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Discontinued Operations

9 Months Ended

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	)