The Company determines if a contract contains a lease at inception. The Company has operating leases for real estate (primarily retail stores, storage and office spaces) some of which have initial terms of 10 years, and in many instances can be extended for an additional term, while the Company's more recent leases are subject to shorter terms as a result of the implementation of the strategy to pursue shorter lease terms. The Company will not include renewal options in the underlying lease term unless the Company is reasonably certain to exercise the renewal option. Substantially all of the Company's leases require a fixed annual rent, and most require the payment of additional rent if store sales exceed a negotiated amount. These percentage rent expenses are considered as variable lease costs and are recognized in the consolidated financial statements when incurred. In addition, the Company's real estate leases may also require additional payments for real estate taxes and other occupancy-related costs which it considers as non-lease components.

ROU assets and operating lease liabilities are recognized based upon the present value of the future lease payments over the lease term. As the Company's leases do not provide an implicit borrowing rate, the Company uses an estimated incremental borrowing rate based upon a combination of market-based factors, such as market quoted forward yield curves and company specific factors, such as the Company's credit rating, lease size and duration to calculate the present value.

Total lease cost is included in SG&A expense in the accompanying Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) and is recorded net of immaterial sublease income. Some leases have a non-cancelable lease term of less than one year and therefore, the Company has elected to exclude these short-term leases from its ROU asset and lease liabilities. Short term lease costs were immaterial for the three months ended April 29, 2023 and April 30, 2022. The Company's lease cost is comprised of the following:


	Three Months Ended
	April 29,		April 30,
(in thousands)	2023		2022
Operating lease cost	$	3,797	$	6,320
Variable operating lease cost		28		234
Total lease cost	$	3,825	$	6,554

The operating lease cost for the three months ended April 29, 2023, included a benefit of $779 for the correction of an error recorded within SG&A expenses related to a lease modification that occurred during fiscal 2022 for a Vince retail store, leading to an overstatement of the ROU assets and an overstatement of the lease obligations in fiscal 2022.

As of April 29, 2023, the future maturity of lease liabilities are as follows:


	April 29,
(in thousands)	2023
Fiscal 2023	$	18,912
Fiscal 2024		21,990
Fiscal 2025		15,349
Fiscal 2026		11,698
Fiscal 2027		8,985
Thereafter		28,534
Total lease payments		105,468
Less: Imputed interest		(19,070	)
Total operating lease liabilities	$	86,398

The operating lease payments do not include any renewal options as such leases are not reasonably certain of being renewed as of April 29, 2023, and do not include $12,427 of legally binding minimum lease payments for leases signed but not yet commenced.