Document And Entity Information
Document And Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Feb. 01, 2020 | Apr. 15, 2020 | Aug. 02, 2019 | |
Cover page | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Feb. 1, 2020 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Entity Registrant Name | Francesca's Holdings CORP | ||
Entity Central Index Key | 0001399935 | ||
Current Fiscal Year End Date | --02-01 | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Trading Symbol | FRAN | ||
Entity Shell Company | false | ||
Entity Common Stock, Shares Outstanding | 3,035,682 | ||
Entity Emerging Growth Company | false | ||
Entity Small Business | true | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Public Float | $ 7.1 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Feb. 01, 2020 | Feb. 02, 2019 | |
Current assets: | |||
Cash and cash equivalents | $ 17,839 | $ 20,103 | |
Accounts receivable | 3,743 | 16,309 | |
Inventories | 31,636 | 30,478 | |
Prepaid expenses and other current assets | 12,325 | 10,357 | |
Total current assets | 65,543 | 77,247 | |
Operating lease right-of-use assets, net | 208,503 | ||
Property and equipment, net | 51,469 | 71,207 | |
Other assets, net | 3,093 | 4,588 | |
TOTAL ASSETS | 328,608 | 153,042 | |
Current liabilities: | |||
Accounts payable | 10,823 | 24,330 | |
Accrued liabilities | 12,410 | 11,333 | |
Current portion of long-term debt , net | 8,936 | ||
Operating lease liabilities | 48,691 | ||
Total current liabilities | 80,860 | 35,663 | |
Operating lease liabilities | 200,938 | ||
Landlord incentives and deferred rent | 33,989 | ||
Long term debt, net | 10,000 | ||
Other liabilities | 284 | ||
Total liabilities | 282,082 | 79,652 | |
Commitments and contingencies | |||
Stockholders' equity: | |||
Common stock-$.01 par value, 80.0 million shares authorized, 4.0 million and 3.9 million shares issued as of February 1, 2020 and February 2, 2019, respectively | [1] | 40 | 39 |
Additional paid-in capital | [1] | 113,101 | 113,121 |
Retained earnings | 93,406 | 120,251 | |
Treasury stock, at cost - 0.9 million shares held at each February 1, 2020 and February 2, 2019 | [1] | (160,021) | (160,021) |
Total stockholders' equity | 46,526 | 73,390 | |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 328,608 | $ 153,042 | |
[1] | Reflects the 12-to-1 reverse stock split that became effective on July 1, 2019. Refer to Note 1 - Summary of Significant Accounting Policies for further information. |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares shares in Millions | Feb. 01, 2020 | Feb. 02, 2019 | |
Consolidated Balance Sheets | |||
Common stock, par value (in dollars per share) | [1] | $ 0.01 | $ 0.01 |
Common stock, shares authorized | [1] | 80 | 80 |
Common stock, shares issued | [1] | 4 | 3.9 |
Treasury stock, shares | [1] | 0.9 | 0.9 |
[1] | Reflects the 12-to-1 reverse stock split that became effective on July 1, 2019. Refer to Note 1 - Summary of Significant Accounting Policies for further information. |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | |||
Feb. 01, 2020 | Feb. 02, 2019 | Feb. 03, 2018 | ||
Consolidated Statements of Operations | ||||
Net sales | $ 407,536 | $ 428,115 | $ 471,678 | |
Cost of goods sold and occupancy costs | 258,000 | 265,119 | 264,915 | |
Gross profit | 149,536 | 162,996 | 206,763 | |
Selling, general, and administrative expenses | 161,689 | 176,379 | 176,543 | |
Asset impairment charges | 11,860 | 20,122 | 258 | |
(Loss) income from operations | (24,013) | (33,505) | 29,962 | |
Interest expense | 1,204 | 426 | 452 | |
Other income | (322) | (483) | (346) | |
(Loss) income before income tax expense | (24,895) | (33,448) | 29,856 | |
Income tax expense | 125 | 7,493 | 14,295 | |
Net (loss) income | $ (25,020) | $ (40,941) | $ 15,561 | |
Basic (loss) earnings per common share | [1] | $ (8.63) | $ (14.12) | $ 5.16 |
Diluted (loss) earnings per common share | [1] | $ (8.63) | $ (14.12) | $ 5.14 |
Weighted average shares outstanding: | ||||
Basic shares | [1] | 2,899 | 2,900 | 3,014 |
Diluted shares | [1] | 2,899 | 2,900 | 3,025 |
[1] | Reflects the 12-to-1 reverse stock split that became effective on July 1, 2019. Refer to Note 1 - Summary of Significant Accounting Policies for further information. |
Consolidated Statement of Chang
Consolidated Statement of Changes in Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands | Common Stock Outstanding | Common Stock | Additional Paid-in Capital | Retained Earnings | Treasury Stock, at cost | Total | ||||
Balance at Jan. 28, 2017 | $ 38 | [1] | $ 109,431 | [1] | $ 143,557 | $ (136,491) | $ 116,535 | |||
Balance (in shares) at Jan. 28, 2017 | [1] | 3,128 | ||||||||
Cumulative effect adjustment on adoption of new accounting standards, net of tax | 120 | [1] | (73) | 47 | ||||||
Net income (loss) | 15,561 | 15,561 | ||||||||
Stock-based compensation | 2,430 | [1] | 2,430 | |||||||
Restricted stocks issued, net of forfeitures | [1] | 1 | (1) | |||||||
Restricted stocks issued, net of forfeitures (in shares) | [1] | 17 | ||||||||
Stock options exercised | 96 | [1] | 96 | |||||||
Stock options exercised (in shares) | [1] | 2 | ||||||||
Shares withheld related to net settlement of equity awards | (213) | [1] | (213) | |||||||
Shares withheld related to net settlement of equity awards (in shares) | [1] | (2) | ||||||||
Repurchases of common stock | (20,008) | $ (20,008) | ||||||||
Repurchases of common stock (in shares) | (155) | [1] | (155) | |||||||
Balance at Feb. 03, 2018 | 39 | [1] | 111,863 | [1] | 159,045 | (156,499) | $ 114,448 | |||
Balance (in shares) at Feb. 03, 2018 | [1] | 2,990 | ||||||||
Cumulative effect adjustment on adoption of new accounting standards, net of tax | 2,147 | 2,147 | ||||||||
Net income (loss) | (40,941) | (40,941) | ||||||||
Stock-based compensation | 1,335 | [1] | 1,335 | |||||||
Restricted stocks issued, net of forfeitures (in shares) | [1] | 38 | ||||||||
Shares withheld related to net settlement of equity awards | (77) | [1] | (77) | |||||||
Shares withheld related to net settlement of equity awards (in shares) | [1] | (1) | ||||||||
Repurchases of common stock | (3,522) | $ (3,522) | ||||||||
Repurchases of common stock (in shares) | (55) | [1] | (55) | |||||||
Balance at Feb. 02, 2019 | 39 | [1] | 113,121 | [1] | 120,251 | (160,021) | $ 73,390 | |||
Balance (in shares) at Feb. 02, 2019 | [1] | 2,972 | ||||||||
Cumulative effect adjustment on adoption of new accounting standards, net of tax | (1,825) | (1,825) | ||||||||
Net income (loss) | (25,020) | (25,020) | ||||||||
Stock-based compensation | (15) | [1] | (15) | |||||||
Fractional shares cancelled | (4) | [1] | (4) | |||||||
Restricted stocks issued, net of forfeitures | [1] | (1) | 1 | |||||||
Restricted stocks issued, net of forfeitures (in shares) | [1] | 65 | ||||||||
Shares withheld related to net settlement of equity awards (in shares) | [1] | (1) | ||||||||
Balance at Feb. 01, 2020 | $ 40 | [1] | $ 113,101 | [1] | $ 93,406 | $ (160,021) | $ 46,526 | |||
Balance (in shares) at Feb. 01, 2020 | [1] | 3,036 | ||||||||
[1] | Reflects the 12-to-1 reverse stock split that became effective on July 1, 2019. Refer to Note 1 - Summary of Significant Accounting Policies for further information. |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 01, 2020 | Feb. 02, 2019 | Feb. 03, 2018 | |
Cash Flows Provided by Operating Activities: | |||
Net (loss) income | $ (25,020) | $ (40,941) | $ 15,561 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 21,450 | 24,532 | 21,202 |
Asset impairment charges | 11,860 | 20,122 | 258 |
Non-cash lease expense | 46,353 | ||
Stock-based compensation expense | 269 | 1,335 | 2,430 |
Loss on disposal of assets | 135 | 761 | 733 |
Amortization of debt issuance costs | 286 | 204 | 250 |
Deferred income taxes | 8,706 | 6,099 | |
Other | 160 | ||
Changes in operating assets and liabilities: | |||
Accounts receivable | 10,644 | 246 | (10,764) |
Inventories | (1,159) | (3,699) | (2,858) |
Prepaid expenses and other assets | (1,831) | (2,566) | (3,177) |
Accounts payable | (11,611) | 5,739 | 6,013 |
Accrued liabilities | 1,077 | (558) | (11,167) |
Operating lease liabilities | (49,789) | ||
Landlord incentives and deferred rent | (4,348) | 245 | |
Net cash (used in) provided by operating activities | 2,824 | 9,533 | 24,825 |
Cash Flows Used in Investing Activities: | |||
Purchases of property and equipment | (3,609) | (26,199) | (26,778) |
Net cash used in investing activities | (3,609) | (26,199) | (26,778) |
Cash Flows Provided by (Used in) Financing Activities: | |||
Proceeds from borrowings under revolving credit facility | 15,000 | 10,000 | |
Proceeds from borrowings under the asset based term loan | 10,000 | ||
Repayments of borrowings under the asset based revolving credit facility | (25,000) | ||
Payment of debt issuance costs | (1,479) | (505) | |
Repurchases of common stock | (3,980) | (19,860) | |
Taxes paid related to net settlement of equity awards | (77) | (154) | |
Proceeds from the exercise of stock options | 96 | ||
Net cash (used in) provided by financing activities | (1,479) | 5,438 | (19,918) |
Net increase (decrease) in cash and cash equivalents | (2,264) | (11,228) | (21,871) |
Cash and cash equivalents, beginning of year | 20,103 | 31,331 | 53,202 |
Cash and cash equivalents, end of period | 17,839 | 20,103 | 31,331 |
Supplemental Disclosures of Cash Flow Information: | |||
Cash (received) paid for income taxes | (9,779) | 75 | 24,163 |
Interest paid | $ 646 | $ 209 | $ 192 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Feb. 01, 2020 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 1. Nature of Business Francesca’s Holdings Corporation (the “Company” or “Holdings”) is a holding company incorporated in 2007 under the laws of Delaware. The Company’s business operations are conducted through its subsidiaries. The Company operates a nationwide-chain of boutiques providing customers a unique, fun and differentiated shopping experience. The Company offers a diverse and balanced mix of apparel, jewelry, accessories and gifts at attractive values. At February 1, 2020, the Company operated 711 boutiques, which are located in 47 states throughout the United States and the District of Columbia, and its ecommerce website. On July 1, 2019, the Company effected a 12-to-1 stock split (the “Reverse Stock Split”), reducing the number of shares of common stock outstanding on that date from 35.4 million (which excludes 1.4 million of restricted stock awards granted to members of the Company's Board of Directors prior to the Reverse Stock Split but issued after the Reverse Stock Split) to 3.1 million shares. Additionally, the number of shares of common stock subject to outstanding stock options, restricted stock awards and restricted stock units, the exercise price of outstanding stock options, and the number of shares reserved for future issuance pursuant to the Company’s equity compensation plans were adjusted proportionately in connection with the Reverse Stock Split. The number of authorized shares of common stock under the Company’s Amended and Restated Certificate of Incorporation and the par value per share of the Company’s common stock were unchanged. All historical share and per share amounts presented herein have been adjusted retrospectively to reflect these changes. Going Concern On March 11, 2020, the World Health Organization declared COVID-19 a pandemic. In recent months, the outbreak has spread globally and has led governments and other authorities around the world, including federal, state and local authorities in the United States, to impose measures intended to reduce its spread, including restrictions on freedom of movement and business operations such as travel bans, border closings, business limitations and closures (subject to exceptions for essential operations and businesses), quarantines and shelter-in-place orders. These measures may remain in place for a significant amount of time and has resulted in the temporary closures of all of the Company’s boutiques from March 25, 2020 to April 30, 2020, when we began reopening a small number of our boutiques in locations where local shutdown orders have been lifted. These measures have also caused an overall disruption in the Company’s supply chain and operations; while its ecommerce and distribution center remain open, they are operating at a reduced capacity. As a result, the Company's revenues, results of operations and cash flows have been materially adversely impacted which raises substantial doubt about the Company's ability to continue as a going concern. In response to such events, management is taking aggressive and prudent actions to reduce expenses and defer payment of accounts payables and inventory purchases to preserve cash on hand. These actions include, but are not limited to, furloughing substantially all of the Company’s corporate and boutique employees, (for the duration of boutique closures at their location and subject to reduced staffing for a phase-in period upon reopening), base salary reduction for the Company’s senior leadership team, deferring payment of rent at the Company’s boutiques, corporate headquarters and distribution facility, beginning in April 2020 subject to discussion with its landlords and other vendors, limiting investments in its ecommerce to necessary website and supporting functions, and suspending all capital expenditures. Additionally, the Company borrowed $5.0 million under its Amended ABL Credit Facility in April 2020. The Company has also filed an income tax refund for $10.7 million with the IRS related to the provision under the Corona Aid, Relief and Economic Security Act (“CARES Act”) enacted in March 2020 that allows the carryback of net operating losses to prior years. The Company is electing to take other available relief under the CARES Act including deferral of payment of certain payroll taxes and employee retention tax credits. The Company continues to evaluate the provisions of the CARES Act and the ways in which it could assist the Company’s business or improve the Company’s liquidity. The inclusion of a going concern qualification in the report of the Company’s independent registered public accountant on its accompanying financial statements for the fiscal year ended February 1, 2020 has resulted in a violation of certain covenants under its Amended ABL Credit Agreement and Term Loan Credit Agreement (each as defined below). On May 1, 2020, the Company entered into a letter agreement (the “JPM Letter Agreement”) in connection with its Amended ABL Credit Agreement and a letter agreement (the “Tiger Letter Agreement”) in connection with its Term Loan Credit Agreement, in each case, to obtain a waiver from its lenders of any default or event of default arising from its failure to (i) deliver annual audited consolidated financial statements for the fiscal year ended February 1, 2020 without a “going concern” or a like qualification or exception and (ii) pay rent on leased locations for the months of April, May and June, 2020. The JPM Letter Agreement and Tiger Letter Agreement contain certain conditions and covenants, including that, in the case of the JPM Letter Agreement, the Company is required to use the entire $10.7 million income tax refund requested under the CARES Act to repay certain outstanding borrowings under the Amended ABL Credit Agreement and providing that no loans will be made under the ABL Credit Agreement unless the Company’s aggregate amount of cash and cash equivalents is less than $3.0 million. See Note 15, Subsequent Events, for additional information. If the Company is unable to meet its financial covenants or if there is an event of default under either agreement, including if it is unable or elects not to pay rent on its leased locations beginning in July 2020 and does not otherwise obtain a waiver from its lenders, the Company’s lenders could instruct the administrative agent under such credit facilities to exercise available remedies including, declaring the principal of and accrued interest on all outstanding indebtedness due and payable immediately and terminating all remaining commitments and obligations under the credit facilities. Although the lenders under the Company’s credit facilities may waive the defaults or forebear the exercise of remedies, they are not obligated to do so. Failure to obtain such a waiver would have a material adverse effect on the liquidity, financial condition and results of operations and may result in filing a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code in order to implement a restructuring plan. The Company could experience other potential impacts as a result of the COVID-19 pandemic, including, but not limited to, charges from potential adjustments to the carrying amount of its inventory and long-lived asset impairment charges. Actual results may differ materially from the Company's current estimates as the scope of the COVID-19 pandemic evolves, depending largely, though not exclusively, on the duration of the disruption to its business. The Company's consolidated financial statement as of February 1, 2020 were prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. Fiscal Year The Company maintains its accounts on a 52‑ to 53‑ week year ending on the Saturday closest to January 31. All references herein to fiscal year “2019” represents the 52‑week period ended February 1, 2020, fiscal year “2018” represents the 52‑week period ended February 2, 2019 and fiscal year and “2017” represents the 53‑week period ended February 3, 2018. Principles of Consolidation and Presentation The accompanying consolidated financial statements include the accounts of the Company and all its subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Management Estimates and Assumptions The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues, net of estimated sales return, and expenses during the reporting periods. Actual results could differ from those estimates. Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Assets and liabilities measured at fair value are classified using the following hierarchy, which is based upon the transparency of inputs to the valuation at the measurement date. · Level 1 - Quoted prices in active markets for identical assets or liabilities. · Level 2 - Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly. · Level 3 - Unobservable inputs based on the Company’s own assumptions. The classification of fair value measurements within the hierarchy is based upon the lowest level of input that is significant to the measurement. Financial assets and liabilities with carrying amounts approximating fair value include cash and cash equivalents, accounts receivable, accounts payable, and accrued liabilities. The carrying amount of these financial assets and liabilities approximates fair value because of their short maturities. The carrying amount of the Company's debt approximates its fair value due to the proximity of the debt issue date and the balance sheet date and the variable component of interest on debt. Non-financial assets and liabilities, including long-lived assets, are measured at fair value on a non-recurring basis. The fair value of those assets is determined using Level 3 inputs which generally requires the Company to make estimates of future cash flows based on historical experience, current trends, market conditions, market participant pricing assumptions considering the highest and best use of the asset and other relevant factors deemed material. Cash and Cash Equivalents The Company considers all interest-bearing deposits and investments purchased with an original maturity of three months or less to be cash equivalents. The Company maintains cash balances at financial institutions that may from time to time exceed the Federal Deposit Insurance Corporation’s insurance limits. The Company mitigates this concentration of credit risk by monitoring the credit worthiness of the financial institutions. Accounts Receivable Accounts receivable consist of amounts due from credit card companies and income tax receivable, if any. The Company’s management has reviewed accounts receivable for collectability and has determined that an allowance for doubtful accounts is not necessary at February 1, 2020 and February 2, 2019. Inventory The Company values merchandise inventory at the lower of cost and net realizable value on a weighted-average cost basis. Inventory costs include freight costs. The Company records merchandise receipts at the time they are delivered to the distribution center or to its boutiques directly from vendors. The Company reviews its inventory levels to identify slow-moving merchandise. In order to clear slow-moving merchandise, the Company uses promotional markdowns or marks certain items out-of-stock and disposes of such inventory at a pace suitable for its merchandising strategy. The Company continually evaluates recent selling trends and the related promotional events or pricing strategies in place to sell through the current inventory levels. The Company also estimates a shrinkage reserve for the period of time between the last physical count and the balance sheet date. The estimate for shrinkage reserve can be affected by changes in merchandise mix and changes in actual shrinkage trends. Changes to the lower of cost and net realizable value and shrinkage reserves are included in costs of goods sold and occupancy costs in the consolidated statements of operations. Property and Equipment Property and equipment is stated at cost. Depreciation of property and equipment is provided on a straight-line basis for financial reporting purposes using the following useful lives: Assets Estimated Useful Lives Equipment 3 - 5 years Furniture and fixtures 5 years Software, including software developed for internal use 3 - 9 years Signage and leasehold improvements the lesser of 5 - 10 years or lease term Assets under construction are not depreciated until the asset is placed in service or ready for use. When a decision is made to dispose of property and equipment prior to the end of its previously estimated useful life, the Company accelerates depreciation to reflect the use of the asset over the shortened estimated useful life. Maintenance and repairs of property and equipment are expensed as incurred, and major improvements are capitalized. Upon retirement, sale or other disposition of property and equipment, the cost and accumulated depreciation are eliminated from the accounts, and any gain or loss is reflected in current earnings. Leases Adoption of Accounting Standards Codification 842 On February 3, 2019, the Company adopted the provisions of Accounting Standards Codification ("ASC”) 842, “Leases,” and its amendments. In adopting the standard, the Company used the additional, optional transition method which allows entities to initially apply the new standard by recognizing a cumulative-effect adjustment to the opening balance of retained earnings at the date of adoption. ASC 842 establishes comprehensive accounting and financial reporting requirements for leasing arrangements, supersedes the existing requirements in ("ASC”) 840, “Leases”, and requires lessees to recognize substantially all lease assets and lease liabilities on the balance sheet. Prior period amounts and disclosures were not adjusted and continue to be reported under ASC 840. In applying the new standard, the Company elected the package of practical expedients which allows the Company to carry forward its prior conclusions under ASC 840 about lease identification, lease classification, and initial direct costs. The Company also elected the practical expedient of combining lease and non-lease components as a single lease component as well as the short-term lease recognition exemption for all leases at transition. As a result of the adoption, the Company recorded an operating lease liability of $ 278.9 million and operating lease right-of-use (“ROU”) asset of $242.9 million at February 3, 2019. Additionally, the Company recognized a $1.8 million cumulative-effect adjustment to the beginning balance of retained earnings related to the impairment of certain operating lease ROU assets subjected to impairment testing under existing accounting guidance for which indicators of impairment existed at the time of the adoption of ASC 842. The adoption of ASC 842 did not have a material impact to the consolidated statements of operations or cash flows. Accounting Policy Under ASC 842 The Company leases boutiques, its distribution center and office space and certain boutique and corporate office equipment under operating leases. The Company determines if an arrangement contains a lease at inception and recognizes operating lease ROU assets and operating lease liabilities at the commencement date based on the present value of the fixed lease payments over the lease term and, for operating lease ROU assets, include initial direct costs and exclude lease incentives. Variable lease payments are expensed as incurred. Lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will elect that option. Subsequent to the recognition of its operating lease ROU assets and operating lease liabilities, the Company recognizes lease expense related to its operating lease payments on a straight-line basis over the lease term. Operating lease liabilities are calculated using the effective interest method and recognized at the commencement date based on the present value of lease payments over the reasonably certain lease term. As the interest rate implicit in the Company’s leases is not readily determinable, the Company utilized a collateralized incremental borrowing rate determined through the development of a synthetic credit rating to calculate the present value of its lease payments. The Company accounts for lease and non-lease components as a single component. Accordingly, the Company’s fixed lease payments mainly consists of base rent, common area maintenance and landlord advertising. Additionally, the Company also elected the short-term lease recognition exemption for all leases. Accounting Policy Under ASC 840 The Company leases boutiques and its distribution center and office space under operating leases. The majority of the Company’s lease agreements provide for tenant improvement allowances, rent escalation clauses and/or contingent rent provisions. The Company records rent expense on a straight-line basis over the lease term, which generally begins on the possession date. Certain leases provide for contingent rents, in addition to a basic fixed rent, which are determined as a percentage of gross sales in excess of specified levels. The Company records a contingent rent liability and the corresponding rent expense when specified levels have been achieved or when management determines that achieving the specified levels during the fiscal year is probable. Landlord incentives, such as tenant improvement allowances, are deferred and amortized on a straight-line basis over the lease term as a reduction of rent expense. Debt Issuance Costs Debt issuance costs represent capitalized costs incurred related to the issuance or amendment of the Company’s credit facilities. These costs are amortized to interest expense using the effective interest method over the term of the loan. Debt issuance costs associated with the Company’s Term Loan Credit Agreement are presented on the Company's consolidated balance sheet as a direct reduction in the carrying value of the associated debt liability. Fees incurred by the Company to obtain its revolving credit facility are included within other assets on the Company's consolidated balance sheet. Revenue Recognition The Company recognizes revenue when control of the merchandise is transferred to customers in an amount that reflects the consideration received in exchange for such merchandise. For boutique sales, control is transferred at the point at which the customer receives and pays for the merchandise at the register. For ecommerce sales, control is transferred when merchandise is tendered to a third party carrier for delivery to the customer. The consideration received is the stated price of the merchandise, net of any discount, sales tax collected and estimated sales returns, and, in the case of ecommerce sales, includes shipping revenue. Cash is typically received on the day of or, in the case of credit or debit card transactions, within several days of the related sales. Management estimates future returns on previously sold merchandise based on return history and current sales levels. Estimated returns are periodically compared to actual sales returns and adjusted, if appropriate. The provision for estimated returns is included in accrued liabilities while the associated cost of merchandise is included as part of prepaid and other current assets in the consolidated balance sheets. The Company adopted ASC 606, “Revenue from Contracts with Customers” on February 4, 2018 using the modified retrospective approach. Prior period amounts were not adjusted and continue to be reported in accordance with ASC 605, “Revenue Recognition.” As a result of adoption of ASC 606, the Company recorded an adjustment of $2.1 million, net of $0.7 million tax effect, to the beginning balance of retained earnings related to the change in timing of recognizing gift card breakage income. Cost of Goods Sold and Occupancy Costs Cost of goods sold and occupancy costs include the cost of purchased merchandise, freight costs from the Company’s suppliers to its distribution centers and freight costs for merchandise shipped directly from its vendors to its boutiques, allowances for inventory shrinkage and obsolescence, boutique occupancy costs including lease expenses, utilities, property taxes, boutique assets depreciation, boutique repair and maintenance costs, and shipping costs related to ecommerce sales. Selling, General and Administrative Expenses Selling, general and administrative expenses include boutique and headquarters payroll (including buying department), employee benefits, freight from distribution centers to boutiques, boutique pre-opening expense, credit card merchant fees, costs of maintaining the Company’s ecommerce operations, travel and administration costs, corporate asset depreciation, stock-based compensation and other expenses related to operations at the corporate headquarters. Freight costs included in selling, general and administrative expenses amounted to $4.4 million, $4.4 million and $4.8 million in fiscal years 2019, 2018, and 2017, respectively. Advertising Advertising costs are charged to expense as incurred or, in the case of media production costs (such as television or print), when advertising first takes place. Advertising costs were $3.9 million, $5.3 million and $4.2 million in fiscal years 2019, 2018 and 2017, respectively, and were included in selling, general and administrative expenses. Stock-Based Compensation Stock-based compensation is measured at the grant date fair value and recognized as expense over the requisite service period (generally the vesting period of the award). Beginning in fiscal year 2017, forfeitures were recognized as they occur rather than estimating expected forfeitures. The fair value of restricted stock awards and restricted stock units are determined based on the closing price of the Company’s common stock on the award date. For awards subject to performance conditions, compensation expense is recognized over the requisite service period when it is probable that the specified performance goals will be achieved. The fair value of time-based stock options is estimated using the Black Scholes option pricing model which requires extensive use of judgment and estimates, including expected stock volatility, expected term, risk-free interest rate and expected dividend yield. Impairment of Long-Lived Assets, Including Operating Lease ROU Assets The Company evaluates long-lived assets held for use, including operating lease ROU assets, and held for sale whenever events or changes in circumstances indicate that the carrying amount of those assets may not be recoverable. Assets are grouped and evaluated for impairment at the lowest level for which there are identifiable cash flows, which is generally at a boutique level. In determining whether an impairment has occurred, the Company considers both qualitative and quantitative factors. The quantitative analysis involves estimating the undiscounted future cash flows directly related to that asset and comparing it against its carrying value. If the carrying value of the asset is greater than the sum of the undiscounted future cash flows, an impairment loss is recognized for the difference between the carrying value of the asset and its fair value. The fair value of the asset group is generally determined using discounted future cash flows or a market participant’s ability to generate economic benefits using the asset in its highest and best use, whichever is appropriate. The determination of fair value takes into account the asset’s historical performance, current sales trends, market conditions, market participant pricing assumptions considering the highest and best use of the asset and other relevant factors deemed material, and discounted using a rate commensurate with the risk. The inputs used in the determination of the fair value are considered as Level 3 inputs in the fair value hierarchy, which require a significant degree of judgment and are based on the Company’s own assumptions. Income Taxes The Company accounts for income taxes using the liability method. Under this method, the amount of taxes currently payable or refundable is accrued, and deferred tax assets and liabilities are recognized for the estimated future tax consequences of temporary differences that currently exist between the tax basis and the financial reporting basis of the Company’s assets and liabilities. Valuation allowances are established against deferred tax assets when it is more-likely-than-not that the realization of those deferred tax assets will not occur. Deferred tax assets and liabilities are measured using the enacted tax rates expected to apply to taxable income in the years when those temporary differences are expected to be realized or be realized or settled. The effect on deferred taxes from a change in tax rate is recognized through continuing operations in the period that includes the enactment date of the change. Changes in tax laws and rates could affect recorded deferred tax assets and liabilities in the future. A tax benefit from an uncertain tax position may be recognized when it is more-likely-than-not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, based on the technical merits. Income tax positions must meet a more-likely-than-not recognition threshold to be recognized. The Company recognizes tax liabilities for uncertain tax positions and adjusts these liabilities when the Company’s judgment changes as a result of the evaluation of new information not previously available. Interest and penalties related to unrecognized tax benefits are recognized in income tax expense. The Company has no uncertain tax positions requiring accrual at February 1, 2020 and February 2, 2019. Recent Accounting Pronouncements Not Yet Adopted In December 2019, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update (“ASU”) 2019-12, "Simplifying the Accounting for Income Taxes." The ASU intends to enhance and simplify aspects of the income tax accounting guidance in ASC 740, "Income Taxes" as part of the FASB's simplification initiative. This guidance is effective for fiscal years and interim periods within those years beginning after December 15, 2020 with early adoption permitted. The Company is currently evaluating the impact this guidance may have on our Consolidated Financial Statements. In August 2018, the FASB issued ASU 2018-15, “Intangibles-Goodwill and Other-Internal-Use-Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract.” ASU 2018-15 aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. This new guidance will be effective for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years. Early adoption is permitted. The Company adopted the provisions of this guidance on February 2, 2020 and does not expect the adoption of this guidance to have a material impact on its consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” ASU 2016-13 changes the methodology for measuring credit losses on financial instruments and timing of when such losses are recorded. Since the original issuance of ASU 2016-13, the FASB has issued several amendments and updates to this guidance. This new guidance is effective for public companies, except for smaller reporting companies, for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. For smaller reporting companies, such as the Company, this new guidance will be effective for fiscal year beginning after December 15, 2022, and interim periods within those fiscal year. Early adoption is permitted. The guidance is to be adopted using the modified retrospective approach. The Company does not expect the adoption of this guidance to have a material impact on its consolidated financial statements. |
Revenues
Revenues | 12 Months Ended |
Feb. 01, 2020 | |
Revenues | |
Revenues | 2. The Company disaggregates net sales into the following major merchandise departments. Fiscal Year Ended February 1, February 2, February 3, 2020 2019 2018 (in thousands) Apparel $ 186,493 $ 200,736 $ 235,048 Jewelry 111,031 104,714 104,638 Accessories 65,530 69,219 69,004 Gifts 41,275 50,311 59,286 Other (1) 3,207 3,135 3,702 $ 407,536 $ 428,115 $ 471,678 (1) Includes gift card breakage income, shipping revenue and change in return reserve. Contract liability Contract liability consists of gift card liability. The Company accounts for the sale of gift cards as a liability at the time a gift card is sold. The liability is relieved and revenue is recognized upon redemption of the gift card. The Company’s gift cards do not have an expiration date. Income from gift card breakage is estimated based on historical redemption patterns and recognized over the historical redemption period. Unredeemed gift cards at the end of the prior fiscal year recognized in revenues during fiscal years 2019, 2018 and 2017 were $4.9 million and $4.5 million, and $6.4 million respectively. Such revenues from gift cards during fiscal year 2019 and 2017 included $0.6 million and $1.5 million, respectively, of additional gift card breakage income recognized due to the changes in the estimated period over which redemption of gift card is considered to be remote. |
(Loss) Earnings per Share
(Loss) Earnings per Share | 12 Months Ended |
Feb. 01, 2020 | |
(Loss) Earnings per Share | |
(Loss) Earnings per Share | 3. Basic (loss) earnings per common share amounts are calculated using the weighted-average number of common shares outstanding for the period. Diluted (loss) earnings per common share amounts are calculated using the weighted-average number of common shares outstanding for the period and include the dilutive impact of shares of restricted stock and stock options using the treasury stock method. The following table summarizes the potential dilutive impact that could occur if outstanding options to acquire common stock were exercised or if outstanding restricted stocks have fully vested, and reconciles the weighted-average common shares outstanding used in the computation of basic and diluted earnings per share. Fiscal Years Ended February 1, February 2, February 3, 2020 2019 2018 (In thousands, except per share data) Numerator: Net (loss) income $ (25,020) $ (40,941) $ 15,561 Denominator: Weighted-average common shares outstanding-basic 2,899 2,900 3,014 Restricted stock and stock options (1) — — 11 Weighted-average common shares outstanding-diluted $ 2,899 $ 2,900 $ 3,025 Per common share: Basic (loss) earnings per common share $ (8.63) $ (14.12) $ 5.16 Diluted (loss) earnings per common share $ (8.63) $ (14.12) $ 5.14 (1) Due to the Company being in a net loss position in fiscal year 2019 and 2018, shares of restricted stock and stock options were excluded in the computation of diluted loss per share as their effect would have been anti-dilutive. Potentially issuable shares under the Company’s stock-based compensation plan amounting to approximately 0.2 million, 0.1 million and less than 0.1 million shares for fiscal years 2019, 2018 and 2017, respectively, were excluded in the computation of diluted earnings per share due to their anti-dilutive effect. The Company also excluded contingently issuable performance awards totaling 0.1 million for fiscal year 2019 and less than 0.1 million in each of fiscal years 2018 and 2017, respectively, from the computation of diluted earnings per share because the pre-established goals have not been satisfied. |
Detail of Certain Balance Sheet
Detail of Certain Balance Sheet Accounts | 12 Months Ended |
Feb. 01, 2020 | |
Detail Of Certain Balance Sheet Accounts | |
Detail Of Certain Balance Sheet Accounts | 4 . As of Fiscal Year Ended February 1, February 2, 2020 2019 (in thousands) Accounts receivable: Credit card receivables 2,599 2,752 Income tax receivable $ 459 $ 10,809 Tenant allowances (1) — 1,785 Others 685 963 $ 3,743 $ 16,309 (1) In fiscal year 2019, tenant allowances are presented as part of operating lease liabilities accordance with ASC 842. Property and equipment, net: Signage and leasehold improvements $ 107,433 $ 107,050 Furniture and fixtures 22,902 22,780 Software 15,666 15,590 Equipment 9,304 9,251 Construction in progress 605 2,348 Total 155,910 157,019 Less accumulated depreciation (104,441) (85,812) $ 51,469 $ 71,207 Accrued liabilities: Gift cards $ 4,100 $ 5,642 Accrued payroll, benefits and bonuses 7,223 4,615 Accrued sales tax 992 1,046 Accrued interest 95 30 $ 12,410 $ 11,333 Landlord incentives and deferred rent under ASC (840): Landlord incentives $ — $ 21,139 Deferred rent — 12,850 $ — $ 33,989 |
Asset Impairment Charges
Asset Impairment Charges | 12 Months Ended |
Feb. 01, 2020 | |
Asset Impairment Charges | |
Asset Impairment Charges | 5 . In connection with the Company’s quarterly impairment review process, the Company identified events and circumstances indicating that the carrying amounts of certain boutique long-lived assets may be impaired. Accordingly, the Company recorded non-cash asset impairment charges of $11.9 million in fiscal year 2019 primarily related to the write-down of operating lease ROU assets for 60 underperforming boutiques. This compares to non-cash asset impairment charges of $20.1 million in fiscal year 2018, which is primarily related to the write-off of boutique assets for 153 underperforming boutiques. Additionally, the asset impairment charge in fiscal year 2018 included a $4.9 million charge associated with the write-off of boutique furniture, fixtures and supplies that are no longer expected to be used as a result of postponing new boutique openings and remodels in future periods. |
Income Taxes
Income Taxes | 12 Months Ended |
Feb. 01, 2020 | |
Income Taxes | |
Income Taxes | 6. The provision for income tax expense or (benefit) for fiscal years 2019, 2018 and 2017 is as follows: Fiscal Years Ended February 1, February 2, February 3, 2020 2019 2018 (in thousands) Current: Federal $ — $ (974) $ 6,882 State 125 (252) 1,314 Total 125 (1,226) 8,196 Deferred: Federal — 4,288 6,373 State — 4,431 (274) Total — 8,719 6,099 Income tax expense $ 125 $ 7,493 $ 14,295 The reconciliation of the statutory federal income tax rate to the effective tax rate follows: Fiscal Years Ended February 1, February 2, February 3, 2020 2019 2018 Income tax expense at statutory rate 21.0 % 21.0 % 33.4 % Valuation allowance on net deferred tax assets (29.0) (51.2) — State tax (benefit), net of federal (benefit) expense 7.7 6.7 1.9 Nondeductible expenses (0.7) (0.2) 0.9 Deferred tax remeasurement under the Tax Cuts and jobs Act — — 11.0 Other 0.5 1.3 0.7 Effective tax expense rate (0.5) % (22.4) % 47.9 % On December 22, 2017, the Tax Cuts and jobs Act (“ Tax Act”) was enacted into law effective on January 1, 2018. Upon enactment, the Company recognized a provisional and one-time non-cash deferred tax expense of $3.3 million due to the remeasurement of our deferred tax assets and liabilities based on the reduction of the statutory federal tax rate to 21%. This expense is included as a component of income tax expense for fiscal year 2017. During fiscal year 2018, we completed the analysis of the impact of the Tax Act and determined that no material adjustments was needed to the previously recorded provisional amount. Deferred tax assets and liabilities Deferred tax assets and liabilities are recorded due to different carrying amounts for financial and income tax reporting purposes arising from cumulative temporary differences as measured by enacted tax rates, which will be in effect when these temporary differences reverse. These differences consist of the following as of the dates indicated: As of Fiscal Year Ended February 1, February 2, 2020 2019 (in thousands) Deferred tax assets: Operating lease liabilities $ 62,912 $ — Landlord Incentives and deferred rent — 8,113 Net operating losses 10,147 7,686 Inventories 2,774 2,143 Accrued liabilities 2,170 1,690 Stock-based compensation 1,063 1,244 Other 12 26 Deferred tax assets before valuation allowance 79,078 20,902 Valuation allowance (24,577) (17,117) 54,501 3,785 Deferred tax liabilities: Operating lease right-of-use assets (52,686) — Property and equipment (1,239) (3,785) Other (576) — (54,501) (3,785) Net deferred tax assets $ — $ — Carryforwards The federal net operating loss carryforward which totaled $6.7 million as of February 2, 2019 has no expiration date under the Tax Act while the state net operating loss carryforward which totaled $3.4 million as of February 2, 2019 will expire in various tax years through fiscal year 2039. Subsequent to February 1, 2020, the Corona Aid, Relief and Economic Security Act (“CARES Act”) was enacted in March 2020 that allows the carryback of net operating losses to prior years. Accordingly, the Company has filed an income tax refund for $10.7 million with the IRS. See Note 1, Summary of Significant Accounting Policies – Going Concern, for additional information. Valuation Allowance The Company performs an assessment of whether a valuation allowance is necessary against its deferred tax asset at each balance sheet date. Based on available positive and negative evidence, including past operating results, estimates of future income, future reversals of existing taxable temporary differences and tax planning strategies, the Company determined that it is more-likely-than-not that it will not realize its deferred tax assets in future periods and therefore, a full valuation allowance amounting to $17.1 million was established at February 2, 2019. The Company recorded an additional valuation allowance on its deferred tax asset of $7.5 million during fiscal year 2019. The Company, in subsequent periods, will continue to weigh all available positive and negative evidence when it assesses the necessity of a valuation allowance at each balance sheet date. If the Company recognizes earnings in future periods, the availability of deferred tax assets may result in additional value to the shareholders. In such event, the Company may reverse the valuation allowance, which would result in an increase in reported income in the relevant period. Any such subsequent reversal of the valuation allowance would not impact the Company’s cash or cash equivalents until such time as the deferred tax asset is realized. Fiscal Years Subject to Examination The Company’s tax years are subject to examination by federal authorities from 2016 forward and by state taxing authorities from 2015 forward. |
Credit Facilities
Credit Facilities | 12 Months Ended |
Feb. 01, 2020 | |
Credit Facilities | |
Credit Facilities | 7. The Company’s credit facilities consisted of the following: Fiscal Years Ended February 1, 2020 February 2, 2019 (in thousands) Asset based revolving credit facility $ — $ 10,000 Term loan 10,000 — Unamortized debt issuance costs (1,064) — Total long-term debt, net 8,936 10,000 Less: Current portion of long term debt (8,936) — Total long-term debt, net of current portion $ — $ 10,000 Asset Based Revolving Credit Facility On May 25, 2018, Francesca’s Holdings Corporation (the “Holdings”), as guarantor, certain of its subsidiaries, as borrowers (the “Borrowers”), and certain of its subsidiaries as guarantors (together with Holdings, and the Borrowers, the “Loan Parties”) entered into an asset based revolving credit agreement (the “ABL Credit Agreement”) with JPMorgan Chase Bank, N.A., as administrative agent and the lenders party thereto. The ABL Credit Agreement provided for Aggregate Revolving Commitments (as defined in the ABL Credit Agreement) of $50.0 million (including up to $10.0 million for letters of credit) and was scheduled to mature on May 25, 2023. On August 13, 2019, concurrent with entering into the Term Loan Credit Agreement (described below), the Borrowers, entered into the first amendment to ABL Credit Agreement (the “First Amendment to ABL Credit Agreement”), which amends the Company’s existing ABL Credit Agreement (the ABL Credit Agreement, as amended by the First Amendment to ABL Credit Agreement, the “Amended ABL Credit Agreement”). The First Amendment to ABL Credit Agreement, among other things, (i) reduced the Aggregate Revolving Commitments (as defined in the Amended ABL Credit Agreement) from $50.0 million to $40.0 million ; (ii) allowed the Loan Parties to enter into the Term Loan Credit Agreement with Tiger Finance, LLC.; (iii) changed the maturity date under the Amended ABL Credit Agreement from May 23, 2023 to the earlier of (a) May 23, 2023 and (b) the date that is 90 days prior to any scheduled maturity of the Term Loan; (iv) institutes a combined borrowing base together with the Company’s new Term Loan Credit Agreement (described below); (v) removed the requirement to maintain the minimum fixed charge coverage ratio previously contained in the ABL Credit Agreement; and (vi) limits the amount of capital expenditures that the Loan Parties may make through the fiscal year ending in 2021, provided that the Loan Parties may make unlimited amounts of capital expenditures if certain payment conditions are met. In connection with the First Amendment to ABL Credit Agreement, the Company wrote-off $0.2 million of unamortized debt issuance costs associated with the reduction in borrowing capacity, which is included in other expense in the accompanying statements of operations. Additionally, the Company incurred $0.2 million of debt issuance costs during the fiscal year 2019, which is being amortized over the remaining term of the Amended ABL Credit Agreement. Availability under the Amended ABL Credit Agreement is subject to a customary borrowing base , as reasonably determined by the applicable agent, comprised of: (a) a specified percentage of the Borrower’s credit card accounts (as defined in the Amended ABL Credit Agreement); and (b) a specified percentage of the Borrower’s eligible inventory (as defined in the Amended ABL Credit Agreement), and reduced by (c) certain customary reserves and adjustments (as defined in the Amended ABL Credit Agreement). The combined borrowing base is the lesser of (i) the sum of the (a) the Revolving Loan Cap (as defined in the Amended ABL Agreement), which is the less of (x) $34.0 million and (y) the borrowing base under the Amended ABL Credit Agreement, plus, (b) any outstanding amount under the Term Loan Credit Agreement and (ii) the Term Loan Credit Agreement borrowing base (described below). As of February 1, 2020, the Company had $17.2 million of combined borrowing base availability under the Amended ABL Credit Agreement and the Term Loan Credit Agreement. In addition, on May 1, 2020, the Company entered the JPM Letter Agreement and Tiger Letter Agreement which contain certain conditions and covenants and provide that , in the case of the JPM Letter Agreement, (i) it is required to use the entire $10.7 million income tax refund requested under the CARES Act to repay certain outstanding borrowings under the Amended ABL Credit Agreement and (ii) no loans will be made under the ABL Credit Agreement unless its aggregate amount of cash and cash equivalents is less than $3.0 million. See Note 15, Subsequent Events for additional information. All obligations of each Loan Party under the Amended ABL Credit Agreement continue to be unconditionally guaranteed by the Company and each of the Company’s existing and future direct and indirect wholly owned domestic subsidiaries, including the Borrowers. All obligations under the Amended ABL Credit Agreement, and the guarantees of those obligations (as well as banking services obligations and any interest rate hedging or other swap agreements), are secured by substantially all of the assets of the Company and each of the Company’s existing and future direct and indirect wholly owned domestic subsidiaries. Additionally, the Amended ABL Credit Agreement contains customary events of default and requires the Loan Parties to comply with certain financial covenants, including a restriction on the amount of capital expenditures that the Loan Parties may make through 2021, subject to certain exceptions. In addition, the Company may declare or make dividend payments, subject to the satisfaction of the Payment Conditions (as defined in the Amended ABL Credit Agreement). The Amended ABL Credit Agreement also requires that the auditor’s report on the Company’s audited financial statements does not contain a “going concern” or like qualification or exception. On May 1, 2020, the Company obtained a waiver from the lender of the failure of the Company to (i) deliver annual audited consolidated financial statements for the fiscal year ended February 1, 2020 without a “going concern” or a like qualification or exception and (ii) pay rent on leased locations for the months of April, May and June, 2020. See Note 15, Subsequent Events, for additional information. Borrowings under the Amended ABL Credit Agreement continue to bear interest at a rate equal to an applicable margin plus, at the option of the Borrowers, either (a) in the case of base rate borrowings, a rate equal to the highest of (1) the prime rate of JPMorgan Chase Bank, N.A., (2) the federal funds rate plus 1/2 of 1.00%, and (3) LIBOR for an interest period of one month plus 1.00% (subject to a 0.0% LIBOR floor), provided that that the interest rate for base rate borrowings (including the addition of the applicable margin) shall be no less than 1.50% per annum, or (b) in the case of LIBOR borrowings, a rate equal to the LIBOR for the interest period relevant to such borrowing subject to a 0.00% floor. The applicable margin for borrowings under the Amended ABL Credit Agreement ranges from -0.50% to 0.00% per annum with respect to base rate borrowings and from 1.25% to 1.75% per annum with respect to LIBOR borrowings, in each case based upon the achievement of specified levels of the Fixed Charge Coverage Ratio (as defined in the Amended ABL Credit Agreement). The Amended ABL Credit Agreement also requires the Borrowers to pay a commitment fee for the unused portion of the revolving credit facility of 0.20% per annum. Term Loan Credit Agreement On August 13, 2019, the Loan Parties, entered into the Term Loan Credit Agreement with Tiger Finance, LLC, as administrative agent and the lenders party thereto. The Term Loan Credit Agreement provides for an aggregate term loan of $10.0 million and matures on August 13, 2022. Although the maturity of the Term Loan Credit Agreement is beyond 12 months from the balance sheet, the Company classified the outstanding amount as current liability in the consolidated balance sheet as of February 1, 2020 due to uncertainties concerning the Company’s future liquidity and on-going covenant compliance as a result of the impact of the COVID-19 pandemic on the Company’s business. See Note 1, Summary of Significant Accounting Policies – Going Concern, and Note 15, Subsequent Events, for additional information. The Term Loan Credit Agreement is subject to a combined borrowing base together with the Company’s existing asset based revolving credit facility under the Amended ABL Credit Agreement. This borrowing base is comprised of: (a) a specified percentage of the Borrower’s credit card accounts (as defined in the Term Loan Credit Agreement); and (b) a specified percentage of the Borrower’s eligible inventory (as defined in the Term Loan Credit Agreement), and reduced by (c) certain customary reserves and adjustments (as defined in the Term Loan Credit Agreement). All obligations of each Loan Party under the Term Loan Credit Agreement are unconditionally guaranteed by the Company and each of the Company’s existing and future direct and indirect wholly owned domestic subsidiaries, including the Borrowers. All obligations under the Term Loan Credit Agreement, and the guarantees of those obligations, are secured on a junior lien basis by substantially all of the assets of the Company and each of the Company’s existing and future direct and indirect wholly owned domestic subsidiaries. As of February 1, 2020, the Company had $17.2 million of combined borrowing base availability under the Amended ABL Credit Agreement and the Term Loan Credit Agreement. On May 1, 2020, the Company obtained a waiver from the lender of the failure of the Company to (i) deliver annual audited consolidated financial statements for the fiscal year ended February 1, 2020 without a “going concern” or a like qualification or exception and (ii) pay rent on leased locations for the months of April, May and June, 2020. See Note 15, Subsequent Events for additional information. Borrowing under the Term Loan Credit Agreement bears interest at a rate equal to LIBOR for the interest period relevant to the Term Loan, subject to a 0.00% floor, plus 8.00%, provided that the interest rate on the Term Loan will not be less than 10.00%. The Term Loan Credit Agreement also requires the Borrowers to pay an annual agency fee of $50,000. In fiscal year 2019, the average effective interest rate for the Term Loan was 10.0%. In connection with the Term Loan Credit Agreement, the Company incurred $1.2 million of debt issuance costs during the fiscal year 2019, which is being amortized over the life of the Term Loan Credit Agreement. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Feb. 01, 2020 | |
Stockholders' Equity | |
Stockholders' Equity | 8. Stockholders' Equity Stockholder Rights Plan On July 31, 2019, the Board of Directors of the Company adopted a limited duration stockholder rights plan (the “Rights Plan”) with an expiration date of August 1, 2022 and an ownership trigger threshold of 15%, subject to certain exceptions. In connection with the Rights Plan, the Board of Directors authorized and declared a dividend to the Company’s stockholders of record at the close of business on August 15, 2019 of one preferred share purchase right (a “Right”) for each outstanding share of the Company’s common stock. Upon certain triggering events (none of which have occurred as of February 1, 2020), each Right will entitle the holder thereof to purchase one five-thousandth (subject to adjustment) of one share of Series A Junior Participating Preferred Stock, $0.01 par value per share of the Company (the “Preferred Stock”) at an exercise price of $18.00 (the “Exercise Price”) per one five-thousandth of a share of Preferred Stock. In addition, if a person or group acquires beneficial ownership of 15% or more of the Company’s common stock without prior approval of the Company’s Board of Directors, or in the case of a person or group that beneficially owned more than 15% of the Company’s common stock prior to the issuance of the press release announcing the adoption of the Rights Agreement on August 2, 2019, such person or group acquires beneficial ownership of any additional shares of the Company’s common stock without prior approval of the Company’s Board of Directors, each holder of a Right (other than the acquiring person or group whose Rights will become void) will have the right to purchase, upon payment of the Exercise Price and in accordance with and subject to the adjustment under the terms of the Rights Plan, a number of shares of the Company’s common stock having a market value of twice the Exercise Price (as adjusted). Share Repurchases On March 15, 2016, the Company’s Board of Directors authorized an additional $100.0 million share repurchase program (“Repurchase Plan”) which commenced in April 2016. The Repurchase Plan has no expiration date. Under the Repurchase Plan, purchases can be made from time to time in the open market, in privately negotiated transactions, under Rule 10b5‑1 plans or through other available means. The specific timing and amount of the repurchases is dependent on market conditions, securities law limitations and other factors. The following table summarizes the Company’s repurchase activity for the periods presented. The cost of repurchased shares is presented as treasury stock in the consolidated balance sheets. Fiscal Year Ended February 1,2020 February 2,2019 February 3,2018 (in thousands, except per data) Number of shares repurchased — 55 155 Total cost of shares repurchased — $ 3,522 $ 20,008 Average price (including brokers’ commission) $ — $ 64.08 $ 129.00 At February 1, 2020, there was $40.2 million remaining balance available for future purchases. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Feb. 01, 2020 | |
Stock-Based Compensation | |
Stock-Based Compensation | 9. Stock-based compensation expense, which is included in selling, general and administrative expenses, consisted of the following. Fiscal Year Ended February 1,2020 February 2,2019 February 3,2018 (in thousands) Stock options $ 145 $ 293 $ 700 Restricted stock awards (161) 1,042 1,730 Restricted stocks units 285 — — $ 269 $ 1,335 $ 2,430 Previously accrued stock-based compensation totaling $1.2 million and $0.8 million were reversed during fiscal years 2019 and 2018, respectively, in connection with certain employee departures, including the Chief Financial Officer, Chief Merchandising Officer, Chief Marketing Officer and certain other members of senior management in fiscal year 2019 and the Chief Executive Officer in fiscal year 2018. Stock Incentive Plans 2010 Stock Incentive Plan On February 27, 2010, the Company adopted the Francesca’s Holdings Corporation 2010 Stock Incentive Plan (the “2010 Plan”) to be administered by the Board or a Committee. Under the 2010 Plan, awards may be in the form of stock options, stock or restricted stock and may be granted to any officers, directors, eligible employees and consultants of the Company. Exercise prices shall not be less than the fair market value of the Company’s common stock at the date of grant as determined by the Board. The awards generally vest over four to five years and have a ten year contractual term. As of July 14, 2011, the Company can no longer grant awards under the 2010 Plan. 2011 Stock Incentive Plan On July 14, 2011, the 2011 Equity Incentive Plan (the “2011 Plan”) was approved by the stockholders and became immediately effective. Under the 2011 Plan, awards may be in the form of nonqualified stock options, stock appreciation rights, stock bonuses, restricted stock, performance stock and other stock-based awards which can be granted to any officers, directors, employees and consultants of the Company. Awards granted under the 2011 Plan generally vest over three to five years and have a ten-year contractual life. As of June 9, 2015, the Company can no longer grant awards under the 2011 Plan. 2015 Stock Incentive Plan On June 9, 2015, the 2015 Equity Incentive Plan (the “2015 Plan”) was approved by the stockholders and became immediately effective. Under the 2015 Plan, awards may be in the form of nonqualified stock options, stock appreciation rights, stock bonuses, restricted stock, stock units, performance stock and other stock-based awards which can be granted to any officers, directors, employees and consultants of the Company. A total of 0.2 million shares of common stock are authorized for issuance under the 2015 Plan which may be increased by the number of awards cancelled, forfeited, expired, or for any reason terminated under the 2011 Plan after June 9, 2015. Awards granted under the 2015 Plan generally vest over three to five years and options and stock appreciation rights have a ten-year contractual life. As of February 2, 2020, there were approximately 0.1 million shares remaining that can be subject to new awards granted under the 2015 Plan. Restricted Stock Units The following table summarizes restricted stock units activity under our stock plans during fiscal year 2019. Weighted Number of Average Grant Shares Date Fair Value (in thousands) (Per share data) Non-vested restricted stock units as of February 2, 2019 — $ — Granted 281 $ 8.65 Forfeited (129) $ 8.65 Non-vested restricted stock units as of February 1, 2020 152 $ 8.65 During fiscal year 2019, the Company granted 0.3 million of restricted stock units to certain executives and key employees. Of the total awards in each period, 50% of the total shares awarded were in the form of performance-based restricted shares ("PSU") while the remaining 50% were in the form of time-based restricted shares ("RSU"). The number of PSUs that may ultimately vest will equal 0% to 150% of the target shares subject to the achievement of pre-established performance goals during the applicable performance period and the employees' continued employment through the third year anniversary of the date. The RSUs vest in one installment on the third anniversary of the award date. At the end of each reporting period, the Company assessed the probability of achieving the pre-established performance conditions related to the PSUs and adjusted stock-based compensation expense based on the result of such assessment. As of February 1, 2020, there was approximately $0.9 million of total unrecognized compensation cost related to non-vested restricted stock units that is expected to be recognized over a weighted-average period of 2 years. Restricted Stock The following table summarizes restricted stock activity during fiscal year 2019. Weighted Number of Average Grant Shares Date Fair Value (in thousands) (Per share data) Non-vested restricted stocks as of February 2, 2019 66 $ 76.18 Granted 118 $ 5.94 Vested (20) $ 38.19 Forfeited (49) $ 65.33 Non-vested restricted stocks as of February 1, 2020 115 $ 15.69 At the end of each reporting period, the Company assessed the probability of achieving the pre-established performance conditions related to the PSAs and adjusted stock-based compensation expense based on the result of such assessment. As a result of this assessment, the Company recognized a reversal of previously accrued expenses totaling $0.3 million, $0.9 million, and $1.2 million in fiscal years 2019, 2018 and 2017, respectively. During fiscal years 2019, 2018 and 2017, restricted stocks were granted at a fair value of $5.94, $59.64 and $173.16, respectively. The total fair value of restricted stock that vested were $0.1 million, $0.7 million, and $1.4 million, during fiscal years 2019, 2018, and 2017, respectively. As of February 1, 2020, there was approximately $0.4 million of total unrecognized compensation cost related to non-vested restricted stock awards that is expected to be recognized over a weighted-average period of 2 years. Stock Options The following table summarizes stock option activity during fiscal year 2019. The intrinsic value of the stock options was calculated based the closing price of the Company’s common stock on the last trading day closest to February 1, 2020. Weighted Average Weighted Remaining Number of Average Contractual Aggregate Options Exercise Price Life Intrinsic Value (in thousands) (Per share data) (in Years) (In thousands) Stock options outstanding as of February 1, 2020 24 170.82 4 — Stock options exercisable as of February 1, 2020 23 170.20 — No stock options were awarded during fiscal years 2019, 2018, or 2017. No stock options were exercised in fiscal year 2019 or 2018. In fiscal year 2017, the intrinsic value of stock options at the date of exercise amounted to less than $0.1 million. As of February 2, 2020, there was less than $0.1 million of total unrecognized compensation cost related to stock option awards that is expected to be recognized over a weighted-average period of 1 year. |
Employee Benefits
Employee Benefits | 12 Months Ended |
Feb. 01, 2020 | |
Employee Benefits | |
Employee Benefits | 10. The Company has adopted Francesca’s Collections, Inc. 401(k) Retirement Plan (the “401(k) Plan”) under which full-time and part-time employees who are at least 21 years of age and have completed six consecutive months of employment are eligible to participate. Employees may elect to contribute a certain percentage of their earnings subject to limitations provided for by the law. The Company makes matching contributions of up to a maximum of 4% of the employees’ salary. The Company may also make discretionary profit sharing contributions to the 401(k) Plan. No profit sharing contributions were made in fiscal years 2019, 2018 and 2017. The Company’s matching contributions were $0.7 million, $0.9 million and $0.7 million in fiscal years 2019, 2018 and 2017, respectively. |
Leases
Leases | 12 Months Ended |
Feb. 01, 2020 | |
Leases | |
Leases | 11. The Company leases boutiques, its distribution center, office space, and certain boutique and corporate office equipment under operating leases expiring in various years through the fiscal year ending 2030. Certain of the leases provide that the Company may cancel the lease, with penalties as defined in the lease, if the Company’s boutique sales at that location fall below an established level. Certain leases provide for additional rent payments to be made when sales exceed a base amount. Certain operating leases provide for renewal options for periods from three to five years at the market rate at the time of renewal. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. Note 1, Leases for additional information regarding the Company’s adoption of ASC 842, Leases on February 3, 2019 and the impact of such adoption. The following table presents the components of the Company’s operating lease costs for the period presented. Fiscal Year 2020 (in thousands) Operating lease costs $ 60,984 Variable lease costs 843 $ 61,827 As of February 1, 2020, the weighted average remaining operating lease term was 5.7 years and the weighted average discount rate for operating leases was 5.8%. Cash paid for operating leases included in the measurement of lease liabilities totaled $65.4 million, including interest, for the fiscal year ended 2020. As of February 1, 2020, the maturities of lease liabilities were as follows: Maturities of lease liabilities 2020 $ 61,688 2021 54,868 2022 47,290 2023 40,566 2024 33,576 Thereafter 57,181 Total lease payments 295,169 Less: Interest 45,540 Present value of lease liabilities 249,629 Operating lease liabilities include amounts due from landlords in tenant improvement allowances. As of February 1, 2020, the minimum rental commitments for operating lease contracts that have not yet commenced was $5.4 million while its lease terms were within the range of 5 to 10 years. Prior to the Adoption of ASC 842 As previously disclosed in the Company Annual Report on Form 10-K for the fiscal year ended February 2, 2019, minimum future rent payments under non-cancellable operating leases as of February 2, 2019 were approximately as follows: Fiscal Year Amount 2019 $ 48,644 2020 43,356 2021 36,785 2022 30,983 2023 26,084 Thereafter 59,039 Total lease payments 244,891 During fiscal years 2018 and 2017, rent expense totaled $45.4 million and $42.2 million, respectively. |
Contingencies
Contingencies | 12 Months Ended |
Feb. 01, 2020 | |
Contingencies | |
Contingencies | 12. On January 27, 2017, a purported collective action lawsuit entitled Meghan Magee, et al. v. Francesca’s Holdings Corp., et al. was filed in the United States District Court for the District of New Jersey, Camden Vicinage against the Company for alleged violations of federal and state wage and hour laws. After substitution of a named plaintiff, the lawsuit is now captioned, Danielle Prulello, et al. v. Francesca’s Holding Corp., et al. On November 6, 2018, the court conditionally certified the collective action. The Company believes that the allegations contained in the lawsuit are without merit and intends to vigorously defend itself against all claims asserted therein. A reasonable estimate of the amount of any possible loss or range of loss cannot be made at this time and, as such, the Company has not recorded an accrual for any possible loss. The Company, from time to time, is subject to various claims and legal proceedings arising in the ordinary course of business. While the outcome of any such claim cannot be predicted with certainty, in the opinion of management, the outcome of these matters will not have a material adverse effect on the Company’s business, results of operations or financial condition. |
Segment Reporting
Segment Reporting | 12 Months Ended |
Feb. 01, 2020 | |
Segment Reporting | |
Segment Reporting | 13. The Company determined that it has one operating and reportable segment, which includes the operation of boutiques and its ecommerce website. The single segment was identified based on how the Company’s chief operating decision maker, or its Chief Executive Officer, evaluates performance and allocates resources. Additionally, the Company considered the similarity of merchandise offered, the customers served in boutiques and through the ecommerce website and the operating characteristics of each channel. All of the Company’s identifiable assets are located in the United States. |
Quarterly Financial Data (Unaud
Quarterly Financial Data (Unaudited) | 12 Months Ended |
Feb. 01, 2020 | |
Quarterly Financial Data (Unaudited) | |
Quarterly Financial Data (Unaudited) | 14. Fiscal Year 2019 Fourth Third Second First Quarter Quarter Quarter Quarter (in thousands, except per share data) Net sales $ 118,936 95,503 105,972 87,125 Gross profit 41,188 37,518 40,503 30,327 Asset impairment charges 10,315 1,356 189 — (Loss) income from operations (11,486) (4,239) 1,379 (9,667) Net (loss) income (11,548) (5,135) 1,812 (10,149) Basic (loss) earnings per common share (1) (3.97) (1.76) 0.62 (3.50) Diluted (loss) earnings per common share (1) (3.97) (1.76) 0.61 (3.50) Fiscal Year 2018 Fourth Third Second First Quarter Quarter Quarter Quarter (in thousands, except per share data) Net sales $ 119,310 95,375 113,025 100,405 Gross profit 46,881 33,645 44,107 38,363 Asset impairment charges 5,555 14,419 121 27 (Loss) income from operations (6,755) (23,060) 830 (4,520) Net (loss) income (21,287) (16,223) 454 (3,885) Basic (loss) earnings per common share (1) (7.34) (5.59) 0.16 (1.34) Diluted (loss) earnings per common share (1) (7.34) (5.59) 0.16 (1.34) (1) The sum of quarterly basic and diluted (loss) earnings per share may not foot across due to rounding. |
Subsequent Event
Subsequent Event | 12 Months Ended |
Feb. 01, 2020 | |
Subsequent Event | |
Subsequent Event | 15. Subsequent Event As discussed in Note 1, "Summary of Significant Accounting Policies - Going Concern" section above, onn March 11, 2020, the World Health Organization declared COVID-19 a pandemic. In recent months, the outbreak has spread globally and has led governments and other authorities around the world, including federal, state and local authorities in the United States, to impose measures intended to reduce its spread, including restrictions on freedom of movement and business operations such as travel bans, border closings, business limitations and closures (subject to exceptions for essential operations and businesses), quarantines and shelter-in-place orders. These measures may remain in place for a significant amount of time and has resulted in the temporary closures of all of the Company’s boutiques from March 25, 2020 to April 30, 2020, when we began reopening a small number of our boutiques in locations where local shutdown orders have been lifted. These measures have also caused an overall disruption in the Company’s supply chain and operations; while its ecommerce and distribution center remain open, they are operating at a reduced capacity. Company's revenues, results of operations and cash flows have been materially adversely impacted which raises substantial doubt about the Company's ability to continue as a going concern. In response to such events, management is taking aggressive and prudent actions to reduce expenses and defer payment of accounts payables and inventory purchases to preserve cash on hand. Additionally, the Company borrowed $5.0 million under its Amended ABL Credit Facility in April 2020. The Company has also filed an income tax refund for $10.7 million with the IRS related to the provision under the CARES Act enacted in March 2020 that allows the carryback of net operating losses to prior years. There is significant uncertainty around the disruptions related to the COVID-19 pandemic and its impact on the global economy. While the Company's results of operations have been significantly impacted and it anticipates that its future results will continue to be adversely impacted, the extent to which the COVID-19 pandemic impacts our future results will depend on future developments, which are highly uncertain and cannot be predicted with certainty, including new information which may emerge concerning the severity of the COVID-19 pandemic in the United States, actions taken to contain it or treat its impact, any possible resurgence of COVID-19 that may occur after the initial outbreak subsides, and how quickly and to what extent normal economic and operating conditions can resume. On May 1, 2020, the Company entered into a letter agreement (the “JPM Letter Agreement”) in connection with its Amended ABL Credit Agreement with JPMorgan Chase Bank, N.A. and the other loan parties thereto, to waive any Default or Event of Default (each as defined in the Amended ABL Credit Agreement) arising from the failure of the Borrowers to (i) deliver annual audited consolidated financial statements for the fiscal year ended February 1, 2020 without a “going concern” or a like qualification or exception and (ii) pay rent on leased locations for the months of April, May and June, 2020. The JPM Letter Agreement contains certain conditions on and covenants of the Borrowers, including (a) the imposition of an additional Reserve (as defined in the Amended ABL Credit Agreement), requiring the Borrowers to keep an additional amount of cash set aside, (b) a limitation on the Borrowers’ ability to borrow under the Amended ABL Credit Agreement unless Qualified Cash (as defined in the Amended ABL Credit Agreement) is less than $3.0 million and (c) a requirement to use the entire $10.7 million income tax refund requested under the CARES Act to prepay the Obligations (as defined in the Amended ABL Credit Agreement), including all outstanding principal and accrued and unpaid interest, and cash collateralize outstanding letters of credit, within two business days of receipt of such refund. The JPM Letter Agreement also amends certain provisions of the Amended ABL Credit Agreement related to the frequency of inspections and appraisals. Additionally, also on May 1, 2020, the Company entered into a letter agreement (the “Tiger Letter Agreement”) in connection with its Term Loan Credit Agreement with Tiger Finance LLC and the other loan parties thereto, to waive any Default or Event of Default (each as defined in the Term Loan Credit Agreement) arising from the failure of the Borrowers to (i) deliver annual audited consolidated financial statements for the fiscal year ended February 1, 2020 without a “going concern” or a like qualification or exception and (ii) pay rent on leased locations for the months of April, May and June, 2020. The Tiger Letter Agreement contains certain conditions on and covenants of the Borrowers, including the imposition of an additional Reserve (as defined in the Term Loan Credit Agreement), requiring the Company to keep an additional amount of cash set aside. The Tiger Letter Agreement also amends certain provisions of the Term Loan Credit Agreement related to the frequency of inspections and appraisals. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Feb. 01, 2020 | |
Summary of Significant Accounting Policies | |
Fiscal Year | Fiscal Year The Company maintains its accounts on a 52‑ to 53‑ week year ending on the Saturday closest to January 31. All references herein to fiscal year “2019” represents the 52‑week period ended February 1, 2020, fiscal year “2018” represents the 52‑week period ended February 2, 2019 and fiscal year and “2017” represents the 53‑week period ended February 3, 2018. |
Principles of Consolidation and Presentation | Principles of Consolidation and Presentation The accompanying consolidated financial statements include the accounts of the Company and all its subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. |
Management Estimates and Assumptions | Management Estimates and Assumptions The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues, net of estimated sales return, and expenses during the reporting periods. Actual results could differ from those estimates. |
Fair Value Measurements | Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Assets and liabilities measured at fair value are classified using the following hierarchy, which is based upon the transparency of inputs to the valuation at the measurement date. · Level 1 - Quoted prices in active markets for identical assets or liabilities. · Level 2 - Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly. · Level 3 - Unobservable inputs based on the Company’s own assumptions. The classification of fair value measurements within the hierarchy is based upon the lowest level of input that is significant to the measurement. Financial assets and liabilities with carrying amounts approximating fair value include cash and cash equivalents, accounts receivable, accounts payable, and accrued liabilities. The carrying amount of these financial assets and liabilities approximates fair value because of their short maturities. The carrying amount of the Company's debt approximates its fair value due to the proximity of the debt issue date and the balance sheet date and the variable component of interest on debt. Non-financial assets and liabilities, including long-lived assets, are measured at fair value on a non-recurring basis. The fair value of those assets is determined using Level 3 inputs which generally requires the Company to make estimates of future cash flows based on historical experience, current trends, market conditions, market participant pricing assumptions considering the highest and best use of the asset and other relevant factors deemed material. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all interest-bearing deposits and investments purchased with an original maturity of three months or less to be cash equivalents. The Company maintains cash balances at financial institutions that may from time to time exceed the Federal Deposit Insurance Corporation’s insurance limits. The Company mitigates this concentration of credit risk by monitoring the credit worthiness of the financial institutions. |
Accounts Receivable | Accounts Receivable Accounts receivable consist of amounts due from credit card companies and income tax receivable, if any. The Company’s management has reviewed accounts receivable for collectability and has determined that an allowance for doubtful accounts is not necessary at February 1, 2020 and February 2, 2019. |
Inventory | Inventory The Company values merchandise inventory at the lower of cost and net realizable value on a weighted-average cost basis. Inventory costs include freight costs. The Company records merchandise receipts at the time they are delivered to the distribution center or to its boutiques directly from vendors. The Company reviews its inventory levels to identify slow-moving merchandise. In order to clear slow-moving merchandise, the Company uses promotional markdowns or marks certain items out-of-stock and disposes of such inventory at a pace suitable for its merchandising strategy. The Company continually evaluates recent selling trends and the related promotional events or pricing strategies in place to sell through the current inventory levels. The Company also estimates a shrinkage reserve for the period of time between the last physical count and the balance sheet date. The estimate for shrinkage reserve can be affected by changes in merchandise mix and changes in actual shrinkage trends. Changes to the lower of cost and net realizable value and shrinkage reserves are included in costs of goods sold and occupancy costs in the consolidated statements of operations. |
Property and Equipment | Property and Equipment Property and equipment is stated at cost. Depreciation of property and equipment is provided on a straight-line basis for financial reporting purposes using the following useful lives: Assets Estimated Useful Lives Equipment 3 - 5 years Furniture and fixtures 5 years Software, including software developed for internal use 3 - 9 years Signage and leasehold improvements the lesser of 5 - 10 years or lease term Assets under construction are not depreciated until the asset is placed in service or ready for use. When a decision is made to dispose of property and equipment prior to the end of its previously estimated useful life, the Company accelerates depreciation to reflect the use of the asset over the shortened estimated useful life. Maintenance and repairs of property and equipment are expensed as incurred, and major improvements are capitalized. Upon retirement, sale or other disposition of property and equipment, the cost and accumulated depreciation are eliminated from the accounts, and any gain or loss is reflected in current earnings. |
Leases | Leases Adoption of Accounting Standards Codification 842 On February 3, 2019, the Company adopted the provisions of Accounting Standards Codification ("ASC”) 842, “Leases,” and its amendments. In adopting the standard, the Company used the additional, optional transition method which allows entities to initially apply the new standard by recognizing a cumulative-effect adjustment to the opening balance of retained earnings at the date of adoption. ASC 842 establishes comprehensive accounting and financial reporting requirements for leasing arrangements, supersedes the existing requirements in ("ASC”) 840, “Leases”, and requires lessees to recognize substantially all lease assets and lease liabilities on the balance sheet. Prior period amounts and disclosures were not adjusted and continue to be reported under ASC 840. In applying the new standard, the Company elected the package of practical expedients which allows the Company to carry forward its prior conclusions under ASC 840 about lease identification, lease classification, and initial direct costs. The Company also elected the practical expedient of combining lease and non-lease components as a single lease component as well as the short-term lease recognition exemption for all leases at transition. As a result of the adoption, the Company recorded an operating lease liability of $ 278.9 million and operating lease right-of-use (“ROU”) asset of $242.9 million at February 3, 2019. Additionally, the Company recognized a $1.8 million cumulative-effect adjustment to the beginning balance of retained earnings related to the impairment of certain operating lease ROU assets subjected to impairment testing under existing accounting guidance for which indicators of impairment existed at the time of the adoption of ASC 842. The adoption of ASC 842 did not have a material impact to the consolidated statements of operations or cash flows. Accounting Policy Under ASC 842 The Company leases boutiques, its distribution center and office space and certain boutique and corporate office equipment under operating leases. The Company determines if an arrangement contains a lease at inception and recognizes operating lease ROU assets and operating lease liabilities at the commencement date based on the present value of the fixed lease payments over the lease term and, for operating lease ROU assets, include initial direct costs and exclude lease incentives. Variable lease payments are expensed as incurred. Lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will elect that option. Subsequent to the recognition of its operating lease ROU assets and operating lease liabilities, the Company recognizes lease expense related to its operating lease payments on a straight-line basis over the lease term. Operating lease liabilities are calculated using the effective interest method and recognized at the commencement date based on the present value of lease payments over the reasonably certain lease term. As the interest rate implicit in the Company’s leases is not readily determinable, the Company utilized a collateralized incremental borrowing rate determined through the development of a synthetic credit rating to calculate the present value of its lease payments. The Company accounts for lease and non-lease components as a single component. Accordingly, the Company’s fixed lease payments mainly consists of base rent, common area maintenance and landlord advertising. Additionally, the Company also elected the short-term lease recognition exemption for all leases. Accounting Policy Under ASC 840 The Company leases boutiques and its distribution center and office space under operating leases. The majority of the Company’s lease agreements provide for tenant improvement allowances, rent escalation clauses and/or contingent rent provisions. The Company records rent expense on a straight-line basis over the lease term, which generally begins on the possession date. Certain leases provide for contingent rents, in addition to a basic fixed rent, which are determined as a percentage of gross sales in excess of specified levels. The Company records a contingent rent liability and the corresponding rent expense when specified levels have been achieved or when management determines that achieving the specified levels during the fiscal year is probable. Landlord incentives, such as tenant improvement allowances, are deferred and amortized on a straight-line basis over the lease term as a reduction of rent expense. |
Debt Issuance Costs | Debt Issuance Costs Debt issuance costs represent capitalized costs incurred related to the issuance or amendment of the Company’s credit facilities. These costs are amortized to interest expense using the effective interest method over the term of the loan. Debt issuance costs associated with the Company’s Term Loan Credit Agreement are presented on the Company's consolidated balance sheet as a direct reduction in the carrying value of the associated debt liability. Fees incurred by the Company to obtain its revolving credit facility are included within other assets on the Company's consolidated balance sheet. |
Revenue Recognition | Revenue Recognition The Company recognizes revenue when control of the merchandise is transferred to customers in an amount that reflects the consideration received in exchange for such merchandise. For boutique sales, control is transferred at the point at which the customer receives and pays for the merchandise at the register. For ecommerce sales, control is transferred when merchandise is tendered to a third party carrier for delivery to the customer. The consideration received is the stated price of the merchandise, net of any discount, sales tax collected and estimated sales returns, and, in the case of ecommerce sales, includes shipping revenue. Cash is typically received on the day of or, in the case of credit or debit card transactions, within several days of the related sales. Management estimates future returns on previously sold merchandise based on return history and current sales levels. Estimated returns are periodically compared to actual sales returns and adjusted, if appropriate. The provision for estimated returns is included in accrued liabilities while the associated cost of merchandise is included as part of prepaid and other current assets in the consolidated balance sheets. The Company adopted ASC 606, “Revenue from Contracts with Customers” on February 4, 2018 using the modified retrospective approach. Prior period amounts were not adjusted and continue to be reported in accordance with ASC 605, “Revenue Recognition.” As a result of adoption of ASC 606, the Company recorded an adjustment of $2.1 million, net of $0.7 million tax effect, to the beginning balance of retained earnings related to the change in timing of recognizing gift card breakage income. |
Cost of Goods Sold and Occupancy Costs | Cost of Goods Sold and Occupancy Costs Cost of goods sold and occupancy costs include the cost of purchased merchandise, freight costs from the Company’s suppliers to its distribution centers and freight costs for merchandise shipped directly from its vendors to its boutiques, allowances for inventory shrinkage and obsolescence, boutique occupancy costs including lease expenses, utilities, property taxes, boutique assets depreciation, boutique repair and maintenance costs, and shipping costs related to ecommerce sales. |
Selling, General and Administrative Expenses | Selling, General and Administrative Expenses Selling, general and administrative expenses include boutique and headquarters payroll (including buying department), employee benefits, freight from distribution centers to boutiques, boutique pre-opening expense, credit card merchant fees, costs of maintaining the Company’s ecommerce operations, travel and administration costs, corporate asset depreciation, stock-based compensation and other expenses related to operations at the corporate headquarters. Freight costs included in selling, general and administrative expenses amounted to $4.4 million, $4.4 million and $4.8 million in fiscal years 2019, 2018, and 2017, respectively. |
Advertising | Advertising Advertising costs are charged to expense as incurred or, in the case of media production costs (such as television or print), when advertising first takes place. Advertising costs were $3.9 million, $5.3 million and $4.2 million in fiscal years 2019, 2018 and 2017, respectively, and were included in selling, general and administrative expenses. |
Stock-Based Compensation | Stock-Based Compensation Stock-based compensation is measured at the grant date fair value and recognized as expense over the requisite service period (generally the vesting period of the award). Beginning in fiscal year 2017, forfeitures were recognized as they occur rather than estimating expected forfeitures. The fair value of restricted stock awards and restricted stock units are determined based on the closing price of the Company’s common stock on the award date. For awards subject to performance conditions, compensation expense is recognized over the requisite service period when it is probable that the specified performance goals will be achieved. The fair value of time-based stock options is estimated using the Black Scholes option pricing model which requires extensive use of judgment and estimates, including expected stock volatility, expected term, risk-free interest rate and expected dividend yield. |
Impairment of Long-Lived Assets, Including Operating Lease ROU Assets | Impairment of Long-Lived Assets, Including Operating Lease ROU Assets The Company evaluates long-lived assets held for use, including operating lease ROU assets, and held for sale whenever events or changes in circumstances indicate that the carrying amount of those assets may not be recoverable. Assets are grouped and evaluated for impairment at the lowest level for which there are identifiable cash flows, which is generally at a boutique level. In determining whether an impairment has occurred, the Company considers both qualitative and quantitative factors. The quantitative analysis involves estimating the undiscounted future cash flows directly related to that asset and comparing it against its carrying value. If the carrying value of the asset is greater than the sum of the undiscounted future cash flows, an impairment loss is recognized for the difference between the carrying value of the asset and its fair value. The fair value of the asset group is generally determined using discounted future cash flows or a market participant’s ability to generate economic benefits using the asset in its highest and best use, whichever is appropriate. The determination of fair value takes into account the asset’s historical performance, current sales trends, market conditions, market participant pricing assumptions considering the highest and best use of the asset and other relevant factors deemed material, and discounted using a rate commensurate with the risk. The inputs used in the determination of the fair value are considered as Level 3 inputs in the fair value hierarchy, which require a significant degree of judgment and are based on the Company’s own assumptions. |
Income Taxes | Income Taxes The Company accounts for income taxes using the liability method. Under this method, the amount of taxes currently payable or refundable is accrued, and deferred tax assets and liabilities are recognized for the estimated future tax consequences of temporary differences that currently exist between the tax basis and the financial reporting basis of the Company’s assets and liabilities. Valuation allowances are established against deferred tax assets when it is more-likely-than-not that the realization of those deferred tax assets will not occur. Deferred tax assets and liabilities are measured using the enacted tax rates expected to apply to taxable income in the years when those temporary differences are expected to be realized or be realized or settled. The effect on deferred taxes from a change in tax rate is recognized through continuing operations in the period that includes the enactment date of the change. Changes in tax laws and rates could affect recorded deferred tax assets and liabilities in the future. A tax benefit from an uncertain tax position may be recognized when it is more-likely-than-not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, based on the technical merits. Income tax positions must meet a more-likely-than-not recognition threshold to be recognized. The Company recognizes tax liabilities for uncertain tax positions and adjusts these liabilities when the Company’s judgment changes as a result of the evaluation of new information not previously available. Interest and penalties related to unrecognized tax benefits are recognized in income tax expense. The Company has no uncertain tax positions requiring accrual at February 1, 2020 and February 2, 2019. |
Recent Accounting Pronouncements Not Yet Adopted | Recent Accounting Pronouncements Not Yet Adopted In December 2019, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update (“ASU”) 2019-12, "Simplifying the Accounting for Income Taxes." The ASU intends to enhance and simplify aspects of the income tax accounting guidance in ASC 740, "Income Taxes" as part of the FASB's simplification initiative. This guidance is effective for fiscal years and interim periods within those years beginning after December 15, 2020 with early adoption permitted. The Company is currently evaluating the impact this guidance may have on our Consolidated Financial Statements. In August 2018, the FASB issued ASU 2018-15, “Intangibles-Goodwill and Other-Internal-Use-Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract.” ASU 2018-15 aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. This new guidance will be effective for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years. Early adoption is permitted. The Company adopted the provisions of this guidance on February 2, 2020 and does not expect the adoption of this guidance to have a material impact on its consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” ASU 2016-13 changes the methodology for measuring credit losses on financial instruments and timing of when such losses are recorded. Since the original issuance of ASU 2016-13, the FASB has issued several amendments and updates to this guidance. This new guidance is effective for public companies, except for smaller reporting companies, for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. For smaller reporting companies, such as the Company, this new guidance will be effective for fiscal year beginning after December 15, 2022, and interim periods within those fiscal year. Early adoption is permitted. The guidance is to be adopted using the modified retrospective approach. The Company does not expect the adoption of this guidance to have a material impact on its consolidated financial statements. |
(Loss) Earnings per Share | Basic (loss) earnings per common share amounts are calculated using the weighted-average number of common shares outstanding for the period. Diluted (loss) earnings per common share amounts are calculated using the weighted-average number of common shares outstanding for the period and include the dilutive impact of shares of restricted stock and stock options using the treasury stock method. The following table summarizes the potential dilutive impact that could occur if outstanding options to acquire common stock were exercised or if outstanding restricted stocks have fully vested, and reconciles the weighted-average common shares outstanding used in the computation of basic and diluted earnings per share. |
Segment Reporting | The Company determined that it has one operating and reportable segment, which includes the operation of boutiques and its ecommerce website. The single segment was identified based on how the Company’s chief operating decision maker, or its Chief Executive Officer, evaluates performance and allocates resources. Additionally, the Company considered the similarity of merchandise offered, the customers served in boutiques and through the ecommerce website and the operating characteristics of each channel. All of the Company’s identifiable assets are located in the United States. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Feb. 01, 2020 | |
Summary of Significant Accounting Policies | |
Schedule of property and equipment estimated useful lives | Property and equipment is stated at cost. Depreciation of property and equipment is provided on a straight-line basis for financial reporting purposes using the following useful lives: Assets Estimated Useful Lives Equipment 3 - 5 years Furniture and fixtures 5 years Software, including software developed for internal use 3 - 9 years Signage and leasehold improvements the lesser of 5 - 10 years or lease term |
Revenues (Tables)
Revenues (Tables) | 12 Months Ended |
Feb. 01, 2020 | |
Revenues | |
Schedule of disaggregated net sales into the major merchandise departments | The Company disaggregates net sales into the following major merchandise departments. Fiscal Year Ended February 1, February 2, February 3, 2020 2019 2018 (in thousands) Apparel $ 186,493 $ 200,736 $ 235,048 Jewelry 111,031 104,714 104,638 Accessories 65,530 69,219 69,004 Gifts 41,275 50,311 59,286 Other (1) 3,207 3,135 3,702 $ 407,536 $ 428,115 $ 471,678 (1) Includes gift card breakage income, shipping revenue and change in return reserve. |
(Loss) Earnings per Share (Tabl
(Loss) Earnings per Share (Tables) | 12 Months Ended |
Feb. 01, 2020 | |
(Loss) Earnings per Share | |
Schedule of (Loss) earnings per share | The following table summarizes the potential dilutive impact that could occur if outstanding options to acquire common stock were exercised or if outstanding restricted stocks have fully vested, and reconciles the weighted-average common shares outstanding used in the computation of basic and diluted earnings per share. Fiscal Years Ended February 1, February 2, February 3, 2020 2019 2018 (In thousands, except per share data) Numerator: Net (loss) income $ (25,020) $ (40,941) $ 15,561 Denominator: Weighted-average common shares outstanding-basic 2,899 2,900 3,014 Restricted stock and stock options (1) — — 11 Weighted-average common shares outstanding-diluted $ 2,899 $ 2,900 $ 3,025 Per common share: Basic (loss) earnings per common share $ (8.63) $ (14.12) $ 5.16 Diluted (loss) earnings per common share $ (8.63) $ (14.12) $ 5.14 (1) Due to the Company being in a net loss position in fiscal year 2019 and 2018, shares of restricted stock and stock options were excluded in the computation of diluted loss per share as their effect would have been anti-dilutive. |
Detail of Certain Balance She_2
Detail of Certain Balance Sheet Accounts (Tables) | 12 Months Ended |
Feb. 01, 2020 | |
Detail Of Certain Balance Sheet Accounts | |
Schedule of accounts receivable | As of Fiscal Year Ended February 1, February 2, 2020 2019 (in thousands) Accounts receivable: Credit card receivables 2,599 2,752 Income tax receivable $ 459 $ 10,809 Tenant allowances (1) — 1,785 Others 685 963 $ 3,743 $ 16,309 (1) In fiscal year 2019, tenant allowances are presented as part of operating lease liabilities accordance with ASC 842. |
Schedule of property, plant and equipment, net | Property and equipment, net: Signage and leasehold improvements $ 107,433 $ 107,050 Furniture and fixtures 22,902 22,780 Software 15,666 15,590 Equipment 9,304 9,251 Construction in progress 605 2,348 Total 155,910 157,019 Less accumulated depreciation (104,441) (85,812) $ 51,469 $ 71,207 |
Schedule of accrued liabilities | Accrued liabilities: Gift cards $ 4,100 $ 5,642 Accrued payroll, benefits and bonuses 7,223 4,615 Accrued sales tax 992 1,046 Accrued interest 95 30 $ 12,410 $ 11,333 |
Schedule of landlord incentives and deferred rent | Landlord incentives and deferred rent under ASC (840): Landlord incentives $ — $ 21,139 Deferred rent — 12,850 $ — $ 33,989 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Feb. 01, 2020 | |
Income Taxes | |
Schedule of provision for income tax expense | Fiscal Years Ended February 1, February 2, February 3, 2020 2019 2018 (in thousands) Current: Federal $ — $ (974) $ 6,882 State 125 (252) 1,314 Total 125 (1,226) 8,196 Deferred: Federal — 4,288 6,373 State — 4,431 (274) Total — 8,719 6,099 Income tax expense $ 125 $ 7,493 $ 14,295 |
Schedule of reconciliation of the statutory federal income tax rate to the effective tax rate | Fiscal Years Ended February 1, February 2, February 3, 2020 2019 2018 Income tax expense at statutory rate 21.0 % 21.0 % 33.4 % Valuation allowance on net deferred tax assets (29.0) (51.2) — State tax (benefit), net of federal (benefit) expense 7.7 6.7 1.9 Nondeductible expenses (0.7) (0.2) 0.9 Deferred tax remeasurement under the Tax Cuts and jobs Act — — 11.0 Other 0.5 1.3 0.7 Effective tax expense rate (0.5) % (22.4) % 47.9 % |
Schedule of deferred tax assets and liabilities | As of Fiscal Year Ended February 1, February 2, 2020 2019 (in thousands) Deferred tax assets: Operating lease liabilities $ 62,912 $ — Landlord Incentives and deferred rent — 8,113 Net operating losses 10,147 7,686 Inventories 2,774 2,143 Accrued liabilities 2,170 1,690 Stock-based compensation 1,063 1,244 Other 12 26 Deferred tax assets before valuation allowance 79,078 20,902 Valuation allowance (24,577) (17,117) 54,501 3,785 Deferred tax liabilities: Operating lease right-of-use assets (52,686) — Property and equipment (1,239) (3,785) Other (576) — (54,501) (3,785) Net deferred tax assets $ — $ — |
Credit Facilities (Tables)
Credit Facilities (Tables) | 12 Months Ended |
Feb. 01, 2020 | |
Credit Facilities | |
Schedule of company's credit facilities | The Company’s credit facilities consisted of the following: Fiscal Years Ended February 1, 2020 February 2, 2019 (in thousands) Asset based revolving credit facility $ — $ 10,000 Term loan 10,000 — Unamortized debt issuance costs (1,064) — Total long-term debt, net 8,936 10,000 Less: Current portion of long term debt (8,936) — Total long-term debt, net of current portion $ — $ 10,000 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Feb. 01, 2020 | |
Stockholders' Equity | |
Schedule of repurchase activity for the periods | Fiscal Year Ended February 1,2020 February 2,2019 February 3,2018 (in thousands, except per data) Number of shares repurchased — 55 155 Total cost of shares repurchased — $ 3,522 $ 20,008 Average price (including brokers’ commission) $ — $ 64.08 $ 129.00 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Feb. 01, 2020 | |
Schedule of stock-based compensation expense | Fiscal Year Ended February 1,2020 February 2,2019 February 3,2018 (in thousands) Stock options $ 145 $ 293 $ 700 Restricted stock awards (161) 1,042 1,730 Restricted stocks units 285 — — $ 269 $ 1,335 $ 2,430 |
Schedule of stock option activity | Weighted Average Weighted Remaining Number of Average Contractual Aggregate Options Exercise Price Life Intrinsic Value (in thousands) (Per share data) (in Years) (In thousands) Stock options outstanding as of February 1, 2020 24 170.82 4 — Stock options exercisable as of February 1, 2020 23 170.20 — |
Restricted Stock Units (RSUs) [Member] | |
Schedule of restricted stock activity | Weighted Number of Average Grant Shares Date Fair Value (in thousands) (Per share data) Non-vested restricted stock units as of February 2, 2019 — $ — Granted 281 $ 8.65 Forfeited (129) $ 8.65 Non-vested restricted stock units as of February 1, 2020 152 $ 8.65 |
Restricted stock awards [Member] | |
Schedule of restricted stock activity | Weighted Number of Average Grant Shares Date Fair Value (in thousands) (Per share data) Non-vested restricted stocks as of February 2, 2019 66 $ 76.18 Granted 118 $ 5.94 Vested (20) $ 38.19 Forfeited (49) $ 65.33 Non-vested restricted stocks as of February 1, 2020 115 $ 15.69 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Feb. 01, 2020 | |
Schedule of components of operating lease costs | Fiscal Year 2020 (in thousands) Operating lease costs $ 60,984 Variable lease costs 843 $ 61,827 |
Schedule of maturity of lease liabilities | Maturities of lease liabilities 2020 $ 61,688 2021 54,868 2022 47,290 2023 40,566 2024 33,576 Thereafter 57,181 Total lease payments 295,169 Less: Interest 45,540 Present value of lease liabilities 249,629 |
Accounting Standards Update 2016-02 [Member] | |
Schedule of maturity of lease liabilities | Fiscal Year Amount 2019 $ 48,644 2020 43,356 2021 36,785 2022 30,983 2023 26,084 Thereafter 59,039 Total lease payments 244,891 |
Quarterly Financial Data (Una_2
Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Feb. 01, 2020 | |
Quarterly Financial Data (Unaudited). | |
Schedule of quarterly financial data (unaudited) | Fiscal Year 2019 Fourth Third Second First Quarter Quarter Quarter Quarter (in thousands, except per share data) Net sales $ 118,936 95,503 105,972 87,125 Gross profit 41,188 37,518 40,503 30,327 Asset impairment charges 10,315 1,356 189 — (Loss) income from operations (11,486) (4,239) 1,379 (9,667) Net (loss) income (11,548) (5,135) 1,812 (10,149) Basic (loss) earnings per common share (1) (3.97) (1.76) 0.62 (3.50) Diluted (loss) earnings per common share (1) (3.97) (1.76) 0.61 (3.50) Fiscal Year 2018 Fourth Third Second First Quarter Quarter Quarter Quarter (in thousands, except per share data) Net sales $ 119,310 95,375 113,025 100,405 Gross profit 46,881 33,645 44,107 38,363 Asset impairment charges 5,555 14,419 121 27 (Loss) income from operations (6,755) (23,060) 830 (4,520) Net (loss) income (21,287) (16,223) 454 (3,885) Basic (loss) earnings per common share (1) (7.34) (5.59) 0.16 (1.34) Diluted (loss) earnings per common share (1) (7.34) (5.59) 0.16 (1.34) (1) The sum of quarterly basic and diluted (loss) earnings per share may not foot across due to rounding. |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Property and Equipment Estimated Useful Lives (Details) | 12 Months Ended |
Feb. 01, 2020 | |
Equipment [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Lives | 3 years |
Equipment [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Lives | 5 years |
Furniture and Fixtures [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Lives | 5 years |
Software and Software Development Costs [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Lives | 3 years |
Software and Software Development Costs [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Lives | 9 years |
Leasehold Improvements [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Lives | 5 years |
Leasehold Improvements [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Lives | 10 years |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details) $ in Thousands, shares in Millions | Jul. 01, 2019shares | Jun. 30, 2019shares | Apr. 30, 2020USD ($) | Feb. 01, 2020USD ($)storestate | Feb. 02, 2019USD ($) | Feb. 03, 2018USD ($) | May 01, 2020USD ($) | Feb. 03, 2019USD ($) |
Summary of Significant Accounting Policies [Line Items] | ||||||||
Year Founded | 2007 | |||||||
Number of Boutiques in Operation | store | 711 | |||||||
Number of States in which Entity Operates | state | 47 | |||||||
Common Stock, Shares, Outstanding | shares | 3.1 | 35.4 | ||||||
Conversion ratio of the reverse stock split | 0.083 | |||||||
Length of Fiscal Period | 364 days | 364 days | 371 days | |||||
Cumulative effect on adoption of new accounting standards, net of tax | $ (1,825) | $ 2,147 | $ 47 | |||||
Amount of borrowings under the asset based revolving credit facility | 15,000 | 10,000 | ||||||
Operating lease right-of-use liabilities | 249,629 | |||||||
Operating lease right-of-use asset | 208,503 | |||||||
Allowance for doubtful accounts - Receivable | 0 | 0 | ||||||
Unrecognized Tax Benefits | 0 | 0 | ||||||
Selling, General and Administrative Expenses [Member] | ||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||
Advertising Expense | 3,900 | 5,300 | 4,200 | |||||
Selling, General and Administrative Expenses [Member] | Cargo and Freight [Member] | ||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||
Freight costs | 4,400 | 4,400 | $ 4,800 | |||||
Accounting Standards Update 2016-04 [Member] | ||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||
Cumulative effect on adoption of new accounting standards, net of tax | 2,100 | |||||||
Cumulative effect adjustment, income tax impact | $ 700 | |||||||
Accounting Standards Update 2016-02 [Member] | ||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||
Cumulative effect on adoption of new accounting standards, net of tax | $ 1,800 | |||||||
Operating lease right-of-use liabilities | $ 278,900 | |||||||
Operating lease right-of-use asset | $ 242,900 | |||||||
Maximum [Member] | ||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||
Length of Fiscal Period | 371 days | |||||||
Minimum [Member] | ||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||
Length of Fiscal Period | 364 days | |||||||
Subsequent events | ||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||
Income Tax Refund | $ 10,700 | |||||||
Subsequent events | Asset Based Revolving Credit Facility [Member] | ||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||
Amount of borrowings under the asset based revolving credit facility | $ 5,000 | |||||||
Minimum cash on hand required before borrowings are allowed under a credit agreement | $ 3,000 | |||||||
Restricted stock awards [Member] | Board of Directors | ||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||
Awards granted (in shares) | shares | 1.4 |
Revenues (Details)
Revenues (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||
Feb. 01, 2020 | Nov. 02, 2019 | Aug. 03, 2019 | May 04, 2019 | Feb. 02, 2019 | Nov. 03, 2018 | Aug. 04, 2018 | May 05, 2018 | Feb. 01, 2020 | Feb. 02, 2019 | Feb. 03, 2018 | ||
Disaggregation of Revenue [Line Items] | ||||||||||||
Net sales | $ 118,936 | $ 95,503 | $ 105,972 | $ 87,125 | $ 119,310 | $ 95,375 | $ 113,025 | $ 100,405 | $ 407,536 | $ 428,115 | $ 471,678 | |
Apparel [Member] | ||||||||||||
Disaggregation of Revenue [Line Items] | ||||||||||||
Net sales | 186,493 | 200,736 | 235,048 | |||||||||
Jewelry [Member] | ||||||||||||
Disaggregation of Revenue [Line Items] | ||||||||||||
Net sales | 111,031 | 104,714 | 104,638 | |||||||||
Accessories [Member] | ||||||||||||
Disaggregation of Revenue [Line Items] | ||||||||||||
Net sales | 65,530 | 69,219 | 69,004 | |||||||||
Gifts [Member] | ||||||||||||
Disaggregation of Revenue [Line Items] | ||||||||||||
Net sales | 41,275 | 50,311 | 59,286 | |||||||||
Others [Member] | ||||||||||||
Disaggregation of Revenue [Line Items] | ||||||||||||
Net sales | [1] | $ 3,207 | $ 3,135 | $ 3,702 | ||||||||
[1] | Includes gift card breakage income, shipping revenue and change in return reserve. |
Revenues - Additional Informati
Revenues - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Feb. 01, 2020 | Feb. 02, 2019 | Feb. 03, 2018 | |
Unredeemed gift card as of the prior year end recognized in revenues | $ 4.9 | $ 4.5 | $ 6.4 |
Change In Estimated Redemption Period For Prepaid Stored Value Card [Member] | |||
Unredeemed gift card as of the prior year end recognized in revenues | $ 0.6 | $ 1.5 |
(Loss) Earnings per Share (Deta
(Loss) Earnings per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||||||||||
Feb. 01, 2020 | Nov. 02, 2019 | Aug. 03, 2019 | May 04, 2019 | Feb. 02, 2019 | Nov. 03, 2018 | Aug. 04, 2018 | May 05, 2018 | Feb. 01, 2020 | Feb. 02, 2019 | Feb. 03, 2018 | |||||||||||||
Numerator: | |||||||||||||||||||||||
Net (loss) income | $ (11,548) | $ (5,135) | $ 1,812 | $ (10,149) | $ (21,287) | $ (16,223) | $ 454 | $ (3,885) | $ (25,020) | $ (40,941) | $ 15,561 | ||||||||||||
Denominator: | |||||||||||||||||||||||
Weighted-average common shares outstanding - basic | [1] | 2,899 | 2,900 | 3,014 | |||||||||||||||||||
Restricted stock and stock options (1) | [2] | 11 | |||||||||||||||||||||
Weighted-average common shares outstanding - diluted | [1] | 2,899 | 2,900 | 3,025 | |||||||||||||||||||
Per common share: | |||||||||||||||||||||||
Basic (loss) earnings per common share | $ (3.97) | [3] | $ (1.76) | [3] | $ 0.62 | [3] | $ (3.50) | [3] | $ (7.34) | [3] | $ (5.59) | [3] | $ 0.16 | [3] | $ (1.34) | [3] | $ (8.63) | [1] | $ (14.12) | [1] | $ 5.16 | [1] | |
Diluted (loss) earnings per common share | $ (3.97) | [3] | $ (1.76) | [3] | $ 0.61 | [3] | $ (3.50) | [3] | $ (7.34) | [3] | $ (5.59) | [3] | $ 0.16 | [3] | $ (1.34) | [3] | $ (8.63) | [1] | $ (14.12) | [1] | $ 5.14 | [1] | |
[1] | Reflects the 12-to-1 reverse stock split that became effective on July 1, 2019. Refer to Note 1 - Summary of Significant Accounting Policies for further information. | ||||||||||||||||||||||
[2] | Due to the Company being in a net loss position in fiscal year 2019 and 2018, shares of restricted stock and stock options were excluded in the computation of diluted loss per share as their effect would have been anti-dilutive. | ||||||||||||||||||||||
[3] | The sum of quarterly basic and diluted (loss) earnings per share may not foot across due to rounding. |
(Loss) Earnings per Share - Add
(Loss) Earnings per Share - Additional Information (Details) - shares shares in Millions | 12 Months Ended | ||
Feb. 01, 2020 | Feb. 02, 2019 | Feb. 03, 2018 | |
Stock Compensation Plan [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share | |||
Securities Excluded from Computation of Diluted Weighted Average Common Stock Outstanding | 0.2 | 0.1 | 0.1 |
Performance Shares [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share | |||
Securities Excluded from Computation of Diluted Weighted Average Common Stock Outstanding | 0.1 | 0.1 | 0.1 |
Detail of Certain Balance She_3
Detail of Certain Balance Sheet Accounts (Details) - USD ($) $ in Thousands | Feb. 01, 2020 | Feb. 02, 2019 | |
Accounts receivable: | |||
Credit card receivables | $ 2,599 | $ 2,752 | |
Income tax receivable | 459 | 10,809 | |
Tenant allowances | [1] | 1,785 | |
Others | 685 | 963 | |
Receivables, Net, Current, Total | 3,743 | 16,309 | |
Property and equipment, net: | |||
Signage and leasehold improvements | 107,433 | 107,050 | |
Furniture and fixtures | 22,902 | 22,780 | |
Software | 15,666 | 15,590 | |
Equipment | 9,304 | 9,251 | |
Construction in progress | 605 | 2,348 | |
Total | 155,910 | 157,019 | |
Less accumulated depreciation | (104,441) | (85,812) | |
Property, Plant and Equipment, Net, Total | 51,469 | 71,207 | |
Accrued liabilities: | |||
Gift cards | 4,100 | 5,642 | |
Accrued payroll, benefits and bonuses | 7,223 | 4,615 | |
Accrued sales tax | 992 | 1,046 | |
Accrued interest | 95 | 30 | |
Accrued Liabilities, Current, Total | $ 12,410 | 11,333 | |
Landlord incentives and deferred rent under ASC (840): | |||
Landlord incentives | 21,139 | ||
Deferred rent | 12,850 | ||
Landlord incentives and deferred rent | $ 33,989 | ||
[1] | In fiscal year 2019, tenant allowances are presented as part of operating lease liabilities accordance with ASC 842. |
Asset Impairment Charges (Detai
Asset Impairment Charges (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Feb. 01, 2020USD ($)store | Nov. 02, 2019USD ($) | Aug. 03, 2019USD ($) | Feb. 02, 2019USD ($)store | Nov. 03, 2018USD ($) | Aug. 04, 2018USD ($) | May 05, 2018USD ($) | Feb. 01, 2020USD ($)store | Feb. 02, 2019USD ($)store | Feb. 03, 2018USD ($) | |
Impaired Long-Lived Assets Held and Used [Line Items] | ||||||||||
Asset impairment charges | $ | $ 10,315 | $ 1,356 | $ 189 | $ 5,555 | $ 14,419 | $ 121 | $ 27 | $ 11,860 | $ 20,122 | $ 258 |
Number of boutiques stores | 711 | 711 | ||||||||
Boutique furniture fixtures and supplies [Member] | ||||||||||
Impaired Long-Lived Assets Held and Used [Line Items] | ||||||||||
Asset impairment charges | $ | $ 4,900 | |||||||||
Boutique Property and Equipment Impaired [Member] | ||||||||||
Impaired Long-Lived Assets Held and Used [Line Items] | ||||||||||
Number of boutiques stores | 153 | 153 | ||||||||
Boutique ROU Asset Impaired [Member] | ||||||||||
Impaired Long-Lived Assets Held and Used [Line Items] | ||||||||||
Number of boutiques stores | 60 | 60 |
Income Taxes - Income Tax Expen
Income Taxes - Income Tax Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 01, 2020 | Feb. 02, 2019 | Feb. 03, 2018 | |
Current: | |||
Federal | $ (974) | $ 6,882 | |
State | $ 125 | (252) | 1,314 |
Total | 125 | (1,226) | 8,196 |
Deferred: | |||
Federal | 4,288 | 6,373 | |
State | 4,431 | (274) | |
Total | 8,719 | 6,099 | |
Income tax expense | $ 125 | $ 7,493 | $ 14,295 |
Income Taxes - Rate Reconciliat
Income Taxes - Rate Reconciliation (Details) | 12 Months Ended | ||
Feb. 01, 2020 | Feb. 02, 2019 | Feb. 03, 2018 | |
Income Taxes | |||
Income tax expense at statutory rate | 21.00% | 21.00% | 33.40% |
Valuation allowance on net deferred tax assets | (29.00%) | (51.20%) | |
State tax (benefit) expense, net of federal (benefit) expense | 7.70% | 6.70% | 1.90% |
Nondeductible expenses | (0.70%) | (0.20%) | 0.90% |
Deferred tax remeasurement under the Tax Cuts and jobs Act | 11.00% | ||
Other | 0.50% | 1.30% | 0.70% |
Effective tax expense rate | (0.50%) | (22.40%) | 47.90% |
Income Taxes - Deferred Tax Ass
Income Taxes - Deferred Tax Asset and Liabilities (Details) - USD ($) $ in Thousands | Feb. 01, 2020 | Feb. 02, 2019 |
Deferred tax assets: | ||
Operating lease liabilities | $ 62,912 | |
Landlord incentives and deferred rents | $ 8,113 | |
Net operating losses | 10,147 | 7,686 |
Inventories | 2,774 | 2,143 |
Accrued liabilities | 2,170 | 1,690 |
Stock-based compensation | 1,063 | 1,244 |
Other | 12 | 26 |
Deferred tax assets before valuation allowance | 79,078 | 20,902 |
Valuation allowance | (24,577) | (17,117) |
Total deferred tax assets | 54,501 | 3,785 |
Deferred tax liabilities: | ||
Operating lease right-of-use assets | (52,686) | |
Property and equipment | (1,239) | (3,785) |
Other | (576) | |
Total deferred tax liabilities | (54,501) | (3,785) |
Net deferred tax assets | $ 0 | $ 0 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | ||
Apr. 30, 2020 | Feb. 01, 2020 | Feb. 02, 2019 | Feb. 03, 2018 | |
Impact of remeasurement of net deferred tax assets | $ 3.3 | |||
Statutory federal tax rate | 21.00% | 21.00% | 33.40% | |
Valuation allowance recognized in income tax expense | $ 7.5 | $ 17.1 | ||
Subsequent events | ||||
Income Tax Refund | $ 10.7 | |||
Domestic Tax Authority [Member] | ||||
Operating Loss Carryforwards | $ 6.7 | |||
Tax Years Subject to Examination | 2016 | |||
State and Local Jurisdiction [Member] | ||||
Operating Loss Carryforwards | $ 3.4 | |||
Operating Loss Carryforwards, Expiration Date | Dec. 31, 2039 | |||
Tax Years Subject to Examination | 2015 |
Credit Facilities (Details)
Credit Facilities (Details) - USD ($) $ in Thousands | Feb. 01, 2020 | Feb. 02, 2019 |
Long-term Debt Details | ||
Less: Current portion of long term debt | $ (8,936) | |
Total long-term debt, net of current portion | $ 10,000 | |
Asset Based Revolving Credit Facility [Member] | ||
Long-term Debt Details | ||
Asset based revolving credit facility | 10,000 | |
Term Loan | ||
Long-term Debt Details | ||
Term loan | 10,000 | |
Unamortized debt issuance costs | (1,064) | |
Total long-term debt, net | $ 8,936 | $ 10,000 |
Credit Facilities - Asset Based
Credit Facilities - Asset Based Revolving Credit Facility (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |||
Apr. 30, 2020 | Feb. 01, 2020 | Feb. 02, 2019 | May 01, 2020 | Aug. 13, 2019 | |
Debt Instrument [Line Items] | |||||
Debt issuance costs incurred | $ 1,479 | $ 505 | |||
Subsequent events | |||||
Debt Instrument [Line Items] | |||||
Income Tax Refund | $ 10,700 | ||||
Asset Based Revolving Credit Facility [Member] | |||||
Debt Instrument [Line Items] | |||||
Maximum borrowing capacity | 40,000 | $ 50,000 | |||
Line Of Credit Availability For Letters Of Credit | 10,000 | $ 10,000 | |||
Write off of unamortized debt issuance costs | 200 | ||||
Debt issuance costs incurred | 200 | ||||
Combined borrowing base availability | $ 17,200 | ||||
Unused Commitment Fee | 0.20% | ||||
Asset Based Revolving Credit Facility [Member] | Maximum [Member] | |||||
Debt Instrument [Line Items] | |||||
Revolving Loan Cap | $ 34,000 | ||||
Asset Based Revolving Credit Facility [Member] | Subsequent events | |||||
Debt Instrument [Line Items] | |||||
Minimum cash on hand required before borrowings are allowed under a credit agreement | $ 3,000 | ||||
Asset Based Revolving Credit Facility [Member] | LIBOR [Member] | Minimum [Member] | |||||
Debt Instrument [Line Items] | |||||
Applicable margin rate | 1.25% | ||||
Interest rate (as a percent) | 0.00% | ||||
Asset Based Revolving Credit Facility [Member] | LIBOR [Member] | Maximum [Member] | |||||
Debt Instrument [Line Items] | |||||
Applicable margin rate | 1.75% | ||||
Asset Based Revolving Credit Facility [Member] | Base Rate [Member] | |||||
Debt Instrument [Line Items] | |||||
Percentage added to one month LIBOR | 1.00% | ||||
Percentage Added To Federal Funds Rate | 0.50% | ||||
Asset Based Revolving Credit Facility [Member] | Base Rate [Member] | Minimum [Member] | |||||
Debt Instrument [Line Items] | |||||
Applicable margin rate | (0.50%) | ||||
Interest rate | 1.50% | ||||
Asset Based Revolving Credit Facility [Member] | Base Rate [Member] | Maximum [Member] | |||||
Debt Instrument [Line Items] | |||||
Applicable margin rate | 0.00% |
Credit Facilities - Term Loan C
Credit Facilities - Term Loan Credit Agreement (Details) - USD ($) | 12 Months Ended | ||
Feb. 01, 2020 | Feb. 02, 2019 | Aug. 13, 2019 | |
Debt Instrument [Line Items] | |||
Debt issuance costs incurred | $ 1,479,000 | $ 505,000 | |
Term Loan | |||
Debt Instrument [Line Items] | |||
Aggregate amount of loan | $ 10,000,000 | ||
Combined borrowing base availability | $ 17,200,000 | ||
Average effective interest rate | 10.00% | ||
Annual agency fee | $ 50,000 | ||
Debt issuance costs incurred | $ 1,200,000 | ||
Term Loan | Minimum [Member] | |||
Debt Instrument [Line Items] | |||
Interest rate (as a percent) | 10.00% | ||
Term Loan | LIBOR [Member] | |||
Debt Instrument [Line Items] | |||
Spread on LIBOR (as a percent) | 8.00% | ||
Term Loan | LIBOR [Member] | Minimum [Member] | |||
Debt Instrument [Line Items] | |||
Interest rate (as a percent) | 0.00% |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) $ / shares in Units, $ in Millions | Feb. 01, 2020 | Jul. 31, 2019 | Mar. 15, 2016 |
Stockholder Rights Plan | |||
Ownership trigger threshold | 15.00% | ||
Number of preferred share purchase rights granted for each outstanding share of common stock | 1 | ||
Number of preferred share purchase right for each outstanding share of common stock | 0.0002 | ||
Preferred Stock, par value | $ 0.01 | ||
Exercise price | $ 18 | ||
Ratio of market price to exercise price if beneficial ownership is acquired without prior board approval | 2 | ||
Repurchase Plan [Member] | |||
Share Repurchases | |||
Amount Authorized Under the Stock Repurchase Program | $ 100 | ||
Remaining amount for future repurchases | $ 40.2 |
Stockholders' Equity - Repurcha
Stockholders' Equity - Repurchase of shares (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | |
Feb. 02, 2019 | Feb. 03, 2018 | |
Stockholders' Equity | ||
Number of shares repurchased | 55 | 155 |
Total cost of shares repurchased | $ 3,522 | $ 20,008 |
Average price per share (includes brokers' commission) | $ 64.08 | $ 129 |
Stock-based Compensation - Stoc
Stock-based Compensation - Stock-based compensation expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 01, 2020 | Feb. 02, 2019 | Feb. 03, 2018 | |
Stock-based Compensation Disclosures | |||
Stock-based compensation expense | $ 269 | $ 1,335 | $ 2,430 |
Employee Stock Option [Member] | |||
Stock-based Compensation Disclosures | |||
Stock-based compensation expense | 145 | 293 | 700 |
Restricted stock awards [Member] | |||
Stock-based Compensation Disclosures | |||
Stock-based compensation expense | (161) | $ 1,042 | $ 1,730 |
Restricted Stock Units (RSUs) [Member] | |||
Stock-based Compensation Disclosures | |||
Stock-based compensation expense | $ 285 |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Stocks Units Roll forward (Details) - Restricted Stock Units (RSUs) [Member] shares in Thousands | 12 Months Ended |
Feb. 01, 2020$ / sharesshares | |
Restricted Stock Rollforward | |
Non-vested restricted stock units as of February 2, 2019 | shares | 0 |
Granted | shares | 281 |
Forfeited | shares | (129) |
Non-vested restricted stock units as of February 1, 2020 | shares | 152 |
Weighted Average Grant Date Fair Value of Restricted Stock | |
Non-vested restricted stock units as of February 2, 2019 | $ / shares | $ 0 |
Granted | $ / shares | 8.65 |
Forfeited | $ / shares | 8.65 |
Non-vested restricted stock units as of February 1, 2020 | $ / shares | $ 8.65 |
Stock-Based Compensation - Re_2
Stock-Based Compensation - Restricted Stocks Roll forward (Details) - Restricted stock awards [Member] - $ / shares shares in Thousands | 12 Months Ended | ||
Feb. 01, 2020 | Feb. 02, 2019 | Feb. 03, 2018 | |
Restricted Stock Rollforward | |||
Non-vested restricted stock units as of February 2, 2019 | 66 | ||
Granted | 118 | ||
Vested | (20) | ||
Forfeited | (49) | ||
Non-vested restricted stock units as of February 1, 2020 | 115 | 66 | |
Weighted Average Grant Date Fair Value of Restricted Stock | |||
Non-vested restricted stock units as of February 2, 2019 | $ 76.18 | ||
Granted | 5.94 | $ 59.64 | $ 173.16 |
Vested | 38.19 | ||
Forfeited | 65.33 | ||
Non-vested restricted stock units as of February 1, 2020 | $ 15.69 | $ 76.18 |
Stock-Based Compensation - St_2
Stock-Based Compensation - Stock Options Roll forward (Details) shares in Thousands | 12 Months Ended |
Feb. 01, 2020$ / sharesshares | |
Stock options rollforward | |
Stock options outstanding (in shares) | shares | 24 |
Stock options exercisable (in shares) | shares | 23 |
Weighted Average Exercise Price of Stock Options | |
Weighted average exercise price, options outstanding | $ / shares | $ 170.82 |
Weighted average exercise price, options exercisable | $ / shares | $ 170.20 |
Weighted Average Remaining Contractual Life and Aggregate Intrinsic Value | |
Weighted average remaining contractual life of stock options outstanding | 4 years |
Weighted average remaining contractual life of stock options exercisable | 4 years |
Stock-based Compensation - Narr
Stock-based Compensation - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Feb. 01, 2020 | Feb. 02, 2019 | Feb. 03, 2018 | |
Stock-based Compensation Disclosures | |||
Stock options granted | 0 | 0 | 0 |
Stock-based compensation expense | $ 269 | $ 1,335 | $ 2,430 |
2010 Stock Incentive Plan | |||
Stock-based Compensation Disclosures | |||
Contractual term | 10 years | ||
Remaining Shares Available for Grant | 0 | ||
2010 Stock Incentive Plan | Minimum [Member] | |||
Stock-based Compensation Disclosures | |||
Vesting term | 4 years | ||
2010 Stock Incentive Plan | Maximum [Member] | |||
Stock-based Compensation Disclosures | |||
Vesting term | 5 years | ||
2011 Stock Incentive Plan | |||
Stock-based Compensation Disclosures | |||
Contractual term | 10 years | ||
Remaining Shares Available for Grant | 0 | ||
2011 Stock Incentive Plan | Minimum [Member] | |||
Stock-based Compensation Disclosures | |||
Vesting term | 3 years | ||
2011 Stock Incentive Plan | Maximum [Member] | |||
Stock-based Compensation Disclosures | |||
Vesting term | 5 years | ||
2015 Stock Incentive Plan | |||
Stock-based Compensation Disclosures | |||
Contractual term | 10 years | ||
Remaining Shares Available for Grant | 100,000 | ||
Share authorized for issuance | 200,000 | ||
2015 Stock Incentive Plan | Minimum [Member] | |||
Stock-based Compensation Disclosures | |||
Vesting term | 3 years | ||
2015 Stock Incentive Plan | Maximum [Member] | |||
Stock-based Compensation Disclosures | |||
Vesting term | 5 years | ||
Management [Member] | |||
Stock-based Compensation Disclosures | |||
Stock-based compensation expense | $ (1,200) | (800) | |
Restricted stock awards [Member] | |||
Stock-based Compensation Disclosures | |||
Weighted average period over which unrecognized compensation costs related to non-vested awards will be recognized | 2 years | ||
Granted | 118,000 | ||
Fair value of restricted stock vested | $ 100 | 700 | 1,400 |
Unrecognized stock-based compensation cost | 400 | ||
Stock-based compensation expense | $ (161) | $ 1,042 | $ 1,730 |
Weighted Average Grant Date Fair Value of Restricted Shares | $ 5.94 | $ 59.64 | $ 173.16 |
Performance Shares [Member] | Minimum [Member] | |||
Stock-based Compensation Disclosures | |||
Percent of Target Shares that May Vest | 0.00% | ||
Performance Shares [Member] | Maximum [Member] | |||
Stock-based Compensation Disclosures | |||
Percent of Target Shares that May Vest | 150.00% | ||
Performance Shares [Member] | Management [Member] | |||
Stock-based Compensation Disclosures | |||
Vesting term | 3 years | ||
Percent of shares awarded | 50.00% | ||
Stock-based compensation expense | $ (300) | $ (900) | $ (1,200) |
Employee Stock Option [Member] | |||
Stock-based Compensation Disclosures | |||
Unrecognized stock-based compensation cost | $ 100 | ||
Weighted average period over which unrecognized compensation costs related to non-vested awards will be recognized | 1 year | ||
Intrinsic value of stock options at the date of exercise | 100 | ||
Stock-based compensation expense | $ 145 | $ 293 | $ 700 |
Stock options exercised | 0 | 0 | |
Restricted Stock Units (RSUs) [Member] | |||
Stock-based Compensation Disclosures | |||
Unrecognized stock-based compensation cost | $ 900 | ||
Weighted average period over which unrecognized compensation costs related to non-vested awards will be recognized | 2 years | ||
Granted | 281,000 | ||
Stock-based compensation expense | $ 285 | ||
Weighted Average Grant Date Fair Value of Restricted Shares | $ 8.65 | ||
Restricted Stock Units (RSUs) [Member] | Management [Member] | |||
Stock-based Compensation Disclosures | |||
Vesting term | 3 years | ||
Percent of shares awarded | 50.00% | ||
Granted | 300,000 |
Employee Benefits (Details)
Employee Benefits (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Feb. 01, 2020 | Feb. 02, 2019 | Feb. 03, 2018 | |
Defined Contribution Plan Disclosure [Line Items] | |||
Minimum Age Requirement to Participate in the Plan | 21 years | ||
Minimum Period of Service Required to Participate in the Plan | 6 months | ||
Company's Matching Contribution | $ 0.7 | $ 0.9 | $ 0.7 |
Profit Sharing Contribution | $ 0 | $ 0 | $ 0 |
Maximum [Member] | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Maximum Employer Contribution (Percentage) | 4.00% |
Leases - Components of operatin
Leases - Components of operating lease costs (Details) $ in Thousands | 12 Months Ended |
Feb. 01, 2020USD ($) | |
Components of operating lease costs | |
Operating lease costs | $ 60,984 |
Variable lease cost | 843 |
Lease cost | $ 61,827 |
Leases - Maturities of lease li
Leases - Maturities of lease liabilities (Details) - USD ($) $ in Thousands | Feb. 01, 2020 | Feb. 02, 2019 |
Maturities of lease liabilities | ||
2020 | $ 61,688 | |
2021 | 54,868 | |
2022 | 47,290 | |
2023 | 40,566 | |
2024 | 33,576 | |
Thereafter | 57,181 | |
Total lease payments | 295,169 | |
Less: Interest | 45,540 | |
Present value of lease liabilities | $ 249,629 | |
Maturities of lease liabilities | ||
2019 | $ 48,644 | |
2020 | 43,356 | |
2021 | 36,785 | |
2022 | 30,983 | |
2023 | 26,084 | |
Thereafter | 59,039 | |
Total lease payments | $ 244,891 |
Leases - Additional Information
Leases - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Feb. 01, 2020 | Dec. 31, 2018 | Dec. 31, 2017 | |
Lessee, Operating Lease | |||
Lease Expiration Year | 2030 | ||
Weighted-average remaining lease term - operating leases | 5 years 8 months 12 days | ||
Weighted-average discount rate - operating leases | 5.80% | ||
Cash paid for operating leases included in the measurement of lease liabilities | $ 65.4 | ||
Rent expense | $ 45.4 | $ 42.2 | |
Lessee, Operating Lease, Not yet Commenced | |||
Lessee Operating Lease Lease Not Yet Commenced Operating Lease Payments | $ 5.4 | ||
Maximum [Member] | |||
Lessee, Operating Lease | |||
Lessee, Operating Lease, Renewal Term | 5 years | ||
Lessee, Operating Lease, Not yet Commenced | |||
Lessee, Operating Lease, Lease Not yet Commenced, Term of Contract | 10 years | ||
Minimum [Member] | |||
Lessee, Operating Lease | |||
Lessee, Operating Lease, Renewal Term | 3 years | ||
Lessee, Operating Lease, Not yet Commenced | |||
Lessee, Operating Lease, Lease Not yet Commenced, Term of Contract | 5 years |
Segment Reporting (Details)
Segment Reporting (Details) | 12 Months Ended |
Feb. 01, 2020segment | |
Segment Reporting | |
Number of Reportable Segments | 1 |
Number of Operating Segments | 1 |
Quarterly Financial Data (Una_3
Quarterly Financial Data (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||||||||||||
Feb. 01, 2020 | Nov. 02, 2019 | Aug. 03, 2019 | May 04, 2019 | Feb. 02, 2019 | Nov. 03, 2018 | Aug. 04, 2018 | May 05, 2018 | Feb. 01, 2020 | Feb. 02, 2019 | Feb. 03, 2018 | ||||||||||||
Quarterly Financial Data (Unaudited). | ||||||||||||||||||||||
Net sales | $ 118,936 | $ 95,503 | $ 105,972 | $ 87,125 | $ 119,310 | $ 95,375 | $ 113,025 | $ 100,405 | $ 407,536 | $ 428,115 | $ 471,678 | |||||||||||
Gross profit | 41,188 | 37,518 | 40,503 | 30,327 | 46,881 | 33,645 | 44,107 | 38,363 | 149,536 | 162,996 | 206,763 | |||||||||||
Asset impairment charges | 10,315 | 1,356 | 189 | 5,555 | 14,419 | 121 | 27 | 11,860 | 20,122 | 258 | ||||||||||||
(Loss) income from operations | (11,486) | (4,239) | 1,379 | (9,667) | (6,755) | (23,060) | 830 | (4,520) | (24,013) | (33,505) | 29,962 | |||||||||||
Net (loss) income | $ (11,548) | $ (5,135) | $ 1,812 | $ (10,149) | $ (21,287) | $ (16,223) | $ 454 | $ (3,885) | $ (25,020) | $ (40,941) | $ 15,561 | |||||||||||
Basic (loss) earnings per common share | $ (3.97) | [1] | $ (1.76) | [1] | $ 0.62 | [1] | $ (3.50) | [1] | $ (7.34) | [1] | $ (5.59) | [1] | $ 0.16 | [1] | $ (1.34) | [1] | $ (8.63) | [2] | $ (14.12) | [2] | $ 5.16 | [2] |
Diluted (loss) earnings per common share | $ (3.97) | [1] | $ (1.76) | [1] | $ 0.61 | [1] | $ (3.50) | [1] | $ (7.34) | [1] | $ (5.59) | [1] | $ 0.16 | [1] | $ (1.34) | [1] | $ (8.63) | [2] | $ (14.12) | [2] | $ 5.14 | [2] |
[1] | The sum of quarterly basic and diluted (loss) earnings per share may not foot across due to rounding. | |||||||||||||||||||||
[2] | Reflects the 12-to-1 reverse stock split that became effective on July 1, 2019. Refer to Note 1 - Summary of Significant Accounting Policies for further information. |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Apr. 30, 2020 | Feb. 01, 2020 | Feb. 02, 2019 | May 01, 2020 | |
Subsequent Event [Line Items] | ||||
Amount of borrowings under the asset based revolving credit facility | $ 15,000 | $ 10,000 | ||
Subsequent events | ||||
Subsequent Event [Line Items] | ||||
Income Tax Refund | $ 10,700 | |||
Asset Based Revolving Credit Facility [Member] | Subsequent events | ||||
Subsequent Event [Line Items] | ||||
Amount of borrowings under the asset based revolving credit facility | $ 5,000 | |||
Minimum cash on hand required before borrowings are allowed under a credit agreement | $ 3,000 |