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Leases

12 Months Ended

Feb. 01, 2025

13. Leases

The Company leases retail stores, office space and equipment under operating leases. As of February 1, 2025, right-of-use operating lease assets, which are recorded in operating lease assets in the consolidated balance sheets, totaled $33.6 million, and operating lease liabilities, which are recorded in current portion of operating lease liabilities and operating lease liabilities, totaled $33.8 million.

In determining our operating lease assets and operating lease liabilities, we apply an incremental borrowing rate to the minimum lease payments within each lease agreement. GAAP requires the use of the rate implicit in the lease whenever that rate is readily determinable; furthermore, if the implicit rate is not readily determinable, a lessee may use its incremental borrowing rate. The incremental borrowing rate is the rate of interest that a lessee would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. To estimate our specific incremental borrowing rates that align with applicable lease terms, we utilized a model consistent with the credit quality of our outstanding debt instruments.

Renewal options of five to 10 years exist on the majority of leased properties. The Company has sole discretion in exercising the lease renewal options. We do not recognize operating lease assets or operating lease liabilities at lease inception for renewal periods unless it has been determined that we are reasonably certain of exercising the renewal options. The depreciable life of operating lease assets and related leasehold improvements is limited by the expected lease term.

Contingent rentals on certain leases are based on a percentage of annual sales in excess of specified amounts. Other contingent rentals are based entirely on a percentage of sales. The Company’s operating lease agreements do not contain any material residual value guarantees or material restrictive covenants.

There were no finance lease obligations outstanding during fiscal 2024, 2023 and 2022. The following table summarizes the Company’s operating leases:


		Operating Leases
(in thousands of dollars)	Classification - Consolidated Balance Sheets	February 1, 2025		February 3, 2024
Assets
Total lease assets	Operating lease assets	$	33,562	$	42,681

Liabilities
Current lease liabilities	Current portion of operating lease liabilities	$	11,411	$	11,252
Noncurrent lease liabilities	Operating lease liabilities		22,345		31,728
Total lease liabilities		$	33,756	$	42,980

Lease Cost


		Operating Lease Cost ^(a)
(in thousands of dollars)	Classification - Consolidated Statements of Operations	Fiscal 2024		Fiscal 2023		Fiscal 2022
Net lease cost	Rentals	$	21,419	$	21,569	$	23,169

(a)	Includes short term lease costs of $3.9 million and $4.4 million and variable lease costs, including contingent rent, of $3.3 million and $3.7 million for fiscal 2024 and 2023, respectively.

Maturities of Lease Liabilities


	Total
(in thousands of dollars)	Operating
Fiscal Year	Leases
2025	$	13,191
2026		10,372
2027		5,044
2028		4,406
2029		1,379
After 2029		4,876
Total minimum lease payments		39,268
Less amount representing interest		(5,512)
Present value of lease liabilities	$	33,756

Lease Term and Discount Rate


	February 1, 2025
Weighted-average remaining lease term
Operating leases	4.6
Weighted-average discount rate
Operating leases	6.6	%

Other Information


(in thousands of dollars)	Fiscal 2024
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	14,598

Lease assets obtained in exchange for new operating lease liabilities	$	2,852

12.