DISCONTINUED OPERATIONS

In the fourth quarter of fiscal 2017, as a result of continued operating losses, the Company closed all of its stores and transferred its license to operate its online store and international operations to its equity method investment.

The results of the Company's retail operations have been presented as discontinued operations in the accompanying consolidated statements of operations and comprehensive income (loss) for all periods presented and are as follows:



	Three Months Ended						Six Months Ended
	December 30, 2017			December 31, 2016			December 30, 2017			December 31, 2016
	(in thousands)						(in thousands)
Net sales	$	—		$	101,931		$	—		$	189,169
Cost of sales, including production and occupancy	—			(66,903		)	(10		)	(126,647		)
Gross margin	—			35,028			(10		)	62,522
Selling, general and administrative expenses	(320		)	(30,524		)	(1,886		)	(56,780		)
Gain on sale of assets	—			—			6,666			—
Income (loss) from discontinued operations, before income tax provision	(320		)	4,504			4,770			5,742
Tax provision	130			(6		)	(18		)	(23		)
Income (loss) from discontinued operations, net of tax provision	$	(190	)	$	4,498		$	4,752		$	5,719

Costs associated with these exit activities are as follows:



	Lease Termination			Severance			Total
	(in thousands)
Balance as of July 1, 2017	$	2,024		$	1,772		$	3,796
Costs incurred in fiscal 2018	—			1,143			1,143
Cash payments made	(654		)	(1,354		)	(2,008		)
Balance as of December 30, 2017	$	1,370		$	1,561		$	2,931

The Company anticipates completing lease termination payments by July 1, 2019 and severance payments before December 31, 2018.

ASSETS OF DISCONTINUED OPERATIONS HELD FOR SALE

Assets of discontinued operations held for sale consist of the following, which are stated at the lower of cost or market:



Description	December 30, 2017		July 1, 2017
	(in thousands)
Distribution Center	$	—	$	15,622
LA Studio	8,613		8,613
Condominiums	—		1,561
Total	$	8,613	$	25,796

The Company sold its distribution center and condominiums for net proceeds totaling $23.7 million during the first quarter of fiscal 2018 and recorded a gain on sale totaling $6.7 million, which is included in income from discontinued operations, net of tax.