Investment, Other than Temporary Impairment Interest expense, net Interest Expense Loss before income tax expense Income (Loss) from Continuing Operations before Income Taxes, Extraordinary Items, Noncontrolling Interest Loss before income tax expense Income tax expense Income Tax Expense (Benefit) Net loss Net Income (Loss) Attributable to Parent Net loss Foreign Currency Translation And Interest Rate Swap Adjustments Net Of Tax Foreign currency translation and interest rate swap adjustments, net of tax Foreign currency translation and interest rate swap adjustments, net of tax Reclassification of foreign currency translation adjustments into net loss Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Reclassification Adjustment Realized upon Sale or Liquidation, before Tax Reclassification of foreign currency translation adjustments into net loss Comprehensive loss Comprehensive Income (Loss), Net of Tax, Attributable to Parent Comprehensive loss Cash flows from operating activities: Net Cash Provided by (Used in) Operating Activities [Abstract] Adjustments to reconcile net loss to net cash provided by operating activities: Adjustments to Reconcile Net Income (Loss) to Cash Provided by (Used in) Operating Activities [Abstract] Impairment Asset Impairment Charges Amortization Of Lease Rights And Other Assets Amortization of lease rights and other assets Amortization of lease rights and other assets Amortization of lease rights and other assets Amortization of debt issuance costs Amortization of Financing Costs Payment of in kind interest expense Paid-in-Kind Interest Foreign currency exchange net loss on Euro Loan Foreign Currency Transaction Gain (Loss), Unrealized Foreign currency exchange net loss on Euro Loan Net Unfavorable Accretion Of Lease Obligations Net unfavorable accretion of lease obligations Net unfavorable accretion of lease obligations Net unfavorable accretion of lease obligations Loss on sale/retirement of property and equipment, net Gain (Loss) on Sale of Property Plant Equipment Loss on sale/retirement of property and equipment, net Gain on early debt extinguishment Stock compensation expense Share-based Compensation (Increase) decrease in: Increase (Decrease) in Operating Assets [Abstract] Inventories Increase (Decrease) in Inventories Inventories Prepaid expenses Increase (Decrease) in Prepaid Expense Prepaid expenses Other assets Increase (Decrease) in Other Operating Assets Other assets Increase (decrease) in: Increase (Decrease) in Operating Liabilities [Abstract] Trade accounts payable Increase (Decrease) in Accounts Payable, Trade Income taxes payable Increase (Decrease) in Income Taxes Payable Accrued interest payable Increase (Decrease) in Interest Payable, Net Accrued expenses and other liabilities Increase (Decrease) in Accrued Liabilities and Other Operating Liabilities Deferred income taxes Increase (Decrease) in Deferred Income Taxes Deferred income taxes Deferred rent expense Increase (Decrease) in Other Deferred Liability Deferred rent expense Net cash provided by operating activities Net Cash Provided by (Used in) Operating Activities Net cash provided by operating activities Cash flows from investing activities: Net Cash Provided by (Used in) Investing Activities [Abstract] Acquisition of property and equipment, net Payments to Acquire Property, Plant, and Equipment Acquisition of property and equipment, net Acquisition of intangible assets/lease rights Payments to Acquire Intangible Assets Acquisition of intangible assets/lease rights Proceeds from sale of property Proceeds from Sale of Property, Plant, and Equipment Changes in restricted cash Increase (Decrease) in Restricted Cash Changes in restricted cash Net cash used in investing activities Net Cash Provided by (Used in) Investing Activities Net cash used in investing activities Cash flows from financing activities: Net Cash Provided by (Used in) Financing Activities [Abstract] Payments of Credit facility Repayments of Secured Debt Payments of Credit facility Proceeds from Note Proceeds from Issuance of Secured Debt Repurchases of Notes Repayments of Notes Payable Repurchases of Notes Payment of debt issuance costs Payments of Debt Issuance Costs Payment of debt issuance costs Principal payments of capital leases Repayments of Long-term Capital Lease Obligations Principal payments of capital leases Net cash used in financing activities Net Cash Provided by (Used in) Financing Activities Net cash used in financing activities Effect of foreign currency exchange rate changes on cash and cash equivalents Effect of Exchange Rate on Cash and Cash Equivalents Net decrease in cash and cash equivalents Cash and Cash Equivalents, Period Increase (Decrease) Net decrease in cash and cash equivalents Cash and cash equivalents, at beginning of period Cash and Cash Equivalents, at Carrying Value, Beginning Balance Cash and cash equivalents, at end of period Restricted cash, at end of period Cash and cash equivalents and restricted cash, at end of period Supplemental disclosure of cash flow information: Supplemental Cash Flow Information [Abstract] Income taxes paid Income Taxes Paid, Net Interest paid Interest Paid Non-cash investing and financing activities: Cash Flow, Noncash Investing and Financing Activities Disclosure [Abstract] Property Acquired Under Capital Lease Property acquired under capital lease Property acquired under capital lease Basis of Presentation Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] Basis of Presentation [Abstract] Basis of Presentation [Abstract] Recent Accounting Pronouncements Description of New Accounting Pronouncements Not yet Adopted [Text Block] Recent Accounting Pronouncements [Abstract] Recent Accounting Pronouncements [Abstract] Fair Value Measurements Fair Value Disclosures [Text Block] Fair Value Measurements [Abstract] Fair Value Measurements [Abstract] Debt Debt Disclosure [Text Block] Debt [Abstract] Debt [Abstract] Derivatives and Hedging Activities Derivative Instruments and Hedging Activities Disclosure [Text Block] Derivatives and Hedging Activities [Abstract] Derivatives and Hedging Activities [Abstract] Commitments and Contingencies Commitments and Contingencies Disclosure [Text Block] Commitments and Contingencies [Abstract] Commitments and Contingencies [Abstract] Stock Options and Stock-Based Compensation Disclosure of Compensation Related Costs, Share-based Payments [Text Block] Stock Options and Stock-Based Compensation [Abstract] Stock Options and Stock-Based Compensation [Abstract] Income Taxes Income Tax Disclosure [Text Block] Income Taxes [Abstract] Income Taxes [Abstract] Related Party Transactions Related Party Transactions Disclosure [Text Block] Related Party Transactions [Abstract] Related Party Transactions [Abstract] Segment Information Segment Reporting Disclosure [Text Block] Segment Information [Abstract] Segment Information [Abstract] Supplemental Financial Information Condensed Financial Information of Parent Company Only Disclosure [Text Block] Supplemental Financial Information [Abstract] Supplemental Financial Information [Abstract] Amendment Flag Current Fiscal Year End Date Document Period End Date Document Type Entity Central Index Key Entity Common Stock, Shares Outstanding Entity Current Reporting Status Entity Filer Category Entity Registrant Name Entity Voluntary Filers Entity Well-known Seasoned Issuer Entity Public Float Document Fiscal Period Focus Document Fiscal Year Focus Condensed Consolidated Balance Sheets [Abstract] Income Statement [Abstract] Condensed Consolidated Statements of Cash Flows [Abstract] EX-101.PRE 10 cle-20110730_pre.xml EX-101 PRESENTATION LINKBASE DOCUMENT XML 11 R3.htm IDEA: XBRL DOCUMENT

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) (USD $) In Thousands, except Share data	Jul. 30, 2011	Jan. 29, 2011
Current assets:
Restricted cash	$ 26,725	$ 23,864
Leased property under capital lease:
Accumulated amortization on intangible assets	45,495	38,747
Accumulated amortization on Deferred financing costs	$ 50,811	$ 41,659
Stockholder's deficit:
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	1,000	1,000
Common stock, shares issued	100	100
Common stock, shares outstanding	100	100

XML 12 R4.htm IDEA: XBRL DOCUMENT

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited) (USD $) In Thousands	3 Months Ended		6 Months Ended
	Jul. 30, 2011	Jul. 31, 2010	Jul. 30, 2011	Jul. 31, 2010
Income Statement [Abstract]
Net sales	$ 358,547	$ 334,233	$ 704,993	$ 656,310
Cost of sales, occupancy and buying expenses	175,382	159,220	346,741	317,971
Gross profit	183,165	175,013	358,252	338,339
Other expenses:
Selling, general and administrative	130,209	121,747	256,931	239,766
Depreciation and amortization	16,352	15,856	33,406	32,222
Severance and transaction-related costs	426	212	769	314
Other (income) expense, net	(1,181)	3,582	4,130	4,812
Total Operating expense	145,806	141,397	295,236	277,114
Operating income	37,359	33,616	63,016	61,225
Gain on early debt extinguishment	233	6,249	482	10,736
Impairment of equity investment		6,030		6,030
Interest expense, net	44,335	40,573	90,570	83,336
Loss before income tax expense	(6,743)	(6,738)	(27,072)	(17,405)
Income tax expense	3,400	1,607	2,668	3,240
Net loss	(10,143)	(8,345)	(29,740)	(20,645)
Foreign currency translation and interest rate swap adjustments, net of tax	(5,125)	2,513	13,305	(9)
Reclassification of foreign currency translation adjustments into net loss		(9,572)		(9,572)
Comprehensive loss	$ (15,268)	$ (15,404)	$ (16,435)	$ (30,226)

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Document and Entity Information (USD $)	6 Months Ended
Document and Entity Information (USD $)	Jul. 30, 2011	Sep. 01, 2011	Apr. 30, 2011
Document and Entity Information [Abstract]
Entity Registrant Name	CLAIRES STORES INC
Entity Central Index Key	0000034115
Document Type	10-Q
Document Period End Date	Jul. 30, 2011
Amendment Flag	false
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q2
Current Fiscal Year End Date	--01-28
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Non-accelerated Filer
Entity Public Float			$ 0
Entity Common Stock, Shares Outstanding		100

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Stock Options and Stock-Based Compensation

6 Months Ended

Jul. 30, 2011

Stock Options and Stock-Based Compensation [Abstract]

Stock Options and Stock-Based Compensation

7. Stock Options and Stock-Based Compensation

The following is a summary of activity in the Company’s stock option plan for the six months ended July 30, 2011:


						Weighted-
				Weighted-		Average
				Average		Remaining
	Number of			Exercise		Contractual
	Shares			Price		Term (Years)
Outstanding at January 29, 2011		6,860,014		$	10.00
Options granted		375,000		$	10.00
Options exercised		—
Options forfeited or expired		(67,406	)	$	10.00

Outstanding at July 30, 2011		7,167,608		$	10.00		4.0


Options vested and expected to vest at July 30, 2011		6,867,260		$	10.00		4.0


Exercisable at July 30, 2011		2,692,445		$	10.00		3.3

The weighted average grant date fair value of options granted during the six months ended July 30, 2011 and July 31, 2010 was $2.86 and $3.00, respectively.

Incentive Plan Modifications

	•		Eliminated the holding period after vesting for Performance and Stretch Performance options;

	•		Changed the definition of “Qualified IPO”;

	•		Eliminated certain restrictions on transfer of shares in the event of a Qualified IPO;

	•		Provided each optionee the right to satisfy the exercise price and any withholding tax obligation triggered by such exercise by any combination of cash and/or shares (including both previously owned shares and shares otherwise to be delivered upon exercise of the option); and

	•		Added two additional vesting events applicable to Performance Options and to certain Stretch Performance Options if they occur prior to or concurrent with the end of the Company’s fiscal 2012 year.

The modifications to the Company’s Incentive Plan resulted in $2.2 million in total incremental compensation cost, of which $0.2 million was recognized in the second fiscal quarter 2011. The remaining unrecognized compensation cost will be amortized over the remaining vesting period. The plan modification affected approximately 155 employees.

Buy-One-Get-One (“BOGO”) Option Offer

- Definition

The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 718
-SubTopic 10
-Section 50
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5444-113901

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Statement of Position (SOP)
-Number 93-6
-Paragraph 53
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Staff Accounting Bulletin (SAB)
-Number Topic 14

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Fair Value Measurements

6 Months Ended

Jul. 30, 2011

Fair Value Measurements [Abstract]

Fair Value Measurements

3. Fair Value Measurements

Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following tables summarize the Company’s assets (liabilities) measured at fair value on a recurring basis segregated among the appropriate levels within the fair value hierarchy (in thousands):

Fair Value Measurements at July 30, 2011 Using

Quoted Prices in

Active Markets for

Significant

Identical Assets

Other Observable

Unobservable

(Liabilities)

Inputs

Carrying Value

(Level 1)

(Level 2)

(Level 3)

Interest rate swap

(2,541

)

—

(2,541

)

—

Fair Value Measurements at January 29, 2011 Using

Quoted Prices in

Active Markets for

Significant

Identical Assets

Other Observable

Unobservable

(Liabilities)

Inputs

Carrying Value

(Level 1)

(Level 2)

(Level 3)

Interest rate swaps

(1,165

)

—

(1,165

)

—

Non-Financial Assets Measured at Fair Value on a Non-Recurring Basis

Financial Instruments Not Measured at Fair Value

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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+ Details

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Related Party Transactions	6 Months Ended
Related Party Transactions	Jul. 30, 2011
Related Party Transactions [Abstract]
Related Party Transactions	9. Related Party Transactions The Company paid store planning and retail design fees to a Company owned by a family member of one of the Company’s executive officers. These fees are included in “Furniture, fixtures and equipment” in the Company’s Unaudited Condensed Consolidated Balance Sheets and “Selling, general and administrative” expenses in the Company’s Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). For the three months ended July 30, 2011 and July 31, 2010, the Company paid fees of approximately $0.4 million and $0.4 million, respectively. For the six months ended July 30, 2011 and July 31, 2010, the Company paid fees of approximately $0.9 million and $0.6 million, respectively. This arrangement was approved by the Audit Committee of the Board of Directors. The initial purchasers of the Senior Secured Second Lien Notes were Credit Suisse Securities (USA) LLC, J.P. Morgan Securities LLC, Goldman Sachs & Co., and Morgan Joseph TriArtisan LLC. Apollo Management, LLC, an affiliate of Apollo Management VI, L.P., the Company’s controlling shareholder, has a non-controlling interest in Morgan Joseph TriArtisan LLC and its affiliates. Additionally, a member of the Company’s Board of Directors is an executive of Morgan Joseph TriArtisan Inc., an affiliate of Morgan Joseph TriArtisan LLC. In connection with the issuance of the Senior Secured Second Lien Notes, the Company paid a fee of approximately $0.3 million to Morgan Joseph TriArtisan LLC.

- Definition

The entire disclosure for related party transactions, including the nature of the relationship(s), a description of the transactions, the amount of the transactions, the effects of any change in the method of establishing the terms of the transaction from the previous period, stated interest rate, expiration date, terms and manner of settlement per the agreement with the related party, and amounts due to or from related parties. If the entity and one or more other entities are under common ownership or management control and this control affects the operating results or financial position, disclosure includes the nature of the control relationship even if there are no transactions between the entities. Disclosure may also include the aggregate amount of current and deferred tax expense for each statement of earnings presented where the entity is a member of a group that files a consolidated tax return, the amount of any tax related balances due to or from affiliates as of the date of each statement of financial position presented, the principal provisions of the method by which the consolidated amount of current and deferred tax expense is allocated to the members of the group and the nature and effect of any changes in that method. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.

+ References

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-Name Accounting Standards Codification
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-SubTopic 10
-Section S99
-Paragraph 1
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-Name Regulation S-X (SX)
-Number 210
-Article 3A
-Section 04
-Paragraph b

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-Name Statement of Financial Accounting Standard (FAS)
-Number 57
-Paragraph 1-4
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-Article 4
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+ Details

XML 18 R15.htm IDEA: XBRL DOCUMENT

Segment Information

6 Months Ended

Jul. 30, 2011

Segment Information [Abstract]

Segment Information

10. Segment Information

Net sales and operating income for the three and six months ended July 30, 2011 and July 31, 2010 are as follows (in thousands):


	Three Months			Three Months			Six Months			Six Months
	Ended			Ended			Ended			Ended
	July 30, 2011			July 31, 2010			July 30, 2011			July 31, 2010
Net sales:
North America	$	217,057		$	210,087		$	441,245		$	422,686
Europe		141,490			124,146			263,748			233,624

Total net sales		358,547			334,233			704,993			656,310


Depreciation and amortization:
North America		10,121			10,402			20,526			20,909
Europe		6,231			5,454			12,880			11,313

Total depreciation and amortization		16,352			15,856			33,406			32,222


Operating income for reportable segments:
North America		23,944			19,368			54,568			43,771
Europe		13,841			14,460			9,217			17,768

Total operating income for reportable segments		37,785			33,828			63,785			61,539
Severance and transaction-related costs		426			212			769			314

Net consolidated operating income		37,359			33,616			63,016			61,225
Gain on early debt extinguishment		233			6,249			482			10,736
Impairment of equity investment		—			6,030			—			6,030
Interest expense, net		44,335			40,573			90,570			83,336


Net consolidated loss before income tax expense	$	(6,743	)	$	(6,738	)	$	(27,072	)	$	(17,405	)

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

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+ Details

XML 19 R13.htm IDEA: XBRL DOCUMENT

Income Taxes	6 Months Ended
Income Taxes	Jul. 30, 2011
Income Taxes [Abstract]
Income Taxes	8. Income Taxes The effective income tax rate was (50.4)% and (9.9)% for the three and six months ended July 30, 2011. This effective income tax rate differed from the statutory federal tax rate of 35% primarily from increases in the valuation allowance recorded for additional deferred tax assets generated in the three and six months ended July 30, 2011 by the Company’s U.S. operations. The effective income tax rate was (23.8)% and (18.6)% for the three and six months ended July 31, 2010. This effective income tax rate differed from the statutory federal tax rate of 35% primarily from increases in the valuation allowance recorded for additional deferred tax assets generated in the three and six months ended July 31, 2010 by the Company’s U.S. operations. In April 2011, the Company received from the Canada Revenue Agency withholding tax assessments for 2003 through 2007 of approximately $5.0 million, including penalties and interest. In conjunction with these assessments, a security deposit will be required in the amount of approximately $5.0 million until such time a final decision is made by the tax authority. The Company is objecting to these assessments and believes it will prevail at the appeals level; therefore, an accrual has not been recorded for this item. In February 2011, the Internal Revenue Service concluded its tax examination of our U.S. Federal income tax return for Fiscal 2007 and did not assess any additional tax liability. The Company’s U.S. Federal income tax returns for Fiscal 2008 and 2009 are currently under review by the Internal Revenue Service.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
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-Name Regulation S-X (SX)
-Number 210
-Section 08
-Paragraph h
-Article 4

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-URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e23780-122690

+ Details

XML 20 R6.htm IDEA: XBRL DOCUMENT

Basis of Presentation	6 Months Ended
Basis of Presentation	Jul. 30, 2011
Basis of Presentation [Abstract]
Basis of Presentation	1. Basis of Presentation The accompanying Unaudited Condensed Consolidated Financial Statements have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair statement of the results for the interim periods presented have been included. These statements should be read in conjunction with the Consolidated Financial Statements and notes thereto included in the Annual Report on Form 10-K for the year ended January 29, 2011 filed with the Securities and Exchange Commission, including Note 2 to the Consolidated Financial Statements included therein which discusses principles of consolidation and summary of significant accounting policies. The Unaudited Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions about future events. These estimates and the underlying assumptions affect the amounts of assets and liabilities reported, disclosures regarding contingent assets and liabilities and reported amounts of revenues and expenses. Such estimates include, but are not limited to, the value of inventories, goodwill, intangible assets and other long-lived assets, legal contingencies and assumptions used in the calculation of income taxes, retirement and other post-retirement benefits, stock-based compensation, derivative and hedging activities, residual values and other items. These estimates and assumptions are based on management’s best estimates and judgment. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, which management believes to be reasonable under the circumstances. Management adjusts such estimates and assumptions when facts and circumstances dictate. Illiquid credit markets, volatile equity, foreign currency, energy markets and declines in consumer spending have combined to increase the uncertainty inherent in such estimates and assumptions. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. Changes in those estimates will be reflected in the financial statements in those future periods when the changes occur. Due to the seasonal nature of the retail industry and the Company’s business, the results of operations for interim periods of the year are not necessarily indicative of the results of operations on an annualized basis. The Unaudited Condensed Consolidated Financial Statements include certain reclassifications of prior period amounts in order to conform to current period presentation.

- Definition

The entire disclosure for organization, consolidation and basis of presentation of financial statements disclosure.

+ References

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-Name Statement of Position (SOP)
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XML 21 R9.htm IDEA: XBRL DOCUMENT

Debt

6 Months Ended

Jul. 30, 2011

Debt [Abstract]

Debt

4. Debt

Debt as of July 30, 2011 and January 29, 2011 included the following components (in thousands):


	July 30, 2011		January 29, 2011
Short-term debt and current portion of long-term debt:
Note payable to bank due 2012	$	61,042	$	57,703
Current portion of long-term debt		—		18,451

Total short-term debt and current portion of long-term debt	$	61,042	$	76,154


Long-term debt:
Senior secured term loan facility due 2014	$	1,154,310	$	1,399,250
Senior notes due 2015		223,000		236,000
Senior toggle notes due 2015		338,667		360,431
Senior subordinated notes due 2017		259,612		259,612
Senior secured second lien notes due 2019		450,000		—

		2,425,589		2,255,293
Less: current portion of long-term debt		—		(18,451	)

Long-term debt	$	2,425,589	$	2,236,842


Senior secured revolving credit facility due 2013	$	—	$	194,000


Obligations under capital leases	$	17,290	$	17,290

See Note 3 for related fair value disclosure on debt.

Short-term Debt

Senior Secured Second Lien Notes

Note Repurchases

The following is a summary of the Company’s debt repurchase activity for the three and six months ended July 30, 2011 and July 31, 2010 (in thousands):


	Three Months Ended July 30, 2011						Six Months Ended July 30, 2011
	Principal		Repurchases		Recognized		Principal		Repurchase		Recognized
Notes Repurchased	Amount		Price		Gain (1)		Amount		Price		Gain (Loss) (2)
Senior Notes	$	3,000	$	2,940	$	12	$	13,000	$	12,870	$	(86	)
Senior Toggle Notes		18,986		18,543		221		33,140		32,627		568

	$	21,986	$	21,483	$	233	$	46,140	$	45,497	$	482


(1)		Net of deferred issuance cost write-offs of $48 for the Senior Notes and $222 for the Senior Toggle Notes.

(2)		Net of deferred issuance cost write-offs of $216 for the Senior Notes and $400 for the Senior Toggle Notes, and accrued interest write-off of $455 for the Senior Toggle Notes.


	Three Months Ended July 31, 2010						Six Months Ended July 31, 2010
	Principal		Repurchases		Recognized		Principal		Repurchase		Recognized
Notes Repurchased	Amount		Price		Gain (1)		Amount		Price		Gain (2)
Senior Toggle Notes	$	41,623	$	36,328	$	5,340	$	47,623	$	41,313	$	6,427
Senior Subordinated Notes		7,000		5,935		909		22,625		17,799		4,309

	$	48,623	$	42,263	$	6,249	$	70,248	$	59,112	$	10,736


(1)		Net of deferred issuance cost write-offs of $673 for the Senior Toggle Notes and $156 for the Senior Subordinated Notes, and accrued interest write-off of $718 for the Senior Toggle Notes.

(2)		Net of deferred issuance cost write-offs of $777 for the Senior Toggle Notes and $517 for the Senior Subordinated Notes, and accrued interest write-off of $894 for the Senior Toggle Notes.

Covenants

	•		incur additional indebtedness;

	•		pay dividends or distributions on our capital stock, repurchase or retire our capital stock and redeem, repurchase or defease any subordinated indebtedness;

	•		make certain investments;

	•		create or incur certain liens;

	•		create restrictions on the payment of dividends or other distributions to us from our subsidiaries;

	•		transfer or sell assets;

	•		engage in certain transactions with our affiliates; and

	•		merge or consolidate with other companies or transfer all or substantially all of our assets.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References+ Details

XML 22 R10.htm IDEA: XBRL DOCUMENT

Derivatives and Hedging Activities

6 Months Ended

Jul. 30, 2011

Derivatives and Hedging Activities [Abstract]

Derivatives and Hedging Activities

5. Derivatives and Hedging Activities

Location of Gain or

(Loss) Reclassified

Amount of Gain or (Loss)

Derivatives in

Amount of Gain or (Loss)

from Accumulated

Reclassified from Accumulated

Cash Flow Hedging

Recognized in OCI on Derivative

OCI into Income

Relationships

(Effective Portion)

(Effective Portion) (1)

Three months ended

July 30, 2011

July 31, 2010

July 30, 2011

July 31, 2010

Interest rate swaps

(1,079

)

2,590

Interest expense, net

(481

)

(3,447

)


(1)		Represents reclassification of amounts from accumulated other comprehensive income (loss) to earnings as interest expense is recognized on the senior secured term loan facility. No ineffectiveness is associated with these interest rate cash flow hedges.

Location of Gain or

(Loss) Reclassified

Amount of Gain or (Loss)

Derivatives in Cash

Amount of Gain or (Loss)

from Accumulated

Reclassified from Accumulated

Flow Hedging

Recognized in OCI on Derivative

OCI into Income

Relationships

(Effective Portion)

(Effective Portion) (1)

Six months ended

July 30, 2011

July 31, 2010

July 30, 2011

July 31, 2010

Interest rate swaps

(1,376

)

7,749

Interest expense, net

(946

)

(8,779

)


(1)		Represents reclassification of amounts from accumulated other comprehensive income (loss) to earnings as interest expense is recognized on the senior secured term loan facility. No ineffectiveness is associated with these interest rate cash flow hedges.

- Definition

The entire disclosure for the entity's entire derivative instruments and hedging activities. Describes an entity's risk management strategies, derivatives in hedging activities and non-hedging derivative instruments, the assets, obligations, liabilities, revenues and expenses arising therefrom, and the amounts of and methodologies and assumptions used in determining the amounts of such items.

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Commitments and Contingencies	6 Months Ended
Commitments and Contingencies	Jul. 30, 2011
Commitments and Contingencies [Abstract]
Commitments and Contingencies	6. Commitments and Contingencies The Company is, from time to time, involved in litigation incidental to the conduct of its business, including personal injury litigation, litigation regarding merchandise sold, including product and safety concerns regarding heavy metal and chemical content in merchandise, litigation with respect to various employment matters, including litigation with present and former employees, wage and hour litigation, and litigation to protect trademark rights. The Company believes that current pending litigation will not have a material adverse effect on its consolidated financial position, results of operations or cash flows.

- Definition

The entire disclosure for commitments and contingencies.

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Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $) In Thousands	6 Months Ended
	Jul. 30, 2011	Jul. 31, 2010
Cash flows from operating activities:
Net loss	$ (29,740)	$ (20,645)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	33,406	32,222
Impairment		6,030
Amortization of lease rights and other assets	1,600	1,610
Amortization of debt issuance costs	8,535	5,038
Payment of in kind interest expense	11,831	19,003
Foreign currency exchange net loss on Euro Loan	2,158
Net unfavorable accretion of lease obligations	(382)	(786)
Loss on sale/retirement of property and equipment, net	58	366
Gain on early debt extinguishment	(482)	(10,736)
Stock compensation expense	2,142	2,541
(Increase) decrease in:
Inventories	(8,694)	(18,501)
Prepaid expenses	(10,930)	917
Other assets	(1,912)	3,945
Increase (decrease) in:
Trade accounts payable	6,899	10,074
Income taxes payable	(5,814)	(2,590)
Accrued interest payable	15,462	(5,612)
Accrued expenses and other liabilities	(19,246)	8,974
Deferred income taxes	(1,349)	(352)
Deferred rent expense	647	1,878
Net cash provided by operating activities	4,189	33,376
Cash flows from investing activities:
Acquisition of property and equipment, net	(32,202)	(19,556)
Acquisition of intangible assets/lease rights	(1,873)	(524)
Proceeds from sale of property		16,765
Changes in restricted cash	(1,680)
Net cash used in investing activities	(35,755)	(3,315)
Cash flows from financing activities:
Payments of Credit facility	(438,940)	(7,250)
Proceeds from Note	450,000
Repurchases of Notes	(45,497)	(59,112)
Payment of debt issuance costs	(10,544)
Principal payments of capital leases		(765)
Net cash used in financing activities	(44,981)	(67,127)
Effect of foreign currency exchange rate changes on cash and cash equivalents	5,047	(1,510)
Net decrease in cash and cash equivalents	(71,500)	(38,576)
Cash and cash equivalents, at beginning of period	255,902	198,708
Cash and cash equivalents, at end of period	184,402	160,132
Restricted cash, at end of period	26,725
Cash and cash equivalents and restricted cash, at end of period	211,127	160,132
Supplemental disclosure of cash flow information:
Income taxes paid	10,123	5,829
Interest paid	54,766	65,232
Non-cash investing and financing activities:
Property acquired under capital lease		$ 18,055

Recent Accounting Pronouncements	6 Months Ended
Recent Accounting Pronouncements	Jul. 30, 2011
Recent Accounting Pronouncements [Abstract]
Recent Accounting Pronouncements	2. Recent Accounting Pronouncements In May 2011, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) 2011-04, Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and International Financial Reporting Standards (“IFRSs”) to provide a consistent definition of fair value and ensure that fair value measurements and disclosure requirements are similar between U.S. GAAP and IFRSs. This guidance changes certain fair value measurement principles and enhances the disclosure requirements for fair value measurements. The amendments in this ASU are effective for interim and annual fiscal periods beginning after December 15, 2011 and are applied prospectively. Early adoption by public entities is not permitted. The Company does not expect adoption of ASU 2011-04 will have a material impact on the Company’s financial position, results of operations or cash flows.

Condensed Consolidated Balance Sheets (Unaudited) (USD $) In Thousands	Jul. 30, 2011	Jan. 29, 2011
Current assets:
Cash and cash equivalents and restricted cash of $26,725 and $23,864, respectively	$ 211,127	$ 279,766
Inventories	147,665	136,148
Prepaid expenses	33,828	21,449
Other current assets	27,189	24,658
Total current assets	419,809	462,021
Property and equipment:
Furniture, fixtures and equipment	203,516	186,514
Leasehold improvements	271,986	248,030
Total property and equipment, gross	475,502	434,544
Less accumulated depreciation and amortization	(265,314)	(233,511)
Total property and equipment, net	210,188	201,033
Leased property under capital lease:
Land and building	18,055	18,055
Less accumulated depreciation and amortization	(1,354)	(903)
Total leased property under capital lease	16,701	17,152
Goodwill	1,550,056	1,550,056
Intangible assets, net of accumulated amortization of $45,495 and $38,747, respectively	558,030	557,466
Deferred financing costs, net of accumulated amortization of $50,811 and $41,659, respectively	37,826	36,434
Other assets	45,907	42,287
Total other noncurrent assets	2,191,819	2,186,243
Total assets	2,838,517	2,866,449
Current liabilities:
Short-term debt and current portion of long-term debt	61,042	76,154
Trade accounts payable	64,870	54,355
Income taxes payable	10,486	11,744
Accrued interest payable	32,282	16,783
Accrued expenses and other current liabilities	91,613	107,115
Total current liabilities	260,293	266,151
Long-term debt	2,425,589	2,236,842
Revolving credit facility	0	194,000
Obligation under capital lease	17,290	17,290
Deferred tax liability	121,112	121,776
Deferred rent expense	27,805	26,637
Unfavorable lease obligations and other long-term liabilities	27,236	30,268
Total liabilities	2,619,032	2,626,813
Commitments and contingencies
Stockholder's deficit:
Common stock par value $0.001 per share; authorized 1,000 shares; issued and outstanding 100 shares	0	0
Additional paid-in capital	623,241	621,099
Accumulated other comprehensive income, net of tax	14,721	1,416
Accumulated deficit	(678,770)	(649,030)
Total stockholder's deficit	(40,808)	(26,515)
Total liabilities and stockholder's deficit	$ 2,838,517	$ 2,866,449