Accounts Receivable, Net

12 Months Ended

Jan. 28, 2017

Receivables [Abstract]

Accounts receivable, net

Accounts receivable, net

Signet’s accounts receivable primarily consist of US customer in-house financing receivables. The accounts receivable portfolio consists of a population that is of similar characteristics and is evaluated collectively for impairment.

(in millions)	January 28, 2017		January 30, 2016
Accounts receivable by portfolio segment, net:
Sterling Jewelers customer in-house finance receivables	$	1,813.3	$	1,725.9
Zale customer in-house finance receivables	33.4		13.6
Other accounts receivable	11.3		16.9
Total accounts receivable, net	$	1,858.0	$	1,756.4

Signet grants credit to customers based on a variety of credit quality indicators, including consumer financial information and prior payment experience. On an ongoing basis, management monitors the credit exposure based on past due status and collection experience, as it has found a meaningful correlation between the past due status of customers and the risk of loss.

During the third quarter of Fiscal 2016, Signet implemented a program to provide in-house credit to customers in the Zale division’s US locations (“second look”). The allowance for credit losses associated with Zale customer in-house finance receivables was immaterial as of January 28, 2017 and January 30, 2016.

Other accounts receivable is comprised primarily of accounts receivable relating to the insurance loss replacement business in the UK Jewelry division of $11.0 million (Fiscal 2016: $13.6 million).

Sterling Jewelers customer in-house finance receivables

The allowance for credit losses on Sterling Jewelers customer in-house finance receivables is shown below:

(in millions)	Fiscal 2017			Fiscal 2016			Fiscal 2015
Beginning balance:	$	(130.0	)	$	(113.1	)	$	(97.8	)
Charge-offs, net	203.4			173.6			144.7
Recoveries	35.1			35.3			27.5
Provision	(247.2		)	(225.8		)	(187.5		)
Ending balance	$	(138.7	)	$	(130.0	)	$	(113.1	)
Ending receivable balance evaluated for impairment	1,952.0			1,855.9			1,666.0
Sterling Jewelers customer in-house finance receivables, net	$	1,813.3		$	1,725.9		$	1,552.9

Net bad debt expense is defined as the provision expense less recoveries.

The credit quality indicator and age analysis of Sterling Jewelers customer in-house finance receivables are shown below:

	January 28, 2017					January 30, 2016					January 31, 2015
(in millions)	Gross		Valuation allowance			Gross		Valuation allowance			Gross		Valuation allowance
Performing:
Current, aged 0 – 30 days	$	1,538.2	$	(47.2	)	$	1,473.0	$	(45.4	)	$	1,332.2	$	(41.1	)
Past due, aged 31 – 60 days	282.0		(9.0		)	259.6		(8.3		)	230.2		(7.5		)
Past due, aged 61 – 90 days	51.6		(2.3		)	49.2		(2.2		)	40.9		(1.8		)
Non Performing:
Past due, aged more than 90 days	80.2		(80.2		)	74.1		(74.1		)	62.7		(62.7		)
	$	1,952.0	$	(138.7	)	$	1,855.9	$	(130.0	)	$	1,666.0	$	(113.1	)

	January 28, 2017				January 30, 2016				January 31, 2015
(as a % of the ending receivable balance)	Gross		Valuation allowance		Gross		Valuation allowance		Gross		Valuation allowance
Performing:
Current, aged 0 – 30 days	78.8	%	3.1	%	79.4	%	3.1	%	80.0	%	3.1	%
Past due, aged 31 – 60 days	14.5	%	3.2	%	14.0	%	3.2	%	13.8	%	3.3	%
Past due, aged 61 – 90 days	2.6	%	4.5	%	2.6	%	4.5	%	2.4	%	4.4	%
Non Performing:
Past due, aged more than 90 days	4.1	%	100.0	%	4.0	%	100.0	%	3.8	%	100.0	%
	100.0	%	7.1	%	100.0	%	7.0	%	100.0	%	6.8	%

Securitized credit card receivables

The Sterling Jewelers division securitizes its credit card receivables through its Sterling Jewelers Receivables Master Note Trust. See Note 20 for additional information regarding this asset-backed securitization facility.