Property, Equipment and Improvements, Net

Property, equipment and improvements, net consisted of the following (in thousands):



Description	November 2, 2019			February 2, 2019
Store leasehold improvements	$	50,271		$	50,305
Store furniture and fixtures	70,396			70,815
Corporate office and distribution center furniture, fixtures and equipment	6,450			6,179
Computer and point of sale hardware and software	33,637			33,098
Construction in progress	146			419
Total property, equipment and improvements, gross	160,900			160,816
Less accumulated depreciation and amortization	(134,340		)	(129,173		)
Total property, equipment and improvements, net	$	26,560		$	31,643

Long-lived assets are evaluated for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable.

When evaluating long-lived assets for potential impairment, we first compare the carrying value of the asset to the asset's estimated future cash flows (undiscounted and without interest charges). If the sum of the estimated future cash flows is less than the carrying value of the asset, we calculate an impairment loss. The impairment loss calculation compares the carrying value of the asset to the asset's estimated fair value, which is typically based on estimated discounted future cash flows. We recognize an impairment loss if the amount of the asset's carrying value exceeds the asset's estimated fair value. If we recognize an impairment loss, the adjusted carrying amount of the asset becomes its new cost basis. For a depreciable long-lived asset, the new cost basis is depreciated over the remaining useful life of that asset.

When reviewing long-lived assets for impairment, we group long-lived assets with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. For long-lived assets deployed at store locations, we review for impairment at the individual store level.

Our impairment loss calculations involve uncertainty because they require management to make assumptions and to apply judgment to estimate future cash flows and asset fair values, including estimating useful lives of the assets and selecting the discount rate that reflects the risk inherent in future cash flows. If actual results are not consistent with our estimates and assumptions used in estimating future cash flows and asset fair values, we may be exposed to losses that could be material.

Even though sales increased and operating income was positive during the quarter ended November 2, 2019, the Company performed an impairment analysis during the period in order to ensure that no significant impairments existed of leasehold improvements, store furniture and fixtures, and right-of-use operating lease assets at certain under-performing stores. As a result of this analysis, no significant impairments were identified for the third quarter of 2019. During the second quarter of 2019, the Company recorded $0.3 million long-lived asset impairment charge. The Company recorded $3.0 million long-lived asset impairment during the thirteen and thirty-nine week periods ended November 3, 2018.

Sale-Leaseback

On April 27, 2018, the Company completed the sale of and entered into an agreement to leaseback its corporate headquarters facility, which includes its distribution center, in Plymouth, Minnesota. The agreement provided for the sale of the facility for a purchase price of $13.7 million and the subsequent leaseback of the facility for a 15-year period. The lease is classified as an operating lease. As a result of this transaction, the Company recorded a deferred gain of $7.7 million. During Fiscal 2018, the Company recognized the deferred gain on a straight-line basis over the term of the lease. At the beginning of Fiscal 2019, the remaining $7.3 million of the deferred gain was recorded as an adjustment to retained earnings with the adoption of ASC 842, Leases.

As part of the transaction, the Company deposited $1.7 million in escrow for certain repairs to the building. As of November 2, 2019, and February 2, 2019, $0.5 million and $0.8 million, respectively, remained in escrow for repairs to the building. This amount is considered to be restricted cash and is included within cash and cash equivalents on the Condensed Consolidated Balance Sheet.