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 of 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 approximately 110 locations, including full stores and attached store concepts, for closure, including 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 close in fiscal 2011, 25 locations expected to close in fiscal 2012 and two locations expected to close in fiscal 2013 under this plan. The scope and timing of closures, consolidations and downsizings under this plan remains dynamic as the Company continues to perform ongoing evaluations of its portfolio and continues the process of negotiating acceptable termination arrangements with related third parties. The Company expects to record total non-recurring restructuring charges of approximately $14.0 million related to this plan. In the thirteen and twenty-six weeks ended July 30, 2011, the Company incurred restructuring charges of $1.0 million and $3.3 million, respectively, primarily comprised of lease exit, severance and related costs for certain locations closed or to be closed under this plan and, through July 30, 2011, closed 17 locations, including 15 full stores, under this plan.

In the twenty-six weeks ended July 31, 2010, the Company recorded $5.1 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 twenty-six weeks ended July 30, 2011 and July 31, 2010:


	Corporate - Wide
	Strategic Initiatives
				Lease -
	Severance			Related			Total
	(In thousands)
Balance at January 29, 2011	$	215		$	3,781		$	3,996
Charges		2,139			1,131			3,270
Cash payments		(639	)		(1,055	)		(1,694	)

Balance at July 30, 2011	$	1,715		$	3,857		$	5,572


	Corporate - Wide
	Strategic Initiatives
				Lease -
	Severance			Related			Total
	(In thousands)
Balance at January 30, 2010	$	3,089		$	784		$	3,873
Charges		1,041			4,030			5,071
Cash payments		(2,960	)		(579	)		(3,539	)
Non-cash items		—			(48	)		(48	)

Balance at July 31, 2010	$	1,170		$	4,187		$	5,357

The non-cash items primarily consisted of the write-off of certain leasehold improvements and lease liability adjustments. Of the $5.6 million in restructuring liabilities at July 30, 2011, $3.7 million, expected to be paid within the next twelve months, is included in accrued liabilities and accounts payable and the remaining $1.9 million, expected to be paid thereafter through 2014, is included in deferred rent under lease commitments.