7.	Impairment of Long-Lived Assets

The Company accounts for impaired long-lived assets in accordance with Topic No. 360. This statement requires that long-lived assets and certain identifiable intangibles to be held and used by an entity (i) be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable and (ii) should be reported at the lower of the carrying amount or fair value less cost to sell. The Company considers historical performance and future estimated results in its evaluation of potential impairment and then compares the carrying amount of the asset to the estimated future cash flows expected to result from the use of the asset. If the carrying amount of the asset exceeds the estimated expected undiscounted future cash flows, the Company measures the amount of the impairment by comparing the carrying amount of the asset to its fair value. The estimation of fair value is either based on prices for similar assets or measured by discounting expected future cash flows using the Company’s risk adjusted interest rate.

The recoverability assessment related to store-level assets requires judgments and estimates of future revenues, gross margin rates and store expenses. The Company bases these estimates upon its past and expected future performance. The Company believes its estimates are appropriate in light of current market conditions. However, future impairment charges could be required if the Company does not achieve its current revenue or cash flow projections. The impairment charges noted below are primarily related to declines in revenues and operating results of the respective stores.

Impairment charges recorded during Fiscal 2012, Fiscal 2011 and Fiscal 2010 amounted to $11.5 million, $1.7 million and $2.1 million, respectively. Impairment charges during these periods related to the following:


	*(in thousands)*
	Fiscal Years Ended
Asset Categories	February 2, 2013		January 28, 2012		January 29, 2011

Favorable Leases	$	6,275	$	165	$	—
Leasehold Improvements		1,885		652		779
Building/Building Improvements		1,814		—		—
Furniture and Fixtures		950		457		1,148
Land		558		—		—
Other Assets		—		410		60
Other Property and Equipment		57		51		93


Total	$	11,539	$	1,735	$	2,080

The impairment of store level assets related to 19 of the Company’s stores for Fiscal 2012, seven of the Company’s stores for Fiscal 2011 and nine of the Company’s stores for Fiscal 2010. As noted above, long-lived assets are measured at fair value on a non-recurring basis for purposes of calculating impairment using the fair value hierarchy of Topic No. 820. Of the 19 and seven stores that were impaired during Fiscal 2012 and Fiscal 2011, respectively, three of the stores impaired in 2012 and all of the stores impaired in Fiscal 2011 were fully impaired and therefore had zero fair value as of February 2, 2013 and January 28, 2012 and would be categorized as Level 3 in the fair value hierarchy described in Note 15 to the Company’s Consolidated Financial Statements entitled “Fair Value of Financial Instruments.”

Of the remaining 16 stores impaired in Fiscal 2012 that were less than fully impaired, the table below sets forth by level within the fair value hierarchy the fair value of the remaining long-lived assets subsequent to impairment charges as of February 2, 2013 for which an impairment assessment was performed:


	*(in thousands)*
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Un -Observable Inputs (Level 3)		Total		Total Impairment Losses

Favorable Leases	$	—	$	—	$	2,566	$	2,566	$	6,275
Leasehold Improvements		—		—		1,705		1,705		1,885
Building/Building Improvements		—		2,569		—		2,569		1,814
Furniture and Fixtures		—		7		1,623		1,630		950
Land		—		1,359		—		1,359		558
Other Property and Equipment		—		—		115		115		57

Total	$	—	$	3,935	$	6,009	$	9,944	$	11,539