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Segment Reporting
9 Months Ended
Oct. 28, 2016
Segment Reporting [Abstract]  
Segment Reporting
SEGMENT REPORTING
The Company is a leading multi-channel retailer of clothing, accessories and footwear, as well as home products, and has two reportable segments: Direct and Retail. Both segments sell similar products and provide services. Product revenues are divided by product categories: Apparel and Non-apparel. The Non-apparel revenues include accessories, footwear, and home goods. Services and other revenue includes embroidery, monogramming, gift wrapping, shipping and other services. Net revenue is aggregated by product category in the following table:
 
 
13 Weeks Ended
 
39 Weeks Ended
(in thousands)
 
October 28, 2016
 
October 30, 2015
 
October 28, 2016
 
October 30, 2015
Net revenue:
 
 
 
 
 
 
 
 
Apparel
 
$
252,082

 
$
272,228

 
$
725,062

 
$
783,841

Non-apparel
 
37,854

 
40,708

 
95,021

 
106,536

Service and other
 
21,540

 
21,498

 
56,836

 
55,858

Total net revenue
 
$
311,476

 
$
334,434

 
$
876,919

 
$
946,235


The Company identifies reportable segments according to how business activities are managed and evaluated. Each of the Company’s operating segments are reportable segments and are strategic business units that offer similar products and services but are sold either directly from its warehouses (Direct) or through its retail stores (Retail). Adjusted EBITDA is the primary measure used to make decisions on allocating resources and assessing performance of each operating segment. Adjusted EBITDA is computed as Income before taxes appearing on the Condensed Consolidated Statements of Operations net of interest expense, depreciation and amortization and other significant items that while periodically affecting the Company's results, may vary significantly from period to period and may have a disproportionate effect in a given period, which may affect comparability of results. Reportable segment assets are those directly used in or clearly allocable to an operating segment’s operations. Depreciation, amortization, and property and equipment expenditures are recognized in each respective segment. There were no material transactions between reporting segments for any periods presented.
The Direct segment sells products through the Company’s e-commerce websites and direct mail catalogs. Operating costs consist primarily of direct marketing costs (catalog and e-commerce marketing costs); order processing and shipping costs; direct labor and benefits costs and facility costs. Assets primarily include goodwill and trade name intangible assets, inventory, accounts receivable, prepaid expenses (deferred catalog costs), technology infrastructure, and property and equipment.
The Retail segment sells products and services through dedicated Lands’ End Shops at Sears across the United States, the Company’s stand-alone Lands’ End Inlet stores and international shop-in-shops. Operating costs consist primarily of labor and benefits costs; rent, CAM and occupancy costs; distribution costs; and in-store marketing costs. Assets primarily include retail inventory, fixtures and leasehold improvements.
Corporate overhead and other expenses include unallocated shared-service costs, which primarily consist of employee services and financial services, legal and corporate expenses. These expenses include labor and benefits costs, corporate headquarters occupancy costs and other administrative expenses. Assets include corporate headquarters and facilities, corporate cash and cash equivalents and deferred income taxes.
Financial information by segment is presented in the following tables.
SUMMARY OF SEGMENT DATA

 
13 Weeks Ended
 
39 Weeks Ended
(in thousands)
 
October 28, 2016
 
October 30, 2015
 
October 28, 2016
 
October 30, 2015
Net revenue:
 



 
 
 
 
Direct
 
$
272,080


$
287,778

 
$
750,660

 
805,886

Retail
 
39,340


46,597

 
126,077

 
140,166

Corporate / other
 
56


59

 
182

 
183

Total net revenue
 
$
311,476

 
$
334,434

 
$
876,919

 
$
946,235


 
 
13 Weeks Ended
 
39 Weeks Ended
(in thousands)
 
October 28, 2016
 
October 30, 2015
 
October 28, 2016
 
October 30, 2015
Adjusted EBITDA:
 
 
 
 
 
 
 
 
Direct
 
$
13,904

 
$
36,951

 
$
41,516

 
$
85,316

Retail
 
(3,583
)
 
(1,714
)
 
(7,063
)
 
(907
)
Corporate / other
 
(9,035
)
 
(8,689
)
 
(25,271
)
 
(25,191
)
Total adjusted EBITDA
 
$
1,286

 
$
26,548

 
$
9,182

 
$
59,218

 
 
13 Weeks Ended
 
39 Weeks Ended
(in thousands)
 
October 28, 2016
 
October 30, 2015
 
October 28, 2016
 
October 30, 2015
Depreciation and amortization:
 
 
 
 
 
 
 
 
Direct
 
$
4,027

 
$
3,385

 
$
11,097

 
$
10,280

Retail
 
408

 
510

 
1,233

 
1,506

Corporate / other
 
360

 
365

 
1,089

 
1,088

Total depreciation and amortization
 
$
4,795

 
$
4,260

 
$
13,419

 
$
12,874

(in thousands)
 
October 28, 2016
 
October 30, 2015
 
January 29, 2016
Total Assets:
 
 
 
 
 
 
Direct
 
$
1,073,975

 
$
1,166,991

 
$
953,502

Retail
 
78,373

 
79,492

 
69,321

Corporate / other
 
160,830

 
135,536

 
258,703

Total assets
 
$
1,313,178

 
$
1,382,019

 
$
1,281,526

 
 
13 Weeks Ended
 
39 Weeks Ended
(in thousands)
 
October 28, 2016
 
October 30, 2015
 
October 28, 2016
 
October 30, 2015
Capital expenditures:
 
 
 
 
 
 
 
 
Direct
 
$
8,041

 
$
4,415

 
$
25,804

 
$
17,717

Retail
 
25

 
95

 
279

 
148

Corporate / other
 

 
87

 

 
252

Total capital expenditures
 
$
8,066

 
$
4,597

 
$
26,083

 
$
18,117