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Related Party | 3 Months Ended
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May 03, 2019
Related Party Transactions [Abstract] |
Related Party | RELATED PARTY TRANSACTIONS According to statements on Schedule 13D filed with the SEC by ESL, ESL beneficially owns significant portions of both the Company's and Sears Holdings Corporation's outstanding shares of common stock. Therefore, Sears Holdings Corporation, the Company's former parent company, is considered a related party. On February 11, 2019 Transform Holdco acquired from Sears Holdings substantially all of the go-forward retail footprint and other assets and component businesses of Sears Holdings as a going concern. The Company believes that ESL holds a significant portion of the membership interest of Transform Holdco and therefore considers that entity to be a related party as well. In connection with and subsequent to the Separation, the Company entered into various agreements with Sears Holdings which, among other things, (i) govern specified aspects of the Company's relationship following the Separation, especially with regards to the Lands’ End Shops at Sears, and (ii) establish terms pursuant to which subsidiaries of Sears Holdings Corporation are providing services to the Company. Some of these agreements have been assumed by and assigned to Transform Holdco in connection with the proceedings related to the Sears Filing (as defined below). The components of the transactions between the Company and Sears Holdings, which exclude pass-through payments to or from third parties, are as follows: Lands’ End Shops at Sears Related party costs charged by Sears Holdings or Transform Holdco to the Company related to Lands’ End Shops at Sears are as follows:
|  | 13 Weeks Ended
(in thousands, except for number of stores) |  | May 3, 2019 |  | May 4, 2018
Rent, CAM and occupancy costs |  | $ | 1,106 |  |  | $ | 4,494 |
Retail services, store labor |  | 988 |  |  | 4,129 |
Financial services and payment processing |  | 68 |  |  | 389 |
Supply chain costs |  | 78 |  |  | 130 |
Total expenses |  | $ | 2,240 |  |  | $ | 9,142 |
Number of Lands’ End Shops at Sears at period end |  | 39 |  |  | 159 |
General Corporate Services Related party costs charged by Sears Holdings or Transform Holdco to the Company for general corporate services are as follows:
|  | 13 Weeks Ended
(in thousands) |  | May 3, 2019 |  | May 4, 2018
Sourcing |  | $ | 1,595 |  |  | $ | 1,817 |
Shop Your Way |  | 35 |  |  | 167 |
Shared services |  | 47 |  |  | 48 |
Total expenses |  | $ | 1,677 |  |  | $ | 2,032 |
Use of Intellectual Property or Services Related party revenue and costs charged by the Company to and from Sears Holdings or Transform Holdco for the use of intellectual property or services is as follows:
|  | 13 Weeks Ended
(in thousands) |  | May 3, 2019 |  | May 4, 2018
Lands' End business outfitters revenue |  | $ | 2 |  |  | $ | 325 |
Credit card revenue |  | 75 |  |  | 153 |
Royalty income |  | 23 |  |  | 27 |
Gift card expense |  | (2 | ) |  | (5 | )
Total income |  | $ | 98 |  |  | $ | 500 |
Additional Balance Sheet Information On October 15, 2018, Sears Holdings Corporation and certain of its subsidiaries filed voluntary petitions in the United States Bankruptcy Court for the Southern District of New York seeking relief under Chapter 11 of Title 11 of the United States Code (collectively the “Sears Filing"). Following the Sears Filing, the Company began netting payables due to Sears Holdings or Transform Holdco, as applicable, against receivables due from Sears Holdings if and as allowed under its contracts. As a result, receivables and payables have been netted, and are presented as a net receivable balance in Accounts receivable, net in the Condensed Consolidated Balance Sheets. At May 3, 2019, the Company recorded a $0.2 million net receivable balance from Sears Holdings or Transform Holdco in Accounts receivable, net and $0 in Accounts payable in the Condensed Consolidated Balance Sheets. On May 4, 2018 the Company recorded $2.2 million in Accounts receivable net, to reflect amounts due from Sears Holdings and $1.9 million in Accounts payable to reflect amounts due to Sears Holdings in the Condensed Consolidated Balance Sheets. At February 1, 2019, the Company recorded a $0.1 million net receivable balance from Sears Holdings in Accounts receivable, net and $0 in Accounts payable in the Consolidated Balance Sheets. In the Third Quarter 2018, the Company recorded a non-cash charge of $2.6 million in Other expense, net, in its Condensed Statement of Operations to reflect a reserve relating to pre-Separation UTBs (including penalties and interest) for which Sears Holdings Corporation indemnified the Company under a Tax Sharing Agreement entered into in connection with the Separation, the recovery of which had become uncertain as a result of the Sears Filing. Sears Holdings rejected the Tax Sharing Agreement, per an order approved on April 4, 2019. At May 3, 2019 and February 1, 2019 the indemnification receivable was $0, as a result of continuing substantial doubt regarding the collectability of this contingent asset.

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- Definition The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 850 -URI http://asc.fasb.org/topic&trid=2122745 + Details
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