pg. 4

"Demand Planning and Inventory Management

Finished goods inventory continues to represent one of the largest and highest risk working capital assets in our business model. We leverage our demand planning process and inventory management to achieve our working capital management goals. We develop a forecast to drive timely purchases of inventory quantities to satisfy demand, minimize transportation costs, including rush costs needed to deliver products to customers by their requested delivery dates, and minimize excess inventory to avoid liquidating excess end-of-season products at discounted prices."

pg. 28

"Excess, Close-Out and Slow Moving Inventory We make ongoing estimates of potential excess, close-out or slow-moving inventory. We evaluate our inventory on hand considering our purchase commitments, sales forecasts, and historical liquidation experience to identify excess, close-out, or slow moving inventory and make provisions as necessary to properly reflect inventory value at the lower of cost or net realizable value. If we determine that a smaller or larger reserve is appropriate, we will record a credit or a charge to Cost of sales in the period in which we make such a determination."

pg. 41

"Inventories

Inventories consist primarily of finished goods and are carried at the lower of cost or net realizable value. Cost is determined using the first-in, first-out method. The Company periodically reviews its inventories for excess, close-out or slow moving items and makes provisions as necessary to properly reflect inventory value."