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Closed Store Reserves and Other Costs
12 Months Ended
Dec. 30, 2018
Restructuring And Related Activities [Abstract]  
Closed Store Reserves and Other Costs

16. Closed Store Reserves and Other Costs

 

Closed Stores

The Company reviews the operating performance of individual stores on a regular basis. During the fourth quarter of 2018, the Company decided to close two stores, one in Alabama and one in Georgia, primarily due to store performance and geographic reasons. These two stores were subsequently closed during December 2018.

As a result, in 2018 the Company has recorded a $3.4 million closed store reserve for future operating lease payments and other occupancy costs associated with these two stores that are no longer being utilized in the Company’s current operations. The reserve is recorded based on the present value of the remaining noncancelable lease payments and estimates of other occupancy costs after the cease use date, less an estimate of subtenant income. The Company also recorded a $4.6 million impairment charge primarily related to the write-off and disposal of the two stores’ long-lived assets, primarily consisting of leasehold improvements, furniture, fixtures and equipment. These expenses are presented in store closure and other costs on the Company’s consolidated statements of income.

A summary of closed store reserve activity is as follows:

 

 

 

As Of

 

 

 

December 30,

2018

 

 

December 31,

2017

 

Beginning balance

 

$

811

 

 

$

1,083

 

Additions

 

 

3,428

 

 

 

 

Usage

 

 

(426

)

 

 

(492

)

Adjustments

 

 

1,094

 

 

 

220

 

Ending balance

 

$

4,907

 

 

$

811

 

 

Executive Severance

During the year ended December 30, 2018, the Company recorded $3.6 million of severance expense related to the separation of the former Chief Executive Officer. This expense was comprised of $3.4 million of severance and $0.2 million associated with the modification of certain stock options and awards, net of expense reversals related to the forfeited options and awards. See Note 26,” Share-Based Compensation” for further information regarding the modifications.