Express 2012 Annual Report Download - page 57

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Notes to Consolidated Financial Statements
1. Description of Business and Basis of Presentation
Business Description
Express, Inc., together with its subsidiaries (“Express” or the “Company”), is a specialty apparel and accessories
retailer of women’s and men’s merchandise, targeting the 20 to 30 year old customer. Express merchandise is
sold through retail stores and the Company’s website, www.express.com. As of February 2, 2013, Express
operated 625 primarily mall-based stores in the United States, Canada, and Puerto Rico. Additionally, the
Company earned revenue from 15 franchise stores. These franchise stores are operated by franchisees pursuant to
franchise agreements covering the Middle East, Mexico, and certain other Latin American countries. Under the
franchise agreements, the franchisees operate stores that sell Express-branded apparel and accessories purchased
directly from the Company.
Fiscal Year
The Company’s fiscal year ends on the Saturday closest to January 31. Fiscal years are referred to by the
calendar year in which the fiscal year commences. References herein to “2012,” “2011,” and “2010” represent
the 53-week period ended February 2, 2013 and the 52-week periods ended January 28, 2012 and January 29,
2011.
Basis of Presentation
In connection with the initial public offering of the Company’s common stock (“IPO”) on May 12, 2010, Express
Parent LLC (“Express Parent”) converted into a Delaware corporation and changed its name from Express Parent
LLC to Express, Inc. This conversion was effective May 2, 2010 for tax purposes. In connection with this
conversion, all of the equity interests in Express Parent, which consisted of Class L, Class A, and Class C units,
were converted into shares of the Company’s common stock at a ratio of 0.702, 0.649, and 0.442, respectively.
The accounting effects of the recapitalization, collectively referred to as the “Reorganization”, are reflected
retrospectively for all periods presented in the Consolidated Financial Statements.
Express, Inc., a holding company, owns all of the outstanding equity interests in Express Topco LLC, a holding
company, which owns all of the outstanding equity interests in Express Holding LLC (“Express Holding”).
Express Holding owns all of the outstanding equity interests in Express, LLC and Express Finance Corp.
(“Express Finance”). Express, LLC, together with its subsidiaries, including Express Fashion Operations, LLC,
conducts the operations of the Company. Express, LLC was a division of L Brands until it was acquired by an
affiliate of Golden Gate Private Equity, Inc. (“Golden Gate”) in 2007 (the “Golden Gate Acquisition”). Express
Finance was formed on January 28, 2010, solely for the purpose of serving as co-issuer of the 8 3/4% Senior
Notes (“Senior Notes”) issued on March 5, 2010 and described in Note 9.
Principles of Consolidation
The Consolidated Financial Statements include the accounts of the Company and its wholly-owned subsidiaries.
All intercompany transactions and balances have been eliminated in consolidation.
Reclassifications
Certain prior period amounts have been reclassified or adjusted to conform to the current year presentation.
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