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Note 1 - Business and Summary of Significant Accounting Policies
3 Months Ended
Apr. 26, 2014
Disclosure Text Block [Abstract]  
Business Description and Basis of Presentation [Text Block]

NOTE 1 – BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES


Organization


Hancock Fabrics, Inc. (“Hancock” or the “Company”) is a specialty retailer committed to nurturing creativity through a complete selection of fashion and home decorating textiles, crafts, sewing accessories, needlecraft supplies and sewing machines. As of April 26, 2014, Hancock operated 260 stores in 37 states and an internet store under the domain name hancockfabrics.com. Hancock conducts business in one operating business segment.


References herein to “Hancock,” the “Company,” “Registrant,” “we,” “our” or “us” refer to Hancock Fabrics, Inc. and its subsidiaries unless the context specifically indicates otherwise. References herein to first quarter 2014 and first quarter 2013 are for the 13 week periods ended April 26, 2014 and April 27, 2013, respectively.


The board of directors of the Company has approved submitting a proposal to the Company stockholders at its 2014 annual meeting to be held on August 15, 2014, to approve an amendment to its certificate of incorporation for the purpose of effecting a thousand for one reverse stock split. In lieu of issuing any fractional post-reverse stock split shares that would result from the reverse stock split, the Company would make a cash payment for any fractional share interest based on $1.20 per pre-reverse split share. If approved, the Company expects the reverse stock split to reduce the number of holders of its common stock in order to permit the Company to terminate the registration of its common stock under the Securities Exchange Act of 1934, as amended and its requirement to file periodic and other reports with the Securities and Exchange Commission (“SEC”). 


As further detailed in the preliminary proxy statement on Schedule 14A filed with the SEC on May 9, 2014, the board of directors may choose not to proceed with this transaction for a variety of reasons including, but not limited to, higher than anticipated costs, increased leverage or other reasons, as applicable.


Basis of Presentation


We maintain our financial records on a 52-53 week fiscal year ending on the last Saturday in January with each new fiscal year commencing on the Sunday thereafter. All quarters consist of 13 weeks except for one 14 week quarter in 53 week years.


The accompanying unaudited Consolidated Financial Statements should be read in conjunction with our audited Consolidated Financial Statements and accompanying notes in our Annual Report on Form 10-K for the year ended January 25, 2014 filed with the SEC on April 25, 2014. The accompanying (a) consolidated balance sheet as of January 25, 2014, has been derived from audited financial statements, and (b) the unaudited consolidated interim financial statements have been prepared pursuant to SEC Rule 10-01 of Regulation S-X. Accordingly, certain information and note disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) have been condensed or omitted pursuant to those rules and regulations from the interim financial statements, although we believe that the disclosures made are adequate to make the information not misleading.


The unaudited results of operations for the interim periods shown in these financial statements are not necessarily indicative of operating results for the entire year. In the opinion of management, the accompanying unaudited Consolidated Financial Statements recognize all adjustments of a normal recurring nature considered necessary to fairly state our consolidated financial position as of April 26, 2014 and April 27, 2013, and our consolidated results of operations and cash flows for the thirteen weeks ended April 26, 2014, and April 27, 2013.


The unaudited Consolidated Financial Statements have been prepared in accordance with GAAP applicable to a going concern. Except as otherwise disclosed, these principles assume that assets will be realized and liabilities will be discharged in the ordinary course of business.