Segment Information

6 Months Ended

Jul. 30, 2011

Segment Information [Abstract]

Segment Information

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.