Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Jan. 30, 2021 | Mar. 15, 2021 | Jul. 31, 2020 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Jan. 30, 2021 | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | FY | ||
Entity Registrant Name | Kirkland’s, Inc. | ||
Entity Central Index Key | 0001056285 | ||
Current Fiscal Year End Date | --01-30 | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Emerging Growth Company | false | ||
Entity Small Business | true | ||
Entity Shell Company | false | ||
Entity Common Stock, Shares Outstanding | 14,295,257 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Interactive Data Current | Yes | ||
Entity Current Reporting Status | Yes | ||
Entity File Number | 000-49885 | ||
Entity Tax Identification Number | 62-1287151 | ||
Entity Address, Address Line One | 5310 Maryland Way | ||
Entity Address, City or Town | Brentwood | ||
Entity Address, State or Province | TN | ||
Entity Address, Postal Zip Code | 37027 | ||
Entity Incorporation, State or Country Code | TN | ||
City Area Code | 615 | ||
Local Phone Number | 872-4800 | ||
ICFR Auditor Attestation Flag | false | ||
Title of 12(b) Security | Common Stock, no par value per share | ||
Trading Symbol | KIRK | ||
Security Exchange Name | NASDAQ | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Entity Public Float | $ 72.5 | ||
Documents Incorporated by Reference | Portions of the definitive Proxy Statement for the Annual Meeting of Shareholders of Kirkland’s, Inc. to be held June 22, 2021, are incorporated by reference into Part III of this Form 10-K. |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jan. 30, 2021 | Feb. 01, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 100,337 | $ 30,132 |
Inventories, net | 62,083 | 94,674 |
Prepaid expenses and other current assets | 8,278 | 6,705 |
Total current assets | 170,698 | 131,511 |
Property and equipment: | ||
Equipment | 20,463 | 21,390 |
Furniture and fixtures | 72,775 | 80,622 |
Leasehold improvements | 109,501 | 123,022 |
Computer software and hardware | 79,260 | 73,984 |
Projects in progress | 1,429 | 6,862 |
Property and equipment, gross | 283,428 | 305,880 |
Accumulated depreciation | (220,018) | (223,017) |
Property and equipment, net | 63,410 | 82,863 |
Operating lease right-of-use assets | 147,334 | 200,067 |
Other assets | 5,670 | 8,001 |
Total assets | 387,112 | 422,442 |
Current liabilities: | ||
Accounts payable | 55,173 | 59,513 |
Accrued expenses | 37,454 | 28,773 |
Operating lease liabilities | 44,973 | 53,154 |
Total current liabilities | 137,600 | 141,440 |
Operating lease liabilities | 148,976 | 195,736 |
Other liabilities | 5,614 | 8,311 |
Total liabilities | 292,190 | 345,487 |
Commitments and contingencies (Note 8) | ||
Shareholders’ equity: | ||
Preferred stock, no par value, 10,000,000 shares authorized; no shares issued or outstanding at January 30, 2021, and February 1, 2020 | 0 | 0 |
Common stock, no par value, 100,000,000 shares authorized; 14,292,250 and 13,955,826 shares issued and outstanding at January 30, 2021, and February 1, 2020, respectively | 174,391 | 172,885 |
Accumulated deficit | (79,469) | (95,930) |
Total shareholders’ equity | 94,922 | 76,955 |
Total liabilities and shareholders’ equity | $ 387,112 | $ 422,442 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Jan. 30, 2021 | Feb. 01, 2020 |
Statement Of Financial Position [Abstract] | ||
Preferred stock, par value | ||
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value | ||
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 14,292,250 | 13,955,826 |
Common stock, shares outstanding (in shares) | 14,292,250 | 13,955,826 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands | 12 Months Ended | ||
Jan. 30, 2021 | Feb. 01, 2020 | Feb. 02, 2019 | |
Income Statement [Abstract] | |||
Net sales | $ 543,496,000 | $ 603,880,000 | $ 647,071,000 |
Cost of sales | 370,658,000 | 423,697,000 | 390,749,000 |
Cost of sales related to merchandise purchased from related party vendor | 0 | 14,749,000 | 53,253,000 |
Cost of sales | 370,658,000 | 438,446,000 | 444,002,000 |
Gross profit | 172,838,000 | 165,434,000 | 203,069,000 |
Operating expenses: | |||
Compensation and benefits | 85,569,000 | 116,895,000 | 116,272,000 |
Other operating expenses | 63,290,000 | 75,647,000 | 74,682,000 |
Depreciation (exclusive of depreciation included in cost of sales) | 6,305,000 | 6,704,000 | 7,234,000 |
Asset impairment | 9,387,000 | 19,229,000 | 0 |
Total operating expenses | 164,551,000 | 218,475,000 | 198,188,000 |
Operating income (loss) | 8,287,000 | (53,041,000) | 4,881,000 |
Interest expense | 571,000 | 457,000 | 267,000 |
Other income | (376,000) | (911,000) | (1,197,000) |
Income (loss) before income taxes | 8,092,000 | (52,587,000) | 5,811,000 |
Income tax (benefit) expense | (8,547,000) | 678,000 | 2,031,000 |
Net income (loss) | $ 16,639,000 | $ (53,265,000) | $ 3,780,000 |
Earnings (loss) per share: | |||
Basic | $ 1.18 | $ (3.79) | $ 0.24 |
Diluted | $ 1.12 | $ (3.79) | $ 0.24 |
Weighted average shares outstanding: | |||
Basic | 14,159 | 14,070 | 15,445 |
Effect of dilutive common stock equivalents | 721 | 0 | 121 |
Diluted | 14,880 | 14,070 | 15,566 |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Revision of Prior Period, Accounting Standards Update, Adjustment | Common Stock | Accumulated Deficit | Accumulated DeficitRevision of Prior Period, Accounting Standards Update, Adjustment |
Balance, beginning of period at Feb. 03, 2018 | $ 140,761 | $ 167,501 | $ (26,740) | ||
Balance, beginning of period (in shares) at Feb. 03, 2018 | 15,977,239 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Employee stock purchases | 320 | $ 320 | |||
Employee stock purchases (in shares) | 37,128 | ||||
Exercise of stock options | 23 | $ 23 | |||
Exercise of stock options (in shares) | 177,526 | ||||
Restricted stock issued | 110,400 | ||||
Net share settlement of stock options and restricted stock | (382) | $ (382) | |||
Net share settlement of stock options and restricted stock (in shares) | (146,721) | ||||
Stock-based compensation expense | 2,015 | $ 2,015 | |||
Repurchase and retirement of common stock | $ (15,717) | (15,717) | |||
Repurchase and retirement of common stock (in shares) | (1,650,748) | (1,650,748) | |||
Net income (loss) | $ 3,780 | 3,780 | |||
Balance, end of period at Feb. 02, 2019 | 130,800 | $ 169,477 | (38,677) | ||
Balance, end of period (Cumulative Effect of Change in Accounting Principle) at Feb. 02, 2019 | $ (331) | $ (331) | |||
Balance, end of period (in shares) at Feb. 02, 2019 | 14,504,824 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Employee stock purchases | 241 | $ 241 | |||
Employee stock purchases (in shares) | 104,160 | ||||
Restricted stock issued | 197,090 | ||||
Net share settlement of stock options and restricted stock | (87) | $ (87) | |||
Net share settlement of stock options and restricted stock (in shares) | (42,973) | ||||
Stock-based compensation expense | 3,254 | $ 3,254 | |||
Repurchase and retirement of common stock | $ (3,657) | (3,657) | |||
Repurchase and retirement of common stock (in shares) | (807,275) | (807,275) | |||
Net income (loss) | $ (53,265) | (53,265) | |||
Balance, end of period at Feb. 01, 2020 | $ 76,955 | $ 172,885 | (95,930) | ||
Balance, end of period (in shares) at Feb. 01, 2020 | 13,955,826 | 13,955,826 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Employee stock purchases | $ 35 | $ 35 | |||
Employee stock purchases (in shares) | 34,999 | ||||
Exercise of stock options | 360 | $ 360 | |||
Exercise of stock options (in shares) | 52,561 | ||||
Restricted stock issued | 281,604 | ||||
Net share settlement of stock options and restricted stock | (60) | $ (60) | |||
Net share settlement of stock options and restricted stock (in shares) | (22,814) | ||||
Stock-based compensation expense | 1,171 | $ 1,171 | |||
Repurchase and retirement of common stock | $ (178) | (178) | |||
Repurchase and retirement of common stock (in shares) | (9,926) | (9,926) | |||
Net income (loss) | $ 16,639 | 16,639 | |||
Balance, end of period at Jan. 30, 2021 | $ 94,922 | $ 174,391 | $ (79,469) | ||
Balance, end of period (in shares) at Jan. 30, 2021 | 14,292,250 | 14,292,250 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | ||
Jan. 30, 2021 | Feb. 01, 2020 | Feb. 02, 2019 | |
Cash flows from operating activities: | |||
Net income (loss) | $ 16,639,000 | $ (53,265,000) | $ 3,780,000 |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||
Depreciation of property and equipment | 23,256,000 | 27,720,000 | 29,453,000 |
Amortization of debt issuance costs | 93,000 | 56,000 | 54,000 |
Asset impairment | 9,387,000 | 19,229,000 | 0 |
Cumulative effect of change in accounting principle | (331,000) | ||
Loss on disposal of property and equipment | 87,000 | 200,000 | 383,000 |
Stock-based compensation expense | 1,171,000 | 3,254,000 | 2,015,000 |
Deferred income taxes | 1,525,000 | 178,000 | 513,000 |
Changes in assets and liabilities: | |||
Inventories, net | 32,591,000 | (10,240,000) | (3,179,000) |
Prepaid expenses and other current assets | (1,654,000) | 3,851,000 | 633,000 |
Accounts payable | (2,883,000) | 18,928,000 | (4,443,000) |
Accounts payable to related party vendor | (8,166,000) | 643,000 | |
Accrued expenses | 6,803,000 | 1,666,000 | (1,592,000) |
Income taxes payable (refundable) | 1,959,000 | (704,000) | (4,448,000) |
Operating lease assets and liabilities | (8,573,000) | (10,645,000) | (1,047,000) |
Other assets and liabilities | (1,838,000) | (444,000) | |
Net cash provided by (used in) operating activities | 78,563,000 | (8,269,000) | 22,321,000 |
Cash flows from investing activities: | |||
Proceeds from sale of property and equipment | 209,000 | ||
Capital expenditures | (8,698,000) | (15,680,000) | (28,775,000) |
Net cash used in investing activities | (8,489,000) | (15,680,000) | (28,775,000) |
Cash flows from financing activities: | |||
Borrowings on revolving line of credit | 40,000,000 | 25,000,000 | |
Repayments on revolving line of credit | (40,000,000) | (25,000,000) | |
Debt issuance costs | (26,000) | (362,000) | |
Cash used in net share settlement of stock options and restricted stock | (60,000) | (87,000) | (382,000) |
Exercise of stock options | 360,000 | 23,000 | |
Employee stock purchases | 35,000 | 241,000 | 320,000 |
Repurchase and retirement of common stock | (178,000) | (3,657,000) | (15,717,000) |
Net cash provided by (used in) financing activities | 131,000 | (3,865,000) | (15,756,000) |
Cash and cash equivalents: | |||
Net increase (decrease) | 70,205,000 | (27,814,000) | (22,210,000) |
Beginning of the year | 30,132,000 | 57,946,000 | 80,156,000 |
End of the year | 100,337,000 | 30,132,000 | 57,946,000 |
Supplemental cash flow information: | |||
Interest paid | 442,000 | 377,000 | 190,000 |
Income taxes (received) paid | (11,945,000) | 1,091,000 | 5,966,000 |
Non-cash accruals for purchases of property and equipment | 396,000 | 1,853,000 | $ 1,272,000 |
Operating lease assets and liabilities recognized upon adoption of ASC 842 | 295,240,000 | ||
(Decrease) increase of operating lease liabilities from new or modified leases | $ (4,001,000) | $ 18,922,000 |
Description of Business and Sig
Description of Business and Significant Accounting Policies | 12 Months Ended |
Jan. 30, 2021 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Description of Business and Significant Accounting Policies | Note 1 — Description of Business and Significant Accounting Policies Nature of busines s — Kirkland’s, Inc. (the “Company”) is a specialty retailer of home décor in the United States operating 373 stores in 35 states as of January 30, 2021, as well as an e-commerce website, www.kirklands.com Principles of consolidation — The consolidated financial statements of the Company include the accounts of Kirkland’s, Inc. and its wholly-owned subsidiaries Kirkland’s Stores, Inc., Kirkland’s DC, Inc. and Kirkland’s Texas, LLC. Significant intercompany accounts and transactions have been eliminated. Use of estimates — The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from the estimates and assumptions used. Changes in estimates are recognized in the period when new information becomes available to management. Areas where the nature of the estimate makes it reasonably possible that actual results could materially differ from amounts estimated include, but are not limited to, impairment assessments on long-lived assets, inventory reserves, self-insurance reserves and deferred tax asset valuation allowances. Company Response to COVID-19 — The COVID-19 pandemic has created significant public health concerns as well as economic disruption, uncertainty, and volatility which has affected the Company’s business operations in fiscal 2020. The Company continues to closely monitor the impact of the COVID-19 pandemic on all facets of its business, which includes the impact on its employees, customers, suppliers, vendors, business partners and supply chain networks. In the first quarter of fiscal 2020, as a proactive and cautionary measure, the Company elected to borrow $40.0 million from its revolving credit facility, which was later repaid during the second quarter of fiscal 2020. The Company also temporarily closed all of its stores in the first quarter of fiscal 2020 and reopened stores during the second quarter of fiscal 2020. In an effort to further strengthen the Company’s financial flexibility and efficiently manage through the pandemic during the first half of the year, the Company permanently reduced store and corporate payroll, furloughed store employees, cancelled inventory purchases, reduced capital expenditures and cut advertising, outbound freight and other expenses. The Company also implemented a new curbside pickup option for customers at our stores. The CARES Act was signed into law during our first fiscal quarter. The CARES Act, among other things, includes provisions relating to refundable payroll tax credits, deferral of employer side social security payments, net operating loss carryback periods, alternative minimum tax credit refunds, modifications to the net interest deduction limitations and technical corrections to tax depreciation methods for qualified improvement property. The CARES Act allowed the Company’s net operating losses incurred in 2019 to be carried back to preceding taxable years to generate a refund of previously paid income taxes of approximately $12.3 million. The Company has a $1.4 million employer tax credit receivable from the IRS, and the Company has deferred $3.3 million in employer payroll taxes. All of the Company’s stores and distribution centers are currently open with enhanced safety measures. The health and safety of the Company’s employees and customers are the primary concerns of the Company’s management team. The Company has taken and continues to take numerous actions to promote health and safety, including, providing personal protective equipment to its employees, establishing mask protocols in its facilities, rolling out additional functionality to support contactless shopping experiences, implementing additional cleaning and sanitation procedures and promoting social distancing. Basis of presentation — In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, “Leases (Topic 842)”, which supersedes the existing guidance for lease accounting, Leases (Topic 840) (“ASU 2016-02”). At the beginning of fiscal 2019, the Company adopted the new lease accounting guidance. The adoption of the new lease accounting guidance had a material impact to the Company’s consolidated balance sheets and related disclosures, and resulted in the recording of right-of-use assets and lease liabilities of approximately $ 295.2 million as of the date of adoption. This guidance was applied using the optional transition method, which allowed the Company to not recast comparative financial information but rather recognize a cumulative-effect adjustment to retained earnings as of the effective date in the period of adoption. An adjustment of $ 331,000 was made to retained earnings as a result of right-of-use assets that were impaired upon the adoption of this guidance. See Note 11 — Impairment for further discussion. The standard did not materially impact the Company’s consolidated statements of operations or cash flows. For additional information, including the required disclosures, related to the impact of adopting this standard, see Note 5 — Leases . Fiscal year — The Company’s fiscal year is comprised of the 52 or 53-week period ending on the Saturday closest to January 31. Accordingly, fiscal 2020, 2019 and 2018 represented the 52 weeks ended on January 30, 2021, February 1, 2020 and February 2, 2019, respectively. Reclassification — Deferred income taxes in the fiscal 2019 asset section of the consolidated balance sheet has been reclassified to be included in other assets to conform to the fiscal 2020 presentation. This reclassification had no effect on total assets. Cash equivalents — Cash and cash equivalents consist of cash on deposit in banks and payments due from banks for customer credit cards, as they generally settle within 24-48 hours. Inventory — The Company’s inventory is stated at the lower of cost or net realizable value, net of reserves and allowances, with cost determined using the average cost method, with average cost approximating current cost. Inventory cost consists of the direct cost of merchandise including freight. The carrying value of our inventory is affected by reserves for shrinkage, damages and obsolescence. The Company incurs various types of warehousing, transportation and delivery costs in connection with inventory purchases and distribution. Such costs are included as a component of the overall cost of inventories and recognized as a component of cost of sales as the related inventory is sold. As of January 30, 2021 and February 1, 2020, there were $4.0 million and $5.9 million, respectively, of distribution center costs included in inventory. The Company estimates as a percentage of sales the amount of inventory shrinkage that has occurred between the most recently completed store physical count and the end of the financial reporting period based upon historical physical inventory count results. The Company adjusts these estimates based on changes, if any, in the trends yielded by its physical inventory counts, which occur throughout the fiscal year. The reserve for estimated inventory shrinkage was $1.7 million and $1.3 million as of January 30, 2021 and February 1, 2020, respectively. The Company estimates a reserve for unknown damaged inventory based on historical damage data. Management adjusts these estimates based on any changes in actual damage results. The reserve for estimated damaged inventory was approximately $547,000 and $1,059,000 as of January 30, 2021 and February 1, 2020, respectively. The Company also evaluates the cost of inventory by category and class of merchandise in relation to the estimated sales price. This evaluation is performed to ensure that inventory is not carried at a value in excess of the amount expected to be realized upon the sale of the merchandise. As of January 30, 2021 and February 1, 2020, our reserve for excess and obsolescence was approximately $263,000 and $745,000, respectively. The Company receives various payments and allowances from vendors, including rebates and other credits. The amounts received are subject to the terms of vendor agreements, which generally do not state an expiration date, but are subject to ongoing negotiations that may be impacted in the future based on changes in market conditions and changes in the profitability, quality or sell-through of the related merchandise. For all such vendor allowances, the Company records the vendor funds as a reduction of inventories. As the related inventory is sold, such allowances and credits are recognized as a reduction to cost of sales. Prepaid expenses and other current assets — The Company recognizes assets for expenses paid but not yet incurred, as well as other items such as supplies inventory and miscellaneous receivables. As of January 30, 2021 and February 1, 2020, prepaid expenses and other current assets included receivables of approximately $3.3 million and $1.0 million, respectively, mainly related to payroll tax refunds allowed for under the CARES Act in the current year and various miscellaneous receivables in the prior year. Property and equipment — Property and equipment are stated at cost less accumulated depreciation. Depreciation is computed on a straight-line basis over the estimated useful lives of the respective assets. Furniture, fixtures and equipment are generally depreciated over five years. Leasehold improvements are amortized over the shorter of the useful life of the asset or the expected lease term, typically ranging from five to 10 years. Maintenance and repairs are expensed as incurred, and improvements are capitalized. Gains or losses on the disposition of fixed assets are recorded upon disposal of the related asset. Cost of internal use software — The Company capitalizes the cost of computer software developed or obtained for internal use. Capitalized computer software costs consist primarily of payroll-related and consulting costs incurred during the application development stage. The Company expenses costs related to preliminary project assessments, research and development, re-engineering, training and application maintenance as they are incurred. Capitalized software costs are amortized on a straight-line basis over an estimated life of three to 10 years. For fiscal years 2020, 2019 and 2018, the Company recorded approximately $6.9 million, $7.0 million and $7.4 million, respectively, for depreciation of capitalized software. The net book value of these assets totaled $20.0 million and $17.0 million at the end of fiscal years 2020 and 2019, respectively. Property and equipment included capitalized computer software currently under development of $1.0 million and $6.3 million as of January 30, 2021 and February 1, 2020, respectively. Asset retirement obligations — The Company recognizes a liability for the fair value of required asset retirement obligations (“ARO”) when such obligations are incurred. The Company’s AROs are primarily associated with leasehold improvements, which, at the end of a lease, the Company is contractually obligated to remove in order to comply with the lease agreement. At the inception of a lease with such conditions, the Company records an ARO liability and a corresponding capital asset in an amount equal to the estimated fair value of the obligation. The liability is estimated based on various assumptions requiring management’s judgment and is accreted to its projected future value over time. The capitalized asset is depreciated using the convention for depreciation of leasehold improvement assets. Upon satisfaction of the ARO conditions, any difference between the recorded ARO liability and the actual retirement costs incurred is recognized as an operating gain or loss in the consolidated statements of operations. As of January 30, 2021 and February 1, 2020, the liability for asset retirement obligations was approximately $755,000 and $822,000, respectively and the asset was approximately $175,000 and $213,000, respectively. Leases — Operating lease assets and liabilities are recognized at the lease commencement date. Operating lease liabilities represent the present value of future lease payments. Operating lease assets represent the Company’s right to use an underlying asset and are based upon the operating lease liabilities adjusted for prepayments or accrued lease payments, initial direct costs, lease incentives, and impairment, if any, of operating lease assets. To determine the present value of lease payments not yet paid at lease commencement or modification, the Company uses the collateralized incremental borrowing rate corresponding to the reasonably certain lease term. The Company estimates its collateralized incremental borrowing rate based upon a synthetic credit rating and yield curve analysis. See Note 5 — Leases for further discussion. Impairment of long-lived assets — The Company evaluates the recoverability of the carrying amounts of long-lived assets, including lease right-of-use assets, when events or changes in circumstances dictate that their carrying values may not be recoverable. This review includes the evaluation of individual under-performing retail stores and assessing the recoverability of the carrying value of the assets related to the stores. Future cash flows are projected for the remaining lease life. If the estimated future cash flows are less than the carrying value of the assets, the Company records an impairment charge equal to the difference between the assets’ fair value and carrying value. The fair value is estimated using a discounted cash flow approach considering such factors as future sales levels, gross margins, changes in rent and other expenses as well as the overall operating environment specific to that store. The amount of the impairment charge is allocated proportionately to all assets in the asset group with no asset written down below its individual fair value. In fiscal 2019, the Company shifted to estimating the fair value of long-lived fixed assets based on orderly liquidation value as the Company believes this method better reflects the fair value of the assets. The Company previously used the age-life method for calculating the fair value of long-lived assets. Under the age-life method, the replacement cost of an asset is estimated and reduced by depreciation based on the effective age of the asset and its expected useful life. The age-life method takes into consideration the fact that we will continue to use these assets based on a presumed investment decision where the expected cash flows from operating the store are greater than the expected cash flows that result from not operating the store. See Note 1 1 — Impairment for further discussion. Insurance reserves — Workers’ compensation, general liability and employee medical insurance programs are predominately self-insured. It is the Company’s policy to record a self-insurance liability using estimates of claims incurred but not yet reported or paid, based on historical claims experience and actuarial methods. Actual results can vary from estimates for many reasons, including, changes in our assumptions about health care costs, the severity of accidents, the average size of claims and other factors. The Company monitors its claims experience in light of these factors and revises its estimates of insurance reserves accordingly. The level of insurance reserves may increase or decrease as a result of these changing circumstances or trends. As of January 30, 2021 and February 1, 2020, the Company’s net self-insurance reserve estimates related to workers’ compensation and general liability were $5.3 million and $5.9 million, respectively. As of January 30, 2021 and February 1, 2020, the Company’s net self-insurance reserve estimates related to employee medical insurance were approximately $265,000 and $513,000, respectively. Net sales — Net sales includes the sale of merchandise, net of returns, shipping revenue, gift card breakage revenue and revenue earned from our private label credit card program and excludes sales taxes. Sales Returns Reserve — The Company reduces net sales and estimates a liability for sales returns based on historical return trends, and the Company believes that its estimate for sales returns is an accurate reflection of future returns associated with past sales. However, as with any estimate, refund activity may vary from estimated amounts. The Company had a liability of approximately $2.0 million and $1.6 million reserved for sales returns at January 30, 2021 and February 1, 2020, respectively, included in accrued expenses on the consolidated balance sheets. The related sales return reserve product recovery asset included in prepaid expenses and other current assets on the consolidated balance sheets was approximately $850,000 and $695,000 at January 30, 2021 and February 1, 2020, respectively. Deferred e-commerce revenue — The Company recognizes revenue at the time of sale of merchandise to customers in its stores. E-commerce revenue is recorded at the estimated time of delivery to the customer. If the Company receives payment before completion of its customer obligations, the revenue is deferred until the customer takes possession of the merchandise and the sale is complete. Deferred revenue related to e-commerce orders that have been shipped but not estimated to be received by customers included in accrued expenses on the consolidated balance sheets was approximately $1,165,000 and $656,000 at January 30, 2021 and February 1, 2020, respectively. The related contract assets, reflected in inventory on the consolidated balance sheets, totaled approximately $530,000 and $319,000 at January 30, 2021 and February 1, 2020, respectively. Gift cards — Gift card sales are recognized as revenue when tendered for payment. While the Company honors all gift cards presented for payment, the Company determines the likelihood of redemption to be remote for certain gift card balances due to long periods of inactivity. The Company uses the redemption recognition method to account for breakage for unused gift card amounts where breakage is recognized as gift cards are redeemed for the purchase of goods based upon a historical breakage rate. In these circumstances, to the extent the Company determines there is no requirement for remitting unredeemed card balances to government agencies under unclaimed property laws, such amounts are recognized in the consolidated statements of operations as a component of net sales. The table below sets forth selected gift card liability information (in thousands) for the periods indicated: January 30, 2021 February 1, 2020 February 2, 2019 Gift card liability, net of estimated breakage (included in accrued expenses) $ 13,408 $ 13,128 $ 13,032 The table below sets forth selected gift card breakage and redemption information (in thousands) for the periods indicated: 52 Weeks Ended January 30, 2021 52 Weeks Ended February 1, 2020 52 Weeks Ended February 2, 2019 Gift card breakage revenue (included in net sales) $ 1,172 $ 1,084 $ 1,102 Gift card redemptions recognized in the current period related to amounts included in the gift card contract liability balance as of the prior period 5,329 6,593 6,194 Customer loyalty program — The Company has established a loyalty program called the K-club, whereby members receive access to coupons, birthday rewards, monthly sweepstakes, sneak peeks, exclusive deals and more. During fiscal 2018, the Company eliminated the part of the program whereby customers earned loyalty points, which became certificates that could be redeemed on future purchases. In fiscal 2020, the Company redesigned the loyalty program to again offer points to members on qualifying purchases that are converted into certificates that may be redeemed on future purchases. This customer option is a material right and, accordingly, represents a separate performance obligation to the customer under ASC 606 Revenue from Contracts with Customers. The allocated consideration for the points earned by loyalty program members is deferred based on the standalone selling price of the points and recorded within accrued expenses on the consolidated balance sheet. The measurement of standalone selling prices takes into consideration the estimated points that will be converted to certificates and certificates that are expected to be redeemed, based on historical redemption patterns. This measurement is applied to the Company’s portfolio of performance obligations for points earned, as all obligations have similar economic characteristics. The Company believes the impact to its consolidated financial statements would not be materially different if this measurement was applied to each individual performance obligation. Revenue is recognized for these performance obligations at a point in time when certificates are redeemed by the customer. These obligations generally relate to contracts with terms less than one year, as points expire on a rolling 12 months and certificates generally expire within two months from issuance. The related loyalty program deferred revenue included in accrued expenses on the consolidated balance sheets was approximately $922,000 at January 30, 2021 compared to none at February 1, 2020. Private Label Credit Card — The Company has a private label credit card program for its customers that was amended on November 18, 2019 to extend the term of the arrangement through December 31, 2024. Each private label credit card bears the logo for the Kirkland’s brand and can only be used at the Company’s store locations and e-commerce channel. The card program is operated and managed by a third-party bank, Wells Fargo, that assumes all of the losses associated with non-payment by the private label card holders and a portion of any fraudulent usage of the accounts. Pursuant to the private-label credit card program, the Company receives cash incentives in exchange for promised services, such as licensing our brand names and marketing the credit card program to customers. The Company can receive incentive payments for the achievement of certain private label credit card volumes and is also reimbursed for marketing and other programs associated with the private label credit card. Funds received related the Company’s private label credit card program are recorded as net sales in the consolidated statements of operations. Services promised under these agreements are separate performance obligations. Revenue is recognized as we fulfill the Company’s performance obligations throughout the contract term. Cost of sales — Cost of sales includes costs of product purchased from vendors, including inbound freight, receiving costs, inspection costs, warehousing costs, outbound freight, inventory damage and shrinkage, payroll and overhead associated with our distribution facility and its network, store occupancy costs and depreciation of leasehold improvements, equipment, and other property in our stores and distribution centers. Distribution facility costs, excluding depreciation, included in cost of sales were approximately $24.7 million, $24.6 million and $22.6 million for fiscal 2020, 2019, and 2018, respectively. Compensation and benefits — Compensation and benefits includes all store and corporate office salaries and wages and incentive pay as well as stock compensation, employee health benefits, 401(k) plan benefits, social security and unemployment taxes. Stock-based compensation — Stock-based compensation includes expenses associated with stock option grants, restricted stock grants, and other transactions under the Company’s stock plans. The Company recognizes compensation expense for its stock-based payments based on the fair value of the awards. The expense is recorded on a straight-line basis over the vesting period within compensation and benefits in the consolidated statements of operations. See Note 6 — Stock-Based Compensation for further discussion. Other operating expenses — Other operating expenses consist of such items as advertising, credit card processing costs, bank fees, utilities, professional fees, software maintenance costs, supplies and postage, workers’ compensation and general liability insurance, trash removal, maintenance and repairs, travel and various other store and corporate expenses. Store pre-opening expenses — Store pre-opening expenses, which consist primarily of occupancy, payroll and supplies costs, are expensed as incurred and are included in other operating expenses. Advertising expenses — Advertising costs are expensed in the period in which the related activity first takes place. These expenses include costs associated with specific marketing campaigns, direct mail, email communications, paid search, digital advertising, social media, public relations and in-store signage. Total advertising expense was $14.3 million, $15.0 million and $12.8 million for fiscal 2020, 2019 and 2018, respectively. Prepaid advertising costs were approximately $294,000 and $273,000 as of January 30, 2021 and February 1, 2020, respectively. Income taxes — Deferred tax assets and liabilities are recognized based on the differences between the financial statement and the tax law treatment of certain items. Realization of certain components of deferred tax assets is dependent upon the occurrence of future events. The Company records valuation allowances to reduce its deferred tax assets to the amount it believes is more likely than not to be realized. These valuation allowances can be impacted by changes in tax laws, changes to statutory tax rates, and future taxable income levels and are based on the Company’s judgment, estimates and assumptions regarding those future events. In the event the Company was to determine that it would not be able to realize all or a portion of the net deferred tax assets in the future, the Company would increase the valuation allowance through a charge to income tax expense in the period that such determination is made. Conversely, if the Company was to determine that it would be able to realize its deferred tax assets in the future, in excess of the net carrying amounts, the Company would decrease the recorded valuation allowance through a decrease to income tax expense in the period that such determination is made. The Company established a valuation allowance against deferred tax assets in fiscal 2019, as the Company is in a three-year cumulative pre-tax loss position. The Company provides for uncertain tax positions and the related interest and penalties, if any, based upon management’s assessment of whether a tax benefit is more likely than not to be sustained upon examination by tax authorities. The Company recognizes interest and penalties accrued related to unrecognized tax benefits in income tax expense. To the extent the Company prevails in matters for which a liability for an unrecognized tax benefit is established or is required to pay amounts in excess of the liability, the Company’s effective tax rate in a given financial statement period may be affected. The Company’s income tax returns are subject to audit by local, state and federal tax authorities, and the Company is typically engaged in various tax examinations at any given time. Tax contingencies often arise due to uncertainty or differing interpretations of the application of tax rules throughout the various jurisdictions in which the Company operates. The contingencies are influenced by items such as tax audits, changes in tax laws, litigation, appeals and experience with previous similar tax positions. The Company regularly reviews its tax reserves for these items and assesses the adequacy of the amount recorded. The Company evaluates potential exposures associated with its various tax filings by estimating a liability for uncertain tax positions based on a two-step process. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step requires estimation and measurement of the tax benefit as the largest amount that is more than 50% likely to be recognized upon settlement. See Note 3 — Income Taxes for further discussion. Sales and use taxes — Governmental authorities assess sales and use taxes on the sale and purchase of goods and services. The Company excludes taxes collected from customers in its reported net sales results. Such amounts are reflected as accrued expenses until remitted to the taxing authorities. Concentrations of risk — The Company has risk of geographic concentration with respect to the sourcing of its inventory purchases. Approximately 76% of the Company’s inventory purchases in fiscal 2020 were from China. The Company also has vendor concentration risk as one vendor, that was formally a related-party, accounted for 10.9%, 17.4%, and 20.7% of purchases in fiscal 2020, 2019 and 2018, respectively. See Note 9 — Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash and cash equivalents. The Company’s cash balances are primarily on deposit at high credit quality financial institutions. Fair value of financial instruments — Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants on the measurement date. The Company uses a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. The carrying amounts of cash and cash equivalents, accounts receivable, other current assets and accounts payable approximate fair value because of their short maturities. The Company maintained The Executive Non-Qualified Excess Plan (the “Deferred Compensation Plan”) as discussed further in Note 7 — The Company measures certain assets at fair value on a non-recurring basis, including the evaluation of long-lived assets for impairment using Company-specific assumptions which would fall within Level 3 of the fair value hierarchy. The Company uses market participant rents to calculate the fair value of right-of-use assets and discounted future cash flows of the asset or asset group using a discount rate that approximates the cost of capital of a market participant to quantify fair value for other long-lived assets. See Note 11 — Earnings (loss) per share — Basic earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of shares outstanding during each period presented. Diluted earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of shares outstanding plus the dilutive effect of stock equivalents outstanding during the applicable periods using the treasury stock method. Diluted earnings (loss) per share reflects the potential dilution that could occur if options to purchase stock were exercised into common stock and if outstanding grants of restricted stock were vested. Stock options and restricted stock units that were not included in the computation of diluted earnings per share, because to do so would have been antidilutive, were approximately 201,000 shares, 1,521,000 shares and 923,000 shares for fiscal 2020, 2019 and 2018, respectively. Comprehensive income (loss) — Comprehensive income (loss) does not differ from the consolidated net income (loss) presented in the consolidated statements of operations. Operating segments — The Company is a specialty retailer of home décor that offers its products in its stores and on its website. The Company has determined that each of its stores and its e-commerce operations is an operating segment. The operating performance of all stores and e-commerce has been aggregated into one reportable segment. The Company’s operating segments are aggregated for financial reporting purposes because they are similar in each of the following areas: econ |
Accrued Expenses
Accrued Expenses | 12 Months Ended |
Jan. 30, 2021 | |
Payables And Accruals [Abstract] | |
Accrued Expenses | Note 2 — Accrued Expenses Accrued expenses are comprised of the following (in thousands): January 30, 2021 February 1, 2020 Gift cards $ 13,408 $ 13,128 Salaries and wages 9,298 6,647 Sales taxes 1,863 1,816 Payroll taxes 3,515 400 Workers’ compensation and general liability reserves 2,321 2,435 Sales returns reserve 2,015 1,554 Income taxes payable 1,911 32 Deferred e-commerce revenue 1,165 656 Loyalty program deferred revenue 922 — Other 1,036 2,105 $ 37,454 $ 28,773 |
Income Taxes
Income Taxes | 12 Months Ended |
Jan. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 3 — Income Taxes The Company’s income tax (benefit) expense is computed based on the federal statutory rates and the state statutory rates, net of related federal benefit. The Company’s provision for income taxes consists of the following (in thousands): 52 Weeks Ended January 30, 2021 52 Weeks Ended February 1, 2020 52 Weeks Ended February 2, 2019 Current tax (benefit) expense: Federal $ (10,124 ) $ (225 ) $ 708 State 52 612 810 Deferred tax expense (benefit): Federal — 362 455 State 1,525 (71 ) 58 $ (8,547 ) $ 678 $ 2,031 Income tax (benefit) expense differs from the amount computed by applying the statutory federal income tax rate to pre-tax income (loss). A reconciliation of income tax (benefit) expense at the statutory federal income tax rate to the amount provided is as follows (in thousands): 52 Weeks Ended January 30, 2021 52 Weeks Ended February 1, 2020 52 Weeks Ended February 2, 2019 Tax at federal statutory rate $ 1,699 $ (11,043 ) $ 1,220 State income taxes, net of federal benefit 338 (1,456 ) 651 Tax credits (90 ) (192 ) (437 ) Enactment of tax legislation (12,276 ) — — Executive compensation 177 — 35 Stock based compensation programs 274 1,162 545 Valuation allowance 1,292 12,035 — Other 39 172 17 Income tax (benefit) expense $ (8,547 ) $ 678 $ 2,031 Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes and are included as part of other assets on the consolidated balance sheets . Significant components of the Company’s deferred tax assets and liabilities are as follows (in thousands): January 30, 2021 February 1, 2020 Deferred tax assets: Accruals $ 3,147 $ 2,622 Inventory valuation 448 739 State tax credit carryforwards 148 148 Federal and state net operating loss carryforwards 1,111 7,462 Impairment 2,410 4,809 Operating lease liabilities 48,808 64,819 Other 2,366 2,505 Total deferred tax assets 58,438 83,104 Valuation allowance for deferred tax assets (6,033 ) (12,145 ) Net deferred tax assets 52,405 70,959 Deferred tax liabilities: Depreciation (12,556 ) (16,834 ) Operating lease right-of-use assets (39,126 ) (51,974 ) Prepaid assets (723 ) (626 ) Total deferred tax liabilities (52,405 ) (69,434 ) Net deferred tax assets $ — $ 1,525 On March 27, 2020, the CARES Act was enacted in response to the COVID-19 pandemic. The CARES Act, among other things, permits net operating loss carry backs to offset 100% of taxable income for taxable years beginning before 2021. The Company elected to carryback its 2019 net operating loss to offset the Company’s previous taxable income, thus generating a refund of $12.3 million. As of January 30, 2021, the Company has $21.3 million of state net operating loss carry-forwards available to offset future taxable income. State net operating loss carry-forwards expire in years 2035 through 2040. As of January 30, 2021, the Company has state tax credit carryforwards of approximately $187,000 that expire in years 2023 through 2025. Future utilization of the deferred tax assets is evaluated by the Company and any valuation allowance is adjusted accordingly. For fiscal 2019, the Company established a valuation allowance against its deferred tax assets due to uncertainty regarding their realization, and in fiscal 2020 the Company established an additional valuation allowance against state net operating loss carry forwards. Accordingly, the Company has established a valuation allowance of $6.0 million and $12.1 million with respect to the deferred tax assets as of January 30, 2021 and February 1, 2020, respectively. Adjustments could be required in the future if the Company estimates that the amount of deferred tax assets to be realized is more or less than the net amount the Company has recorded. Any decrease in the valuation allowance could have the effect of increasing or decreasing the income tax provision based on the nature of the deferred tax asset deemed realizable in the period in which such a determination is made. The Company and one or more of its subsidiaries file income tax returns in the U.S. federal jurisdiction and various state and local jurisdictions. The Company is no longer subject to U.S. federal income tax examinations by authorities for years prior to 2017. With few exceptions, the Company is no longer subject to state and local income tax examinations for years prior to 2015. The Company is not currently engaged in any U.S. federal, state or local income tax examinations. The Company had no unrecognized tax benefits as of January 30, 2021 and February 1, 2020. The Company accrues interest on unrecognized tax benefits as a component of income tax expense. Penalties, if incurred, would be recognized as a component of income tax expense. The Company had no amounts accrued for the payment of interest and penalties associated with unrecognized tax benefits as of January 31, 2021 and February 1, 2020. |
Senior Credit Facility
Senior Credit Facility | 12 Months Ended |
Jan. 30, 2021 | |
Debt Disclosure [Abstract] | |
Senior Credit Facility | Note 4 — Senior Credit Facility On December 6, 2019, the Company entered into a Second Amended and Restated Credit Agreement (the “2019 Credit Agreement”) with Bank of America, N.A. as administrative agent and collateral agent, and lender. The 2019 Credit Agreement replaced the Company’s Amended and Restated Credit Agreement dated as of August 19, 2011, as amended by that Joinder and First Amendment to Amended and Restated Credit Agreement dated as of February 26, 2016 (the “2016 Credit Agreement”) and, together with the 2019 Credit Agreement (the “Credit Agreements”). Like the 2016 Credit Agreement, the 2019 Credit Agreement contains a $75 million senior secured revolving credit facility, a swingline availability of $10 million, and a $25 million incremental accordion feature. The 2019 Credit Agreement contains substantially similar terms and conditions as the 2016 Credit Agreement, and extends its maturity date to December 2024. The 2016 Credit Agreement was scheduled to expire in February 2021. Advances under the Credit Agreements bear interest at an annual rate equal to LIBOR plus a margin ranging from 125 to 175 basis points with no LIBOR floor, and the fee paid to the lender on the unused portion of the credit facility is 25 basis points per annum. Borrowings under the Credit Agreements are subject to certain conditions and contain customary events of default, including, without limitation, failure to make payments, a cross-default to certain other debt, breaches of covenants, breaches of representations and warranties, a change in control, certain monetary judgments and bankruptcy and ERISA events. Upon any such event of default, the principal amount of any unpaid loans and all other obligations under the Credit Agreements may be declared immediately due and payable. The maximum availability under the Credit Agreements is limited by a borrowing base formula, which consists of a percentage of eligible inventory and eligible credit card receivables, less reserves. The Company is subject to a Second Amended and Restated Security Agreement (“Security Agreement”) with its lender. Pursuant to the Security Agreement, the Company pledged and granted to the administrative agent, for the benefit of itself and the secured parties specified therein, a lien on and security interest in all of the rights, title and interest in substantially all of the Company’s assets to secure the payment and performance of the obligations under the Credit Agreements. As of January 30, 2021, the Company was in compliance with the covenants in the 2019 Credit Agreement. Under the 2019 Agreement, there were no outstanding borrowings and $1.75 million in letters of credit outstanding, with approximately $39.5 million available for borrowing as of January 30, 2021. |
Leases
Leases | 12 Months Ended |
Jan. 30, 2021 | |
Leases [Abstract] | |
Leases | Note 5 — Leases The Company leases retail store facilities, corporate office space, warehouse facilities and certain vehicles and equipment under operating leases with terms generally ranging up to 10 years and expiring at various dates through 2030. Most of the retail store agreements include an initial term with renewal options and provide for minimum fixed rental payments. The Company does not include lease renewal options in the lease term for calculations of its right-of-use assets and liabilities until it is reasonably certain that the Company plans to renew these leases. A few retail store lease agreements have only variable lease payments based on a percentage of sales, while other store leases contain contingent rentals based on sales performance in excess of specified minimums in addition to minimum fixed rentals. The majority of the Company’s leases have monthly fixed rent with additional costs that are not components of the lease (e.g., real estate taxes and insurance costs) and non-lease components (e.g., common area maintenance) either of which can be variable or fixed. These additional components are excluded from the calculation of the lease liability and right-of-use asset. The Company’s leases do not provide an implicit rate, so the incremental borrowing rate, based on the information available at commencement or modification date, is used in determining the present value of lease payments. For operating leases that commenced prior to the date of adoption of the new lease accounting guidance, the Company used the incremental borrowing rate that corresponded to the remaining lease term as of the date of adoption. The Company's classification of lease cost on the Company's condensed consolidated statements of operations is as follows (in thousands): 52 Week Period Ended (1) 52 Week Period Ended (1) January 30, 2021 February 1, 2020 Cost of sales (2) Operating lease cost $ 43,753 $ 53,382 Short-term lease cost 755 1,469 Variable lease cost 1,554 1,329 Total lease cost in cost of sales 46,062 56,180 Other operating expenses Operating lease cost 1,862 2,824 Short-term lease cost 60 382 Total lease cost in other operating expenses 1,922 3,206 Total lease cost $ 47,984 $ 59,386 (1) Total lease cost excludes expense for non-lease components including common area maintenance and excludes costs that are not a component of the lease including real estate taxes, insurance, sales taxes and utilities for the Company’s leases. (2) Cost of sales includes all distribution center lease costs and store occupancy-related lease costs. As of January 30, 2021, future minimum payments, by year and in the aggregate, under all operating leases with initial terms of one year or more consist of the following (in thousands): Operating Leases 2021 $ 60,159 2022 48,140 2023 37,330 2024 30,395 2025 23,726 Thereafter 32,230 Total lease payments (1) 231,980 Less: interest (38,031 ) Present value of lease liabilities $ 193,949 (1) Operating lease payments exclude $485,000 of legally binding minimum lease payments for a lease signed but not yet commenced for one new store. The Company’s lease term and discount rate is as follows: January 30, 2021 Weighted-average remaining lease term (years) 5.2 Weighted-average discount rate 7.4 % Cash paid for amounts included in the measurement of lease liabilities is as follows (in thousands): 52 Weeks Ended January 30, 2021 52 Weeks Ended February 1, 2020 Operating cash flows from operating leases $ 57,310 $ 64,654 |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Jan. 30, 2021 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock-Based Compensation | Note 6 — Stock-Based Compensation Stock-based compensation — Stock-based compensation includes stock option grants, restricted stock unit grants and other transactions under the Company’s equity plans. Total stock-based compensation expense is included as a component of compensation and benefits on the consolidated statements of operations and was approximately $ 1.2 million, $ 3.3 million and $ 2.0 million for fiscal years 2020 , 2019 and 2018 , respectively. On June 4, 2013, the Company adopted the Kirkland’s, Inc. Amended and Restated 2002 Equity Incentive Plan (the “2002 Plan”), replacing the plan adopted in July 2002. The 2002 Plan provides for the award of restricted stock, restricted stock units (“RSUs”), incentive stock options, non-qualified stock options and stock appreciation rights with respect to shares of common stock to employees, directors, consultants and other individuals who perform services for the Company. The 2002 Plan is authorized to provide awards for up to a maximum of 4,500,000 shares of common stock. As of January 30, 2021, options to purchase 173,518 shares of common stock were outstanding under the 2002 Plan at exercise prices ranging from $1.65 to $25.52 per share. As of January 30, 2021, there were 1,169,403 RSUs outstanding under the 2002 Plan with fair value grant prices ranging from $0.82 to $12.54 per share. Shares reserved for future stock-based grants under the 2002 Plan was 1,280,595 at January 30, 2021. Stock options — The Company allows for the settlement of vested stock options on a net share basis (“net share settled stock options”) or on a gross basis with the holder providing cash to cover the option exercise price and the minimum statutory tax withholdings. With net share settled stock options, the employee does not surrender any cash or shares upon exercise. Rather, the Company withholds the number of shares to cover the option exercise price and the minimum statutory tax withholding obligations from the shares that would otherwise be issued upon exercise. The settlement of vested stock options on a net share basis results in fewer shares issued by the Company. Options issued to employees under the 2002 Plan have maximum contractual terms of 10 years and generally vest ratably over 4 years. Stock option activity for the fiscal year ended January 30, 2021 was as follows: Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value (in thousands) Balance at February 1, 2020 381,513 $ 11.76 Options exercised (52,561 ) 8.55 Options forfeited (131,684 ) 14.23 Options expired (23,750 ) 18.14 Balance at January 30, 2021 173,518 $ 9.99 6.0 $ 2,686 Options Exercisable As of: January 30, 2021 83,843 $ 16.11 3.6 $ 785 The aggregate intrinsic values in the table above represent the total difference between the Company’s closing stock price at year-end and the option exercise price, multiplied by the number of in-the-money options at each year-end. As of January 30, 2021, there were 152,018 outstanding in-the-money options. The fair value of each option is recorded as compensation expense on a straight-line basis over the applicable vesting period. At January 30, 2021, unrecognized stock compensation expense related to the unvested portion of outstanding stock options was approximately $141,000, which is expected to be recognized over a weighted average period of 2.0 years. In fiscal 2019, the company entered into stock option cancellation agreements with certain members of its management team pursuant to which such individuals surrendered and canceled certain previously granted stock options in order to make additional shares available under the Company’s 2002 Plan for future equity awards. The surrender and cancellation of the stock options was a settlement for no consideration, and the Company recorded the previously unrecognized compensation cost related to the canceled stock options of approximately $861,000 during fiscal 2019. The canceled options that were surrendered had an exercise price that ranged from $7.14 to $25.52. Other information related to option activity during fiscal 2020, 2019 and 2018 is as follows: 52 Weeks Ended January 30, 2021 52 Weeks Ended February 1, 2020 52 Weeks Ended February 2, 2019 Weighted average grant date fair value of options granted (per share) $ — $ 3.28 $ 6.18 Total fair value of stock options vested (in thousands) $ 119 $ 543 $ 834 Intrinsic value of stock options exercised (in thousands) $ 538 $ — $ 684 The Company has estimated the fair value of all stock option awards as of the date of the grant by applying the Black-Scholes option pricing model. The application of this valuation model involves assumptions that are judgmental and highly subjective in the determination of compensation expense. The Company did not grant any stock options in fiscal 2020. The weighted averages for key assumptions used in determining the fair value of options granted for the periods indicated below and a summary of the methodology applied to develop each assumption are as follows: 52 Weeks Ended January 30, 2021 52 Weeks Ended February 1, 2020 52 Weeks Ended February 2, 2019 Expected price volatility — % 53 % 47 % Risk-free interest rate — % 2.24 % 2.79 % Expected life — years 6.3 years 6.3 years Dividend yield — % 0 % 0 % Expected price volatility — The expected price volatility is a measure of the amount by which the stock price has fluctuated or is expected to fluctuate. The Company uses actual historical changes in the market value of its stock to calculate the volatility assumption as it is management’s belief that this is the best indicator of future volatility. The Company calculates daily market value changes using the historical volatility of returns for the six years prior to the grant. An increase in the expected volatility will increase compensation expense. Risk-free interest rate — The risk-free interest rate is the U.S. Treasury rate for the week of the grant having a term equal to the expected life of the option. An increase in the risk-free interest rate will increase compensation expense. Expected life — The expected life is the period of time over which the options granted are expected to remain outstanding. The Company uses the “simplified” method found in the Securities and Exchange Commission’s Staff Accounting Bulletin No. 107 to estimate the expected life of stock option grants. Options granted have a maximum term of ten years. An increase in the expected life will increase compensation expense. Forfeiture rate — The forfeiture rate is the percentage of options granted that were forfeited or canceled before becoming fully vested. The Company accounts for forfeitures of share-based awards as they occur. An increase in the forfeiture rate will decrease compensation expense. Restricted stock units — The Company grants restricted stock units for a fixed number of shares to various employees and directors. The RSUs granted to directors become 100% vested on the first anniversary of the grant date. The RSUs granted to employees prior to fiscal 2020 typically vest 25% annually on the anniversary of the grant date over 4 years. The RSUs granted to employees in fiscal 2020 vest 100% on the second anniversary of the grant date. The fair values of the RSUs are equal to the closing price of the Company’s common stock on the date of the grant. Compensation expense related to RSUs is recognized ratably over the requisite service period. As of January 30, 2021, there was approximately $1.2 million of unrecognized compensation expense related to RSUs which is expected to be recognized over a weighted average period of 1.6 years. RSU activity for the fiscal year ended January 30, 2021, was as follows: Shares Weighted Average Grant Date Fair Value Non-Vested at February 1, 2020 433,444 $ 4.67 Granted 1,050,421 0.92 Vested (281,604 ) 3.61 Forfeited (32,858 ) 1.92 Non-Vested at January 30, 2021 1,169,403 $ 1.63 Other information related to RSU activity during fiscal 2020, 2019 and 2018 is as follows: 52 Weeks Ended January 30, 2021 52 Weeks Ended February 1, 2020 52 Weeks Ended February 2, 2019 Weighted average grant date fair value of RSUs (per share) $ 0.92 $ 4.32 $ 10.83 Total fair value of restricted stock units vested (in thousands) $ 638 $ 465 $ 1,387 Employee stock purchase plan — In July 2002, the Company adopted an Employee Stock Purchase Plan (“ESPP”) which was amended in 2006, 2008 and 2016. Under the ESPP, full-time employees who have completed twelve consecutive months of service are allowed to purchase shares of the Company’s common stock, subject to certain limitations, through payroll deduction, at a 15% discount from fair market value. The Company’s ESPP was originally authorized to issue up to 500,000 shares of common stock. In June 2016, the shareholders ratified the amendment to the Company’s ESPP to increase the number of shares of common stock authorized to be issued under the ESPP by 125,000 shares with an optional annual increase thereafter each January 1 commencing on January 1, 2017 by up to an additional 35,000 shares. During fiscal 2020, 2019 and 2018, there were 34,999, 104,160 and 37,128 shares of common stock, respectively, issued to participants under the ESPP. During fiscal 2020, the Company suspended the ESPP. As of January 30, 2021, the total amount authorized under the ESPP was 730,000 with 39 shares remaining unissued under the authorization. |
Retirement Benefit Plans
Retirement Benefit Plans | 12 Months Ended |
Jan. 30, 2021 | |
Postemployment Benefits [Abstract] | |
Retirement Benefit Plans | Note 7 401(k) savings plan — The Company maintains a defined contribution 401(k) employee benefit plan, which provides retirement benefits for eligible employees. The Company matches 100% of the employee’s elective contributions up to 4% of eligible compensation. The Company’s matching contributions were approximately $860,000, $989,000 and $904,000 in fiscal 2020, 2019 and 2018, respectively. The Company has the option to make additional contributions to the 401(k) employee benefit plan on behalf of covered employees; however, no such contributions were made in fiscal 2020, 2019 or 2018. Deferred compensation plan — The Board of Directors approved the termination of the Deferred Compensation Plan effective September 6, 2019, and all remaining balances in the Deferred Compensation Plan were paid out during fiscal 2020. Deferred Compensation Plan assets and liabilities were zero and $1.9 million as of January 30, 2021 and February 1, 2020, respectively, and were recorded in other assets and other liabilities in the consolidated balance sheets. The Company had no matching contributions to this Plan in fiscal 2020, 2019 and 2018. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Jan. 30, 2021 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 8 — Commitments and Contingencies The Company was named as a defendant in a putative class action filed in April 2017 in the United States District Court for the Western District of Pennsylvania, Gennock v. Kirkland’s, Inc. The complaint alleged that the Company, in violation of federal law, published more than the last five digits of a credit or debit card number on customers’ receipts. On October 21, 2019, the District Court dismissed the matter and ruled that the Plaintiffs did not have standing based on the Third Circuit’s recent decision in Kamal v. J. Crew Group, Inc., 918 F.3d 102 (3d. Cir. 2019). Following the dismissal in federal court, on October 25, 2019, the Plaintiffs filed a Praecipe to Transfer the case to Pennsylvania state court, and on August 20, 2020, the court ruled that the Plaintiffs have standing. However, the court also certified the standing issue for an interlocutory appeal, and the Company has filed a petition for allowance of appeal with the Pennsylvania Supreme Court. The Company continues to believe that the case is without merit and intends to continue to vigorously defend itself against the allegations. The matter is covered by insurance, and the Company does not believe that the case will have a material adverse effect on its consolidated financial condition, operating results or cash flows. The Company has been named as a defendant in a putative class action filed in May 2018 in the Superior Court of California, Miles v. Kirkland’s Stores, Inc. The case has been removed to Federal Court, Central District of California, and trial is currently set for November 8, 2021. The complaint alleges, on behalf of Miles and all other hourly Kirkland’s employees in California, various wage and hour violations. Kirkland’s denies the material allegations in the complaint and believes that its employment policies are generally compliant with California law. The parties are currently engaging in discovery, and the Plaintiff has until April 9, 2021 to file for class certification. The Company believes the case is without merit and intends to vigorously defend itself against the allegations. The Company is also party to other pending legal proceedings and claims that arise in the normal course of business. Although the outcome of such proceedings and claims cannot be determined with certainty, the Company’s management is of the opinion that it is unlikely that such proceedings and any claims in excess of insurance coverage will have a material effect on its consolidated financial condition, operating results or cash flows. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Jan. 30, 2021 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 9 — Related Party Transactions The Company had an agreement with a related party vendor to purchase merchandise inventory. The vendor was considered a related party for financial reporting purposes because its principal owner is the spouse of the Company’s former Vice President of Product Development and Trend. As of June 14, 2019, the vendor is no longer a related party. The table below sets forth selected results related to this vendor, for the time period that the vendor was a related party, in dollars (thousands) and percentages for the periods indicated: 52 Weeks Ended January 30, 2021 52 Weeks Ended February 1, 2020 52 Weeks Ended February 2, 2019 Related Party Vendor Purchases $ — $ 19,577 $ 54,280 Purchases as a percent of total merchandise purchases — % 7.6 % 20.7 % |
Share Repurchase Plan
Share Repurchase Plan | 12 Months Ended |
Jan. 30, 2021 | |
Treasury Stock Transactions [Abstract] | |
Share Repurchase Plan | Note 10 — Share Repurchase Plan On August 22, 2017, the Company announced that its Board of Directors authorized a share repurchase plan providing for the purchase in the aggregate of up to $10 million of the Company’s outstanding common stock. This share repurchase plan was completed during the third quarter of fiscal 2018. On September 24, 2018, the Company announced that its Board of Directors authorized a new share repurchase plan providing for the purchase in the aggregate of up to $10 million of the Company’s outstanding common stock. This share repurchase plan was completed during the fourth quarter of fiscal 2020. On December 3, 2020, the Company announced that its Board of Directors authorized a new share repurchase plan providing for the purchase in the aggregate of up to $20 million of the Company’s outstanding common stock. Repurchases of shares are made in accordance with applicable securities laws and may be made from time to time in the open market or by negotiated transactions. The amount and timing of repurchases are based on a variety of factors, including stock price, regulatory limitations and other market and economic factors. The share repurchase plan does not require the Company to repurchase any specific number of shares, and the Company may terminate the share repurchase plan at any time. As of January 30, 2021, the Company had approximately $19.8 million remaining under the current share repurchase plan. The table below sets forth selected share repurchase plan information (in thousands, except share amounts) for the periods indicated: 52 Weeks Ended January 30, 2021 52 Weeks Ended February 1, 2020 52 Weeks Ended February 2, 2019 Shares repurchased and retired 9,926 807,275 1,650,748 Share repurchase cost $ 178 $ 3,657 $ 15,717 |
Impairment
Impairment | 12 Months Ended |
Jan. 30, 2021 | |
Impairment [Abstract] | |
Impairment | Note 11 — Impairment In connection with the adoption of the new lease accounting standard at the beginning of fiscal 2019, the Company reviewed its store portfolio for possible impairment, as right-of-use assets are now included as part of the long-lived asset group that is evaluated for impairment. As a result of this review, eight stores were identified for which the carrying amounts of the store assets were not expected to be recoverable. As of the beginning of fiscal 2019, the Company recorded an adjustment to increase the opening balance of accumulated deficit by approximately $331,000 for the cumulative effect of the adoption of ASC 842 for right-of-use assets at six of the impaired stores. The Company recorded an impairment charge of approximately $9.4 million, $19.2 million and zero in fiscal 2020, 2019 and 2018, respectively. During fiscal 2020, the $9.4 million impairment charge included $6.2 million for right-of-use asset impairment at 24 stores, $3.1 million for property and equipment impairment charges at 24 stores and excess store fixture impairment of $0.1 million. The $19.2 million fiscal 2019 impairment charge included approximately $2.9 million for right-of-use asset impairment at nine stores, $9.9 million for property and equipment impairment charges at 38 stores, $0.9 million in excess store fixture impairment, $4.7 million in impaired software projects and $0.8 million related to e-commerce distribution center impairment. |
New Accounting Pronouncements
New Accounting Pronouncements | 12 Months Ended |
Jan. 30, 2021 | |
New Accounting Pronouncements And Changes In Accounting Principles [Abstract] | |
New Accounting Pronouncements | Note 12 New Accounting Pronouncements Recently Adopted In August 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement,” which amends the disclosure requirements for fair value measurements by removing, modifying and adding certain disclosures. This guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2019, with early adoption permitted. The Company adopted this guidance in the first quarter of fiscal 2020. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements and related disclosures. In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740) Simplifying the Accounting for Income Taxes.” The amendments in this ASU simplify the accounting for income taxes by removing specific exceptions included in Topic 740, introducing simplifications and making technical corrections. For public business entities, the amendments in this ASU are effective for fiscal years, and interim periods within those years, beginning after December 15, 2020, with early adoption permitted. The Company adopted this guidance in the second quarter of fiscal 2020. For the 26-week period ended August 1, 2020, the pretax loss was greater than the forecasted pretax loss for the year, which historically resulted in a calculation that limited the tax benefit that could be recorded. The adoption of ASU 2019-12 provided the Company an exception to this methodology. The adoption of this guidance did not have any other material impact on the Company’s consolidated financial statements and related disclosures. New Accounting Pronouncements Not Yet Adopted In June 2016, the FASB issued ASU 2016-13, “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” which amends the impairment model to utilize an expected loss methodology in place of the currently used incurred loss methodology, which will result in more timely recognition of losses. The new guidance applies to financial assets measured at amortized cost basis, including receivables that result from revenue transactions and held-to-maturity debt securities. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022 for non-accelerated filers, and early adoption is permitted for fiscal years beginning after December 15, 2018. The Company does not expect the adoption of this guidance to have a material impact on its consolidated financial statements and related disclosures. In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” This guidance is in response to accounting concerns regarding contract modifications and hedge accounting because of impending rate reform associated with structural risks of interbank offered rates (IBORs), and, particularly, the risk of cessation of the London Interbank Offered Rate (LIBOR) related to regulators in several jurisdictions around the world having undertaken reference rate reform initiatives to identify alternative reference rates. The guidance provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The adoption of this guidance is effective for all entities as of March 12, 2020 through December 31, 2022. The Company does not expect the adoption of this guidance to have a material impact on its consolidated financial statements and related disclosures. |
Description of Business and S_2
Description of Business and Significant Accounting Policies (Policies) | 12 Months Ended |
Jan. 30, 2021 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Nature of business | Nature of busines s — Kirkland’s, Inc. (the “Company”) is a specialty retailer of home décor in the United States operating 373 stores in 35 states as of January 30, 2021, as well as an e-commerce website, www.kirklands.com |
Principles of consolidation | Principles of consolidation — The consolidated financial statements of the Company include the accounts of Kirkland’s, Inc. and its wholly-owned subsidiaries Kirkland’s Stores, Inc., Kirkland’s DC, Inc. and Kirkland’s Texas, LLC. Significant intercompany accounts and transactions have been eliminated. |
Use of estimates | Use of estimates — The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from the estimates and assumptions used. Changes in estimates are recognized in the period when new information becomes available to management. Areas where the nature of the estimate makes it reasonably possible that actual results could materially differ from amounts estimated include, but are not limited to, impairment assessments on long-lived assets, inventory reserves, self-insurance reserves and deferred tax asset valuation allowances. |
Company Response to COVID-19 | Company Response to COVID-19 — The COVID-19 pandemic has created significant public health concerns as well as economic disruption, uncertainty, and volatility which has affected the Company’s business operations in fiscal 2020. The Company continues to closely monitor the impact of the COVID-19 pandemic on all facets of its business, which includes the impact on its employees, customers, suppliers, vendors, business partners and supply chain networks. In the first quarter of fiscal 2020, as a proactive and cautionary measure, the Company elected to borrow $40.0 million from its revolving credit facility, which was later repaid during the second quarter of fiscal 2020. The Company also temporarily closed all of its stores in the first quarter of fiscal 2020 and reopened stores during the second quarter of fiscal 2020. In an effort to further strengthen the Company’s financial flexibility and efficiently manage through the pandemic during the first half of the year, the Company permanently reduced store and corporate payroll, furloughed store employees, cancelled inventory purchases, reduced capital expenditures and cut advertising, outbound freight and other expenses. The Company also implemented a new curbside pickup option for customers at our stores. The CARES Act was signed into law during our first fiscal quarter. The CARES Act, among other things, includes provisions relating to refundable payroll tax credits, deferral of employer side social security payments, net operating loss carryback periods, alternative minimum tax credit refunds, modifications to the net interest deduction limitations and technical corrections to tax depreciation methods for qualified improvement property. The CARES Act allowed the Company’s net operating losses incurred in 2019 to be carried back to preceding taxable years to generate a refund of previously paid income taxes of approximately $12.3 million. The Company has a $1.4 million employer tax credit receivable from the IRS, and the Company has deferred $3.3 million in employer payroll taxes. All of the Company’s stores and distribution centers are currently open with enhanced safety measures. The health and safety of the Company’s employees and customers are the primary concerns of the Company’s management team. The Company has taken and continues to take numerous actions to promote health and safety, including, providing personal protective equipment to its employees, establishing mask protocols in its facilities, rolling out additional functionality to support contactless shopping experiences, implementing additional cleaning and sanitation procedures and promoting social distancing. |
Basis of presentation | Basis of presentation — In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, “Leases (Topic 842)”, which supersedes the existing guidance for lease accounting, Leases (Topic 840) (“ASU 2016-02”). At the beginning of fiscal 2019, the Company adopted the new lease accounting guidance. The adoption of the new lease accounting guidance had a material impact to the Company’s consolidated balance sheets and related disclosures, and resulted in the recording of right-of-use assets and lease liabilities of approximately $ 295.2 million as of the date of adoption. This guidance was applied using the optional transition method, which allowed the Company to not recast comparative financial information but rather recognize a cumulative-effect adjustment to retained earnings as of the effective date in the period of adoption. An adjustment of $ 331,000 was made to retained earnings as a result of right-of-use assets that were impaired upon the adoption of this guidance. See Note 11 — Impairment for further discussion. The standard did not materially impact the Company’s consolidated statements of operations or cash flows. For additional information, including the required disclosures, related to the impact of adopting this standard, see Note 5 — Leases . |
Fiscal year | Fiscal year — The Company’s fiscal year is comprised of the 52 or 53-week period ending on the Saturday closest to January 31. Accordingly, fiscal 2020, 2019 and 2018 represented the 52 weeks ended on January 30, 2021, February 1, 2020 and February 2, 2019, respectively. |
Reclassification | Reclassification — Deferred income taxes in the fiscal 2019 asset section of the consolidated balance sheet has been reclassified to be included in other assets to conform to the fiscal 2020 presentation. This reclassification had no effect on total assets. |
Cash equivalents | Cash equivalents — Cash and cash equivalents consist of cash on deposit in banks and payments due from banks for customer credit cards, as they generally settle within 24-48 hours. |
Inventory | Inventory — The Company’s inventory is stated at the lower of cost or net realizable value, net of reserves and allowances, with cost determined using the average cost method, with average cost approximating current cost. Inventory cost consists of the direct cost of merchandise including freight. The carrying value of our inventory is affected by reserves for shrinkage, damages and obsolescence. The Company incurs various types of warehousing, transportation and delivery costs in connection with inventory purchases and distribution. Such costs are included as a component of the overall cost of inventories and recognized as a component of cost of sales as the related inventory is sold. As of January 30, 2021 and February 1, 2020, there were $4.0 million and $5.9 million, respectively, of distribution center costs included in inventory. The Company estimates as a percentage of sales the amount of inventory shrinkage that has occurred between the most recently completed store physical count and the end of the financial reporting period based upon historical physical inventory count results. The Company adjusts these estimates based on changes, if any, in the trends yielded by its physical inventory counts, which occur throughout the fiscal year. The reserve for estimated inventory shrinkage was $1.7 million and $1.3 million as of January 30, 2021 and February 1, 2020, respectively. The Company estimates a reserve for unknown damaged inventory based on historical damage data. Management adjusts these estimates based on any changes in actual damage results. The reserve for estimated damaged inventory was approximately $547,000 and $1,059,000 as of January 30, 2021 and February 1, 2020, respectively. The Company also evaluates the cost of inventory by category and class of merchandise in relation to the estimated sales price. This evaluation is performed to ensure that inventory is not carried at a value in excess of the amount expected to be realized upon the sale of the merchandise. As of January 30, 2021 and February 1, 2020, our reserve for excess and obsolescence was approximately $263,000 and $745,000, respectively. The Company receives various payments and allowances from vendors, including rebates and other credits. The amounts received are subject to the terms of vendor agreements, which generally do not state an expiration date, but are subject to ongoing negotiations that may be impacted in the future based on changes in market conditions and changes in the profitability, quality or sell-through of the related merchandise. For all such vendor allowances, the Company records the vendor funds as a reduction of inventories. As the related inventory is sold, such allowances and credits are recognized as a reduction to cost of sales. |
Prepaid expenses and other current assets | Prepaid expenses and other current assets — The Company recognizes assets for expenses paid but not yet incurred, as well as other items such as supplies inventory and miscellaneous receivables. As of January 30, 2021 and February 1, 2020, prepaid expenses and other current assets included receivables of approximately $3.3 million and $1.0 million, respectively, mainly related to payroll tax refunds allowed for under the CARES Act in the current year and various miscellaneous receivables in the prior year. |
Property and equipment | Property and equipment — Property and equipment are stated at cost less accumulated depreciation. Depreciation is computed on a straight-line basis over the estimated useful lives of the respective assets. Furniture, fixtures and equipment are generally depreciated over five years. Leasehold improvements are amortized over the shorter of the useful life of the asset or the expected lease term, typically ranging from five to 10 years. Maintenance and repairs are expensed as incurred, and improvements are capitalized. Gains or losses on the disposition of fixed assets are recorded upon disposal of the related asset. |
Cost of internal use software | Cost of internal use software — The Company capitalizes the cost of computer software developed or obtained for internal use. Capitalized computer software costs consist primarily of payroll-related and consulting costs incurred during the application development stage. The Company expenses costs related to preliminary project assessments, research and development, re-engineering, training and application maintenance as they are incurred. Capitalized software costs are amortized on a straight-line basis over an estimated life of three to 10 years. For fiscal years 2020, 2019 and 2018, the Company recorded approximately $6.9 million, $7.0 million and $7.4 million, respectively, for depreciation of capitalized software. The net book value of these assets totaled $20.0 million and $17.0 million at the end of fiscal years 2020 and 2019, respectively. Property and equipment included capitalized computer software currently under development of $1.0 million and $6.3 million as of January 30, 2021 and February 1, 2020, respectively. |
Asset retirement obligations | Asset retirement obligations — The Company recognizes a liability for the fair value of required asset retirement obligations (“ARO”) when such obligations are incurred. The Company’s AROs are primarily associated with leasehold improvements, which, at the end of a lease, the Company is contractually obligated to remove in order to comply with the lease agreement. At the inception of a lease with such conditions, the Company records an ARO liability and a corresponding capital asset in an amount equal to the estimated fair value of the obligation. The liability is estimated based on various assumptions requiring management’s judgment and is accreted to its projected future value over time. The capitalized asset is depreciated using the convention for depreciation of leasehold improvement assets. Upon satisfaction of the ARO conditions, any difference between the recorded ARO liability and the actual retirement costs incurred is recognized as an operating gain or loss in the consolidated statements of operations. As of January 30, 2021 and February 1, 2020, the liability for asset retirement obligations was approximately $755,000 and $822,000, respectively and the asset was approximately $175,000 and $213,000, respectively. |
Leases | Leases — Operating lease assets and liabilities are recognized at the lease commencement date. Operating lease liabilities represent the present value of future lease payments. Operating lease assets represent the Company’s right to use an underlying asset and are based upon the operating lease liabilities adjusted for prepayments or accrued lease payments, initial direct costs, lease incentives, and impairment, if any, of operating lease assets. To determine the present value of lease payments not yet paid at lease commencement or modification, the Company uses the collateralized incremental borrowing rate corresponding to the reasonably certain lease term. The Company estimates its collateralized incremental borrowing rate based upon a synthetic credit rating and yield curve analysis. See Note 5 — Leases for further discussion. |
Impairment of long-lived assets | Impairment of long-lived assets — The Company evaluates the recoverability of the carrying amounts of long-lived assets, including lease right-of-use assets, when events or changes in circumstances dictate that their carrying values may not be recoverable. This review includes the evaluation of individual under-performing retail stores and assessing the recoverability of the carrying value of the assets related to the stores. Future cash flows are projected for the remaining lease life. If the estimated future cash flows are less than the carrying value of the assets, the Company records an impairment charge equal to the difference between the assets’ fair value and carrying value. The fair value is estimated using a discounted cash flow approach considering such factors as future sales levels, gross margins, changes in rent and other expenses as well as the overall operating environment specific to that store. The amount of the impairment charge is allocated proportionately to all assets in the asset group with no asset written down below its individual fair value. In fiscal 2019, the Company shifted to estimating the fair value of long-lived fixed assets based on orderly liquidation value as the Company believes this method better reflects the fair value of the assets. The Company previously used the age-life method for calculating the fair value of long-lived assets. Under the age-life method, the replacement cost of an asset is estimated and reduced by depreciation based on the effective age of the asset and its expected useful life. The age-life method takes into consideration the fact that we will continue to use these assets based on a presumed investment decision where the expected cash flows from operating the store are greater than the expected cash flows that result from not operating the store. See Note 1 1 — Impairment for further discussion. |
Insurance reserves | Insurance reserves — Workers’ compensation, general liability and employee medical insurance programs are predominately self-insured. It is the Company’s policy to record a self-insurance liability using estimates of claims incurred but not yet reported or paid, based on historical claims experience and actuarial methods. Actual results can vary from estimates for many reasons, including, changes in our assumptions about health care costs, the severity of accidents, the average size of claims and other factors. The Company monitors its claims experience in light of these factors and revises its estimates of insurance reserves accordingly. The level of insurance reserves may increase or decrease as a result of these changing circumstances or trends. As of January 30, 2021 and February 1, 2020, the Company’s net self-insurance reserve estimates related to workers’ compensation and general liability were $5.3 million and $5.9 million, respectively. As of January 30, 2021 and February 1, 2020, the Company’s net self-insurance reserve estimates related to employee medical insurance were approximately $265,000 and $513,000, respectively. |
Revenue from contracts with customers | Net sales — Net sales includes the sale of merchandise, net of returns, shipping revenue, gift card breakage revenue and revenue earned from our private label credit card program and excludes sales taxes. Sales Returns Reserve — The Company reduces net sales and estimates a liability for sales returns based on historical return trends, and the Company believes that its estimate for sales returns is an accurate reflection of future returns associated with past sales. However, as with any estimate, refund activity may vary from estimated amounts. The Company had a liability of approximately $2.0 million and $1.6 million reserved for sales returns at January 30, 2021 and February 1, 2020, respectively, included in accrued expenses on the consolidated balance sheets. The related sales return reserve product recovery asset included in prepaid expenses and other current assets on the consolidated balance sheets was approximately $850,000 and $695,000 at January 30, 2021 and February 1, 2020, respectively. Deferred e-commerce revenue — The Company recognizes revenue at the time of sale of merchandise to customers in its stores. E-commerce revenue is recorded at the estimated time of delivery to the customer. If the Company receives payment before completion of its customer obligations, the revenue is deferred until the customer takes possession of the merchandise and the sale is complete. Deferred revenue related to e-commerce orders that have been shipped but not estimated to be received by customers included in accrued expenses on the consolidated balance sheets was approximately $1,165,000 and $656,000 at January 30, 2021 and February 1, 2020, respectively. The related contract assets, reflected in inventory on the consolidated balance sheets, totaled approximately $530,000 and $319,000 at January 30, 2021 and February 1, 2020, respectively. Gift cards — Gift card sales are recognized as revenue when tendered for payment. While the Company honors all gift cards presented for payment, the Company determines the likelihood of redemption to be remote for certain gift card balances due to long periods of inactivity. The Company uses the redemption recognition method to account for breakage for unused gift card amounts where breakage is recognized as gift cards are redeemed for the purchase of goods based upon a historical breakage rate. In these circumstances, to the extent the Company determines there is no requirement for remitting unredeemed card balances to government agencies under unclaimed property laws, such amounts are recognized in the consolidated statements of operations as a component of net sales. The table below sets forth selected gift card liability information (in thousands) for the periods indicated: January 30, 2021 February 1, 2020 February 2, 2019 Gift card liability, net of estimated breakage (included in accrued expenses) $ 13,408 $ 13,128 $ 13,032 The table below sets forth selected gift card breakage and redemption information (in thousands) for the periods indicated: 52 Weeks Ended January 30, 2021 52 Weeks Ended February 1, 2020 52 Weeks Ended February 2, 2019 Gift card breakage revenue (included in net sales) $ 1,172 $ 1,084 $ 1,102 Gift card redemptions recognized in the current period related to amounts included in the gift card contract liability balance as of the prior period 5,329 6,593 6,194 Customer loyalty program — The Company has established a loyalty program called the K-club, whereby members receive access to coupons, birthday rewards, monthly sweepstakes, sneak peeks, exclusive deals and more. During fiscal 2018, the Company eliminated the part of the program whereby customers earned loyalty points, which became certificates that could be redeemed on future purchases. In fiscal 2020, the Company redesigned the loyalty program to again offer points to members on qualifying purchases that are converted into certificates that may be redeemed on future purchases. This customer option is a material right and, accordingly, represents a separate performance obligation to the customer under ASC 606 Revenue from Contracts with Customers. The allocated consideration for the points earned by loyalty program members is deferred based on the standalone selling price of the points and recorded within accrued expenses on the consolidated balance sheet. The measurement of standalone selling prices takes into consideration the estimated points that will be converted to certificates and certificates that are expected to be redeemed, based on historical redemption patterns. This measurement is applied to the Company’s portfolio of performance obligations for points earned, as all obligations have similar economic characteristics. The Company believes the impact to its consolidated financial statements would not be materially different if this measurement was applied to each individual performance obligation. Revenue is recognized for these performance obligations at a point in time when certificates are redeemed by the customer. These obligations generally relate to contracts with terms less than one year, as points expire on a rolling 12 months and certificates generally expire within two months from issuance. The related loyalty program deferred revenue included in accrued expenses on the consolidated balance sheets was approximately $922,000 at January 30, 2021 compared to none at February 1, 2020. Private Label Credit Card — The Company has a private label credit card program for its customers that was amended on November 18, 2019 to extend the term of the arrangement through December 31, 2024. Each private label credit card bears the logo for the Kirkland’s brand and can only be used at the Company’s store locations and e-commerce channel. The card program is operated and managed by a third-party bank, Wells Fargo, that assumes all of the losses associated with non-payment by the private label card holders and a portion of any fraudulent usage of the accounts. Pursuant to the private-label credit card program, the Company receives cash incentives in exchange for promised services, such as licensing our brand names and marketing the credit card program to customers. The Company can receive incentive payments for the achievement of certain private label credit card volumes and is also reimbursed for marketing and other programs associated with the private label credit card. Funds received related the Company’s private label credit card program are recorded as net sales in the consolidated statements of operations. Services promised under these agreements are separate performance obligations. Revenue is recognized as we fulfill the Company’s performance obligations throughout the contract term. |
Cost of sales | Cost of sales — Cost of sales includes costs of product purchased from vendors, including inbound freight, receiving costs, inspection costs, warehousing costs, outbound freight, inventory damage and shrinkage, payroll and overhead associated with our distribution facility and its network, store occupancy costs and depreciation of leasehold improvements, equipment, and other property in our stores and distribution centers. Distribution facility costs, excluding depreciation, included in cost of sales were approximately $24.7 million, $24.6 million and $22.6 million for fiscal 2020, 2019, and 2018, respectively. |
Compensation and benefits | Compensation and benefits — Compensation and benefits includes all store and corporate office salaries and wages and incentive pay as well as stock compensation, employee health benefits, 401(k) plan benefits, social security and unemployment taxes. |
Stock-based compensation | Stock-based compensation — Stock-based compensation includes expenses associated with stock option grants, restricted stock grants, and other transactions under the Company’s stock plans. The Company recognizes compensation expense for its stock-based payments based on the fair value of the awards. The expense is recorded on a straight-line basis over the vesting period within compensation and benefits in the consolidated statements of operations. See Note 6 — Stock-Based Compensation for further discussion. Stock options — The Company allows for the settlement of vested stock options on a net share basis (“net share settled stock options”) or on a gross basis with the holder providing cash to cover the option exercise price and the minimum statutory tax withholdings. With net share settled stock options, the employee does not surrender any cash or shares upon exercise. Rather, the Company withholds the number of shares to cover the option exercise price and the minimum statutory tax withholding obligations from the shares that would otherwise be issued upon exercise. The settlement of vested stock options on a net share basis results in fewer shares issued by the Company. Options issued to employees under the 2002 Plan have maximum contractual terms of 10 years and generally vest ratably over 4 years. Expected price volatility — The expected price volatility is a measure of the amount by which the stock price has fluctuated or is expected to fluctuate. The Company uses actual historical changes in the market value of its stock to calculate the volatility assumption as it is management’s belief that this is the best indicator of future volatility. The Company calculates daily market value changes using the historical volatility of returns for the six years prior to the grant. An increase in the expected volatility will increase compensation expense. Risk-free interest rate — The risk-free interest rate is the U.S. Treasury rate for the week of the grant having a term equal to the expected life of the option. An increase in the risk-free interest rate will increase compensation expense. Expected life — The expected life is the period of time over which the options granted are expected to remain outstanding. The Company uses the “simplified” method found in the Securities and Exchange Commission’s Staff Accounting Bulletin No. 107 to estimate the expected life of stock option grants. Options granted have a maximum term of ten years. An increase in the expected life will increase compensation expense. Forfeiture rate — The forfeiture rate is the percentage of options granted that were forfeited or canceled before becoming fully vested. The Company accounts for forfeitures of share-based awards as they occur. An increase in the forfeiture rate will decrease compensation expense. Restricted stock units — The Company grants restricted stock units for a fixed number of shares to various employees and directors. The RSUs granted to directors become 100% vested on the first anniversary of the grant date. The RSUs granted to employees prior to fiscal 2020 typically vest 25% annually on the anniversary of the grant date over 4 years. The RSUs granted to employees in fiscal 2020 vest 100% on the second anniversary of the grant date. The fair values of the RSUs are equal to the closing price of the Company’s common stock on the date of the grant. Compensation expense related to RSUs is recognized ratably over the requisite service period. As of January 30, 2021, there was approximately $1.2 million of unrecognized compensation expense related to RSUs which is expected to be recognized over a weighted average period of 1.6 years. |
Other operating expenses | Other operating expenses — Other operating expenses consist of such items as advertising, credit card processing costs, bank fees, utilities, professional fees, software maintenance costs, supplies and postage, workers’ compensation and general liability insurance, trash removal, maintenance and repairs, travel and various other store and corporate expenses. |
Store preopening expenses | Store pre-opening expenses — Store pre-opening expenses, which consist primarily of occupancy, payroll and supplies costs, are expensed as incurred and are included in other operating expenses. |
Advertising expenses | Advertising expenses — Advertising costs are expensed in the period in which the related activity first takes place. These expenses include costs associated with specific marketing campaigns, direct mail, email communications, paid search, digital advertising, social media, public relations and in-store signage. Total advertising expense was $14.3 million, $15.0 million and $12.8 million for fiscal 2020, 2019 and 2018, respectively. Prepaid advertising costs were approximately $294,000 and $273,000 as of January 30, 2021 and February 1, 2020, respectively. |
Income taxes | Income taxes — Deferred tax assets and liabilities are recognized based on the differences between the financial statement and the tax law treatment of certain items. Realization of certain components of deferred tax assets is dependent upon the occurrence of future events. The Company records valuation allowances to reduce its deferred tax assets to the amount it believes is more likely than not to be realized. These valuation allowances can be impacted by changes in tax laws, changes to statutory tax rates, and future taxable income levels and are based on the Company’s judgment, estimates and assumptions regarding those future events. In the event the Company was to determine that it would not be able to realize all or a portion of the net deferred tax assets in the future, the Company would increase the valuation allowance through a charge to income tax expense in the period that such determination is made. Conversely, if the Company was to determine that it would be able to realize its deferred tax assets in the future, in excess of the net carrying amounts, the Company would decrease the recorded valuation allowance through a decrease to income tax expense in the period that such determination is made. The Company established a valuation allowance against deferred tax assets in fiscal 2019, as the Company is in a three-year cumulative pre-tax loss position. The Company provides for uncertain tax positions and the related interest and penalties, if any, based upon management’s assessment of whether a tax benefit is more likely than not to be sustained upon examination by tax authorities. The Company recognizes interest and penalties accrued related to unrecognized tax benefits in income tax expense. To the extent the Company prevails in matters for which a liability for an unrecognized tax benefit is established or is required to pay amounts in excess of the liability, the Company’s effective tax rate in a given financial statement period may be affected. The Company’s income tax returns are subject to audit by local, state and federal tax authorities, and the Company is typically engaged in various tax examinations at any given time. Tax contingencies often arise due to uncertainty or differing interpretations of the application of tax rules throughout the various jurisdictions in which the Company operates. The contingencies are influenced by items such as tax audits, changes in tax laws, litigation, appeals and experience with previous similar tax positions. The Company regularly reviews its tax reserves for these items and assesses the adequacy of the amount recorded. The Company evaluates potential exposures associated with its various tax filings by estimating a liability for uncertain tax positions based on a two-step process. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step requires estimation and measurement of the tax benefit as the largest amount that is more than 50% likely to be recognized upon settlement. See Note 3 — Income Taxes for further discussion. |
Sales and use taxes | Sales and use taxes — Governmental authorities assess sales and use taxes on the sale and purchase of goods and services. The Company excludes taxes collected from customers in its reported net sales results. Such amounts are reflected as accrued expenses until remitted to the taxing authorities. |
Concentrations of risk | Concentrations of risk — The Company has risk of geographic concentration with respect to the sourcing of its inventory purchases. Approximately 76% of the Company’s inventory purchases in fiscal 2020 were from China. The Company also has vendor concentration risk as one vendor, that was formally a related-party, accounted for 10.9%, 17.4%, and 20.7% of purchases in fiscal 2020, 2019 and 2018, respectively. See Note 9 — Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash and cash equivalents. The Company’s cash balances are primarily on deposit at high credit quality financial institutions. |
Fair value of financial instruments | Fair value of financial instruments — Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants on the measurement date. The Company uses a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. The carrying amounts of cash and cash equivalents, accounts receivable, other current assets and accounts payable approximate fair value because of their short maturities. The Company maintained The Executive Non-Qualified Excess Plan (the “Deferred Compensation Plan”) as discussed further in Note 7 — The Company measures certain assets at fair value on a non-recurring basis, including the evaluation of long-lived assets for impairment using Company-specific assumptions which would fall within Level 3 of the fair value hierarchy. The Company uses market participant rents to calculate the fair value of right-of-use assets and discounted future cash flows of the asset or asset group using a discount rate that approximates the cost of capital of a market participant to quantify fair value for other long-lived assets. See Note 11 — |
Earnings (loss) per share | Earnings (loss) per share — Basic earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of shares outstanding during each period presented. Diluted earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of shares outstanding plus the dilutive effect of stock equivalents outstanding during the applicable periods using the treasury stock method. Diluted earnings (loss) per share reflects the potential dilution that could occur if options to purchase stock were exercised into common stock and if outstanding grants of restricted stock were vested. Stock options and restricted stock units that were not included in the computation of diluted earnings per share, because to do so would have been antidilutive, were approximately 201,000 shares, 1,521,000 shares and 923,000 shares for fiscal 2020, 2019 and 2018, respectively. |
Comprehensive income (loss) | Comprehensive income (loss) — Comprehensive income (loss) does not differ from the consolidated net income (loss) presented in the consolidated statements of operations. |
Operating segments | Operating segments — The Company is a specialty retailer of home décor that offers its products in its stores and on its website. The Company has determined that each of its stores and its e-commerce operations is an operating segment. The operating performance of all stores and e-commerce has been aggregated into one reportable segment. The Company’s operating segments are aggregated for financial reporting purposes because they are similar in each of the following areas: economic characteristics, class of consumer, nature of products and distribution methods. Revenues from external customers are derived from merchandise sales, and the Company does not rely on any major customers as a source of revenue. Across its store base, the Company operates one store format under the Kirkland’s name in which each store offers the same general mix of merchandise with similar categories and similar customers. The Company believes that disaggregating its operating segments would not provide meaningful additional information. |
New accounting pronouncements recently adopted and new accounting pronouncements not yet adopted | New Accounting Pronouncements Recently Adopted In August 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement,” which amends the disclosure requirements for fair value measurements by removing, modifying and adding certain disclosures. This guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2019, with early adoption permitted. The Company adopted this guidance in the first quarter of fiscal 2020. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements and related disclosures. In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740) Simplifying the Accounting for Income Taxes.” The amendments in this ASU simplify the accounting for income taxes by removing specific exceptions included in Topic 740, introducing simplifications and making technical corrections. For public business entities, the amendments in this ASU are effective for fiscal years, and interim periods within those years, beginning after December 15, 2020, with early adoption permitted. The Company adopted this guidance in the second quarter of fiscal 2020. For the 26-week period ended August 1, 2020, the pretax loss was greater than the forecasted pretax loss for the year, which historically resulted in a calculation that limited the tax benefit that could be recorded. The adoption of ASU 2019-12 provided the Company an exception to this methodology. The adoption of this guidance did not have any other material impact on the Company’s consolidated financial statements and related disclosures. New Accounting Pronouncements Not Yet Adopted In June 2016, the FASB issued ASU 2016-13, “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” which amends the impairment model to utilize an expected loss methodology in place of the currently used incurred loss methodology, which will result in more timely recognition of losses. The new guidance applies to financial assets measured at amortized cost basis, including receivables that result from revenue transactions and held-to-maturity debt securities. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022 for non-accelerated filers, and early adoption is permitted for fiscal years beginning after December 15, 2018. The Company does not expect the adoption of this guidance to have a material impact on its consolidated financial statements and related disclosures. In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” This guidance is in response to accounting concerns regarding contract modifications and hedge accounting because of impending rate reform associated with structural risks of interbank offered rates (IBORs), and, particularly, the risk of cessation of the London Interbank Offered Rate (LIBOR) related to regulators in several jurisdictions around the world having undertaken reference rate reform initiatives to identify alternative reference rates. The guidance provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The adoption of this guidance is effective for all entities as of March 12, 2020 through December 31, 2022. The Company does not expect the adoption of this guidance to have a material impact on its consolidated financial statements and related disclosures. |
Description of Business and S_3
Description of Business and Significant Accounting Policies (Tables) | 12 Months Ended |
Jan. 30, 2021 | |
Payables And Accruals [Abstract] | |
Schedule of Gift Card Liability, Breakage and Redemption Information | The table below sets forth selected gift card liability information (in thousands) for the periods indicated: January 30, 2021 February 1, 2020 February 2, 2019 Gift card liability, net of estimated breakage (included in accrued expenses) $ 13,408 $ 13,128 $ 13,032 The table below sets forth selected gift card breakage and redemption information (in thousands) for the periods indicated: 52 Weeks Ended January 30, 2021 52 Weeks Ended February 1, 2020 52 Weeks Ended February 2, 2019 Gift card breakage revenue (included in net sales) $ 1,172 $ 1,084 $ 1,102 Gift card redemptions recognized in the current period related to amounts included in the gift card contract liability balance as of the prior period 5,329 6,593 6,194 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 12 Months Ended |
Jan. 30, 2021 | |
Payables And Accruals [Abstract] | |
Accrued Expenses | Accrued expenses are comprised of the following (in thousands): January 30, 2021 February 1, 2020 Gift cards $ 13,408 $ 13,128 Salaries and wages 9,298 6,647 Sales taxes 1,863 1,816 Payroll taxes 3,515 400 Workers’ compensation and general liability reserves 2,321 2,435 Sales returns reserve 2,015 1,554 Income taxes payable 1,911 32 Deferred e-commerce revenue 1,165 656 Loyalty program deferred revenue 922 — Other 1,036 2,105 $ 37,454 $ 28,773 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Jan. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Tax (Benefit) Expense | The Company’s income tax (benefit) expense is computed based on the federal statutory rates and the state statutory rates, net of related federal benefit. The Company’s provision for income taxes consists of the following (in thousands): 52 Weeks Ended January 30, 2021 52 Weeks Ended February 1, 2020 52 Weeks Ended February 2, 2019 Current tax (benefit) expense: Federal $ (10,124 ) $ (225 ) $ 708 State 52 612 810 Deferred tax expense (benefit): Federal — 362 455 State 1,525 (71 ) 58 $ (8,547 ) $ 678 $ 2,031 |
Reconciliation of Income Tax (Benefit) Expense at the Statutory Federal Income Tax Rate | A reconciliation of income tax (benefit) expense at the statutory federal income tax rate to the amount provided is as follows (in thousands): 52 Weeks Ended January 30, 2021 52 Weeks Ended February 1, 2020 52 Weeks Ended February 2, 2019 Tax at federal statutory rate $ 1,699 $ (11,043 ) $ 1,220 State income taxes, net of federal benefit 338 (1,456 ) 651 Tax credits (90 ) (192 ) (437 ) Enactment of tax legislation (12,276 ) — — Executive compensation 177 — 35 Stock based compensation programs 274 1,162 545 Valuation allowance 1,292 12,035 — Other 39 172 17 Income tax (benefit) expense $ (8,547 ) $ 678 $ 2,031 |
Significant Components of Deferred Tax Assets and Liabilities | Significant components of the Company’s deferred tax assets and liabilities are as follows (in thousands): January 30, 2021 February 1, 2020 Deferred tax assets: Accruals $ 3,147 $ 2,622 Inventory valuation 448 739 State tax credit carryforwards 148 148 Federal and state net operating loss carryforwards 1,111 7,462 Impairment 2,410 4,809 Operating lease liabilities 48,808 64,819 Other 2,366 2,505 Total deferred tax assets 58,438 83,104 Valuation allowance for deferred tax assets (6,033 ) (12,145 ) Net deferred tax assets 52,405 70,959 Deferred tax liabilities: Depreciation (12,556 ) (16,834 ) Operating lease right-of-use assets (39,126 ) (51,974 ) Prepaid assets (723 ) (626 ) Total deferred tax liabilities (52,405 ) (69,434 ) Net deferred tax assets $ — $ 1,525 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Jan. 30, 2021 | |
Leases [Abstract] | |
Schedule of Classification of Lease Cost | The Company's classification of lease cost on the Company's condensed consolidated statements of operations is as follows (in thousands): 52 Week Period Ended (1) 52 Week Period Ended (1) January 30, 2021 February 1, 2020 Cost of sales (2) Operating lease cost $ 43,753 $ 53,382 Short-term lease cost 755 1,469 Variable lease cost 1,554 1,329 Total lease cost in cost of sales 46,062 56,180 Other operating expenses Operating lease cost 1,862 2,824 Short-term lease cost 60 382 Total lease cost in other operating expenses 1,922 3,206 Total lease cost $ 47,984 $ 59,386 (1) Total lease cost excludes expense for non-lease components including common area maintenance and excludes costs that are not a component of the lease including real estate taxes, insurance, sales taxes and utilities for the Company’s leases. (2) Cost of sales includes all distribution center lease costs and store occupancy-related lease costs. |
Rent Expense Under Operating Leases | As of January 30, 2021, future minimum payments, by year and in the aggregate, under all operating leases with initial terms of one year or more consist of the following (in thousands): Operating Leases 2021 $ 60,159 2022 48,140 2023 37,330 2024 30,395 2025 23,726 Thereafter 32,230 Total lease payments (1) 231,980 Less: interest (38,031 ) Present value of lease liabilities $ 193,949 (1) Operating lease payments exclude $485,000 of legally binding minimum lease payments for a lease signed but not yet commenced for one new store. |
Schedule of Lease Term and Discount Rate | The Company’s lease term and discount rate is as follows: January 30, 2021 Weighted-average remaining lease term (years) 5.2 Weighted-average discount rate 7.4 % |
Schedule of Cash Paid for Amounts Included in Measurement of Lease Liabilities | Cash paid for amounts included in the measurement of lease liabilities is as follows (in thousands): 52 Weeks Ended January 30, 2021 52 Weeks Ended February 1, 2020 Operating cash flows from operating leases $ 57,310 $ 64,654 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Jan. 30, 2021 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock Option Activity | Stock option activity for the fiscal year ended January 30, 2021 was as follows: Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value (in thousands) Balance at February 1, 2020 381,513 $ 11.76 Options exercised (52,561 ) 8.55 Options forfeited (131,684 ) 14.23 Options expired (23,750 ) 18.14 Balance at January 30, 2021 173,518 $ 9.99 6.0 $ 2,686 Options Exercisable As of: January 30, 2021 83,843 $ 16.11 3.6 $ 785 Other information related to option activity during fiscal 2020, 2019 and 2018 is as follows: 52 Weeks Ended January 30, 2021 52 Weeks Ended February 1, 2020 52 Weeks Ended February 2, 2019 Weighted average grant date fair value of options granted (per share) $ — $ 3.28 $ 6.18 Total fair value of stock options vested (in thousands) $ 119 $ 543 $ 834 Intrinsic value of stock options exercised (in thousands) $ 538 $ — $ 684 |
Weighted Average for Key Assumptions Used in Determining the Fair Value of Options Granted | The weighted averages for key assumptions used in determining the fair value of options granted for the periods indicated below and a summary of the methodology applied to develop each assumption are as follows: 52 Weeks Ended January 30, 2021 52 Weeks Ended February 1, 2020 52 Weeks Ended February 2, 2019 Expected price volatility — % 53 % 47 % Risk-free interest rate — % 2.24 % 2.79 % Expected life — years 6.3 years 6.3 years Dividend yield — % 0 % 0 % |
RSU Activity | RSU activity for the fiscal year ended January 30, 2021, was as follows: Shares Weighted Average Grant Date Fair Value Non-Vested at February 1, 2020 433,444 $ 4.67 Granted 1,050,421 0.92 Vested (281,604 ) 3.61 Forfeited (32,858 ) 1.92 Non-Vested at January 30, 2021 1,169,403 $ 1.63 |
Share-based Payment Arrangement, Restricted Stock and Restricted Stock Unit, Activity | Other information related to RSU activity during fiscal 2020, 2019 and 2018 is as follows: 52 Weeks Ended January 30, 2021 52 Weeks Ended February 1, 2020 52 Weeks Ended February 2, 2019 Weighted average grant date fair value of RSUs (per share) $ 0.92 $ 4.32 $ 10.83 Total fair value of restricted stock units vested (in thousands) $ 638 $ 465 $ 1,387 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 12 Months Ended |
Jan. 30, 2021 | |
Related Party Transactions [Abstract] | |
Schedule of Selected Results Related to Vendor | The table below sets forth selected results related to this vendor, for the time period that the vendor was a related party, in dollars (thousands) and percentages for the periods indicated: 52 Weeks Ended January 30, 2021 52 Weeks Ended February 1, 2020 52 Weeks Ended February 2, 2019 Related Party Vendor Purchases $ — $ 19,577 $ 54,280 Purchases as a percent of total merchandise purchases — % 7.6 % 20.7 % |
Share Repurchase Plan (Tables)
Share Repurchase Plan (Tables) | 12 Months Ended |
Jan. 30, 2021 | |
Treasury Stock Transactions [Abstract] | |
Schedule of Share Repurchase Plan Information | The table below sets forth selected share repurchase plan information (in thousands, except share amounts) for the periods indicated: 52 Weeks Ended January 30, 2021 52 Weeks Ended February 1, 2020 52 Weeks Ended February 2, 2019 Shares repurchased and retired 9,926 807,275 1,650,748 Share repurchase cost $ 178 $ 3,657 $ 15,717 |
Description of Business and S_4
Description of Business and Significant Accounting Policies - Additional Information (Details) | Nov. 18, 2019 | May 02, 2020USD ($) | Jan. 30, 2021USD ($)storestateSegmentshares | Feb. 01, 2020USD ($)shares | Feb. 02, 2019USD ($)shares | Feb. 03, 2019USD ($) |
Description Of Business And Summary Of Significant Accounting Policies [Line Items] | ||||||
Number of home decor and gifts store | store | 373 | |||||
Number of states | state | 35 | |||||
Tax refund under CARES Act | $ 12,300,000 | |||||
Deferred employer payroll taxes | 3,300,000 | |||||
Right-of-use assets | 147,334,000 | $ 200,067,000 | ||||
Lease liabilities | 193,949,000 | |||||
Retained earnings | (79,469,000) | (95,930,000) | ||||
Distribution center costs included in inventory | 4,000,000 | 5,900,000 | ||||
Receivables included in prepaid expenses and other current assets | 3,300,000 | 1,000,000 | ||||
Depreciation of capitalized software | 6,900,000 | 7,000,000 | $ 7,400,000 | |||
Net book value of capitalized software assets | 20,000,000 | 17,000,000 | ||||
Capitalized computer software currently under development | 1,000,000 | 6,300,000 | ||||
Liability for asset retirement obligations | 755,000 | 822,000 | ||||
Capitalized costs, asset retirement costs | 175,000 | 213,000 | ||||
Liability for sales returns | 2,015,000 | 1,554,000 | ||||
Sales return reserve product recovery asset | 850,000 | 695,000 | ||||
Deferred e-commerce revenue | 1,165,000 | 656,000 | ||||
Contract assets in inventory | 530,000 | 319,000 | ||||
Private label credit card program extended date | Dec. 31, 2024 | |||||
Distribution expense | 24,700,000 | 24,600,000 | 22,600,000 | |||
Advertising expense | 14,300,000 | 15,000,000 | $ 12,800,000 | |||
Prepaid advertising | $ 294,000 | $ 273,000 | ||||
Tax benefit likelihood recognized | 50.00% | |||||
Vendor geographic concentration | 76.00% | |||||
Vendor concentration | 10.90% | 17.40% | 20.70% | |||
Stock options and restricted stock units not included in the computation of diluted earnings (loss) per share (in shares) | shares | 201,000 | 1,521,000 | 923,000 | |||
Number of reportable segments | Segment | 1 | |||||
Workers Compensation and General Liability | ||||||
Description Of Business And Summary Of Significant Accounting Policies [Line Items] | ||||||
Self-insurance reserve | $ 5,300,000 | $ 5,900,000 | ||||
Employee Medical Insurance | ||||||
Description Of Business And Summary Of Significant Accounting Policies [Line Items] | ||||||
Self-insurance reserve | 265,000 | 513,000 | ||||
Customer Loyalty Program | ||||||
Description Of Business And Summary Of Significant Accounting Policies [Line Items] | ||||||
Deferred revenue | $ 922,000 | 0 | ||||
Minimum | Capitalized Software Costs | ||||||
Description Of Business And Summary Of Significant Accounting Policies [Line Items] | ||||||
Estimated life of software | 3 years | |||||
Maximum | Capitalized Software Costs | ||||||
Description Of Business And Summary Of Significant Accounting Policies [Line Items] | ||||||
Estimated life of software | 10 years | |||||
Furniture, Fixtures and Equipment | ||||||
Description Of Business And Summary Of Significant Accounting Policies [Line Items] | ||||||
Estimated useful lives of assets | 5 years | |||||
Leasehold Improvements | Minimum | ||||||
Description Of Business And Summary Of Significant Accounting Policies [Line Items] | ||||||
Estimated useful lives of assets | 5 years | |||||
Leasehold Improvements | Maximum | ||||||
Description Of Business And Summary Of Significant Accounting Policies [Line Items] | ||||||
Estimated useful lives of assets | 10 years | |||||
Inventory Shrinkage | ||||||
Description Of Business And Summary Of Significant Accounting Policies [Line Items] | ||||||
Inventory Valuation Reserves | $ 1,700,000 | 1,300,000 | ||||
Damaged Inventory | ||||||
Description Of Business And Summary Of Significant Accounting Policies [Line Items] | ||||||
Inventory Valuation Reserves | 547,000 | 1,059,000 | ||||
Excess and Obsolescence | ||||||
Description Of Business And Summary Of Significant Accounting Policies [Line Items] | ||||||
Inventory Valuation Reserves | 263,000 | $ 745,000 | ||||
Revision of Prior Period, Accounting Standards Update, Adjustment | Accounting Standards Update 2016-02 | ||||||
Description Of Business And Summary Of Significant Accounting Policies [Line Items] | ||||||
Right-of-use assets | $ 295,200,000 | |||||
Lease liabilities | 295,200,000 | |||||
Retained earnings | $ 331,000 | |||||
IRS | ||||||
Description Of Business And Summary Of Significant Accounting Policies [Line Items] | ||||||
Employer tax credit receivable | $ 1,400,000 | |||||
Revolving credit facility | ||||||
Description Of Business And Summary Of Significant Accounting Policies [Line Items] | ||||||
Proceeds from secured lines of credit | $ 40,000,000 |
Description of Business and S_5
Description of Business and Significant Accounting Policies - Schedule of Gift Card Liability, Breakage and Redemption Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 30, 2021 | Feb. 01, 2020 | Feb. 02, 2019 | |
Gift Card Breakage And Redemption [Abstract] | |||
Gift card liability, net of estimated breakage (included in accrued expenses) | $ 13,408 | $ 13,128 | $ 13,032 |
Gift card breakage revenue (included in net sales) | 1,172 | 1,084 | 1,102 |
Gift card redemptions recognized in the current period related to amounts included in the gift card contract liability balance as of the prior period | $ 5,329 | $ 6,593 | $ 6,194 |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) $ in Thousands | Jan. 30, 2021 | Feb. 01, 2020 | Feb. 02, 2019 |
Payables And Accruals [Abstract] | |||
Gift cards | $ 13,408 | $ 13,128 | $ 13,032 |
Salaries and wages | 9,298 | 6,647 | |
Sales taxes | 1,863 | 1,816 | |
Payroll taxes | 3,515 | 400 | |
Workers’ compensation and general liability reserves | 2,321 | 2,435 | |
Sales returns reserve | 2,015 | 1,554 | |
Income taxes payable | 1,911 | 32 | |
Deferred e-commerce revenue | 1,165 | 656 | |
Loyalty program deferred revenue | 922 | ||
Other | 1,036 | 2,105 | |
Total accrued expenses | $ 37,454 | $ 28,773 |
Income Taxes - Income Tax (Bene
Income Taxes - Income Tax (Benefit) Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 30, 2021 | Feb. 01, 2020 | Feb. 02, 2019 | |
Current tax (benefit) expense: | |||
Federal | $ (10,124) | $ (225) | $ 708 |
State | 52 | 612 | 810 |
Deferred tax expense (benefit): | |||
Federal | 362 | 455 | |
State | 1,525 | (71) | 58 |
Income tax (benefit) expense | $ (8,547) | $ 678 | $ 2,031 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Income Tax (Benefit) Expense at the Statutory Federal Income Tax Rate (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 30, 2021 | Feb. 01, 2020 | Feb. 02, 2019 | |
Income Tax Disclosure [Abstract] | |||
Tax at federal statutory rate | $ 1,699 | $ (11,043) | $ 1,220 |
State income taxes, net of federal benefit | 338 | (1,456) | 651 |
Tax credits | (90) | (192) | (437) |
Enactment of tax legislation | (12,276) | 0 | 0 |
Executive compensation | 177 | 0 | 35 |
Stock based compensation programs | 274 | 1,162 | 545 |
Valuation allowance | 1,292 | 12,035 | 0 |
Other | 39 | 172 | 17 |
Income tax (benefit) expense | $ (8,547) | $ 678 | $ 2,031 |
Income Taxes - Significant Comp
Income Taxes - Significant Components of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Jan. 30, 2021 | Feb. 01, 2020 |
Deferred tax assets: | ||
Accruals | $ 3,147 | $ 2,622 |
Inventory valuation | 448 | 739 |
State tax credit carryforwards | 148 | 148 |
Federal and state net operating loss carryforwards | 1,111 | 7,462 |
Impairment | 2,410 | 4,809 |
Operating lease liabilities | 48,808 | 64,819 |
Other | 2,366 | 2,505 |
Total deferred tax assets | 58,438 | 83,104 |
Valuation allowance for deferred tax assets | (6,033) | (12,145) |
Net deferred tax assets | 52,405 | 70,959 |
Deferred tax liabilities: | ||
Depreciation | (12,556) | (16,834) |
Operating lease right-of-use assets | (39,126) | (51,974) |
Prepaid assets | (723) | (626) |
Total deferred tax liabilities | $ (52,405) | (69,434) |
Net deferred tax assets | $ 1,525 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) | Mar. 27, 2020 | Jan. 30, 2021 | Feb. 01, 2020 |
Income Tax [Line Items] | |||
Income tax benefit related to the carryback of the 2019 federal net operating loss to prior periods pursuant to the CARES Act | $ 12,300,000 | ||
Valuation allowance for deferred tax assets | $ 6,033,000 | $ 12,145,000 | |
Unrecognized tax benefits | 0 | 0 | |
Accrued payment of interest and penalties associated with unrecognized tax benefits | 0 | $ 0 | |
State and Local | |||
Income Tax [Line Items] | |||
Operating loss carryforwards | 21,300,000 | ||
State tax credit carryforwards | $ 187,000 | ||
State and Local | Earliest Tax Year | |||
Income Tax [Line Items] | |||
Operating loss carryforwards expirations period | 2035 | ||
Tax credit carryforwards expiration period | 2023 | ||
State and Local | Latest Tax Year | |||
Income Tax [Line Items] | |||
Operating loss carryforwards expirations period | 2040 | ||
Tax credit carryforwards expiration period | 2025 |
Senior Credit Facility - Additi
Senior Credit Facility - Additional Information (Details) - Revolving credit facility | 12 Months Ended |
Jan. 30, 2021USD ($) | |
Line of Credit Facility [Line Items] | |
Percentage of fee on unused portion of the facility | 0.25% |
Letters of Credit Outstanding, Amount | $ 1,750,000 |
Minimum | |
Line of Credit Facility [Line Items] | |
Interest at an annual rate equal to LIBOR plus a margin range | 1.25% |
Maximum | |
Line of Credit Facility [Line Items] | |
Interest at an annual rate equal to LIBOR plus a margin range | 1.75% |
Secured credit facility | |
Line of Credit Facility [Line Items] | |
Line of credit facility maximum borrowing capacity | $ 75,000,000 |
Swingline availability | 10,000,000 |
Incremental accordion feature | 25,000,000 |
Revolving line of credit | 0 |
Available borrowing capacity of line of credit facility | $ 39,500,000 |
Leases - Additional Information
Leases - Additional Information (Details) | 12 Months Ended |
Jan. 30, 2021 | |
Lease Cost [Line Items] | |
Lease term expiration through date | 2030 |
Maximum | |
Lease Cost [Line Items] | |
Maximum term of operating leases | 10 years |
Leases - Schedule of Classifica
Leases - Schedule of Classification of Lease Cost (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 30, 2021 | Feb. 01, 2020 | |
Lease Cost [Line Items] | ||
Lease, cost | $ 47,984 | $ 59,386 |
Cost of Sales | ||
Lease Cost [Line Items] | ||
Operating lease cost | 43,753 | 53,382 |
Short-term lease cost | 755 | 1,469 |
Variable lease cost | 1,554 | 1,329 |
Lease, cost | 46,062 | 56,180 |
Other Operating Income (Expense) | ||
Lease Cost [Line Items] | ||
Operating lease cost | 1,862 | 2,824 |
Short-term lease cost | 60 | 382 |
Lease, cost | $ 1,922 | $ 3,206 |
Leases - Schedule of Future Min
Leases - Schedule of Future Minimum Lease Payments Under Operating Leases (Details) $ in Thousands | Jan. 30, 2021USD ($) |
Leases [Abstract] | |
Operating Leases, Future Minimum Payments Due, Next Twelve Months | $ 60,159 |
Operating Leases, Future Minimum Payments, Due in Two Years | 48,140 |
Operating Leases, Future Minimum Payments, Due in Three Years | 37,330 |
Operating Leases, Future Minimum Payments, Due in Four Years | 30,395 |
Operating Leases, Future Minimum Payments, Due in Five Years | 23,726 |
Thereafter | 32,230 |
Total minimum lease payments | 231,980 |
Less: interest | (38,031) |
Present value of lease liabilities | $ 193,949 |
Leases - Schedule of Future M_2
Leases - Schedule of Future Minimum Lease Payments Under Operating Leases (Parenthetical) (Details) | Jan. 30, 2021USD ($) |
Leases [Abstract] | |
Guarantor Obligations, Maximum Exposure, Undiscounted | $ 485,000 |
Leases - Schedule of Lease Term
Leases - Schedule of Lease Term and Discount Rate (Details) | Jan. 30, 2021 |
Leases [Abstract] | |
Weighted-average remaining lease term (years) | 5 years 2 months 12 days |
Weighted-average discount rate | 7.40% |
Leases - Schedule of Cash Paid
Leases - Schedule of Cash Paid for Amounts Included in Measurement of Lease Liabilities (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 30, 2021 | Feb. 01, 2020 | |
Leases [Abstract] | ||
Operating cash flows from operating leases | $ 57,310 | $ 64,654 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Jan. 30, 2021 | Feb. 01, 2020 | Feb. 02, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense | $ 1,171 | $ 3,254 | $ 2,015 |
Maximum shares of common stock award (in shares) | 4,500,000 | ||
Shares reserved for future stock-based grants (in shares) | 1,280,595 | ||
Restricted Stock Units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based Payment Arrangement, Option, Exercise Price Range, Lower Range Limit | $ 0.82 | ||
Share-based Payment Arrangement, Option, Exercise Price Range, Upper Range Limit | $ 12.54 | ||
Restricted stock units outstanding (in shares) | 1,169,403 | 433,444 | |
Stock Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Options to purchase outstanding common stock (in shares) | 173,518 | 381,513 | |
Share-based Payment Arrangement, Option, Exercise Price Range, Lower Range Limit | $ 1.65 | ||
Share-based Payment Arrangement, Option, Exercise Price Range, Upper Range Limit | $ 25.52 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Options (Details) - USD ($) | 12 Months Ended | ||
Jan. 30, 2021 | Feb. 01, 2020 | Feb. 02, 2019 | |
Stock Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period | 10 years | ||
Vesting period of options issued to employees | 4 years | ||
Options to purchase outstanding common stock (in shares) | 173,518 | 381,513 | |
Unrecognized stock compensation expense | $ 141,000 | ||
Weighted average expected recognition period of stock compensation expense | 2 years | ||
Weighted average grant date fair value of options granted (in dollars per share) | $ 3.28 | $ 6.18 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested in Period, Fair Value | $ 119,000 | $ 543,000 | $ 834,000 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Intrinsic Value | $ 538,000 | $ 0 | $ 684,000 |
Stock options grant in period | 0 | ||
In-the-Money Stock Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Options to purchase outstanding common stock (in shares) | 152,018 |
Stock-Based Compensation - St_2
Stock-Based Compensation - Stock Option Activity (Details) - Stock Options $ / shares in Units, $ in Thousands | 12 Months Ended |
Jan. 30, 2021USD ($)$ / sharesshares | |
Number of Options | |
Beginning balance (in shares) | shares | 381,513 |
Options exercised (in shares) | shares | (52,561) |
Options forfeited (in shares) | shares | (131,684) |
Options expired (in shares) | shares | (23,750) |
Ending balance (in shares) | shares | 173,518 |
Options Exercisable (in shares) | shares | 83,843 |
Weighted Average Exercise Price | |
Balance (in dollars per share) | $ / shares | $ 11.76 |
Options exercised (in dollars per share) | $ / shares | 8.55 |
Options forfeited (in dollars per share) | $ / shares | 14.23 |
Options expired (in dollars per share) | $ / shares | 18.14 |
Balance (in dollars per share) | $ / shares | 9.99 |
Exercisable (in dollars per share) | $ / shares | $ 16.11 |
Weighted Average Remaining Contractual Term (in years) | |
Outstanding | 6 years |
Options Exercisable | 3 years 7 months 6 days |
Aggregate intrinsic value of options outstanding | $ | $ 2,686 |
Aggregate Intrinsic value of options exercisable | $ | $ 785 |
Stock-Based Compensation - Canc
Stock-Based Compensation - Cancelled Stock Options (Details) | 12 Months Ended |
Feb. 01, 2020USD ($)$ / shares | |
Cancelled Stock Options [Abstract] | |
Total value of cancelled options | $ | $ 861,000 |
Share-based Payment Arrangement, Options Cancelled, Exercise Price Range, Lower Range Limit | $ 7.14 |
Share-based Payment Arrangement, Options Cancelled, Exercise Price Range, Upper Range Limit | $ 25.52 |
Stock-Based Compensation - Weig
Stock-Based Compensation - Weighted Average for Key Assumptions Used in Determining the Fair Value of Options Granted (Details) | 12 Months Ended | |
Feb. 01, 2020 | Feb. 02, 2019 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ||
Expected price volatility | 53.00% | 47.00% |
Risk-free interest rate | 2.24% | 2.79% |
Expected life | 6 years 3 months 18 days | 6 years 3 months 18 days |
Dividend yield | 0.00% | 0.00% |
Stock-Based Compensation - Expe
Stock-Based Compensation - Expected Life, Forfeiture Rate and Restricted Stock Units (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jan. 30, 2021 | Feb. 01, 2020 | Feb. 02, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected life | 6 years 3 months 18 days | 6 years 3 months 18 days | |
Restricted Stock Units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Unrecognized compensation expense related to RSUs | $ 1.2 | ||
Weighted average expected recognition period of stock compensation expense | 1 year 7 months 6 days | ||
Restricted Stock Units | Directors | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Percent of RSUs vested on the first anniversary of grant | 100.00% | ||
Restricted Stock Units | Employees | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Percent of RSUs vested on the first anniversary of grant | 25.00% | ||
Percent of RSUs vested on the second anniversary of grant | 100.00% | ||
Vesting period of restricted stock units issued to employees | 4 years | ||
Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected life | 10 years |
Stock-Based Compensation - RSU
Stock-Based Compensation - RSU Activity (Details) - Restricted Stock Units - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Jan. 30, 2021 | Feb. 01, 2020 | Feb. 02, 2019 | |
Shares | |||
Beginning balance, non-vested (in shares) | 433,444 | ||
Granted (in shares) | 1,050,421 | ||
Vested (in shares) | (281,604) | ||
Forfeited (in shares) | (32,858) | ||
Ending balance, non-vested (in shares) | 1,169,403 | 433,444 | |
Weighted Average Grant Date Fair Value | |||
Beginning balance (in dollars per share) | $ 4.67 | ||
Granted (in dollars per share) | 0.92 | $ 4.32 | $ 10.83 |
Vested (in dollars per share) | 3.61 | ||
Forfeited (in dollars per share) | 1.92 | ||
Ending balance, non-vested (in shares) | 1.63 | 4.67 | |
Granted (in dollars per share) | $ 0.92 | $ 4.32 | $ 10.83 |
Fair value of restricted stock units vested | $ 638 | $ 465 | $ 1,387 |
Stock-Based Compensation - Empl
Stock-Based Compensation - Employee Stock Purchase Plan (Details) - shares | Jan. 01, 2020 | Jan. 01, 2019 | Jan. 01, 2017 | Jun. 30, 2016 | Jan. 30, 2021 | Feb. 01, 2020 | Feb. 02, 2019 | Jul. 31, 2002 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Maximum shares of common stock award (in shares) | 4,500,000 | |||||||
Shares remaining unissued under the original authorization (in shares) | 1,280,595 | |||||||
Employee Stock Purchase Plan | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Period of service required by employees to purchase shares | 12 months | |||||||
Discount rate of employee stock purchase plan | 15.00% | |||||||
Maximum shares of common stock award (in shares) | 730,000 | 500,000 | ||||||
Number of additional shares authorized (in shares) | 35,000 | 35,000 | 35,000 | 125,000 | ||||
Shares of common stock issued (in shares) | 34,999 | 104,160 | 37,128 | |||||
Shares remaining unissued under the original authorization (in shares) | 39 |
Retirement Benefit Plans - Addi
Retirement Benefit Plans - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Jan. 30, 2021 | Feb. 01, 2020 | Feb. 02, 2019 | |
Postemployment Benefits [Abstract] | |||
Maximum matching contribution percent for 401(k) savings plan | 4.00% | 4.00% | 4.00% |
Percent of employee's contribution matched for 401(k) savings plan | 100.00% | 100.00% | 100.00% |
Company's matching contributions to the 401(k) savings plan | $ 860,000 | $ 989,000 | $ 904,000 |
Additional contributions made on behalf of employees to 401(k) savings plan | 0 | 0 | 0 |
Deferred Compensation Plan assets | 0 | 1,900,000 | |
Deferred Compensation Plan liabilities | 0 | 1,900,000 | |
Company's matching contributions | $ 0 | $ 0 | $ 0 |
Related Party Transactions - Sc
Related Party Transactions - Schedule of Selected Results Related to Vendor (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 30, 2021 | Feb. 01, 2020 | Feb. 02, 2019 | |
Related Party Transactions [Abstract] | |||
Purchases | $ 0 | $ 19,577 | $ 54,280 |
Purchases as a percent of total merchandise purchases | 7.60% | 20.70% |
Share Repurchase Plan - Additio
Share Repurchase Plan - Additional Information (Details) - USD ($) | Jan. 30, 2021 | Dec. 03, 2020 | Sep. 24, 2018 | Aug. 22, 2017 |
Treasury Stock Transactions [Abstract] | ||||
Share repurchase plan, authorized amount | $ 20,000,000 | $ 10,000,000 | $ 10,000,000 | |
Share repurchase plan, remaining authorized amount | $ 19,800,000 |
Share Repurchase Plan - Schedul
Share Repurchase Plan - Schedule of Share Repurchase Plan Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 30, 2021 | Feb. 01, 2020 | Feb. 02, 2019 | |
Treasury Stock Transactions [Abstract] | |||
Shares repurchased and retired | 9,926 | 807,275 | 1,650,748 |
Share repurchase cost | $ 178 | $ 3,657 | $ 15,717 |
Impairment - Additional Informa
Impairment - Additional Information (Details) | 12 Months Ended | ||
Jan. 30, 2021USD ($)store | Feb. 01, 2020USD ($)store | Feb. 02, 2019USD ($) | |
Impaired Long-Lived Assets Held and Used [Line Items] | |||
Accumulated deficit | $ (79,469,000) | $ (95,930,000) | |
Asset impairment charge | 9,387,000 | 19,229,000 | $ 0 |
Impairment of operating lease right-of-use assets | 6,200 | 2,900 | |
Impairment net of tax | $ 6,900,000 | $ 15,100,000 | |
Right of Use Asset | |||
Impaired Long-Lived Assets Held and Used [Line Items] | |||
Number of store locations with impairment | store | 24 | 9 | |
Property and Equipment | |||
Impaired Long-Lived Assets Held and Used [Line Items] | |||
Number of store locations with impairment | store | 24 | 38 | |
Impairment of long-lived assets held-for-use | $ 3,100,000 | $ 9,900,000 | |
Excess Fixture Impairment | |||
Impaired Long-Lived Assets Held and Used [Line Items] | |||
Impairment of long-lived assets held-for-use | $ 100,000 | 900,000 | |
Software Projects | |||
Impaired Long-Lived Assets Held and Used [Line Items] | |||
Impairment of long-lived assets held-for-use | 4,700,000 | ||
ECommerce Distribution Center | |||
Impaired Long-Lived Assets Held and Used [Line Items] | |||
Impairment of long-lived assets held-for-use | 800,000 | ||
Cumulative Effect, Period of Adoption, Adjustment | Cumulative Effect of Change in Accounting Principle | |||
Impaired Long-Lived Assets Held and Used [Line Items] | |||
Accumulated deficit | $ 331,000 |
New Accounting Pronouncements -
New Accounting Pronouncements - Additional Information (Details) | Jan. 30, 2021 |
ASU 2018-13 | |
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | |
Change in Accounting Principle, Accounting Standards Update, Adopted [true false] | true |
Change in Accounting Principle, Accounting Standards Update, Adoption Date | May 2, 2020 |
Change in Accounting Principle, Accounting Standards Update, Immaterial Effect [true false] | true |
ASU 2019-12 | |
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | |
Change in Accounting Principle, Accounting Standards Update, Adopted [true false] | true |
Change in Accounting Principle, Accounting Standards Update, Adoption Date | Aug. 1, 2020 |