Related-Party Transactions

3 Months Ended

Apr. 30, 2022

Related Party Transactions [Abstract]

Related-Party Transactions

Related-Party Transactions

The Company leases one store under a lease arrangement with Preferred Growth Properties, LLC, a wholly owned subsidiary of Books-A-Million, Inc. ("BAMM"). One of our Directors, Terrance G. Finley is an executive officer of BAMM. Minimum annual lease payments are $0.1 million, if not in co-tenancy, and the lease termination date is February 28, 2027. Minimum lease payments remaining under the lease at April 30, 2022 and May 1, 2021 were immaterial.

T.I.G. Construction ("TIG")

TIG performs certain new store and store remodel construction for the Company and is owned by a close relative of Michael E. Longo, the Company's President and CEO. For the 13-weeks ended April 30, 2022 and May 1, 2021, payments to TIG for its services were $2.9 million and $1.4 million, respectively. The amount outstanding to TIG,included in accounts payable on our unaudited condensed consolidated balance sheets at April 30, 2022, January 29, 2022, and May 1, 2021, was immaterial.

Retail Security Gates, LLC ("RSG")

During the second quarter of Fiscal 2022, a close relative of Mr. Longo purchased a 50% interest in an existing Company vendor, which was reorganized as RSG. We utilize RSG for specially manufactured store front security gates. For the 13-weeks ended April 30, 2022, payments to RSG were $0.3 million. The amount outstanding to RSG, included in accounts payable on our unaudited condensed consolidated balance sheets at April 30, 2022 and January 29, 2022, was immaterial.

In addition to the related party interests listed above, Mr. Longo also had a membership interest in a contingent earnout (the "Earnout") related to the acquisition of City Gear based on City Gear's achievement of an EBITDA threshold for the 52-weeks ended January 30, 2021. The Earnout was in addition to the aggregate consideration payable to the sellers of City Gear, LLC in November 2018. Pursuant to the Membership Interest and Warrant Purchase Agreement dated October 29, 2018, and based on Fiscal 2021 financial results, the former members and warrant holders of City Gear were entitled to and were paid the Earnout payment of $15.0 million in April 2021. Mr. Longo's share of the earnout payment was approximately 22.8% or approximately $3.4 million.