NET SALES

The following table disaggregates the Company’s net sales by major source (in thousands):

	Three Months Ended
	May 5, 2018		April 29, 2017
Net Sales
Retail stores	$	62,987	$	70,848
Leased departments		9,989		11,563
Total retail locations		72,976		82,411
Ecommerce		25,482		17,840
Marketing partnerships		3,935		4,350
Wholesale and franchisee		834		1,825
Total net sales	$	103,227	$	106,426

The Company’s performance obligations consist primarily of transferring control of merchandise to customers. Retail and ecommerce sales are recognized upon transfer of control, which occurs when merchandise is taken at point-of-sale for a retail transaction or upon receipt of shipment for an ecommerce transaction. Sales are reported net of returns and sales taxes. Shipping and handling fees billed to customers are recognized in net sales when control of the underlying merchandise is transferred to the customer.

The Company earns revenue through a variety of marketing partnership programs utilizing the Company’s opt-in customer database and various in-store marketing initiatives focused on baby and parent-related products and services. Revenue from these activities is recognized when the goods or services are provided.

Sales of product to the Company’s wholesale customers and international franchisees are recognized upon transfer of control which is primarily when the product is shipped. Franchise fees are recorded by the Company when all material services have been performed or in the case of royalties earned on sales of product, in the period when the franchisee sells product to their retail customer.