Sears Hometown & Outlet Stores (SHOS) 10-Q 4 Sep 15 2015 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information Document - shares	6 Months Ended
	Aug. 01, 2015	Sep. 01, 2015
Document and Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Aug. 1, 2015
Document Fiscal Year Focus	2,015
Document Fiscal Period Focus	Q2
Entity Registrant Name	Sears Hometown & Outlet Stores, Inc.
Entity Central Index Key	1,548,309
Current Fiscal Year End Date	--01-30
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		22,721,560

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Aug. 01, 2015	Aug. 02, 2014	Aug. 01, 2015	Aug. 02, 2014
NET SALES	$ 619,610	$ 638,693	$ 1,202,379	$ 1,228,547
COSTS AND EXPENSES
Cost of sales and occupancy	478,250	491,604	920,660	937,559
Selling and administrative	136,223	139,226	270,725	274,505
Depreciation	2,164	2,067	4,025	4,355
Total costs and expenses	616,637	632,897	1,195,410	1,216,419
Operating income	2,973	5,796	6,969	12,128
Interest expense	(614)	(905)	(1,395)	(1,839)
Other income	560	798	1,242	1,478
Income before income taxes	2,919	5,689	6,816	11,767
Income tax expense	(1,409)	(2,329)	(3,156)	(4,728)
NET INCOME	$ 1,510	$ 3,360	$ 3,660	$ 7,039
NET INCOME PER COMMON SHARE ATTRIBUTABLE TO STOCKHOLDERS
Basic (in dollars per share)	$ 0.07	$ 0.15	$ 0.16	$ 0.31
Diluted (in dollars per share)	$ 0.07	$ 0.15	$ 0.16	$ 0.31
Basic weighted average common shares outstanding (in shares)	22,666	22,666	22,666	22,666
Diluted weighted average common shares outstanding (in shares)	22,666	22,666	22,666	22,666

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Aug. 01, 2015	Jan. 31, 2015	Aug. 02, 2014
CURRENT ASSETS
Cash and cash equivalents	$ 23,390	$ 19,746	$ 20,978
Accounts and franchisee receivables, net	13,583	15,456	21,211
Merchandise inventories	431,376	442,743	469,607
Prepaid expenses and other current assets	17,550	19,350	13,312
Total current assets	485,899	497,295	525,108
PROPERTY AND EQUIPMENT, net	52,841	50,708	51,973
GOODWILL	0	0	167,000
LONG-TERM DEFERRED TAXES	53,904	54,273	48,345
OTHER ASSETS, net	43,395	43,446	45,898
TOTAL ASSETS	636,039	645,722	838,324
CURRENT LIABILITIES
Short-term borrowings	10,100	84,100	74,800
Payable to Sears Holdings Corporation	91,778	61,089	83,711
Accounts payable	29,463	14,888	13,897
Other current liabilities	76,855	60,938	64,495
Current portion of capital lease obligations	32	147	286
Total current liabilities	208,228	221,162	237,189
CAPITAL LEASE OBLIGATIONS	291	176	3
OTHER LONG-TERM LIABILITIES	1,973	2,098	3,475
TOTAL LIABILITIES	$ 210,492	$ 223,436	$ 240,667
COMMITMENTS AND CONTINGENCIES (Note 10)
STOCKHOLDERS' EQUITY
TOTAL STOCKHOLDERS' EQUITY	$ 425,547	$ 422,286	$ 597,657
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 636,039	$ 645,722	$ 838,324

Condensed Consolidated Stateme4

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Aug. 01, 2015	Aug. 02, 2014
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$ 3,660	$ 7,039
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	4,025	4,355
Share-based compensation	(399)	393
Provision for losses on franchisee receivables	364	0
Change in operating assets and liabilities:
Accounts and franchisee receivables	1,231	(7,821)
Merchandise inventories	11,367	12,500
Payable to Sears Holdings Corporation	30,689	15,315
Accounts payable	14,575	(10,232)
Customer deposits	2,610	(257)
Deferred income taxes	2,635	4,278
Other operating assets	154	102
Other operating liabilities	13,181	3,558
Net cash provided by operating activities	84,092	29,230
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment	(6,448)	(7,050)
Net cash used in investing activities	(6,448)	(7,050)
CASH FLOWS FROM FINANCING ACTIVITIES
Payments of capital lease obligations	0	(377)
Net short-term borrowings (payments)	(74,000)	(24,300)
Net cash used in financing activities	(74,000)	(24,677)
NET CHANGE IN CASH AND CASH EQUIVALENTS	3,644	(2,497)
CASH AND CASH EQUIVALENTS—Beginning of period	19,746	23,475
CASH AND CASH EQUIVALENTS—End of period	23,390	20,978
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid for interest	1,457	1,737
Cash paid (refunded) for income taxes	$ (2,484)	$ 204

Condensed Consolidated Stateme5

Condensed Consolidated Statements of Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands	Total	Common Stock [Member]	Capital in Excess of Par Value [Member]	Retained Earnings (Deficit) [Member]
Beginning balance at Feb. 01, 2014	$ 590,225	$ 228	$ 547,021	$ 42,976
Beginning balance, Shares at Feb. 01, 2014		22,753
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	7,039			7,039
Share-based compensation	393	$ (1)	394
Share-based compensation, Shares		(14)
Ending balance at Aug. 02, 2014	597,657	$ 227	547,415	50,015
Ending balance, Shares at Aug. 02, 2014		22,739
Beginning balance at Jan. 31, 2015	422,286	$ 227	547,888	(125,829)
Beginning balance, Shares at Jan. 31, 2015		22,736
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	3,660			3,660
Share-based compensation	(399)		(399)
Share-based compensation, Shares		(14)
Ending balance at Aug. 01, 2015	$ 425,547	$ 227	$ 547,489	$ (122,169)
Ending balance, Shares at Aug. 01, 2015		22,722

Background and Basis of Present

Background and Basis of Presentation	6 Months Ended
	Aug. 01, 2015
Organization, Consolidation and Presentation of Financial Statements [Abstract]
BACKGROUND AND BASIS OF PRESENTATION	BACKGROUND AND BASIS OF PRESENTATION Background Sears Hometown and Outlet Stores, Inc. is a national retailer primarily focused on selling home appliances, hardware, tools, and lawn and garden equipment. As of August 1, 2015 the Company or its dealers and franchisees operated a total of 1,215 stores across all 50 states and in Puerto Rico and Bermuda. In these notes and elsewhere in this Quarterly Report on Form 10-Q the terms “we,” “us,” “our,” “SHO,” and the “Company” refer to Sears Hometown and Outlet Stores, Inc. and its subsidiaries. The Separation The Company separated from Sears Holdings Corporation (“Sears Holdings”) in October 2012 (the “Separation”). Effective upon the Separation, Sears Holdings ceased to own shares of our common stock, and thereafter our common stock began trading on the NASDAQ Stock Market under the trading symbol “SHOS.” Basis of Presentation These unaudited condensed consolidated financial statements include the accounts of Sears Hometown and Outlet Stores, Inc. and its subsidiaries, all of which are wholly owned. These unaudited condensed consolidated financial statements do not include all of the information and footnotes required in annual consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"). In the opinion of management, all adjustments (which include normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the first and second quarters ended August 1, 2015 are not necessarily indicative of the results that may be expected for the full fiscal year. These financial statements and related notes should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended January 31, 2015. We operate through two segments--our Sears Hometown and Hardware segment ("Hometown") and our Sears Outlet segment ("Outlet"). Our fiscal-year end is the Saturday closest to January 31 each year. Our second fiscal-quarter end is the Saturday closest to July 31 each year. Variable Interest Entities and Consolidation The Financial Accounting Standards Board ("FASB") has issued guidance on variable interest entities and consolidation for determining whether an entity is a variable interest entity as well as the methods permitted for determining the primary beneficiary of a variable interest entity. In addition, this guidance requires ongoing reassessments of whether a company is the primary beneficiary of a variable interest entity and disclosures related to a company’s involvement with a variable interest entity. On an ongoing basis the Company evaluates its business relationships, such as those with its dealers, franchisees, and suppliers, to identify potential variable interest entities. Generally, these businesses either qualify for a scope exception under the consolidation guidance or, where a variable interest exists, the Company does not possess the power to direct the activities that most significantly impact the economic performance of these businesses. The Company has not consolidated any of such entities in the periods presented. Fair Value of Financial Instruments We determine the fair value of financial instruments in accordance with standards pertaining to fair value measurements. Such standards define fair value and establish a framework for measuring fair value under GAAP. Under fair value measurement accounting standards, fair value is considered to be the exchange price in an orderly transaction between market participants to sell an asset or transfer a liability at the measurement date. We report the fair value of financial assets and liabilities based on the fair value hierarchy prescribed by accounting standards for fair value measurements, which prioritizes the inputs to valuation techniques used to measure fair value into three levels, as follows: Level 1 inputs —unadjusted quoted prices in active markets for identical assets or liabilities that we have the ability to access. An active market for the asset or liability is one in which transactions for the asset or liability occurs with sufficient frequency and volume to provide ongoing pricing information. Level 2 inputs —inputs other than quoted market prices included in Level 1 that are observable, either directly or indirectly, for the asset or liability. Level 2 inputs include, but are not limited to, quoted prices for similar assets or liabilities in an active market, quoted prices for identical or similar assets or liabilities in markets that are not active, and inputs other than quoted market prices that are observable for the asset or liability, such as interest-rate curves and yield curves observable at commonly quoted intervals, volatilities, credit risks, and default rates. Level 3 inputs —unobservable inputs for the asset or liability. Cash and cash equivalents (level 1), accounts receivable, notes receivable (level 2), short-term debt (level 2), merchandise payables, and accrued expenses are reflected in the Condensed Consolidated Balance Sheets at cost, which approximates fair value due to the short-term nature of these instruments. For short-term debt, the variable interest rates are a significant input in our fair value assessments. The carrying value of long-term notes receivable approximates fair value. We measure certain non-financial assets and liabilities, including long-lived assets, at fair value on a non-recurring basis. The Company was not required to measure any other significant non-financial asset or liability at fair value as of August 1, 2015. Recent Accounting Pronouncements Consolidation In February 2015, the Financial Accounting Standards Board ("FASB") issued an accounting standards update which revises the consolidation model. Specifically, the amendments modify the evaluation of whether limited partnerships and similar legal entities are variable interest entities (VIEs) or voting interest entities, eliminate the presumption that a general partner should consolidate a limited partnership, affect the consolidation analysis of reporting entities that are involved with VIEs, particularly those that have fee arrangements and related party relationships, and provide a scope exception from consolidation guidance for reporting entities with interests in legal entities that are required to comply with or operate in accordance with requirements that are similar to those in Rule 2a-7 of the Investment Company Act of 1940 for registered money market funds. This update was effective for the Company in the first quarter of 2015. The adoption of the new standard did not impact the Company’s consolidated financial position, results of operations, cash flows or disclosures. Extraordinary and Unusual Items In January 2015, the FASB issued an accounting standards update which eliminates the concept of an extraordinary item. Extraordinary items are events and transactions that are distinguished by their unusual nature and by the infrequency of their occurrence. Eliminating the extraordinary classification simplifies income statement presentation by altogether removing the concept of extraordinary items from consideration. This update was effective for the Company in the first quarter of 2015. The adoption of the new standard did not impact the Company’s consolidated financial position, results of operations, cash flows or disclosures. Presentation of Financial Statements - Going Concern In August 2014, the FASB issued an accounting standards update which requires management to assess whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the financial statements are issued. If substantial doubt exists, additional disclosures are required. This update will be effective for the Company in the fourth quarter of 2016. The adoption of the new standard is not expected to have a material impact on the Company’s consolidated financial position, results of operations, cash flows or disclosures. Revenue from Contracts with Customers In May 2014, the FASB issued an accounting standards update which replaces the current revenue recognition standards. The new revenue recognition standard provides a five-step analysis of transactions to determine when and how revenue is recognized. The core principle is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This update will be effective for the Company in the first quarter of 2018 and may be applied retrospectively for each period presented or as a cumulative-effect adjustment at the date of adoption. The Company is evaluating the effect of adopting this new standard and has not yet determined the method by which the standard will be adopted. Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity In April 2014, the FASB issued an accounting standards update which modifies the requirements for disposals to qualify as discontinued operations and expands related disclosure requirements. The update was effective for the Company in the first quarter of 2015. The adoption of the new standard did not impact the Company’s consolidated financial position, results of operations, cash flows or disclosures.

Accounts and Franchisee Receiva

Accounts and Franchisee Receivables and Other Assets	6 Months Ended
	Aug. 01, 2015
Receivables [Abstract]
Accounts and Franchisee Receivables and Other Assets	ACCOUNTS AND FRANCHISEE RECEIVABLES AND OTHER ASSETS Accounts and franchisee receivables and other assets consist of the following: August 1, Thousands Hometown Outlet Total Short-term franchisee receivables $ 1,867 $ 3,576 $ 5,443 Miscellaneous receivables 5,136 3,396 8,532 Long-term franchisee receivables 17,321 28,132 45,453 Other assets 1,635 236 1,871 Provision for losses on short-term franchisee receivables (1) (384 ) (8 ) (392 ) Provision for losses on long-term franchisee receivables (1) (3,839 ) (90 ) (3,929 ) Total Accounts and franchisee receivables and other assets $ 21,736 $ 35,242 $ 56,978 August 2, Thousands Hometown Outlet Total Short-term franchisee receivables $ 2,749 $ 2,999 $ 5,748 Miscellaneous receivables 12,839 2,624 15,463 Long-term franchisee receivables 20,159 23,320 43,479 Other assets 2,224 195 2,419 Total Accounts and franchisee receivables and other assets $ 37,971 $ 29,138 $ 67,109 January 31, Thousands Hometown Outlet Total Short-term franchisee receivables $ 6,169 $ 3,652 $ 9,821 Miscellaneous receivables 6,316 2,540 8,856 Long-term franchisee receivables 20,678 28,652 49,330 Other assets 1,973 290 2,263 Provision for losses on short-term franchisee receivables (1) (3,212 ) (9 ) (3,221 ) Provision for losses on long-term franchisee receivables (1) (8,068 ) (79 ) (8,147 ) Total Accounts and franchisee receivables and other assets $ 23,856 $ 35,046 $ 58,902 (1) The Company recognizes a provision for losses on franchisee receivables (which consist primarily of franchisee promissory notes) in an amount equal to estimated probable losses net of recoveries. The provision is based on an analysis of expected future write-offs, existing economic conditions, and an assessment of specific identifiable franchisee promissory notes and other franchisee receivables considered at risk or uncollectible. The expense associated with the provision for losses on franchisee receivables is recognized as selling and administrative expense. Most of our franchisee promissory notes authorize us to deduct debt service from our commissions otherwise due and payable to the franchisees, and we routinely make those deductions to the extent of available commissions payable. We established the provision for losses on franchisee receivables during the 2014 fiscal year based on our receivable-by-receivable assessment that some of the franchisee receivables were potentially uncollectible in future periods due to (a) declining results of operations of, or other adverse financial events with respect to, Hometown franchise stores that indicated that the franchisees might not be able to meet their debt-service and other obligations to us as they became due and (b) the refusal during the year of one of our Hometown franchisees to continue to operate its franchise stores in accordance with the franchisee's agreements with us. We have commenced litigation that seeks to recover approximately $4.4 million on guarantees with respect to some of the 2014 losses, but we cannot predict whether we will recover any monies.

Provision for Losses on Franchi

Provision for Losses on Franchisee Receivables	6 Months Ended
	Aug. 01, 2015
Receivables [Abstract]
Provision for Losses on Franchisee Receivables	PROVISION FOR LOSSES ON FRANCHISEE RECEIVABLES The provision for losses on Franchisee Receivables, which was established in fiscal 2014, consists of the following: Thousands August 1, 2015 August 2, 2014 January 31, 2015 Provision for losses on franchisee receivables, beginning of period $ 11,368 $ — $ — Expense accruals during the period 364 — 13,055 Write off of franchisee receivables (1) (7,411 ) — (1,687 ) Provision for losses on franchisee receivables, end of period $ 4,321 $ — $ 11,368 (1) We established a provision for losses on these franchisee receivables during the 2014 fiscal year.

Other Current and Long-Term Lia

Other Current and Long-Term Liabilities	6 Months Ended
	Aug. 01, 2015
Payables and Accruals [Abstract]
OTHER CURRENT AND LONG-TERM LIABILITIES	OTHER CURRENT AND LONG-TERM LIABILITIES Other current and long-term liabilities consist of the following: Thousands August 1, August 2, January 31, Customer deposits $ 32,850 $ 35,290 $ 30,241 Sales and other taxes 15,547 13,739 12,458 Accrued expenses 22,311 12,201 16,265 Payroll and related items 5,580 6,740 4,072 Store closing, severance, and executive transition costs 2,540 — — Total Other current and long-term liabilities $ 78,828 $ 67,970 $ 63,036

Goodwill

Goodwill	6 Months Ended
	Aug. 01, 2015
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill	GOODWILL We recorded a $167.0 million non-cash goodwill impairment charge in the third quarter of fiscal 2014. We reviewed the Hometown Stores and Home Appliance Showrooms ("Hometown Reporting Unit") goodwill for impairment annually at the beginning of the fourth fiscal quarter and whenever events or changes in circumstances indicated the carrying value of goodwill may not be recoverable. The goodwill impairment test involved a two-step process. In the first step, SHO compared the fair value of the Hometown Reporting Unit to its carrying value. If the fair value of the Hometown Reporting Unit exceeded its carrying value, goodwill was not impaired and no further testing was required. If the fair value of the Hometown Reporting Unit was less than its carrying value, SHO performed the second step of the impairment test to measure the amount of impairment loss. In the second step, the Hometown Reporting Unit's fair value was allocated to all of the assets and liabilities of the Hometown Reporting Unit, including any unrecognized intangible assets, in a hypothetical analysis that calculates the implied fair value of goodwill in the same manner as if the Hometown Reporting Unit were being acquired in a business combination. If the implied fair value of the Hometown Reporting Unit's goodwill was less than its carrying value, the difference was recorded as a non-cash impairment loss. During the third quarter of fiscal 2014 we determined that sufficient indicators of potential impairment existed to require that we conduct an interim impairment analysis of the Hometown Reporting Unit's goodwill. These indicators included a significant and sustained decline in the recent trading values of SHO's stock, coupled with market conditions and business trends affecting the Hometown Reporting Unit. The primary operating factors were declines in revenue and profitability for fiscal 2014. Merchandise revenues in fiscal 2014 were impacted by the highly promotional environment, along with other factors that caused declines in comparable store sales and related profitability below expectations for the Hometown Reporting Unit. SHO estimated the fair value of the Hometown Reporting Unit using a weighting of fair values derived from the income approach and the market approach. Under the income approach, SHO calculated the fair value of the Hometown Reporting Unit based on the present value of the Hometown Reporting Unit's estimated future cash flows. The cash flow projections were based on management's estimates of revenue growth rates and operating margins, taking into consideration industry and market conditions. SHO used a discount rate that was based on a weighted average cost of capital adjusted for the relevant risk associated with the characteristics of the Hometown Reporting Unit and its projected cash flows. SHO's market approach used estimated fair values based on market multiples of revenue and earnings derived from comparable publicly traded companies with operating and investment characteristics that were comparable to the operating and investment characteristics of the Hometown Reporting Unit. Due to the complexity and the effort required to estimate the fair value of the Hometown Reporting Unit for the first step of the impairment test and to estimate the fair values of all assets and liabilities of the Hometown Reporting Unit for the second step of the impairment test, SHO used fair value estimates that were derived based on assumptions and analyses that are subject to change. SHO’s first-step evaluation concluded that the fair value of the Hometown Reporting Unit was substantially below its carrying value. Based on SHO's second-step analyses, the implied fair value of the Hometown Reporting Unit's goodwill was $0 . As a result, a full impairment of goodwill was required and we recorded the $167.0 million non-cash goodwill impairment charge in the third quarter of fiscal 2014, which was reflected as "Impairment of goodwill" in the Condensed Consolidated Statements of Operations. The primary factor that contributed to the goodwill impairment loss was the aforementioned 2014 operating issues leading to less-optimistic forecasts for the remainder of fiscal 2014 and fiscal 2015 and the projected corresponding impact beyond those periods.

Income Taxes

Income Taxes	6 Months Ended
	Aug. 01, 2015
Income Tax Disclosure [Abstract]
Income Taxes	INCOME TAXES SHO and Sears Holdings have entered into a Tax Sharing Agreement that governs the rights and obligations of the parties with respect to pre-Separation and post-Separation tax matters. Under the Tax Sharing Agreement, Sears Holdings generally is responsible for any federal, state, or foreign income tax liability relating to tax periods ending on or before the Separation. For all periods after the Separation, the Company generally is responsible for any federal, state, or foreign tax liability. Current income taxes payable for any federal, state, or foreign income tax returns is reported in the period incurred. We account for uncertainties in income taxes according to accounting standards for uncertain tax positions. The Company is present in a large number of taxable jurisdictions and, at any point in time, can have audits underway at various stages of completion in one or more of these jurisdictions. We evaluate our tax positions and establish liabilities for uncertain tax positions that may be challenged by local authorities and may not be fully sustained, despite our belief that the underlying tax positions are fully supportable. Unrecognized tax benefits are reviewed on an ongoing basis and are adjusted in light of changing facts and circumstances, including progress of tax audits, developments in case law, and closings of statutes of limitation. Such adjustments are reflected in the tax provision as appropriate. For the 26 weeks ended August 1, 2015 and August 2, 2014, no unrecognized tax benefits have been identified and reflected in the financial statements. We classify interest expense and penalties related to unrecognized tax benefits and interest income on tax overpayments as components of income tax expense. As no unrecognized tax benefits have been identified and reflected in the condensed consolidated financial statements, no interest or penalties related to unrecognized tax benefits are reflected in the condensed consolidated balance sheets or statements of operations. As of August 1, 2015 the Company's net deferred tax asset balance was $62.5 million compared to $53.7 million as of August 2, 2014 and $65.2 million as of January 31, 2015.

Related Party Agreements and Tr

Related Party Agreements and Transactions	6 Months Ended
	Aug. 01, 2015
Related Party Transactions [Abstract]
RELATED-PARTY AGREEMENTS AND TRANSACTIONS	RELATED-PARTY AGREEMENTS AND TRANSACTIONS According to publicly available information ESL Investments, Inc. and investment affiliates (collectively, "ESL") beneficially own approximately 46% of our outstanding shares of common stock and approximately 56% of Sears Holdings' outstanding shares of common stock. SHO and Sears Holdings have entered into various agreements (the "SHO-Sears Holdings Agreements") that, among other things, (1) govern specified aspects of our relationship with Sears Holdings, (2) establish terms under which subsidiaries of Sears Holdings provide services to us, and (3) establish terms pursuant to which subsidiaries of Sears Holdings obtain merchandise inventories for us. The terms of the SHO-Sears Holdings Agreements were agreed to prior to the Separation (except for terms changes agreed to after the Separation that have been approved by the Audit Committee of SHO's Board of Directors) in the context of a parent-subsidiary relationship and in the overall context of the Separation. The costs and allocations charged to the Company by Sears Holdings do not necessarily reflect the costs of obtaining the services from unaffiliated third parties or of the Company itself providing the applicable services. The Company engages in frequent discussions, and seeks to resolve disputes, with Sears Holdings about the terms and conditions of the SHO-Sears Holdings Agreements, the business relationships that are reflected in the SHO-Sears Holdings Agreements, and the details of these business relationships, many of which details are not addressed by the terms and conditions of the SHO-Sears Holdings Agreements or, if addressed, are in dispute as to their meaning or application in the context of the existing business relationships. Some of these discussions have resulted in adjustments to the relationships that the Company believes together are in Company's best interests. In many other instances the Company's dispute-resolution efforts, which are continuing, have yet to resolve the underlying disputes. The following is a summary of the nature of the related-party transactions between SHO and Sears Holdings: • SHO receives commissions from Sears Holdings for specified sales of merchandise made through www.sears.com and www.searsoutlet.com, the sale of extended service contracts, delivery and handling services, and relating to the use in our stores of credit cards branded with the Sears name. For specified transactions SHO pays a commission to Sears Holdings. • We obtain a significant amount of our merchandise inventories from Sears Holdings. We have a retailer's customary rights to return to Sears Holdings merchandise that is defective (except with respect to agreed-upon amounts of defective apparel that we purchase and then liquidate) or otherwise does not meet contract requirements. In addition, we may determine that an item of Outlet merchandise (usually merchandise that is not new in-box) we have received from Sears Holdings cannot be refurbished or reconditioned or is otherwise not in a physical condition to offer for sale to our customers. We and Sears Holdings (and our Outlet vendors generally) refer to an item of merchandise in this condition as "not saleable" or "non-saleable," and in the normal course we can return the item to Sears Holdings. We generally have comparable return rights with our other Outlet vendors. • We pay royalties related to our sale of products branded with the KENMORE®, CRAFTSMAN®, and DIEHARD® marks (which marks are owned by subsidiaries of Sears Holdings, together the "KCD Marks"). • We pay fees for participation in Sears Holdings' SHOP YOUR WAY REWARDS® program. • We have also entered into agreements with Sears Holdings for logistics, handling, warehouse, and transportation services, the charges for which are based generally on merchandise inventory units. • Sears Holdings provides the Company with specified corporate services. These services include accounting and finance, human resources, and information technology, among other services. Sears Holdings charges the Company for these corporate services based on actual usage or pro rata charges based upon sales, head count, or other measurements. • Sears Holdings leases stores and distribution/repair facilities to the Company, for which the Company pays rent and related occupancy charges to Sears Holdings. The following table summarizes the results of the transactions with Sears Holdings reflected in the Company’s Condensed Consolidated Financial Statements: 13 Weeks Ended 26 Weeks Ended August 1, August 2, August 1, August 2, Thousands Net Commissions from Sears Holdings $ 24,170 $ 26,570 $ 48,566 $ 54,739 Purchases related to cost of sales and occupancy 375,440 417,511 734,794 804,697 Services 22,938 24,048 46,316 49,787 We incur payables to Sears Holdings for merchandise inventory purchases and service and occupancy charges (net of commissions) based on the SHO-Sears Holdings Agreements. Amounts due to or from Sears Holdings are non-interest bearing and are settled on a net basis. We generally pay undisputed amounts within 10 days after the invoice date.

Financing Arrangements

Financing Arrangements	6 Months Ended
	Aug. 01, 2015
Debt Disclosure [Abstract]
Financing Arrangements	FINANCING ARRANGEMENT As of August 1, 2015 we had $10.1 million outstanding under our asset-based senior secured revolving credit facility with a group of financial institutions (the "Senior ABL Facility”), which approximated the fair value of these borrowings. The Senior ABL Facility provides (subject to availability under a borrowing base) for maximum borrowings up to the aggregate commitments of all of the lenders, which as of August 1, 2015 totaled $250 million . Up to $75 million of the Senior ABL Facility is available for the issuance of letters of credit and up to $25 million is available for swingline loans. The Senior ABL Facility permits us to request commitment increases in an aggregate principal amount of up to $100 million . Availability under the Senior ABL Facility as of August 1, 2015 was $234.3 million , with $5.6 million of letters of credit outstanding under the facility. The principal terms of the Senior ABL Facility are summarized below. Senior ABL Facility Maturity; Amortization and Prepayments The Senior ABL Facility will mature on the earlier of (i) October 11, 2017 or (ii) six months prior to the expiration of our Merchandising Agreement with Sears Holdings (the "Merchandising Agreement"), our Services Agreement with Sears Holdings (the "Services Agreement"), and the other agreements with Sears Holdings or its subsidiaries in connection with the Separation that are specified in the Senior ABL Facility, unless such agreements have been extended to a date later than October 11, 2017 or terminated on a basis reasonably satisfactory to the administrative agent under the Senior ABL Facility. The Senior ABL Facility is subject to mandatory prepayment in amounts equal to the amount by which the outstanding extensions of credit exceed the lesser of the borrowing base and the commitments then in effect. Guarantees; Security The obligations under the Senior ABL Facility are guaranteed by us and each of our existing and future direct and indirect wholly owned domestic subsidiaries (subject to certain exceptions). The Senior ABL Facility and the guarantees thereunder are secured by a first priority security interest in assets of the borrowers and guarantors consisting primarily of accounts and notes receivable, inventory, cash, cash equivalents, deposit accounts and securities accounts, as well as certain other assets (other than intellectual property) ancillary to the foregoing and all proceeds of all of the foregoing, including cash proceeds and the proceeds of applicable insurance. Interest; Fees The interest rates per annum applicable to the loans under the Senior ABL Facility are based on a fluctuating rate of interest measured by reference to, at our election, either (1) an adjusted London inter-bank offered rate (LIBOR) plus a borrowing margin, which rate was approximately 2.19% at August 1, 2015 or (2) an alternate base rate plus a borrowing margin, with the borrowing margin subject to adjustment based on the average excess availability under the Senior ABL Facility for the preceding fiscal quarter, which rate was approximately 4.25% at August 1, 2015. Customary fees are payable in respect of the Senior ABL Facility, including letter of credit fees and commitment fees. Covenants The Senior ABL Facility includes a number of covenants that, among other things, limit or restrict our ability to, subject to specified exceptions, incur additional indebtedness (including guarantees), grant liens, make investments, make prepayments on other indebtedness, engage in mergers, or change the nature of our business. The Senior ABL Facility limits SHO's ability to declare and pay cash dividends and repurchase its common stock. SHO may declare and pay cash dividends to its stockholders and may repurchase stock if the following conditions are satisfied: either (a) (i) no specified default then exists or would arise as a result of the declaration or payment of the cash dividend or as a result of the stock repurchase, (ii) SHO and its subsidiaries that are also borrowers have demonstrated to the reasonable satisfaction of the agent for the lenders that monthly availability (as determined in accordance with the Senior ABL Facility), immediately following the declaration and payment of the cash dividend or the stock repurchase and as projected on a pro forma basis for the twelve months following and after giving effect to the declaration and payment of the cash dividend or the stock repurchase, would be at least equal to the greater of (x) 25% of the Loan Cap (which is the lesser of (A) the aggregate commitments of the lenders and (B) the borrowing base) and (y) $50,000,000 , and (iii) after giving pro forma effect to the declaration and payment of the cash dividend or the stock repurchase as if it constituted a specified debt service charge, the specified consolidated fixed charge coverage ratio, as calculated on a trailing twelve months basis, would be equal to or greater than 1.1 :1.0, or (b) (i) no specified default then exists or would arise as a result of the declaration or payment of the cash dividend or the stock repurchase, (ii) payment of the cash dividend or the stock repurchase is not made with the proceeds of any credit extension under the Senior ABL Facility, (iii) during the 120 -day period prior to declaration and payment of the cash dividend or the stock repurchase, no credit extension was outstanding under the Senior ABL Facility, and (iv) SHO demonstrates to the reasonable satisfaction of the agent for the lenders that, on a pro forma and projected basis, no credit extensions would be outstanding under the Senior ABL Facility for the 120-day period following the declaration and payment of the cash dividend or the stock repurchase. No default or event of default presently exists. At August 1, 2015 we did not meet either of the foregoing conditions and as a result the Senior ABL Facility does not permit us to pay cash dividends or repurchase our common stock. The Senior ABL Facility also contains affirmative covenants, including financial and other reporting requirements. Events of Default The Senior ABL Facility includes customary events of default including non-payment of principal, interest or fees, violation of covenants, inaccuracy of representations or warranties, cross default to certain other material indebtedness, bankruptcy and insolvency events, invalidity or impairment of guarantees or security interests, material judgments, change of control, failure to perform a "Material Contract" (which includes the Merchandising Agreement, the Services Agreement, and other SHO-Sears Holdings Agreements) to the extent required to maintain it in full force and effect, the failure to enforce a Material Contract in accordance with its terms, and Sears Holdings terminating the "Separation Agreements" (which include, among other SHO-Sears Holdings Agreements, the Merchandising Agreement and the Services Agreement).

Summary of Segment Data

Summary of Segment Data	6 Months Ended
	Aug. 01, 2015
Segment Reporting [Abstract]
SUMMARY OF SEGMENT DATA	SUMMARY OF SEGMENT DATA The Hometown reportable segment consists of the aggregation of our Hometown Stores, Hardware Stores, and Home Appliance Showrooms business formats described in “Item 2 Management's Discussion and Analysis of Financial Condition and Results of Operations-Executive Overview" of this Quarterly Report on Form 10-Q. The Outlet reportable segment also represents a business format. These segments are evaluated by our Chief Operating Decision Maker to make decisions about resource allocation and to assess performance. Each of these segments derives its revenues from the sale of merchandise and related services to customers, primarily in the U.S. The net sales categories include appliances, lawn and garden, tools and paint, and other (which includes initial franchise revenue of $(0.2) million and $5.4 million for the 13 weeks ended August 1, 2015 and August 2, 2014, respectively). Initial franchise revenue consists of franchise fees paid with respect to new or existing Company-operated stores that we transfer to franchisees plus the net gain or loss on any related transfer of assets to the franchisees. For the 26 weeks ended August 1, 2015, initial franchise revenue was $0.3 million compared to $8.7 million in the 26 weeks ended August 2, 2014. 13 Weeks Ended August 1, 2015 Thousands Hometown Outlet Total Net sales Appliances $ 287,026 $ 124,214 $ 411,240 Lawn and garden 114,570 8,263 122,833 Tools and paint 39,362 4,311 43,673 Other 19,789 22,075 41,864 Total 460,747 158,863 619,610 Costs and expenses Cost of sales and occupancy 357,533 120,717 478,250 Selling and administrative 98,133 38,090 136,223 Depreciation 883 1,281 2,164 Total 456,549 160,088 616,637 Operating income (loss) $ 4,198 $ (1,225 ) $ 2,973 Total assets $ 434,220 $ 201,819 $ 636,039 Capital expenditures $ 1,508 $ 2,862 $ 4,370 13 Weeks Ended August 2, 2014 Thousands Hometown Outlet Total Net sales Appliances $ 288,748 $ 121,252 $ 410,000 Lawn and garden 123,518 7,590 131,108 Tools and paint 44,597 4,426 49,023 Other 23,390 25,172 48,562 Total 480,253 158,440 638,693 Costs and expenses Cost of sales and occupancy 372,047 119,557 491,604 Selling and administrative 105,515 33,711 139,226 Depreciation 730 1,337 2,067 Total 478,292 154,605 632,897 Operating income $ 1,961 $ 3,835 $ 5,796 Total assets $ 632,249 $ 206,075 $ 838,324 Capital expenditures $ 1,251 $ 1,859 $ 3,110 26 Weeks Ended August 1, 2015 Thousands Hometown Outlet Total Net sales Appliances $ 541,938 $ 264,979 $ 806,917 Lawn and garden 204,546 12,694 217,240 Tools and paint 81,674 8,642 90,316 Other 43,249 44,657 87,906 Total 871,407 330,972 1,202,379 Costs and expenses Cost of sales and occupancy 668,620 252,040 920,660 Selling and administrative 191,937 78,788 270,725 Depreciation 1,536 2,489 4,025 Total 862,093 333,317 1,195,410 Operating income (loss) $ 9,314 $ (2,345 ) $ 6,969 Total assets $ 434,220 $ 201,819 $ 636,039 Capital expenditures $ 2,479 $ 3,969 $ 6,448 26 Weeks Ended August 2, 2014 Thousands Hometown Outlet Total Net sales Appliances $ 534,274 $ 258,780 $ 793,054 Lawn and garden 218,858 12,481 231,339 Tools and paint 90,734 8,917 99,651 Other 54,923 49,580 104,503 Total 898,789 329,758 1,228,547 Costs and expenses Cost of sales and occupancy 684,201 253,358 937,559 Selling and administrative 204,352 70,153 274,505 Depreciation 1,381 2,974 4,355 Total 889,934 326,485 1,216,419 Operating income $ 8,855 $ 3,273 $ 12,128 Total assets $ 632,249 $ 206,075 $ 838,324 Capital expenditures $ 1,930 $ 5,120 $ 7,050

Commitments and Contingencies

Commitments and Contingencies	6 Months Ended
	Aug. 01, 2015
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGENCIES	COMMITMENTS AND CONTINGENCIES We are subject to various legal and governmental proceedings arising out of the ordinary course of business, the outcome of which, individually or in the aggregate, in the opinion of management, would not have a material adverse effect on our business, financial position, results of operations, or cash flows.

Income Per Common Share

Income Per Common Share	6 Months Ended
	Aug. 01, 2015
Earnings Per Share [Abstract]
INCOME PER COMMON SHARE	INCOME PER COMMON SHARE Basic income per common share is calculated by dividing net income by the weighted average number of common shares outstanding for each period. Diluted income per common share also includes the dilutive effect of potential common shares. The following table sets forth the components used to calculate basic and diluted income per common share attributable to our stockholders. 13 Weeks Ended 13 Weeks Ended 26 Weeks Ended 26 Weeks Ended August 1, 2015 August 2, 2014 August 1, 2015 August 2, 2014 Thousands except income per common share Basic weighted average shares 22,666 22,666 22,666 22,666 Dilutive effect of restricted stock — — — — Diluted weighted average shares 22,666 22,666 22,666 22,666 Net income $ 1,510 $ 3,360 $ 3,660 $ 7,039 Income per common share: Basic $ 0.07 $ 0.15 $ 0.16 $ 0.31 Diluted $ 0.07 $ 0.15 $ 0.16 $ 0.31

Equity

Equity	6 Months Ended
	Aug. 01, 2015
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
EQUITY	EQUITY Stock-based Compensation Four million shares of the Company's common stock are reserved for issuance under the Company's Amended and Restated 2012 Stock Plan (the "Plan"). A total of 89,221 shares of restricted stock were granted under the Plan in the second quarter of 2013 to a group of eligible individuals (as defined in the Plan) and 14,000 shares of restricted stock were granted under the Plan to an eligible individual in the second quarter of 2015. All of the eligible individuals were employees of the Company at the time of the grants. As of August 1, 2015, 47,263 shares of the original grant of 89,221 shares of restricted stock had been forfeited. During the first quarter of 2015 the Company granted a total of 159,475 stock units under the Plan (all of which stock units are payable solely in cash based on our stock price at the vesting date) to a group of eligible individuals, all of whom were employees of the Company at the time of the grants. As of August 1, 2015, 28,237 stock units had been forfeited. We are authorized to grant stock options and to make other awards (in addition to restricted stock and stock units) to eligible participants pursuant to the Plan. The Company has made no stock-option awards under the Plan. Except for the 103,221 shares of restricted stock and the 159,475 stock units, the Company has made no grants or awards under the Plan. We do not currently have a broad-based program that provides for awards under the Plan on an annual basis. We account for stock-based compensation using the fair value method in accordance with accounting standards regarding share-based payment transactions. During the first and second quarters of 2015 we recorded $(0.4) million in total compensation expense for the remaining 55,958 shares of restricted stock, including the reversal of approximately $0.7 million of compensation expense related to severance and executive transition costs, and $0.1 million in total compensation expense for the remaining 131,238 stock units (none of which had vested as of August 1, 2015). At August 1, 2015 we had $0.6 million in total unrecognized compensation cost related to the remaining non-vested restricted stock, which cost we expect to recognize over approximately the next two years . At August 1, 2015, we had $1.0 million in total unrecognized compensation cost related to the remaining non-vested stock units, which cost we expect to recognize over approximately the next three years . The remaining 41,958 shares of restricted stock will vest, if at all, on May 16, 2016, and 14,000 shares of restricted stock will vest, if at all, on July 10, 2017, in accordance with and subject to the terms and conditions of restricted-stock agreements (including forfeiture conditions) and the Plan. The fair value of these awards is equal to the market price of our common stock on the date of grant. Changes in restricted-stock awards for 2015 were as follows: 26 Weeks Ended August 1, 2015 (Shares in Thousands) Shares Weighted-Average Fair Value on Date of Grant Beginning of year balance 70 $ 44.45 Granted 14 9.38 Vested — — Forfeited (28 ) 44.45 Balance at 8/1/2015 56 $ 35.68 The remaining 131,238 stock units will vest, if at all, on April 13, 2018 in accordance with and subject to the terms and conditions of stock unit agreements, including forfeiture conditions, and the Plan. The fair value of these awards will vary based on changes in our stock price at each reporting period. Share Repurchase Program On August 28, 2013 the Company's Board of Directors authorized a $25 million repurchase program for the Company's outstanding shares of common stock. The timing and amount of repurchases depend on various factors, including market conditions, the Company's capital position and internal cash generation, and other factors. The Company's repurchase program does not include specific price targets, may be executed through open-market, privately negotiated, and other transactions that may be available, and may include utilization of Rule 10b5-1 plans. The repurchase program does not obligate the Company to repurchase any dollar amount, or any number of shares, of common stock. The repurchase program does not have a termination date, and the Company may suspend or terminate the repurchase program at any time. At August 1, 2015, the Senior ABL Facility prohibited cash dividends and the repurchase of our common stock. Shares that are repurchased by the Company pursuant to the repurchase program will be retired and resume the status of authorized and unissued shares of common stock. No shares were repurchased during the 13 and 26 weeks ended August 1, 2015. At August 1, 2015, we had approximately $12.5 million of remaining authorization under the repurchase program.

Background and Basis of Prese18

Background and Basis of Presentation (Policies)	6 Months Ended
	Aug. 01, 2015
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Variable Interest Entities and Consolidation	Variable Interest Entities and Consolidation The Financial Accounting Standards Board ("FASB") has issued guidance on variable interest entities and consolidation for determining whether an entity is a variable interest entity as well as the methods permitted for determining the primary beneficiary of a variable interest entity. In addition, this guidance requires ongoing reassessments of whether a company is the primary beneficiary of a variable interest entity and disclosures related to a company’s involvement with a variable interest entity. On an ongoing basis the Company evaluates its business relationships, such as those with its dealers, franchisees, and suppliers, to identify potential variable interest entities. Generally, these businesses either qualify for a scope exception under the consolidation guidance or, where a variable interest exists, the Company does not possess the power to direct the activities that most significantly impact the economic performance of these businesses. The Company has not consolidated any of such entities in the periods presented.
Fair Value of Financial Instruments	Fair Value of Financial Instruments We determine the fair value of financial instruments in accordance with standards pertaining to fair value measurements. Such standards define fair value and establish a framework for measuring fair value under GAAP. Under fair value measurement accounting standards, fair value is considered to be the exchange price in an orderly transaction between market participants to sell an asset or transfer a liability at the measurement date. We report the fair value of financial assets and liabilities based on the fair value hierarchy prescribed by accounting standards for fair value measurements, which prioritizes the inputs to valuation techniques used to measure fair value into three levels, as follows: Level 1 inputs —unadjusted quoted prices in active markets for identical assets or liabilities that we have the ability to access. An active market for the asset or liability is one in which transactions for the asset or liability occurs with sufficient frequency and volume to provide ongoing pricing information. Level 2 inputs —inputs other than quoted market prices included in Level 1 that are observable, either directly or indirectly, for the asset or liability. Level 2 inputs include, but are not limited to, quoted prices for similar assets or liabilities in an active market, quoted prices for identical or similar assets or liabilities in markets that are not active, and inputs other than quoted market prices that are observable for the asset or liability, such as interest-rate curves and yield curves observable at commonly quoted intervals, volatilities, credit risks, and default rates. Level 3 inputs —unobservable inputs for the asset or liability. Cash and cash equivalents (level 1), accounts receivable, notes receivable (level 2), short-term debt (level 2), merchandise payables, and accrued expenses are reflected in the Condensed Consolidated Balance Sheets at cost, which approximates fair value due to the short-term nature of these instruments. For short-term debt, the variable interest rates are a significant input in our fair value assessments. The carrying value of long-term notes receivable approximates fair value. We measure certain non-financial assets and liabilities, including long-lived assets, at fair value on a non-recurring basis. The Company was not required to measure any other significant non-financial asset or liability at fair value as of August 1, 2015.
Recent Accounting Pronouncements	Recent Accounting Pronouncements Consolidation In February 2015, the Financial Accounting Standards Board ("FASB") issued an accounting standards update which revises the consolidation model. Specifically, the amendments modify the evaluation of whether limited partnerships and similar legal entities are variable interest entities (VIEs) or voting interest entities, eliminate the presumption that a general partner should consolidate a limited partnership, affect the consolidation analysis of reporting entities that are involved with VIEs, particularly those that have fee arrangements and related party relationships, and provide a scope exception from consolidation guidance for reporting entities with interests in legal entities that are required to comply with or operate in accordance with requirements that are similar to those in Rule 2a-7 of the Investment Company Act of 1940 for registered money market funds. This update was effective for the Company in the first quarter of 2015. The adoption of the new standard did not impact the Company’s consolidated financial position, results of operations, cash flows or disclosures. Extraordinary and Unusual Items In January 2015, the FASB issued an accounting standards update which eliminates the concept of an extraordinary item. Extraordinary items are events and transactions that are distinguished by their unusual nature and by the infrequency of their occurrence. Eliminating the extraordinary classification simplifies income statement presentation by altogether removing the concept of extraordinary items from consideration. This update was effective for the Company in the first quarter of 2015. The adoption of the new standard did not impact the Company’s consolidated financial position, results of operations, cash flows or disclosures. Presentation of Financial Statements - Going Concern In August 2014, the FASB issued an accounting standards update which requires management to assess whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the financial statements are issued. If substantial doubt exists, additional disclosures are required. This update will be effective for the Company in the fourth quarter of 2016. The adoption of the new standard is not expected to have a material impact on the Company’s consolidated financial position, results of operations, cash flows or disclosures. Revenue from Contracts with Customers In May 2014, the FASB issued an accounting standards update which replaces the current revenue recognition standards. The new revenue recognition standard provides a five-step analysis of transactions to determine when and how revenue is recognized. The core principle is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This update will be effective for the Company in the first quarter of 2018 and may be applied retrospectively for each period presented or as a cumulative-effect adjustment at the date of adoption. The Company is evaluating the effect of adopting this new standard and has not yet determined the method by which the standard will be adopted. Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity In April 2014, the FASB issued an accounting standards update which modifies the requirements for disposals to qualify as discontinued operations and expands related disclosure requirements. The update was effective for the Company in the first quarter of 2015. The adoption of the new standard did not impact the Company’s consolidated financial position, results of operations, cash flows or disclosures.

Accounts and Franchisee Recei19

Accounts and Franchisee Receivables and Other Assets (Tables)	6 Months Ended
	Aug. 01, 2015
Receivables [Abstract]
Schedule of Accounts and Franchisee Receivables and Other Assets	Accounts and franchisee receivables and other assets consist of the following: August 1, Thousands Hometown Outlet Total Short-term franchisee receivables $ 1,867 $ 3,576 $ 5,443 Miscellaneous receivables 5,136 3,396 8,532 Long-term franchisee receivables 17,321 28,132 45,453 Other assets 1,635 236 1,871 Provision for losses on short-term franchisee receivables (1) (384 ) (8 ) (392 ) Provision for losses on long-term franchisee receivables (1) (3,839 ) (90 ) (3,929 ) Total Accounts and franchisee receivables and other assets $ 21,736 $ 35,242 $ 56,978 August 2, Thousands Hometown Outlet Total Short-term franchisee receivables $ 2,749 $ 2,999 $ 5,748 Miscellaneous receivables 12,839 2,624 15,463 Long-term franchisee receivables 20,159 23,320 43,479 Other assets 2,224 195 2,419 Total Accounts and franchisee receivables and other assets $ 37,971 $ 29,138 $ 67,109 January 31, Thousands Hometown Outlet Total Short-term franchisee receivables $ 6,169 $ 3,652 $ 9,821 Miscellaneous receivables 6,316 2,540 8,856 Long-term franchisee receivables 20,678 28,652 49,330 Other assets 1,973 290 2,263 Provision for losses on short-term franchisee receivables (1) (3,212 ) (9 ) (3,221 ) Provision for losses on long-term franchisee receivables (1) (8,068 ) (79 ) (8,147 ) Total Accounts and franchisee receivables and other assets $ 23,856 $ 35,046 $ 58,902 (1) The Company recognizes a provision for losses on franchisee receivables (which consist primarily of franchisee promissory notes) in an amount equal to estimated probable losses net of recoveries. The provision is based on an analysis of expected future write-offs, existing economic conditions, and an assessment of specific identifiable franchisee promissory notes and other franchisee receivables considered at risk or uncollectible. The expense associated with the provision for losses on franchisee receivables is recognized as selling and administrative expense. Most of our franchisee promissory notes authorize us to deduct debt service from our commissions otherwise due and payable to the franchisees, and we routinely make those deductions to the extent of available commissions payable. We established the provision for losses on franchisee receivables during the 2014 fiscal year based on our receivable-by-receivable assessment that some of the franchisee receivables were potentially uncollectible in future periods due to (a) declining results of operations of, or other adverse financial events with respect to, Hometown franchise stores that indicated that the franchisees might not be able to meet their debt-service and other obligations to us as they became due and (b) the refusal during the year of one of our Hometown franchisees to continue to operate its franchise stores in accordance with the franchisee's agreements with us. We have commenced litigation that seeks to recover approximately $4.4 million on guarantees with respect to some of the 2014 losses, but we cannot predict whether we will recover any monies.

Provision for Losses on Franc20

Provision for Losses on Franchisee Receivables (Tables)	6 Months Ended
	Aug. 01, 2015
Receivables [Abstract]
Schedule of Provision for Losses on Franchisee Receivables	The provision for losses on Franchisee Receivables, which was established in fiscal 2014, consists of the following: Thousands August 1, 2015 August 2, 2014 January 31, 2015 Provision for losses on franchisee receivables, beginning of period $ 11,368 $ — $ — Expense accruals during the period 364 — 13,055 Write off of franchisee receivables (1) (7,411 ) — (1,687 ) Provision for losses on franchisee receivables, end of period $ 4,321 $ — $ 11,368

Other Current and Long-Term L21

Other Current and Long-Term Liabilities (Tables)	6 Months Ended
	Aug. 01, 2015
Payables and Accruals [Abstract]
Schedule of Accrued Expenses and Other Long-term Liabilities	Other current and long-term liabilities consist of the following: Thousands August 1, August 2, January 31, Customer deposits $ 32,850 $ 35,290 $ 30,241 Sales and other taxes 15,547 13,739 12,458 Accrued expenses 22,311 12,201 16,265 Payroll and related items 5,580 6,740 4,072 Store closing, severance, and executive transition costs 2,540 — — Total Other current and long-term liabilities $ 78,828 $ 67,970 $ 63,036

Related Party Agreements and 22

Related Party Agreements and Transactions (Tables)	6 Months Ended
	Aug. 01, 2015
Related Party Transactions [Abstract]
Schedule of Related Party Transactions	The following table summarizes the results of the transactions with Sears Holdings reflected in the Company’s Condensed Consolidated Financial Statements: 13 Weeks Ended 26 Weeks Ended August 1, August 2, August 1, August 2, Thousands Net Commissions from Sears Holdings $ 24,170 $ 26,570 $ 48,566 $ 54,739 Purchases related to cost of sales and occupancy 375,440 417,511 734,794 804,697 Services 22,938 24,048 46,316 49,787

Summary of Segment Data (Tables

Summary of Segment Data (Tables)	6 Months Ended
	Aug. 01, 2015
Segment Reporting [Abstract]
Schedule of Segment Data	13 Weeks Ended August 1, 2015 Thousands Hometown Outlet Total Net sales Appliances $ 287,026 $ 124,214 $ 411,240 Lawn and garden 114,570 8,263 122,833 Tools and paint 39,362 4,311 43,673 Other 19,789 22,075 41,864 Total 460,747 158,863 619,610 Costs and expenses Cost of sales and occupancy 357,533 120,717 478,250 Selling and administrative 98,133 38,090 136,223 Depreciation 883 1,281 2,164 Total 456,549 160,088 616,637 Operating income (loss) $ 4,198 $ (1,225 ) $ 2,973 Total assets $ 434,220 $ 201,819 $ 636,039 Capital expenditures $ 1,508 $ 2,862 $ 4,370 13 Weeks Ended August 2, 2014 Thousands Hometown Outlet Total Net sales Appliances $ 288,748 $ 121,252 $ 410,000 Lawn and garden 123,518 7,590 131,108 Tools and paint 44,597 4,426 49,023 Other 23,390 25,172 48,562 Total 480,253 158,440 638,693 Costs and expenses Cost of sales and occupancy 372,047 119,557 491,604 Selling and administrative 105,515 33,711 139,226 Depreciation 730 1,337 2,067 Total 478,292 154,605 632,897 Operating income $ 1,961 $ 3,835 $ 5,796 Total assets $ 632,249 $ 206,075 $ 838,324 Capital expenditures $ 1,251 $ 1,859 $ 3,110

Income Per Common Share (Tables

Income Per Common Share (Tables)	6 Months Ended
	Aug. 01, 2015
Earnings Per Share [Abstract]
Schedule of Earnings Per Share, Basic and Diluted	The following table sets forth the components used to calculate basic and diluted income per common share attributable to our stockholders. 13 Weeks Ended 13 Weeks Ended 26 Weeks Ended 26 Weeks Ended August 1, 2015 August 2, 2014 August 1, 2015 August 2, 2014 Thousands except income per common share Basic weighted average shares 22,666 22,666 22,666 22,666 Dilutive effect of restricted stock — — — — Diluted weighted average shares 22,666 22,666 22,666 22,666 Net income $ 1,510 $ 3,360 $ 3,660 $ 7,039 Income per common share: Basic $ 0.07 $ 0.15 $ 0.16 $ 0.31 Diluted $ 0.07 $ 0.15 $ 0.16 $ 0.31

Equity (Tables)

Equity (Tables)	6 Months Ended
	Aug. 01, 2015
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Schedule of Restricted Stock Award Activity	Changes in restricted-stock awards for 2015 were as follows: 26 Weeks Ended August 1, 2015 (Shares in Thousands) Shares Weighted-Average Fair Value on Date of Grant Beginning of year balance 70 $ 44.45 Granted 14 9.38 Vested — — Forfeited (28 ) 44.45 Balance at 8/1/2015 56 $ 35.68

Background and Basis of Prese26

Background and Basis of Presentation (Details) - Aug. 01, 2015	storesegmentstate
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Number of stores | store	1,215
Number of states in which the Company operates	50
Number of operating segments | segment	2

Accounts and Franchisee Recei27

Accounts and Franchisee Receivables and Other Assets (Details) - USD ($) $ in Thousands	Aug. 01, 2015	Jan. 31, 2015	Aug. 02, 2014
Accounts, Notes, Loans and Financing Receivable [Line Items]
Short-term franchisee receivables	$ 5,443	$ 9,821	$ 5,748
Miscellaneous receivables	8,532	8,856	15,463
Long-term franchisee receivables	45,453	49,330	43,479
Other assets	1,871	2,263	2,419
Provision for losses on short-term franchisee receivables	(392)	(3,221)
Provision for losses on long-term franchisee receivables	(3,929)	(8,147)
Total Accounts and franchisee receivables and other assets	56,978	58,902	67,109
Estimate of possible loss	4,400
Sears Hometown and Hardware [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Short-term franchisee receivables	1,867	6,169	2,749
Miscellaneous receivables	5,136	6,316	12,839
Long-term franchisee receivables	17,321	20,678	20,159
Other assets	1,635	1,973	2,224
Provision for losses on short-term franchisee receivables	(384)	(3,212)
Provision for losses on long-term franchisee receivables	(3,839)	(8,068)
Total Accounts and franchisee receivables and other assets	21,736	23,856	37,971
Sears Outlet [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Short-term franchisee receivables	3,576	3,652	2,999
Miscellaneous receivables	3,396	2,540	2,624
Long-term franchisee receivables	28,132	28,652	23,320
Other assets	236	290	195
Provision for losses on short-term franchisee receivables	(8)	(9)
Provision for losses on long-term franchisee receivables	(90)	(79)
Total Accounts and franchisee receivables and other assets	$ 35,242	$ 35,046	$ 29,138

Provision for Losses on Franc28

Provision for Losses on Franchisee Receivables (Details) - Franchise Receivable [Member] - USD ($) $ in Thousands	6 Months Ended		12 Months Ended
	Aug. 01, 2015	Aug. 02, 2014	Jan. 31, 2015
Provision for Losses on Franchisee Receivables [Roll Forward]
Provision for losses on franchisee receivables, beginning of period	$ 11,368	$ 0	$ 0
Expense accruals during the period	364	0	13,055
Write off of franchisee receivables	(7,411)	0	(1,687)
Provision for losses on franchisee receivables, end of period	$ 4,321	$ 0	$ 11,368

Other Current and Long-Term L29

Other Current and Long-Term Liabilities (Details) - USD ($) $ in Thousands	Aug. 01, 2015	Jan. 31, 2015	Aug. 02, 2014
Payables and Accruals [Abstract]
Customer deposits	$ 32,850	$ 30,241	$ 35,290
Sales and other taxes	15,547	12,458	13,739
Accrued expenses	22,311	16,265	12,201
Payroll and related items	5,580	4,072	6,740
Store closing, severance, and executive transition costs	2,540	0	0
Total Other current and long-term liabilities	$ 78,828	$ 63,036	$ 67,970

Goodwill (Details)

Goodwill (Details) - USD ($) $ in Thousands	3 Months Ended
	Nov. 01, 2014	Aug. 01, 2015
Goodwill [Line Items]
Impairment Loss	$ 167,000
Sears Hometown and Hardware [Member]
Goodwill [Line Items]
Goodwill		$ 0

Income Taxes (Details)

Income Taxes (Details) - USD ($) $ in Millions	Aug. 01, 2015	Jan. 31, 2015	Aug. 02, 2014
Income Tax Disclosure [Abstract]
Deferred tax assets	$ 62.5	$ 65.2	$ 53.7

Related Party Agreements and 32

Related Party Agreements and Transactions (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Aug. 01, 2015	Aug. 02, 2014	Aug. 01, 2015	Aug. 02, 2014
ESL [Member]
Related Party Transaction [Line Items]
Beneficial interest acquired by related party, percentage	46.00%		46.00%
Sears Holdings Corporation [Member]
Related Party Transaction [Line Items]
Net Commissions from Sears Holdings	$ 24,170	$ 26,570	$ 48,566	$ 54,739
Purchases related to cost of sales and occupancy	375,440	417,511	734,794	804,697
Services	$ 22,938	$ 24,048	$ 46,316	$ 49,787
Invoice payment term			10 days
Sears Holdings [Member] | ESL [Member]
Related Party Transaction [Line Items]
Beneficial interest acquired by related party, percentage	56.00%		56.00%

Financing Arrangements (Details

Financing Arrangements (Details) - Aug. 01, 2015 - Senior ABL Facility [Member]	USD ($)
Debt Instrument [Line Items]
Remaining borrowing capacity	$ 10,100,000
Covenant, maximum percentage of Loan Cap	25.00%
Covenant, component of aggregate commitment calculation	$ 50,000,000
Covenant, fixed charge coverage ratio	1.1
Covenant, period of credit extensions outstanding	120 days
LIBOR [Member]
Debt Instrument [Line Items]
Basis spread on variable rate	2.19%
Base Rate [Member]
Debt Instrument [Line Items]
Basis spread on variable rate	4.25%
Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Aggregate maximum borrowings	$ 250,000,000
Increases in aggregate principal	100,000,000
Letter of Credit [Member]
Debt Instrument [Line Items]
Remaining borrowing capacity	234,300,000
Aggregate maximum borrowings	75,000,000
Amount outstanding	5,600,000
Swingline Loans [Member]
Debt Instrument [Line Items]
Aggregate maximum borrowings	$ 25,000,000

Summary of Segment Data (Detail

Summary of Segment Data (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Aug. 01, 2015	Aug. 02, 2014	Aug. 01, 2015	Aug. 02, 2014	Jan. 31, 2015
Segment Reporting Information [Line Items]
Initial franchise revenue	$ (200)	$ 5,400	$ 300	$ 8,700
Net sales	619,610	638,693	1,202,379	1,228,547
Cost of sales and occupancy	478,250	491,604	920,660	937,559
Selling and administrative	136,223	139,226	270,725	274,505
Depreciation	2,164	2,067	4,025	4,355
Total costs and expenses	616,637	632,897	1,195,410	1,216,419
Operating income (loss)	2,973	5,796	6,969	12,128
Total assets	636,039	838,324	636,039	838,324	$ 645,722
Capital expenditures	4,370	3,110	6,448	7,050
Appliances [Member]
Segment Reporting Information [Line Items]
Net sales	411,240	410,000	806,917	793,054
Lawn and Garden [Member]
Segment Reporting Information [Line Items]
Net sales	122,833	131,108	217,240	231,339
Tools and Paint [Member]
Segment Reporting Information [Line Items]
Net sales	43,673	49,023	90,316	99,651
Other [Member]
Segment Reporting Information [Line Items]
Net sales	41,864	48,562	87,906	104,503
Sears Hometown and Hardware [Member]
Segment Reporting Information [Line Items]
Net sales	460,747	480,253	871,407	898,789
Cost of sales and occupancy	357,533	372,047	668,620	684,201
Selling and administrative	98,133	105,515	191,937	204,352
Depreciation	883	730	1,536	1,381
Total costs and expenses	456,549	478,292	862,093	889,934
Operating income (loss)	4,198	1,961	9,314	8,855
Total assets	434,220	632,249	434,220	632,249
Capital expenditures	1,508	1,251	2,479	1,930
Sears Hometown and Hardware [Member] | Appliances [Member]
Segment Reporting Information [Line Items]
Net sales	287,026	288,748	541,938	534,274
Sears Hometown and Hardware [Member] | Lawn and Garden [Member]
Segment Reporting Information [Line Items]
Net sales	114,570	123,518	204,546	218,858
Sears Hometown and Hardware [Member] | Tools and Paint [Member]
Segment Reporting Information [Line Items]
Net sales	39,362	44,597	81,674	90,734
Sears Hometown and Hardware [Member] | Other [Member]
Segment Reporting Information [Line Items]
Net sales	19,789	23,390	43,249	54,923
Sears Outlet [Member]
Segment Reporting Information [Line Items]
Net sales	158,863	158,440	330,972	329,758
Cost of sales and occupancy	120,717	119,557	252,040	253,358
Selling and administrative	38,090	33,711	78,788	70,153
Depreciation	1,281	1,337	2,489	2,974
Total costs and expenses	160,088	154,605	333,317	326,485
Operating income (loss)	(1,225)	3,835	(2,345)	3,273
Total assets	201,819	206,075	201,819	206,075
Capital expenditures	2,862	1,859	3,969	5,120
Sears Outlet [Member] | Appliances [Member]
Segment Reporting Information [Line Items]
Net sales	124,214	121,252	264,979	258,780
Sears Outlet [Member] | Lawn and Garden [Member]
Segment Reporting Information [Line Items]
Net sales	8,263	7,590	12,694	12,481
Sears Outlet [Member] | Tools and Paint [Member]
Segment Reporting Information [Line Items]
Net sales	4,311	4,426	8,642	8,917
Sears Outlet [Member] | Other [Member]
Segment Reporting Information [Line Items]
Net sales	$ 22,075	$ 25,172	$ 44,657	$ 49,580

Income Per Common Share (Detail

Income Per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Aug. 01, 2015	Aug. 02, 2014	Aug. 01, 2015	Aug. 02, 2014
Earnings Per Share [Abstract]
Basic weighted average shares	22,666	22,666	22,666	22,666
Dilutive effect of restricted stock	0	0	0	0
Diluted weighted average shares	22,666	22,666	22,666	22,666
Net income	$ 1,510	$ 3,360	$ 3,660	$ 7,039
Income per common share:
Basic (in dollars per share)	$ 0.07	$ 0.15	$ 0.16	$ 0.31
Diluted (in dollars per share)	$ 0.07	$ 0.15	$ 0.16	$ 0.31

Equity (Narrative) (Details)

Equity (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended			6 Months Ended
	Aug. 01, 2015	May. 02, 2015	Aug. 03, 2013	Aug. 01, 2015	Aug. 28, 2013	May. 14, 2013
Stock-based Compensation
Shares reserved under plan						4,000,000
Share Repurchase Program
Authorized amount					$ 25
Remaining authorized repurchase amount	$ 12.5			$ 12.5
Restricted Stock [Member]
Stock-based Compensation
Stock granted	14,000	103,221	89,221	55,958
Forfeited in period				47,263
Share-based compensation expense	$ (0.4)
Total unrecognized compensation	0.6			$ 0.6
Period for recognition				2 years
Restricted Stock [Member] | May 16, 2016 [Member]
Stock-based Compensation
Stock granted				41,958
Restricted Stock [Member] | July 10, 2017 [Member]
Stock-based Compensation
Stock granted				14,000
Restricted Stock Units (RSUs) [Member]
Stock-based Compensation
Stock granted		159,475		131,238
Forfeited in period				28,237
Share-based compensation expense	0.1
Total unrecognized compensation	1			$ 1
Period for recognition				3 years
Restricted Stock Units (RSUs) [Member] | April 13, 2018 [Member]
Stock-based Compensation
Stock granted				131,238
Severance and Executive Transition Costs [Member]
Stock-based Compensation
Share-based compensation expense	$ 0.7

Equity (Restricted Stock Awards

Equity (Restricted Stock Awards) (Details) - 6 months ended Aug. 01, 2015 - Restricted Stock [Member] - $ / shares shares in Thousands	Total
Shares
Beginning of year balance	70
Granted	14
Vested	0
Forfeited	(28)
Balance at end of period	56
Weighted-Average Fair Value on Date of Grant
Beginning of year balance (in dollars per share)	$ 44.45
Granted (in dollars per share)	9.38
Vested (in dollars per share)	0
Forfeited (in dollars per share)	44.45
Balance at end of period (in dollars per share)	$ 35.68