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Segment Reporting | 9 Months Ended
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Oct. 27, 2017
Segment Reporting [Abstract] |
Segment Reporting | SEGMENT REPORTING The Company is a leading multi-channel retailer of clothing, accessories and footwear, as well as home products, and has two operating segments: Direct and Retail. Product revenues are divided by product categories: Apparel and Non-apparel. The Non-apparel revenues include accessories, footwear, and home goods. Services and other revenue includes embroidery, monogramming, gift wrapping, shipping and other services. Net revenue is aggregated by product category in the following table:
|  | 13 Weeks Ended |  | 39 Weeks Ended
(in thousands) |  | October 27, 2017 |  | October 28, 2016 |  | October 27, 2017 |  | October 28, 2016
Net revenue: |  |  |  |  |  |  |  |
Apparel |  | $ | 272,175 |  |  | $ | 252,082 |  |  | $ | 759,460 |  |  | $ | 725,062 |
Non-apparel |  | 38,559 |  |  | 37,854 |  |  | 93,067 |  |  | 95,021 |
Service and other |  | 14,755 |  |  | 21,540 |  |  | 43,517 |  |  | 56,836 |
Total net revenue |  | $ | 325,489 |  |  | $ | 311,476 |  |  | $ | 896,044 |  |  | $ | 876,919 |
The Company identifies reportable segments according to how business activities are managed and evaluated. Each of the Company’s operating segments are reportable segments and are strategic business units that offer similar products and services but are sold either directly from its warehouses (Direct) or through its retail stores (Retail). Adjusted EBITDA is the primary measure used to make decisions on allocating resources and assessing performance of each operating segment. Adjusted EBITDA is computed as Income before taxes appearing on the Condensed Consolidated Statements of Operations net of interest expense, depreciation and amortization and other significant items that while periodically affecting the Company's results, may vary significantly from period to period and may have a disproportionate effect in a given period, which may affect comparability of results. Reportable segment assets are those directly used in or clearly allocable to an operating segment’s operations. Depreciation, amortization, and property and equipment expenditures are recognized in each respective segment. There were no material transactions between reporting segments for any periods presented.
• | The Direct segment sells products through the Company’s e-commerce websites and direct mail catalogs. Operating costs consist primarily of direct marketing costs (catalog and e-commerce marketing costs); order processing and shipping costs; direct labor and benefits costs and facility costs. Assets primarily include goodwill and trade name intangible assets, inventory, accounts receivable, prepaid expenses (deferred catalog costs), technology infrastructure, and property and equipment.
• | The Retail segment sells products and services through dedicated Lands’ End Shops at Sears across the United States and the Company’s stand-alone Lands’ End stores. Operating costs consist primarily of labor and benefits costs; rent, CAM and occupancy costs; distribution costs; and in-store marketing costs. Assets primarily include retail inventory, fixtures and leasehold improvements.
• | Corporate overhead and other expenses include unallocated shared-service costs, which primarily consist of employee services and financial services, legal and corporate expenses. These expenses include labor and benefits costs, corporate headquarters occupancy costs and other administrative expenses. Assets include corporate headquarters and facilities, corporate cash and cash equivalents and deferred income taxes.
Financial information by segment is presented in the following tables. SUMMARY OF SEGMENT DATA
|  | 13 Weeks Ended |  | 39 Weeks Ended
(in thousands) |  | October 27, 2017 |  | October 28, 2016 |  | October 27, 2017 |  | October 28, 2016
Net revenue: |  |  |  |  |  |  |  |
Direct |  | $ | 290,326 |  |  | $ | 272,080 |  |  | $ | 778,554 |  |  | $ | 750,660 |
Retail |  | 35,104 |  |  | 39,340 |  |  | 117,317 |  |  | 126,077 |
Corporate / other |  | 59 |  |  | 56 |  |  | 173 |  |  | 182 |
Total net revenue |  | $ | 325,489 |  |  | $ | 311,476 |  |  | $ | 896,044 |  |  | $ | 876,919 |
|  | 13 Weeks Ended |  | 39 Weeks Ended
(in thousands) |  | October 27, 2017 |  | October 28, 2016 |  | October 27, 2017 |  | October 28, 2016
Adjusted EBITDA: |  |  |  |  |  |  |  |
Direct |  | $ | 29,100 |  |  | $ | 13,904 |  |  | $ | 54,018 |  |  | $ | 41,516 |
Retail |  | (6,003 | ) |  | (3,583 | ) |  | (7,405 | ) |  | (7,063 | )
Corporate / other |  | (10,245 | ) |  | (9,035 | ) |  | (25,635 | ) |  | (25,271 | )
Total adjusted EBITDA |  | $ | 12,852 |  |  | $ | 1,286 |  |  | $ | 20,978 |  |  | $ | 9,182 |
Product recall |  | — |  |  | (212 | ) |  | — |  |  | (212 | )
Loss on disposal of property and equipment |  | 89 |  |  | 126 |  |  | 151 |  |  | 172 |
Transfer of corporate functions |  | 475 |  |  | — |  |  | 2,401 |  |  | — |
Depreciation and amortization |  | 6,347 |  |  | 4,795 |  |  | 19,031 |  |  | 13,419 |
Operating income (loss) |  | $ | 5,941 |  |  | $ | (3,423 | ) |  | $ | (605 | ) |  | $ | (4,197 | )
Interest expense |  | 6,350 |  |  | 6,149 |  |  | 18,642 |  |  | 18,493 |
Other income, net |  | (576 | ) |  | (432 | ) |  | (1,812 | ) |  | (1,413 | )
Income tax expense (benefit) |  | 5 |  |  | (1,918 | ) |  | (5,878 | ) |  | (6,316 | )
NET INCOME (LOSS) |  | $ | 162 |  |  | $ | (7,222 | ) |  | $ | (11,557 | ) |  | $ | (14,961 | )
|  | 13 Weeks Ended |  | 39 Weeks Ended
(in thousands) |  | October 27, 2017 |  | October 28, 2016 |  | October 27, 2017 |  | October 28, 2016
Depreciation and amortization: |  |  |  |  |  |  |  |
Direct |  | $ | 5,747 |  |  | $ | 4,027 |  |  | $ | 17,015 |  |  | $ | 11,097 |
Retail |  | 285 |  |  | 408 |  |  | 992 |  |  | 1,233 |
Corporate / other |  | 315 |  |  | 360 |  |  | 1,024 |  |  | 1,089 |
Total depreciation and amortization |  | $ | 6,347 |  |  | $ | 4,795 |  |  | $ | 19,031 |  |  | $ | 13,419 |
(in thousands) |  | October 27, 2017 |  | October 28, 2016 |  | January 27, 2017
Total Assets: |  |  |  |  |  |
Direct |  | $ | 934,508 |  |  | $ | 1,073,975 |  |  | $ | 805,201 |
Retail |  | 67,965 |  |  | 78,373 |  |  | 69,792 |
Corporate / other |  | 118,007 |  |  | 160,830 |  |  | 239,398 |
Total assets |  | $ | 1,120,480 |  |  | $ | 1,313,178 |  |  | $ | 1,114,391 |
|  | 13 Weeks Ended |  | 39 Weeks Ended
(in thousands) |  | October 27, 2017 |  | October 28, 2016 |  | October 27, 2017 |  | October 28, 2016
Capital expenditures: |  |  |  |  |  |  |  |
Direct |  | $ | 8,791 |  |  | $ | 8,041 |  |  | $ | 29,004 |  |  | $ | 25,804 |
Retail |  | — |  |  | 25 |  |  | 10 |  |  | 279 |
Corporate / other |  | 129 |  |  | — |  |  | 129 |  |  | — |
Total capital expenditures |  | $ | 8,920 |  |  | $ | 8,066 |  |  | $ | 29,143 |  |  | $ | 26,083 |

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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