Employee Benefit Plans

12 Months Ended

Jan. 28, 2023

Postemployment Benefits [Abstract]

Employee Benefit Plans

J. EMPLOYEE BENEFIT PLANS

The Company accounts for its employee benefit plans in accordance with ASC Topic 715, Compensation – Retirement Benefits. ASC Topic 715 requires an employer to: (a) recognize in its statement of financial position an asset for a plan’s over-funded status or a liability for a plan’s under-funded status; (b) measure a plan’s assets and its obligations that determine its funded status as of the end of the employer’s fiscal year (with limited exceptions); and (c) recognize changes in the funded status of a defined benefit postretirement plan in the year in which the changes occur.

These amounts will be subsequently recognized as net periodic pension cost pursuant to the Company’s accounting policy for amortizing such amounts. Further, actuarial gains and losses that arise in subsequent periods and are not recognized as net periodic pension cost in the same periods will be recognized as a component of accumulated other comprehensive income (loss). The amortization of the unrecognized loss was calculated based on the average remaining lifetime of all employees, as opposed to the average remaining future service of active employees, due to the low percentage of active employees in the Plan. For fiscal 2023, the Company expects a net periodic pension cost of $232,000.

Noncontributory Pension Plan

In connection with the Casual Male acquisition in May 2002, the Company assumed the assets and liabilities of the Casual Male Noncontributory Pension Plan “Casual Male Corp. Retirement Plan”, which was previously known as the J. Baker, Inc. Qualified Plan (the “Pension Plan”). Casual Male Corp. froze all future benefits under this plan on May 1, 1997.

The following table sets forth the Pension Plan’s funded status at January 28, 2023 and January 29, 2022:

	January 28, 2023			January 29, 2022
	in thousands
Change in benefit obligation:
Balance at beginning of period	$	14,361		$	15,864
Benefits and expenses paid		(818	)		(839	)
Interest costs		414			373
Settlements		(358	)		(353	)
Actuarial (gain) loss		(2,145	)		(684	)
Balance at end of year	$	11,454		$	14,361
Change in fair value of plan assets:
Balance at beginning of period	$	11,293		$	11,351
Actual return on plan assets		(1,050	)		512
Employer contributions		524			622
Settlements		(358	)		(353	)
Benefits and expenses paid		(818	)		(839	)
Balance at end of period	$	9,591		$	11,293
Reconciliation of funded status:
Projected benefit obligation	$	11,454		$	14,361
Fair value of plan assets		9,591			11,293
Unfunded status	$	(1,863	)	$	(3,068	)
Balance sheet classification:
Other long-term liabilities	$	1,863		$	3,068

Total plan expense and other amounts recognized in accumulated other comprehensive loss for the years ended January 28, 2023, January 29, 2022 and January 30, 2021 include the following components:

	January 28, 2023			January 29, 2022			January 30, 2021
Net pension cost:	(in thousands)
Interest cost on projected benefit obligation	$	414		$	373		$	430
Expected return on plan assets		(723	)		(728	)		(737	)
Amortization of unrecognized loss		270			314			989
Net pension cost	$	(39	)	$	(41	)	$	682
Other changes recognized in other comprehensive loss,    before taxes:
Unrecognized losses at the beginning of the year	$	6,132		$	6,914		$	7,206
Net periodic pension cost		39			41			(682	)
Employer contribution		524			622			611
Change in plan assets and benefit obligations		(1,205	)		(1,445	)		(221	)
Unrecognized losses at the end of year	$	5,490		$	6,132		$	6,914

The Company’s contribution for fiscal 2023 is estimated to be approximately $324,000.

Assumptions used to determine the benefit obligations as of January 28, 2023 and January 29, 2022 include a discount rate of 4.79% for fiscal 2022 and 3.00% for fiscal 2021. Assumptions used to determine the net periodic benefit cost for the years ended January 28, 2023, January 29, 2022 and January 30, 2021 included a discount rate of 3.00% for fiscal 2022, 2.39% for fiscal 2021 and 2.72% for fiscal 2020.

The expected long-term rate of return for plan assets was assumed to be 6.00% and 6.50% for fiscal 2022 and fiscal 2021, respectively. The expected long-term rate of return assumption was developed considering historical and future expectations for returns for each asset class.

Estimated Future Benefit Payments

The estimated future benefit payments for the next ten fiscal years are as follows:

	Total
FISCAL YEAR	(in thousands)
2023	$	869
2024		872
2025		871
2026		887
2027		889
2028-2032		4,361

Plan Assets

The fair values of the Company’s noncontributory defined benefit retirement plan assets at the end of fiscal 2022 and fiscal 2021, by asset category, were as follows:

	Fair Value Measurement
	January 28, 2023								January 29, 2022
(in thousands)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Asset category:
Mutual Funds:
U.S. Equity	$	3,743		—		—	$	3,743	$	4,446		—		—	$	4,446
International Equity		2,592		—		—		2,592		3,254		—		—		3,254
Fixed Income		1,333		—		—		1,333		3,486		—		—		3,486
Cash		1,923		—		—		1,923		107		—		—		107
Total	$	9,591	$	—	$	—	$	9,591	$	11,293	$	—	$	—	$	11,293

The Company’s target asset allocation for fiscal 2023 and its asset allocation at January 28, 2023 and January 29, 2022, by asset category, were as follows:

	Target Allocation			Percentage of plan assets at
	Fiscal 2023			January 28, 2023			January 29, 2022
Asset category:
Equity securities		63.0	%		66.1	%		68.2	%
Debt securities		35.0	%		13.9	%		30.9	%
Cash		2.0	%		20.0	%		0.9	%
Total		100.0	%		100.0	%		100.0	%

The target policy is set to maximize returns with consideration to the long-term nature of the obligations and maintaining a lower level of overall volatility through the allocation of fixed income. The asset allocation is reviewed throughout the year for adherence to the target policy and is rebalanced periodically towards the target weights. At January 28, 2023, due to timing, the cash balance included short-term investments from the sale of debt securities that were pending reinvestment.

Supplemental Executive Retirement Plan

In connection with the Casual Male acquisition, the Company also assumed the liability of the Casual Male Supplemental Retirement Plan (the “SERP”).

The following table sets forth the SERP’s funded status at January 28, 2023 and January 29, 2022:

	January 28, 2023			January 29, 2022
	in thousands
Change in benefit obligation:
Balance at beginning of period	$	514		$	563
Benefits and expenses paid		(40	)		(40	)
Interest costs		14			12
Actuarial (gain) loss		(61	)		(21	)
Balance at end of year	$	427		$	514
Change in fair value of plan assets:
Balance at beginning of period	$	—		$	—
Employer contributions		40			40
Benefits and expenses paid		(40	)		(40	)
Balance at end of period	$	—		$	—
Projected benefit obligation	$	427		$	514
Reconciliation of funded status:
Projected benefit obligation	$	427		$	514
Fair value of plan assets		—			—
Unfunded Status	$	(427	)	$	(514	)
Balance sheet classification:
Other long-term liabilities	$	427		$	514

Other changes recognized in other comprehensive loss, before taxes (in thousands):

	January 28, 2023			January 29, 2022			January 30, 2021
	in thousands
Other changes recognized in other comprehensive loss, before taxes:
Unrecognized losses at the beginning of the year	$	95		$	120		$	82
Net periodic pension cost		(17	)		(16	)		(15	)
Employer contribution		40			40			38
Change in benefit obligations		(87	)		(49	)		15
Unrecognized losses at the end of year	$	31		$	95		$	120

Assumptions used to determine the benefit obligations as of January 28, 2023 and January 29, 2022 included a discount rate of 4.75% for fiscal 2022 and 2.90% for fiscal 2021. Assumptions used to determine the net periodic benefit cost for the years ended January 28, 2023, January 29, 2022 and January 30, 2021 included a discount rate of 2.90% for fiscal 2022, 2.24% for fiscal 2021 and 2.59% for fiscal 2020.

Defined Contribution Plan

The Company has one defined contribution plan, the Destination XL Group, Inc. 401(k) Savings Plan (the “401(k) Plan”). Under the 401(k) Plan, the Company offers a qualified automatic contribution arrangement (“QACA”) with the Company matching 100% of the first 1% of deferred compensation and 50% of the next 5% (with a maximum contribution of 3.5% of eligible compensation). Employees who are 21 years of age or older are eligible to make deferrals after 6 months of employment and are eligible to receive a Company match after one year of employment and 1,000 hours.

For the 2021 plan year, the Company suspended its QACA safe harbor and, while not required, the Company made a discretionary employer match for 2021. The Company has resumed its QACA status for fiscal 2022.

The Company recognized $2.1 million, $2.0 million and $1.5 million of expense under the 401(k) Plan in fiscal 2022, 2021 and 2020, respectively.