Note 6 - Inventories

12 Months Ended

Nov. 30, 2019

Notes to Financial Statements

Inventory Disclosure [Text Block]

6. Inventories

Inventories consist of the following:

	November 30, 2019			November 24, 2018
Wholesale finished goods	$	27,792		$	30,750
Work in process		733			432
Raw materials and supplies		17,293			15,503
Retail merchandise		31,534			27,599
Total inventories on first-in, first-out method		77,352			74,284
LIFO adjustment		(8,688	)		(8,326	)
Reserve for excess and obsolete inventory		(2,362	)		(1,766	)
	$	66,302		$	64,192

We source a significant amount of our wholesale product from other countries. During 2019, 2018 and 2017, purchases from our two largest vendors located in Vietnam and China were $15,221, $24,073 and $21,977 respectively.

We estimate an inventory reserve for excess quantities and obsolete items based on specific identification and historical write-offs, taking into account future demand, market conditions and the respective valuations at LIFO. The need for these reserves is primarily driven by the normal product life cycle. As products mature and sales volumes decline, we rationalize our product offerings to respond to consumer tastes and keep our product lines fresh. If actual demand or market conditions in the future are less favorable than those estimated, additional inventory write-downs may be required. In determining reserves, we calculate separate reserves on our wholesale and retail inventories. Our wholesale inventories tend to carry the majority of the reserves for excess quantities and obsolete inventory due to the nature of our distribution model. These wholesale reserves primarily represent design and style obsolescence. Typically, product is not shipped to our retail warehouses until a consumer has ordered and paid a deposit for the product. We do not typically hold retail inventory for stock purposes. Consequently, floor sample inventory and inventory for delivery to customers account for the majority of our inventory at retail. Retail reserves are based on accessory and clearance floor sample inventory in our stores and any inventory that is not associated with a specific customer order in our retail warehouses.

Activity in the reserves for excess quantities and obsolete inventory by segment are as follows:

	Wholesale Segment			Retail Segment			Total
Balance at November 25, 2017	$	1,618		$	277		$	1,895
Acquired reserve on inventory (Note 3)		110			-			110
Additions charged to expense		1,884			425			2,309
Write-offs		(2,112	)		(436	)		(2,548	)
Balance at November 24, 2018		1,500			266			1,766
Additions charged to expense		1,881			373			2,254
Write-offs		(1,327	)		(331	)		(1,658	)
Balance at November 30, 2019	$	2,054		$	308		$	2,362

Additions charged to expense for our wholesale segment during the year ended November 30, 2019 includes a $390 inventory valuation charge arising from our decision to exit the juvenile furniture line of business.