Leases

12 Months Ended

Jan. 29, 2022

Leases

The Company leases retail stores, office space and equipment under operating leases. As of January 29, 2022, right-of-use operating lease assets, which are recorded in operating lease assets in the consolidated balance sheets, totaled $42.9 million, and operating lease liabilities, which are recorded in current portion of operating lease liabilities and operating lease liabilities, totaled $42.7 million.

In determining our operating lease assets and operating lease liabilities, we apply an incremental borrowing rate to the minimum lease payments within each lease agreement. GAAP requires the use of the rate implicit in the lease whenever that rate is readily determinable; furthermore, if the implicit rate is not readily determinable, a lessee may use its incremental borrowing rate. The incremental borrowing rate is the rate of interest that a lessee would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. To estimate

our specific incremental borrowing rates that align with applicable lease terms, we utilized a model consistent with the credit quality of our outstanding debt instruments.

Renewal options of five to 10 years exist on the majority of leased properties. The Company has sole discretion in exercising the lease renewal options. We do not recognize operating lease assets or operating lease liabilities at lease inception for renewal periods unless it has been determined that we are reasonably certain of exercising the renewal options. The depreciable life of operating lease assets and related leasehold improvements is limited by the expected lease term.

Contingent rentals on certain leases are based on a percentage of annual sales in excess of specified amounts. Other contingent rentals are based entirely on a percentage of sales. The Company's operating lease agreements do not contain any material residual value guarantees or material restrictive covenants.

The following table summarizes the Company's operating and finance leases:


(in thousands of dollars)	Classification - Consolidated Balance Sheets	January 29, 2022		January 30, 2021
Assets
Finance lease assets	Property and equipment, net (a)	$	—	$	247
Operating lease assets	Operating lease assets	42,941		47,612
Total leased assets		$	42,941	$	47,859

Liabilities
Current
Finance	Current portion of finance lease liabilities	$	—	$	695
Operating	Current portion of operating lease liabilities	11,712		13,819
Noncurrent
Finance	Finance lease liabilities	—		—
Operating	Operating lease liabilities	30,969		33,392
Total lease liabilities		$	42,681	$	47,906

(a) Finance lease assets are recorded net of accumulated amortization of $14.3 million as of January 30, 2021.


Lease Cost
(in thousands of dollars)	Classification - Consolidated Statements of Operations	Fiscal 2021		Fiscal 2020		Fiscal 2019
Operating lease cost (a)	Rentals	$	22,594	$	22,174	$	26,375
Finance lease cost
Amortization of leased assets	Depreciation and amortization	247		423		423
Interest on lease liabilities	Interest and debt expense, net	31		209		462
Net lease cost		$	22,872	$	22,806	$	27,260

(a) Includes short term lease costs of $2.0 million and $2.0 million and variable lease costs, including contingent rent, of $3.6 million and $2.1 million for fiscal 2021 and 2020, respectively.

Maturities of Lease Liabilities


(in thousands of dollars) Fiscal Year	Operating Leases		Finance Leases		Total
2022	$	13,638	$	—	$	13,638
2023	11,019		—		11,019
2024	6,289		—		6,289
2025	5,507		—		5,507
2026	3,808		—		3,808
After 2026	10,748		—		10,748
Total minimum lease payments	51,009		—		51,009
Less amount representing interest	(8,328)		—		(8,328)
Present value of lease liabilities	$	42,681	$	—	$	42,681

Lease Term and Discount Rate


	January 29, 2022
Weighted-average remaining lease term
Operating leases	5.8 years

Weighted-average discount rate
Operating leases	6.0	%

Other Information


(in thousands of dollars)	Fiscal 2021
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	16,915
Operating cash flows from finance leases	31
Financing cash flows from finance leases	695

Lease assets obtained in exchange for new operating lease liabilities	$	9,627