Basis of Presentation

 

Basis of Consolidation

 

The consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), and present the financial position, operational results, comprehensive (loss) income and cash flows of the Company and its 100% owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.

 

Use of Estimates

 

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and footnotes thereto. Actual results could differ materially from those estimates.

 

Significant estimates inherent in the preparation of the consolidated financial statements include: the determination of the fair values of assets acquired and liabilities assumed in a business combination; the realizability of inventory; reserves for litigation and other contingencies; useful lives and impairments of long-lived tangible assets; evaluation of goodwill and other intangible assets for impairment; accounting for income taxes and related uncertain tax positions; the valuation of stock-based compensation and related expected forfeiture rates; and the self-insured insurance reserves.

 

Fiscal Year

 

The Company utilizes a 52-53 week fiscal year ending on the last Saturday in July. As such, fiscal year 2016 ended on July 30, 2016 and reflected a 53-week period (“Fiscal 2016"); fiscal year 2015 ended on July 25, 2015 and reflected a 52-week period (“Fiscal 2015"); and fiscal year 2014 ended on July 26, 2014 and reflected a 52-week period (“Fiscal 2014”). The results of the Company's newly acquired ANN segment for the post-acquisition period from August 22, 2015 to July 30, 2016 have been included in the Company's consolidated statements of operations for Fiscal 2016. All references to “Fiscal 2017” refer to our 52-week period that will end on July 29, 2017.

Discontinued Operations

On June 14, 2012, the Company acquired the Figi’s business in connection with the acquisition of the Lane Bryant and Catherines businesses. Contemporaneously with the acquisition of these businesses, the Company announced its intent to sell the acquired Figi’s business. The sale of Figi’s closed during the first quarter of Fiscal 2014 and resulted in pretax charges of $4.6 million to reflect transaction costs and the adjustment of certain liabilities which existed at the date it was sold as well as the operating results for the Figi’s business (including $7.4 million of revenues for the first quarter of Fiscal 2014). These charges have been classified as components of discontinued operations in the accompanying consolidated statements of operations.