10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MAY 5, 2018
OR
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT FOR THE TRANSITION PERIOD FROM _________ TO _________

COMMISSION FILE NUMBER: 0-14818

TRANS WORLD ENTERTAINMENT CORPORATION

(Exact name of registrant as specified in its charter)

New York	14-1541629
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer
	Identification Number)

38 Corporate Circle

Albany, New York 12203

(Address of principal executive offices, including zip code)

(518) 452-1242

(Registrant’s telephone number, including area code)

Indicate by a check mark whether the Registrant (1) has filed all reports required to be filed by Sections 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definition of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o          Accelerated filer o           Non-accelerated filer o

Smaller reporting company x

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 450 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-1 of this chapter). 

Emerging growth company o

Indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Common Stock, $.01 par value,

36,212,570 shares outstanding as of May 5, 2018

TRANS WORLD ENTERTAINMENT CORPORATION AND SUBSIDIARIES

QUARTERLY REPORT ON FORM 10-Q

INDEX TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

	Form 10-Q
		Page No.
PART I. FINANCIAL INFORMATION
Item 1 – Interim Condensed Consolidated Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets at May 5, 2018, February 3, 2018 and April 29, 2017		3
Condensed Consolidated Statements of Operations – Thirteen Weeks Ended May 5, 2018 and April 29, 2017		4
Condensed Consolidated Statements of Comprehensive Income (Loss) – Thirteen Weeks Ended May 5, 2018 and April 29, 2017		5
Condensed Consolidated Statements of Cash Flows – Thirteen Weeks Ended May 5, 2018 and April 29, 2017		6
Notes to Interim Condensed Consolidated Financial Statements		7
Item 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations		16
Item 3 – Quantitative and Qualitative Disclosures about Market Risk		25
Item 4 – Controls and Procedures		25
PART II.  OTHER INFORMATION
Item 1 – Legal Proceedings		26
Item 1A- Risk Factors		26
Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds		26
Item 3 – Defaults Upon Senior Securities		26
Item 4 – Mine Safety Disclosures		26
Item 5 – Other Information		26
Item 6 – Exhibits		27
Signatures		28

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TRANS WORLD ENTERTAINMENT CORPORATION AND SUBSIDIARIES

PART 1. FINANCIAL INFORMATION

Item 1 - Interim Condensed Consolidated Financial Statements

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except per share and share amounts)

(unaudited)

	May 5,			February 3,			April 29,
	2018			2018			2017
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	14,509		$	31,326		$	15,803
Restricted cash		4,113			1,505			13,001
Accounts receivable		6,620			4,469			5,950
Merchandise inventory		110,677			109,377			127,509
Prepaid expenses and other assets		7,418			6,976			8,621
Total current assets		143,337			153,653			170,884
Restricted cash		6,354			10,675			10,496
Fixed assets, net		13,138			13,546			45,002
Goodwill		39,191			39,191			39,191
Intangible assets, net		22,995			23,967			26,886
Other assets		6,760			7,139			7,598
TOTAL ASSETS	$	231,775		$	248,171		$	300,057
LIABILITIES
CURRENT LIABILITIES
Accounts payable	$	36,894		$	41,780		$	40,778
Accrued expenses and other current liabilities		9,900			11,038			11,224
Deferred revenue		7,473			8,464			8,190
Total current liabilities		54,267			61,282			60,192
Other long-term liabilities		27,059			29,131			37,624
TOTAL LIABILITIES		81,326			90,413			97,816
SHAREHOLDERS’ EQUITY
Preferred stock ($0.01 par value; 5,000,000 shares authorized; none issued)		—			—			—
Common stock ($0.01 par value; 200,000,000 shares authorized; 64,369,171, 64,305,171 and 64,252,671 shares issued, respectively)		643			643			643
Additional paid-in capital		341,946			341,103			338,842
Treasury stock at cost (28,156,601, 28,156,601 and 28,137,283 shares, respectively)		(230,145	)		(230,145	)		(230,144	)
Accumulated other comprehensive loss		(1,003	)		(998	)		(797	)
Retained earnings		39,008			47,155			93,697
TOTAL SHAREHOLDERS’ EQUITY		150,449			157,758			202,241
TOTAL LIABILITIES AND EQUITY	$	231,775		$	248,171		$	300,057

See Accompanying Notes to Interim Condensed Consolidated Financial Statements.

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TRANS WORLD ENTERTAINMENT CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

($ in thousands)

(unaudited)

	Thirteen Weeks Ended
	May 5,			April 29,
	2018			2017
Net sales	$	95,232		$	100,752
Other revenue		1,371			1,215
Total revenue		96,603			101,967
Cost of sales		64,915			65,662
Gross profit		31,688			36,305
Selling, general and administrative expenses		40,079			41,512
Income from joint venture		(233	)		—
Loss from operations		(8,158	)		(5,207	)
Interest expense		64			56
Gain on insurance proceeds		—			(8,835	)
Other income		(79	)		(15	)
Income (loss) before income tax expense		(8,143	)		3,587
Income tax expense		4			54
Net income (loss)		($8,147	)	$	3,533
BASIC AND DILUTED INCOME (LOSS) PER SHARE:
Basic income (loss) per common share	$	(0.22	)	$	0.10
Weighted average number of common shares outstanding – basic		36,237			36,177
Diluted income (loss) per common share	$	(0.22	)	$	0.10
Weighted average number of common shares outstanding – diluted		36,237			36,214

See Accompanying Notes to Interim Condensed Consolidated Financial Statements.

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TRANS WORLD ENTERTAINMENT CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

($ in thousands)

(unaudited)

	Thirteen Weeks ended
	May 5,			April 29,
	2018			2017
Net income (loss)		($8,147	)	$	3,533
Amortization of pension gain (loss)		5			(9	)
Comprehensive income (loss)		($8,142	)	$	3,524

See Accompanying Notes to Interim Condensed Consolidated Financial Statements.

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TRANS WORLD ENTERTAINMENT CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

($ in thousands)

(unaudited)

	Thirteen Weeks Ended
	May 5,			April 29,
	2018			2017
OPERATING ACTIVITIES:
Net income (loss)		($8,147	)	$	3,533
Adjustments to reconcile net income (loss) to net cash  used in operating activities:
Depreciation of fixed assets		1,261			2,406
Amortization of intangible assets		972			972
Stock based compensation		843			768
Loss on disposal of fixed assets		10			10
Change in cash surrender value		51			(68	)
Gain on life insurance asset		—			(8,859	)
Changes in operating assets and liabilities that provide (use) cash:
Accounts receivable		(2,151	)		1,463
Merchandise inventory		(1,300	)		(1,505	)
Prepaid expenses and other current assets		(442	)		(351	)
Other long-term assets		(126	)		(194	)
Accounts payable		(4,886	)		(11,529	)
Accrued expenses and other current liabilities		362			527
Deferred revenue		(991	)		(1,039	)
Other long-term liabilities		(2,077	)		(17	)
Net cash used in operating activities		(16,621	)		(13,883	)
INVESTING ACTIVITIES:
Purchases of fixed assets		(863	)		(2,321	)
Proceeds from company owned life insurance		—			14,032
Investment in joint venture		—			(2,605	)
Capital distributions from joint venture		454			—
Net cash (used in) provided by investing activities		(409	)		9,106
FINANCING ACTIVITIES:
Payments to etailz shareholders		(1,500	)		—
Net cash  used in financing activities		(1,500	)		—
Net decrease in cash, cash equivalents, and restricted cash		(18,530	)		(4,777	)
Cash, cash equivalents, and restricted cash, beginning of period		43,506			44,077
Cash, cash equivalents, and restricted cash, end of period	$	24,976		$	39,300

See Accompanying Notes to Interim Condensed Consolidated Financial Statements.

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TRANS WORLD ENTERTAINMENT CORPORATION AND SUBSIDIARIES

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

May 5, 2018 and April 29, 2017

Note 1. Nature of Operations

Trans World Entertainment Corporation and subsidiaries (“the Company”) is one of the largest specialty retailers of entertainment products, including trend, video, music, electronics and related products in the United States. The Company operates in two reportable segments: fye and etailz. The fye segment operates a chain of retail entertainment stores and e-commerce sites, www.fye.com and www.secondspin.com. As of May 5, 2018, the fye segment operated 253 stores totaling approximately 1.4 million square feet in the United States, the District of Columbia and the U.S. Virgin Islands. The etailz segment generates substantially all of its revenue through Amazon Marketplace. The Company’s business is seasonal in nature, with the peak selling period being the holiday season which falls in the Company’s fourth fiscal quarter.

Liquidity and Cash Flows:

The Company’s primary sources of working capital are cash provided by operations and borrowing capacity under its revolving credit facility. The Company’s cash flows fluctuate from quarter to quarter due to various items, including seasonality of sales and earnings, merchandise inventory purchases and returns, the related terms on the purchases and capital expenditures. Management believes it will have adequate resources to fund its cash needs for the foreseeable future, including its capital spending, its seasonal increase in merchandise inventory and other operating cash requirements and commitments.

Management anticipates any cash requirements due to a shortfall in cash from operations will be funded by the Company’s revolving credit facility. See note 8 in the interim condensed consolidated financial statements for additional information.

In connection with the preparation of these unaudited interim condensed consolidated financial statements, the Company has evaluated and concluded there are no conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern for a period of one year following the date that these financial statements are issued.

Note 2. Basis of Presentation

The accompanying interim condensed consolidated financial statements consist of Trans World Entertainment Corporation, Record Town, Inc. (“Record Town”), Record Town’s subsidiaries and etailz, Inc., all of which are wholly-owned. All intercompany accounts and transactions have been eliminated.

The interim condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. The information furnished in these unaudited interim condensed consolidated financial statements reflects all normal, recurring adjustments which, in the opinion of management, are necessary for the fair presentation of such financial statements. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Certain information and footnote disclosures normally included in the financial statements prepared in accordance with accounting principles generally

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accepted in the United States of America have been condensed or omitted pursuant to rules and regulations applicable to interim financial statements.

The accompanying unaudited interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto and Management’s Discussion and Analysis of Financial Condition and Results of Operations as of and for the year ended February 3, 2018 contained in the Company’s Annual Report on Form 10-K filed May 4, 2018. The results of operations for the thirteen weeks ended May 5, 2018 are not necessarily indicative of the results to be expected for the entire fiscal year ending February 2, 2019. 

The Company’s significant accounting policies are the same as those described in Note 1 to the Company’s Consolidated Financial Statements on Form 10-K for the fiscal year ended February 3, 2018.

There have been no material changes to the accounting policies applied to our consolidated results and footnote disclosures.

Recently Adopted Accounting Pronouncements

In June 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606), which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. On February 4, 2018, the Company adopted ASU No. 2014-09 using the modified retrospective approach. The adoption of this ASU impacted the timing of revenue recognition for gift card breakage. Prior to adoption of ASU No. 2014-09, gift card breakage was recognized at the point gift card redemption became remote. In accordance with this ASU, the Company will recognize gift card breakage in proportion to the pattern of rights exercised by the customer. The adoption of this ASU also impacted presentation of our condensed consolidated financial statements related to sales return reserves. The cumulative effect of initially applying ASU No. 2014-09 was a $0.5 million decrease to the opening balance of retained earnings as of February 4, 2018. The comparative prior period information continues to be reported under the accounting standards in effect during those periods.

Note 3. Recently Issued Accounting Pronouncements

In February 2016, the FASB issued ASU No. 2016-02, “Leases”, which will replace most existing lease accounting guidance in U.S. GAAP. The core principle of this ASU is that an entity should recognize the rights and obligations resulting from leases as assets and liabilities. The new standard requires qualitative and specific quantitative disclosures to supplement the amounts recorded in the financial statements so that users can understand more about the nature of an entity’s leasing activities, including significant judgments and changes in judgments. The new standard will be effective for the Company’s fiscal year beginning February 3, 2019, and requires the modified retrospective method of adoption. Management is progressing with implementation and continuing to evaluate the effect to the Company’s Condensed Consolidated Financial Statements and disclosures. Given the nature of the operating leases for the Company’s home office, distribution center, and stores, the Company expects an increase to the carrying value of its assets and liabilities.

Note 4. Goodwill and Other Intangible Assets

Our goodwill results from our acquisition of etailz and represents the excess purchase price over the net identifiable assets acquired. All of our goodwill is associated with etailz, a separate reporting unit, and there is no goodwill associated with our other reporting unit, fye. Goodwill is not amortized and we are required to evaluate our goodwill for impairment at least annually or whenever indicators of impairment

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are present. Our annual test is completed during the fourth fiscal quarter, and interim tests are conducted when circumstances indicate the carrying value of the goodwill or other intangible assets may not be recoverable. 

Estimating the fair value of reporting units requires the use of estimates and significant judgments that are based on a number of factors including actual operating results. It is possible that these judgments and estimates could change in future periods.

The determination of the fair value of intangible assets and liabilities acquired in a business acquisition, including the Company’s acquisition of etailz in 2016, is subject to many estimates and assumptions. Our identifiable intangible assets that resulted from our acquisition of etailz consist of vendor relationships, technology and tradenames. We review amortizable intangible asset groups for impairment whenever events or changes in circumstances indicate that the related carrying amounts may not be recoverable.

Identifiable intangible assets as of May 5, 2018 consisted of the following ($ in thousands):

	May 5, 2018
	Weighted Average Amortization Period (in months)		Original Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Vendor relationships		120	$	19,100	$	2,965	$	16,135
Technology		60		6,700		2,073		4,627
Trade names and trademarks		60		3,200		967		2,233
			$	29,000	$	6,005	$	22,995
The changes in net intangibles and goodwill from February 3, 2018 to May 5, 2018 were as follows:
($ in thousands)			February 3, 2018		Amortization		May 5, 2018
Amortized intangible assets:
Vendor relationships			$	16,612	$	477	$	16,135
Technology				4,962		335		4,627
Trade names and trademarks				2,393		160		2,233
Net amortized intangible assets			$	23,967	$	972	$	22,995
Unamortized intangible assets:
Goodwill			$	39,191	$	—	$	39,191
Total unamortized intangible assets			$	39,191	$	—	$	39,191
Amortization expense of intangible assets for the thirteen weeks ended May 5, 2018 and April 29, 2017 consisted of the following:
			Thirteen Weeks Ended
($ in thousands)			May 5, 2018		April 29, 2017
Amortized intangible assets:
Vendor relationships			$	477	$	477
Technology				335		335
Trade names and trademarks				160		160
Total amortization expense			$	972	$	972

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Estimated amortization expense for the remainder of fiscal 2018 and the five succeeding fiscal years and thereafter is as follows:

Year	Annual Amortization
( $ in thousands)
2018	$	2,918
2019		3,890
2020		3,890
2021		3,325
2022		1,910
2023		1,910
Thereafter		5,152

Note 5. Depreciation and Amortization

Depreciation and amortization included in the interim condensed consolidated statements of operations is as follows:

	Thirteen Weeks Ended
	May 5,		April 29,
	2018		2017
	($ in thousands)
Cost of sales	$	0	$	154
Selling, general and administrative expenses		2,233		3,223
Total	$	2,233	$	3,377

Note 6. Segment Data

As described in Note 1 to the interim condensed consolidated financial statements, we operate in two reportable segments as shown in the following table:

	Thirteen Weeks Ended
($ in thousands)	May 5, 2018			April 29, 2017
Total Revenue
fye	$	54,063		$	64,944
etailz		42,540			37,023
Total Company	$	96,603		$	101,967
Gross Profit
fye	$	22,271		$	26,910
etailz		9,417			9,395
Total Company	$	31,688		$	36,305
Loss From Operations
fye	$	(5,372	)	$	(4,386	)
etailz		(2,786	)		(821	)
Total Company	$	(8,158	)	$	(5,207	)
Total Assets
fye	$	132,461		$	201,335
etailz		99,314			98,722
Total Company	$	231,775		$	300,057

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Note 7. Restricted Cash

As of May 5, 2018, the Company had restricted cash of $4.1 million and $6.4 million reported in current and other assets on the accompanying interim condensed consolidated balance sheet, respectively. As of April 29, 2017, the Company had restricted cash of $13.0 million and $10.5 million reported in current and other assets on the accompanying interim condensed consolidated balance sheet, respectively.

In connection with the acquisition of etailz and under the terms of the amended and restated share purchase agreement, the Company designated $3.2 million of the restricted cash to equal the maximum earn-out amount that could be paid to the selling shareholders of etailz in accordance with the share purchase agreement.

During the thirteen weeks ended May 5, 2018, the Company paid out $1.5 million of the restricted cash to the etailz shareholders per the terms of the original etailz acquisition share purchase agreement.

In addition, as a result of the death of its former Chairman, the Company holds $7.3 million in a rabbi trust, of which $0.9 million is classified as restricted cash in current assets and $6.4 million is classified as restricted cash in other assets on the accompanying interim condensed consolidated balance sheet.

A summary of cash, cash equivalents and restricted cash is as follows ($ in thousands):

	May 5,		February 3,		April 29,
	2018		2018		2017
Cash and cash equivalents	$	14,509	$	31,326	$	15,803
Restricted cash		10,467		12,180		23,497
Total cash, cash equivalents and restricted cash	$	24,976	$	43,506	$	39,300

Note 8. Line of Credit

In January 2017, the Company entered into a $50 million asset based credit facility (“Credit Facility”) which amended the previous credit facility. The principal amount of all outstanding loans under the Credit Facility, together with any accrued but unpaid interest, are due and payable in January 2022, unless otherwise paid earlier pursuant to the terms of the Credit Facility. Payments of amounts due under the Credit Facility are secured by the assets of the Company. The Credit Facility contains a provision to increase availability to $75 million during October to December of each year, as needed. The availability under the Credit Facility is subject to limitations based on receivables and inventory levels.

The Credit Facility contains customary affirmative and negative covenants, including restrictions on dividends and share repurchases, incurrence of additional indebtedness and acquisitions and covenants around the net number of store closings and restrictions related to the payment of cash dividends and share repurchases, including limiting the amount of dividends and share repurchases to $5.0 million annually and not allowing borrowings under the amended facility for the six months before or six months after the dividend payment. The Credit Facility also includes customary events of default, including, among other things, material adverse effect, bankruptcy, and certain changes of control. As of May 5, 2018, the Company was compliant with all covenants.

Interest under the Credit Facility will accrue, at the election of the Company, at a Base Rate or LIBO Rate, plus, in each case, an Applicable Margin, which is determined by reference to the level of availability, with the Applicable Margin for LIBO Rate loans ranging from 1.75% to 2.00% and the Applicable Margin for Prime Rate loans ranging from 0.75% to 1.00%. In addition, a commitment fee of 0.25% is also payable on unused commitments.

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As of May 5, 2018 and April 29, 2017, the Company did not have any borrowings under the Credit Facility. The Company had $41.1 million and $35.0 million available for borrowing as of May 5, 2018 and April 29, 2017, respectively.

As of May 5, 2018, the Company had $1.2 million in outstanding letters of credit related to an import purchase. As of April 29, 2017 the Company did not have any outstanding letters of credit.

Note 9. Stock Based Compensation

As of May 5, 2018, there was approximately $2.8 million of unrecognized compensation cost related to stock option awards comprised of the following: $0.7 million was related to stock option awards listed in the table below and expected to be recognized as expense over a weighted average period of 2.3 years; $0.2 million was related to restricted stock option awards expected to be recognized as expense over a weighted average period of 3.0 years; and $1.9 million was related to restricted shares issued in connection with the acquisition of etailz, as discussed further below, and expected to be recognized as expense over the next 9 months.

The Company has outstanding awards under three employee stock award plans, the 2005 Long Term Incentive and Share Award Plan, the Amended and Restated 2005 Long Term Incentive and Share Award Plan (the “Old Plans”); and the 2005 Long Term Incentive and Share Award Plan (as amended and restated April 5, 2017 (the “New Plan”). Collectively, these plans are referred to herein as the Stock Award Plans. Additionally, the Company had a stock award plan for non-employee directors (the “1990 Plan”). The Company no longer issues stock options under the Old Plans or the 1990 Plan.

Equity awards authorized for issuance under the New Plan total 5.0 million. As of May 5, 2018, of the awards authorized for issuance under the Stock Award Plans, 2.5 million were granted and are outstanding, 1.4 million of which were vested and exercisable. Shares available for future grants of options and other share based awards under the New Plan at May 5, 2018 were 4.9 million.

The following table summarizes stock award activity during the thirteen weeks ended May 5, 2018:

	Employee and Director Stock Award Plans
	Number of Shares Subject To Option			Weighted Average Exercise Price	Weighted Average Remaining Contractual Term	Other Share Awards (1)		Weighted Average Grant Fair Value
Balance February 3, 2018	2,585,914		$	3.06	7.2	183,427	$	3.22
Granted	—			—	—	—		—
Canceled	(89,500	)		3.21	—	—		—
Exercised	—			—	—	—		—
Balance May 5, 2018	2,496,414		$	3.05	7.0	183,427	$	3.22
Exercisable May 5, 2018	1,404,789		$	3.19	6.0	63,427	$	4.50

(1) Other Share Awards include deferred shares granted to Directors and restricted share units granted to executive officers.

As of May 5, 2018, all stock awards outstanding and exercisable had a grant price higher than the market price of the stock and had no intrinsic value.

In connection with the acquisition of etailz, the Company issued 1,572,552 restricted shares of Company stock to a key etailz employee, with a grant date fair value of $3.56 per share. These shares vest ratably through January 2019. During the thirteen weeks ended May 5, 2018, the Company recognized $622 thousand of compensation cost related to these shares. As of May 5, 2018, there was approximately $1.9 million of unrecognized compensation cost related to these restricted shares that is expected to be recognized as expense over the next 9 months.

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Note 10. Accumulated Other Comprehensive Loss

Accumulated other comprehensive loss that the Company reports in the interim condensed consolidated balance sheets represents net loss, adjusted for the difference between the accrued pension liability and accrued benefit cost, net of taxes, associated with the Company’s defined benefit plan. Comprehensive loss consists of net loss and the amortization of pension costs (gain) associated with Company’s defined benefit plan for the thirteen weeks ended May 5, 2018 and April 29 2017.

Note 11. Defined Benefit Plan

The Company maintains a non-qualified Supplemental Executive Retirement Plan (“SERP”) for certain executive officers of the Company. The SERP provides eligible executives defined pension benefits that supplement benefits under other retirement arrangements. During the thirteen weeks ended May 5, 2018, the Company did not make any cash contributions to the SERP and presently expects to pay approximately $1.2 million in benefits relating to the SERP during fiscal 2018.

The measurement date for the SERP is the fiscal year end, using actuarial techniques which reflect estimates for mortality, turnover and expected retirement. In addition, management makes assumptions concerning future salary increases. Discount rates are generally established as of the measurement date using theoretical bond models that select high-grade corporate bonds with maturities or coupons that correlate to the expected payouts of the applicable liabilities.

The following represents the components of the net periodic pension cost related to the Company’s SERP for the respective periods:

	Thirteen Weeks Ended
	May 5, 2018		April 29, 2017
	($ in thousands)
Service cost	$	14	$	16
Interest cost		140		139
Amortization of pension costs		0		4
Amortization of net gain (loss) (1)		5		(9	)
Net periodic pension cost	$	159	$	150

⁽¹⁾ The amortization of net gain (loss) is related to a Director Retirement Plan previously provided by the Company.

Note 12. Basic and Diluted Loss Per Share

Basic income (loss) per share is calculated by dividing net income (loss) by the weighted average common shares outstanding for the period. Diluted income (loss) per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock (net of any assumed repurchases) that then shared in the earnings of the Company, if any. It is computed by dividing net income (loss) by the sum of the weighted average shares outstanding and additional common shares that would have been outstanding if the dilutive potential common shares had been issued for the Company’s common stock awards from the Company’s Stock Award Plans.

13

For the thirteen week period ended May 5, 2018, the impact of all outstanding stock awards was not considered because the Company reported a net loss and such impact would be anti-dilutive. Accordingly, basic and diluted loss per share was the same. For the thirteen week period ended April 29, 2017, 37 thousand shares of employee stock options were considered dilutive. Total anti-dilutive stock awards for the thirteen weeks ended May 5, 2018, were approximately 2.6 million shares as compared to 2.3 million for the thirteen weeks ended April 29, 2017.

Note 13. Income Taxes

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized.  The ultimate realization of deferred tax assets is dependent on the generation of future taxable income. Management considers the scheduled reversal of taxable temporary differences, projected future taxable income and tax planning strategies in making this assessment.  Based on available objective evidence, management concluded that a full valuation allowance should continue to be recorded against the Company’s deferred tax assets. Management will continue to assess the need for and amount of the valuation allowance against the deferred tax assets by giving consideration to all available evidence to the Company’s ability to generate future taxable income in its conclusion of the need for a full valuation allowance.  Any reversal of the Company’s valuation allowance will favorably impact its results of operations in the period of reversal.  The Company is currently unable to determine whether or when that reversal might occur, but it will continue to assess the realizability of its deferred tax assets and will adjust the valuation allowance if it is more likely than not that all or a portion of the deferred tax assets will become realizable in the future.  The Company has significant net operating loss carry forwards and other tax attributes that are available to offset projected taxable income and current taxes payable, if any, for the year ending February 2, 2019.  The deferred tax impact resulting from the utilization of the net operating loss carry forwards and other tax attributes will be offset by a reduction in the valuation allowance. As of February 3, 2018, the Company had a net operating loss carry forward of $208.3 million for federal income tax purposes and approximately $273.4 million for state income tax purposes that expire at various times through 2037 and are subject to certain limitations and statutory expiration periods. The Company has also recorded $0.1 million of deferred tax liability relating to the etailz segment that relates to state income tax returns that do not allow consolidated filing. The Company has not changed its overall conclusion with respect to the need for a valuation allowance against its new deferred tax assets, which remain fully reserved.

Note 14. Commitments and Contingencies

Legal Proceedings

The Company is subject to legal proceedings and claims that have arisen in the ordinary course of its business and have not been finally adjudicated. Although there can be no assurance as to the ultimate disposition of these matters, it is management’s opinion, based upon the information available at this time, that the expected outcome of these matters, individually and in the aggregate, will not have a material adverse effect on the results of operations and financial condition of the Company.

Store Manager Class Actions

Two former Store Managers filed actions alleging claims of entitlement to unpaid compensation for overtime. In one action, the plaintiff seeks to represent a class of allegedly similarly situated employees who performed the same position (Store Manager and Senior Assistant Manager) while the other plaintiff seeks to represent a class of allegedly similarly situated employees who performed the same position (Store Manager).

14

Specifically, Carol Spack filed a complaint against Trans World Entertainment Corporation (Trans World) in the United States District Court, District of New Jersey, on April 20, 2017 (Case No.: 3:17-cv-02687-BRM-LHG) alleging that she is entitled to unpaid compensation for overtime under the federal Fair Labor Standards Act (FLSA). She brings a nationwide collective action under the FLSA on behalf of all Store Managers and Senior Assistant Managers. She also brings class action claims under New Jersey and Pennsylvania law on behalf of all persons who worked as Store Managers in New Jersey or Senior Assistant Managers in Pennsylvania.

On May 19, 2017, Natasha Roper filed a complaint against Trans World in the U.S. District Court for the Northern District of New York (Case No.: 1:17-cv-0553-TJM-CFH) in which she also alleges that she is entitled to unpaid compensation for overtime under the FLSA. Ms. Roper brings a nationwide collective action under the FLSA on behalf of all similarly situated Store Managers.

15

TRANS WORLD ENTERTAINMENT CORPORATION AND SUBSIDIARIES
PART 1. FINANCIAL INFORMATION

Item 2 - Management’s Discussion and Analysis of Financial Condition and
Results of Operations

May 5, 2018 and April 29, 2017

Overview

Management’s Discussion and Analysis of Financial Condition and Results of Operations provides information that the Company’s management believes necessary to achieve an understanding of its financial statements and results of operations. To the extent that such analysis contains statements which are not of a historical nature, such statements are forward-looking statements, which involve risks and uncertainties. These risks include, but are not limited to, changes in the competitive environment, availability of new products, change in vendor policies or relationships, general economic factors in markets where the Company’s merchandise is sold; and other factors discussed in the Company’s filings with the Securities and Exchange Commission. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the unaudited interim condensed consolidated financial statements and related notes included elsewhere in this report and the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended February 3, 2018.

The Company operates in two reportable segments: fye and etailz. The fye segment operates a chain of retail entertainment stores and e-commerce sites, www.fye.com and www.secondspin.com. As of May 5, 2018, the fye segment operated 253 stores totaling approximately 1.4 million square feet in the United States, the District of Columbia and the U.S. Virgin Islands. The etailz segment is a leading digital marketplace retailer and generates substantially all of its revenue through Amazon Marketplace. The Company’s business is seasonal in nature, for both segments, with the peak selling period being the holiday season which falls in the Company’s fourth fiscal quarter.

The Company’s results have been, and will continue to be, contingent upon management’s ability to understand industry trends and to manage the business in response to those trends and general economic trends. Management monitors a number of key performance indicators to evaluate its performance, including:

Net Sales and Comparable Store Net Sales: The fye segment measures the rate of comparable store net sales change. A store is included in comparable store net sales calculations at the beginning of its thirteenth full month of operation. Stores relocated, expanded or downsized are excluded from comparable store sales if the change in square footage is greater than 20% until the thirteenth full month following relocation, expansion or downsizing. Closed stores that were open for at least thirteen months are included in comparable store sales through the month immediately preceding the month of closing. The fye segment further analyzes net sales by store format and by product category. The etailz segment measures total year over year sales growth by product category and evaluates product sales by supplier.

Cost of Sales and Gross Profit: Gross profit is calculated based on the cost of product in relation to its retail selling value. Changes in gross profit are impacted primarily by net sales levels, mix of products sold, vendor discounts and allowances, shrinkage, obsolescence and distribution costs. Distribution expenses include those costs associated with receiving, inspecting & warehousing merchandise, Amazon fulfillment fees, and costs associated with product returns to vendors.

Selling, General and Administrative (“SG&A”) Expenses: Included in SG&A expenses are payroll and related costs, occupancy charges, general operating and overhead expenses and depreciation charges (excluding those related to distribution operations, see Note 5 to the Condensed Consolidated Financial Statements in this report). SG&A expenses also include fixed assets write-offs associated with store closures, if any, and miscellaneous income and expense items, other than interest. 

16

Balance Sheet and Ratios: The Company views cash, net inventory investment (merchandise inventory less accounts payable) and working capital (current assets less current liabilities) as relevant indicators of its financial position. See Liquidity and Capital Resources for further discussion of these items.

17

RESULTS OF OPERATIONS

Thirteen Weeks Ended May 5, 2018
Compared to the Thirteen Weeks Ended April 29, 2017

Segment Highlights:

	Thirteen Weeks Ended
	May 5, 2018			April 29, 2017
Total Revenue
fye	$	54,063		$	64,944
etailz		42,540			37,023
Total Company	$	96,603		$	101,967
Gross Profit
fye	$	22,271		$	26,910
etailz		9,417			9,395
Total Company	$	31,688		$	36,305
Loss From Operations
fye	$	(5,372	)	$	(4,386	)
etailz		(2,786	)		(821	)
Total Company	$	(8,158	)	$	(5,207	)
Reconciliation of etailz Loss from Operations to etailz Adjusted Income (Loss) from Operations
etailz loss fom operations	$	(2,786	)	$	(821	)
Acquisition related amortization and compensation expenses (1)		2,093			1,880
etailz adjusted income (loss) from operations (2)	$	(693	)	$	1,059

(1)	Acquisition related expenses consisted of amortization expense of intangible assets of $972 thousand and compensation expenses of $1,121 thousand.
(2)	In addition to the results of operations determined in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”), we reported non-GAAP adjusted operating income for the etailz segment as shown above.

Total Revenue. The following table sets forth a year-over-year comparison of the Company’s total revenue:

	Thirteen Weeks Ended				Change
	May 5, 2018		April 29, 2017		$			%
($ in thousands)
fye revenue	$	54,063	$	64,944	$	(10,881	)		-16.8	%
etailz revenue		42,540		37,023		5,517			14.9	%
Total revenue	$	96,603	$	101,967	$	(5,364	)		-5.3	%

Total revenue decreased 5.3% to $96.6 million for the thirteen weeks ended May 5, 2018 compared to $102.0 million in the same period last year.

18

fye Segment

The following table sets forth a period over period comparison of net fye sales by merchandise category:

	Thirteen Weeks Ended						Change
	May 5, 2018			April 29, 2017			$			%			Comp Store Net Sales
($ in thousands)
fye net sales	$	52,692			63,729		$	(11,037	)		-17.3	%		-8.5	%
Other revenue		1,371			1,215			156			12.8	%
Total revenue	$	54,063		$	64,944		$	(10,881	)		-16.8	%
As a % of FYE net sales
Trend/Lifestyle		37.8	%		32.4	%								2.6	%
Video (1)		31.8	%		35.9	%								-14.9	%
Music		18.7	%		21.5	%								-19.9	%
Electronics		11.7	%		10.2	%								3.1	%
Store Count:		253			273			(20	)		-7.3	%
Total Square footage		1,394			1,513			(119	)		-7.9	%

⁽¹⁾ Includes Video Games category, which represented 0.2% of fye fiscal first quarter net sales.  Fiscal 2017 data was adjusted to include this immaterial reclassification.

Net sales. The 16.8% net sales decline from the prior year is due to a 7.3% decline in total stores in operation and an 8.5% decline in comparable store net sales.

Trend/lifestyle:

fye stores offer a selection of trend/lifestyle products that primarily relate to theatrical, music, and gaming releases. The trend/lifestyle category increased 2.6% on a comparable store sales basis in fiscal 2018. The trend/lifestyle category represented 37.8% of the Company’s total net sales for the thirteen weeks ended May 5, 2018 versus 32.4% in the comparable quarter last year. The Company continues to take advantage of opportunities to strengthen its selection and shift product mix to growing categories of entertainment-related merchandise. The Company grew comparable store sales in this category by strengthening its assortment of consumables and collectables, as well as by improving the product presentation and value proposition.

Video:

Comparable store net sales in the video category decreased 14.9% during the thirteen weeks ended May 5, 2018. The video category represented 31.8% of total net sales for the thirteen weeks ended May 5, 2018 compared to 35.9% in the comparable quarter last year, as the fye segment is shifting its product mix to growing categories of entertainment and pop culture related merchandise.

Music:

Comparable store net sales in the music category decreased 19.9% during the thirteen weeks ended May 5, 2018. The music category represented 18.7% of total net sales for the thirteen weeks ended May 5, 2018 compared to 21.5% in the comparable quarter last year.

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Electronics:

Comparable store net sales in the electronics category increased 3.1% during the thirteen weeks ended May 5, 2018. Electronics net sales represented 11.7% of total net sales for the thirteen weeks ended May 5, 2018 compared to 10.2% in the comparable quarter last year.

Other Revenue. Other revenue, which was primarily related to commissions and fees earned from third parties, was approximately $1.4 million and $1.2 million for the thirteen weeks ended May 5, 2018 and April 29, 2017, respectively.

etailz Segment

etailz revenue for the thirteen weeks ended May 5, 2018 was $42.5 million, a 14.9% increase when compared to the same 13 week period in the prior fiscal year. etailz generates revenue across a broad array of product lines primarily through the Amazon Marketplace. Categories include: apparel, baby, beauty, electronics, health & personal care, home/kitchen/grocery, pets, sporting goods, toys & art. During the thirteen weeks ended May 5, 2018, etailz sold approximately 31,000 SKUs from over 2,200 suppliers, compared to approximately 19,000 SKUs from over 1,800 suppliers during the thirteen weeks ended April 29, 2017.

Gross Profit. The following table sets forth a year-over-year comparison of the Company’s Gross Profit:

	Thirteen Weeks Ended						Change
	May 5, 2018			April 29, 2017			$			%
($ in thousands)
fye gross profit	$	22,271		$	26,910		$	(4,639	)		-17.2	%
etailz gross profit		9,417			9,395			22			0.2	%
Total gross profit	$	31,688		$	36,305		$	(4,617	)		-12.7	%
fye gross profit as a % of fye revenue		41.2	%		41.4	%
etailz gross profit as a % of etailz revenue		22.1	%		25.4	%
Total gross profit as a % of total revenue		32.8	%		35.6	%

Gross profit decreased 12.7% to $31.7 million for the thirteen weeks ended May 5, 2018 compared to $36.3 million for the thirteen weeks ended April 29, 2017.

fye Segment

fye gross profit as a percentage of total revenue for the thirteen weeks ended May 5, 2018 was 41.2% compared to 41.4% for the thirteen weeks ended April 29, 2017.

etailz Segment

etailz gross profit as a percentage of revenue for the thirteen weeks ended May 5, 2018 was 22.1% versus 25.4% for the thirteen weeks ended April 29, 2017. The decrease in gross profit as a percentage of sales was due to increased warehousing and fulfillment fees.

20

SG&A Expenses. The following table sets forth a period over period comparison of the Company’s SG&A expenses:

	Thirteen Weeks Ended						Change
	May 5, 2018			April 29, 2017			$			%
	($ in thousands)
fye SG&A, excluding depreciation and amortization	$	26,489		$	29,095			($2,606	)		-9.0	%
As a % of total fye revenue		49.0	%		44.8	%					4.2	%
etailz SG&A, excluding depreciation and amortization		11,357			9,194			2,163			23.5	%
As a % of total etailz revenue		26.7	%		24.8	%
Depreciation and amortization		2,233			3,223			(990	)		-30.7	%
Total SG&A	$	40,079		$	41,512			($1,433	)		-3.5	%
As a % of total revenue		41.5	%		40.7	%

SG&A expenses decreased $1.4 million or 3.5%.

fye Segment

fye SG&A, excluding depreciation and amortization expenses, decreased $2.6 million, or 9.0%. As a percentage of fye revenue, SG&A expenses in the fye segment were 49.0% compared to 44.8% for the same quarter last year. The increase in the rate was primarily due to the comp sales decline.

etailz Segment

etailz SG&A, excluding depreciation and amortization expenses, increased $2.2 million primarily due to higher marketplace commissions on the higher sales, and investments in product identification and sourcing, technology, and diversification.

Depreciation and amortization expense. Consolidated depreciation and amortization expense decreased $1.0 million primarily due to the $29.1 million net decrease in carrying value of fixed assets, resulting from impairment charges recorded for the fye segment, during the fourth quarter of fiscal 2017. For a discussion of the Company’s impairment charges, see “Nature of Operations and Summary of Significant Accounting Policies” in the Notes to Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended February 3, 2018.

Income from Joint Venture. Income from joint venture was $233 thousand during the thirteen weeks ended May 5, 2018.

Interest Expense. Interest expense was approximately $64 thousand during the thirteen weeks ended May 5, 2018 compared to $56 thousand during the thirteen weeks ended April 29, 2017.

Gain on Insurance Proceeds. During the thirteen weeks ended April 29, 2017, the fye segment recorded an $8.8 million gain on insurance proceeds related to the death of the Company’s former Chairman.

Other Income. Other income was $79 thousand dollars during the thirteen weeks ended May 5, 2018 compared to $15 thousand dollars in the same period last year.

21

Income Tax Expense.   Based on available objective evidence, management concluded that a full valuation allowance should be recorded against the Company’s deferred tax assets As a result, there were insignificant tax expense amounts recorded during the thirteen weeks ended May 5, 2018.

Net Income. The following table sets forth a period over period comparison of the Company’s net income:

	Thirteen Weeks ended
	May 5, 2018			April 29, 2017		Change
Income (loss) before income tax		($8,143	)	$	3,587		($11,730	)
Income tax expense		4			54		(50	)
Net income (loss)		($8,147	)	$	3,533		($11,680	)

LIQUIDITY

Liquidity and Cash Flows:

In connection with the preparation of the interim condensed consolidated financial statements, the Company conducted an evaluation as to whether there were conditions and events, considered in the aggregate, which raised substantial doubt as to the entity’s ability to continue as a going concern within one year after the date of the issuance, or the date of availability, of the financial statements to be issued, noting that there was no evidence that would give rise to a substantial doubt of the entity’s ability to continue as a going concern.

The Company’s primary sources of working capital are cash provided by operations and borrowing capacity under its revolving credit facility. The Company’s cash flows fluctuate from quarter to quarter due to various items, including seasonality of sales and earnings, merchandise inventory purchases and returns, the related terms on the purchases and capital expenditures. Management believes it will have adequate resources to fund its cash needs for the foreseeable future, including its capital spending, its seasonal increase in merchandise inventory and other operating cash requirements and commitments.

Management anticipates any cash requirements due to a shortfall in cash from operations will be funded by the Company’s revolving credit facility. See Note 8 to the Company’s interim condensed consolidated financial statements. The Company does not expect any material changes in the mix (between equity and debt) or the relative cost of capital resources during fiscal 2018.

22

The following table sets forth a summary of key components of cash flow and working capital:

		As of and for the Thirteen Weeks ended						Change
($ in thousands)		May 5, 2018			April 29, 2017			$
Operating Cash Flows		$	(16,621	)	$	(13,883	)	$	(2,738	)
Investing Cash Flows			(409	)		9,106			(9,515	)
Financing Cash Flows			(1,500	)		—			(1,500	)
Capital Expenditures	(1)		(863	)		(2,321	)		1,458
Cash, Cash Equivalents, and Restricted Cash	(2)		24,976			39,300			(14,324	)
Merchandise Inventory			110,677			127,509			(16,832	)
Working Capital			89,070			110,692			(21,622	)

(1)	Included in Investing Cash Flows
(2)	Cash and cash equivalents per interim condensed consolidated balance sheets	$	14,509	$	15,803	$	(1,294	)
	Add: restricted cash		10,467		23,497		(13,030	)
	Cash, cash equivalents, and restricted cash	$	24,976	$	39,300	$	(14,324	)

Cash used in operations was $16.6 million primarily due to net loss of $8.1 million, $2.2 million increase in accounts receivable, $1.3 million increase in inventory, a $4.9 million seasonal reduction of accounts payable, and a $2.1 million decrease in other long term liabilities, offset by depreciation and amortization of $2.2 million. The Company’s merchandise inventory and accounts payable are influenced by the seasonality of its business. A significant reduction of accounts payable occurs annually in the fiscal first quarter, reflecting payments for merchandise inventory purchased during the prior year’s holiday season.

Cash used in investing activities was $0.4 million for the thirteen weeks ended May 5, 2018, which consisted of $0.9 million in capital expenditures, offset by a $0.5 million of capital distributions from the joint venture. Cash provided by investing activities for the thirteen weeks ended April 29, 2017, included proceeds from Company owned life insurance and SERP benefits of $14.0 million.

Cash used in financing activities was $1.5 million for the thirteen weeks ended May 5, 2018, which was comprised entirely of a payment to etailz shareholders as per the original etailz acquisition share purchase agreement.

Capital Expenditures. During the thirteen weeks ended May 5, 2018, the Company made capital expenditures of $0.9 million. The Company currently plans to spend approximately $3.0 million for capital expenditures during fiscal 2018.

23

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States requires that management apply accounting policies and make estimates and assumptions that affect results of operations and the reported amounts of assets and liabilities in the financial statements. Management continually evaluates its estimates and judgments including those related to merchandise inventory and return costs and income taxes. Management bases its estimates and judgments on historical experience and other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations included in the Form 10-K for the year ended February 3, 2018 includes a summary of the critical accounting policies and methods used by the Company in the preparation of its interim condensed consolidated financial statements. There have been no material changes or modifications to the policies since February 3, 2018.

Recent Accounting Pronouncements:

The information set forth under Note 2 , Recently Adopted Accounting Pronouncements section, and Note 3, Recently Issued Accounting Pronouncements, contained in Item 1, “Notes to Interim Condensed Consolidated Financial Statements”, is incorporated herein by reference.

Non-GAAP Measures:

This Form 10-Q contains certain non-GAAP metrics, including: adjusted operating income (loss) for the etailz segment and SG&A excluding depreciation and amortization, expenses for each reporting segment. A non-GAAP measure is not a recognized measure of financial performance under GAAP in the United States, and should not be considered as a substitute for SG&A, operating earnings, net earnings from continuing operations or cash flows from operating activities, as determined in accordance with GAAP. Non-GAAP items are provided because management believes that, when reconciled from the GAAP items to which they relate, they provide additional useful information to investors regarding the Company’s operational performance.

The Company calculates etailz adjusted income from operations to evaluate its own operating performance and as an integral part of its planning process. The Company presents etailz adjusted income from operations as a supplemental measure because it believes such a measure provides management and investors with a more complete understanding of its business operating results, including underlying trends, by excluding the effects of certain charges.

The Company calculates SG&A, excluding depreciation and amortization expenses for each reporting segment, to evaluate its own operating performance and as an integral part of its planning process. The Company presents SG&A, excluding depreciation and amortization expenses, as a supplemental measure because it believes such a measure provides management and investors with a more complete understanding of its business operating results, including underlying trends, by excluding the effects of certain charges.

24

TRANS WORLD ENTERTAINMENT CORPORATION AND SUBSIDIARIES

PART I – FINANCIAL INFORMATION

Item 3 - Quantitative and Qualitative Disclosures about Market Risk

The Company does not hold any financial instruments that expose it to significant market risk and does not engage in hedging activities. To the extent the Company borrows under its revolving credit facility, the Company is subject to risk resulting from interest rate fluctuations since interest on the Company’s borrowings under its credit facility can be variable. If interest rates on the Company’s revolving credit facility were to increase by 25 basis points, and to the extent borrowings were outstanding, for every $1,000,000 outstanding on the facility, income before income taxes would be reduced by $2,500 per year. For a discussion of the Company’s accounting policies for financial instruments and further disclosures relating to financial instruments, see “Nature of Operations and Summary of Significant Accounting Policies” in the Notes to Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended February 3, 2018.

Item 4 – Controls and Procedures

(a) Evaluation of disclosure controls and procedures. The Company’s Chief Executive Officer and Chief Financial Officer, after evaluating the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in the Securities Exchange Act of 1934 Rules 13a-15(e) and 15d-15(e)) as of May 5, 2018, have concluded that as of such date the Company’s disclosure controls and procedures were effective and designed to ensure that (i) information required to be disclosed by the issuer in the reports that it files or submits under the Securities Exchange Act of 1934 (the “Exchange Act”) is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and (ii) information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

 (b) Changes in internal controls. There have been no changes in the Company’s internal controls over financial reporting that occurred during the fiscal quarter covered by this quarterly report that have materially affected, or are reasonably likely to materially affect, the Company’s internal controls over financial reporting.

25

TRANS WORLD ENTERTAINMENT CORPORATION AND SUBSIDIARIES

PART II - OTHER INFORMATION

Item 1 – Legal Proceedings

The Company is subject to legal proceedings and claims that have arisen in the ordinary course of its business and have not been finally adjudicated. Although there can be no assurance as to the ultimate disposition of these matters, it is management’s opinion, based upon the information available at this time, that the expected outcome of these matters, individually and in the aggregate, will not have a material adverse effect on the results of operations and financial condition of the Company.

Store Manager Class Actions

Two former Store Managers filed actions alleging claims of entitlement to unpaid compensation for overtime. In one action, the plaintiff seeks to represent a class of allegedly similarly situated employees who performed the same position (Store Manager and Senior Assistant Manager) while the other plaintiff seeks to represent a class of allegedly similarly situated employees who performed the same position (Store Manager.)

Specifically, Carol Spack filed a complaint against Trans World Entertainment Corporation (Trans World) in the United States District Court, District of New Jersey, on April 20, 2017 (Case No.: 3:17-cv-02687-BRM-LHG) alleging that she is entitled to unpaid compensation for overtime under the federal Fair Labor Standards Act (FLSA). She brings a nationwide collective action under the FLSA on behalf of all Store Managers and Senior Assistant Managers. She also brings class action claims under New Jersey and Pennsylvania law on behalf of all persons who worked as Store Managers in New Jersey or Senior Assistant Managers in Pennsylvania.

On May 19, 2017, Natasha Roper filed a complaint against Trans World in the U.S. District Court for the Northern District of New York (Case No.: 1:17-cv-0553-TJM-CFH) in which she also alleges that she is entitled to unpaid compensation for overtime under the FLSA. Ms. Roper brings a nationwide collective action under the FLSA on behalf of all similarly situated Store Managers.

Item 1A – Risk Factors

Risks relating to the Company’s business and Common Stock are described in detail in Item 1A of the Company’s most recently filed Annual Report on Form 10-K for the year ended February 3, 2018.

Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3 – Defaults Upon Senior Securities

None.

Item 4 – Mine Safety Disclosure

Not Applicable.

Item 5 – Other Information

None.

26

Item 6 - Exhibits

(A) Exhibits -

Exhibit No.	Description
31.1	Chief Executive Officer certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Chief Financial Officer certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32	Certification pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	XBRL Instance Document (furnished herewith)
101.SCH	XBRL Taxonomy Extension Schema (furnished herewith)
101.CAL	XBRL Taxonomy Extension Calculation Linkbase (furnished herewith)
101.DEF	XBRL Taxonomy Extension Definition Linkbase (furnished herewith)
101.LAB	XBRL Taxonomy Extension Label Linkbase (furnished herewith)
101.PRE	XBRL Taxonomy Extension Presentation Linkbase (furnished herewith)

27

SIGNATURES

Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

TRANS WORLD ENTERTAINMENT CORPORATION

June 19, 2018	By: /s/ Michael Feurer
	Michael Feurer
	Chief Executive Officer
	(Principal Executive Officer)
June 19, 2018	By: /s/ John Anderson
	John Anderson
	Chief Financial Officer
	(Principal and Chief Accounting Officer)

28

EX-31.1

Exhibit 31.1

CHIEF EXECUTIVE OFFICER CERTIFICATION PURSUANT TO SECTION 302 OF SARBANES OXLEY ACT 2002

 I, Michael Feurer certify that:

(1) I have reviewed this report on Form 10–Q of the Registrant;

(2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

(3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

(4) The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

(5) The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated:  June 19, 2018

/s/ Michael Feurer

Michael Feurer
Chief Executive Officer
Trans World Entertainment Corporation

EX-31.2

Exhibit 31.2

CHIEF FINANCIAL OFFICER CERTIFICATION PURSUANT TO SECTION 302 OF SARBANES OXLEY ACT 2002

I, John Anderson, Chief Financial Officer of Trans World Entertainment Corporation (the “Registrant”), certify that:

(1) I have reviewed this report on Form 10–Q of the Registrant;

(2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

(3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

(4) The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

(5) The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated:  June 19, 2018

/s/ John Anderson    

John Anderson
Chief Financial Officer
Trans World Entertainment Corporation

EX-32

Exhibit 32

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Trans World Entertainment Corporation (the “Company”) on Form 10-Q for the period ending May 5, 2018 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), we, Michael Feurer, Chief Executive Officer of the Company and John Anderson, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of our knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Michael Feurer	/s/ John Anderson
Michael Feurer Chief Executive Officer June 19, 2018	John Anderson Chief Financial Officer June 19, 2018

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Document And Entity Information	3 Months Ended
	May 05, 2018 shares
Document and Entity Information [Abstract]
Entity Registrant Name	TRANS WORLD ENTERTAINMENT CORP
Document Type	10-Q
Current Fiscal Year End Date	--01-31
Entity Common Stock, Shares Outstanding	36,212,570
Amendment Flag	false
Entity Central Index Key	0000795212
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Accelerated Filer
Entity Well-known Seasoned Issuer	No
Document Period End Date	May 05, 2018
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q1

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CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	May 05, 2018	Feb. 03, 2018	Apr. 29, 2017
CURRENT ASSETS
Cash and cash equivalents	$ 14,509	$ 31,326	$ 15,803
Restricted cash	4,113	1,505	13,001
Accounts receivable	6,620	4,469	5,950
Merchandise inventory	110,677	109,377	127,509
Prepaid expenses and other assets	7,418	6,976	8,621
Total current assets	143,337	153,653	170,884
Restricted cash	6,354	10,675	10,496
Fixed assets, net	13,138	13,546	45,002
Goodwill	39,191	39,191	39,191
Intangible assets, net	22,995	23,967	26,886
Other assets	6,760	7,139	7,598
TOTAL ASSETS	231,775	248,171	300,057
CURRENT LIABILITIES
Accounts payable	36,894	41,780	40,778
Accrued expenses and other current liabilities	9,900	11,038	11,224
Deferred revenue	7,473	8,464	8,190
Total current liabilities	54,267	61,282	60,192
Other long-term liabilities	27,059	29,131	37,624
TOTAL LIABILITIES	81,326	90,413	97,816
SHAREHOLDERS’ EQUITY
Preferred stock ($0.01 par value; 5,000,000 shares authorized; none issued)
Common stock ($0.01 par value; 200,000,000 shares authorized; 64,369,171, 64,305,171 and 64,252,671 shares issued, respectively)	643	643	643
Additional paid-in capital	341,946	341,103	338,842
Treasury stock at cost (28,156,601, 28,156,601 and 28,137,283 shares, respectively)	(230,145)	(230,145)	(230,144)
Accumulated other comprehensive loss	(1,003)	(998)	(797)
Retained earnings	39,008	47,155	93,697
TOTAL SHAREHOLDERS’ EQUITY	150,449	157,758	202,241
TOTAL LIABILITIES AND EQUITY	$ 231,775	$ 248,171	$ 300,057

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CONDENSED CONSOLIDATED BALANCE SHEETS (Parentheticals) - $ / shares	May 05, 2018	Feb. 03, 2018	Apr. 29, 2017
Preferred stock par value (in Dollars per share)	$ 0.01	$ 0.01	$ 0.01
Preferred stock, shares authorized	5,000,000	5,000,000	5,000,000
Preferred stock, shares issued	0	0	0
Common stock par value (in Dollars per share)	$ 0.01	$ 0.01	$ 0.01
Common stock, shares authorized	200,000,000	200,000,000	200,000,000
Common stock, shares issued	64,369,171	64,305,171	64,252,671
Treasury stock, shares at cost	28,156,601	28,156,601	28,137,283

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	May 05, 2018	Apr. 29, 2017
Net sales	$ 95,232	$ 100,752
Other revenue	1,371	1,215
Total revenue	96,603	101,967
Cost of sales	64,915	65,662
Gross profit	31,688	36,305
Selling, general and administrative expenses	40,079	41,512
Income from joint venture	(233)
Loss from operations	(8,158)	(5,207)
Interest expense	64	56
Gain on insurance proceeds		(8,835)
Other income	(79)	(15)
Income (loss) before income tax expense	(8,143)	3,587
Income tax expense	4	54
Net income (loss)	$ (8,147)	$ 3,533
BASIC AND DILUTED INCOME (LOSS) PER SHARE:
Basic income (loss) per common share (in Dollars per share)	$ (0.22)	$ 0.10
Weighted average number of common shares outstanding – basic (in Shares)	36,237	36,177
Diluted income (loss) per common share (in Dollars per share)	$ (0.22)	$ 0.10
Weighted average number of common shares outstanding – diluted (in Shares)	36,237	36,214

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands	3 Months Ended
	May 05, 2018	Apr. 29, 2017
Net income (loss)	$ (8,147)	$ 3,533
Amortization of pension gain (loss)	5	(9)
Comprehensive income (loss)	$ (8,142)	$ 3,524

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	May 05, 2018	Apr. 29, 2017
OPERATING ACTIVITIES:
Net income (loss)	$ (8,147)	$ 3,533
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation of fixed assets	1,261	2,406
Amortization of intangible assets	972	972
Stock based compensation	843	768
Loss on disposal of fixed assets	10	10
Change in cash surrender value	51	(68)
Gain on life insurance asset		(8,859)
Changes in operating assets and liabilities that provide (use) cash:
Accounts receivable	(2,151)	1,463
Merchandise inventory	(1,300)	(1,505)
Prepaid expenses and other current assets	(442)	(351)
Other long-term assets	(126)	(194)
Accounts payable	(4,886)	(11,529)
Accrued expenses and other current liabilities	362	527
Deferred revenue	(991)	(1,039)
Other long-term liabilities	(2,077)	(17)
Net cash used in operating activities	(16,621)	(13,883)
INVESTING ACTIVITIES:
Purchases of fixed assets	(863)	(2,321)
Proceeds from company owned life insurance		14,032
Investment in joint venture		(2,605)
Capital distributions from joint venture	454
Net cash (used in) provided by investing activities	(409)	9,106
FINANCING ACTIVITIES:
Payments to etailz shareholders	(1,500)
Net cash used in financing activities	(1,500)
Net decrease in cash, cash equivalents, and restricted cash	(18,530)	(4,777)
Cash, cash equivalents, and restricted cash, beginning of period	43,506	44,077
Cash, cash equivalents, and restricted cash, end of period	$ 24,976	$ 39,300

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Nature of Operations

3 Months Ended

May 05, 2018

Disclosure Text Block [Abstract]

Nature of Operations [Text Block]

Note 1. Nature of Operations

Trans World Entertainment Corporation and subsidiaries (“the Company”) is one of the largest specialty retailers of entertainment products, including trend, video, music, electronics and related products in the United States. The Company operates in two reportable segments: fye and etailz. The fye segment operates a chain of retail entertainment stores and e-commerce sites, www.fye.com and www.secondspin.com. As of May 5, 2018, the fye segment operated 253 stores totaling approximately 1.4 million square feet in the United States, the District of Columbia and the U.S. Virgin Islands. The etailz segment generates substantially all of its revenue through Amazon Marketplace. The Company’s business is seasonal in nature, with the peak selling period being the holiday season which falls in the Company’s fourth fiscal quarter.

Liquidity and Cash Flows:

The Company’s primary sources of working capital are cash provided by operations and borrowing capacity under its revolving credit facility. The Company’s cash flows fluctuate from quarter to quarter due to various items, including seasonality of sales and earnings, merchandise inventory purchases and returns, the related terms on the purchases and capital expenditures. Management believes it will have adequate resources to fund its cash needs for the foreseeable future, including its capital spending, its seasonal increase in merchandise inventory and other operating cash requirements and commitments.

Management anticipates any cash requirements due to a shortfall in cash from operations will be funded by the Company’s revolving credit facility. See note 8 in the interim condensed consolidated financial statements for additional information.

In connection with the preparation of these unaudited interim condensed consolidated financial statements, the Company has evaluated and concluded there are no conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern for a period of one year following the date that these financial statements are issued.

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Basis of Presentation

3 Months Ended

May 05, 2018

Disclosure Text Block [Abstract]

Basis of Accounting [Text Block]

Note 2. Basis of Presentation

The accompanying interim condensed consolidated financial statements consist of Trans World Entertainment Corporation, Record Town, Inc. (“Record Town”), Record Town’s subsidiaries and etailz, Inc., all of which are wholly-owned. All intercompany accounts and transactions have been eliminated.

The interim condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. The information furnished in these unaudited interim condensed consolidated financial statements reflects all normal, recurring adjustments which, in the opinion of management, are necessary for the fair presentation of such financial statements. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Certain information and footnote disclosures normally included in the financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to rules and regulations applicable to interim financial statements.

The accompanying unaudited interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto and Management’s Discussion and Analysis of Financial Condition and Results of Operations as of and for the year ended February 3, 2018 contained in the Company’s Annual Report on Form 10-K filed May 4, 2018. The results of operations for the thirteen weeks ended May 5, 2018 are not necessarily indicative of the results to be expected for the entire fiscal year ending February 2, 2019. 

The Company’s significant accounting policies are the same as those described in Note 1 to the Company’s Consolidated Financial Statements on Form 10-K for the fiscal year ended February 3, 2018.

There have been no material changes to the accounting policies applied to our consolidated results and footnote disclosures.

Recently Adopted Accounting Pronouncements

In June 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606), which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. On February 4, 2018, the Company adopted ASU No. 2014-09 using the modified retrospective approach. The adoption of this ASU impacted the timing of revenue recognition for gift card breakage. Prior to adoption of ASU No. 2014-09, gift card breakage was recognized at the point gift card redemption became remote. In accordance with this ASU, the Company will recognize gift card breakage in proportion to the pattern of rights exercised by the customer. The adoption of this ASU also impacted presentation of our condensed consolidated financial statements related to sales return reserves. The cumulative effect of initially applying ASU No. 2014-09 was a $0.5 million decrease to the opening balance of retained earnings as of February 4, 2018. The comparative prior period information continues to be reported under the accounting standards in effect during those periods.

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Recent Accounting Pronouncements

3 Months Ended

May 05, 2018

New Accounting Pronouncements and Changes in Accounting Principles [Abstract]

New Accounting Pronouncements and Changes in Accounting Principles [Text Block]

Note 3. Recently Issued Accounting Pronouncements

In February 2016, the FASB issued ASU No. 2016-02, “Leases”, which will replace most existing lease accounting guidance in U.S. GAAP. The core principle of this ASU is that an entity should recognize the rights and obligations resulting from leases as assets and liabilities. The new standard requires qualitative and specific quantitative disclosures to supplement the amounts recorded in the financial statements so that users can understand more about the nature of an entity’s leasing activities, including significant judgments and changes in judgments. The new standard will be effective for the Company’s fiscal year beginning February 3, 2019, and requires the modified retrospective method of adoption. Management is progressing with implementation and continuing to evaluate the effect to the Company’s Condensed Consolidated Financial Statements and disclosures. Given the nature of the operating leases for the Company’s home office, distribution center, and stores, the Company expects an increase to the carrying value of its assets and liabilities.

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Goodwill and Other Intangible Assets

3 Months Ended

May 05, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets Disclosure [Text Block]

Note 4. Goodwill and Other Intangible Assets

Our goodwill results from our acquisition of etailz and represents the excess purchase price over the net identifiable assets acquired. All of our goodwill is associated with etailz, a separate reporting unit, and there is no goodwill associated with our other reporting unit, fye. Goodwill is not amortized and we are required to evaluate our goodwill for impairment at least annually or whenever indicators of impairment are present. Our annual test is completed during the fourth fiscal quarter, and interim tests are conducted when circumstances indicate the carrying value of the goodwill or other intangible assets may not be recoverable. 

Estimating the fair value of reporting units requires the use of estimates and significant judgments that are based on a number of factors including actual operating results. It is possible that these judgments and estimates could change in future periods.

The determination of the fair value of intangible assets and liabilities acquired in a business acquisition, including the Company’s acquisition of etailz in 2016, is subject to many estimates and assumptions. Our identifiable intangible assets that resulted from our acquisition of etailz consist of vendor relationships, technology and tradenames. We review amortizable intangible asset groups for impairment whenever events or changes in circumstances indicate that the related carrying amounts may not be recoverable.

Identifiable intangible assets as of May 5, 2018 consisted of the following ($ in thousands):

	May 5, 2018
	Weighted Average Amortization Period (in months)		Original Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Vendor relationships		120	$	19,100	$	2,965	$	16,135
Technology		60		6,700		2,073		4,627
Trade names and trademarks		60		3,200		967		2,233
			$	29,000	$	6,005	$	22,995

The changes in net intangibles and goodwill from February 3, 2018 to May 5, 2018 were as follows:

($ in thousands)	February 3, 2018		Amortization		May 5, 2018
Amortized intangible assets:
Vendor relationships	$	16,612	$	477	$	16,135
Technology		4,962		335		4,627
Trade names and trademarks		2,393		160		2,233
Net amortized intangible assets	$	23,967	$	972	$	22,995
Unamortized intangible assets:
Goodwill	$	39,191	$	—	$	39,191
Total unamortized intangible assets	$	39,191	$	—	$	39,191

Amortization expense of intangible assets for the thirteen weeks ended May 5, 2018 and April 29, 2017 consisted of the following:

	Thirteen Weeks Ended
($ in thousands)	May 5, 2018		April 29, 2017
Amortized intangible assets:
Vendor relationships	$	477	$	477
Technology		335		335
Trade names and trademarks		160		160
Total amortization expense	$	972	$	972

Estimated amortization expense for the remainder of fiscal 2018 and the five succeeding fiscal years and thereafter is as follows:

Year	Annual Amortization
( $ in thousands)
2018	$	2,918
2019		3,890
2020		3,890
2021		3,325
2022		1,910
2023		1,910
Thereafter		5,152

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Depreciation and Amortization

3 Months Ended

May 05, 2018

Depreciation and Amoritzation [Abstract]

Depreciation and Amoritzation [Text Block]

Note 5. Depreciation and Amortization

Depreciation and amortization included in the interim condensed consolidated statements of operations is as follows:

	Thirteen Weeks Ended
	May 5,		April 29,
	2018		2017
	($ in thousands)
Cost of sales	$	0	$	154
Selling, general and administrative expenses		2,233		3,223
Total	$	2,233	$	3,377

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Segment Data

3 Months Ended

May 05, 2018

Segment Reporting [Abstract]

Segment Reporting Disclosure [Text Block]

Note 6. Segment Data

As described in Note 1 to the interim condensed consolidated financial statements, we operate in two reportable segments as shown in the following table:

	Thirteen Weeks Ended
($ in thousands)	May 5, 2018			April 29, 2017
Total Revenue
fye	$	54,063		$	64,944
etailz		42,540			37,023
Total Company	$	96,603		$	101,967
Gross Profit
fye	$	22,271		$	26,910
etailz		9,417			9,395
Total Company	$	31,688		$	36,305
Loss From Operations
fye	$	(5,372	)	$	(4,386	)
etailz		(2,786	)		(821	)
Total Company	$	(8,158	)	$	(5,207	)
Total Assets
fye	$	132,461		$	201,335
etailz		99,314			98,722
Total Company	$	231,775		$	300,057

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Restricted Cash

3 Months Ended

May 05, 2018

Disclosure Text Block Supplement [Abstract]

Restricted Assets Disclosure [Text Block]

Note 7. Restricted Cash

As of May 5, 2018, the Company had restricted cash of $4.1 million and $6.4 million reported in current and other assets on the accompanying interim condensed consolidated balance sheet, respectively. As of April 29, 2017, the Company had restricted cash of $13.0 million and $10.5 million reported in current and other assets on the accompanying interim condensed consolidated balance sheet, respectively.

In connection with the acquisition of etailz and under the terms of the amended and restated share purchase agreement, the Company designated $3.2 million of the restricted cash to equal the maximum earn-out amount that could be paid to the selling shareholders of etailz in accordance with the share purchase agreement.

During the thirteen weeks ended May 5, 2018, the Company paid out $1.5 million of the restricted cash to the etailz shareholders per the terms of the original etailz acquisition share purchase agreement.

In addition, as a result of the death of its former Chairman, the Company holds $7.3 million in a rabbi trust, of which $0.9 million is classified as restricted cash in current assets and $6.4 million is classified as restricted cash in other assets on the accompanying interim condensed consolidated balance sheet.

A summary of cash, cash equivalents and restricted cash is as follows ($ in thousands):

	May 5,		February 3,		April 29,
	2018		2018		2017
Cash and cash equivalents	$	14,509	$	31,326	$	15,803
Restricted cash		10,467		12,180		23,497
Total cash, cash equivalents and restricted cash	$	24,976	$	43,506	$	39,300

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Line of Credit

3 Months Ended

May 05, 2018

Line of Credit [Abstract]

Line of Credit [Text Block]

Note 8. Line of Credit

In January 2017, the Company entered into a $50 million asset based credit facility (“Credit Facility”) which amended the previous credit facility. The principal amount of all outstanding loans under the Credit Facility, together with any accrued but unpaid interest, are due and payable in January 2022, unless otherwise paid earlier pursuant to the terms of the Credit Facility. Payments of amounts due under the Credit Facility are secured by the assets of the Company. The Credit Facility contains a provision to increase availability to $75 million during October to December of each year, as needed. The availability under the Credit Facility is subject to limitations based on receivables and inventory levels.

The Credit Facility contains customary affirmative and negative covenants, including restrictions on dividends and share repurchases, incurrence of additional indebtedness and acquisitions and covenants around the net number of store closings and restrictions related to the payment of cash dividends and share repurchases, including limiting the amount of dividends and share repurchases to $5.0 million annually and not allowing borrowings under the amended facility for the six months before or six months after the dividend payment. The Credit Facility also includes customary events of default, including, among other things, material adverse effect, bankruptcy, and certain changes of control. As of May 5, 2018, the Company was compliant with all covenants.

Interest under the Credit Facility will accrue, at the election of the Company, at a Base Rate or LIBO Rate, plus, in each case, an Applicable Margin, which is determined by reference to the level of availability, with the Applicable Margin for LIBO Rate loans ranging from 1.75% to 2.00% and the Applicable Margin for Prime Rate loans ranging from 0.75% to 1.00%. In addition, a commitment fee of 0.25% is also payable on unused commitments.

As of May 5, 2018 and April 29, 2017, the Company did not have any borrowings under the Credit Facility. The Company had $41.1 million and $35.0 million available for borrowing as of May 5, 2018 and April 29, 2017, respectively.

As of May 5, 2018, the Company had $1.2 million in outstanding letters of credit related to an import purchase. As of April 29, 2017 the Company did not have any outstanding letters of credit.

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Stock Based Compensation

3 Months Ended

May 05, 2018

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

Note 9. Stock Based Compensation

As of May 5, 2018, there was approximately $2.8 million of unrecognized compensation cost related to stock option awards comprised of the following: $0.7 million was related to stock option awards listed in the table below and expected to be recognized as expense over a weighted average period of 2.3 years; $0.2 million was related to restricted stock option awards expected to be recognized as expense over a weighted average period of 3.0 years; and $1.9 million was related to restricted shares issued in connection with the acquisition of etailz, as discussed further below, and expected to be recognized as expense over the next 9 months.

The Company has outstanding awards under three employee stock award plans, the 2005 Long Term Incentive and Share Award Plan, the Amended and Restated 2005 Long Term Incentive and Share Award Plan (the “Old Plans”); and the 2005 Long Term Incentive and Share Award Plan (as amended and restated April 5, 2017 (the “New Plan”). Collectively, these plans are referred to herein as the Stock Award Plans. Additionally, the Company had a stock award plan for non-employee directors (the “1990 Plan”). The Company no longer issues stock options under the Old Plans or the 1990 Plan.

Equity awards authorized for issuance under the New Plan total 5.0 million. As of May 5, 2018, of the awards authorized for issuance under the Stock Award Plans, 2.5 million were granted and are outstanding, 1.4 million of which were vested and exercisable. Shares available for future grants of options and other share based awards under the New Plan at May 5, 2018 were 4.9 million.

The following table summarizes stock award activity during the thirteen weeks ended May 5, 2018:

	Employee and Director Stock Award Plans
	Number of Shares Subject To Option			Weighted Average Exercise Price	Weighted Average Remaining Contractual Term	Other Share Awards (1)		Weighted Average Grant Fair Value
Balance February 3, 2018	2,585,914		$	3.06	7.2	183,427	$	3.22
Granted	—			—	—	—		—
Canceled	(89,500	)		3.21	—	—		—
Exercised	—			—	—	—		—
Balance May 5, 2018	2,496,414		$	3.05	7.0	183,427	$	3.22
Exercisable May 5, 2018	1,404,789		$	3.19	6.0	63,427	$	4.50

(1) Other Share Awards include deferred shares granted to Directors and restricted share units granted to executive officers.

As of May 5, 2018, all stock awards outstanding and exercisable had a grant price higher than the market price of the stock and had no intrinsic value.

In connection with the acquisition of etailz, the Company issued 1,572,552 restricted shares of Company stock to a key etailz employee, with a grant date fair value of $3.56 per share. These shares vest ratably through January 2019. During the thirteen weeks ended May 5, 2018, the Company recognized $622 thousand of compensation cost related to these shares. As of May 5, 2018, there was approximately $1.9 million of unrecognized compensation cost related to these restricted shares that is expected to be recognized as expense over the next 9 months.

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Accumulated Other Comprehensive Loss

3 Months Ended

May 05, 2018

Disclosure Text Block Supplement [Abstract]

Other Comprehensive Income, Noncontrolling Interest [Text Block]

Note 10. Accumulated Other Comprehensive Loss

Accumulated other comprehensive loss that the Company reports in the interim condensed consolidated balance sheets represents net loss, adjusted for the difference between the accrued pension liability and accrued benefit cost, net of taxes, associated with the Company’s defined benefit plan. Comprehensive loss consists of net loss and the amortization of pension costs (gain) associated with Company’s defined benefit plan for the thirteen weeks ended May 5, 2018 and April 29 2017.

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Defined Benefit Plans

3 Months Ended

May 05, 2018

Disclosure Text Block Supplement [Abstract]

Compensation and Employee Benefit Plans [Text Block]

Note 11. Defined Benefit Plan

The Company maintains a non-qualified Supplemental Executive Retirement Plan (“SERP”) for certain executive officers of the Company. The SERP provides eligible executives defined pension benefits that supplement benefits under other retirement arrangements. During the thirteen weeks ended May 5, 2018, the Company did not make any cash contributions to the SERP and presently expects to pay approximately $1.2 million in benefits relating to the SERP during fiscal 2018.

The measurement date for the SERP is the fiscal year end, using actuarial techniques which reflect estimates for mortality, turnover and expected retirement. In addition, management makes assumptions concerning future salary increases. Discount rates are generally established as of the measurement date using theoretical bond models that select high-grade corporate bonds with maturities or coupons that correlate to the expected payouts of the applicable liabilities.

The following represents the components of the net periodic pension cost related to the Company’s SERP for the respective periods:

	Thirteen Weeks Ended
	May 5, 2018		April 29, 2017
	($ in thousands)
Service cost	$	14	$	16
Interest cost		140		139
Amortization of pension costs		0		4
Amortization of net gain (loss) (1)		5		(9	)
Net periodic pension cost	$	159	$	150

⁽¹⁾ The amortization of net gain (loss) is related to a Director Retirement Plan previously provided by the Company.

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Basic and Diluted Loss Per Share

3 Months Ended

May 05, 2018

Earnings Per Share [Abstract]

Earnings Per Share [Text Block]

Note 12. Basic and Diluted Loss Per Share

Basic income (loss) per share is calculated by dividing net income (loss) by the weighted average common shares outstanding for the period. Diluted income (loss) per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock (net of any assumed repurchases) that then shared in the earnings of the Company, if any. It is computed by dividing net income (loss) by the sum of the weighted average shares outstanding and additional common shares that would have been outstanding if the dilutive potential common shares had been issued for the Company’s common stock awards from the Company’s Stock Award Plans.

For the thirteen week period ended May 5, 2018, the impact of all outstanding stock awards was not considered because the Company reported a net loss and such impact would be anti-dilutive. Accordingly, basic and diluted loss per share was the same. For the thirteen week period ended April 29, 2017, 37 thousand shares of employee stock options were considered dilutive. Total anti-dilutive stock awards for the thirteen weeks ended May 5, 2018, were approximately 2.6 million shares as compared to 2.3 million for the thirteen weeks ended April 29, 2017.

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Income Taxes

3 Months Ended

May 05, 2018

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

Note 13. Income Taxes

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized.  The ultimate realization of deferred tax assets is dependent on the generation of future taxable income. Management considers the scheduled reversal of taxable temporary differences, projected future taxable income and tax planning strategies in making this assessment.  Based on available objective evidence, management concluded that a full valuation allowance should continue to be recorded against the Company’s deferred tax assets. Management will continue to assess the need for and amount of the valuation allowance against the deferred tax assets by giving consideration to all available evidence to the Company’s ability to generate future taxable income in its conclusion of the need for a full valuation allowance.  Any reversal of the Company’s valuation allowance will favorably impact its results of operations in the period of reversal.  The Company is currently unable to determine whether or when that reversal might occur, but it will continue to assess the realizability of its deferred tax assets and will adjust the valuation allowance if it is more likely than not that all or a portion of the deferred tax assets will become realizable in the future.  The Company has significant net operating loss carry forwards and other tax attributes that are available to offset projected taxable income and current taxes payable, if any, for the year ending February 2, 2019.  The deferred tax impact resulting from the utilization of the net operating loss carry forwards and other tax attributes will be offset by a reduction in the valuation allowance. As of February 3, 2018, the Company had a net operating loss carry forward of $208.3 million for federal income tax purposes and approximately $273.4 million for state income tax purposes that expire at various times through 2037 and are subject to certain limitations and statutory expiration periods. The Company has also recorded $0.1 million of deferred tax liability relating to the etailz segment that relates to state income tax returns that do not allow consolidated filing. The Company has not changed its overall conclusion with respect to the need for a valuation allowance against its new deferred tax assets, which remain fully reserved.

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Commitments and Contingencies

3 Months Ended

May 05, 2018

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies Disclosure [Text Block]

Note 14. Commitments and Contingencies

Legal Proceedings

The Company is subject to legal proceedings and claims that have arisen in the ordinary course of its business and have not been finally adjudicated. Although there can be no assurance as to the ultimate disposition of these matters, it is management’s opinion, based upon the information available at this time, that the expected outcome of these matters, individually and in the aggregate, will not have a material adverse effect on the results of operations and financial condition of the Company.

Store Manager Class Actions

Two former Store Managers filed actions alleging claims of entitlement to unpaid compensation for overtime. In one action, the plaintiff seeks to represent a class of allegedly similarly situated employees who performed the same position (Store Manager and Senior Assistant Manager) while the other plaintiff seeks to represent a class of allegedly similarly situated employees who performed the same position (Store Manager).

Specifically, Carol Spack filed a complaint against Trans World Entertainment Corporation (Trans World) in the United States District Court, District of New Jersey, on April 20, 2017 (Case No.: 3:17-cv-02687-BRM-LHG) alleging that she is entitled to unpaid compensation for overtime under the federal Fair Labor Standards Act (FLSA). She brings a nationwide collective action under the FLSA on behalf of all Store Managers and Senior Assistant Managers. She also brings class action claims under New Jersey and Pennsylvania law on behalf of all persons who worked as Store Managers in New Jersey or Senior Assistant Managers in Pennsylvania.

On May 19, 2017, Natasha Roper filed a complaint against Trans World in the U.S. District Court for the Northern District of New York (Case No.: 1:17-cv-0553-TJM-CFH) in which she also alleges that she is entitled to unpaid compensation for overtime under the FLSA. Ms. Roper brings a nationwide collective action under the FLSA on behalf of all similarly situated Store Managers.

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Goodwill and Other Intangible Assets (Tables)

3 Months Ended

May 05, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Finite-Lived Intangible Assets [Table Text Block]

Identifiable intangible assets as of May 5, 2018 consisted of the following ($ in thousands):

	May 5, 2018
	Weighted Average Amortization Period (in months)		Original Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Vendor relationships		120	$	19,100	$	2,965	$	16,135
Technology		60		6,700		2,073		4,627
Trade names and trademarks		60		3,200		967		2,233
			$	29,000	$	6,005	$	22,995

Schedule of Intangible Assets and Goodwill [Table Text Block]

The changes in net intangibles and goodwill from February 3, 2018 to May 5, 2018 were as follows:

($ in thousands)	February 3, 2018		Amortization		May 5, 2018
Amortized intangible assets:
Vendor relationships	$	16,612	$	477	$	16,135
Technology		4,962		335		4,627
Trade names and trademarks		2,393		160		2,233
Net amortized intangible assets	$	23,967	$	972	$	22,995
Unamortized intangible assets:
Goodwill	$	39,191	$	—	$	39,191
Total unamortized intangible assets	$	39,191	$	—	$	39,191

Finite-lived Intangible Assets Amortization Expense [Table Text Block]

Amortization expense of intangible assets for the thirteen weeks ended May 5, 2018 and April 29, 2017 consisted of the following:

	Thirteen Weeks Ended
($ in thousands)	May 5, 2018		April 29, 2017
Amortized intangible assets:
Vendor relationships	$	477	$	477
Technology		335		335
Trade names and trademarks		160		160
Total amortization expense	$	972	$	972

Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block]

Estimated amortization expense for the remainder of fiscal 2018 and the five succeeding fiscal years and thereafter is as follows:

Year	Annual Amortization
( $ in thousands)
2018	$	2,918
2019		3,890
2020		3,890
2021		3,325
2022		1,910
2023		1,910
Thereafter		5,152

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Depreciation and Amortization (Tables)

3 Months Ended

May 05, 2018

Depreciation and Amoritzation [Abstract]

Schedule of Depreciation and Amortization of Fixed Assets [Table Text Block]

Depreciation and amortization included in the interim condensed consolidated statements of operations is as follows:

	Thirteen Weeks Ended
	May 5,		April 29,
	2018		2017
	($ in thousands)
Cost of sales	$	0	$	154
Selling, general and administrative expenses		2,233		3,223
Total	$	2,233	$	3,377

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Segment Data (Tables)

3 Months Ended

May 05, 2018

Segment Reporting [Abstract]

Schedule of Segment Reporting Information, by Segment [Table Text Block]

As described in Note 1 to the interim condensed consolidated financial statements, we operate in two reportable segments as shown in the following table:

	Thirteen Weeks Ended
($ in thousands)	May 5, 2018			April 29, 2017
Total Revenue
fye	$	54,063		$	64,944
etailz		42,540			37,023
Total Company	$	96,603		$	101,967
Gross Profit
fye	$	22,271		$	26,910
etailz		9,417			9,395
Total Company	$	31,688		$	36,305
Loss From Operations
fye	$	(5,372	)	$	(4,386	)
etailz		(2,786	)		(821	)
Total Company	$	(8,158	)	$	(5,207	)
Total Assets
fye	$	132,461		$	201,335
etailz		99,314			98,722
Total Company	$	231,775		$	300,057

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Restricted Cash (Tables)

3 Months Ended

May 05, 2018

Disclosure Text Block Supplement [Abstract]

Restrictions on Cash and Cash Equivalents [Table Text Block]

A summary of cash, cash equivalents and restricted cash is as follows ($ in thousands):

	May 5,		February 3,		April 29,
	2018		2018		2017
Cash and cash equivalents	$	14,509	$	31,326	$	15,803
Restricted cash		10,467		12,180		23,497
Total cash, cash equivalents and restricted cash	$	24,976	$	43,506	$	39,300

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Stock Based Compensation (Tables)

3 Months Ended

May 05, 2018

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Exercisable [Table Text Block]

The following table summarizes stock award activity during the thirteen weeks ended May 5, 2018:

	Employee and Director Stock Award Plans
	Number of Shares Subject To Option			Weighted Average Exercise Price	Weighted Average Remaining Contractual Term	Other Share Awards (1)		Weighted Average Grant Fair Value
Balance February 3, 2018	2,585,914		$	3.06	7.2	183,427	$	3.22
Granted	—			—	—	—		—
Canceled	(89,500	)		3.21	—	—		—
Exercised	—			—	—	—		—
Balance May 5, 2018	2,496,414		$	3.05	7.0	183,427	$	3.22
Exercisable May 5, 2018	1,404,789		$	3.19	6.0	63,427	$	4.50

(1) Other Share Awards include deferred shares granted to Directors and restricted share units granted to executive officers.

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Defined Benefit Plans (Tables)

3 Months Ended

May 05, 2018

Disclosure Text Block Supplement [Abstract]

Schedule of Net Benefit Costs [Table Text Block]

The following represents the components of the net periodic pension cost related to the Company’s SERP for the respective periods:

	Thirteen Weeks Ended
	May 5, 2018		April 29, 2017
	($ in thousands)
Service cost	$	14	$	16
Interest cost		140		139
Amortization of pension costs		0		4
Amortization of net gain (loss) (1)		5		(9	)
Net periodic pension cost	$	159	$	150

⁽¹⁾ The amortization of net gain (loss) is related to a Director Retirement Plan previously provided by the Company.

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Nature of Operations (Details) ft² in Millions	3 Months Ended
	May 05, 2018 ft²
Disclosure Text Block [Abstract]
Number of Reportable Segments	2
Number of Stores	253
Area of Stores (in Square Feet)	1.4

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Basis of Presentation (Details) $ in Millions	Feb. 04, 2018 USD ($)
Disclosure Text Block [Abstract]
Cumulative Effect of New Accounting Principle in Period of Adoption	$ 0.5

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Recent Accounting Pronouncements (Details)	3 Months Ended
	May 05, 2018
Accounting Standards Update 2016-02 [Member]
Recent Accounting Pronouncements (Details) [Line Items]
New Accounting Pronouncement or Change in Accounting Principle, Description	In February 2016, the FASB issued ASU No. 2016-02, “Leases”, which will replace most existinglease accounting guidance in U.S. GAAP. The core principle of this ASU is that an entity should recognize the rights and obligationsresulting from leases as assets and liabilities. The new standard requires qualitative and specific quantitative disclosures tosupplement the amounts recorded in the financial statements so that users can understand more about the nature of an entity’sleasing activities, including significant judgments and changes in judgments. The new standard will be effective for the Company’sfiscal year beginning February 3, 2019, and requires the modified retrospective method of adoption. Management is progressingwith implementation and continuing to evaluate the effect to the Company’s Condensed Consolidated Financial Statements and disclosures.Given the nature of the operating leases for the Company’s home office, distribution center, and stores, the Company expectsan increase to the carrying value of its assets and liabilities.

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Goodwill and Other Intangible Assets (Details) - Schedule of Identifiable Intangible Assets $ in Thousands	3 Months Ended
	May 05, 2018 USD ($)
Finite-Lived Intangible Assets [Line Items]
Original Gross Carrying Amount	$ 29,000
Accumulated Amortization	6,005
Net Carrying Amount	$ 22,995
Vendor Relationships [Member]
Finite-Lived Intangible Assets [Line Items]
Weighted Average Amortization Period (in months)	120 months
Original Gross Carrying Amount	$ 19,100
Accumulated Amortization	2,965
Net Carrying Amount	$ 16,135
Technology-Based Intangible Assets [Member]
Finite-Lived Intangible Assets [Line Items]
Weighted Average Amortization Period (in months)	60 months
Original Gross Carrying Amount	$ 6,700
Accumulated Amortization	2,073
Net Carrying Amount	$ 4,627
Trademarks and Trade Names [Member]
Finite-Lived Intangible Assets [Line Items]
Weighted Average Amortization Period (in months)	60 months
Original Gross Carrying Amount	$ 3,200
Accumulated Amortization	967
Net Carrying Amount	$ 2,233

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Goodwill and Other Intangible Assets (Details) - Schedule of Changes in Net Intangibles and Goodwill - USD ($) $ in Thousands	3 Months Ended
	May 05, 2018	Apr. 29, 2017	Feb. 03, 2018
Amortized intangible assets:
Amortization of intangible assets	$ 972	$ 972
Net amortized intangible assets	22,995	26,886	$ 23,967
Amortization of net intangible assets	972
Unamortized intangible assets:
Goodwill	39,191	39,191	39,191
Total unamortized intangible assets	39,191		39,191
Vendor Relationships [Member]
Amortized intangible assets:
Amortized intangible assets	16,135		16,612
Amortization of intangible assets	477	477
Technology [Member]
Amortized intangible assets:
Amortized intangible assets	4,627		4,962
Amortization of intangible assets	335	335
Trademarks and Trade Names [Member]
Amortized intangible assets:
Amortized intangible assets	2,233		$ 2,393
Amortization of intangible assets	$ 160	$ 160

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Goodwill and Other Intangible Assets (Details) - Schedule of Amortization Expense of Intangible Assets - USD ($) $ in Thousands	3 Months Ended
	May 05, 2018	Apr. 29, 2017
Amortized intangible assets:
Amortized intangible assets:	$ 972	$ 972
Vendor Relationships [Member]
Amortized intangible assets:
Amortized intangible assets:	477	477
Technology [Member]
Amortized intangible assets:
Amortized intangible assets:	335	335
Trademarks and Trade Names [Member]
Amortized intangible assets:
Amortized intangible assets:	$ 160	$ 160

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Goodwill and Other Intangible Assets (Details) - Schedule of Estimated Amortization Expense $ in Thousands	May 05, 2018 USD ($)
Schedule of Estimated Amortization Expense [Abstract]
2018	$ 2,918
2019	3,890
2020	3,890
2021	3,325
2022	1,910
2023	1,910
Thereafter	$ 5,152

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Depreciation and Amortization (Details) - Schedule of Depreciation and Amortization of Fixed Assets - USD ($) $ in Thousands	3 Months Ended
	May 05, 2018	Apr. 29, 2017
Schedule of Depreciation and Amortization of Fixed Assets [Abstract]
Cost of sales	$ 0	$ 154
Selling, general and administrative expenses	2,233	3,223
Total	$ 2,233	$ 3,377

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Segment Data (Details)	3 Months Ended
	May 05, 2018
Segment Reporting [Abstract]
Number of Reportable Segments	2

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Segment Data (Details) - Schedule of Reporting Segements - USD ($) $ in Thousands	3 Months Ended
	May 05, 2018	Apr. 29, 2017	Feb. 03, 2018
Total Revenue
Total Revenue	$ 96,603	$ 101,967
Gross Profit
Gross Profit	31,688	36,305
Loss From Operations
Loss From Operations	(8,158)	(5,207)
Total Assets
Total Assets	231,775	300,057	$ 248,171
fye [Member]
Total Revenue
Total Revenue	54,063	64,944
Gross Profit
Gross Profit	22,271	26,910
Loss From Operations
Loss From Operations	(5,372)	(4,386)
Total Assets
Total Assets	132,461	201,335
etailz [Member]
Total Revenue
Total Revenue	42,540	37,023
Gross Profit
Gross Profit	9,417	9,395
Loss From Operations
Loss From Operations	(2,786)	(821)
Total Assets
Total Assets	99,314	98,722
Total Company [Member]
Total Revenue
Total Revenue	96,603	101,967
Gross Profit
Gross Profit	31,688	36,305
Loss From Operations
Loss From Operations	(8,158)	(5,207)
Total Assets
Total Assets	$ 231,775	$ 300,057

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Restricted Cash (Details) - USD ($) $ in Millions	3 Months Ended
	May 05, 2018	Apr. 29, 2017
Restricted Cash (Details) [Line Items]
Restricted Cash and Cash Equivalents, Current	$ 4.1	$ 13.0
Restricted Cash and Cash Equivalents, Noncurrent	6.4	$ 10.5
In Connection With Acquisition of etailz [Member]
Restricted Cash (Details) [Line Items]
Restricted Cash Maximum Earn Out Provision	3.2
Business Combination, Indemnification Assets, Amount as of Acquisition Date	1.5
As a Result of Death of Chairman [Member]
Restricted Cash (Details) [Line Items]
Restricted Cash and Cash Equivalents, Current	0.9
Restricted Cash and Cash Equivalents, Noncurrent	6.4
Assets Held-in-trust	$ 7.3

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Restricted Cash (Details) - Schedule of Cash, Cash Equivalents, and Restricted Cash - USD ($) $ in Thousands	May 05, 2018	Feb. 03, 2018	Feb. 02, 2018	Apr. 29, 2017	Jan. 28, 2017
Schedule of Cash, Cash Equivalents, and Restricted Cash [Abstract]
Cash and cash equivalents	$ 14,509	$ 31,326		$ 15,803
Restricted cash	10,467	12,180		23,497
Total cash, cash equivalents and restricted cash	$ 24,976	$ 43,506	$ 43,506	$ 39,300	$ 44,077

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Line of Credit (Details) - USD ($) $ in Millions	3 Months Ended
	May 05, 2018	Apr. 29, 2017
Line of Credit (Details) [Line Items]
Line of Credit Facility, Current Borrowing Capacity	$ 50.0
Line of Credit Facility, Dividend Restrictions	The Credit Facility contains customary affirmative and negative covenants, including restrictions ondividends and share repurchases, incurrence of additional indebtedness and acquisitions and covenants around the net number ofstore closings and restrictions related to the payment of cash dividends and share repurchases, including limiting the amountof dividends and share repurchases to $5.0 million annually and not allowing borrowings under the amended facility for the sixmonths before or six months after the dividend payment. The Credit Facility also includes customary events of default, including,among other things, material adverse effect, bankruptcy, and certain changes of control.
Dividends and Share Repurchase Maximum	$ 5.0
Line of Credit Facility, Remaining Borrowing Capacity	41.1	$ 35.0
Letters of Credit Outstanding, Amount	1.2
Increased Maximum During Months of October, November, and December [Member]
Line of Credit (Details) [Line Items]
Line of Credit Facility, Current Borrowing Capacity	$ 75.0
Credit Facility [Member]
Line of Credit (Details) [Line Items]
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage	0.25%
LIBOR Rate [Member] | Minimum [Member] | Credit Facility [Member]
Line of Credit (Details) [Line Items]
Debt Instrument, Basis Spread on Variable Rate	1.75%
LIBOR Rate [Member] | Maximum [Member] | Credit Facility [Member]
Line of Credit (Details) [Line Items]
Debt Instrument, Basis Spread on Variable Rate	2.00%
Prime Rate [Member] | Minimum [Member] | Credit Facility [Member]
Line of Credit (Details) [Line Items]
Debt Instrument, Basis Spread on Variable Rate	0.75%
Prime Rate [Member] | Maximum [Member] | Credit Facility [Member]
Line of Credit (Details) [Line Items]
Debt Instrument, Basis Spread on Variable Rate	1.00%

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Stock Based Compensation (Details)	3 Months Ended
	May 05, 2018 USD ($) $ / shares shares
Stock Based Compensation (Details) [Line Items]
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized | $	$ 0.7
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | shares	5,000,000
Share Based Compensation Arrangement By Share Based Payment Award Options And Other Than Options Outstanding Number | shares	2,500,000
Share Based Compensation Arrangement By Share Based Payment Award Options And Other Than Options Vested And Expected To Vest Exercisable Number | shares	1,400,000
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | shares	4,900,000
Employee Stock Option [Member]
Stock Based Compensation (Details) [Line Items]
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized | $	$ 2,800
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition	2 years 109 days
Restricted Stock [Member]
Stock Based Compensation (Details) [Line Items]
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized | $	$ 0.2
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition	3 years
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value | $ / shares	$ 3.56
Restricted Stock [Member] | In Connection With Acquisition of etailz [Member]
Stock Based Compensation (Details) [Line Items]
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized | $	$ 1,900,000
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition	9 months
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Granted | shares	1,572,552
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost | $	$ 622,000

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Stock Based Compensation (Details) - Schedule of Disclosure of Share-based Compensation Arrangements by Share-based Payment Award - $ / shares				3 Months Ended
		May 05, 2018	Feb. 03, 2018	May 05, 2018
Schedule of Disclosure of Share-based Compensation Arrangements by Share-based Payment Award [Abstract]
Balance February 3, 2018			2,585,914	2,585,914
Balance February 3, 2018 (in Dollars per share)			$ 3.06	$ 3.06
Balance February 3, 2018			7 years 73 days
Balance February 3, 2018	[1]		183,427	183,427
Balance February 3, 2018 (in Dollars per share)			$ 3.22	$ 3.22
Granted	[1]
Canceled				(89,500)
Canceled (in Dollars per share)				$ 3.21
Exercised	[1]
Balance May 5, 2018		2,496,414		2,496,414
Balance May 5, 2018 (in Dollars per share)		$ 3.05		$ 3.05
Balance May 5, 2018		7 years
Balance May 5, 2018	[1]	183,427		183,427
Balance May 5, 2018 (in Dollars per share)		$ 3.22		$ 3.22
Exercisable May 5, 2018		1,404,789		1,404,789
Exercisable May 5, 2018 (in Dollars per share)		$ 3.19		$ 3.19
Exercisable May 5, 2018		6 years
Exercisable May 5, 2018	[1]	63,427
Exercisable May 5, 2018 (in Dollars per share)		$ 4.50

[1] Other Share Awards include deferred shares granted to Directors and restricted share units granted to executive officers.

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Defined Benefit Plans (Details) $ in Millions	May 05, 2018 USD ($)
Supplemental Employee Retirement Plan [Member]
Defined Benefit Plans (Details) [Line Items]
Defined Benefit Plan, Expected Future Benefit Payment, Next Twelve Months	$ 1.2

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Defined Benefit Plans (Details) - Schedule Components of Net Periodic Benefit Cost and Other Comprehensive Income Loss - USD ($) $ in Thousands		3 Months Ended
		May 05, 2018	Apr. 29, 2017
Schedule Components of Net Periodic Benefit Cost and Other Comprehensive Income Loss [Abstract]
Service cost		$ 14	$ 16
Interest cost		140	139
Amortization of pension costs		0	4
Amortization of net gain (loss)	[1]	5	(9)
Net periodic pension cost		$ 159	$ 150

[1] The amortization of net gain (loss) is related to a Director Retirement Plan previously provided by the Company.

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Basic and Diluted Loss Per Share (Details) - shares shares in Thousands	3 Months Ended
	May 05, 2018	Apr. 29, 2017
Earnings Per Share [Abstract]
Weighted Average Number Diluted Shares Outstanding Adjustment		37
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	2,600	2,300

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Income Taxes (Details) $ in Millions	3 Months Ended
	May 05, 2018 USD ($)
Domestic Tax Authority [Member]
Income Taxes (Details) [Line Items]
Operating Loss Carryforwards	$ 208.3
State and Local Jurisdiction [Member]
Income Taxes (Details) [Line Items]
Operating Loss Carryforwards	$ 273.4
Tax Credit Carryforward Expiration Year	2037
etailz [Member] | State and Local Jurisdiction [Member]
Income Taxes (Details) [Line Items]
Deferred Tax Liabilities, Net	$ 0.1

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Commitments and Contingencies (Details)	May 19, 2017	Apr. 20, 2017
Commitments and Contingencies Disclosure [Abstract]
Description of Filed Claim	On May 19, 2017, Natasha Roper filed a complaint against TransWorld in the U.S. District Court for the Northern District of New York (Case No.: 1:17-cv-0553-TJM-CFH) in which she also allegesthat she is entitled to unpaid compensation for overtime under the FLSA. Ms. Roper brings a nationwide collective action underthe FLSA on behalf of all similarly situated Store Managers.	Specifically, Carol Spack filed a complaint against Trans WorldEntertainment Corporation (Trans World) in the United States District Court, District of New Jersey, on April 20, 2017 (Case No.:3:17-cv-02687-BRM-LHG) alleging that she is entitled to unpaid compensation for overtime under the federal Fair Labor StandardsAct (FLSA). She brings a nationwide collective action under the FLSA on behalf of all Store Managers and Senior Assistant Managers.She also brings class action claims under New Jersey and Pennsylvania law on behalf of all persons who worked as Store Managersin New Jersey or Senior Assistant Managers in Pennsylvania.