American Eagle Outfitters 2001 Annual Report Download - page 44

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In addition, the Company and its subsidiaries sell end-of-season, overstock and irregular merchandise to various parties, including Value City Department
Stores, Inc., a publicly-traded subsidiary of SSC. These sell-offs are typically sold below cost. Proceeds from sell-offs have an insignificant effect on
cost of sales.
Related party amounts follow:
For the years ended Feb 2, 2002 Feb 3, 2001 Jan 29, 2000
in thousands
Merchandise purchases through a related party importer $—$—$63,763
Rent expense $2,461 $2,541 $1,896
Proceeds from sell-offs $4,786 $11,540 $7,388
The Company had approximately $2.3 million and $2.1 million included in accounts receivable at February 2, 2002 and February 3, 2001, respectively,
that pertained to related parties. The majority of the receivable related to merchandise sell-offs.
SSC and its affiliates charge the Company for various professional services provided to the Company, including certain legal, real estate and insurance
services. For Fiscal 2001 and Fiscal 2000, these costs were approximately $1.4 million and $0.6 million, respectively. Additionally, during Fiscal 2001,
the Company made a deposit with SSC of approximately $1.2 million in a cost sharing arrangement for the acquisition of an interest in several corpo-
rate aircraft. The Company paid $1.1 million and $0.6 million to SSC to cover its share of operating costs based on usage of the corporate aircraft dur-
ing Fiscal 2001 and Fiscal 2000, respectively.
In connection with the liquidation of certain inventory from the Canadian acquisition, the Company contracted the services of a related party consultant,
an affiliate of SSC. The contract was in effect until July 2001, when certain stores closed and were turned over to the Company for conversion to American
Eagle stores (see Note 3 of the Consolidated Financial Statements). During Fiscal 2001, the Company paid $1.7 million to the consultant. As of February
2, 2002, all services have been completed under this contract.
Note 5. Accounts and Note Receivable
Accounts and note receivable is comprised of the following:
Feb 2, 2002 Feb 3, 2001
in thousands
Accounts receivable—construction allowances $4,198 $7,346
Related party accounts receivable 2,313 2,149
Note receivable 2,645 5,904
Accounts receivable—other 8,471 14,067
Tota l $17,627 $29,466
AE Notes to Consolidated Financial Statements
43