Rue 21 2012 Annual Report Download - page 47

rue21, inc.
Notes to Consolidated Financial Statements
For the Year Ended February 2, 2013
Note 1 — Business and Summary of Significant Accounting Policies
Organization
rue21, inc. (the Company or rue21) is a specialty retailer of junior girls and young men’s apparel and
accessories with 877, 755, and 638 stores as of February 2, 2013, January 28, 2012 and January 29, 2011
respectively, in various strip centers, regional malls and outlet centers throughout the United States. Sales are
generally transacted for cash, checks and through the acceptance of third-party credit and debit cards.
On November 13, 2009, the Company completed an initial public offering of 7,780,252 shares of common
stock at a price to the public of $19.00 per share, of which 1,650,000 shares were sold by the Company, 6,130,252
were sold by the selling stockholders (including 913,590 by members of the Company’s management). Upon
completion of the offering, the Company received proceeds of approximately $29.2 million, net of underwriters’
discounts and commissions. On February 26, 2010, the Company completed an offering of 6,961,958 shares of
common stock, including 908,081 shares of common stock subsequently sold pursuant to the underwriters’ over-
allotment option, at a price of $28.50 per share, all of which were sold by funds advised by Apax Partners L.P., the
Company’s principal stockholder and certain members of the Company’s management. The Company received no
proceeds from the offering and incurred approximately $0.6 million in expense related to the offering.
The Company’s authorized capital stock consists of 200,000,000 shares of common stock, par value $0.001 per
share, and 10,000,000 shares of preferred stock, par value $0.001 per share.
Principles of Consolidation
The consolidated financial statements include all the accounts of the Company and its wholly owned
subsidiaries “r services, llc”and “rue services corporation.” All intercompany transactions and balances have been
eliminated in consolidation. At February 2, 2013, the Company operated as one segment.
Fiscal Year
The Company’s fiscal year is 52 or 53 weeks ending on the Saturday nearest to January 31 of the following
year. These consolidated financial statements were prepared for the 53 weeks ended February 2, 2013, “Fiscal Year
2012.” As used herein “Fiscal Year 2011” and “Fiscal Year 2010” refer to the 52 week period ended January 28,
2012 and January 29, 2011, respectively.
Reclassifications
Certain prior period amounts have been reclassified to conform to the current year presentation.
Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the
United States requires management to make estimates and assumptions. These estimates and assumptions affect the
reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of net sales and expenses during the reporting period. Actual results
could differ from those estimates. On an ongoing basis, management reviews its estimates based on currently
available information. Changes in facts and circumstances may result in revised estimates.
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