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NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
(continued)
(Dollar
amounts in thousands except per share data)
9.SEGMENT
INFORMATION
The
Company has segmented its operations in a manner that reflects how its chief operating decision-maker reviews the results of the operating segments that make up the
consolidated entity.
The
Company has two reportable segments, its retail stores (the "Stores Segment"), which include
the Company’s United States, Canada and United Kingdom retail store operations, and its catalog
operations (the "Catalog
Segment"), which includes both catalog and internet operations.
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The
Company’s reportable segments offer similar products; however, each segment requires different
marketing and management strategies. The Stores Segment derives its revenues from the sale of women's
and children's classic apparel, accessories and shoes, through its retail stores, while the Catalog
Segment derives its revenues through its approximately 29 distinct catalog mailings per year and,
beginning in November 1999, through its e-commerce site
at www.talbots.com.
The
Company evaluates the operating performance of its identified segments based on a direct profit
measure. The accounting policies of the segments are generally the same as those described in the
summary of significant accounting policies, except as follows: direct profit is calculated as net
sales less cost of goods sold and direct expenses, such as payroll, occupancy and other direct costs.
Indirect expenses are not allocated on a segment basis; therefore,
no measure of segment net income or loss is available. Assets are not allocated between segments;
therefore, no measure of segment assets is available.
The
following is segment information as of and for the years ended February 3, 2001, January 29, 2000 and
January 30, 1999:
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FEBRUARY 3, 2001
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STORES
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CATALOG
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TOTAL
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Net sales
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$1,325,961
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$269,035
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$1,594,996
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Direct profit
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262,133
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49,422
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311,555
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JANUARY 29, 2000
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STORES
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CATALOG
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TOTAL
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Net sales
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$1,099,929
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$208,729
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$1,308,658
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Direct profit
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174,083
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28,143
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202,226
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JANUARY 30, 1999
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STORES
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CATALOG
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TOTAL
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Net sales
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$ 972,974
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$184,763
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$1,157,737
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Direct profit
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134,258
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18,644
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152,902
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The
following reconciles direct profit to consolidated net income before taxes as of and for the years
ended February 3, 2001, January 29, 2000 and January 30, 1999:
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FEBRUARY 3, 2001
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JANUARY 29, 2000
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JANUARY 30, 1999
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Total direct profit or loss for reportable segments
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$311,555
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$202,226
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$152,902
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Less: indirect expenses
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124,234
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107,169
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93,279
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Consolidated net income before taxes
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$187,321
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$ 95,057
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$ 59,623
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As
a retailer that sells to the general public, the Company has no single customer who accounts for
greater than 10% of the Company’s consolidated net sales.
The
following is geographical information as of and for the years ended February 3, 2001, January 29, 2000
and January 30, 1999:
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FEBRUARY 3, 2001
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JANUARY 29, 2000
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JANUARY 30, 1999
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SALES
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United States
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$1,544,258
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$1,265,511
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$1,116,626
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Foreign
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50,738
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43,147
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41,111
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Total consolidated revenues
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$1,594,996
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$1,308,658
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$1,157,737
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LONG-LIVED ASSETS
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United States
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$ 344,171
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$ 314,149
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$ 302,607
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Foreign
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5,756
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7,910
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9,483
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Total long-lived assets
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$ 349,927
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$ 322,059
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$ 312,090
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The
classification "Foreign" is comprised of the Company’s Canada and United Kingdom retail
store operations and the classification "United States" is comprised of the Company’s
United States retail store operations and the Company’s catalog operations.
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