Abercrombie & Fitch 2009 Annual Report Download - page 40

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CAPITAL EXPENDITURES
Capital expenditures totaled $175.5 million, $367.6 million and $403.3 million for Fiscal 2009, Fiscal
2008 and Fiscal 2007, respectively. A summary of capital expenditures for the last three fiscal years is as
follows:
Capital Expenditures 2009 2008 2007
(In millions)
New Store Construction, Store Refreshes and Remodels ....... $137.0 $286.4 $252.8
Home Office, Distribution Centers and Information Technology . . 38.5 81.2 150.5
Total Capital Expenditures .......................... $175.5 $367.6 $403.3
During Fiscal 2010, based on expected store openings, the Company anticipates capital expenditures
between approximately $250 million and $260 million. Approximately $215 to $225 million of this amount is
allocated to new store construction, full store remodels and store refreshes. The Company is planning
approximately $35 million in capital expenditures at the home office related to information technology,
distribution center and other home office projects.
During Fiscal 2010, the Company plans to open Abercrombie & Fitch flagship stores in Copenhagen,
Denmark and Fukuoka, Japan and a Hollister Epic store on Fifth Avenue in New York. Additionally, the
Company plans to open one Abercrombie & Fitch mall-based store, three Hollister stores, two Gilly Hicks
stores, and a number of outlet stores in the United States. The Company also plans to open approximately 30
international Hollister mall-based stores in Fiscal 2010, including locations in two or more new countries.
CLOSURE OF RUEHL BRANDED STORES AND RELATED DIRECT-TO-CONSUMER
OPERATIONS
On June 16, 2009, A&F’s Board of Directors approved the closure of the Company’s 29 RUEHL branded
stores and related direct-to-consumer operations. The determination to take this action was based on a
comprehensive review and evaluation of the performance of RUEHL branded stores and related
direct-to-consumer operations, as well as the related real estate portfolio. The Company completed the
closure of the RUEHL branded stores and related direct-to-consumer operations during the fourth quarter of
Fiscal 2009. Accordingly, the results of operations of RUEHL are reflected in Net Loss from Discontinued
Operations for all periods presented on the Consolidated Statements of Operations and Comprehensive
Income.
Costs associated with exit or disposal activities are recorded when the liability is incurred. The Company
expects to make gross cash payments of approximately $29.5 million in Fiscal 2010 and an aggregate of
$19.2 million in fiscal years thereafter, related primarily to lease termination agreements associated with the
closure of RUEHL branded stores.
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