Note 1 - Overview

12 Months Ended

Jun. 30, 2013

Disclosure Text Block [Abstract]

Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

Note 1 - Overview

The Company

We are a leading designer and marketer of branded men’s, women’s and children’s accessories, including belts, gifts and small leather goods.  Our merchandise is marketed under a broad portfolio of nationally recognized licensed and proprietary brand names, as well as private brands for major retail customers.  We sell our products through all major retail distribution channels throughout North America, including, without limitation, mass merchants, national chain stores, department stores, specialty stores, catalog retailers, golf pro shops, sporting goods stores, and the retail exchange operations of the United States military.

Basis Of Presentation and Liquidity; Going Concern Uncertainties

The accompanying financial statements have been prepared on the basis of accounting principles applicable to a going concern, which contemplates the realization of assets and extinguishment of liabilities in the normal course of business.  We have incurred a net loss in each of our two most recent fiscal years and we have an accumulated deficit. Our financial results and liquidity forecasts were negatively impacted by lower than expected consumer point-of-sale purchases and retailer promotional activity in December 2012 in our gifts segment, which was markedly higher than both our expectations and historical levels.  These factors raise substantial doubt about our ability to continue as a going concern. These financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

In response to these negative factors we executed the following initiatives which we believe will allow us to effectively manage our liquidity over the near-term:

· Announced and executed a restructuring plan (“Restructuring”) which (1) eliminated unprofitable products; (2) reduced the amount of risk in our gifts business; (3) reduced corporate and distribution employee headcount; (4) closed or downsized four facilities; (5) outsourced and relocated our gifts distribution facility from Dallas to a third-party provider in California; and (6) exited development efforts and accelerated recognition of future expenses associated with non-core brands. We expect these efforts will result in annual cost savings of $6.0 to $7.0 million in fiscal 2014.

· On July 24, 2013, we replaced our previous credit facility with a new senior credit facility expiring in July 2015. We believe this new senior facility, along with a new purchase order financing arrangement with another lender, will provide us with sufficient credit availability to fund our operations in the foreseeable future. At September 23, 2013, we had $1.2 million in borrowing availability under our new senior credit facility after accounting for the $900,000 minimum excess availability requirement. Covenants set by our senior lender place additional restrictions on the use of the credit availability on a week-to-week basis.

· In July 2013, we entered into agreements with two significant licensors and three significant vendors to address outstanding accounts payable owed to these parties. The arrangements with these parties consist of unsecured, subordinated promissory notes which are to be paid under varying payment terms and interest rates over a period of 12 to 24 months. These payments are subject to pre-established minimum availability levels as set by our new senior lender.

· On September 26, 2013 we, along with our subsidiaries, H.A. Sheldon Canada, Ltd. and TBAC Investment Trust, and our senior lender Salus Capital Partners LLC, entered into a First Amendment to Credit Agreement, dated July 24, 2013 (the “Amendment”). Pursuant to the Amendment, our lender formally waived the going concern qualification in the audit report as an event of default, our failure to satisfy a minimum availability requirement for certain weeks, and extended the time period to deliver certain post-close deliverables.

In addition, we are continuing to evaluate and execute initiatives to improve liquidity such as selling unproductive assets (such as our held-for-sale facility in Yoakum, Texas) and raising additional capital.  We cannot make assurances as to whether any of these actions can be effected on a timely basis, on satisfactory terms or maintained once initiated.  Even if such actions are successfully implemented, our liquidity plan could result in limiting certain operational and strategic initiatives that were designed to grow our business over the long term. In addition, our current credit facility requires us to maintain minimum profitability and leverage ratios, as further described in Note 4, which we could have difficulty meeting to the extent that our plans are unsuccessfully implemented or for a number of additional reasons that are outside of our control, including but not limited to, the loss of key customers or suppliers.  Any potential covenant violation and our ability to successfully obtain waivers from our senior lender of such violations could negatively impact our ability to continue as a going concern.

The preparation of our consolidated financial statements in accordance with U.S. generally accepted accounting principles requires the use of estimates that affect the reported value of assets, liabilities, revenues, and expenses. These estimates are based on historical experience and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for our conclusions.  We continually evaluate the information used to make these estimates as the business and economic environment changes, including evaluation of events subsequent to our fiscal year end through the financial statements issuance date.  Actual results may differ from these estimates under different assumptions or conditions.  Such differences could have a material impact on our future financial position, results of operations, and cash flows.

The consolidated financial statements include the accounts of the Company and our subsidiaries, all of which are wholly owned.  Intercompany accounts and transactions have been eliminated in consolidation.  Amounts related to costs for a third party provider to assemble and package gift products have been reclassified from cost of goods sold to the selling, general and administrative expense line item in the consolidated statements of operations and business segment information in the fiscal 2012 financial statements to conform to the fiscal 2013 presentation.

Foreign Currency Translation

For our Canadian operations, the functional currency is the Canadian dollar (“CAD”).  Its assets and liabilities are translated into U.S. dollars (“USD”) at the exchange rates in effect at each balance sheet date, and resulting translation gains or losses are accumulated in other comprehensive income as a separate component of stockholders’ equity.  Revenue and expenses are translated at monthly average exchange rates.  For our Mexican operations, the functional currency is the U.S. dollar.