Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Oct. 28, 2017 | Nov. 24, 2017 | |
Document And Entity Information | ||
Entity Registrant Name | Christopher & Banks Corporation | |
Entity Central Index Key | 883,943 | |
Current Fiscal Year End Date | --02-03 | |
Entity Filer Category | Non-accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Oct. 28, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 37,834,003 | |
Entity Current Reporting Status | Yes |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Oct. 28, 2017 | Jan. 28, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 17,867 | $ 35,006 |
Accounts receivable | 4,196 | 2,549 |
Merchandise inventories | 51,431 | 36,834 |
Prepaid expenses and other current assets | 4,638 | 3,485 |
Income taxes receivable | 243 | 516 |
Total current assets | 78,375 | 78,390 |
Property, equipment and improvements, net | 50,374 | 55,332 |
Other non-current assets: | ||
Deferred income taxes | 296 | 321 |
Other assets | 638 | 577 |
Total other non-current assets | 934 | 898 |
Total assets | 129,683 | 134,620 |
Current liabilities: | ||
Accounts payable | 22,600 | 13,867 |
Accrued salaries, wages and related expenses | 5,972 | 6,613 |
Accrued liabilities and other current liabilities | 24,871 | 26,426 |
Total current liabilities | 53,443 | 46,906 |
Non-current liabilities: | ||
Deferred lease incentives | 8,186 | 9,021 |
Deferred rent obligations | 6,623 | 6,576 |
Other non-current liabilities | 2,500 | 822 |
Total non-current liabilities | 17,309 | 16,419 |
Commitments and contingencies | 0 | 0 |
Stockholders’ equity: | ||
Preferred stock — $0.01 par value, 1,000 shares authorized, none outstanding | 0 | 0 |
Common stock — $0.01 par value, 74,000 shares authorized, 47,629 and 47,425 shares issued, and 37,838 and 37,634 shares outstanding at October 28, 2017 and January 28, 2017, respectively | 475 | 473 |
Additional paid-in capital | 127,348 | 126,516 |
Retained earnings | 43,819 | 57,017 |
Common stock held in treasury, 9,791 shares at cost at October 28, 2017 and January 28, 2017 | (112,711) | (112,711) |
Total stockholders’ equity | 58,931 | 71,295 |
Total liabilities and stockholders’ equity | $ 129,683 | $ 134,620 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Oct. 28, 2017 | Jan. 28, 2017 |
Stockholders’ equity: | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 1,000,000 | 1,000,000 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 74,000,000 | 74,000,000 |
Common stock, shares issued (in shares) | 47,629,000 | 47,425,000 |
Common stock, shares outstanding (in shares) | 37,838,000 | 37,634,000 |
Common stock held in treasury, shares ( in shares) | 9,791,000 | 9,791,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 28, 2017 | Oct. 29, 2016 | Oct. 28, 2017 | Oct. 29, 2016 | |
Income Statement [Abstract] | ||||
Net sales | $ 98,468,000 | $ 106,668,000 | $ 273,642,000 | $ 296,625,000 |
Merchandise, buying and occupancy costs | 65,229,000 | 67,447,000 | 185,237,000 | 189,543,000 |
Gross profit | 33,239,000 | 39,221,000 | 88,405,000 | 107,082,000 |
Other operating expenses: | ||||
Selling, general and administrative | 31,802,000 | 32,483,000 | 91,956,000 | 98,585,000 |
Depreciation and amortization | 2,976,000 | 3,119,000 | 9,242,000 | 9,116,000 |
Impairment of long-lived assets | 0 | 0 | 163,000 | 476,000 |
Total other operating expenses | 34,778,000 | 35,602,000 | 101,361,000 | 108,177,000 |
Operating (loss) income | (1,539,000) | 3,619,000 | (12,956,000) | (1,095,000) |
Interest expense, net | (38,000) | (44,000) | (107,000) | (126,000) |
Other income | 0 | 0 | 0 | 911,000 |
(Loss) income before income taxes | (1,577,000) | 3,575,000 | (13,063,000) | (310,000) |
Income tax provision | 45,000 | 82,000 | 136,000 | 249,000 |
Net (loss) income | $ (1,622,000) | $ 3,493,000 | $ (13,199,000) | $ (559,000) |
Basic (loss) income per share: | ||||
Net (loss) income (in dollars per share) | $ (0.05) | $ 0.09 | $ (0.36) | $ (0.02) |
Basic shares outstanding (in shares) | 37,285 | 37,075 | 37,178 | 36,992 |
Diluted (loss) income per share: | ||||
Net (loss) income (in dollars per share) | $ (0.05) | $ 0.09 | $ (0.36) | $ (0.02) |
Diluted shares outstanding (in shares) | 37,285 | 37,153 | 37,178 | 36,992 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Comprehensive (Loss) Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 28, 2017 | Oct. 29, 2016 | Oct. 28, 2017 | Oct. 29, 2016 | |
Statement of Comprehensive Income [Abstract] | ||||
Net (loss) income | $ (1,622) | $ 3,493 | $ (13,199) | $ (559) |
Other comprehensive income, net of tax | 0 | 0 | 0 | 0 |
Comprehensive (loss) income | $ (1,622) | $ 3,493 | $ (13,199) | $ (559) |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows - USD ($) | 9 Months Ended | |
Oct. 28, 2017 | Oct. 29, 2016 | |
Cash flows from operating activities: | ||
Net (loss) income | $ (13,199,000) | $ (559,000) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 9,242,000 | 9,116,000 |
Impairment of long-lived assets | 163,000 | 476,000 |
Deferred income taxes, net | 25,000 | 18,000 |
Gain from company-owned life insurance | 0 | (911,000) |
Amortization of premium on investments | 0 | 10,000 |
Amortization of financing costs | 47,000 | 47,000 |
Deferred lease-related liabilities | (866,000) | (817,000) |
Stock-based compensation expense | 859,000 | 565,000 |
Loss on disposal of assets | 0 | 1,000 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (1,648,000) | 326,000 |
Merchandise inventories | (14,597,000) | (11,604,000) |
Prepaid expenses and other assets | (1,260,000) | (543,000) |
Income taxes receivable | 273,000 | (88,000) |
Accounts payable | 8,640,000 | 123,000 |
Accrued liabilities | (2,089,000) | 2,912,000 |
Other liabilities | 1,743,000 | 164,000 |
Net cash used in operating activities | (12,667,000) | (764,000) |
Cash flows from investing activities: | ||
Purchases of property, equipment and improvements | (4,447,000) | (8,770,000) |
Proceeds from company-owned life insurance | 0 | 911,000 |
Maturities of available-for-sale investments | 0 | 3,005,000 |
Net cash used in investing activities | (4,447,000) | (4,854,000) |
Cash flows from financing activities: | ||
Exercise of stock options | 0 | 17,000 |
Shares redeemed for payroll taxes | (25,000) | (23,000) |
Net cash used in financing activities | (25,000) | (6,000) |
Net decrease in cash and cash equivalents | (17,139,000) | (5,624,000) |
Cash and cash equivalents at beginning of period | 35,006,000 | 31,506,000 |
Cash and cash equivalents at end of period | 17,867,000 | 25,882,000 |
Supplemental cash flow information: | ||
Interest paid | 107,000 | 143,000 |
Income taxes (refunded) paid | (263,000) | 102,000 |
Accrued purchases of equipment and improvements | $ 288,000 | $ 267,000 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Oct. 28, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q have been prepared by Christopher & Banks Corporation and its subsidiaries (collectively referred to as “Christopher & Banks”, “the Company”, “we” or “us”) pursuant to the current rules and regulations of the United States ("U.S.") Securities and Exchange Commission. Accordingly, certain information and disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the U.S. have been omitted, pursuant to such rules and regulations. These unaudited condensed consolidated financial statements, except the condensed consolidated balance sheet as of January 28, 2017 derived from the Company's audited financial statements, should be read in conjunction with the audited financial statements and related notes included in the Company's Annual Report on Form 10-K for the fiscal year ended January 28, 2017 . The results of operations for the interim period shown in this report are not necessarily indicative of results to be expected for the full fiscal year. In the opinion of management, the information contained herein reflects all adjustments, consisting only of normal adjustments, except as otherwise stated in these notes, considered necessary to present fairly our financial position, results of operations, and cash flows as of October 28, 2017 , and October 29, 2016 and for all periods presented. Recently issued accounting pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued authoritative guidance under Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers. ASU 2014-09 supersedes existing revenue recognition requirements and provides a new comprehensive revenue recognition model that requires entities to recognize revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers, Deferral of the Effective Date , which defers the effective date of the new revenue recognition standard by one year. As a result, ASU 2014-09 is effective retrospectively for fiscal years and interim periods within those years beginning after December 15, 2017. We do not believe the adoption of this standard will have a material impact on our consolidated financial statements. The new revenue standard will require the Company to recognize gift card breakage proportional to actual gift card redemptions. We plan to adopt this ASU under the modified retrospective approach beginning in the first quarter of fiscal 2018 which includes a cumulative adjustment to retained earnings. As interpretations of the new guidance continue to evolve in the fourth quarter of fiscal 2017, we will monitor developments and will finalize conclusions on our revenue recognition policy, disclosure requirements and changes that may be necessary to our internal controls over financial reporting. In February 2016, the FASB issued ASU 2016-02, Leases , which requires that any lease arrangements longer than twelve months result in an entity recognizing an asset and liability on its balance sheet. The updated guidance is effective for interim and annual periods beginning after December 15, 2018, and early adoption is permitted. The provisions of this new guidance are to be applied using a modified retrospective approach, with elective reliefs, which requires application of the new guidance for all periods presented. The Company is currently evaluating the guidance and its impact on our consolidated financial statements and the related internal controls over financial reporting. The Company expects the adoption of this standard will have a material impact on its consolidated balance sheet for recognition of lease-related assets and liabilities. We will adopt the ASU beginning in the first quarter of fiscal 2019. In March 2016, the FASB issued ASU No. 2016-09, Compensation-Stock Compensation (Topic 718) Improvements to Employee Share-Based Payment Accounting . ASU 2016-09 addresses simplification of several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. ASU 2016-09 is effective for public companies for annual reporting periods beginning after December 15, 2016, and interim periods within those fiscal years. The adoption of ASU 2016-09 did not have a material impact on the Company's consolidated financial statements mostly due to the impact of the tax valuation allowance. We reviewed all other significant newly-issued accounting pronouncements and concluded they are either not applicable to our operations, or that no material effect is expected on our consolidated financial statements as a result of future adoption. |
Merchandise Inventories and Sou
Merchandise Inventories and Sources of Supply | 9 Months Ended |
Oct. 28, 2017 | |
Inventory Disclosure [Abstract] | |
Merchandise Inventories and Sources of Supply | Merchandise Inventories and Sources of Supply Merchandise inventories consisted of the following (in thousands): October 28, 2017 January 28, 2017 Merchandise - in store/eCommerce $ 44,367 $ 28,584 Merchandise - in transit 7,064 8,250 Total merchandise inventories $ 51,431 $ 36,834 There have been no material changes to our ratio of imports to total merchandise purchases or concentration of supplier purchases in the thirty-nine weeks ended October 28, 2017 compared to the fiscal 2016 year ended January 28, 2017 . |
Property, Equipment and Improve
Property, Equipment and Improvements, Net | 9 Months Ended |
Oct. 28, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property, Equipment and Improvements, Net | Property, Equipment and Improvements, Net Property, equipment and improvements, net consisted of the following (in thousands): Description October 28, 2017 January 28, 2017 Land $ 1,597 $ 1,597 Corporate office, distribution center and related building improvements 12,753 12,700 Store leasehold improvements 49,281 49,450 Store furniture and fixtures 69,405 69,598 Corporate office and distribution center furniture, fixtures and equipment 4,900 4,880 Computer and point of sale hardware and software 33,868 32,313 Construction in progress 1,795 1,321 Total property, equipment and improvements, gross 173,599 171,859 Less accumulated depreciation and amortization (123,225 ) (116,527 ) Total property, equipment and improvements, net $ 50,374 $ 55,332 Long-lived assets are evaluated for impairment whenever events or changes in circumstances indicate that the carrying value of the asset may not be recoverable. In conjunction with an impairment analysis, the Company determined that improvements and equipment at certain under-performing stores and at stores identified for closure were impaired. As a result, the Company recorded no long-lived asset impairment during the thirteen week periods ended October 28, 2017 and October 29, 2016 . The Company recorded approximately $0.2 million and $0.5 million for long-lived asset impairments during the thirty-nine week periods ended October 28, 2017 and October 29, 2016 , respectively. |
Accrued Liabilities
Accrued Liabilities | 9 Months Ended |
Oct. 28, 2017 | |
Payables and Accruals [Abstract] | |
Accrued Liabilities | Accrued Liabilities Accrued liabilities and other current liabilities consisted of the following (in thousands): October 28, 2017 January 28, 2017 Gift card and store credit liabilities $ 4,535 $ 7,414 Accrued Friendship Rewards Program loyalty liability 3,763 3,770 Accrued income, sales and other taxes payable 2,403 1,239 Accrued occupancy-related expenses 3,217 3,614 Sales return reserve 2,055 943 eCommerce obligations 5,156 3,190 Other accrued liabilities 3,742 6,256 Total accrued liabilities and other current liabilities $ 24,871 $ 26,426 |
Credit Facility
Credit Facility | 9 Months Ended |
Oct. 28, 2017 | |
Debt Disclosure [Abstract] | |
Credit Facility | Credit Facility The Company is party to an amended and restated credit agreement (the "Credit Facility") with Wells Fargo Bank, N.A. (“Wells Fargo”), as lender. The Credit Facility was most recently amended and extended on September 8, 2014. The current expiration date is September 8, 2019. The Credit Facility provides the Company with revolving credit loans of up to $50.0 million in the aggregate, subject to a borrowing base formula based primarily on eligible credit card receivables, inventory and real estate, as such terms are defined in the Credit Facility, and up to $10.0 million of which may be drawn in the form of standby and documentary letters of credit. Borrowings under the Credit Facility will generally accrue interest at a rate ranging from 1.50% to 1.75% over the London Interbank Offered Rate ("LIBOR") or 0.50% to 0.75% over the Wells Fargo Prime Rate based on the amount of Average Daily Availability for the Fiscal Quarter immediately preceding each Adjustment Date, as such terms are defined in the Credit Facility. The Company has the ability to select between the LIBOR or prime based rate at the time of the cash advance. The Credit Facility has an unused commitment fee of 0.25% . The Credit Facility contains customary events of default and various affirmative and negative covenants. The sole financial covenant contained in the Credit Facility requires the Company to maintain Availability at least equal to the greater of (a) ten percent ( 10% ) of the borrowing base or (b) $3.0 million . In addition, the Credit Facility permits the payment of dividends to the Company's stockholders if certain financial conditions are met. The Company was in compliance with all covenants and other financial provisions as of October 28, 2017 . The Company's obligations under the Credit Facility are secured by the assets of the Company and its subsidiaries. The Company has pledged substantially all of its assets as collateral security for the loans, including accounts owed to the Company, bank accounts, inventory, other tangible and intangible personal property, intellectual property (including patents and trademarks), and stock or other evidences of ownership of 100% of all of the Company's subsidiaries. The Company had no revolving credit loan borrowings under the Credit Facility during each of the thirty-nine week periods ended October 28, 2017 , and October 29, 2016 . The total Borrowing Base at October 28, 2017 was approximately $48.1 million . As of October 28, 2017 , the Company had open on-demand letters of credit of approximately $2.3 million . Accordingly, after reducing the Borrowing Base for the open letters of credit and the required minimum availability of the greater of $3.0 million , or 10.0% of the Borrowing Base, the net availability of revolving credit loans under the Credit Facility was approximately $40.9 million at October 28, 2017 . |
Income Taxes
Income Taxes | 9 Months Ended |
Oct. 28, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company's liability for unrecognized tax benefits associated with uncertain tax positions is recorded within other non-current liabilities. There has been no material change in the reserve for unrecognized tax benefits since the end of the previous year. The Company recognizes interest and penalties related to unrecognized tax benefits as components of income tax expense. The Company and its subsidiaries are subject to U.S. federal income taxes and the income tax obligations of various state and local jurisdictions. Periods after fiscal 2013 remain subject to examination by the Internal Revenue Service. With few exceptions, the Company is not subject to state income tax examination by tax authorities for taxable years prior to fiscal 2012. As of October 28, 2017 , the end of the third quarter of fiscal 2017, the Company had no other ongoing audits in various jurisdictions and does not expect the liability for unrecognized tax benefits to significantly increase or decrease in the next twelve months. As of October 28, 2017 , the possibility of future cumulative losses still exists. Accordingly, the Company has continued to maintain a valuation allowance against its net deferred tax assets. A small deferred tax asset was allowed related to certain tax benefits. The Company has federal and state net operating loss ("NOL") carryforwards which will reduce future taxable income. Approximately $36.2 million in net federal tax benefits are available from these federal loss carryforwards. An additional $1.2 million is available in net tax credit carryforwards. The state loss carryforwards will result in net state tax benefits of approximately $2.5 million . Sections 382 and 383 of the Internal Revenue Code limit the annual utilization of certain tax attributes, including net operating loss carryforwards, incurred prior to a change in ownership. If the Company were to experience an ownership change, as defined by Sections 382 and 383, its ability to utilize its tax attributes could be substantially limited. Depending on the severity of the annual NOL limitation, the Company could permanently lose its ability to use a significant number of its accumulated NOLs. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Oct. 28, 2017 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share The following table sets forth the calculation of basic and diluted earnings per share (“EPS”) shown on the face of the accompanying consolidated statement of operations: Thirteen Weeks Ended Thirty-Nine Weeks Ended October 28, October 29, October 28, October 29, 2017 2016 2017 2016 Numerator (in thousands) : Net (loss) income attributable to Christopher & Banks Corporation $ (1,622 ) $ 3,493 $ (13,199 ) $ (559 ) Denominator (in thousands) : Weighted average common shares outstanding - basic 37,285 37,075 37,178 36,992 Dilutive shares — 78 — — Weighted average common and common equivalent shares outstanding - diluted 37,285 37,153 37,178 36,992 Net (loss) income per common share: Basic $ (0.05 ) $ 0.09 $ (0.36 ) $ (0.02 ) Diluted $ (0.05 ) $ 0.09 $ (0.36 ) $ (0.02 ) Total stock options of approximately 2.6 million and 3.2 million were excluded from the shares used in the computation of diluted earnings per share for the thirteen week periods ended October 28, 2017 and October 29, 2016 , as they were anti-dilutive. Total stock options of approximately 2.6 million and 2.8 million were excluded from the shares used in the computation of diluted earnings per share for the thirty-nine week periods ended October 28, 2017 and October 29, 2016 , respectively, as they were anti-dilutive. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Oct. 28, 2017 | |
Fair Value Disclosures [Abstract] | |
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 recorded at fair value are categorized using defined hierarchical levels directly related to the amount of subjectivity associated with the inputs to fair value measurements, as follows: Level 1 – Quoted prices in active markets for identical assets or liabilities Level 2 – Inputs other than quoted prices included in Level 1 that are either directly or indirectly observable Level 3 – Unobservable inputs that are significant to the fair value of the asset or liability. Assets that are Measured at Fair Value on a Non-recurring Basis: The following table summarizes certain information for non-financial assets for the thirty-nine weeks ended October 28, 2017 and the fiscal year ended January 28, 2017 , that are measured at fair value on a non-recurring basis in periods subsequent to an initial recognition period. The Company places amounts into the most appropriate level within the fair value hierarchy based on the inputs used to determine the fair value at the measurement date. Thirty-Nine Weeks Ended Fiscal Year Ended Long-Lived Assets Held and Used (in thousands) : October 28, 2017 January 28, 2017 Carrying value $ 163 $ 877 Fair value measured using Level 3 inputs $ — $ 91 Impairment charge $ 163 $ 786 All of the fair value measurements included in the table above were based on significant unobservable inputs (Level 3). The Company determines fair value for measuring assets on a non-recurring basis using a discounted cash flow approach as discussed in Note 1, Nature of Business and Significant Accounting Policies in our Form 10-K for the year ended January 28, 2017 . In determining future cash flows, the Company uses its best estimate of future operating results, which requires the use of significant estimates and assumptions, including estimated sales, merchandise margin and expense levels, and the selection of an appropriate discount rate; therefore, differences in the estimates or assumptions could produce significantly different results. General economic uncertainty impacting the retail industry and the continuation of recent trends in company performance makes it reasonably possible that additional long-lived asset impairments could be identified and recorded in future periods. The fair value measurement of the long-lived assets encompasses the following significant unobservable inputs: Range Unobservable Inputs Fiscal 2016 Weighted Average Cost of Capital (WACC) 16% Annual sales growth 0% to 7% n |
Legal Proceedings
Legal Proceedings | 9 Months Ended |
Oct. 28, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Legal Proceedings | Legal Proceedings The Company is subject, from time to time, to various claims, lawsuits or actions that arise in the ordinary course of business. We accrue for loss contingencies associated with outstanding litigation or legal claims for which management has determined it is probable that a loss contingency exists and the amount of the loss can be reasonably estimated. The ultimate resolution of legal matters can be inherently uncertain and for some matters, we are currently unable to predict the ultimate outcome, determine whether a liability has been incurred or make an estimate of the reasonably possible liability that could result from an unfavorable outcome because of these uncertainties. The Company does not, however, currently believe that the resolution of any pending matter will have a material adverse effect on its financial position, results of operations or liquidity. In connection with a preliminary settlement of pre-litigation employment claims reached in February 2017, we established a loss contingency of $1.475 million as of January 28, 2017. In connection therewith, on April 13, 2017, a complaint was filed in State Circuit Court in the Fifteenth Judicial Circuit in Palm Beach County, Florida (the “Florida Circuit Court”) by three named plaintiffs in a purported class action asserting claims on behalf of current and former store managers. The named plaintiffs principally alleged that they and other similarly situated store managers were improperly classified as exempt employees and thus not compensated for overtime work as required under applicable federal and state law. On May 4, 2017, the Company entered into a settlement agreement with the named plaintiffs and the proposed class. On May 8, 2017, the Florida Circuit Court issued an order approving the class settlement. As approved by the Florida Circuit Court, certain current and former store managers are eligible to receive payments in connection with time worked in prior years. The settlement of the lawsuit is not an admission by us of any wrongdoing. As part of the settlement, the Company contributed $1.475 million into a settlement fund in the second fiscal quarter of 2017. Following approval of the settlement, opt-in notices were sent to the members of the class. After the opt-in period concluded, settlement checks were mailed to the class members who opted in, which represented approximately 58% of the class members. On November 16, 2017, the Company received approximately $339,000 from the settlement administrator representing the remainder of the settlement fund after payment of all submitted claims and related settlement fund costs and expenses. |
Segment Reporting
Segment Reporting | 9 Months Ended |
Oct. 28, 2017 | |
Segment Reporting [Abstract] | |
Segment Reporting | Segment Reporting In the table below, Retail Operations includes activity generated by the Company’s retail store locations (Missy Petite Women ("MPW"), Outlets, Christopher & Banks, and C.J. Banks stores) as well as the eCommerce business. Retail Operations only includes net sales, merchandise gross margin and direct store expenses with no allocation of corporate overhead as that is the information used by the chief operating decision maker to evaluate performance and to allocate resources. The Corporate/Administrative balances include supporting administrative activity at the corporate office and distribution center facility and are included to reconcile the amounts to the condensed consolidated financial statements. Business Segment Information (in thousands) Retail Corporate/ Operations Administrative Consolidated Thirteen Weeks Ended October 28, 2017 Net sales $ 98,468 $ — $ 98,468 Depreciation and amortization 2,327 649 2,976 Impairment of long-lived assets — — — Operating income (loss) 12,008 (13,547 ) (1,539 ) Thirteen Weeks Ended October 29, 2016 Net sales $ 106,668 $ — $ 106,668 Depreciation and amortization 2,484 635 3,119 Impairment of long-lived assets — — — Operating income (loss) 16,890 (13,271 ) 3,619 Thirty-Nine Weeks Ended October 28, 2017 Net sales $ 273,642 $ — $ 273,642 Depreciation and amortization 7,278 1,964 9,242 Impairment of long-lived assets 163 — 163 Operating income (loss) 25,960 (38,916 ) (12,956 ) Total assets 100,708 28,975 129,683 Thirty-Nine Weeks Ended October 29, 2016 Net sales $ 296,625 $ — $ 296,625 Depreciation and amortization 7,231 1,885 9,116 Impairment of long-lived assets 476 — 476 Operating income (loss) 40,410 (41,505 ) (1,095 ) Total assets 107,251 45,092 152,343 |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 9 Months Ended |
Oct. 28, 2017 | |
Accounting Policies [Abstract] | |
Recently issued accounting pronouncements | Recently issued accounting pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued authoritative guidance under Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers. ASU 2014-09 supersedes existing revenue recognition requirements and provides a new comprehensive revenue recognition model that requires entities to recognize revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers, Deferral of the Effective Date , which defers the effective date of the new revenue recognition standard by one year. As a result, ASU 2014-09 is effective retrospectively for fiscal years and interim periods within those years beginning after December 15, 2017. We do not believe the adoption of this standard will have a material impact on our consolidated financial statements. The new revenue standard will require the Company to recognize gift card breakage proportional to actual gift card redemptions. We plan to adopt this ASU under the modified retrospective approach beginning in the first quarter of fiscal 2018 which includes a cumulative adjustment to retained earnings. As interpretations of the new guidance continue to evolve in the fourth quarter of fiscal 2017, we will monitor developments and will finalize conclusions on our revenue recognition policy, disclosure requirements and changes that may be necessary to our internal controls over financial reporting. In February 2016, the FASB issued ASU 2016-02, Leases , which requires that any lease arrangements longer than twelve months result in an entity recognizing an asset and liability on its balance sheet. The updated guidance is effective for interim and annual periods beginning after December 15, 2018, and early adoption is permitted. The provisions of this new guidance are to be applied using a modified retrospective approach, with elective reliefs, which requires application of the new guidance for all periods presented. The Company is currently evaluating the guidance and its impact on our consolidated financial statements and the related internal controls over financial reporting. The Company expects the adoption of this standard will have a material impact on its consolidated balance sheet for recognition of lease-related assets and liabilities. We will adopt the ASU beginning in the first quarter of fiscal 2019. In March 2016, the FASB issued ASU No. 2016-09, Compensation-Stock Compensation (Topic 718) Improvements to Employee Share-Based Payment Accounting . ASU 2016-09 addresses simplification of several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. ASU 2016-09 is effective for public companies for annual reporting periods beginning after December 15, 2016, and interim periods within those fiscal years. The adoption of ASU 2016-09 did not have a material impact on the Company's consolidated financial statements mostly due to the impact of the tax valuation allowance. We reviewed all other significant newly-issued accounting pronouncements and concluded they are either not applicable to our operations, or that no material effect is expected on our consolidated financial statements as a result of future adoption. |
Merchandise Inventories and S18
Merchandise Inventories and Sources of Supply (Tables) | 9 Months Ended |
Oct. 28, 2017 | |
Inventory Disclosure [Abstract] | |
Schedule of merchandise inventories | Merchandise inventories consisted of the following (in thousands): October 28, 2017 January 28, 2017 Merchandise - in store/eCommerce $ 44,367 $ 28,584 Merchandise - in transit 7,064 8,250 Total merchandise inventories $ 51,431 $ 36,834 |
Property, Equipment and Impro19
Property, Equipment and Improvements, Net (Tables) | 9 Months Ended |
Oct. 28, 2017 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property, equipment and improvements, net | Property, equipment and improvements, net consisted of the following (in thousands): Description October 28, 2017 January 28, 2017 Land $ 1,597 $ 1,597 Corporate office, distribution center and related building improvements 12,753 12,700 Store leasehold improvements 49,281 49,450 Store furniture and fixtures 69,405 69,598 Corporate office and distribution center furniture, fixtures and equipment 4,900 4,880 Computer and point of sale hardware and software 33,868 32,313 Construction in progress 1,795 1,321 Total property, equipment and improvements, gross 173,599 171,859 Less accumulated depreciation and amortization (123,225 ) (116,527 ) Total property, equipment and improvements, net $ 50,374 $ 55,332 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 9 Months Ended |
Oct. 28, 2017 | |
Payables and Accruals [Abstract] | |
Schedule of accrued liabilities and other current liabilities | Accrued liabilities and other current liabilities consisted of the following (in thousands): October 28, 2017 January 28, 2017 Gift card and store credit liabilities $ 4,535 $ 7,414 Accrued Friendship Rewards Program loyalty liability 3,763 3,770 Accrued income, sales and other taxes payable 2,403 1,239 Accrued occupancy-related expenses 3,217 3,614 Sales return reserve 2,055 943 eCommerce obligations 5,156 3,190 Other accrued liabilities 3,742 6,256 Total accrued liabilities and other current liabilities $ 24,871 $ 26,426 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Oct. 28, 2017 | |
Earnings Per Share [Abstract] | |
Schedule of earnings per share | The following table sets forth the calculation of basic and diluted earnings per share (“EPS”) shown on the face of the accompanying consolidated statement of operations: Thirteen Weeks Ended Thirty-Nine Weeks Ended October 28, October 29, October 28, October 29, 2017 2016 2017 2016 Numerator (in thousands) : Net (loss) income attributable to Christopher & Banks Corporation $ (1,622 ) $ 3,493 $ (13,199 ) $ (559 ) Denominator (in thousands) : Weighted average common shares outstanding - basic 37,285 37,075 37,178 36,992 Dilutive shares — 78 — — Weighted average common and common equivalent shares outstanding - diluted 37,285 37,153 37,178 36,992 Net (loss) income per common share: Basic $ (0.05 ) $ 0.09 $ (0.36 ) $ (0.02 ) Diluted $ (0.05 ) $ 0.09 $ (0.36 ) $ (0.02 ) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Oct. 28, 2017 | |
Fair Value Disclosures [Abstract] | |
Schedule of assets measured at fair value on a non-recurring basis | The following table summarizes certain information for non-financial assets for the thirty-nine weeks ended October 28, 2017 and the fiscal year ended January 28, 2017 , that are measured at fair value on a non-recurring basis in periods subsequent to an initial recognition period. The Company places amounts into the most appropriate level within the fair value hierarchy based on the inputs used to determine the fair value at the measurement date. Thirty-Nine Weeks Ended Fiscal Year Ended Long-Lived Assets Held and Used (in thousands) : October 28, 2017 January 28, 2017 Carrying value $ 163 $ 877 Fair value measured using Level 3 inputs $ — $ 91 Impairment charge $ 163 $ 786 |
Schedule of long-lived assets unobservable inputs | The fair value measurement of the long-lived assets encompasses the following significant unobservable inputs: Range Unobservable Inputs Fiscal 2016 Weighted Average Cost of Capital (WACC) 16% Annual sales growth 0% to 7% |
Segment Reporting (Tables)
Segment Reporting (Tables) | 9 Months Ended |
Oct. 28, 2017 | |
Segment Reporting [Abstract] | |
Schedule of segment reporting | Business Segment Information (in thousands) Retail Corporate/ Operations Administrative Consolidated Thirteen Weeks Ended October 28, 2017 Net sales $ 98,468 $ — $ 98,468 Depreciation and amortization 2,327 649 2,976 Impairment of long-lived assets — — — Operating income (loss) 12,008 (13,547 ) (1,539 ) Thirteen Weeks Ended October 29, 2016 Net sales $ 106,668 $ — $ 106,668 Depreciation and amortization 2,484 635 3,119 Impairment of long-lived assets — — — Operating income (loss) 16,890 (13,271 ) 3,619 Thirty-Nine Weeks Ended October 28, 2017 Net sales $ 273,642 $ — $ 273,642 Depreciation and amortization 7,278 1,964 9,242 Impairment of long-lived assets 163 — 163 Operating income (loss) 25,960 (38,916 ) (12,956 ) Total assets 100,708 28,975 129,683 Thirty-Nine Weeks Ended October 29, 2016 Net sales $ 296,625 $ — $ 296,625 Depreciation and amortization 7,231 1,885 9,116 Impairment of long-lived assets 476 — 476 Operating income (loss) 40,410 (41,505 ) (1,095 ) Total assets 107,251 45,092 152,343 |
Merchandise Inventories and S24
Merchandise Inventories and Sources of Supply (Details) - USD ($) $ in Thousands | Oct. 28, 2017 | Jan. 28, 2017 |
Inventory Disclosure [Abstract] | ||
Merchandise - in store/eCommerce | $ 44,367 | $ 28,584 |
Merchandise - in transit | 7,064 | 8,250 |
Total merchandise inventories | $ 51,431 | $ 36,834 |
Property, Equipment and Impro25
Property, Equipment and Improvements, Net (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Oct. 28, 2017 | Oct. 29, 2016 | Oct. 28, 2017 | Oct. 29, 2016 | Jan. 28, 2017 | |
Property, equipment and improvements | |||||
Total property, equipment and improvements, gross | $ 173,599,000 | $ 173,599,000 | $ 171,859,000 | ||
Less accumulated depreciation and amortization | (123,225,000) | (123,225,000) | (116,527,000) | ||
Total property, equipment and improvements, net | 50,374,000 | 50,374,000 | 55,332,000 | ||
Long-lived asset impairments | 0 | $ 0 | 163,000 | $ 476,000 | |
Land | |||||
Property, equipment and improvements | |||||
Total property, equipment and improvements, gross | 1,597,000 | 1,597,000 | 1,597,000 | ||
Corporate office, distribution center and related building improvements | |||||
Property, equipment and improvements | |||||
Total property, equipment and improvements, gross | 12,753,000 | 12,753,000 | 12,700,000 | ||
Store leasehold improvements | |||||
Property, equipment and improvements | |||||
Total property, equipment and improvements, gross | 49,281,000 | 49,281,000 | 49,450,000 | ||
Store furniture and fixtures | |||||
Property, equipment and improvements | |||||
Total property, equipment and improvements, gross | 69,405,000 | 69,405,000 | 69,598,000 | ||
Corporate office and distribution center furniture, fixtures and equipment | |||||
Property, equipment and improvements | |||||
Total property, equipment and improvements, gross | 4,900,000 | 4,900,000 | 4,880,000 | ||
Computer and point of sale hardware and software | |||||
Property, equipment and improvements | |||||
Total property, equipment and improvements, gross | 33,868,000 | 33,868,000 | 32,313,000 | ||
Construction in progress | |||||
Property, equipment and improvements | |||||
Total property, equipment and improvements, gross | $ 1,795,000 | $ 1,795,000 | $ 1,321,000 |
Accrued Liabilities (Details)
Accrued Liabilities (Details) - USD ($) $ in Thousands | Oct. 28, 2017 | Jan. 28, 2017 |
Payables and Accruals [Abstract] | ||
Gift card and store credit liabilities | $ 4,535 | $ 7,414 |
Accrued Friendship Rewards Program loyalty liability | 3,763 | 3,770 |
Accrued income, sales and other taxes payable | 2,403 | 1,239 |
Accrued occupancy-related expenses | 3,217 | 3,614 |
Sales return reserve | 2,055 | 943 |
eCommerce obligations | 5,156 | 3,190 |
Other accrued liabilities | 3,742 | 6,256 |
Total accrued liabilities and other current liabilities | $ 24,871 | $ 26,426 |
Credit Facility (Details)
Credit Facility (Details) - USD ($) | 9 Months Ended | |
Oct. 28, 2017 | Oct. 29, 2016 | |
Credit Facility | ||
Maximum availability under credit facility | $ 50,000,000 | |
Maximum availability for letters of credit | $ 10,000,000 | |
Unused commitment fee, as a percent | 0.25% | |
Minimum availability requirement, percentage of borrowing base | 10.00% | |
Minimum availability requirement, amount | $ 3,000,000 | |
Ownership interest percentage held as collateral security | 100.00% | |
Borrowings under the credit facility | $ 0 | $ 0 |
Borrowing base | 48,100,000 | |
Open on-demand letters of credit | 2,300,000 | |
Net available borrowing capacity under the credit facility | $ 40,900,000 | |
Minimum | ||
Credit Facility | ||
Minimum availability requirement, percentage of borrowing base | 10.00% | |
London Interbank Offered Rate (LIBOR) | Minimum | ||
Credit Facility | ||
Basis spread on variable rate (as a percent) | 1.50% | |
London Interbank Offered Rate (LIBOR) | Maximum | ||
Credit Facility | ||
Basis spread on variable rate (as a percent) | 1.75% | |
Prime Rate | Minimum | ||
Credit Facility | ||
Basis spread on variable rate (as a percent) | 0.50% | |
Prime Rate | Maximum | ||
Credit Facility | ||
Basis spread on variable rate (as a percent) | 0.75% |
Income Taxes (Details)
Income Taxes (Details) $ in Millions | Oct. 28, 2017USD ($) |
Operating Loss Carryforwards | |
Tax credit carryforward | $ 1.2 |
Federal | |
Operating Loss Carryforwards | |
Net tax benefit available | 36.2 |
State | |
Operating Loss Carryforwards | |
Net tax benefit available | $ 2.5 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 28, 2017 | Oct. 29, 2016 | Oct. 28, 2017 | Oct. 29, 2016 | |
Numerator (in thousands): | ||||
Net (loss) income attributable to Christopher & Banks Corporation | $ (1,622) | $ 3,493 | $ (13,199) | $ (559) |
Denominator (in thousands): | ||||
Weighted average common shares outstanding - basic (in shares) | 37,285 | 37,075 | 37,178 | 36,992 |
Dilutive shares (in shares) | 0 | 78 | 0 | 0 |
Weighted average common and common equivalent shares outstanding - diluted (in shares) | 37,285 | 37,153 | 37,178 | 36,992 |
Net (loss) income per common share: | ||||
Basic (in dollars per share) | $ (0.05) | $ 0.09 | $ (0.36) | $ (0.02) |
Diluted (in dollars per share) | $ (0.05) | $ 0.09 | $ (0.36) | $ (0.02) |
Stock options excluded from the shares used in the computation of diluted earnings per share because they were anti-dilutive (in shares) | 2,600 | 3,200 | 2,600 | 2,800 |
Fair Value Measurements-non-rec
Fair Value Measurements-non-recurring (Details) - Fair Value, Measurements, Nonrecurring - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Oct. 28, 2017 | Jan. 28, 2017 | |
Fair value measurements | ||
Carrying value | $ 163 | $ 877 |
Impairment charge | 163 | 786 |
Level 3 | ||
Fair value measurements | ||
Fair value measured using Level 3 inputs | $ 0 | $ 91 |
Fair Value Measurements-valuati
Fair Value Measurements-valuation (Details) | 12 Months Ended |
Jan. 28, 2017 | |
Unobservable Inputs [Line Items] | |
Weighted Average Cost of Capital (WACC) | 16.00% |
Minimum | |
Unobservable Inputs [Line Items] | |
Annual sales growth | 0.00% |
Maximum | |
Unobservable Inputs [Line Items] | |
Annual sales growth | 7.00% |
Legal Proceedings Legal Proceed
Legal Proceedings Legal Proceedings (Details) $ in Thousands | Nov. 16, 2017USD ($) | Apr. 13, 2017plaintiff | Jul. 29, 2017USD ($) | Jan. 28, 2017USD ($) |
Loss Contingencies [Line Items] | ||||
Loss contingency accrual | $ 1,475 | |||
Loss contingency, number of plaintiffs | plaintiff | 3 | |||
Litigation settlement fund contribution | $ 1,475 | |||
Percent of class members | 58.00% | |||
Subsequent Event | ||||
Loss Contingencies [Line Items] | ||||
Amount received from other party | $ 339 |
Segment Reporting (Details)
Segment Reporting (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Oct. 28, 2017 | Oct. 29, 2016 | Oct. 28, 2017 | Oct. 29, 2016 | Jan. 28, 2017 | |
Segment Reporting | |||||
Net sales | $ 98,468,000 | $ 106,668,000 | $ 273,642,000 | $ 296,625,000 | |
Depreciation and amortization | 2,976,000 | 3,119,000 | 9,242,000 | 9,116,000 | |
Impairment of long-lived assets | 0 | 0 | 163,000 | 476,000 | |
Operating income (loss) | (1,539,000) | 3,619,000 | (12,956,000) | (1,095,000) | |
Total assets | 129,683,000 | 152,343,000 | 129,683,000 | 152,343,000 | $ 134,620,000 |
Corporate/ Administrative | |||||
Segment Reporting | |||||
Net sales | 0 | 0 | 0 | 0 | |
Depreciation and amortization | 649,000 | 635,000 | 1,964,000 | 1,885,000 | |
Impairment of long-lived assets | 0 | 0 | 0 | 0 | |
Operating income (loss) | (13,547,000) | (13,271,000) | (38,916,000) | (41,505,000) | |
Total assets | 28,975,000 | 45,092,000 | 28,975,000 | 45,092,000 | |
Retail Operations | Operating Segments | |||||
Segment Reporting | |||||
Net sales | 98,468,000 | 106,668,000 | 273,642,000 | 296,625,000 | |
Depreciation and amortization | 2,327,000 | 2,484,000 | 7,278,000 | 7,231,000 | |
Impairment of long-lived assets | 0 | 0 | 163,000 | 476,000 | |
Operating income (loss) | 12,008,000 | 16,890,000 | 25,960,000 | 40,410,000 | |
Total assets | $ 100,708,000 | $ 107,251,000 | $ 100,708,000 | $ 107,251,000 |