Segment Information

9 Months Ended

Oct. 01, 2011

Segment Reporting [Abstract]

Segment Information

SEGMENT INFORMATION

The Company has three reportable segments-Stores, Port Supply (wholesale) and Direct Sales (Internet and call center)-all of which sell merchandise directly to customers. The customer base overlaps between the Company's Stores and Port Supply segments, and between its Stores and Direct Sales segments. All processes for the three segments within the supply chain are commingled, including purchases from vendors, distribution center activity and customer delivery. Revenues from external customers are derived from merchandise sales, and the Company does not rely on any major customers as a source of revenue.

The Company considers its individual stores to be operating segments. Each store's operating performance has been aggregated into one reportable segment. The Company's individual store operating segments are aggregated for financial reporting purposes because they are similar in each of the following areas: economic characteristics; class of consumer; nature of products; and distribution methods. The Company believes that disaggregating its operating segments would not provide meaningful additional information.

In addition to the Company's 10 stores located in Canada and the three franchised stores located in Turkey, revenues are attributed to geographic locations based on the location to which the Company ships its products. Through the Direct Sales segment, the Company promotes and sells products internationally through both its website and call center. The Company operates primarily in the United States with foreign revenues representing less than 5% of total net revenues during each of the 13-week and 39-week periods ended October 1, 2011 and October 2, 2010, and foreign long-lived assets totaling less than 2% of long-lived assets at each of these dates.

Segment assets are those directly allocated to an operating segment's operations. For the Stores segment, assets primarily consist of leasehold improvements, computer assets, fixtures, land and buildings. For the Port Supply and Direct Sales segments, assets primarily consist of information technology assets. Unallocated assets include merchandise inventory, shared technology infrastructure, distribution centers, corporate headquarters, prepaid expenses, deferred taxes and other assets. Capital expenditures and depreciation expense for each segment are allocated to the assets assigned to the segment. Contribution is defined as net revenues less product costs and direct expenses.

Following is financial information related to the Company’s business segments (in thousands):

	13 Weeks Ended						39 Weeks Ended
	October 1, 2011			October 2, 2010			October 1, 2011			October 2, 2010
Net revenues:
Stores	$	163,839		$	157,429		$	478,839		$	466,449
Direct Sales	9,400			8,408			29,247			26,375
Port Supply	7,030			6,707			21,963			22,669
Consolidated net revenues	$	180,269		$	172,544		$	530,049		$	515,493
Contribution:
Stores	$	29,415		$	24,959		$	82,949		$	79,223
Direct Sales	1,878			1,430			5,463			5,363
Port Supply	(728		)	(1,044		)	(1,850		)	(1,691		)
Consolidated contribution	$	30,565		$	25,345		$	86,562		$	82,895
Reconciliation of consolidated contribution to net income:
Consolidated contribution	$	30,565		$	25,345		$	86,562		$	82,895
Less:
Indirect costs of goods sold not included in consolidated contribution	(7,781		)	(8,309		)	(20,248		)	(21,818		)
General and administrative expense	(9,894		)	(9,249		)	(25,291		)	(26,497		)
Interest expense	(226		)	(153		)	(666		)	(414		)
Benefit (provision) for income taxes	(1,448		)	(208		)	3,257			(1,154		)
Net income	$	11,216		$	7,426		$	43,614		$	33,012
	13 Weeks Ended						39 Weeks Ended
	October 1, 2011			October 2, 2010			October 1, 2011			October 2, 2010
Assets:
Stores							$	36,631		$	34,815
Port Supply							5,955			5,669
Direct Sales							216			376
Unallocated							314,030			288,570
Total assets							$	356,832		$	329,430
Capital expenditures:
Stores	$	2,526		$	2,299		$	10,687		$	6,947
Port Supply	—			—			—			—
Direct Sales	26			—			53			—
Unallocated	480			1,115			2,925			3,040
Total capital expenditures	$	3,032		$	3,414		$	13,665		$	9,987
Depreciation and amortization:
Stores	$	2,395		$	2,355		$	6,980		$	7,313
Port Supply	7			21			28			82
Direct Sales	35			61			103			195
Unallocated	1,423			1,282			3,775			3,887
Total depreciation and amortization	$	3,860		$	3,719		$	10,886		$	11,477