Rue 21 2011 Annual Report Download - page 25

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Item 2. Properties.
We do not own any real property. Our principal executive office is located in an 84,000 square foot space in
Warrendale, Pennsylvania and is leased under a lease agreement expiring in 2021.
Our 378,000 square foot distribution facility is located in Weirton, West Virginia. Our distribution facility is
leased under a lease agreement expiring in 2026, with an option to renew for two additional five-year terms.
As of January 28, 2012, we operated 755 stores in 713 cities in 46 states. All of our stores are leased from third
parties and the leases typically have terms of five to ten years with options to renew for additional five-year periods
thereafter. Most of our leases have early cancellation clauses, which permit the lease to be terminated by us or the
landlord if certain sales levels are not met in specific periods or if a shopping center does not meet specified
occupancy standards. In addition to future minimum lease payments, most of our store leases provide for additional
rental payments based on a percentage of net sales if sales at the respective stores exceed specified levels, as well as
the payment of common area maintenance charges, real property insurance and real estate taxes. Many of our lease
agreements have defined escalating rent provisions over the initial term and any extensions.
We believe that our facilities are generally adequate for current and anticipated future use.
Item 3. Legal Proceedings.
We are subject to various legal proceedings and claims which arise in the ordinary course of our business. If a
potential loss arising from these lawsuits, claims and pending actions is probable and reasonably estimable, we
record the estimated liability based on circumstances and assumptions existing at the time. Management does not
believe that the outcome of current litigation will have a material adverse effect on our consolidated results of
operations or financial condition, and believes that the recorded liabilities are adequate. However, there are inherent
limitations in projecting the outcome of these matters and in the estimation process, and should future actual
liabilities exceed projected liabilities, it could have a material adverse effect on our consolidated financial condition
or on our operations.
Item 4. Mine Safety Disclosures
Not Applicable.
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