10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MAY 2, 2015

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT FOR THE TRANSITION PERIOD FROM _______ TO______

COMMISSION FILE NUMBER: 0-14818

TRANS WORLD ENTERTAINMENT CORPORATION

(Exact name of registrant as specified in its charter)

New York	14-1541629
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer
	Identification Number)

38 Corporate Circle

Albany, New York 12203

(Address of principal executive offices, including zip code)

(518) 452-1242

(Registrant’s telephone number, including area code)

Indicate by a check mark whether the Registrant (1) has filed all reports required to be filed by Sections 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definition of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o   Accelerated filer x   Non-accelerated filer o

Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Common Stock, $.01 par value,

31,154,500 shares outstanding as of May 2, 2015

TRANS WORLD ENTERTAINMENT CORPORATION AND SUBSIDIARIES

QUARTERLY REPORT ON FORM 10-Q

INDEX TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

	Form 10-Q Page No.
PART I. FINANCIAL INFORMATION
Item 1 – Interim Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets at May 2, 2015, January 31, 2015 and May 3, 2014	3
Condensed Consolidated Statements of Operations – Thirteen Weeks Ended May 2, 2015 and May 3, 2014	4
Condensed Consolidated Statements of Comprehensive Income (Loss) – Thirteen Weeks Ended May 2, 2015 and May 3, 2014	5
Condensed Consolidated Statements of Cash Flows – Thirteen Weeks Ended May 2, 2015 and May 3, 2014	6
Notes to Condensed Consolidated Financial Statements	7
Item 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations	13
Item 3 – Quantitative and Qualitative Disclosures about Market Risk	20
Item 4 – Controls and Procedures	20
PART II. OTHER INFORMATION
Item 1 – Legal Proceedings	21
Item 1A- Risk Factors	21
Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds	21
Item 3 – Defaults Upon Senior Securities	21
Item 4 – Mine Safety Disclosures	21
Item 5 – Other Information	21
Item 6 – Exhibits	21
Signatures	22

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TRANS WORLD ENTERTAINMENT CORPORATION AND SUBSIDIARIES

PART 1. FINANCIAL INFORMATION

Item 1 - Financial Statements

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except per share and share amounts)

(unaudited)

	May 2,			January 31,			May 3,
	2015			2015			2014
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	102,540		$	118,537		$	90,088
Merchandise inventory		121,577			126,377			140,138
Other current assets		9,112			10,244			9,759
Total current assets		233,229			255,158			239,985
NET FIXED ASSETS		18,026			15,769			13,914
OTHER ASSETS		9,328			9,082			9,132
TOTAL ASSETS	$	260,583		$	280,009		$	263,031
LIABILITIES
CURRENT LIABILITIES:
Accounts payable	$	44,582		$	63,527		$	46,999
Accrued expenses and other current liabilities		7,260			7,397			7,839
Deferred revenue		9,490			9,852			9,569
Current portion of capital lease obligations		649			938			1,101
Total current liabilities		61,981			81,714			65,508
CAPITAL LEASE OBLIGATIONS, less current portion		—			—			649
OTHER LONG-TERM LIABILITIES		26,769			26,555			23,109
TOTAL LIABILITIES		88,750			108,269			89,266
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; 58,337,668, 58,337,668 and 58,316,668 shares issued, respectively)		583			583			583
Additional paid-in capital		315,619			315,486			315,022
Treasury stock at cost (27,183,168, 27,094,423 and 26,320,550 shares, respectively)		(226,732	)		(226,412	)		(223,762	)
Accumulated other comprehensive (loss) income		(2,095	)		(2,181	)		26
Retained earnings		84,458			84,264			81,896
TOTAL SHAREHOLDERS’ EQUITY		171,833			171,740			173,765
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	260,583		$	280,009		$	263,031

See Accompanying Notes to Condensed Consolidated Financial Statements.

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TRANS WORLD ENTERTAINMENT CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

(unaudited)

	Thirteen Weeks Ended
	May 2, 2015		May 3, 2014
Net sales	$	77,963	$	87,216
Cost of sales		47,160		54,439
Gross profit		30,803		32,777
Selling, general and administrative expenses		30,127		32,633
Income from operations		676		144
Interest expense, net		438		483
Income (loss) before income tax expense		238		(339	)
Income tax expense		44		47
Net income (loss)	$	194	$	(386	)
BASIC AND DILUTED INCOME (LOSS) PER SHARE:
Basic income (loss) per share	$	0.01	$	(0.01	)
Weighted average number of common shares outstanding – basic		31,208		32,089
Diluted income (loss) per share	$	0.01	$	(0.01	)
Weighted average number of common shares outstanding – diluted		31,371		32,089

See Accompanying Notes to Condensed Consolidated Financial Statements.

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TRANS WORLD ENTERTAINMENT CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(in thousands)

(unaudited)

	Thirteen Weeks Ended
	May 2, 2015		May 3, 2014
Net income (loss)	$	194	$	(386	)
Amortization of pension costs		76		145
Comprehensive income (loss)	$	270	$	(241	)

See Accompanying Notes to Condensed Consolidated Financial Statements.

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TRANS WORLD ENTERTAINMENT CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

	Thirteen Weeks Ended
	May 2, 2015			May 3, 2014
Net cash used by operating activities	$	(12,009	)	$	(20,352	)
Cash flows from investing activities:
Purchases of fixed assets		(3,379	)		(3,489	)
Net cash used by investing activities		(3,379	)		(3,489	)
Cash flows from financing activities:
Cash dividends paid		—			(16,036	)
Payments of capital lease obligations		(289	)		(254	)
Exercise of stock options		—			31
Purchase of treasury stock		(320	)		(814	)
Net cash used by financing activities		(609	)		(17,073	)
Net decrease in cash and cash equivalents		(15,997	)		(40,914	)
Cash and cash equivalents, beginning of period		118,537			131,002
Cash and cash equivalents, end of period	$	102,540		$	90,088

See Accompanying Notes to Condensed Consolidated Financial Statements.

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TRANS WORLD ENTERTAINMENT CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

May 2, 2015 and May 3, 2014

Note 1. Nature of Operations

Trans World Entertainment Corporation and subsidiaries (“the Company”) is one of the largest specialty retailers of entertainment products, including video, music, electronics, trend, video games and related products in the United States. The Company operates a chain of retail entertainment stores, primarily under the names f.y.e. for your entertainment and Suncoast Motion Pictures, and e-commerce sites, www.fye.com, www.wherehouse.com, and www.secondspin.com in a single industry segment. As of May 2, 2015, the Company operated 310 stores totaling approximately 1.8 million square feet in the United States, the District of Columbia and the Commonwealth of Puerto Rico.

Liquidity and Cash Flows:

The Company’s primary sources of working capital are cash and cash equivalents on hand, cash provided by operations and borrowing capacity under its revolving credit facility (See Note 6 for further details). The Company’s cash flows fluctuate from quarter to quarter due to various items, including seasonality of sales and earnings, merchandise inventory purchases and returns and the related terms on the purchases and capital expenditures. Management believes it will have adequate resources to fund its cash needs for the next twelve months and beyond, including its capital spending, its seasonal increase in merchandise inventory and other operating cash requirements and commitments.

Management anticipates that any future cash requirements due to a shortfall in cash from operations would be funded by the Company’s cash and cash equivalents on hand and its revolving credit facility.

Seasonality:

The Company’s business is seasonal, with the fourth fiscal quarter constituting the Company’s peak selling period. In fiscal 2014, the fourth quarter accounted for approximately 35% of annual net sales and all of net income. In anticipation of increased sales activity in the fourth quarter, the Company purchases additional inventory and hires seasonal associates to supplement its core store sales and distribution center staffs. If, for any reason, the Company’s sales were below seasonal norms during the fourth quarter, the Company’s operating results could be adversely affected. Quarterly sales can also be affected by the timing of new product releases, new store openings, store closings and the performance of existing stores.

Note 2: Basis of Presentation

The accompanying unaudited condensed consolidated financial statements consist of Trans World Entertainment Corporation, its wholly-owned subsidiary, Record Town, Inc. (“Record Town”), and Record Town’s subsidiaries, all of which are wholly-owned. All significant intercompany accounts and transactions have been eliminated.

The interim condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. The information furnished in these unaudited condensed consolidated financial statements reflects all normal, recurring adjustments which, in the opinion of management, are necessary for the fair presentation of such financial statements. The

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preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Certain information and footnote disclosures normally included in the financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to rules and regulations applicable to interim financial statements.

Selling, general and administrative expenses include miscellaneous income and expense items, other than interest.  The Company recorded miscellaneous income items of $1.5 million and $1.3 million for the thirteen weeks ended May 2, 2015 and May 3, 2014, respectively.

The information presented in the accompanying unaudited condensed consolidated balance sheet as of January 31, 2015 has been derived from the Company’s January 31, 2015 audited consolidated financial statements. All other information has been derived from the Company’s unaudited condensed consolidated financial statements as of and for the thirteen weeks ended May 2, 2015 and May 3, 2014. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, 2015.

The Company’s significant accounting policies are the same as those described in Note 1 to the Company’s Consolidated Financial Statements on Form 10-K for the fiscal year ended January 31, 2015.

Note 3. Recently Adopted Accounting Pronouncements

In April 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No.  2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity, (“ASU 2014-08”). This amendment changes the requirements for reporting discontinued operations and includes enhanced disclosures about discontinued operations. Under the amendment, only those disposals of components of an entity that represent a strategic shift that has a major effect on an entity’s operations and financial results will be reported as discontinued operations in the financial statements. ASU 2014-08 is effective prospectively for annual periods beginning on or after December 15, 2014, and interim reporting periods within those years. The Company adopted ASU 2014-08 as of the beginning of 2015 and it did not have a material impact on the Company’s consolidated financial position, cash flows, or results of operations.

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Note 4. Stock Based Compensation

Total stock-based compensation expense recognized in the condensed consolidated statements of operations for the thirteen weeks ended May 2, 2015 and May 3, 2014 was approximately $133,000 and $60,000, respectively, before income taxes. No deferred tax benefit was recorded against stock-based compensation expense for the thirteen weeks ended May 2, 2015 and May 3, 2014.

As of May 2, 2015, there was approximately $756,000 of unrecognized compensation cost related to stock award awards that is expected to be recognized as expense over a weighted average period of 2.1 years.

As of May 2, 2015, stock awards authorized for issuance under the Company’s current long term equity incentive plans total 8.0 million. There are certain authorized stock awards for which the Company no longer grants awards. Of these awards authorized for issuance, 2.2 million were granted and are outstanding, 1.2 million of which were vested and exercisable. Awards available for future grants at May 2, 2015 were 2.4 million.

The table below outlines the assumptions that the Company used to estimate the fair value of stock based awards granted during the thirteen weeks ended May 2, 2015:

Dividend yield	0%
Expected stock price volatility	42.0%-50.2%
Risk-free interest rate	1.32%-1.71%
Expected award life (in years)	4.98-5.71
Weighted average fair value per share of awards granted during the period	$1.47

The following table summarizes stock award activity during the thirteen weeks ended May 2, 2015:

	Employee and Director Stock Award Plans
	Number of			Weighted		Weighted		Other		Weighted
	Shares Subject To Option			Average Exercise Price		Average Remaining Contractual Term		Share Awards(1)		Average Grant Fair Value
Balance January 31, 2015		2,465,110		$	6.81		3.8		237,400	$	3.75
Granted		135,000			3.73		9.9		13,774		3.63
Canceled		(668,735	)		14.00		—		—		—
Balance May 2, 2015		1,931,375		$	4.10		5.2		251,174	$	3.74
Exercisable May 2, 2015		1,182,625		$	4.42		3.0		51,774	$	4.68

(1) Other Share Awards include deferred shares granted to Directors and restricted share units granted to executive officers.

As of May 2, 2015, the intrinsic value of stock awards outstanding was approximately $680,000 and exercisable was $455,000.

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Note 5. Defined Benefit Plans

The Company maintains a non-qualified Supplemental Executive Retirement Plan (“SERP”) for certain executive officers of the Company. The SERP provides eligible executives defined pension benefits that supplement benefits under other retirement arrangements. During the thirteen weeks ended May 2, 2015, the Company did not make any cash contributions to the SERP and presently expects to pay approximately $182,000 in benefits relating to the SERP during Fiscal 2015.

The Company had previously provided the Board of Directors with a noncontributory, unfunded retirement plan (“Director Retirement Plan”) that paid retired directors an annual retirement benefit. During the thirteen weeks ended May 2, 2015, the Company did not make any cash contributions to the Director Retirement Plan, and presently expects to pay approximately $25,000 in benefits relating to the Director Retirement Plan during Fiscal 2015.

The measurement date for the SERP and Director Retirement Plan is fiscal year end, using actuarial techniques which reflect estimates for mortality, turnover and expected retirement. In addition, management makes assumptions concerning future salary increases. Discount rates are generally established as of the measurement date using theoretical bond models that select high-grade corporate bonds with maturities or coupons that correlate to the expected payouts of the applicable liabilities.

The following represents the components of the net periodic pension cost related to the Company’s SERP and Director Retirement Plan for the respective periods:  

	Thirteen weeks ended
	May 2, 2015			May 3, 2014
	(in thousands)
Service cost	$	17		$	14
Interest cost		145			172
Amortization of prior service cost		85			180
Amortization of net gain		(9	)		(35	)
Net periodic pension cost	$	238		$	331

Note 6. Line of Credit

In May 2012, the Company entered into a $75 million credit facility (“Credit Facility”) which amended the previous credit facility. The principal amount of all outstanding loans under the Credit Facility together with any accrued but unpaid interest, are due and payable in May 2017, unless otherwise paid earlier pursuant to the terms of the Credit Facility. Payments of amounts due under the Credit Facility are secured by the assets of the Company.

The Credit Facility includes customary provisions, including affirmative and negative covenants, which include representations, warranties and restrictions on additional indebtedness and acquisitions. The Credit Facility also includes customary events of default, including, among other things, material adverse effect, bankruptcy, and certain changes of control. The Credit Facility also contains other terms and conditions, including limitations on the payment of dividends and covenants around the number of store closings. The Company is compliant with all covenants.

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Interest under the Credit Facility will accrue, at the election of the Company, at a Base Rate or LIBO Rate, plus, in each case, an Applicable Margin, which is determined by reference to the level of availability, with the Applicable Margin for LIBO Rate loans ranging from 2.25% to 2.75% and the Applicable Margin for Prime Rate loans ranging from 0.75% to 1.25%. In addition, a commitment fee ranging from 0.375% to 0.50% is also payable on unused commitments.

The availability under the Credit Facility is subject to limitations based on inventory levels.

During the first quarters of 2015 and 2014, the Company did not have any borrowings under the Credit Facility. The Company did not have any borrowings under its Credit Facility during Fiscal 2012, Fiscal 2013 and Fiscal 2014. As of May 2, 2015 and May 3, 2014, the Company had no outstanding letter of credit obligations under the Credit Facility. The Company had $38 million and $47 million available for borrowing as of May 2, 2015 and May 3, 2014, respectively.

Note 7. Accumulated Other Comprehensive Income (Loss)

Accumulated other comprehensive income (loss) that the Company reports in the condensed consolidated balance sheets represents the difference between the accrued pension liability and accrued benefit cost, net of taxes, associated with the Company’s defined benefit plans. Comprehensive income (loss) consists of net income and the reclassification of pension costs previously reported in comprehensive income (loss) for the thirteen weeks ended May 2, 2015 and May 3, 2014.

Note 8. Depreciation and Amortization of Fixed Assets

Depreciation and amortization of fixed assets included in the condensed consolidated statements of operations is as follows:

	Thirteen Weeks Ended
	May 2, 2015		May 3, 2014
	(in thousands)
Cost of sales	$	122	$	123
Selling, general and administrative expenses		964		782
Total	$	1,086	$	905

Note 9. Income (Loss) Per Share

Basic income (loss) per share is calculated by dividing net income (loss) by the weighted average common shares outstanding for the period. Diluted income per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock (net of any assumed repurchases) that then shared in the earnings of the Company, if any. It is computed by dividing net income (loss) by the sum of the weighted average shares outstanding and additional common shares that would have been outstanding if the dilutive potential common shares had been issued for the Company’s common stock awards from the Company’s Stock Award Plans.

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Weighted average shares are calculated as follows:

	Thirteen weeks ended
	May 2, 2015		May 3, 2014
	(in thousands)
Weighted average common shares outstanding – basic		31,208		32,089
Dilutive effect of employee stock options		163		—
Weighted average common shares outstanding–diluted		31,371		32,089
Anti-dilutive stock options		1,405		1,685

Note 10. Shareholders’ Equity

During the thirteen weeks ending May 2, 2015, the Company repurchased 88,745 shares of common stock at an average price of $3.57 per share. Since the inception of the program, the Company has repurchased 1,662,563 shares of common stock at an average price of $3.84 per share. The Company has approximately $15.6 million available for purchase under its repurchase program.

The Company classified the repurchased shares as treasury stock on the Company’s balance sheet.

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TRANS WORLD ENTERTAINMENT CORPORATION AND SUBSIDIARIES

PART 1. FINANCIAL INFORMATION

Item 2 - Management’s Discussion and Analysis of Financial Condition and

Results of Operations

May 2, 2015 and May 3, 2014

Overview

Management’s Discussion and Analysis of Financial Condition and Results of Operations provides information that the Company’s management believes necessary to achieve an understanding of its financial statements and results of operations. To the extent that such analysis contains statements which are not of a historical nature, such statements are forward-looking statements, which involve risks and uncertainties. These risks include, but are not limited to, changes in the competitive environment for the Company’s merchandise, including the entry or exit of non-traditional retailers of the Company’s merchandise to or from its markets; releases by the music, video and video games industries of an increased or decreased number of “hit releases”; general economic factors in markets where the Company’s merchandise is sold; and other factors discussed in the Company’s filings with the Securities and Exchange Commission. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the unaudited condensed consolidated financial statements and related notes included elsewhere in this report and the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, 2015.

At May 2, 2015, the Company operated 310 stores totaling approximately 1.8 million square feet in the United States, the District of Columbia and the Commonwealth of Puerto Rico. The Company’s stores offer predominantly entertainment product, including video and music. In total, these two categories represented 73% of the Company’s net sales for the thirteen weeks ended May 2, 2015. The balance of categories, including trend, electronics, video games and related products represented 27% of the Company’s net sales for the thirteen weeks ended May 2, 2015.

The Company’s results have been, and will continue to be, contingent upon management’s ability to understand industry trends and to manage the business in response to those trends and general economic trends. Management monitors a number of key performance indicators to evaluate its performance, including:

Net sales and comparable store net sales: The Company measures and reports the rate of comparable store net sales change. A store is included in comparable store net sales calculations at the beginning of its thirteenth full month of operation. Stores relocated/expanded or downsized are excluded from comparable store net sales if the change in square footage is greater than 20%. Closed stores that were open for at least thirteen months are included in comparable store net sales through the month immediately preceding the month of closing. The Company further analyzes net sales by store format and by product category.

Cost of Sales and Gross Profit: Gross profit is impacted primarily by the mix of products sold, by discounts negotiated with vendors and discounts offered to customers. The Company records its distribution and product shrink expenses in cost of sales. Distribution expenses include those costs associated with receiving, shipping, inspecting and warehousing product and costs associated with product returns to vendors. Cost of sales further includes obsolescence costs and is reduced by the benefit of vendor allowances, net of direct reimbursements of expense.

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Selling, General and Administrative (“SG&A”) Expenses: Included in SG&A expenses are payroll and related costs, occupancy charges, general operating and overhead expenses and depreciation charges (excluding those related to distribution operations, as disclosed in Note 8 to the condensed consolidated financial statements). Selling, general and administrative expenses also include fixed asset write offs associated with store closures, if any, and miscellaneous income and expense items, other than interest. The Company recorded miscellaneous income items of $1.5 million and $1.3 million for the thirteen weeks ended May 2, 2015 and May 3, 2014.

Balance Sheet and Ratios: The Company views cash, net inventory investment (merchandise inventory less accounts payable) and working capital (current assets less current liabilities) as relevant indicators of its financial position. See Liquidity and Capital Resources for further discussion of these items.

RESULTS OF OPERATIONS

Thirteen Weeks Ended May 2, 2015

Compared to the Thirteen Weeks Ended May 3, 2014

The following table sets forth a period over period comparison of the Company’s net sales by category:

	Thirteen Weeks Ended
	May 2, 2015			May 3, 2014			Change			%			Comp Store Net Sales
		(in thousands, except store data)
Net sales	$	77,963		$	87,216		$	(9,253	)		(10.6	%)		(3.0	)%
As a % of sales
Video		46.1	%		47.7	%								(7.4	%)
Music		27.3	%		28.5	%								(7.1	%)
Trend		14.3	%		10.8	%								26.5	%
Electronics		9.0	%		8.4	%								6.1	%
Video Games		3.3	%		4.6	%								(23.0	%)
Store Count:		310			333			(23	)		(6.9	%)

Net sales: Comparable sales decreased 3.0% for the first quarter due to negative comparable sales in the video, music, and video games categories. Net sales decreased 10.6% during the thirteen weeks ended May 2, 2015, as compared to the same period last year. The decline in net sales for the thirteen week period resulted from a decrease in store count of 6.9%.

Video:

Comparable store net sales in the video category decreased 7.4% during the thirteen weeks ended May 2, 2015. The video category represented 46.1% of total net sales for the thirteen weeks ended May 2, 2015 compared to 47.7% in the comparable quarter last year. Video comparable sales in 2015 were negatively impacted by the release of Frozen in last year’s first quarter.

According to Warner Brothers Home Video, total physical video sales industrywide were down 20.1% during the period corresponding to the Company’s first fiscal quarter.

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Music:

Comparable store net sales in the music category decreased 7.1% during the thirteen weeks ended May 2, 2015. The music category represented 27.3% of total net sales for the thirteen weeks ended May 2, 2015 compared to 28.5% in the comparable quarter last year.

According to Soundscan, total physical unit sales of albums industry-wide were down 8.5% during the period corresponding to the Company’s first fiscal quarter.

Trend:

Comparable store net sales in the trend category increased 26.5% during the thirteen weeks ended May 2, 2015. Trend product represented 14.3% of total net sales for the thirteen weeks ended May 2, 2015 compared to 10.8% in the comparable quarter last year.

Electronics:

Comparable store net sales in the electronics category increased 6.1% during the thirteen weeks ended May 2, 2015. Electronics net sales represented 9.0% of total net sales for the thirteen weeks ended May 2, 2015 compared to 8.4% in the comparable quarter last year.

Video Games:

Comparable store net sales for video games decreased 23.0% during the thirteen weeks ended May 2, 2015. Currently, 56 stores, or 18.1% of the Company’s stores carry games on a go forward basis.

Gross Profit. The following table sets forth a period over period comparison of the Company’s gross profit:

	Thirteen weeks ended (in thousands)						Change
	May 2, 2015			May 3, 2014			$			%
Gross Profit	$	30,803		$	32,777		$	(1,974	)		(6.0%)
As a % of net sales		39.5	%		37.6	%

Gross profit decreased 6.0% for the thirteen weeks ended May 2, 2015 as compared to the comparable period last year. The increase in gross profit as a percentage of sales was driven by increases in all of our merchandise categories through disciplined inventory control, better price management and a shift in mix to higher margin categories.

SG&A Expenses. The following table sets forth a period over period comparison of the Company’s SG&A expenses:

	Thirteen weeks ended (in thousands)						Change
	May 2, 2015			May 3, 2014			$			%
SG&A	$	30,127		$	32,633		$	(2,506	)		(7.7%)
As a % of net sales		38.6	%		37.4	%

For the thirteen weeks ended May 2, 2015, SG&A expenses decreased $2.5 million, or 7.7% on the net sales decline of 10.6% resulting in a 120 basis point increase in SG&A expenses as a percentage of net

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sales. The increase in SG&A as a percentage of net sales is due to lost leverage on the comparable sales decline.

Interest Expense, Net. Net interest expense was approximately $438,000 during the thirteen weeks ended May 2, 2015, compared to approximately $483,000 during the thirteen weeks ended May 3, 2014. Net interest expense consists primarily of interest on capital leases, unused commitment fees and the amortization of fees related to the Company’s credit facility.

Income Tax Expense (Benefit).  In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent on the generation of future taxable income. Management considers the scheduled reversal of taxable temporary differences, projected future taxable income and tax planning strategies in making this assessment. Based on available objective evidence, management concluded that a full valuation allowance should be recorded against the Company’s deferred tax assets. Management will continue to assess the need for and amount of the valuation allowance against the deferred tax assets by giving consideration to all available evidence to the Company’s ability to generate future taxable income in its conclusion of the need for a full valuation allowance. Any reversal of the Company’s valuation allowance will favorably impact its results of operations in the period of reversal. The Company is currently unable to determine whether or when that reversal might occur, but it will continue to assess the realizability of its deferred tax assets and will adjust the valuation allowance if it is more likely than not that all or a portion of the deferred tax assets will become realizable in the future. The Company has significant net operating loss carry forwards and other tax attributes that are available to offset projected taxable income and current taxes payable, if any, for the year ending January 30, 2016.  The deferred tax impact resulting from the utilization of the net operating loss carry forwards and other tax attributes will be offset by a reduction in the valuation allowance.  As of January 31, 2015, the Company had a net operating loss carry forward of $158.8 million for federal income tax purposes and approximately $247 million for state income tax purposes that expire at various times through 2031 and are subject to certain limitations and statutory expiration periods.

For the thirteen week periods ended May 2, 2015 and May 3, 2014, the Company’s current tax expense was associated with quarter-specific items attributable to interest accruals on related uncertain tax positions and state taxes based on modified gross receipts incurred for these thirteen week periods.

16

Net Income (Loss). The following table sets forth a period over period comparison of the Company’s net income (loss):

	Thirteen weeks ended
	May 2, 2015		May 3, 2014			Change
			(in thousands)
Income (loss) before income tax	$	238	$	(339	)	$	577
Income tax expense		44		47			3
Net income (loss)	$	194	$	(386	)	$	580

For the thirteen weeks ended May 2, 2015, the Company’s net income increased approximately $580,000 to a profit of $194,000 from a loss of $386,000 for the thirteen weeks ended May 3, 2014. The increase was primarily due to a 190 basis point increase in the Company’s gross margin rate.

LIQUIDITY

Liquidity and Cash Flows: The Company’s primary sources of working capital are cash and cash equivalents on hand, cash provided by operations and borrowing capacity under its revolving credit facility (See Note 6 to the condensed consolidated financial statements for further details). The Company’s cash flows fluctuate from quarter to quarter due to various items, including seasonality of net sales and earnings, merchandise inventory purchases and returns and the related terms on the purchases and capital expenditures. Management believes it will have adequate resources to fund its cash needs for the next twelve months and beyond, including its capital spending, its seasonal increase in merchandise inventory and other operating cash requirements and commitments.

Management anticipates that any future cash requirements due to a shortfall in cash from operations would be funded by the Company’s cash and cash equivalents on hand and its revolving credit facility, discussed hereafter. The Company does not expect any material changes in the mix (between equity and debt) or the relative cost of capital resources.

The following table sets forth a summary of key components of cash flow and working capital for each of the thirteen weeks ended May 2, 2015 and May 3, 2014, or at those dates:

	As of or for the Thirteen weeks ended						Change
(in thousands)	May 2, 2015			May 3, 2014			$
Operating Cash Flows	$	(12,009	)	$	(20,352	)	$	8,343
Investing Cash Flows		(3,379	)		(3,489	)		110
Financing Cash Flows		(609	)		(17,073	)		16,464
Capital Expenditures		(3,379	)		(3,489	)		110
Cash and Cash Equivalents		102,540			90,088			12,452
Merchandise Inventory		121,577			140,138			(18,561	)
Working Capital		171,248			174,477			(3,229	)

17

The Company had cash and cash equivalents of $102.5 million at May 2, 2015, compared to $118.5 million at January 31, 2015 and $90.1 million at May 3, 2014. Merchandise inventory was $68 per square foot at May 2, 2015 compared to $71 per square foot as of May 3, 2014.

Cash used by operating activities was $12.0 million for the thirteen weeks ended May 2, 2015. The primary use of cash was an $18.9 million seasonal reduction of accounts payable, partially offset by a $4.8 million reduction in inventory. The Company’s merchandise inventory and accounts payable are influenced by the seasonality of its business. A significant reduction of accounts payable occurs annually in the fiscal first quarter, reflecting payments for merchandise inventory purchased during the prior year’s holiday season.

Cash used by investing activities, which was constituted entirely of capital expenditures, was $3.4 million for the thirteen weeks ended May 2, 2015.

Cash used by financing activities was $0.6 million for the thirteen weeks ended May 2, 2015. The primary uses of cash were the purchases of common stock for $320,000 and payments on capital leases for $289,000.

During the thirteen weeks ended May 2, 2015, the Company repurchased 88,745 shares of common stock at an average price of $3.57 per share. Since the inception of the program, the Company has repurchased 1,662,563 shares of common stock at an average price of $3.84 per share. The Company has approximately $15.6 million available under its repurchase program.

On March 6, 2014, the Board of Directors declared a special cash dividend of $0.50 per common share. The total special dividend payout was $16.0 million.

In May 2012, the Company entered into a $75 million credit facility (“Credit Facility”) which amended the previous credit facility. The principal amount of all outstanding loans under the Credit Facility together with any accrued but unpaid interest, are due and payable in May 2017, unless otherwise paid earlier pursuant to the terms of the Credit Facility. Payments of amounts due under the Credit Facility are secured by the assets of the Company.

The Credit Facility includes customary provisions, including affirmative and negative covenants, which include representations, warranties and restrictions on additional indebtedness and acquisitions. The Credit Facility also includes customary events of default, including, among other things, material adverse effect, bankruptcy, and certain changes of control. The Credit Facility also contains other terms and conditions, including limitations on the payment of dividends and covenants around the number of store closings. The Company is compliant with all covenants.

Interest under the Credit Facility will accrue, at the election of the Company, at a Base Rate or LIBO Rate, plus, in each case, an Applicable Margin, which is determined by reference to the level of availability, with the Applicable Margin for LIBO Rate loans ranging from 2.25% to 2.75% and the Applicable Margin for Prime Rate loans ranging from 0.75% to 1.25%. In addition, a commitment fee ranging from 0.375% to 0.50% is also payable on unused commitments.

The availability under the Credit Facility is subject to limitations based on sufficient inventory levels.

During the first quarters of Fiscal 2015 and 2014, the Company did not have any borrowings under the Credit Facility. The Company did not have any borrowings under its Credit Facility during Fiscal 2012, Fiscal 2013 and Fiscal 2014. As of May 2, 2015 and May 3, 2014, the Company had no outstanding letter of credit

18

obligations under the Credit Facility. The Company had $38 million and $47 million available for borrowing as of May 2, 2015 and May 3, 2014, respectively.

Capital Expenditures. During the thirteen weeks ended May 2, 2015, the Company made capital expenditures of $3.4 million. The Company currently plans to spend approximately $15.0 million for capital expenditures in fiscal 2015.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States requires that management apply accounting policies and make estimates and assumptions that affect results of operations and the reported amounts of assets and liabilities in the financial statements. Management continually evaluates its estimates and judgments including those related to merchandise inventory and return costs, income taxes and accounting for gift card liability. Management bases its estimates and judgments on historical experience and other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations included in the Form 10-K for the year ended January 31, 2015 includes a summary of the critical accounting policies and methods used by the Company in the preparation of its condensed consolidated financial statements. There have been no material changes or modifications to the policies since January 31, 2015.

Recently Issued Accounting Pronouncements:

On May 28, 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. The new standard is effective for the Company on January 28, 2017. Early application is not permitted. The standard permits the use of either the retrospective or cumulative effect transition method. The Company is evaluating the effect that ASU 2014-09 will have on its consolidated financial statements and related disclosures. The Company has not yet selected a transition method nor has it determined the effect of the standard on its ongoing financial reporting. In April 2015, the FASB proposed a one-year deferral of the effective date of the new revenue standard. As a result of this proposal, ASU 2014-09 would be effective for the Company beginning on February 4, 2018.

In August 2014, the FASB issued ASU No. 2014-15, Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern, which requires the Company to assess their ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing standards. Specifically, the amendments (1) provide a definition of the term substantial doubt, (2) require an evaluation every reporting period including interim periods, (3) provide principles for considering the mitigating effect of Company’s plans, (4) require certain disclosures when substantial doubt is alleviated as a result of consideration of management’s plans, (5) require an express statement and other disclosures when substantial doubt is not alleviated, and (6) require an assessment for a period of one year after the date that the financial statements are issued (or available to be issued). The new standard is effective for reporting periods beginning after December 15, 2016. Early application is permitted. The Company does not expect the adoption of this update to have a significant effect on our financial statements.

19

TRANS WORLD ENTERTAINMENT CORPORATION AND SUBSIDIARIES
PART I – FINANCIAL INFORMATION

Item 3 - Quantitative and Qualitative Disclosures about Market Risk

To the extent the Company borrows under its Credit Facility, the Company is subject to risk resulting from interest rate fluctuations since interest on the Company’s borrowings under its Credit Facility can be variable. Interest under the Credit Facility will accrue, at the election of the Company, at a Base Rate or LIBO Rate, plus, in each case, an Applicable Margin, which is determined by reference to the level of availability as defined in the Credit Agreement, with the Applicable Margin for LIBO Rate loans ranging from 2.25% to 2.75% and the Applicable Margin for Base Rate loans ranging from 0.75% to 1.25%. If interest rates on the Company’s Credit Facility were to increase by 25 basis points, and to the extent borrowings were outstanding, for every $1,000,000 outstanding on the facility, income before income taxes would be reduced by $2,500 per year. For a discussion of the Company’s accounting policies for financial instruments and further disclosures relating to financial instruments, see “Nature of Operations and Summary of Significant Accounting Policies” in the Notes to Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended January 31, 2015. The Company does not currently hold any derivative instruments.

Item 4 – Controls and Procedures

(a) Evaluation of disclosure controls and procedures. The Company’s Chief Executive Officer and Chief Financial Officer, after evaluating the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in the Securities Exchange Act of 1934 Rules 13a-15(e) and 15d-15(e)) as of May 2, 2015, have concluded that as of such date the Company’s disclosure controls and procedures were effective and designed to ensure that (i) information required to be disclosed by the issuer in the reports that it files or submits under the Securities Exchange Act of 1934 (the “Exchange Act”) is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and (ii) information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

(b) Changes in internal controls. There have been no changes in the Company’s internal controls over financial reporting that occurred during the fiscal quarter covered by this quarterly report that have materially affected, or are reasonably likely to materially affect, the Company’s internal controls over financial reporting.

20

TRANS WORLD ENTERTAINMENT CORPORATION AND SUBSIDIARIES

PART II - OTHER INFORMATION

Item 1 – Legal Proceedings

The Company is subject to legal proceedings and claims that have arisen in the ordinary course of its business and have not been finally adjudicated. Although there can be no assurance as to the ultimate disposition of these matters, it is management’s opinion, based upon the information available at this time, that the expected outcome of these matters, individually and in the aggregate, will not have a material adverse effect on the results of operations and financial condition of the Company.

Item 1A – Risk Factors

Risks relating to the Company’s business and Common Stock are described in detail in Item 1A of the Company’s most recently filed Annual Report on Form 10-K for the year ended January 31, 2015.

Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3 – Defaults Upon Senior Securities

None.

Item 4 – Mine Safety Disclosure

Not Applicable.

Item 5 – Other Information

None.

Item 6 - Exhibits

(A) Exhibits -

Exhibit No.		Description
	31.1	Chief Executive Officer certification pursuant to Section 302 of the  Sarbanes-Oxley Act of 2002.
	31.2	Chief Financial Officer certification pursuant to Section 302 of the  Sarbanes-Oxley Act of 2002.
	32	Certification pursuant to 18 U.S.C Section 1350, as adopted pursuant to  Section 906 of the Sarbanes-Oxley Act of 2002.
	101.INS	XBRL Instance Document (furnished herewith)
	101.SCH	XBRL Taxonomy Extension Schema (furnished herewith)
	101.CAL	XBRL Taxonomy Extension Calculation Linkbase (furnished herewith)
	101.DEF	XBRL Taxonomy Extension Definition Linkbase (furnished herewith)
	101.LAB	XBRL Taxonomy Extension Label Linkbase (furnished herewith)
	101.PRE	XBRL Taxonomy Extension Presentation Linkbase (furnished herewith)

21

SIGNATURES

Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

TRANS WORLD ENTERTAINMENT CORPORATION

June 11, 2015	By: /s/ Michael Feurer
	Michael Feurer
	Chairman and Chief Executive Officer
	(Principal Executive Officer)
June 11, 2015	By: /s/ John Anderson
	John Anderson
	Chief Financial Officer
	(Principal and Chief Accounting Officer)

22

EX-31.1

Exhibit 31.1

CHIEF EXECUTIVE OFFICER CERTIFICATION PURSUANT TO SECTION 302 OF SARBANES
OXLEY ACT 2002

I, Michael Feurer certify that:

(1) I have reviewed this report on Form 10–Q of the Registrant;

(2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

(3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

(4) The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

(5) The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated:   June 11, 2015

/s/ Michael Feurer

Michael Feurer

Chief Executive Officer

Trans World Entertainment Corporation

23

EX-31.2

Exhibit 31.2

CHIEF FINANCIAL OFFICER CERTIFICATION PURSUANT TO SECTION 302 OF SARBANES
OXLEY ACT 2002

I, John Anderson, Chief Financial Officer of Trans World Entertainment Corporation (the “Registrant”), certify that:

(1) I have reviewed this report on Form 10–Q of the Registrant;

(2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

(3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

(4) The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

(5) The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated:   June 11, 2015

/s/ John Anderson

John Anderson

Chief Financial Officer

Trans World Entertainment Corporation

24

EX-32

Exhibit 32

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Trans World Entertainment Corporation (the “Company”) on Form 10-Q for the period ending May 2, 2015 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), we, Michael Feurer, Chief Executive Officer of the Company and John Anderson, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of our knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Michael Feurer	/s/ John Anderson
Michael Feurer	John Anderson
Chief Executive Officer	Chief Financial Officer
June 11, 2015	June 11, 2015

25

XML

Stock Based Compensation (Details) - Schedule of Disclosure of Share-based Compensation Arrangements by Share-based Payment Award (USD $)	3 Months Ended
	May 02, 2015		Jan. 31, 2015
Schedule of Disclosure of Share-based Compensation Arrangements by Share-based Payment Award [Abstract]
Number of Shares Subject To option, Balance	1,931,375		2,465,110
Weighted Average Exercise Price	$ 4.10		$ 6.81
Weighted Average Remaining Contractual Term	5.2		3.8
Other Share Awards, Balance	251,174	[1]	237,400	[1]
Weighted Average Grant Date Value, Balance	$ 3.74		$ 3.75
Exercisable May 2, 2015	1,182,625
Exercisable May 2, 2015	$ 4.42
Exercisable May 2, 2015	3.0
Exercisable May 2, 2015	51,774	[1]
Exercisable May 2, 2015	$ 4.68
Granted	13,774	[1]
Granted	$ 3.63
Granted	135,000
Granted	$ 3.73
Granted	9.9
Canceled	(668,735)
Canceled	$ 14.00

[1] Other Share Awards include deferred shares granted to Directors and restricted share units granted to executive officers.

XML

Recently Adopted Accounting Pronouncements

3 Months Ended

May 02, 2015

Accounting Changes and Error Corrections [Abstract]

Accounting Changes and Error Corrections [Text Block]

Note 3. Recently Adopted Accounting Pronouncements

In April 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No.  2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity, (“ASU 2014-08”). This amendment changes the requirements for reporting discontinued operations and includes enhanced disclosures about discontinued operations. Under the amendment, only those disposals of components of an entity that represent a strategic shift that has a major effect on an entity’s operations and financial results will be reported as discontinued operations in the financial statements. ASU 2014-08 is effective prospectively for annual periods beginning on or after December 15, 2014, and interim reporting periods within those years. The Company adopted ASU 2014-08 as of the beginning of 2015 and it did not have a material impact on the Company’s consolidated financial position, cash flows, or results of operations.

XML

Depreciation and Amortization of Fixed Assets (Details) - Schedule of Depreciation and Amortization of Fixed Assets (USD $) In Thousands, unless otherwise specified	3 Months Ended
	May 02, 2015	May 03, 2014
Schedule of Depreciation and Amortization of Fixed Assets [Abstract]
Cost of sales	$ 122	$ 123
Selling, general and administrative expenses	964	782
Total	$ 1,086	$ 905

XML

Line of Credit (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	May 02, 2015	May 03, 2014
Line of Credit (Details) [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity (in Dollars)	75
Line of Credit Facility, Current Borrowing Capacity (in Dollars)	38	$ 47
LIBOR Rate [Member] | Minimum [Member] | Credit Facility [Member]
Line of Credit (Details) [Line Items]
Debt Instrument, Basis Spread on Variable Rate	2.25%
LIBOR Rate [Member] | Maximum [Member] | Credit Facility [Member]
Line of Credit (Details) [Line Items]
Debt Instrument, Basis Spread on Variable Rate	2.75%
Base Rate [Member] | Minimum [Member] | Credit Facility [Member]
Line of Credit (Details) [Line Items]
Debt Instrument, Basis Spread on Variable Rate	0.75%
Base Rate [Member] | Maximum [Member] | Credit Facility [Member]
Line of Credit (Details) [Line Items]
Debt Instrument, Basis Spread on Variable Rate	1.25%
Minimum [Member] | Credit Facility [Member]
Line of Credit (Details) [Line Items]
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage	0.375%
Maximum [Member] | Credit Facility [Member]
Line of Credit (Details) [Line Items]
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage	0.50%

XML

Income (Loss) Per Share (Details) - Schedule of Weighted Average Number of Shares In Thousands, unless otherwise specified	3 Months Ended		12 Months Ended
	May 02, 2015	May 03, 2014	May 02, 2015	May 03, 2014
Schedule of Weighted Average Number of Shares [Abstract]
Weighted average common shares outstanding – basic	31,208	32,089	31,208	32,089
Dilutive effect of employee stock options			163
Weighted average common shares outstanding–diluted	31,371	32,089	31,371	32,089
Anti-dilutive stock options			1,405	1,685

XML

Shareholders' Equity (Details) (USD $) In Millions, except Share data, unless otherwise specified	3 Months Ended	20 Months Ended
	May 02, 2015	May 03, 2015
Shareholders' Equity (Details) [Line Items]
Stock Repurchase Program, Remaining Authorized Repurchase Amount		$ 15.6
Common Stock [Member]
Shareholders' Equity (Details) [Line Items]
Stock Repurchased During Period, Shares	88,745	1,662,563
Treasury Stock Acquired, Average Cost Per Share	$ 3.57	$ 3.84

XML

Basis of Presentation

3 Months Ended

May 02, 2015

Disclosure Text Block [Abstract]

Basis of Accounting [Text Block]

Note 2: Basis of Presentation

The accompanying unaudited condensed consolidated financial statements consist of Trans World Entertainment Corporation, its wholly-owned subsidiary, Record Town, Inc. (“Record Town”), and Record Town’s subsidiaries, all of which are wholly-owned. All significant intercompany accounts and transactions have been eliminated.

The interim condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. The information furnished in these unaudited condensed consolidated financial statements reflects all normal, recurring adjustments which, in the opinion of management, are necessary for the fair presentation of such financial statements. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Certain information and footnote disclosures normally included in the financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to rules and regulations applicable to interim financial statements.

Selling, general and administrative expenses include miscellaneous income and expense items, other than interest.  The Company recorded miscellaneous income items of $1.5 million and $1.3 million for the thirteen weeks ended May 2, 2015 and May 3, 2014, respectively.

The information presented in the accompanying unaudited condensed consolidated balance sheet as of January 31, 2015 has been derived from the Company’s January 31, 2015 audited consolidated financial statements. All other information has been derived from the Company’s unaudited condensed consolidated financial statements as of and for the thirteen weeks ended May 2, 2015 and May 3, 2014. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, 2015.

The Company’s significant accounting policies are the same as those described in Note 1 to the Company’s Consolidated Financial Statements on Form 10-K for the fiscal year ended January 31, 2015.

XML

CONSOLIDATED BALANCE SHEETS (USD $) In Thousands, unless otherwise specified	May 02, 2015	Jan. 31, 2015	May 03, 2014
CURRENT ASSETS:
Cash and cash equivalents	$ 102,540	$ 118,537	$ 90,088
Merchandise inventory	121,577	126,377	140,138
Other current assets	9,112	10,244	9,759
Total current assets	233,229	255,158	239,985
NET FIXED ASSETS	18,026	15,769	13,914
OTHER ASSETS	9,328	9,082	9,132
TOTAL ASSETS	260,583	280,009	263,031
CURRENT LIABILITIES:
Accounts payable	44,582	63,527	46,999
Accrued expenses and other current liabilities	7,260	7,397	7,839
Deferred revenue	9,490	9,852	9,569
Current portion of capital lease obligations	649	938	1,101
Total current liabilities	61,981	81,714	65,508
CAPITAL LEASE OBLIGATIONS, less current portion			649
OTHER LONG-TERM LIABILITIES	26,769	26,555	23,109
TOTAL LIABILITIES	88,750	108,269	89,266
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; 58,337,668, 58,337,668 and 58,316,668 shares issued, respectively)	583	583	583
Additional paid-in capital	315,619	315,486	315,022
Treasury stock at cost (27,183,168, 27,094,423 and 26,320,550 shares, respectively)	(226,732)	(226,412)	(223,762)
Accumulated other comprehensive (loss) income	(2,095)	(2,181)	26
Retained earnings	84,458	84,264	81,896
TOTAL SHAREHOLDERS’ EQUITY	171,833	171,740	173,765
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$ 260,583	$ 280,009	$ 263,031

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CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Thousands, unless otherwise specified	3 Months Ended
	May 02, 2015	May 03, 2014
Net cash used by operating activities	$ (12,009)	$ (20,352)
Cash flows from investing activities:
Purchases of fixed assets	(3,379)	(3,489)
Net cash used by investing activities	(3,379)	(3,489)
Cash flows from financing activities:
Cash dividends paid		(16,036)
Payments of capital lease obligations	(289)	(254)
Exercise of stock options		31
Purchase of treasury stock	(320)	(814)
Net cash used by financing activities	(609)	(17,073)
Net decrease in cash and cash equivalents	(15,997)	(40,914)
Cash and cash equivalents, beginning of period	118,537	131,002
Cash and cash equivalents, end of period	$ 102,540	$ 90,088

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Basis of Presentation (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	May 02, 2015	May 03, 2014
Disclosure Text Block [Abstract]
Other Income	$ 1.5	$ 1.3

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Stock Based Compensation (Details) - Schedule for estimation of fair value for the stock based awards granted (USD $)	3 Months Ended
	May 02, 2015
Stock Based Compensation (Details) - Schedule for estimation of fair value for the stock based awards granted [Line Items]
Dividend yield	0.00%
Weighted average fair value per share of awards granted during the period (in Dollars per share)	$ 1.47
Minimum [Member]
Stock Based Compensation (Details) - Schedule for estimation of fair value for the stock based awards granted [Line Items]
Expected stock price volatility	42.00%
Risk-free interest rate	1.32%
Expected award life (in years)	4 years 357 days
Maximum [Member]
Stock Based Compensation (Details) - Schedule for estimation of fair value for the stock based awards granted [Line Items]
Expected stock price volatility	50.20%
Risk-free interest rate	1.71%
Expected award life (in years)	5 years 259 days

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Nature of Operations

3 Months Ended

May 02, 2015

Disclosure Text Block [Abstract]

Nature of Operations [Text Block]

Note 1. Nature of Operations

Trans World Entertainment Corporation and subsidiaries (“the Company”) is one of the largest specialty retailers of entertainment products, including video, music, electronics, trend, video games and related products in the United States. The Company operates a chain of retail entertainment stores, primarily under the names f.y.e. for your entertainment and Suncoast Motion Pictures, and e-commerce sites, www.fye.com, www.wherehouse.com, and www.secondspin.com in a single industry segment. As of May 2, 2015, the Company operated 310 stores totaling approximately 1.8 million square feet in the United States, the District of Columbia and the Commonwealth of Puerto Rico.

Liquidity and Cash Flows:

The Company’s primary sources of working capital are cash and cash equivalents on hand, cash provided by operations and borrowing capacity under its revolving credit facility (See Note 6 for further details). The Company’s cash flows fluctuate from quarter to quarter due to various items, including seasonality of sales and earnings, merchandise inventory purchases and returns and the related terms on the purchases and capital expenditures. Management believes it will have adequate resources to fund its cash needs for the next twelve months and beyond, including its capital spending, its seasonal increase in merchandise inventory and other operating cash requirements and commitments.

Management anticipates that any future cash requirements due to a shortfall in cash from operations would be funded by the Company’s cash and cash equivalents on hand and its revolving credit facility.

Seasonality:

The Company’s business is seasonal, with the fourth fiscal quarter constituting the Company’s peak selling period. In fiscal 2014, the fourth quarter accounted for approximately 35% of annual net sales and all of net income. In anticipation of increased sales activity in the fourth quarter, the Company purchases additional inventory and hires seasonal associates to supplement its core store sales and distribution center staffs. If, for any reason, the Company’s sales were below seasonal norms during the fourth quarter, the Company’s operating results could be adversely affected. Quarterly sales can also be affected by the timing of new product releases, new store openings, store closings and the performance of existing stores.

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CONSOLIDATED BALANCE SHEETS (Parentheticals) (USD $)	May 02, 2015	Jan. 31, 2015	May 03, 2014
Preferred stock par value (in Dollars per share)	$ 0.01	$ 0.01	$ 0.01
Preferred stock, shares authorized	5,000,000	5,000,000	5,000,000
Preferred stock, shares issued	0	0	0
Common stock par value (in Dollars per share)	$ 0.01	$ 0.01	$ 0.01
Common stock, shares authorized	200,000,000	200,000,000	200,000,000
Common stock, shares issued	58,337,668	58,337,668	58,316,668
Treasury stock, shares at cost	27,183,168	27,094,423	26,320,550

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Stock Based Compensation (Tables)

3 Months Ended

May 02, 2015

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block]

The table below outlines the assumptions that the Company used to estimate the fair value of stock based awards granted during the thirteen weeks ended May 2, 2015:

Dividend yield	0%
Expected stock price volatility	42.0%-50.2%
Risk-free interest rate	1.32%-1.71%
Expected award life (in years)	4.98-5.71
Weighted average fair value per share of awards granted during the period	$1.47

Disclosure of Share-based Compensation Arrangements by Share-based Payment Award [Table Text Block]

The following table summarizes stock award activity during the thirteen weeks ended May 2, 2015:

	Employee and Director Stock Award Plans
	Number of			Weighted		Weighted		Other		Weighted
	Shares Subject To Option			Average Exercise Price		Average Remaining Contractual Term		Share Awards(1)		Average Grant Fair Value
Balance January 31, 2015		2,465,110		$	6.81		3.8		237,400	$	3.75
Granted		135,000			3.73		9.9		13,774		3.63
Canceled		(668,735	)		14.00		—		—		—
Balance May 2, 2015		1,931,375		$	4.10		5.2		251,174	$	3.74
Exercisable May 2, 2015		1,182,625		$	4.42		3.0		51,774	$	4.68

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Document And Entity Information	3 Months Ended
	May 02, 2015
Document and Entity Information [Abstract]
Entity Registrant Name	TRANS WORLD ENTERTAINMENT CORP
Document Type	10-Q
Current Fiscal Year End Date	--01-31
Entity Common Stock, Shares Outstanding	31,154,500
Amendment Flag	false
Entity Central Index Key	0000795212
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Accelerated Filer
Entity Well-known Seasoned Issuer	No
Document Period End Date	May 02, 2015
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q1

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Defined Benefit Plans (Tables)

3 Months Ended

May 02, 2015

Disclosure Text Block Supplement [Abstract]

Schedule of Net Benefit Costs [Table Text Block]

The following represents the components of the net periodic pension cost related to the Company’s SERP and Director Retirement Plan for the respective periods:

	Thirteen weeks ended
	May 2, 2015			May 3, 2014
	(in thousands)
Service cost	$	17		$	14
Interest cost		145			172
Amortization of prior service cost		85			180
Amortization of net gain		(9	)		(35	)
Net periodic pension cost	$	238		$	331

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CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	May 02, 2015	May 03, 2014
Net sales	$ 77,963	$ 87,216
Cost of sales	47,160	54,439
Gross profit	30,803	32,777
Selling, general and administrative expenses	30,127	32,633
Income from operations	676	144
Interest expense, net	438	483
Income (loss) before income tax expense	238	(339)
Income tax expense	44	47
Net income (loss)	$ 194	$ (386)
BASIC AND DILUTED INCOME (LOSS) PER SHARE:
Basic income (loss) per share (in Dollars per share)	$ 0.01	$ (0.01)
Weighted average number of common shares outstanding – basic (in Shares)	31,208	32,089
Diluted income (loss) per share (in Dollars per share)	$ 0.01	$ (0.01)
Weighted average number of common shares outstanding – diluted (in Shares)	31,371	32,089

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Line of Credit

3 Months Ended

May 02, 2015

Debt Disclosure [Abstract]

Debt Disclosure [Text Block]

Note 6. Line of Credit

In May 2012, the Company entered into a $75 million credit facility (“Credit Facility”) which amended the previous credit facility. The principal amount of all outstanding loans under the Credit Facility together with any accrued but unpaid interest, are due and payable in May 2017, unless otherwise paid earlier pursuant to the terms of the Credit Facility. Payments of amounts due under the Credit Facility are secured by the assets of the Company.

The Credit Facility includes customary provisions, including affirmative and negative covenants, which include representations, warranties and restrictions on additional indebtedness and acquisitions. The Credit Facility also includes customary events of default, including, among other things, material adverse effect, bankruptcy, and certain changes of control. The Credit Facility also contains other terms and conditions, including limitations on the payment of dividends and covenants around the number of store closings. The Company is compliant with all covenants.

Interest under the Credit Facility will accrue, at the election of the Company, at a Base Rate or LIBO Rate, plus, in each case, an Applicable Margin, which is determined by reference to the level of availability, with the Applicable Margin for LIBO Rate loans ranging from 2.25% to 2.75% and the Applicable Margin for Prime Rate loans ranging from 0.75% to 1.25%. In addition, a commitment fee ranging from 0.375% to 0.50% is also payable on unused commitments.

The availability under the Credit Facility is subject to limitations based on inventory levels.

During the first quarters of 2015 and 2014, the Company did not have any borrowings under the Credit Facility. The Company did not have any borrowings under its Credit Facility during Fiscal 2012, Fiscal 2013 and Fiscal 2014. As of May 2, 2015 and May 3, 2014, the Company had no outstanding letter of credit obligations under the Credit Facility. The Company had $38 million and $47 million available for borrowing as of May 2, 2015 and May 3, 2014, respectively.

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Defined Benefit Plans

3 Months Ended

May 02, 2015

Disclosure Text Block Supplement [Abstract]

Compensation and Employee Benefit Plans [Text Block]

Note 5. Defined Benefit Plans

The Company maintains a non-qualified Supplemental Executive Retirement Plan (“SERP”) for certain executive officers of the Company. The SERP provides eligible executives defined pension benefits that supplement benefits under other retirement arrangements. During the thirteen weeks ended May 2, 2015, the Company did not make any cash contributions to the SERP and presently expects to pay approximately $182,000 in benefits relating to the SERP during Fiscal 2015.

The Company had previously provided the Board of Directors with a noncontributory, unfunded retirement plan (“Director Retirement Plan”) that paid retired directors an annual retirement benefit. During the thirteen weeks ended May 2, 2015, the Company did not make any cash contributions to the Director Retirement Plan, and presently expects to pay approximately $25,000 in benefits relating to the Director Retirement Plan during Fiscal 2015.

The measurement date for the SERP and Director Retirement Plan is fiscal year end, using actuarial techniques which reflect estimates for mortality, turnover and expected retirement. In addition, management makes assumptions concerning future salary increases. Discount rates are generally established as of the measurement date using theoretical bond models that select high-grade corporate bonds with maturities or coupons that correlate to the expected payouts of the applicable liabilities.

The following represents the components of the net periodic pension cost related to the Company’s SERP and Director Retirement Plan for the respective periods:  

	Thirteen weeks ended
	May 2, 2015			May 3, 2014
	(in thousands)
Service cost	$	17		$	14
Interest cost		145			172
Amortization of prior service cost		85			180
Amortization of net gain		(9	)		(35	)
Net periodic pension cost	$	238		$	331

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Stock Based Compensation (Details) (USD $) Share data in Millions, unless otherwise specified	3 Months Ended
	May 02, 2015	May 03, 2014
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Share-based Compensation	$ 133,000	$ 60,000
Deferred Tax Assets, Tax Deferred Expense, Compensation and Benefits, Share-based Compensation Cost	0	0
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized	756,000
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition	2 years 36 days
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized (in Shares)	8.0
Share Based Compensation Arrangement By Share Based Payment Award Options And Other Than Options Outstanding Number (in Shares)	2.2
Share Based Compensation Arrangement By Share Based Payment Award Options And Other Than Options Vested And Expected To Vest Exercisable Number (in Shares)	1.2
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant (in Shares)	2.4
Intrinsic Value of Stock Awards Outstanding	680,000
Intrinsic Value of Stock Awards Exercisable	$ 455,000

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Depreciation and Amortization of Fixed Assets (Tables)

3 Months Ended

May 02, 2015

Property, Plant and Equipment [Abstract]

Schedule of Depreciation and Amortization of Fixed Assets [Table Text Block]

Depreciation and amortization of fixed assets included in the condensed consolidated statements of operations is as follows:

	Thirteen Weeks Ended
	May 2, 2015		May 3, 2014
	(in thousands)
Cost of sales	$	122	$	123
Selling, general and administrative expenses		964		782
Total	$	1,086	$	905

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Income (Loss) Per Share

3 Months Ended

May 02, 2015

Earnings Per Share [Abstract]

Earnings Per Share [Text Block]

Note 9. Income (Loss) Per Share

Basic income (loss) per share is calculated by dividing net income (loss) by the weighted average common shares outstanding for the period. Diluted income per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock (net of any assumed repurchases) that then shared in the earnings of the Company, if any. It is computed by dividing net income (loss) by the sum of the weighted average shares outstanding and additional common shares that would have been outstanding if the dilutive potential common shares had been issued for the Company’s common stock awards from the Company’s Stock Award Plans.

Weighted average shares are calculated as follows:

	Thirteen weeks ended
	May 2, 2015		May 3, 2014
	(in thousands)
Weighted average common shares outstanding – basic		31,208		32,089
Dilutive effect of employee stock options		163		—
Weighted average common shares outstanding–diluted		31,371		32,089
Anti-dilutive stock options		1,405		1,685

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Accumulated Other Comprehensive Income/Loss

3 Months Ended

May 02, 2015

Disclosure Text Block [Abstract]

Comprehensive Income (Loss) Note [Text Block]

Note 7. Accumulated Other Comprehensive Income (Loss)

Accumulated other comprehensive income (loss) that the Company reports in the condensed consolidated balance sheets represents the difference between the accrued pension liability and accrued benefit cost, net of taxes, associated with the Company’s defined benefit plans. Comprehensive income (loss) consists of net income and the reclassification of pension costs previously reported in comprehensive income (loss) for the thirteen weeks ended May 2, 2015 and May 3, 2014.

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Depreciation and Amortization of Fixed Assets

3 Months Ended

May 02, 2015

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment Disclosure [Text Block]

Note 8. Depreciation and Amortization of Fixed Assets

Depreciation and amortization of fixed assets included in the condensed consolidated statements of operations is as follows:

	Thirteen Weeks Ended
	May 2, 2015		May 3, 2014
	(in thousands)
Cost of sales	$	122	$	123
Selling, general and administrative expenses		964		782
Total	$	1,086	$	905

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Shareholders' Equity

3 Months Ended

May 02, 2015

Stockholders' Equity Note [Abstract]

Stockholders' Equity Note Disclosure [Text Block]

Note 10. Shareholders’ Equity

During the thirteen weeks ending May 2, 2015, the Company repurchased 88,745 shares of common stock at an average price of $3.57 per share. Since the inception of the program, the Company has repurchased 1,662,563 shares of common stock at an average price of $3.84 per share. The Company has approximately $15.6 million available for purchase under its repurchase program.

The Company classified the repurchased shares as treasury stock on the Company’s balance sheet.

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Nature of Operations (Details)	3 Months Ended
	Jan. 31, 2015	May 02, 2015 sqft
Disclosure Text Block [Abstract]
Number of Stores		310
Area of Stores (in Square Feet)		1,800,000
Percentage of Annual Net Sales Recorded in the Fourth Quarter	35.00%

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Defined Benefit Plans (Details) (USD $)	May 02, 2015
Supplemental Employee Retirement Plan [Member]
Defined Benefit Plans (Details) [Line Items]
Defined Benefit Plan, Expected Future Benefit Payments, Next Twelve Months	$ 182,000
Director Retirement Plan [Member]
Defined Benefit Plans (Details) [Line Items]
Defined Benefit Plan, Expected Future Benefit Payments, Next Twelve Months	$ 25,000

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	May 02, 2015	May 03, 2014
Net income (loss)	$ 194	$ (386)
Amortization of pension costs	76	145
Comprehensive income (loss)	$ 270	$ (241)

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Stock Based Compensation

3 Months Ended

May 02, 2015

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

Note 4. Stock Based Compensation

Total stock-based compensation expense recognized in the condensed consolidated statements of operations for the thirteen weeks ended May 2, 2015 and May 3, 2014 was approximately $133,000 and $60,000, respectively, before income taxes. No deferred tax benefit was recorded against stock-based compensation expense for the thirteen weeks ended May 2, 2015 and May 3, 2014.

As of May 2, 2015, there was approximately $756,000 of unrecognized compensation cost related to stock award awards that is expected to be recognized as expense over a weighted average period of 2.1 years.

As of May 2, 2015, stock awards authorized for issuance under the Company’s current long term equity incentive plans total 8.0 million. There are certain authorized stock awards for which the Company no longer grants awards. Of these awards authorized for issuance, 2.2 million were granted and are outstanding, 1.2 million of which were vested and exercisable. Awards available for future grants at May 2, 2015 were 2.4 million.

The table below outlines the assumptions that the Company used to estimate the fair value of stock based awards granted during the thirteen weeks ended May 2, 2015:

Dividend yield	0%
Expected stock price volatility	42.0%-50.2%
Risk-free interest rate	1.32%-1.71%
Expected award life (in years)	4.98-5.71
Weighted average fair value per share of awards granted during the period	$1.47

The following table summarizes stock award activity during the thirteen weeks ended May 2, 2015:

	Employee and Director Stock Award Plans
	Number of			Weighted		Weighted		Other		Weighted
	Shares Subject To Option			Average Exercise Price		Average Remaining Contractual Term		Share Awards(1)		Average Grant Fair Value
Balance January 31, 2015		2,465,110		$	6.81		3.8		237,400	$	3.75
Granted		135,000			3.73		9.9		13,774		3.63
Canceled		(668,735	)		14.00		—		—		—
Balance May 2, 2015		1,931,375		$	4.10		5.2		251,174	$	3.74
Exercisable May 2, 2015		1,182,625		$	4.42		3.0		51,774	$	4.68

(1) Other Share Awards include deferred shares granted to Directors and restricted share units granted to executive officers.

As of May 2, 2015, the intrinsic value of stock awards outstanding was approximately $680,000 and exercisable was $455,000.

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Defined Benefit Plans (Details) - Schedule Components of Net Periodic Benefit Cost and Other Comprehensive Income Loss (USD $) In Thousands, unless otherwise specified	3 Months Ended
	May 02, 2015	May 03, 2014
Schedule Components of Net Periodic Benefit Cost and Other Comprehensive Income Loss [Abstract]
Service cost	$ 17	$ 14
Interest cost	145	172
Amortization of prior service cost	85	180
Amortization of net gain	(9)	(35)
Net periodic pension cost	$ 238	$ 331

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Income (Loss) Per Share (Tables)

3 Months Ended

May 02, 2015

Earnings Per Share [Abstract]

Schedule of Weighted Average Number of Shares [Table Text Block]

Weighted average shares are calculated as follows:

	Thirteen weeks ended
	May 2, 2015		May 3, 2014
	(in thousands)
Weighted average common shares outstanding – basic		31,208		32,089
Dilutive effect of employee stock options		163		—
Weighted average common shares outstanding–diluted		31,371		32,089
Anti-dilutive stock options		1,405		1,685