Restructuring

3 Months Ended

Apr. 30, 2011

4. Restructuring

In March 2011, the Company announced the acceleration of its store rationalization plan, a program designed to increase the productivity of the Company’s store square footage by evaluating the Company’s store portfolio on a market-by-market basis and closing, consolidating or downsizing certain selected locations. This evaluation includes consideration of factors such as overall size and potential sales in each market, current performance and growth potential of each store and available lease expirations, lease renewals and other lease termination opportunities. As a result of this evaluation, the Company identified 90 to 100 locations, including full stores and attached store concepts, for closure and 15 to 20 locations as consolidation or downsizing opportunities. The Company has adopted a staged approach to closing, consolidating and downsizing these locations to best match its existing lease opportunities with approximately 83 locations expected to be closed in fiscal 2011, 25 locations expected to be closed in fiscal 2012 and two locations expected to be closed in fiscal 2013 under this plan. The Company expects to record total one-time restructuring charges of approximately $15.0 million associated with this plan. In the thirteen weeks ended April 30, 2011, the Company incurred restructuring charges of $2.3 million, primarily comprised of lease exit, severance and related costs for certain locations to be closed under this plan.

In the thirteen weeks ended May 1, 2010, the Company recorded $5.0 million of restructuring charges primarily related to the consolidation of the Company’s Madison Avenue, New York flagship location in which the Company reduced active leased floor space and wrote down certain assets and leasehold improvements no longer used in the redesigned lay-out.

The following is a summary of the activity and liability balances related to restructuring for the thirteen weeks ended April 30, 2011 and May 1, 2010:


	Corporate - Wide
	Strategic Initiatives
				Lease -
	Severance			Related			Total
	(In thousands)
Balance at January 29, 2011	$	215		$	3,781		$	3,996
Charges		1,847			418			2,265
Cash payments		(410	)		(437	)		(847	)

Balance at April 30, 2011	$	1,652		$	3,762		$	5,414


	Corporate - Wide
	Strategic Initiatives
				Lease -
	Severance			Related			Total
	(In thousands)
Balance at January 30, 2010	$	3,089		$	784		$	3,873
Charges		934			4,025			4,959
Cash payments		(1,873	)		(250	)		(2,123	)
Non-cash items		—			(44	)		(44	)

Balance at May 1, 2010	$	2,150		$	4,515		$	6,665

The non-cash items primarily consisted of the write-off of certain leasehold improvements and lease liability adjustments. Of the $5.4 million in restructuring liabilities at April 30, 2011, $3.3 million, expected to be paid within the next twelve months, is included in accrued liabilities and the remaining $2.1 million, expected to be paid thereafter through 2014, is included in deferred rent under lease commitments.