Segment Information

9 Months Ended

Nov. 02, 2013

Segment Information

11. 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 Loss within its North America segment. The franchise fees the Company charges under the franchising agreements are reported in “Other income, net” in the accompanying Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss within its Europe segment. Substantially all of the interest expense on the Company’s outstanding debt is recorded in the Company’s North America segment.

Net sales, depreciation and amortization and operating income (loss) for the three and nine months ended November 2, 2013 and October 27, 2012 are as follows (in thousands):

	Three Months			Three Months			Nine Months			Nine Months
	Ended			Ended			Ended			Ended
	November 2, 2013			October 27, 2012			November 2, 2013			October 27, 2012
Net sales:
North America	$	211,093		$	226,390		$	656,367		$	666,705
Europe		145,845			136,998			421,280			396,917
Total net sales		356,938			363,388			1,077,647			1,063,622
Depreciation and amortization:
North America		10,673			9,786			30,138			29,795
Europe		7,705			6,256			20,018			18,437
Total depreciation and amortization		18,378			16,042			50,156			48,232
Operating income for reportable segments:
North America		16,374			35,077			78,096			98,786
Europe		15,221			14,709			32,214			27,684
Total operating income for reportable segments		31,595			49,786			110,310			126,470
Severance and transaction-related costs		978			(29	)		2,782			1,168
Consolidated operating income		30,617			49,815			107,528			125,302
Loss on early debt extinguishment		—			5,105			4,795			9,707
Interest expense, net		53,210			54,042			169,184			149,943
Consolidated loss before income tax expense	$	(22,593	)	$	(9,332	)	$	(66,451	)	$	(34,348	)

Excluded from operating income for the North America segment are severance and transaction-related costs of approximately $0.2 million and $0 million for the three months ended November 2, 2013 and October 27, 2012, respectively, and $1.3 million and $1.4 million for the nine months ended November 2, 2013 and October 27, 2012, respectively.

Excluded from operating income for the Europe segment are severance and transaction-related costs of approximately $0.8 million and $0 million for the three months ended November 2, 2013 and October 27, 2012, respectively, and $1.5 million and $(0.2) million for the nine months ended November 2, 2013 and October 27, 2012, respectively.