Gordmans Acquisition (Notes)

3 Months Ended

Apr. 29, 2017

Business Combinations [Abstract]

Business Combination Disclosure [Text Block]

GORDMANS ACQUISITION

On April 7, 2017, we acquired select assets of Gordmans Stores, Inc. and its subsidiaries (collectively, the “Sellers”) through a bankruptcy auction. Under the terms of the transaction agreement, we will take an assignment of a minimum of 50 Sellers’ store leases, with rights to take an assignment of the leases for an additional seven stores and a distribution center. We have also acquired all of the Sellers’ inventory, furniture, fixtures and equipment at the 57 store locations and distribution center, as well as the trademarks and other intellectual property of the Sellers. The GORDMANS branded stores, which we intend to operate as an off-price concept, add scale to our business, while allowing us to leverage strategic synergies and our current infrastructure. The acquisition also brings beneficial geographic and customer diversification.

We expect to pay approximately $38 million in cash for the inventory and other assets acquired from the Sellers, of which $33.8 million was paid during the three months endedApril 29, 2017 using existing cash and availability under our Revolving Credit Facility. The transaction, including the lease assignments, and purchase price are expected to be finalized in the second quarter 2017.

The estimated fair values of the assets acquired at the acquisition date, which are provisional pending the final valuation, were as follows (in thousands):

	April 7, 2017
Inventory	$	34,700
Property, plant and equipment and other assets	3,000
Total	$	37,700

We recognized $6.3 million of acquisition and integration related costs in selling, general and administrative expenses for the three months endedApril 29, 2017.

Net sales included in our condensed consolidated statement of operations from the 57 GORDMANS branded stores that we operated from April 7, 2017 through April 29, 2017 were $16.3 million.

Pro forma net sales and earnings for the three months ended April 29, 2017 and April 30, 2016 are not presented due to the impracticability in substantiating this information as the Gordmans Acquisition was limited to select assets and assignment of leases acquired through a bankruptcy auction. Furthermore, the results of operations may be impacted by the Sellers’ liquidation and may not be indicative of future performance.