Note 5 - Inventories

9 Months Ended

Aug. 25, 2012

Inventory Disclosure [Text Block]

5. Inventories

Inventories are valued at the lower of cost or market. Cost is determined for domestic furniture inventories using the last-in, first-out (LIFO) method. The costs for imported inventories are determined using the first-in, first-out (FIFO) method.

Inventories were comprised of the following:

	August 25, 2012			November 26, 2011
Wholesale finished goods	$	31,261		$	26,873
Work in process		328			222
Raw materials and supplies		8,149			5,660
Retail merchandise		23,361			20,504
Total inventories on first-in, first-out method		63,099			53,259
LIFO adjustment		(7,449	)		(6,955	)
Reserve for excess and obsolete inventory		(1,106	)		(1,175	)
	$	54,544		$	45,129

We estimate an inventory reserve for excess quantities and obsolete items based on specific identification and historical write-offs, taking into account future demand, market conditions and the respective valuations at LIFO.  The need for these reserves is primarily driven by the normal product life cycle.  As products mature and sales volumes decline, we rationalize our product offerings to respond to consumer tastes and keep our product lines fresh.  If actual demand or market conditions in the future are less favorable than those estimated, additional inventory write-downs may be required. In determining reserves, we calculate separate reserves on our wholesale and retail inventories.  Our wholesale inventories tend to carry the majority of the reserves for excess quantities and obsolete inventory due to the nature of our distribution model. These wholesale reserves primarily represent design and/or style obsolescence. Typically, product is not shipped to our retail warehouses until a consumer has ordered and paid a deposit for the product. We do not typically hold retail inventory for stock purposes. Consequently, floor sample inventory and inventory for delivery to customers account for the majority of our inventory at retail.  Retail reserves are based on accessory and clearance floor sample inventory in our stores and any inventory that is not associated with a specific customer order in our retail warehouses.

Activity in the reserves for excess quantities and obsolete inventory by segment are as follows:

	Wholesale Segment			Retail Segment			Total
Balance at November 26, 2011	$	987		$	188		$	1,175
Additions charged to expense		866			251			1,117
Write-offs		(1,011	)		(175	)		(1,186	)
Balance at August 25, 2012	$	842		$	264		$	1,106

Our estimates and assumptions have been reasonably accurate in the past. We have not made any significant changes to our methodology for determining inventory reserves in 2012 and do not anticipate that our methodology is likely to change in the future. A plus or minus 10% change in our inventory reserves would not have been material to our financial statements for the periods presented.