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Leases | 3 Months Ended
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Mar. 28, 2021
Leases [Abstract] |
Leases | (6) Leases We determine if a contract contains a lease at inception. We lease retail shops, warehouse and office space under operating leases. For leases with renewal periods at our option, we determine the expected lease period based on whether the renewal of any options are reasonably assured at the inception of the lease. Operating lease assets and liabilities are recognized at the lease commencement date. Operating lease liabilities represent the present value of lease payments not yet paid. Operating lease assets represent our right to use an underlying asset and are based upon the operating lease liabilities adjusted for prepayments or accrued lease payments, initial direct costs, lease incentives, and impairment of operating lease assets. To determine the present value of lease payments not yet paid, we estimate incremental secured borrowing rates corresponding to the maturities of the leases. We estimate this rate based on prevailing financial market conditions, comparable company and credit analysis, and management judgment. We recognize expense for these leases on a straight-line basis over the lease term. Additionally, tenant incentives used to fund leasehold improvements are recognized when earned and reduce our right-of-use asset related to the lease. These are amortized through the right-of-use asset as reductions of expense over the lease term. Beginning in fiscal year 2020, as a result of COVID-19, we held discussions with landlords regarding restructuring of our leases in light of various contractual and legal defenses and have subsequently entered into a total of 339 amendments with our respective landlords as of March 28, 2021. Under these amendments, certain rent payments have been abated, deferred or modified without penalty for various periods, generally covering two to four months of rent payments. During the 13 weeks ended March 28, 2021, we received concessions from certain landlords in the form of rent deferrals and abatements which were not substantial, and we have elected to not account for these rent concessions as lease modifications. During the 13 weeks ended March 28, 2021, we terminated 2 leases. We incurred $0.2 million in lease termination fees related to these leases for the 13 weeks ended March 28, 2021. Upon termination of leases during the 13 weeks ended March 28, 2021, we derecognized ROU assets of $0.6 million and lease liabilities of $0.7 million that resulted in a net gain of $0.1 million that is recorded in impairment, loss on disposal of property and equipment and shop closures. During the first quarter of 2021, we amended the lease for our corporate Support Center office in Chicago to relocate to a different office space within the same building. We accounted for this amendment as a lease modification which resulted in a decrease in the related right-of-use asset and lease liability of $2.7 million. Operating lease term and discount rate were as follows:
|  | March 28, |  |  | March 29, |
|  | 2021 |  |  | 2020 |
Weighted average remaining lease term (years) |  |  | 7.65 |  |  |  | 8.33 |
Weighted average discount rate |  |  | 7.83 | % |  |  | 7.90 | %
Certain of our operating lease agreements include variable payments that are passed through by the landlord, such as common area maintenance and real estate taxes, as well as variable payments based on percentage rent for certain of our shops. Pass-through charges and payments based on percentage rent are included within variable lease cost. The components of lease cost were as follows:
|  |  | 13 weeks ended |
|  |  | March 28, |  | March 29, |
| Classification |  | 2021 |  | 2020 |
Operating lease cost | Occupancy and General and administrative expenses |  |  | 10,411 |  |  | 11,770 |
Variable lease cost | Occupancy |  |  | 3,239 |  |  | 3,322 |
Total lease cost |  |  | $ | 13,650 |  | $ | 15,092 |
Supplemental disclosures of cash flow information related to leases were as follows:
|  | 13 weeks ended |
|  | March 28, |  | March 29, |
|  | 2021 |  | 2020 |
Operating cash flows rent paid for operating lease liabilities |  |  | 12,914 |  |  | 11,979 |
Operating right-of-use assets obtained in exchange for new operating lease liabilities |  |  | 1,718 |  |  | 5,534 |
Reduction in operating right-of-use assets due to lease terminations and modifications |  |  | 3,294 |  |  | 1,439 |
As of March 28, 2021, we had no real estate leases entered into that had not yet commenced. Maturities of lease liabilities were as follows as of March 28, 2021:
|  | Operating Leases |
Remainder of 2021 |  |  | 36,613 |
2022 |  |  | 39,353 |
2023 |  |  | 37,229 |
2024 |  |  | 34,706 |
2025 |  |  | 31,823 |
2026 |  |  | 28,224 |
Thereafter |  |  | 82,198 |
Total lease payments |  |  | 290,146 |
Less: imputed interest |  |  | (76,343 | )
Present value of lease liabilities |  | $ | 213,803 |

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- Definition The entire disclosure for operating leases of lessee. Includes, but is not limited to, description of operating lease and maturity analysis of operating lease liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 842 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=77888251 + Details
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