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Note 10 - Commitments and Contingencies
 12 Months Ended
Jan. 30, 2021
Notes to Financial Statements  
Commitments and Contingencies Disclosure [Text Block]

(10)

Commitments and Contingencies

 

 

(a)

Operating Leases 

 

The Company leases its retail stores and corporate offices under agreements which expire at various dates through 2031. See Note 4 — Leases for information related to our lease commitments.

 

 

(b)

Litigation

 

In the normal course of business, the Company is subject to legal proceedings, government inquiries and claims, and other commercial disputes. If one or more of these matters has an unfavorable resolution, it is possible that the results of operations, liquidity or financial position of the Company could be materially affected in any particular period.  The Company accrues a liability for these types of contingencies when it believes that it is both probable that a liability has been incurred and that it can reasonably estimate the amount of the loss. Gain contingencies are recorded when the underlying uncertainty has been settled.

 

Assessments made by the U.K. customs authority in 2012 were appealed by the Company, which has paid the disputed duty, strictly under protest, pending the outcome of the continuing dispute, and this is included in receivables, net in the DTC segment. The U.K. customs authority contested the Company's appeal. Rulings by the trial court in November 2019 and upper tribunal in March 2021 held that duty was due on some, but not all, of the products at issue. The period during which the Company or the U.K. customs authority may seek leave to appeal the Upper Tribunal ruling has not yet passed. The Company maintains a provision against the related receivable, based on a current evaluation of collectability, using the latest facts available in the dispute. As of January 30, 2021, the Company had a gross receivable balance of $4.6 million and a reserve of $3.5 million, leaving a net receivable of $1.1 million. The Company believes that the outcome of this dispute will not have a material adverse impact on the results of operations, liquidity or financial position of the Company.