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Discontinued Operations | 9 Months Ended
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Nov. 02, 2025
Discontinued Operations and Disposal Groups [Abstract] |
Disposal Groups, Including Discontinued Operations, Disclosure [Text Block] | 3. Discontinued Operations During the third quarter of fiscal 2026, we determined that the Home Meridian segment no longer aligned with our long-term strategy to streamline our portfolio and enhance profitability by focusing on brands that generate consistent earnings. As a result, we initiated a process to sell two brands in the segment. On December 1, 2025, we entered into an Asset Purchase Agreement (the “Asset Purchase Agreement”) with a buyer to sell the Company’s Pulaski Furniture (“PFC”) and Samuel Lawrence (“SLF”) casegoods brands, including specified assets and liabilities associated with those brands. We will retain the Samuel Lawrence brand in connection with the operation of its hospitality business. We believe this transaction represents a single disposal plan that constitutes a strategic shift expected to have a material effect on our operations and financial results. Accordingly, the PFC and SLF businesses qualify for presentation as assets and liabilities held for sale and as discontinued operations in accordance with U.S. GAAP. As such, the financial results of the PFC and SLF businesses are reflected in our unaudited condensed consolidated statements of operations as discontinued operations for all periods presented. Current and non-current assets and liabilities of the discontinued operations are reflected in our unaudited condensed consolidated balance sheets for both periods presented. Assets and liabilities classified as held for sale are required to be recorded at the lower of carrying value or fair value less costs to sell. As of November 2, 2025, we determined that the fair value of the PFC and SLF businesses, including costs to sell was lower than its carrying value and we recorded $6.5 million valuation allowance against the assets held for sale. The $6.5 million non-cash valuation allowance was recorded within “Loss from classification to held for sale” in the summarized statements of operations information of discontinued operations. The following table represents summarized balance sheet information of carrying amounts of major classes of assets and liabilities included as part of discontinued operations held for sale as of November 2, 2025 and February 2, 2025:
|  | November 2, |  |  | February 2, |
|  | 2025 |  |  | 2025 |
Assets: |  |  |  |  |  |
Trade accounts receivable |  | $ | 6,482 |  |  | $ | 13,575 |
Less allowances |  |  | (527 | ) |  |  | (865 | )
Inventories |  |  | 2,606 |  |  |  | 4,528 |
Other current assets |  |  | 233 |  |  |  | 275 |
Property, plant and equipment, net |  |  | 790 |  |  |  | 852 |
Intangible assets |  |  | 4,796 |  |  |  | 4,106 |
Operating lease right-of-use assets |  |  | 5,465 |  |  |  | 6,311 |
Valuation allowance to adjust assets to estimated fair value |  | $ | (6,544 | ) |  |  | 0 |
Total assets held for sale |  | $ | 13,301 |  |  | $ | 28,782 |
Liabilities: |  |  |  |  |  |  |  |
Accounts payable |  |  | 3,014 |  |  |  | 3,625 |
Accrued expenses and other current liabilities |  |  | 109 |  |  |  |  |
Operating lease liabilities |  | $ | 6,054 |  |  | $ | 6,933 |
Total liabilities of discontinued operations |  | $ | 9,177 |  |  | $ | 10,558 |
The following table represents summarized statements of operations information of carrying amounts of major classes of line items constituting pretax loss of discontinued operations included as part of discontinued operations held for sale as of November 2, 2025 and October 27, 2024:
|  | For the |
|  | Thirteen Weeks Ended |  |  | Thirty-Nine Weeks Ended |
|  | November 2, |  |  | October 27, |  |  | November 2, |  |  | October 27, |
|  | 2025 |  |  | 2024 |  |  | 2025 |  |  | 2024 |
Net sales |  | $ | 10,341 |  |  | $ | 21,683 |  |  | $ | 37,379 |  |  | $ | 59,877 |
Cost of sales |  |  | 12,081 |  |  |  | 18,122 |  |  |  | 37,929 |  |  |  | 51,240 |
Gross profit |  |  | (1,740 | ) |  |  | 3,561 |  |  |  | (550 | ) |  |  | 8,637 |
Selling and administrative expenses |  |  | 4,042 |  |  |  | 4,316 |  |  |  | 11,597 |  |  |  | 12,623 |
Trade name impairment charges |  |  | - |  |  |  | 1,172 |  |  |  | - |  |  |  | 1,175 |
Intangible asset amortization |  |  | 248 |  |  |  | 229 |  |  |  | 745 |  |  |  | 688 |
Other income items that are not major |  |  | (665 | ) |  |  | - |  |  |  | (665 | ) |  |  | - |
Pretax loss of discontinued operations related to major classes |  |  | (5,365 | ) |  |  | (2,156 | ) |  |  | (12,227 | ) |  |  | (5,849 | )
Pretax loss from classification to held for sale |  |  | 6,544 |  |  |  |  |  |  |  | 6,544 |  |  |  |  |
(Loss) / income from discontinued operations before income taxes |  |  | (11,909 | ) |  |  | (2,156 | ) |  |  | (18,771 | ) |  |  | (5,849 | )
Income tax (benefit) / expense |  |  | (3,269 | ) |  |  | (1,606 | ) |  |  | (4,916 | ) |  |  | (1,550 | )
Net income / (loss) from discontinued operations |  |  | (8,640 | ) |  |  | (550 | ) |  |  | (13,855 | ) |  |  | (4,299 | )
The significant components included in our Consolidated Statements of Cash Flows for the discontinued operations are as follows:
|  | For the Thirty-Nine Weeks Ended |
|  | November 2, |  |  | October 27, |
|  | 2025 |  |  | 2024 |
Operating Activities: |  |  |  |  |  |
Loss from discontinued operations, net of tax |  | $ | (13,855 | ) |  | $ | (4,299 | )
Depreciation and amortization |  |  | 1,123 |  |  |  | 1,153 |
Tradename impairment |  |  | - |  |  |  | 1,175 |
Loss from classification on assets held-for-sale |  |  | 6,544 |  |  |  | - |
Loss / (gain) on disposal of assets |  |  | 2,422 |  |  |  | - |
Changes in assets and liabilities: |  |  |  |  |  |  |  |
Trade accounts receivable, net |  |  | 6,756 |  |  |  | 678 |
Inventories |  |  | 1,921 |  |  |  | 3,110 |
Trade accounts payable |  |  | (611 | ) |  |  | 141 |
Other assets and liabilities |  |  | (3,579 | ) |  |  | (2,423 | )
Cash provided by / (used in) operating activities from discontinued operations |  |  | 722 |  |  |  | (465 | )
Investing Activities: |  |  |  |  |  |  |  |
Purchase of properties and equipment |  |  | (185 | ) |  |  | (279 | )
Cash used in investing activities from discontinued operations |  | $ | (185 | ) |  | $ | (279 | )

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- Definition The entire disclosure related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 205 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/205-20/tableOfContent Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 360 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/360/tableOfContent + Details
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