Property, Equipment and Improvements, Net

9 Months Ended

Oct. 31, 2020

Property, Plant and Equipment [Abstract]

Property, Equipment and Improvements, Net

Property, Equipment and Improvements, Net

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

Description	October 31, 2020		February 1, 2020
Store leasehold improvements	$	50,317	$	49,894
Store furniture and fixtures	69,724		69,735
Corporate office and distribution center furniture, fixtures and equipment	6,467		6,463
Computer and point of sale hardware and software	33,292		32,952
Construction in progress	119		275
Total property, equipment and improvements, gross	159,919		159,319
Less accumulated depreciation and amortization	(139,909)		(134,367)
Total property, equipment and improvements, net	$	20,010	$	24,952

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 or market value, as appropriate. 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.

Due to continued operating losses and sales declines resulting from the temporary closure of all stores as of March 19, 2020 due to the COVID-19 pandemic, the Company performed an impairment analysis for the quarter ended October 31, 2020. In performing the analysis, the Company estimated future sales, gross margins and store operating expenses, taking into account projected sales and other activity ramping up to more normal levels. Leasehold improvements, store furniture and fixtures, and right-of-use operating lease assets at certain under-performing stores, and stores identified for closure were analyzed for impairment. The Company recorded $0.2 million and $0.4 million in store asset impairment, respectively, for the thirteen and thirty-nine week periods ended October 31, 2020. The Company recorded zero and $0.3 million in store asset impairment during the thirteen and thirty-nine week periods ended November 2, 2019.