Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Oct. 28, 2017 | Nov. 29, 2017 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Oct. 28, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 | |
Entity Registrant Name | Sears Hometown & Outlet Stores, Inc. | |
Entity Central Index Key | 1,548,309 | |
Current Fiscal Year End Date | --02-03 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 22,702,132 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 28, 2017 | Oct. 29, 2016 | Oct. 28, 2017 | Oct. 29, 2016 | |
Income Statement [Abstract] | ||||
NET SALES | $ 385,959 | $ 487,795 | $ 1,324,177 | $ 1,581,164 |
COSTS AND EXPENSES | ||||
Cost of sales and occupancy | 299,271 | 392,562 | 1,051,386 | 1,254,860 |
Selling and administrative | 93,101 | 109,158 | 319,190 | 345,958 |
Depreciation and amortization | 3,002 | 3,188 | 9,910 | 9,738 |
Gain on sale of assets | 0 | 0 | 0 | (25,269) |
Total costs and expenses | 395,374 | 504,908 | 1,380,486 | 1,585,287 |
Operating loss | (9,415) | (17,113) | (56,309) | (4,123) |
Interest expense | (2,149) | (840) | (5,614) | (2,492) |
Other income | 194 | 373 | 744 | 1,148 |
Loss before income taxes | (11,370) | (17,580) | (61,179) | (5,467) |
Income tax benefit (expense) | 437 | (75,617) | (634) | (80,658) |
NET LOSS | $ (10,933) | $ (93,197) | $ (61,813) | $ (86,125) |
NET LOSS PER COMMON SHARE ATTRIBUTABLE TO STOCKHOLDERS | ||||
Basic (in dollars per share) | $ (0.48) | $ (4.11) | $ (2.72) | $ (3.80) |
Diluted (in dollars per share) | $ (0.48) | $ (4.11) | $ (2.72) | $ (3.80) |
Basic weighted average common shares outstanding (in shares) | 22,702 | 22,702 | 22,702 | 22,688 |
Diluted weighted average common shares outstanding (in shares) | 22,702 | 22,702 | 22,702 | 22,688 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Oct. 28, 2017 | Jan. 28, 2017 | Oct. 29, 2016 |
CURRENT ASSETS | |||
Cash and cash equivalents | $ 13,994 | $ 14,104 | $ 15,525 |
Accounts and franchisee receivables, net | 13,151 | 11,448 | 20,577 |
Merchandise inventories | 354,825 | 373,815 | 424,714 |
Prepaid expenses and other current assets | 9,777 | 9,370 | 9,404 |
Total current assets | 391,747 | 408,737 | 470,220 |
PROPERTY AND EQUIPMENT, net | 39,284 | 40,935 | 50,053 |
OTHER ASSETS, net | 9,767 | 18,754 | 14,936 |
TOTAL ASSETS | 440,798 | 468,426 | 535,209 |
CURRENT LIABILITIES | |||
Short-term borrowings | 119,200 | 26,800 | 91,900 |
Payable to Sears Holdings Corporation | 26,114 | 80,724 | 19,889 |
Accounts payable | 23,613 | 17,853 | 39,189 |
Other current liabilities | 60,499 | 70,377 | 64,772 |
Total current liabilities | 229,426 | 195,754 | 215,750 |
OTHER LONG-TERM LIABILITIES | 2,589 | 1,973 | 2,984 |
TOTAL LIABILITIES | 232,015 | 197,727 | 218,734 |
COMMITMENTS AND CONTINGENCIES (Note 9) | |||
STOCKHOLDERS' EQUITY | |||
TOTAL STOCKHOLDERS' EQUITY | 208,783 | 270,699 | 316,475 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 440,798 | $ 468,426 | $ 535,209 |
Condensed Consolidated Stateme4
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Oct. 28, 2017 | Oct. 29, 2016 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss | $ (61,813) | $ (86,125) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 9,910 | 9,738 |
Share-based compensation | (103) | 91 |
Deferred income taxes | 0 | 79,141 |
Gain on sale of assets | 0 | (25,269) |
Provision for (recoveries of) losses on franchisee receivables | 5,820 | (725) |
Change in operating assets and liabilities: | ||
Accounts and franchisee receivables | (1,124) | (7,283) |
Merchandise inventories | 18,990 | 10,132 |
Payable to Sears Holdings Corporation | (54,610) | (34,237) |
Accounts payable | 5,760 | (573) |
Closing store accrual | (2,827) | 1,046 |
Other operating assets and liabilities, net | (5,559) | 9,946 |
Net cash used in operating activities | (85,556) | (44,118) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Proceeds from the sale of assets | 0 | 26,073 |
Purchases of property and equipment | (7,037) | (8,600) |
Net cash (used in) provided by investing activities | (7,037) | 17,473 |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Net short-term borrowings | 92,400 | 23,600 |
Net borrowings of capital lease obligations | 83 | 326 |
Net cash provided by financing activities | 92,483 | 23,926 |
NET CHANGE IN CASH AND CASH EQUIVALENTS | (110) | (2,719) |
CASH AND CASH EQUIVALENTS—Beginning of period | 14,104 | 18,244 |
CASH AND CASH EQUIVALENTS—End of period | 13,994 | 15,525 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION | ||
Cash paid for interest | 5,781 | 2,557 |
Cash paid (refunded) for income taxes | $ 757 | $ (9,430) |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Capital in Excess of Par Value | Accumulated Deficit |
Beginning balance at Jan. 30, 2016 | $ 402,509 | $ 227 | $ 555,372 | $ (153,090) |
Beginning balance (in shares) at Jan. 30, 2016 | 22,722 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net loss | (86,125) | (86,125) | ||
Share-based compensation | 91 | 91 | ||
Share-based compensation (in shares) | 6 | |||
Ending balance at Oct. 29, 2016 | 316,475 | $ 227 | 555,463 | (239,215) |
Ending balance (in shares) at Oct. 29, 2016 | 22,716 | |||
Beginning balance at Jan. 28, 2017 | 270,699 | $ 227 | 555,481 | (285,009) |
Beginning balance (in shares) at Jan. 28, 2017 | 22,716 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net loss | (61,813) | (61,813) | ||
Share-based compensation | (103) | (103) | ||
Share-based compensation (in shares) | 14 | |||
Ending balance at Oct. 28, 2017 | $ 208,783 | $ 227 | $ 555,378 | $ (346,822) |
Ending balance (in shares) at Oct. 28, 2017 | 22,702 |
Background and Basis of Present
Background and Basis of Presentation | 9 Months Ended |
Oct. 28, 2017 | |
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, lawn and garden equipment, and tools. As of October 28, 2017 the Company or its dealers and franchisees operated a total of 921 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. Our common stock trades on the NASDAQ Stock Market under the trading symbol “SHOS.” The Separation The Company separated from Sears Holdings Corporation (“Sears Holdings”) in October 2012 (the “Separation”). To our knowledge Sears Holdings does not own any shares of our common stock. The Company has specified rights to use the "Sears" name under a license agreement from Sears Holdings. 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 13 and 39 weeks ended October 28, 2017 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 28, 2017 (the "2016 10-K"). We operate through two segments--our Sears Hometown segment ("Hometown") and our Sears Outlet segment ("Outlet"). Our third fiscal-quarter end is the Saturday closest to October 31 each year. Our fiscal-year end is the Saturday closest to January 31 each year. Our current fiscal-year ends February 3, 2018 and is a 53-week year. Reclassifications- certain amounts have been reclassified in order to conform to the current period presentation. 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 ("VIE") as well as the methods permitted for determining the primary beneficiary of a VIE. In addition, this guidance requires ongoing reassessments as to whether a reporting company is the primary beneficiary of a VIE and disclosures regarding the reporting company’s involvement with a VIE. On an ongoing basis the Company evaluates its business relationships, such as those with its independent dealers, independent franchisees, and suppliers, to identify potential VIE's. 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, merchandise payables, accrued expenses (Level 1), accounts and franchisee notes receivable, and short-term debt (Level 2) 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 and are consistent with the interest rates in the market. The carrying value of long-term notes receivable approximates fair value. We may be required, on a nonrecurring basis, to adjust the carrying value of the Company's long-lived assets. When necessary, these valuations are determined by the Company using Level 3 inputs. These assets are subject to fair value adjustments in certain circumstances as when there is evidence that impairment may exist. Recent Accounting Pronouncements ASU 2017-01 "Business Combinations (Topic 805) Clarifying the Definition of Business" In January 2017, the FASB issued ASU No. 2017-01, "Business Combinations (Topic 805): Clarifying the Definition of Business" . This Accounting Standards Update ("ASU") is intended to clarify the definition of a business to add guidance when determining when an acquisition or disposal should be accounted for as a sale of assets or business. This ASU provides a more robust framework to use in determining when a set of assets or activities should be classified as a business, providing more consistency in accounting for business or asset acquisitions. This ASU is effective for public companies for fiscal years beginning after December 15, 2017, including interim periods within those periods. The ASU will be applied prospectively. ASU 2016-15 "Statement of Cash Flows (Topic 230) Classification of Certain Cash Receipts and Cash Payments" In August 2016, the FASB issued ASU No. 2016-15, "Classification of Certain Cash Receipts and Cash Payments". This ASU reduces the diversity in reporting of eight specific cash flow issues due to accounting guidance that is unclear or does not exist. The eight issues relate to certain debt activities, business combination activities, insurance settlements and other various activities. This ASU is effective for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years. Early adoption is permitted and is to be applied retrospectively using a transition method for each period presented. An entity that elects early adoption of the guidance under this ASU must adopt all aspects of the guidance in the same period. Application of this ASU is not expected to have a material impact on our consolidated financial statements. ASU 2016-02 "Leases (Topic 842)" In February 2016, the FASB issued ASU 2016-02, "Leases (Topic 842)". This ASU created a new Topic under the accounting standards codification to account for the provisions of the ASU. This ASU amendment is meant to provide transparency and to improve comparability between entities. This ASU requires companies to record an asset and liability on the balance sheet for leases that were formerly designated as operating leases as well as leases designated as financing leases. The provisions of the ASU predominately change the recognition of leases for lessees, but the provisions do not substantially change the accounting for lessors. This ASU will supersede the provisions of Topic 840 Leases. The liability recorded for a lease is generally intended to recognize the present value of lease payments and the asset as a right to use the underlying asset for the lease, including optional periods if it is reasonably certain the option will be exercised. If a lease term is less than twelve months, a company is allowed to elect not to record the asset and liability. Expense related to these leases are to be amortized straight-line over the expected term of the lease. Additionally, the provisions of this ASU provide additional guidance on separating lease terms from maintenance and other type of provisions that provide a good or service, accounting for sale-leaseback provisions, and leveraged leases. These updates are required to be applied under a modified retrospective approach from the beginning of the earliest period presented. The modified approach provides optional practical expedients that may be elected, which will allow companies to continue to account for leases under the previous guidance for leases that commenced prior to the effective date. Reporting in the cash flow statement remains virtually unchanged. Additional qualitative and quantitative disclosures are required. The provisions of this ASU are effective for fiscal years beginning after December 15, 2018, and interim periods within those periods. Early adoption is allowed. We are in the process of evaluating the impact of this ASU on our financial statements, and therefore, its impact has not yet been determined. However, upon adoption, we expect that the right of use asset and the lease liability will be recognized in the balance sheets in amounts that will be material. ASU 2014-09 , "Revenue from Contracts with Customers (Topic 606)" In May 2014, the FASB issued ASU 2014-09, "Revenue from Contracts with Customers (Topic 606)". The guidance in this ASU affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards (for example, insurance contracts or lease contracts). The new revenue recognition guidance more closely aligns U.S. GAAP with International Financial Reporting Standards ("IFRS"). The core principle of the guidance is that an entity 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. In August 2015, the FASB issued ASU 2015-14, "Accounting for Revenue from Contracts with Customers (Topic 606) ". This ASU deferred the effective date of ASU 2014-09 to annual periods beginning after December 15, 2017 and interim periods within those fiscal years. Early adoption is permitted for annual periods beginning after December 15, 2016 and interim periods within those fiscal years. In addition, four other ASUs have been issued amending and clarifying ASU 2014-09 and must be adopted concurrently. • ASU 2016-08 "Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net)" • ASU 2016-10 "Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing" • ASU 2016-12 "Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients" • ASU 2016-20 "Revenue from Contracts with Customers (Topic 606): Technical Corrections and Improvements" The Company will adopt the ASUs in the first quarter of fiscal 2018. The Company's assessment, which is ongoing, includes a detailed review of contracts for each of its disaggregated revenue streams and a comparison of its historical accounting policies and practices to the new standard. Based on the procedures performed to date, the Company has not identified performance obligations that change the timing of recognition of revenue for our revenue streams as compared to historical accounting. The Company's balance sheet presentation of its sales returns reserve will change to present a separate return asset and liability, instead of the net presentation used currently. The Company expects to finalize its assessment in the fourth quarter of fiscal 2017, and adopt the ASUs using the modified retrospective method on February 4, 2018. |
Accounts and Franchisee Receiva
Accounts and Franchisee Receivables and Other Assets | 9 Months Ended |
Oct. 28, 2017 | |
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: Thousands October 28, 2017 October 29, 2016 January 28, 2017 Short-term franchisee receivables $ 1,584 $ 2,203 $ 1,920 Miscellaneous receivables 12,593 19,604 10,475 Long-term franchisee receivables 10,829 20,455 18,406 Other assets 5,057 3,484 7,643 Allowance for losses on short-term franchisee receivables (1) (1,027 ) (1,230 ) (947 ) Allowance for losses on long-term franchisee receivables (1) (6,118 ) (9,003 ) (7,295 ) Net accounts and franchisee receivables and other assets $ 22,918 $ 35,513 $ 30,202 (1) The Company recognizes an allowance for losses on franchisee receivables (which consist primarily of franchisee promissory notes) in an amount equal to estimated probable losses net of recoveries. The allowance is based on an analysis of expected future write-offs and 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 allowance 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. |
Allowance for Losses on Franchi
Allowance for Losses on Franchisee Receivables | 9 Months Ended |
Oct. 28, 2017 | |
Receivables [Abstract] | |
ALLOWANCE FOR LOSSES ON FRANCHISEE RECEIVABLES | ALLOWANCE FOR LOSSES ON FRANCHISEE RECEIVABLES The allowance for losses on franchisee receivables consists of the following as of: 39 Weeks Ended Thousands October 28, 2017 October 29, 2016 Allowance for losses on franchisee receivables, beginning of period $ 8,242 $ 12,141 Provisions (recoveries) during the period 5,820 (725 ) Write off of franchisee receivables against the allowance (6,917 ) (1,458 ) Other — 275 Allowance for losses on franchisee receivables, end of period $ 7,145 $ 10,233 On June 7, 2017, the Company and a franchisee entered into a transaction consisting of agreements that terminated all of the franchisee's franchise agreements and sublease arrangements for 14 franchised locations (except with respect to one location as to which the Company would either assume the lease or enter into a lease directly with the landlord). The agreements provided that the franchisee transferred ownership of all assets, management of stores, and certain rights to property leases (in one instance pursuant to an Occupancy Agreement). The assets the Company purchased included all store furniture, fixtures, and equipment. As of the transaction date, the franchisee was the obligor on promissory notes to the Company with a total carrying value, net of reserves, of $5.5 million . As part of the transaction, the Company waived the remaining unpaid principal on these promissory notes and received a new promissory note from the franchisee in the amount of $1.5 million , which is payable in installments through December 11, 2022. During the 39 weeks ended October 28, 2017 , the Company recognized a loss of $5.5 million on the transaction. |
Other Current and Long-Term Lia
Other Current and Long-Term Liabilities | 9 Months Ended |
Oct. 28, 2017 | |
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 October 28, 2017 October 29, 2016 January 28, 2017 Customer deposits $ 17,761 $ 27,631 $ 19,943 Sales and other taxes 8,782 13,303 11,380 Accrued expenses 23,191 19,306 27,602 Payroll and related items 8,522 6,992 5,766 Store closing costs 4,832 524 7,659 Total Other current and long-term liabilities $ 63,088 $ 67,756 $ 72,350 |
Income Taxes
Income Taxes | 9 Months Ended |
Oct. 28, 2017 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES SHO and Sears Holdings 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 tax 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 13 and 39 Weeks ended October 28, 2017 and October 29, 2016 , no unrecognized tax benefits have been identified and reflected in the Condensed Consolidated 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. Management assesses the available positive and negative evidence to estimate whether sufficient future taxable income will be generated to realize the benefit of the existing deferred tax assets. A significant piece of objective negative evidence evaluated was the cumulative loss for the three years ended January 28, 2017. Such objective evidence limits the ability to consider other subjective evidence such as our projections for future income. On the basis of this analysis, management has established a full valuation allowance to offset the net deferred tax assets that are not expected to be realized. Management will continue to evaluate objective and subjective evidence for changes in circumstances that cause a change in judgment about the realizability of the deferred tax assets. We file federal, state, and city income tax returns in the United States and foreign tax returns in Puerto Rico. The U.S. Internal Revenue Service has commenced an audit of the Company's federal income tax return for the year ended January 30, 2016. SHO was also a part of the Sears Holdings' combined state returns for the years ended February 2, 2013 and February 1, 2014. Currently, the Company is under audit in one state for the years ended February 2, 2013 and February 1, 2014 as part of the Sears Holdings' combined return audits and one separate return state audit for the year ended February 1, 2014. |
Related Party Agreements and Tr
Related Party Agreements and Transactions | 9 Months Ended |
Oct. 28, 2017 | |
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 including Edward S. Lampert (collectively, "ESL") beneficially own approximately 58% of our outstanding shares of common stock and approximately 49% of Sears Holdings' outstanding shares of common stock (the latter percentage amount excludes shares that may be acquired within 60 days upon the exercise of warrants to purchase shares). Mr. Lampert is the Chairman of the Board and Chief Executive Officer of Sears Holdings. SHO and Sears Holdings (and in some circumstances, its subsidiaries) have entered into various agreements (as amended, 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 amendments entered into after the Separation that were 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 has engaged in frequent discussions, and has resolved 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 had not been addressed by the terms and conditions of the SHO-Sears Holdings Agreements or, if addressed, in the past were, and in the future could be, in dispute as to their meaning or application in the context of the existing business relationships. Many of these discussions have resulted in adjustments to the relationships that the Company believes together are in Company's best interests. The following is a summary of the nature of the related-party transactions between SHO and Sears Holdings: • We obtain a significant amount of our merchandise inventories from Sears Holdings. • We pay royalties related to our sale of products branded with the KENMORE®, CRAFTSMAN®, and DIEHARD® marks (which marks are owned by, or licensed to, subsidiaries of Sears Holdings, together the "KCD Marks"). The royalty rates vary but none exceeds 6% . • We pay fees for participation in Sears Holdings' SHOP YOUR WAY REWARDS® program. • We pay fees to Sears Holdings for logistics, handling, warehouse, and transportation services, which fees are based generally on merchandise inventory units. • Sears Holdings provides the Company with specified corporate services. These services include accounting and finance, 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 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. • SHO receives commissions from Sears Holdings for specified online sales, sales of extended service contracts, and sales of delivery and handling services, and commissions relating to the use in our stores of credit cards branded with the Sears name. For specified transactions SHO pays commissions 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 39 Weeks Ended October 28, 2017 October 29, 2016 October 28, 2017 October 29, 2016 Thousands Net Commissions from Sears Holdings $ 15,548 $ 20,878 $ 51,393 $ 65,270 Purchases related to cost of sales and occupancy 218,445 282,949 751,559 899,037 Services included in selling and administrative expense 12,150 19,163 46,053 59,475 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, except as provided in the following sentences of this paragraph, are settled on a net basis and have payment terms of 10 days after the invoice date. In accordance with the SHO–Sears Holdings Agreements and at the request of Sears Holdings, the Company can pay invoices on two or three -day terms and receive a deduction on invoices for early–payment discounts of 43 basis points or 37 basis points, respectively. The Company can, in its sole discretion, revert to ten –day, no–discount payment terms at any time upon notice to Sears Holdings. The discount received for payments made on accelerated terms, net of incremental interest expense, results in a net financial benefit to the Company. During 2017, the Company has paid most invoices on either two or three –day terms and received discounts for the 13 and 39 weeks ended October 28, 2017 of $1.2 million and $3.2 million , respectively, which are reflected in the Condensed Consolidated Statements of Operations. During 2016 the Company began paying invoices on accelerated terms on May 1, 2016 and received discounts for the 13 and 39 weeks ended October 29, 2016 of $1.8 million and $2.7 million , respectively. We recorded real estate occupancy payments of $0.3 million and $0.9 million for the 13 and 39 weeks ended October 28, 2017 , respectively, and $0.2 million and $0.6 million for the 13 and 39 weeks ended October 29, 2016 , respectively, to Seritage Growth Properties, a real estate investment trust. Edward S. Lampert is the Chairman of the Board of Trustees of Seritage. |
Financing Arrangements
Financing Arrangements | 9 Months Ended |
Oct. 28, 2017 | |
Debt Disclosure [Abstract] | |
FINANCING ARRANGEMENTS | FINANCING ARRANGEMENTS In October 2012, the Company entered into a Credit Agreement with a syndicate of lenders, including Bank of America, N.A., as administrative agent, which provided (subject to availability under a borrowing base) for aggregate maximum borrowings of $250 million (the “Prior Facility”). Under the Prior Facility the Company initially borrowed $100 million which was used to pay a cash dividend to Sears Holdings prior to the Separation. On November 1, 2016, the Company and its primary operating subsidiaries, entered into an Amended and Restated Credit Agreement with a syndicate of lenders, including Bank of America, N.A., as administrative agent and collateral agent, which provides (subject to availability under a borrowing base) for aggregate maximum borrowings of $250 million (the “Senior ABL Facility”). The Senior ABL Facility, which amended and restated the Prior Facility in its entirety, provides for extended revolving credit commitments of specified lenders in an aggregate amount equal to $170 million (the “Extended Revolving Credit Commitments”) and non-extended revolving credit commitments of specified lenders (the "Non-Extending Lenders") in an aggregate amount equal to $80 million (the “Non-Extended Revolving Credit Commitments”). The Extended Revolving Credit Commitments will mature on the earlier of (1) February 29, 2020 and (2) six months prior to the expiration of specified agreements entered into with Sears Holdings and its subsidiaries in connection with the Separation (the “Subject Agreements”) unless they are extended to a date later than February 29, 2020 or terminated on a basis reasonably satisfactory to the administrative agent under the Senior ABL Facility. The Non-Extended Revolving Credit Commitments were not extended by the Non-Extending Lenders in accordance with the Senior ABL Facility and matured on October 11, 2017. Unamortized debt costs related to the Senior ABL Facility of $4.0 million are included in Prepaid and Other current assets on the Condensed Consolidated Balance Sheet as of October 28, 2017 and are being amortized over the remaining term of the Senior ABL Facility. As of October 28, 2017 , we had $119.2 million outstanding under the Senior ABL Facility, which approximated the fair value of these borrowings. 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 October 28, 2017 was $43.6 million , with $7.2 million of letters of credit outstanding under the facility. In the first quarter of 2017, we resumed our agreement with Sears Holdings whereby SHO paid Sears Holdings' invoices for merchandise and services on accelerated terms in exchange for a 37 to 43 basis-point cash discount depending on the number of days we paid before the invoice due date. The Senior ABL Facility borrowings increased by approximately $19 million as of October 28, 2017 , as a result of our accelerated payments. The discounts we received for the accelerated payments, less the incremental interest expense, resulted in a net financial benefit to the Company that is described in Note 6 to these Condensed Consolidated Financial Statements. The principal terms of the Senior ABL Facility are summarized below. Prepayments 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. Security and Guarantees The Senior ABL Facility is secured by a first lien security interest on substantially all the assets of the Company and its subsidiaries, including, without limitation, accounts receivable, inventory, general intangibles, investment property, equipment, cash, cash equivalents, deposit accounts and securities accounts, as well as certain other assets (other than intellectual property and fee-owned interests in real property) ancillary to any of the foregoing and all proceeds of any of the foregoing, including cash proceeds and the proceeds of applicable insurance. The Senior ABL Facility is guaranteed by the Company and each of its existing and future direct and indirect wholly owned domestic subsidiaries (other than specified immaterial subsidiaries). 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 the Company’s election, either (1) an adjusted London inter-bank offered rate (LIBOR) plus a borrowing margin ranging from (x) 3.50% to 4.50% , in the case of the Extended Revolving Credit Commitments or (y) 2.00% to 2.50% , in the case of the Non-Extended Revolving Credit Commitments (which the rate was approximately 5.00% at October 28, 2017 ), and in each case based on availability under the Senior ABL Facility, or (2) an alternate base rate plus a borrowing margin, ranging from (x) 2.50% to 3.50% , in the case of the Extended Revolving Credit Commitments or (y) 1.00% to 1.50% , in the case of the Non-Extended Revolving Credit Commitments (which the rate was approximately 7.00% at maturity on October 11, 2017), and in each case based on availability under the Senior ABL Facility. 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 negative covenants that, among other things, limit or restrict the ability of the Company and its subsidiaries (including the guarantors) to, subject to certain exceptions, incur additional indebtedness (including guarantees), grant liens, make investments, make prepayments on other indebtedness, engage in mergers, and change the nature of the business of the Company and its subsidiaries (including the guarantors). In addition, upon excess availability falling below a specified level (which has not occurred), the Company is required to comply with a minimum fixed charge coverage ratio. The Senior ABL Facility also limits SHO’s ability to declare and pay cash dividends and to repurchase its common stock. The Senior ABL Facility would not have permitted us to pay cash dividends or to repurchase our common stock as of October 28, 2017. The Senior ABL Facility also contains affirmative covenants, including financial and other reporting requirements. As of October 28, 2017 , SHO was in compliance with all covenants under the Senior ABL Facility. Events of Default The Senior ABL Facility includes customary and other events of default including non-payment of principal, interest or fees, violation of covenants, inaccuracy of representations or warranties, cross default to 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 specified SHO-Sears Holdings Agreements) to the extent required to maintain it in full force and effect, failure to enforce a Material Contract in accordance with its terms, or termination by Sears Holdings of specified “Separation Agreements” (which include specified SHO-Sears Holdings Agreements). |
Summary of Segment Data
Summary of Segment Data | 9 Months Ended |
Oct. 28, 2017 | |
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. Sales categories include appliances, lawn and garden, tools and paint, and other. 13 Weeks Ended October 28, 2017 Thousands Hometown Outlet Total Net sales Appliances $ 188,591 $ 104,356 $ 292,947 Lawn and garden 40,315 4,804 45,119 Tools and paint 20,575 3,167 23,742 Other 10,473 13,678 24,151 Total 259,954 126,005 385,959 Costs and expenses Cost of sales and occupancy 202,473 96,798 299,271 Selling and administrative 64,287 28,814 93,101 Depreciation and amortization 1,175 1,827 3,002 Total 267,935 127,439 395,374 Operating loss $ (7,981 ) $ (1,434 ) $ (9,415 ) Total assets $ 298,859 $ 141,939 $ 440,798 Capital expenditures $ 829 $ 1,567 $ 2,396 13 Weeks Ended October 29, 2016 Thousands Hometown Outlet Total Net sales Appliances $ 243,670 $ 122,630 $ 366,300 Lawn and garden 49,654 5,214 54,868 Tools and paint 29,614 3,853 33,467 Other 16,601 16,559 33,160 Total 339,539 148,256 487,795 Costs and expenses Cost of sales and occupancy 271,254 121,308 392,562 Selling and administrative 76,436 32,722 109,158 Depreciation and amortization 1,339 1,849 3,188 Total 349,029 155,879 504,908 Operating loss $ (9,490 ) $ (7,623 ) $ (17,113 ) Total assets $ 347,277 $ 187,932 $ 535,209 Capital expenditures $ 1,376 $ 386 $ 1,762 39 Weeks Ended October 28, 2017 Thousands Hometown Outlet Total Net sales Appliances $ 608,830 $ 346,876 955,706 Lawn and garden 185,115 16,096 201,211 Tools and paint 70,398 10,433 80,831 Other 40,465 45,964 86,429 Total 904,808 419,369 1,324,177 Costs and expenses Cost of sales and occupancy 712,473 338,913 1,051,386 Selling and administrative 214,463 104,727 319,190 Depreciation and amortization 3,920 5,990 9,910 Total 930,856 449,630 1,380,486 Operating loss $ (26,048 ) $ (30,261 ) $ (56,309 ) Total assets $ 298,859 $ 141,939 $ 440,798 Capital expenditures $ 3,180 $ 3,857 $ 7,037 39 Weeks Ended October 29, 2016 Thousands Hometown Outlet Total Net sales Appliances $ 734,050 $ 394,397 $ 1,128,447 Lawn and garden 219,267 16,773 236,040 Tools and paint 97,100 12,822 109,922 Other 52,315 54,440 106,755 Total 1,102,732 478,432 1,581,164 Costs and expenses Cost of sales and occupancy 868,623 386,237 1,254,860 Selling and administrative 240,843 105,115 345,958 Depreciation and amortization 4,415 5,323 9,738 Gain on the sale of assets — (25,269 ) (25,269 ) Total 1,113,881 471,406 1,585,287 Operating (loss) income $ (11,149 ) $ 7,026 $ (4,123 ) Total assets $ 347,277 $ 187,932 $ 535,209 Capital expenditures $ 5,950 $ 2,650 $ 8,600 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Oct. 28, 2017 | |
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. |
Loss Per Common Share
Loss Per Common Share | 9 Months Ended |
Oct. 28, 2017 | |
Earnings Per Share [Abstract] | |
LOSS PER COMMON SHARE | LOSS PER COMMON SHARE Basic earnings per share is calculated by dividing net loss 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. In the periods where the Company records a net loss the diluted per share amount is equal to the basic per share amount. The following table sets forth the components used to calculate basic and diluted loss per share attributable to our stockholders. 13 Weeks Ended 39 Weeks Ended October 28, 2017 October 29, 2016 October 28, 2017 October 29, 2016 Thousands except income per common share Basic weighted average shares 22,702 22,702 22,702 22,688 Diluted weighted average shares 22,702 22,702 22,702 22,688 Net loss $ (10,933 ) $ (93,197 ) $ (61,813 ) $ (86,125 ) Loss per common share: Basic $ (0.48 ) $ (4.11 ) $ (2.72 ) $ (3.80 ) Diluted $ (0.48 ) $ (4.11 ) $ (2.72 ) $ (3.80 ) For the 39 weeks ended October 29, 2016 , 14,000 unvested shares of restricted stock (forfeited during the first quarter of 2017) were excluded from the computation of diluted loss per share due to the anti-dilutive effect of the unvested shares. |
Equity
Equity | 9 Months Ended |
Oct. 28, 2017 | |
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 2013 (the "2013 Grants") 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 2015 (the "2015 Grant"). As of May 16, 2016, 52,691 shares of the restricted stock comprising the 2013 Grants had been forfeited. On that date the remaining 36,530 shares of the restricted stock comprising the 2013 Grants vested in accordance with the terms and conditions of the governing restricted-stock agreements and the Plan. The 14,000 shares of restricted stock comprising the 2015 Grant were forfeited in the first quarter of 2017. In 2015 the Company granted a total of 159,475 stock units under the Plan to a group of eligible individuals, all of whom were employees of the Company at the time of the grants. As of October 28, 2017 , 34,091 stock units had been forfeited. The remaining 125,384 stock units will vest, if at all, on April 13, 2018 in accordance with and subject to the terms and conditions of governing 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. During the first quarter of 2017, the Company granted a total of 222,788 stock units under the Plan to a group of eligible individuals, all of whom were employees of the Company at the time of the grants. In addition, the Company granted 40,000 stock units under the Plan to an eligible individual during the third quarter of 2017. As of October 28, 2017 , 33,333 of these stock units had been forfeited. The remaining 229,455 stock units will vest, if at all, in three substantially equal installments on January 30 in 2018, 2019, and 2020 in accordance with and subject to the terms and conditions of governing stock unit agreements, including forfeiture conditions, and the Plan. The shares of restricted stock referred to above in this Note 11 constituted outstanding shares of the Company's common stock. The recipients of the restricted stock grants had full voting and dividend rights with respect to, but were unable to transfer or pledge, their shares of restricted stock prior to the applicable vesting dates. The stock units referred to above in this Note 11, which are payable solely in cash based on the Nasdaq closing price of our common stock at the applicable vesting dates, do not constitute outstanding shares of the Company's common stock. The recipients of the stock unit grants have, with respect to their stock units, no rights to receive the Company's common stock or other securities of the Company, no rights as a stockholder of the Company, no dividend rights, and no voting rights. 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 grants of restricted stock and stock units referred to above in this Note 11, the Company has not made any grant or award 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 39 weeks ended October 28, 2017 , we recorded $0.1 million in total compensation income for the then-outstanding stock units. At October 28, 2017 we had $0.7 million in total unrecognized compensation cost related to the then-outstanding stock units, which we expect to recognize over the next approximately 2.25 years. Changes during 2017 with respect to the 2015 Grant are noted below. 39 Weeks Ended October 28, 2017 (Shares in Thousands) Shares Weighted-Average Fair Value Per Share on Date of Grant Balance at January 28, 2017 14 $ 9.38 Granted — — Vested — — Forfeited (14 ) 9.38 Balance at October 28, 2017 — $ — Share Repurchase Program During 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. See Note 7 to these Condensed Consolidated Financial Statements regarding the Senior ABL Facility's limits on SHO’s ability to repurchase its 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 39 weeks ended October 28, 2017 . At October 28, 2017 , we had approximately $12.5 million of remaining authorization under the repurchase program. |
Store Closing Charges
Store Closing Charges | 9 Months Ended |
Oct. 28, 2017 | |
Restructuring and Related Activities [Abstract] | |
STORE CLOSING CHARGES | STORE CLOSING CHARGES Accelerated Closed Store Charges We continue to take proactive steps to make the best use of capital by closing unprofitable stores. In accordance with accounting standards governing costs associated with exit or disposal activities, expenses related to future rent payments for which we no longer expect to receive any economic benefit are accrued as of when we ceased to use the leased space and have been reduced for estimated sublease income. Accelerated store closure costs for the 13 and 39 weeks ended October 28, 2017 were as follows: Thousands Lease Termination Costs (1) Inventory Related (1) Impairment and Accelerated Depreciation (2) Other Charges (3) Total Store Closing Costs 13 weeks ended October 28, 2017 $ (169 ) $ 2,614 $ — $ (169 ) $ 2,276 Thousands Lease Termination Costs (1) Inventory Related (1) Impairment and Accelerated Depreciation (2) Other Charges (3) Total Store Closing Costs 39 weeks ended October 28, 2017 $ 8,278 $ 4,410 $ 979 $ 217 $ 13,884 (1) Recorded within cost of sales and occupancy in the Condensed Consolidated Statements of Operations. Lease termination costs are net of estimated sublease income, and include the reversal of closed store reserves when a lease agreement is terminated for an amount less than the remaining reserve established for the store. (2) Recorded within depreciation and amortization in the Condensed Consolidated Statements of Operations. (3) Recorded within selling and administrative in the Condensed Consolidated Statements of Operations. Closed Store Reserves Store closing reserves at October 28, 2017 and January 28, 2017 are shown in the table below. Store closing reserves of $4.8 million , $0.5 million , and $7.7 million are included within other current liabilities in the Condensed Consolidated Balance Sheets at October 28, 2017 , October 29, 2016 and January 28, 2017 , respectively. Thousands Total Balance at January 28, 2017 $ 7,659 Store closing costs 8,495 Payments/utilization (11,322 ) Balance at October 28, 2017 $ 4,832 |
Background and Basis of Prese18
Background and Basis of Presentation (Policies) | 9 Months Ended |
Oct. 28, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | 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 13 and 39 weeks ended October 28, 2017 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 28, 2017 (the "2016 10-K"). We operate through two segments--our Sears Hometown segment ("Hometown") and our Sears Outlet segment ("Outlet"). Our third fiscal-quarter end is the Saturday closest to October 31 each year. Our fiscal-year end is the Saturday closest to January 31 each year. Our current fiscal-year ends February 3, 2018 and is a 53-week year. |
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 ("VIE") as well as the methods permitted for determining the primary beneficiary of a VIE. In addition, this guidance requires ongoing reassessments as to whether a reporting company is the primary beneficiary of a VIE and disclosures regarding the reporting company’s involvement with a VIE. On an ongoing basis the Company evaluates its business relationships, such as those with its independent dealers, independent franchisees, and suppliers, to identify potential VIE's. 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, merchandise payables, accrued expenses (Level 1), accounts and franchisee notes receivable, and short-term debt (Level 2) 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 and are consistent with the interest rates in the market. The carrying value of long-term notes receivable approximates fair value. We may be required, on a nonrecurring basis, to adjust the carrying value of the Company's long-lived assets. When necessary, these valuations are determined by the Company using Level 3 inputs. These assets are subject to fair value adjustments in certain circumstances as when there is evidence that impairment may exist. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements ASU 2017-01 "Business Combinations (Topic 805) Clarifying the Definition of Business" In January 2017, the FASB issued ASU No. 2017-01, "Business Combinations (Topic 805): Clarifying the Definition of Business" . This Accounting Standards Update ("ASU") is intended to clarify the definition of a business to add guidance when determining when an acquisition or disposal should be accounted for as a sale of assets or business. This ASU provides a more robust framework to use in determining when a set of assets or activities should be classified as a business, providing more consistency in accounting for business or asset acquisitions. This ASU is effective for public companies for fiscal years beginning after December 15, 2017, including interim periods within those periods. The ASU will be applied prospectively. ASU 2016-15 "Statement of Cash Flows (Topic 230) Classification of Certain Cash Receipts and Cash Payments" In August 2016, the FASB issued ASU No. 2016-15, "Classification of Certain Cash Receipts and Cash Payments". This ASU reduces the diversity in reporting of eight specific cash flow issues due to accounting guidance that is unclear or does not exist. The eight issues relate to certain debt activities, business combination activities, insurance settlements and other various activities. This ASU is effective for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years. Early adoption is permitted and is to be applied retrospectively using a transition method for each period presented. An entity that elects early adoption of the guidance under this ASU must adopt all aspects of the guidance in the same period. Application of this ASU is not expected to have a material impact on our consolidated financial statements. ASU 2016-02 "Leases (Topic 842)" In February 2016, the FASB issued ASU 2016-02, "Leases (Topic 842)". This ASU created a new Topic under the accounting standards codification to account for the provisions of the ASU. This ASU amendment is meant to provide transparency and to improve comparability between entities. This ASU requires companies to record an asset and liability on the balance sheet for leases that were formerly designated as operating leases as well as leases designated as financing leases. The provisions of the ASU predominately change the recognition of leases for lessees, but the provisions do not substantially change the accounting for lessors. This ASU will supersede the provisions of Topic 840 Leases. The liability recorded for a lease is generally intended to recognize the present value of lease payments and the asset as a right to use the underlying asset for the lease, including optional periods if it is reasonably certain the option will be exercised. If a lease term is less than twelve months, a company is allowed to elect not to record the asset and liability. Expense related to these leases are to be amortized straight-line over the expected term of the lease. Additionally, the provisions of this ASU provide additional guidance on separating lease terms from maintenance and other type of provisions that provide a good or service, accounting for sale-leaseback provisions, and leveraged leases. These updates are required to be applied under a modified retrospective approach from the beginning of the earliest period presented. The modified approach provides optional practical expedients that may be elected, which will allow companies to continue to account for leases under the previous guidance for leases that commenced prior to the effective date. Reporting in the cash flow statement remains virtually unchanged. Additional qualitative and quantitative disclosures are required. The provisions of this ASU are effective for fiscal years beginning after December 15, 2018, and interim periods within those periods. Early adoption is allowed. We are in the process of evaluating the impact of this ASU on our financial statements, and therefore, its impact has not yet been determined. However, upon adoption, we expect that the right of use asset and the lease liability will be recognized in the balance sheets in amounts that will be material. ASU 2014-09 , "Revenue from Contracts with Customers (Topic 606)" In May 2014, the FASB issued ASU 2014-09, "Revenue from Contracts with Customers (Topic 606)". The guidance in this ASU affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards (for example, insurance contracts or lease contracts). The new revenue recognition guidance more closely aligns U.S. GAAP with International Financial Reporting Standards ("IFRS"). The core principle of the guidance is that an entity 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. In August 2015, the FASB issued ASU 2015-14, "Accounting for Revenue from Contracts with Customers (Topic 606) ". This ASU deferred the effective date of ASU 2014-09 to annual periods beginning after December 15, 2017 and interim periods within those fiscal years. Early adoption is permitted for annual periods beginning after December 15, 2016 and interim periods within those fiscal years. In addition, four other ASUs have been issued amending and clarifying ASU 2014-09 and must be adopted concurrently. • ASU 2016-08 "Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net)" • ASU 2016-10 "Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing" • ASU 2016-12 "Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients" • ASU 2016-20 "Revenue from Contracts with Customers (Topic 606): Technical Corrections and Improvements" The Company will adopt the ASUs in the first quarter of fiscal 2018. The Company's assessment, which is ongoing, includes a detailed review of contracts for each of its disaggregated revenue streams and a comparison of its historical accounting policies and practices to the new standard. Based on the procedures performed to date, the Company has not identified performance obligations that change the timing of recognition of revenue for our revenue streams as compared to historical accounting. The Company's balance sheet presentation of its sales returns reserve will change to present a separate return asset and liability, instead of the net presentation used currently. The Company expects to finalize its assessment in the fourth quarter of fiscal 2017, and adopt the ASUs using the modified retrospective method on February 4, 2018. |
Accounts and Franchisee Recei19
Accounts and Franchisee Receivables and Other Assets (Tables) | 9 Months Ended |
Oct. 28, 2017 | |
Receivables [Abstract] | |
Schedule of Accounts and Franchisee Receivables and Other Assets | Accounts and franchisee receivables and other assets consist of the following: Thousands October 28, 2017 October 29, 2016 January 28, 2017 Short-term franchisee receivables $ 1,584 $ 2,203 $ 1,920 Miscellaneous receivables 12,593 19,604 10,475 Long-term franchisee receivables 10,829 20,455 18,406 Other assets 5,057 3,484 7,643 Allowance for losses on short-term franchisee receivables (1) (1,027 ) (1,230 ) (947 ) Allowance for losses on long-term franchisee receivables (1) (6,118 ) (9,003 ) (7,295 ) Net accounts and franchisee receivables and other assets $ 22,918 $ 35,513 $ 30,202 (1) The Company recognizes an allowance for losses on franchisee receivables (which consist primarily of franchisee promissory notes) in an amount equal to estimated probable losses net of recoveries. The allowance is based on an analysis of expected future write-offs and 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 allowance 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. |
Allowance for Losses on Franc20
Allowance for Losses on Franchisee Receivables (Tables) | 9 Months Ended |
Oct. 28, 2017 | |
Receivables [Abstract] | |
Schedule of Provision for Losses on Franchisee Receivables | The allowance for losses on franchisee receivables consists of the following as of: 39 Weeks Ended Thousands October 28, 2017 October 29, 2016 Allowance for losses on franchisee receivables, beginning of period $ 8,242 $ 12,141 Provisions (recoveries) during the period 5,820 (725 ) Write off of franchisee receivables against the allowance (6,917 ) (1,458 ) Other — 275 Allowance for losses on franchisee receivables, end of period $ 7,145 $ 10,233 |
Other Current and Long-Term L21
Other Current and Long-Term Liabilities (Tables) | 9 Months Ended |
Oct. 28, 2017 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses and Other Long-term Liabilities | Other current and long-term liabilities consist of the following: Thousands October 28, 2017 October 29, 2016 January 28, 2017 Customer deposits $ 17,761 $ 27,631 $ 19,943 Sales and other taxes 8,782 13,303 11,380 Accrued expenses 23,191 19,306 27,602 Payroll and related items 8,522 6,992 5,766 Store closing costs 4,832 524 7,659 Total Other current and long-term liabilities $ 63,088 $ 67,756 $ 72,350 |
Related Party Agreements and 22
Related Party Agreements and Transactions (Tables) | 9 Months Ended |
Oct. 28, 2017 | |
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 39 Weeks Ended October 28, 2017 October 29, 2016 October 28, 2017 October 29, 2016 Thousands Net Commissions from Sears Holdings $ 15,548 $ 20,878 $ 51,393 $ 65,270 Purchases related to cost of sales and occupancy 218,445 282,949 751,559 899,037 Services included in selling and administrative expense 12,150 19,163 46,053 59,475 |
Summary of Segment Data (Tables
Summary of Segment Data (Tables) | 9 Months Ended |
Oct. 28, 2017 | |
Segment Reporting [Abstract] | |
Schedule of Segment Data | Sales categories include appliances, lawn and garden, tools and paint, and other. 13 Weeks Ended October 28, 2017 Thousands Hometown Outlet Total Net sales Appliances $ 188,591 $ 104,356 $ 292,947 Lawn and garden 40,315 4,804 45,119 Tools and paint 20,575 3,167 23,742 Other 10,473 13,678 24,151 Total 259,954 126,005 385,959 Costs and expenses Cost of sales and occupancy 202,473 96,798 299,271 Selling and administrative 64,287 28,814 93,101 Depreciation and amortization 1,175 1,827 3,002 Total 267,935 127,439 395,374 Operating loss $ (7,981 ) $ (1,434 ) $ (9,415 ) Total assets $ 298,859 $ 141,939 $ 440,798 Capital expenditures $ 829 $ 1,567 $ 2,396 13 Weeks Ended October 29, 2016 Thousands Hometown Outlet Total Net sales Appliances $ 243,670 $ 122,630 $ 366,300 Lawn and garden 49,654 5,214 54,868 Tools and paint 29,614 3,853 33,467 Other 16,601 16,559 33,160 Total 339,539 148,256 487,795 Costs and expenses Cost of sales and occupancy 271,254 121,308 392,562 Selling and administrative 76,436 32,722 109,158 Depreciation and amortization 1,339 1,849 3,188 Total 349,029 155,879 504,908 Operating loss $ (9,490 ) $ (7,623 ) $ (17,113 ) Total assets $ 347,277 $ 187,932 $ 535,209 Capital expenditures $ 1,376 $ 386 $ 1,762 39 Weeks Ended October 28, 2017 Thousands Hometown Outlet Total Net sales Appliances $ 608,830 $ 346,876 955,706 Lawn and garden 185,115 16,096 201,211 Tools and paint 70,398 10,433 80,831 Other 40,465 45,964 86,429 Total 904,808 419,369 1,324,177 Costs and expenses Cost of sales and occupancy 712,473 338,913 1,051,386 Selling and administrative 214,463 104,727 319,190 Depreciation and amortization 3,920 5,990 9,910 Total 930,856 449,630 1,380,486 Operating loss $ (26,048 ) $ (30,261 ) $ (56,309 ) Total assets $ 298,859 $ 141,939 $ 440,798 Capital expenditures $ 3,180 $ 3,857 $ 7,037 39 Weeks Ended October 29, 2016 Thousands Hometown Outlet Total Net sales Appliances $ 734,050 $ 394,397 $ 1,128,447 Lawn and garden 219,267 16,773 236,040 Tools and paint 97,100 12,822 109,922 Other 52,315 54,440 106,755 Total 1,102,732 478,432 1,581,164 Costs and expenses Cost of sales and occupancy 868,623 386,237 1,254,860 Selling and administrative 240,843 105,115 345,958 Depreciation and amortization 4,415 5,323 9,738 Gain on the sale of assets — (25,269 ) (25,269 ) Total 1,113,881 471,406 1,585,287 Operating (loss) income $ (11,149 ) $ 7,026 $ (4,123 ) Total assets $ 347,277 $ 187,932 $ 535,209 Capital expenditures $ 5,950 $ 2,650 $ 8,600 |
Loss Per Common Share (Tables)
Loss Per Common Share (Tables) | 9 Months Ended |
Oct. 28, 2017 | |
Earnings Per Share [Abstract] | |
Schedule of Loss Per Common Share, Basic and Diluted | The following table sets forth the components used to calculate basic and diluted loss per share attributable to our stockholders. 13 Weeks Ended 39 Weeks Ended October 28, 2017 October 29, 2016 October 28, 2017 October 29, 2016 Thousands except income per common share Basic weighted average shares 22,702 22,702 22,702 22,688 Diluted weighted average shares 22,702 22,702 22,702 22,688 Net loss $ (10,933 ) $ (93,197 ) $ (61,813 ) $ (86,125 ) Loss per common share: Basic $ (0.48 ) $ (4.11 ) $ (2.72 ) $ (3.80 ) Diluted $ (0.48 ) $ (4.11 ) $ (2.72 ) $ (3.80 ) |
Equity (Tables)
Equity (Tables) | 9 Months Ended |
Oct. 28, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Restricted Stock Award Activity | Changes during 2017 with respect to the 2015 Grant are noted below. 39 Weeks Ended October 28, 2017 (Shares in Thousands) Shares Weighted-Average Fair Value Per Share on Date of Grant Balance at January 28, 2017 14 $ 9.38 Granted — — Vested — — Forfeited (14 ) 9.38 Balance at October 28, 2017 — $ — |
Store Closing Charges (Tables)
Store Closing Charges (Tables) | 9 Months Ended |
Oct. 28, 2017 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Accelerated Store Closure Costs | Accelerated store closure costs for the 13 and 39 weeks ended October 28, 2017 were as follows: Thousands Lease Termination Costs (1) Inventory Related (1) Impairment and Accelerated Depreciation (2) Other Charges (3) Total Store Closing Costs 13 weeks ended October 28, 2017 $ (169 ) $ 2,614 $ — $ (169 ) $ 2,276 Thousands Lease Termination Costs (1) Inventory Related (1) Impairment and Accelerated Depreciation (2) Other Charges (3) Total Store Closing Costs 39 weeks ended October 28, 2017 $ 8,278 $ 4,410 $ 979 $ 217 $ 13,884 (1) Recorded within cost of sales and occupancy in the Condensed Consolidated Statements of Operations. Lease termination costs are net of estimated sublease income, and include the reversal of closed store reserves when a lease agreement is terminated for an amount less than the remaining reserve established for the store. (2) Recorded within depreciation and amortization in the Condensed Consolidated Statements of Operations. (3) Recorded within selling and administrative in the Condensed Consolidated Statements of Operations. |
Schedule of Store Closing Reserves | Store closing reserves of $4.8 million , $0.5 million , and $7.7 million are included within other current liabilities in the Condensed Consolidated Balance Sheets at October 28, 2017 , October 29, 2016 and January 28, 2017 , respectively. Thousands Total Balance at January 28, 2017 $ 7,659 Store closing costs 8,495 Payments/utilization (11,322 ) Balance at October 28, 2017 $ 4,832 |
Background and Basis of Prese27
Background and Basis of Presentation (Details) | 9 Months Ended |
Oct. 28, 2017storesegmentstate | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of stores | store | 921 |
Number of states in which the Company operates | state | 50 |
Number of operating segments | segment | 2 |
Accounts and Franchisee Recei28
Accounts and Franchisee Receivables and Other Assets (Details) - USD ($) $ in Thousands | Oct. 28, 2017 | Jan. 28, 2017 | Oct. 29, 2016 |
Receivables [Abstract] | |||
Short-term franchisee receivables | $ 1,584 | $ 1,920 | $ 2,203 |
Miscellaneous receivables | 12,593 | 10,475 | 19,604 |
Long-term franchisee receivables | 10,829 | 18,406 | 20,455 |
Other assets | 5,057 | 7,643 | 3,484 |
Allowance for losses on short-term franchisee receivables | (1,027) | (947) | (1,230) |
Allowance for losses on long-term franchisee receivables | (6,118) | (7,295) | (9,003) |
Net accounts and franchisee receivables and other assets | $ 22,918 | $ 30,202 | $ 35,513 |
Allowance for Losses on Franc29
Allowance for Losses on Franchisee Receivables (Details) $ in Thousands | 9 Months Ended | ||
Oct. 28, 2017USD ($) | Oct. 29, 2016USD ($) | Jun. 07, 2017USD ($)location | |
Provision for Losses on Franchisee Receivables [Roll Forward] | |||
Number of franchise locations terminated | location | 14 | ||
Franchise Receivable | |||
Provision for Losses on Franchisee Receivables [Roll Forward] | |||
Allowance for losses on franchisee receivables, beginning of period | $ 8,242 | $ 12,141 | |
Provisions (recoveries) during the period | 5,820 | (725) | |
Write off of franchisee receivables against the allowance | (6,917) | (1,458) | |
Other | 0 | 275 | |
Allowance for losses on franchisee receivables, end of period | 7,145 | $ 10,233 | |
Previous Franchisee note Receivable | |||
Provision for Losses on Franchisee Receivables [Roll Forward] | |||
Promissory note carrying amount | $ 5,500 | ||
Loss on transaction | $ 5,500 | ||
New Franchisee Note Receivable | |||
Provision for Losses on Franchisee Receivables [Roll Forward] | |||
Promissory note carrying amount | $ 1,500 |
Other Current and Long-Term L30
Other Current and Long-Term Liabilities (Details) - USD ($) $ in Thousands | Oct. 28, 2017 | Jan. 28, 2017 | Oct. 29, 2016 |
Payables and Accruals [Abstract] | |||
Customer deposits | $ 17,761 | $ 19,943 | $ 27,631 |
Sales and other taxes | 8,782 | 11,380 | 13,303 |
Accrued expenses | 23,191 | 27,602 | 19,306 |
Payroll and related items | 8,522 | 5,766 | 6,992 |
Store closing costs | 4,832 | 7,659 | 524 |
Total Other current and long-term liabilities | $ 63,088 | $ 72,350 | $ 67,756 |
Related Party Agreements and 31
Related Party Agreements and Transactions (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 28, 2017 | Oct. 29, 2016 | Oct. 28, 2017 | Oct. 29, 2016 | |
ESL | ||||
Related Party Transaction [Line Items] | ||||
Beneficial interest acquired by related party, percentage | 58.00% | 58.00% | ||
ESL | Sears Holdings | ||||
Related Party Transaction [Line Items] | ||||
Beneficial interest acquired by related party, percentage | 49.00% | 49.00% | ||
Sears Holdings Corporation | ||||
Related Party Transaction [Line Items] | ||||
Maximum percentage of royalty rates | 6.00% | |||
Net Commissions from Sears Holdings | $ 15,548 | $ 20,878 | $ 51,393 | $ 65,270 |
Purchases related to cost of sales and occupancy | 218,445 | 282,949 | 751,559 | 899,037 |
Services included in selling and administrative expense | 12,150 | 19,163 | $ 46,053 | 59,475 |
Invoice payment term | 10 days | |||
Discounts received | 1,200 | 1,800 | $ 3,200 | 2,700 |
Sears Holdings Corporation | Minimum | ||||
Related Party Transaction [Line Items] | ||||
Invoice payment term | 2 days | |||
Sears Holdings Corporation | Minimum | Payments for Merchandise Inventory to Related Party | ||||
Related Party Transaction [Line Items] | ||||
Early payment discount percentage | 0.37% | |||
Sears Holdings Corporation | Maximum | ||||
Related Party Transaction [Line Items] | ||||
Invoice payment term | 3 days | |||
Sears Holdings Corporation | Maximum | Payments for Merchandise Inventory to Related Party | ||||
Related Party Transaction [Line Items] | ||||
Early payment discount percentage | 0.43% | |||
Seritage Growth Properties | ||||
Related Party Transaction [Line Items] | ||||
Occupancy payments | $ 300 | $ 200 | $ 900 | $ 600 |
Financing Arrangements (Details
Financing Arrangements (Details) - USD ($) | 1 Months Ended | 9 Months Ended | |
Oct. 31, 2012 | Oct. 28, 2017 | Nov. 01, 2016 | |
Debt Instrument [Line Items] | |||
Increases in aggregate principal | $ 100,000,000 | ||
Remaining and is included in Prepaid and Other current assets | 4,000,000 | ||
Short-term debt outstanding under the Senior ABL Facility | $ 119,200,000 | ||
LIBOR | |||
Debt Instrument [Line Items] | |||
Blended interest rate | 5.00% | ||
Base Rate | |||
Debt Instrument [Line Items] | |||
Blended interest rate | 7.00% | ||
Minimum | Sears Holdings Corporation | Payments for Merchandise Inventory to Related Party | |||
Debt Instrument [Line Items] | |||
Early payment discount percentage | 0.37% | ||
Maximum | Sears Holdings Corporation | Payments for Merchandise Inventory to Related Party | |||
Debt Instrument [Line Items] | |||
Early payment discount percentage | 0.43% | ||
Swingline Loans | |||
Debt Instrument [Line Items] | |||
Aggregate maximum borrowings | $ 25,000,000 | ||
Letter of Credit | |||
Debt Instrument [Line Items] | |||
Aggregate maximum borrowings | 75,000,000 | ||
Senior ABL Facility | |||
Debt Instrument [Line Items] | |||
Aggregate maximum borrowings | $ 250,000,000 | $ 250,000,000 | |
Increases in aggregate principal | $ 100,000,000 | ||
Remaining borrowing capacity | 43,600,000 | ||
Credit facility borrowings increase | 19,000,000 | ||
Senior ABL Facility | Letter of Credit | |||
Debt Instrument [Line Items] | |||
Remaining borrowing capacity | $ 7,200,000 | ||
Senior ABL Facility Extended Commitments | |||
Debt Instrument [Line Items] | |||
Aggregate maximum borrowings | 170,000,000 | ||
Senior ABL Facility Extended Commitments | Minimum | LIBOR | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 3.50% | ||
Senior ABL Facility Extended Commitments | Minimum | Base Rate | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 2.50% | ||
Senior ABL Facility Extended Commitments | Maximum | LIBOR | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 4.50% | ||
Senior ABL Facility Extended Commitments | Maximum | Base Rate | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 3.50% | ||
Senior ABL Facility Non-Extended Commitments | |||
Debt Instrument [Line Items] | |||
Aggregate maximum borrowings | $ 80,000,000 | ||
Senior ABL Facility Non-Extended Commitments | Minimum | LIBOR | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 2.00% | ||
Senior ABL Facility Non-Extended Commitments | Minimum | Base Rate | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 1.00% | ||
Senior ABL Facility Non-Extended Commitments | Maximum | LIBOR | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 2.50% | ||
Senior ABL Facility Non-Extended Commitments | Maximum | Base Rate | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 1.50% |
Summary of Segment Data (Detail
Summary of Segment Data (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Oct. 28, 2017 | Oct. 29, 2016 | Oct. 28, 2017 | Oct. 29, 2016 | Jan. 28, 2017 | |
Segment Reporting Information [Line Items] | |||||
Net sales | $ 385,959 | $ 487,795 | $ 1,324,177 | $ 1,581,164 | |
Cost of sales and occupancy | 299,271 | 392,562 | 1,051,386 | 1,254,860 | |
Selling and administrative | 93,101 | 109,158 | 319,190 | 345,958 | |
Depreciation and amortization | 3,002 | 3,188 | 9,910 | 9,738 | |
Gain on sale of assets | 0 | 0 | 0 | (25,269) | |
Total costs and expenses | 395,374 | 504,908 | 1,380,486 | 1,585,287 | |
Operating loss | (9,415) | (17,113) | (56,309) | (4,123) | |
Total assets | 440,798 | 535,209 | 440,798 | 535,209 | $ 468,426 |
Capital expenditures | 2,396 | 1,762 | 7,037 | 8,600 | |
Appliances | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 292,947 | 366,300 | 955,706 | 1,128,447 | |
Lawn and garden | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 45,119 | 54,868 | 201,211 | 236,040 | |
Tools and paint | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 23,742 | 33,467 | 80,831 | 109,922 | |
Other | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 24,151 | 33,160 | 86,429 | 106,755 | |
Hometown | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 259,954 | 339,539 | 904,808 | 1,102,732 | |
Cost of sales and occupancy | 202,473 | 271,254 | 712,473 | 868,623 | |
Selling and administrative | 64,287 | 76,436 | 214,463 | 240,843 | |
Depreciation and amortization | 1,175 | 1,339 | 3,920 | 4,415 | |
Gain on sale of assets | 0 | ||||
Total costs and expenses | 267,935 | 349,029 | 930,856 | 1,113,881 | |
Operating loss | (7,981) | (9,490) | (26,048) | (11,149) | |
Total assets | 298,859 | 347,277 | 298,859 | 347,277 | |
Capital expenditures | 829 | 1,376 | 3,180 | 5,950 | |
Hometown | Appliances | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 188,591 | 243,670 | 608,830 | 734,050 | |
Hometown | Lawn and garden | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 40,315 | 49,654 | 185,115 | 219,267 | |
Hometown | Tools and paint | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 20,575 | 29,614 | 70,398 | 97,100 | |
Hometown | Other | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 10,473 | 16,601 | 40,465 | 52,315 | |
Outlet | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 126,005 | 148,256 | 419,369 | 478,432 | |
Cost of sales and occupancy | 96,798 | 121,308 | 338,913 | 386,237 | |
Selling and administrative | 28,814 | 32,722 | 104,727 | 105,115 | |
Depreciation and amortization | 1,827 | 1,849 | 5,990 | 5,323 | |
Gain on sale of assets | (25,269) | ||||
Total costs and expenses | 127,439 | 155,879 | 449,630 | 471,406 | |
Operating loss | (1,434) | (7,623) | (30,261) | 7,026 | |
Total assets | 141,939 | 187,932 | 141,939 | 187,932 | |
Capital expenditures | 1,567 | 386 | 3,857 | 2,650 | |
Outlet | Appliances | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 104,356 | 122,630 | 346,876 | 394,397 | |
Outlet | Lawn and garden | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 4,804 | 5,214 | 16,096 | 16,773 | |
Outlet | Tools and paint | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 3,167 | 3,853 | 10,433 | 12,822 | |
Outlet | Other | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | $ 13,678 | $ 16,559 | $ 45,964 | $ 54,440 |
Loss Per Common Share (Details)
Loss Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 28, 2017 | Oct. 29, 2016 | Oct. 28, 2017 | Oct. 29, 2016 | |
Earnings Per Share [Abstract] | ||||
Basic weighted average shares (in shares) | 22,702,000 | 22,702,000 | 22,702,000 | 22,688,000 |
Diluted weighted average shares (in shares) | 22,702,000 | 22,702,000 | 22,702,000 | 22,688,000 |
Net loss | $ (10,933) | $ (93,197) | $ (61,813) | $ (86,125) |
Loss per common share: | ||||
Basic (in dollars per share) | $ (0.48) | $ (4.11) | $ (2.72) | $ (3.80) |
Diluted (in dollars per share) | $ (0.48) | $ (4.11) | $ (2.72) | $ (3.80) |
Unvested shares of restricted stock (in shares) | 14,000 |
Equity (Narrative) (Details)
Equity (Narrative) (Details) - USD ($) | May 16, 2016 | Oct. 28, 2017 | Apr. 29, 2017 | Oct. 28, 2017 | Jan. 30, 2016 | Feb. 01, 2014 | Oct. 28, 2017 | Oct. 28, 2017 | Dec. 31, 2013 |
Stock-based Compensation | |||||||||
Shares reserved under plan (in shares) | 4,000,000 | 4,000,000 | 4,000,000 | 4,000,000 | |||||
Share Repurchase Program | |||||||||
Authorized amount | $ 25,000,000 | ||||||||
Stock repurchased (in shares) | 0 | 0 | |||||||
Remaining authorized repurchase amount | $ 12,500,000 | $ 12,500,000 | $ 12,500,000 | $ 12,500,000 | |||||
Restricted Stock | |||||||||
Stock-based Compensation | |||||||||
Stock granted (in shares) | 14,000 | 89,221 | |||||||
Forfeited in period (in shares) | 52,691 | 14,000 | |||||||
Vested (in shares) | 36,530 | 0 | |||||||
Share-based compensation income | $ 100,000 | ||||||||
Total unrecognized compensation | $ 700,000 | $ 700,000 | $ 700,000 | $ 700,000 | |||||
Compensation to be recognized term | 2 years 3 months | ||||||||
Restricted Stock Units (RSUs) | |||||||||
Stock-based Compensation | |||||||||
Unvested (in shares) | 229,455 | 229,455 | 229,455 | 229,455 | |||||
Share-based Compensation Award, Tranche One | Restricted Stock Units (RSUs) | |||||||||
Stock-based Compensation | |||||||||
Vesting installment percentage | 33.00% | ||||||||
Share-based Compensation Award, Tranche Two | Restricted Stock Units (RSUs) | |||||||||
Stock-based Compensation | |||||||||
Vesting installment percentage | 33.00% | ||||||||
Share-based Compensation Award, Tranche Three | Restricted Stock Units (RSUs) | |||||||||
Stock-based Compensation | |||||||||
Vesting installment percentage | 33.00% | ||||||||
Amended and Restated 2012 Stock Plan (the 'Plan') | Restricted Stock Units (RSUs) | |||||||||
Stock-based Compensation | |||||||||
Stock granted (in shares) | 40,000 | 222,788 | 159,475 | ||||||
Forfeited in period (in shares) | 34,091 | 33,333 | |||||||
Unvested (in shares) | 125,384 | 125,384 | 125,384 | 125,384 |
Equity (Restricted Stock Awards
Equity (Restricted Stock Awards) (Details) - Restricted Stock - $ / shares | May 16, 2016 | Oct. 28, 2017 |
Shares | ||
Beginning of year balance (in shares) | 14,000 | |
Granted (in shares) | 0 | |
Vested (in shares) | (36,530) | 0 |
Forfeited (in shares) | (14,000) | |
Balance at end of period (in shares) | 0 | |
Weighted-Average Fair Value Per Share on Date of Grant | ||
Beginning of year balance (in dollars per share) | $ 9.38 | |
Granted (in dollars per share) | 0 | |
Vested (in dollars per share) | 0 | |
Forfeited (in dollars per share) | 9.38 | |
Balance at end of period (in dollars per share) | $ 0 |
Store Closing Charges (Narrativ
Store Closing Charges (Narrative) (Details) - USD ($) $ in Thousands | Oct. 28, 2017 | Jan. 28, 2017 | Oct. 29, 2016 |
Restructuring and Related Activities [Abstract] | |||
Store closing restructuring reserves | $ 4,832 | $ 7,659 | $ 500 |
Store Closing Charges (Schedule
Store Closing Charges (Schedule of Store Closing Costs) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Oct. 28, 2017 | Oct. 28, 2017 | |
Restructuring Cost and Reserve [Line Items] | ||
Total Store Closing Costs | $ 8,495 | |
Facility Closing | ||
Restructuring Cost and Reserve [Line Items] | ||
Total Store Closing Costs | $ 2,276 | 13,884 |
Cost of Sales and Occupancy | Facility Closing | ||
Restructuring Cost and Reserve [Line Items] | ||
Lease Termination Costs | (169) | 8,278 |
Inventory Related | 2,614 | 4,410 |
Depreciation and Amortization | Facility Closing | ||
Restructuring Cost and Reserve [Line Items] | ||
Impairment and Accelerated Depreciation | 0 | 979 |
Selling and Administrative Expenses | Facility Closing | ||
Restructuring Cost and Reserve [Line Items] | ||
Other Charges | $ (169) | $ 217 |
Store Closing Charges (Schedu39
Store Closing Charges (Schedule of Store Closing Reserves) (Details) $ in Thousands | 9 Months Ended |
Oct. 28, 2017USD ($) | |
Restructuring and Related Activities [Abstract] | |
Closed store reserve, Beginning balance | $ 7,659 |
Store closing costs | 8,495 |
Payments/utilization | (11,322) |
Closed store reserve, Ending balance | $ 4,832 |