RTW Retailwinds (RTW) 10-Q 13 Dec 18 2018 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Nov. 03, 2018	Nov. 30, 2018
Document and Entity Information
Entity Registrant Name	RTW Retailwinds, Inc.
Entity Central Index Key	1,211,351
Document Type	10-Q
Document Period End Date	Nov. 3, 2018
Amendment Flag	false
Current Fiscal Year End Date	--02-02
Entity Current Reporting Status	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Common Stock, Shares Outstanding		64,857,002
Document Fiscal Year Focus	2,018
Document Fiscal Period Focus	Q3

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Nov. 03, 2018	Oct. 28, 2017	Nov. 03, 2018	Oct. 28, 2017
Condensed Consolidated Statements of Operations
Net sales	$ 210,758	$ 214,182	$ 645,957	$ 648,155
Cost of goods sold, buying and occupancy costs	142,383	146,584	438,247	447,574
Gross profit	68,375	67,598	207,710	200,581
Selling, general and administrative expenses	66,802	66,980	199,605	198,659
Operating income	1,573	618	8,105	1,922
Interest expense, net of interest income of $330, $104, $815, and $238, respectively	(258)	161	(453)	678
Loss on extinguishment of debt			239
Income before income taxes	1,831	457	8,319	1,244
Provision for income taxes	106	105	441	316
Net income	$ 1,725	$ 352	$ 7,878	$ 928
Basic earnings per share	$ 0.03	$ 0.01	$ 0.12	$ 0.01
Diluted earnings per share	$ 0.03	$ 0.01	$ 0.12	$ 0.01
Weighted average shares outstanding:
Basic shares of common stock (in shares)	63,940	63,242	63,738	63,213
Diluted shares of common stock (in shares)	66,289	64,099	65,979	63,842

Condensed Consolidated Statem_2

Condensed Consolidated Statements of Operations (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Nov. 03, 2018	Oct. 28, 2017	Nov. 03, 2018	Oct. 28, 2017
Condensed Consolidated Statements of Operations
Interest income	$ 330	$ 104	$ 815	$ 238

Condensed Consolidated Statem_3

Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Nov. 03, 2018	Oct. 28, 2017	Nov. 03, 2018	Oct. 28, 2017
Condensed Consolidated Statements of Comprehensive Income
Comprehensive income	$ 1,760	$ 362	$ 7,983	$ 1,123

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Nov. 03, 2018	Feb. 03, 2018	[1]	Oct. 28, 2017
Current assets:
Cash and cash equivalents	$ 83,662	$ 90,908		$ 69,235
Accounts receivable	14,134	12,528		16,242
Income taxes receivable	55	115		115
Inventories, net	121,586	84,498		125,604
Prepaid expenses	16,894	16,447		17,648
Other current assets	2,308	1,924		2,587
Total current assets	238,639	206,420		231,431
Property and equipment, net	65,292	77,906		78,796
Intangible assets	16,891	17,125		14,879
Other assets	1,411	1,505		1,635
Total assets	322,233	302,956		326,741
Current liabilities:
Current portion-long-term debt		841		841
Accounts payable	107,231	70,089		105,419
Accrued expenses	66,487	70,677		61,714
Income taxes payable	16	28
Total current liabilities	173,734	141,635		167,974
Long-term debt, net of current portion		10,644		10,854
Deferred rent	25,623	27,217		28,192
Other liabilities	32,226	36,599		38,498
Total liabilities	231,583	216,095		245,518
Stockholders? equity:
Common stock, voting, par value $0.001; 300,000 shares authorized 66,663, 65,896 and 66,012 shares issued and 64,832 , 64,065 and 64,180 shares outstanding at November 3, 2018, February 3, 2018 and October 28, 2017, respectively	67	66		66
Additional paid-in capital	184,916	183,228		182,947
Retained deficit	(88,802)	(90,797)		(95,544)
Accumulated other comprehensive loss	(446)	(551)		(1,161)
Treasury stock at cost; 1,831 shares at November 3, 2018, February 3, 2018 and October 28, 2017	(5,085)	(5,085)		(5,085)
Total stockholders? equity	90,650	86,861		81,223
Total liabilities and stockholders? equity	$ 322,233	$ 302,956		$ 326,741
[1]	Derived from the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended February 3, 2018.

Condensed Consolidated Balanc_2

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares shares in Thousands	Nov. 03, 2018	Feb. 03, 2018	Oct. 28, 2017
Condensed Consolidated Balance Sheets
Common stock, voting, par value (in dollars per share)	$ 0.001	$ 0.001	$ 0.001
Common stock, voting, shares authorized	300,000	300,000	300,000
Common stock, voting, shares issued	66,663	65,896	66,012
Common stock, voting, shares outstanding	64,832	64,065	64,180
Treasury stock at cost, shares	1,831	1,831	1,831

Condensed Consolidated Statem_4

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Nov. 03, 2018	Oct. 28, 2017
Operating activities
Net income	$ 7,878	$ 928
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization	15,833	16,354
Loss from impairment charges	486	611
Amortization of intangible assets	234
Amortization of deferred financing costs	49	142
Write-off of unamortized deferred financing costs	239
Share-based compensation expense	1,997	1,756
Changes in operating assets and liabilities:
Accounts receivable	(1,981)	(4,455)
Income taxes receivable	60	29
Inventories, net	(37,088)	(47,560)
Prepaid expenses	(447)	1,098
Accounts payable	37,142	37,351
Accrued expenses	(10,202)	(7,872)
Income taxes payable	(12)	(174)
Deferred rent	(1,594)	(1,847)
Other assets and liabilities	(3,131)	(4,978)
Net cash provided by (used in) operating activities	9,463	(8,617)
Investing activities
Capital expenditures	(3,705)	(7,794)
Insurance recoveries	375	50
Net cash used in investing activities	(3,330)	(7,744)
Financing activities
Repayment of long-term debt	(11,750)	(750)
Principal payment on capital lease obligations	(1,320)	(1,199)
Shares withheld for payment of employee payroll taxes	(309)	(202)
Purchase of treasury stock		(622)
Net cash used in financing activities	(13,379)	(2,773)
Net decrease in cash and cash equivalents	(7,246)	(19,134)
Cash and cash equivalents at beginning of period	90,908	88,369
Cash and cash equivalents at end of period	$ 83,662	69,235
Supplementary non-cash investing activities
Non-cash capital lease transactions		$ 818

Organization and Basis of Prese

Organization and Basis of Presentation	9 Months Ended
	Nov. 03, 2018
Organization and Basis of Presentation
Organization and Basis of Presentation	1. Organization and Basis of Presentation RTW Retailwinds, Inc., formerly known as New York & Company, Inc., (together with its subsidiaries, the "Company") is a specialty women's omni-channel and digitally enabled retailer with a powerful multi-brand lifestyle platform providing curated fashion solutions that are versatile, on-trend, and stylish at a great value. The specialty retailer, first incorporated in 1918, has grown to now operate roughly 428 retail and outlet locations in 36 states while also growing a substantial eCommerce business. The company's portfolio includes branded merchandise from New York & Company, Fashion to Figure, and collaborations with Eva Mendes, Gabrielle Union and Kate Hudson. The Company's branded merchandise is sold exclusively at its retail locations and online at www.nyandcompany.com , www. fashiontofigure.com , and www.nyandcompanycloset.com . The target customers for the Company's merchandise are women between the ages of 25 and 49. The condensed consolidated financial statements as of November 3, 2018 and October 28, 2017 and for the 13 weeks ("three months") and 26 weeks ("nine months") ended November 3, 2018 and October 28, 2017 are unaudited and are presented pursuant to the rules and regulations of the United States Securities and Exchange Commission ("SEC"). Accordingly, these unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the 53-week fiscal year ended February 3, 2018 ("fiscal year 2017"), which were filed with the Company's Annual Report on Form 10-K with the SEC on April 17, 2018. The 52-week fiscal year ending February 2, 2019 is referred to herein as "fiscal year 2018." The Company's fiscal year is a 52- or 53-week year that ends on the Saturday closest to January 31. The Company identifies its operating segments according to how its business activities are managed and evaluated. Its operating segments have been aggregated and are reported as one reportable segment based on the similar nature of products sold, production process, distribution process, target customers and economic characteristics. All of the Company's revenues are generated in the United States. In the opinion of management, the accompanying condensed consolidated financial statements reflect all adjustments, which are of a normal recurring nature, necessary to present fairly the financial condition, results of operations and cash flows for the interim periods. All significant intercompany balances and transactions have been eliminated in consolidation. Due to seasonal variations in the retail industry, the results of operations for any interim period are not necessarily indicative of the results expected for the full fiscal year. Certain totals that appear in this Quarterly Report on Form 10-Q may not equal the sum of the components due to rounding.

New Accounting Pronouncements

New Accounting Pronouncements	9 Months Ended
	Nov. 03, 2018
New Accounting Pronouncements
New Accounting Pronouncements	2. New Accounting Pronouncements In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2014-09, "Revenue from Contracts with Customers (Topic 606)" ("Topic 606"), which supersedes the revenue recognition requirements in FASB Accounting Standards Codification™ ("ASC") Topic 605, "Revenue Recognition" and requires entities to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which an entity expects to be entitled to in exchange for those goods or services. The Company adopted Topic 606 as of February 4, 2018 using the modified retrospective method with a cumulative adjustment to the opening retained earnings balance. Please refer to Note 3, "Revenue Recognition" for further information regarding the adoption of Topic 606. In February 2016, the FASB issued ASU 2016-02, "Leases" ("ASU 2016-02"), which is a comprehensive new lease standard that amends various aspects of existing accounting guidance for leases. The core principle of ASU 2016-02 will require lessees to present the assets and liabilities that arise from leases on their balance sheets. ASU 2016-02 is effective for annual periods beginning after December 15, 2018, and interim periods within those fiscal years and requires modified retrospective adoption. Early adoption is permitted. The Company will adopt ASU 2016-02 on February 3, 2019 using the transition option to recognize a cumulative adjustment to the opening retained earnings balance and without adjustment to prior periods. The Company has gathered all of its existing contracts that meet the definition of a lease under ASU 2016-02, and it has concluded that the Company's real estate leases will drive the significant impact to the Company's consolidated balance sheet. The Company is going through the process of determining its policy elections and its application of practical expedients as they pertain to the adoption of ASU 2016-02. While the Company continues to evaluate the impact of the adoption of this new standard on the Company's financial position and results of operations, the Company expects that the adoption of ASU 2016-02 will result in a significant increase to its long-term assets and liabilities on the consolidated balance sheet. In March 2017, the FASB issued ASU 2017-07, "Compensation-Retirement Benefits: Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost" ("ASU 2017-07"), which requires: (i) the disaggregation of the service cost component from the other components of net benefit costs in the income statement; (ii) provides explicit guidance on the presentation of the service cost component and the other components of net benefit cost in the income statement; and (iii) allows only the service cost component of net benefit cost to be eligible for capitalization. ASU 2017-07 is effective for annual reporting periods beginning after December 15, 2017, and interim periods within those fiscal years, and requires retrospective adoption. The Company prospectively adopted ASU 2017-07 on February 4, 2018, as the Company deemed the impact of prior period reclassifications to be immaterial. The impact on the three months ended October 28, 2017 would have resulted in a net increase of "Selling, general, and administrative expenses" and a decrease in "Operating income" on the Company's condensed consolidated statements of operations by $52,000. The impact on the nine months ended October 28, 2017 would have resulted in a net decrease of "Selling, general, and administrative expenses" and an increase in "Operating income" on the Company's condensed consolidated statements of operations by $60,000.

Revenue Recognition

Revenue Recognition	9 Months Ended
	Nov. 03, 2018
Revenue Recognition
Revenue Recognition	3. Revenue Recognition On February 4, 2018, the Company adopted Topic 606 using the modified retrospective method applied to all contracts not completed as of the date of adoption. Results for reporting periods beginning February 4, 2018 are presented under Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with the Company's historic accounting under Topic 605. On February 4, 2018, the Company recorded a net increase to the opening "Retained deficit" balance of $5.9 million with an offsetting adjustment to "Accrued expenses" due to the cumulative impact of adopting Topic 606. The cumulative effect adjustment related primarily to the Company's private label credit card loyalty program (the "Runway Rewards" program). Runway Rewards is the Company's points-based customer loyalty program, in which customers earn points based on purchases. When customers reach predetermined point thresholds, earned points are converted to rewards that can be redeemed for discounts on future purchases of Company merchandise. Previously under Topic 605, the Company recognized revenue for the full sale amount at the time of sale; however, the Company would accrue the estimated cost of points and rewards earned and outstanding until they were redeemed or expired, which is referred to as the incremental cost method. Under Topic 606, the Company no longer accrues the estimated cost of points and rewards earned and outstanding. Instead, it defers a portion of the revenue at the time of sale using the standalone selling price method, as described in Topic 606, until the points and rewards are redeemed or expire. On the date of adoption of Topic 606, the Company established a current liability for deferred revenue equal to the estimated sales value of points and rewards earned and outstanding that are expected to be redeemed, with an offsetting adjustment to the opening balance of "Retained deficit." In accordance with the new revenue standard requirements, the disclosure of the impact of adoption on the Company's consolidated balance sheet on February 4, 2018 was as follows: February 3, 2018 Effect of February 4, 2018 (Amounts in thousands) Accrued expenses $ $ $ Retained deficit $ ) $ ) $ ) There was no impact to the Company's condensed consolidated statement of operations on the date of adoption of Topic 606. In accordance with the new revenue standard requirements, the disclosure of the impact of adoption on the Company's consolidated balance sheet as of November 3, 2018 was as follows: As of November 3, 2018 Balances Effect of As Reported (Amounts in thousands) Accrued expenses $ $ $ Retained deficit $ ) $ ) $ ) In accordance with the new revenue standard requirements, the disclosure of the impact of adoption on the Company's condensed consolidated statements of operations during the three and nine months ended November 3, 2018 was as follows: Three months ended November 3, 2018 Nine months ended November 3, 2018 Balances Effect of As Reported Balances Effect of As Reported (Amounts in thousands) Net sales $ $ ) $ $ $ ) $ Cost of goods sold, buying and occupancy costs $ $ $ $ $ $ Gross profit $ $ ) $ $ $ ) $ Operating income $ $ ) $ $ $ ) $ As a result of the adoption of Topic 606, the Company could experience a shift in revenues and gross profit between fiscal quarters in the future, depending on the timing and level of rewards earned and redeemed by customers. Revenue Recognition Accounting Policies Revenue from the sale of merchandise at the Company's stores is recognized at the time the customer takes possession of the related merchandise and the purchases are paid for. Revenue, including shipping fees billed to customers, from the sale of merchandise at the Company's eCommerce store is recognized when the merchandise is shipped to the customer and the purchases are paid for. Revenue for gift cards and merchandise credits is recognized at redemption. Prior to their redemption, gift cards and merchandise credits are recorded as a liability. Discounts and promotional coupons offered to customers are accounted for as a reduction of sales revenue at the time the coupons are tendered by the customer. For sales incentives that provide customers with a coupon for a discount on future purchases, the Company defers a portion of the revenue at the time the coupon is earned using the standalone selling price method, until the coupon is redeemed or expired. Sales taxes collected from customers are excluded from revenues. The Company reserves for sales returns on a gross basis through a separate right of return asset and liability with reductions in sales and cost of goods sold based upon historical merchandise returns experience and current sales levels. The Company issues gift cards and merchandise credits which do not contain provisions for expiration or inactivity fees. The portion of the dollar value of gift cards and merchandise credits that ultimately is not used by customers to make purchases is known as breakage and will be recognized as revenue if the Company determines it is not required to escheat such amounts to government agencies under state escheatment laws. The Company recognizes gift card and merchandise credit breakage as revenue as each is redeemed over a two-year redemption period based on their respective historical breakage rate. The Company considers the likelihood of redemption remote beyond a two-year redemption period, at which point any unrecognized breakage is recognized as revenue. The Company determined the redemption period and the breakage rates for gift cards and merchandise credits based on their respective historical redemption patterns. Under the Company's Runway Rewards program, points earned expire within 12 months if the point threshold for a reward is not attained. Issued rewards expire within approximately 60 days if they are not redeemed. As rewards are being earned the Company defers a portion of the revenue equal to the estimated sales value of the reward that is expected to be redeemed using the standalone selling price method. Revenue is recognized as rewards are redeemed or expire. The Company determines the estimated redemption rate based on the historical experience of rewards being earned and redeemed. The Company also recognizes revenue in connection with its private label credit card agreement with Comenity Bank, a bank subsidiary of Alliance Data Systems Corporation ("ADS") (the "ADS Agreement"). Pursuant to the terms of the ADS Agreement, ADS has the exclusive right to provide private label credit cards to its customers. The Company's private label credit card is issued to the Company's customers for use exclusively at the Company's stores and eCommerce websites, and credit is extended to such customers by Comenity Bank on a non-recourse basis to the Company. Upon execution of the ADS Agreement on July 14, 2016, the Company was entitled to a $40 million signing bonus, which was recorded as deferred revenue, and is being amortized on a straight-line basis over the 10-year term of the ADS agreement. In addition, over the term of the ADS Agreement, the Company receives royalty payments based on a percentage of private label credit card sales, which the Company recognizes as revenue as it is earned. Contract Liabilities Deferred revenue related to the Company's gift cards and merchandise credits outstanding was $12.1 million and $13.6 million as of November 3, 2018 and February 3, 2018, respectively, which is included in "Accrued expenses" on the Company's condensed consolidated balance sheets. During the nine months ended November 3, 2018, the Company recognized approximately $5.1 million of revenue that was included in the deferred revenue liability for gift cards and merchandise credits at February 3, 2018. Deferred revenue related to the Company's Runway Rewards program and other sales incentive programs, including the impact of Topic 606 adoption, was $7.8 million and $7.3 million as of November 3, 2018 and February 3, 2018, respectively. At November 3, 2018, the $7.8 million deferred revenue liability for loyalty programs is included in "Accrued expenses" on the Company's condensed consolidated balance sheet. During the three and nine months ended November 3, 2018, the net impact of rewards earned, redeemed and expired under these programs was a $0.3 million and $0.4 million deferral of revenue, respectively. Deferred revenue related to the ADS Agreement was $30.0 million at November 3, 2018, of which $26.0 million is included in "Other liabilities" and $4.0 million is included in "Accrued expenses" on the condensed consolidated balance sheet. As of February 3, 2018, deferred revenue related to the ADS Agreement was $33.0 million, of which $29.0 million is included in "Other liabilities" and $4.0 million is included in "Accrued expenses" on the condensed consolidated balance sheet. During the three months ended November 3, 2018 and October 28, 2017, the Company recognized revenue of $6.0 million and $6.1 million, respectively, from royalties and the amortization of signing bonuses in connection with the ADS Agreement. During the nine months ended November 3, 2018 and October 28, 2017, the Company recognized revenue of $17.6 million and $17.7 million, respectively, from royalties and the amortization of signing bonuses in connection with the ADS Agreement.

Earnings Per Share

Earnings Per Share	9 Months Ended
	Nov. 03, 2018
Earnings Per Share
Earnings Per Share	4. Earnings Per Share Basic earnings per share are computed by dividing net income by the weighted average number of shares of common stock outstanding for the period. Except when the effect would be anti-dilutive, diluted earnings per share are calculated based on the weighted average number of outstanding shares of common stock plus the dilutive effect of share-based awards calculated under the treasury stock method. A reconciliation between basic and diluted earnings per share is as follows: Three months Three months Nine months Nine months (Amounts in thousands, except per share amounts) Net income $ $ $ $ Basic earnings per share : Weighted average shares outstanding: Basic shares of common stock ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic earnings per share $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Diluted earnings per share: Weighted average shares outstanding: Basic shares of common stock Plus impact of share-based awards ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Diluted shares of common stock ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Diluted earnings per share $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The calculation of diluted earnings per share for the three and nine months ended November 3, 2018 and October 28, 2017 excludes the share-based awards listed in the following table due to their anti-dilutive effect as determined under the treasury stock method: Three months Three months Nine months Nine months (Amounts in thousands) Stock options — Stock appreciation rights(1) Restricted stock and units ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total anti-dilutive shares ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) Each stock appreciation right ("SAR") referred to above represents the right to receive a payment measured by the increase in the fair market value of one share of common stock from the date of grant of the SAR to the date of exercise of the SAR. Upon exercise, the SARs will be settled in stock.

Pension Plan

Pension Plan	9 Months Ended
	Nov. 03, 2018
Pension Plan
Pension Plan	5. Pension Plan The Company sponsors a single employer defined benefit pension plan ("plan") covering substantially all union employees. Employees covered by collective bargaining agreements are primarily non-management store associates, representing approximately 7% of the Company's workforce at November 3, 2018. The collective bargaining agreement with the Local 1102 unit of the Retail, Wholesale and Department Store Union AFL-CIO is in effect through January 31, 2019. The plan provides retirement benefits for union employees who have attained the age of 21 and complete 1,000 or more hours of service in any calendar year following the date of employment. The plan provides benefits based on length of service. The Company's funding policy for the pension plan is to contribute annually the amount necessary to provide for benefits based on accrued service and to contribute at least the minimum required by ERISA rules. Net periodic benefit cost includes the following components: Three months Three months Nine months Nine months (Amounts in thousands) Service cost $ $ $ $ Interest cost Expected return on plan assets ) ) ) ) Amortization of unrecognized losses Amortization of prior service credit ) ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net periodic benefit cost $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ In accordance with FASB ASC Topic 220, "Comprehensive Income," comprehensive income reported on the Company's condensed consolidated statements of comprehensive income includes net income and other comprehensive income. For the Company, other comprehensive income consists of the reclassification of unrecognized losses and prior service credits related to the Company's minimum pension liability. The total amount of unrecognized losses and prior service credits reclassified out of "Accumulated other comprehensive loss" on the condensed consolidated balance sheets and into "Selling, general, and administrative expenses" on the Company's condensed consolidated statements of operations for the three months ended November 3, 2018 and October 28, 2017 was approximately $35,000 and $10,000, respectively, and for the nine months ended November 3, 2018 and October 28, 2017 was approximately $105,000 and $195,000, respectively. As of February 3, 2018, the Company reported a minimum pension liability of $1.2 million due to the underfunded status of the plan. The minimum pension liability is reported in "Other liabilities" on the condensed consolidated balance sheets.

Income Taxes

Income Taxes	9 Months Ended
	Nov. 03, 2018
Income Taxes
Income Taxes	6. Income Taxes The Company files U.S. federal income tax returns and income tax returns in various state and local jurisdictions. The Company is no longer subject to U.S. federal income tax examinations for tax years through 2014. With limited exception, the Company is no longer subject to state and local income tax examinations for tax years through 2013. At February 3, 2018, the Company reported a total liability for unrecognized tax benefits of $2.0 million, including interest and penalties. There have been no material changes during the nine months ended November 3, 2018. Of the total $2.0 million of unrecognized tax benefits at February 3, 2018, approximately $1.6 million, if recognized, would impact the Company's effective tax rate. The Company does not anticipate any significant increases or decreases to the balance of unrecognized tax benefits during the next 12 months. The Company continues to maintain a valuation allowance against its deferred tax assets until the Company believes it is more likely than not that these assets will be realized in the future. If sufficient positive evidence arises in the future indicating that all or a portion of the deferred tax assets meet the more likely than not standard under ASC Topic 740, "Income Taxes," the valuation allowance would be reversed accordingly in the period that such determination is made. As of November 3, 2018, the Company's valuation allowance against its deferred tax assets was $55.1 million.

Long-Term Debt and Credit Facil

Long-Term Debt and Credit Facilities	9 Months Ended
	Nov. 03, 2018
Long-Term Debt and Credit Facilities
Long-Term Debt and Credit Facilities	7. Long-Term Debt and Credit Facilities On October 24, 2014, Lerner New York, Inc., Lernco, Inc. and Lerner New York Outlet, LLC, wholly-owned indirect subsidiaries of RTW Retailwinds, Inc., entered into a Fourth Amended and Restated Loan and Security Agreement (the "Loan Agreement") with Wells Fargo Bank, National Association, as Agent and Term Loan Agent and the lender party thereto. The obligations under the Loan Agreement are guaranteed by RTW Retailwinds, Inc. and its other subsidiaries. The Loan Agreement expires on October 24, 2019. The Loan Agreement consists of a revolving credit facility that provides the Company with up to $100 million of credit, consisting of a $75 million revolving credit facility (which includes a sub-facility for issuance of letters of credit up to $45 million) with a fully committed accordion option that allows the Company to increase the revolving credit facility up to $100 million or decrease it to a minimum of $60 million, subject to certain restrictions. On April 5, 2018, the Company used cash on-hand to prepay in full an $11.5 million outstanding balance of a $15 million, 5-year term loan under the Loan Agreement. Under the terms of the Loan Agreement, the interest rates applicable to Revolving Loans are, at the Company's option, either at a floating rate equal to the Adjusted Eurodollar Rate plus a margin of between 1.50% and 1.75% per year for Eurodollar Rate Loans or a floating rate equal to the Prime Rate plus a margin of between 0.50% and 0.75% per year for Prime Rate Loans, depending upon the Company's Average Compliance Excess Availability. The Company pays to the lender under the revolving credit facility a monthly fee on outstanding commercial letters of credit at a rate of between 0.75% and 0.875% per year and on standby letters of credit at a rate of between 1.50% and 1.75% per year, depending upon the Company's Average Compliance Excess Availability, plus a monthly fee on a proportion of the unused commitments under the revolving credit facility at a rate of 0.25% per year. The maximum borrowing availability under the Company's revolving credit facility is determined by a monthly borrowing base calculation based on applying specified advance rates against inventory and certain other eligible assets. As of November 3, 2018, the Company had availability under its revolving credit facility of $59.9 million, net of letters of credit outstanding of $13.0 million, as compared to availability of $38.1 million, net of letters of credit outstanding of $12.5 million, as of February 3, 2018, and availability of $59.4 million, net of letters of credit outstanding of $14.7 million, as of October 28, 2017. The $13.0 million of letters of credit outstanding at November 3, 2018 includes $11.9 million of standby letters of credit primarily related to the Company's new corporate headquarters and certain insurance contracts. Standby letters of credit related to the Company's corporate headquarters are scheduled to be reduced by $2.0 million annually, which began in October 2017, for a total reduction of $6.0 million by October 2019. Under the terms of the Loan Agreement, the Company is subject to a Minimum Excess Availability covenant of $7.5 million. The Loan Agreement contains other covenants and conditions, including restrictions on the Company's ability to pay dividends on its common stock, incur additional indebtedness and to prepay, redeem, defease or purchase other indebtedness. Subject to such restrictions, the Company may incur more indebtedness for working capital, capital expenditures, stock repurchases, acquisitions and for other purposes. The lender has been granted a pledge of the common stock of Lerner New York Holding, Inc. and certain of its subsidiaries, and a first priority security interest in substantially all other tangible and intangible assets of RTW Retailwinds, Inc. and its subsidiaries, as collateral for the Company's obligations under the Loan Agreement. In addition, RTW Retailwinds, Inc. and certain of its subsidiaries have fully and unconditionally guaranteed the obligations under the Loan Agreement, and such guarantees are joint and several. As of November 3, 2018, February 3, 2018, and October 28, 2017, the Company had $4.4 million, $5.8 million, and $6.2 million of capital lease obligations outstanding, respectively. The Company's capital lease obligations are generally required to be repaid ratably over a five-year term beginning on the respective lease commencement date.

Fair Value Measurements

Fair Value Measurements	9 Months Ended
	Nov. 03, 2018
Fair Value Measurements
Fair Value Measurements	8. Fair Value Measurements The Company measures fair value in accordance with FASB ASC Topic 820, "Fair Value Measurements" ("ASC 820"). ASC 820 establishes a three-level fair value hierarchy that requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The three levels of inputs used to measure fair value are as follows: Level 1: Observable inputs such as quoted prices in active markets; Level 2: Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and Level 3: Unobservable inputs in which there is little or no market data and require the reporting entity to develop its own assumptions. The Company's financial instruments consist of cash and cash equivalents, short-term trade receivables, accounts payable, and long-term debt in prior periods. The carrying values on the balance sheets for cash and cash equivalents, short-term trade receivables and accounts payable approximate their fair values due to the short-term maturities of such items. The carrying amount of long-term debt on the balance sheets approximates its fair value due to the variable interest rate it carries. The Company classifies long-lived store assets within Level 3 of the fair value hierarchy. The Company evaluates the impairment of long-lived assets in accordance with ASC Topic 360, "Property, Plant and Equipment." Long-lived assets are evaluated for recoverability whenever events or changes in circumstances indicate that an asset may have been impaired. The evaluation is performed at the individual store level, which is the lowest level for which identifiable cash flows are largely independent of the cash flows of other groups of assets and liabilities. In evaluating long-lived assets for recoverability, the Company estimates the future cash flows at the individual store level that are expected to result from the use of each store's assets based on historical experience, omni-channel strategy, knowledge and market data assumptions. If the sum of the expected future undiscounted cash flows is less than the carrying amount of the long-lived assets, an impairment loss, equal to the excess of the carrying amount over the fair value of the assets, is recognized. During the nine months ended November 3, 2018, the Company recorded $0.5 million of non-cash impairment charges related to underperforming store assets in "Selling, general and administrative expenses" on the Company's condensed consolidated statement of operations. There were no asset impairment charges recorded during the three months ended November 3, 2018. During the three and nine months ended October 28, 2017, the Company recorded $0.1 million and $0.6 million, respectively, of non-cash impairment charges related to underperforming store assets in "Selling, general and administrative expenses" on the Company's condensed consolidated statement of operations.

Revenue Recognition (Tables)

Revenue Recognition (Tables)	9 Months Ended
	Nov. 03, 2018
Revenue Recognition
Schedule of disclosure of the impact of adoption	In accordance with the new revenue standard requirements, the disclosure of the impact of adoption on the Company's consolidated balance sheet on February 4, 2018 was as follows: February 3, 2018 Effect of February 4, 2018 (Amounts in thousands) Accrued expenses $ $ $ Retained deficit $ ) $ ) $ ) In accordance with the new revenue standard requirements, the disclosure of the impact of adoption on the Company's consolidated balance sheet as of November 3, 2018 was as follows: As of November 3, 2018 Balances Effect of As Reported (Amounts in thousands) Accrued expenses $ $ $ Retained deficit $ ) $ ) $ ) In accordance with the new revenue standard requirements, the disclosure of the impact of adoption on the Company's condensed consolidated statements of operations during the three and nine months ended November 3, 2018 was as follows: Three months ended November 3, 2018 Nine months ended November 3, 2018 Balances Effect of As Reported Balances Effect of As Reported (Amounts in thousands) Net sales $ $ ) $ $ $ ) $ Cost of goods sold, buying and occupancy costs $ $ $ $ $ $ Gross profit $ $ ) $ $ $ ) $ Operating income $ $ ) $ $ $ ) $

Earnings Per Share (Tables)

Earnings Per Share (Tables)	9 Months Ended
	Nov. 03, 2018
Earnings Per Share
Schedule of reconciliation between basic and diluted earnings per share	Three months Three months Nine months Nine months (Amounts in thousands, except per share amounts) Net income $ $ $ $ Basic earnings per share : Weighted average shares outstanding: Basic shares of common stock ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic earnings per share $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Diluted earnings per share: Weighted average shares outstanding: Basic shares of common stock Plus impact of share-based awards ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Diluted shares of common stock ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Diluted earnings per share $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Schedule listing the share-based awards excluded from the computation of diluted earnings per share due to their anti-dilutive effect	Three months Three months Nine months Nine months (Amounts in thousands) Stock options — Stock appreciation rights(1) Restricted stock and units ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total anti-dilutive shares ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) Each stock appreciation right ("SAR") referred to above represents the right to receive a payment measured by the increase in the fair market value of one share of common stock from the date of grant of the SAR to the date of exercise of the SAR. Upon exercise, the SARs will be settled in stock.

Pension Plan (Tables)

Pension Plan (Tables)	9 Months Ended
	Nov. 03, 2018
Pension Plan
Schedule of net periodic benefit cost	Three months Three months Nine months Nine months (Amounts in thousands) Service cost $ $ $ $ Interest cost Expected return on plan assets ) ) ) ) Amortization of unrecognized losses Amortization of prior service credit ) ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net periodic benefit cost $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Organization and Basis of Pre_2

Organization and Basis of Presentation (Details)	3 Months Ended		9 Months Ended		12 Months Ended
	Nov. 03, 2018stateitem	Oct. 28, 2017	Nov. 03, 2018statesegmentitemage	Oct. 28, 2017	Feb. 02, 2019	Feb. 03, 2018
Organization and Basis of Presentation
Number of stores operated | item	428		428
Number of states in which entity operated the stores | state	36		36
Length of period	91 days	91 days	182 days	182 days
Length of fiscal year					364 days	371 days
Number of reportable segments | segment			1
Minimum
Organization and Basis of Presentation
Age of women targeted as customers			25
Length of fiscal year					364 days
Maximum
Organization and Basis of Presentation
Age of women targeted as customers			49
Length of fiscal year					371 days

New Accounting Pronouncements (

New Accounting Pronouncements (Details) - USD ($)	3 Months Ended		9 Months Ended
	Nov. 03, 2018	Oct. 28, 2017	Nov. 03, 2018	Oct. 28, 2017
New Accounting Pronouncements
Selling, general and administrative expenses	$ 66,802,000	$ 66,980,000	$ 199,605,000	$ 198,659,000
Operating income	$ 1,573,000	618,000	$ 8,105,000	1,922,000
ASU 2017-07
New Accounting Pronouncements
Selling, general and administrative expenses		52,000		(60,000)
Operating income		$ (52,000)		$ 60,000

Revenue Recognition (Details)

Revenue Recognition (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Nov. 03, 2018	Oct. 28, 2017	Nov. 03, 2018	Oct. 28, 2017	Feb. 04, 2018	Feb. 03, 2018
Revenue, Initial Application Period Cumulative Effect Transition
Accrued expenses	$ 66,487	$ 61,714	$ 66,487	$ 61,714	$ 76,560	$ 70,677	[1]
Retained deficit	(88,802)	(95,544)	(88,802)	(95,544)	(96,680)	(90,797)	[1]
Net sales	210,758	214,182	645,957	648,155
Cost of goods sold, buying and occupancy costs	142,383	146,584	438,247	447,574
Gross profit	68,375	67,598	207,710	200,581
Operating income	1,573	$ 618	8,105	$ 1,922
Balances Without Adoption of ASC 606 | ASU 2014-09
Revenue, Initial Application Period Cumulative Effect Transition
Accrued expenses	65,964		65,964			70,677
Retained deficit	(88,279)		(88,279)			$ (90,797)
Net sales	211,144		646,383
Cost of goods sold, buying and occupancy costs	142,355		438,150
Gross profit	68,789		208,233
Operating income	1,987		8,628
Effect of Topic 606 Adoption | ASU 2014-09
Revenue, Initial Application Period Cumulative Effect Transition
Accrued expenses	523		523		5,883
Retained deficit	(523)		(523)		$ (5,883)
Net sales	(386)		(426)
Cost of goods sold, buying and occupancy costs	28		97
Gross profit	(414)		(523)
Operating income	$ (414)		$ (523)
[1]	Derived from the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended February 3, 2018.

Revenue Recognition - Revenue R

Revenue Recognition - Revenue Recognition Accounting Policies and Contract Liabilities (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Nov. 03, 2018	Oct. 28, 2017	Nov. 03, 2018	Oct. 28, 2017	Feb. 03, 2018	Jul. 14, 2016
Revenue, Initial Application Period Cumulative Effect Transition
Redemption period for gift card and merchandise credit breakage			2 years
Points earned expiry period for Runway Rewards			12 months
Issued rewards expiry period for Runway Rewards			60 days
Gift cards and merchandise credits
Revenue, Initial Application Period Cumulative Effect Transition
Revenue recognized			$ 5.1
Gift cards and merchandise credits | Accrued expenses
Revenue, Initial Application Period Cumulative Effect Transition
Deferred revenue	$ 12.1		12.1		$ 13.6
Runway Rewards program and other sales-incentive programs
Revenue, Initial Application Period Cumulative Effect Transition
Deferred revenue	7.8		7.8		7.3
Runway rewards program
Revenue, Initial Application Period Cumulative Effect Transition
Net impact of rewards earned, redeemed and expired to deferral of revenue	0.3		0.4
Runway rewards program | Accrued expenses
Revenue, Initial Application Period Cumulative Effect Transition
Deferred revenue	7.8		7.8
Second Amended and Restated Label Credit Card Program Agreement | ADS
Revenue, Initial Application Period Cumulative Effect Transition
Deferred revenue	30		30		33	$ 40
Amortization period of deferred revenue						10 years
Revenue recognized	6	$ 6.1	17.6	$ 17.7
Second Amended and Restated Label Credit Card Program Agreement | ADS | Other liabilities
Revenue, Initial Application Period Cumulative Effect Transition
Deferred revenue	26		26		29
Second Amended and Restated Label Credit Card Program Agreement | ADS | Accrued expenses
Revenue, Initial Application Period Cumulative Effect Transition
Deferred revenue	$ 4		$ 4		$ 4

Earnings Per Share - Reconcilia

Earnings Per Share - Reconciliation between basic and diluted earnings (loss) per share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Nov. 03, 2018	Oct. 28, 2017	Nov. 03, 2018	Oct. 28, 2017
Earnings Per Share
Net income	$ 1,725	$ 352	$ 7,878	$ 928
Weighted average shares outstanding:
Basic shares of common stock (in shares)	63,940	63,242	63,738	63,213
Basic earnings per share	$ 0.03	$ 0.01	$ 0.12	$ 0.01
Weighted average shares outstanding:
Basic shares of common stock (in shares)	63,940	63,242	63,738	63,213
Plus impact of share-based awards (in shares)	2,349	857	2,241	629
Diluted shares of common stock (in shares)	66,289	64,099	65,979	63,842
Diluted earnings per share	$ 0.03	$ 0.01	$ 0.12	$ 0.01

Earnings Per Share - Antidiluti

Earnings Per Share - Antidilutive shares (Details) - shares	3 Months Ended		9 Months Ended
	Nov. 03, 2018	Oct. 28, 2017	Nov. 03, 2018	Oct. 28, 2017
Shares excluded from calculation of diluted earnings per share
Total anti-dilutive shares	1,159,000	2,985,000	456,000	6,606,000
Stock options
Shares excluded from calculation of diluted earnings per share
Total anti-dilutive shares		13,000	4,000	190,000
Stock appreciation rights
Shares excluded from calculation of diluted earnings per share
Total anti-dilutive shares	846,000	2,880,000	339,000	6,208,000
Number of shares of common stock for which increase in fair market value considered as basis for measurement of payment			1
Restricted stock and units
Shares excluded from calculation of diluted earnings per share
Total anti-dilutive shares	313,000	92,000	113,000	208,000

Pension Plan (Details)

Pension Plan (Details)	3 Months Ended		9 Months Ended
	Nov. 03, 2018USD ($)	Oct. 28, 2017USD ($)	Nov. 03, 2018USD ($)item	Oct. 28, 2017USD ($)	Feb. 03, 2018USD ($)
Pension Plan
Employees covered by collective bargaining agreements (as a percent)	7.00%		7.00%
Age of employees, after attainment of which plan provides retirement benefits | item			21
Minimum hours of service to be completed for plan to provide retirement benefits			1000 hours
Net periodic benefit cost
Service cost	$ 97,000	$ 84,000	$ 290,000	$ 252,000
Interest cost	76,000	72,000	229,000	244,000
Expected return on plan assets	(140,000)	(134,000)	(421,000)	(379,000)
Amortization of unrecognized losses	39,000	13,000	117,000	206,000
Amortization of prior service credit	(4,000)	(3,000)	(12,000)	(11,000)
Net periodic benefit cost	68,000	32,000	203,000	312,000
Amounts reclassified from accumulated other comprehensive loss	$ 35,000	$ 10,000	$ 105,000	$ 195,000
Minimum pension liability due to the underfunded status of the plan					$ 1,200,000

Income Taxes (Details)

Income Taxes (Details) - USD ($) $ in Millions	Nov. 03, 2018	Feb. 03, 2018
Income Taxes
Unrecognized tax benefits		$ 2
Unrecognized tax benefit impact on effective tax rate		$ 1.6
Deferred tax assets, valuation allowance	$ 55.1

Long-Term Debt and Credit Fac_2

Long-Term Debt and Credit Facilities (Details) - USD ($) $ in Thousands	Apr. 05, 2018	Nov. 03, 2018	Oct. 28, 2017	Feb. 03, 2018
Long-Term Debt and Credit Facilities
Quarterly repayment		$ 11,750	$ 750
Minimum excess availability covenant		7,500
Capital Lease Obligations		$ 4,400	6,200	$ 5,800
Periods for payment of Capital lease obligations		5 years
Line of credit
Long-Term Debt and Credit Facilities
Maximum borrowing capacity		$ 100,000
Revolving credit facility
Long-Term Debt and Credit Facilities
Maximum borrowing capacity		$ 75,000
Monthly commitment fee on the unused proportion of credit facility (as a percent)		0.25%
Borrowing availability		$ 59,900	59,400	38,100
Outstanding letters of credit		13,000	$ 14,700	$ 12,500
Revolving credit facility | Minimum
Long-Term Debt and Credit Facilities
Accordion option to increase or decrease commitments under the credit facility		60,000
Revolving credit facility | Maximum
Long-Term Debt and Credit Facilities
Accordion option to increase or decrease commitments under the credit facility		$ 100,000
Revolving credit facility | Eurodollar rate
Long-Term Debt and Credit Facilities
Variable rate basis		Eurodollar Rate
Revolving credit facility | Eurodollar rate | Minimum
Long-Term Debt and Credit Facilities
Interest rate margin (as a percent)		1.50%
Revolving credit facility | Eurodollar rate | Maximum
Long-Term Debt and Credit Facilities
Interest rate margin (as a percent)		1.75%
Revolving credit facility | Prime rate
Long-Term Debt and Credit Facilities
Variable rate basis		Prime Rate
Revolving credit facility | Prime rate | Minimum
Long-Term Debt and Credit Facilities
Interest rate margin (as a percent)		0.50%
Revolving credit facility | Prime rate | Maximum
Long-Term Debt and Credit Facilities
Interest rate margin (as a percent)		0.75%
Commercial letters of credit
Long-Term Debt and Credit Facilities
Maximum borrowing capacity		$ 45,000
Commercial letters of credit | Minimum
Long-Term Debt and Credit Facilities
Monthly commitment fee letters of credit (as a percent)		0.75%
Commercial letters of credit | Maximum
Long-Term Debt and Credit Facilities
Monthly commitment fee letters of credit (as a percent)		0.875%
Stand by letters of credit
Long-Term Debt and Credit Facilities
Outstanding letters of credit		$ 11,900
Expected annual reduction of letters of credit		2,000
Expected total reduction of letters of credit		$ 6,000
Stand by letters of credit | Minimum
Long-Term Debt and Credit Facilities
Monthly commitment fee letters of credit (as a percent)		1.50%
Stand by letters of credit | Maximum
Long-Term Debt and Credit Facilities
Monthly commitment fee letters of credit (as a percent)		1.75%
Term loan
Long-Term Debt and Credit Facilities
Quarterly repayment	$ 11,500
Term loan		$ 15,000
Length of term loan		5 years

Fair Value Measurements (Detail

Fair Value Measurements (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Nov. 03, 2018	Oct. 28, 2017	Nov. 03, 2018	Oct. 28, 2017
Non-cash impairment charges			$ 486	$ 611
Impairment charges	$ 0
Underperforming New York & Company stores | Selling, general and administrative expenses
Non-cash impairment charges		$ 100	$ 500	$ 600