IMPAIRMENTS AND ASSETS HELD FOR SALE

6 Months Ended

Jul. 30, 2011

IMPAIRMENTS AND ASSETS HELD FOR SALE

IMPAIRMENTS AND ASSETS HELD FOR SALE

NOTE 11—IMPAIRMENTS AND ASSETS HELD FOR SALE

During the second quarter of fiscal 2011 and 2010, the Company recorded a $0.4 million and a $0.8 million impairment charge, respectively, related to stores classified as held and used. The Company used a probability-weighted approach and estimates of expected future cash flows to determine the fair value of the stores. Discount and growth rate assumptions were derived from current economic conditions, management’s expectations and projected trends of current operating results. The fair market value estimate is classified as a Level 3 measure within the fair value hierarchy. Of the $0.4 million impairment charge in fiscal 2011, $0.1 million was charged to costs of merchandise sales, and $0.3 million was charged to costs of service revenues. Of the $0.8 million impairment charge in fiscal 2010, $0.6 million was charged to costs of merchandise sales, and $0.2 million was charged to costs of service revenue.

During the second quarter of fiscal 2010, the Company also recorded a $0.2 million impairment charge related to a store classified as held for disposal. The Company lowered its selling price reflecting declines in the commercial real estate market. The fair market value of the store is classified as a Level 2 measure within the fair value hierarchy. Substantially all of this impairment was charged to costs of merchandise sales.

The Company did not sell any properties during the twenty-six week period ending July 30, 2011.

During the thirteen week period ended July 31, 2010, the Company sold one store classified as held for disposal for net proceeds of $0.8 million and recognized a net gain of $0.2 million. During the twenty-six week period ended July 31, 2010, the Company sold four stores classified as held for disposal for net proceeds of $2.9 million and recognized a net gain of $0.3 million.

Assets held for sale were $0.4 million as of July 30, 2011 and $0.5 million as of January 29, 2011 and are recorded within other current assets.