Rue 21 2012 Annual Report Download - page 48

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rue21, inc.
Notes to Consolidated Financial Statements — Continued
Seasonality
Our business is seasonal and historically has consisted of two principal seasons: Spring (the first and second
quarters) and Fall (the third and fourth quarters). Generally, our highest sales volume occurs in the fourth quarter,
which includes the holiday selling season. Our business is also subject, at certain times, to calendar shifts which
may occur during key selling times such as school holidays, Easter and regional fluctuations in the calendar during
the back-to-school selling season.
Segment Reporting
Business or operating segments are defined as components of an enterprise for which separate financial
information is available that is regularly evaluated by the chief operating decision maker in deciding how to allocate
resources and assess performance.
The Financial Accounting Standard Board (FASB) has established authoritative guidance for reporting
information about a company’s operating segments, including disclosures related to a company’s products and
services, geographic areas and major customers. The Company does not have multiple operating segments or
business components for which discrete financial information is prepared. The Company operates in and reports as a
single operating segment which is the operation of its retail stores which are only located in the United States. The
Company’s Chief Executive Officer (CEO) is the chief decision maker. The Company’s CEO utilizes a consolidated
approach to assess performance and allocate resources. The Company has no international sales. Net sales are
primarily generated through the retail store sale of merchandise to consumers. All of the Company’s identifiable
assets are located in the United States.
Business Concentration
The Company sells a diversified product mix that seeks a complementary balance to attract our core customers.
The table below indicates our product mix as a percentage of net sales as of the fiscal year indicated:
Fiscal Year
2012 2011 2010
Girls
Apparel ............................................ 57.5% 56.6% 55.9%
Accessories ......................................... 23.6% 25.0% 25.7%
Guys Apparel and Accessories ............................. 18.9% 18.4% 18.4%
Total .................................................. 100.0% 100.0% 100.0%
Fair Value of Financial Instruments
The FASB has established authoritative guidance that requires management to disclose the estimated fair value
of certain assets and liabilities defined as financial instruments. As of February 2, 2013 and January 28, 2012,
management believes that the carrying amounts of cash and cash equivalents, receivables, and payables approximate
fair value because of the short maturity of these financial instruments.
Cash and Cash Equivalents
Cash includes cash equivalents, which includes credit and debit card transactions. Credit and debit card
transactions are typically paid to the Company on the next business day. The Company considers all highly liquid
investments purchased with an initial maturity of three months or less to be cash equivalents.
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