Rue 21 2012 Annual Report Download - page 57

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rue21, inc.
Notes to Consolidated Financial Statements — Continued
Note 6 — Lease Commitments
All of the Company’s operations are conducted from leased premises. Store leases provide for base rentals,
some of which increase over time, and the payment of a percentage of sales as additional rent when sales exceed
specified levels; the latter, providing the basis upon which material contingent rental payments are determined.
Minimum rentals relating to these leases are recorded on a straight-line basis. Generally, lease terms are five to ten
years in length excluding renewal options. In addition, the Company is typically responsible under its leases for
maintenance, common area charges, real estate taxes, and certain other expenses. Point of sale equipment is also
leased by the Company for a term of four years. All leases are classified as operating leases.
A summary of fixed minimum and contingent rent expense for all operating leases follows:
Fiscal Year Ended
(in thousands)
February 2,
2013
January 28,
2012
January 29,
2011
Store Rent :
Fixed minimum ................................... $66,631 $56,421 $44,276
Contingent ....................................... 3,868 3,388 2,700
Total store rent, excluding common maintenance charges, real
estate taxes and certain other expenses ................... 70,499 59,809 46,976
Offices, distribution facilities and equipment ................ 5,308 4,371 3,320
Total Rent Expense .................................... $75,807 $64,180 $50,296
The table below summarizes future annual minimum lease obligations under all operating leases as required by
the lease agreements:
(in thousands)
Fiscal Year
2013 ....................................................................... $ 75,921
2014 ....................................................................... 69,924
2015 ....................................................................... 63,994
2016 ....................................................................... 57,328
2017 ....................................................................... 49,855
Thereafter .................................................................. 144,151
Total future lease obligations ................................................... $461,173
Note 7 — 401(k) Profit Sharing Plan
The Company sponsors a qualified 401(k) plan with a contributory profit-sharing feature (the Plan) for eligible
employees. Under the provisions of the plan, employees must have completed one year of service and be at least 21
years of age to be eligible. The plan permits participants of the plan to contribute up to 50% of pretax annual
compensation as defined in the plan, subject to certain limitations. The Company matches 100% of participant
contributions up to 4% of pretax annual compensation as defined in the plan. Profit-sharing contributions to the
plan, as determined by the Board of Directors, are discretionary, but generally may not exceed 15% of defined
annual compensation paid to all participating employees. 401(k) matching contributions and profit-sharing
contributions to the plan were $0.9 million, $0.7 million and $0.6 million for the fiscal years 2012, 2011, and 2010,
respectively, and are included in selling, general, and administrative expense in the Consolidated Statements of
Income.
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