| Schedule of New Accounting Pronouncements and Changes in Accounting Principles [Table Text Block] | Note 3. Recently Adopted Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (the
“FASB”) issued ASU 2016-02, Leases (Topic 842). Lessees are required to recognize a right-of-use asset and a lease
liability for virtually all of their leases (other than leases that meet the definition of a short-term lease). The liability is
equal to the present value of lease payments. The asset is based on the liability, subject to certain adjustments, such as for
initial direct costs. For income statement purposes, a dual model was retained, requiring leases to be classified as either operating
or finance leases. Operating leases result in straight-line expense (similar to operating leases under the prior accounting standard)
while finance leases result in a frontloaded expense pattern (similar to capital leases under the prior accounting standard). The Company adopted this new accounting standard on February
3, 2019 on a modified retrospective basis and applied the new standard to all leases greater than one year. As a result, comparative
financial information has not been restated and continues to be reported under the accounting standards in effect for those periods.
The Company elected the package of practical expedients permitted under the transition guidance within the new standard, which
includes, among other things, the ability to carry forward the existing lease classification. The Company does not engage in any
Lessor transactions, and as a Lessee, the Company does not have any finance leases. As a result, the new standard had a material
impact on the unaudited condensed consolidated balance sheet, but did not materially impact the Company’s consolidated operating
results and did not materially impact the Company’s cash flows. The following is a discussion of the Company’s lease policy
under the new lease accounting standard: The Company determines if an arrangement contains a lease at
the inception of a contract. Right-of-use assets represent the Company’s right to use an underlying asset for the lease term
and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Right-of-use assets
and lease liabilities are recognized at the commencement date based on the present value of the remaining future minimum lease
payments. As the interest rate implicit in the Company’s leases is not readily determinable, the Company utilizes its incremental
borrowing rate to discount the lease payments. The operating lease right-of-use assets also include lease payments made before
commencement and reduced by lease incentives. Leases with an initial term of 12 months or less are not recorded on the consolidated
balance sheet and lease expense is recognized on a straight-line basis over the term of the short-term lease. For real estate leases, the Company accounts for lease components
and non-lease components as a single lease component. Certain real estate leases require additional payments based on reimbursement
for real estate taxes, common area maintenance and insurance, which are expensed as incurred as variable lease costs. Other real
estate leases contain one fixed lease payment that includes real estate taxes, common area maintenance and insurance. These fixed
payments are considered part of the lease payment and included in the right-of-use assets and lease liabilities. We elected the following package of practical expedients permitted
under the lease standard: We do not record leases with an initial term of 12 months or less on the balance
sheet but continue to expense them on a straight-line basis over the lease term. As of November 2, 2019, 153 leases were
short-term in nature and were exempt from being recorded on the balance sheet. The Company leases its 181,300 square foot distribution center/office
facility in Albany, New York from an entity controlled by the estate of Robert J. Higgins, its former Chairman and largest shareholder.
The distribution center/office lease commenced on January 1, 2016, and expires on December 31, 2020. Under the lease, accounted
for as an operating lease, the Company is responsible for monthly payments in the amount of $103 thousand per month. Under the
terms of the lease agreement, the Company is also responsible for property taxes and other operating costs with respect to the
premises. During the thirty nine weeks
ended November 2, 2019, the Company concluded, based on continued operating losses within the fye segment driven by lower than
expected third quarter sales that triggering events had occurred, and an evaluation of the fye o for impairment was required. O ,
primarily at the Company’s retail store locations, where impairment was determined to exist were written down to their estimated
fair values as of the end of November 2, 2019, resulting in the recording of asset impairment charges of $13.7 million. Estimated
fair values at these locations were determined based on a measure of discounted future cash flows over the remaining lease terms
at the respective locations. Future cash flows were estimated based on individual store and corporate level plans and were discounted
at a rate approximating the Company’s cost of capital. Management believes its assumptions were reasonable and consistently
applied. Impact of New Lease Standard on Balance Sheet
Line Items As a result of applying the new lease standard using a modified
retrospective method, the following adjustments were made to accounts on the condensed consolidated balance sheet as of February
3, 2019:
Impact of Change in Accounting Policy
As Reported Adjustments Adjusted
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 4,355 $ — $ 4,355
Restricted cash 4,126 — 4,126
Accounts receivable 5,383 — 5,383
Merchandise inventory 94,842 — 94,842
Prepaid expenses and other current assets 6,657 (748 ) 5,909
Total current assets 115,363 (748 ) 114,615
Restricted cash 5,745 — 5,745
Fixed assets, net 7,529 — 7,529
Operating lease right-of-use assets — 28,044 28,044
Intangible assets, net 3,668 — 3,668
Other assets 5,708 — 5,708
TOTAL ASSETS $ 138,013 $ 27,296 $ 165,309
LIABILITIES
CURRENT LIABILITIES
Accounts payable $ 34,329 $ — $ 34,329
Accrued expenses and other current liabilities 8,132 (1,319 ) 6,813
Deferred revenue 6,955 — 6,955
Current portion of operating lease liabilites — 9,064 9,064
Total current liabilities 49,416 7,745 57,161
Operating lease liabilities — 22,728 22,728
Other long-term liabilities 24,867 (3,177 ) 21,690
TOTAL LIABILITIES 74,283 27,296 101,579
SHAREHOLDERS’ EQUITY
Preferred stock ($0.01 par value; 5,000,000 shares authorized; none issued) — — —
Common stock ($0.01 par value; 200,000,000 shares authorized;
3,221,834 shares issued) 32 — 32
Additional paid-in capital 344,826 — 344,826
Treasury stock at cost (1,408,892
shares) (230,166 ) — (230,166 )
Accumulated other comprehensive loss (735 ) — (735 )
Accumulated deficit (50,227 ) — (50,227 )
TOTAL SHAREHOLDERS’ EQUITY 63,730 — 63,730
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 138,013 $ 27,296 $ 165,309 The following table is a summary of the Company’s components
of net lease cost for the thirteen and thirty-nine week periods ended November 2, 2019: Lease Cost
Thirteen Thirty-nine
(amounts in thousands) Classification November 2, November 2,
Short-term operating lease cost SG&A $ 4,838 $ 10,043
Operating lease cost SG&A 1,753 7,013
Variable lease cost SG&A 127 369
Net lease cost $ 6,718 $ 17,425 During the thirteen and thirty-nine weeks ended November 3, 2018, the Company recorded minimum rentals of $7.2 million and $21.9 million, respectively, and did not record any contingent rentals. As of November 2, 2019, the maturity of lease liabilities is as follows:
(amounts in thousands) Operating Leases
2019 $ 2,656
2020 10,502
2021 7,312
2022 3,181
2023 2,278
Thereafter 2,116
Total lease payments 28,045
Less: amounts representing interest (2,378 )
Present value of lease liabilities $ 25,667 Lease term and discount rate are as follows:
November 2, 2019
Weighted-average remaining lease term (years) Operating leases 1.06
Weighted-average
discount rate 5 %
Other information:
Thirty-nine
Weeks Ended
(amounts in thousands) November 2, 2019
Cash paid for amounts included in the measurement of operating lease liabilities
Operating cash flows from operating leases $ 6,582 As determined prior to the adoption of the new lease standard,
the future minimum lease payments under operating leases in effect as of February 2, 2019 were as follows:
2019 $ 24,426
2020 8,393
2021 5,239
2022 1,881
2023 1,137
Thereafter 1,060
Total minimum lease payments $ 42,136 |
