Leases

6 Months Ended

Jul. 31, 2021

Leases [Abstract]

Leases

LEASES

We lease retail stores, a limited amount of office space and certain equipment under operating leases expiring in various years through the fiscal year ending 2031. All of our leases have been classified as operating leases and are recognized and measured as such.

Certain operating leases provide for renewal options that are at a pre-determined period and rental value. Furthermore, certain leases provide that we may cancel the lease if our retail sales at that location fall below an established level. Within the first few years of the initial lease term, a majority of our store operating leases contain cancellation clauses that allow the leases to be terminated at our discretion, if certain minimum sales levels are not met. In the normal course of business, operating leases are typically renewed or replaced by other leases.

Escalation of operating lease payments of certain leases depend on an existing index or rate, such as the consumer price index or the market interest rate. These are considered variable lease payments and are included in lease payments when the escalation is known.

The Company deferred substantially all rent payments due in the months of April, May and June 2020 and otherwise made reduced rent payments where and when applicable during fiscal 2020 as a result of the impact of the pandemic. In April 2020, the FASB granted a practical expedient permitting an entity to choose to forgo the evaluation of the enforceable rights and obligations of the original lease contract, specifically in situations where rent concessions have been agreed to with landlords as a result of the pandemic. Instead, the entity may account for pandemic-related rent concessions, whatever their form (e.g. rent deferral, abatement or other) either: a) as if they were part of the enforceable rights and obligations of the parties under the existing lease contract; or b) as lease modifications. During the thirteen and twenty-six weeks ended July 31, 2021 and August 1, 2020, we received concessions from certain landlords in the form of rent deferrals, rent abatements and other lease or rent modifications as a result of the impact of the pandemic. In accordance with the practical expedient allowed by the FASB, the Company has elected to treat all pandemic-related rent concessions and related amendments, including pandemic-related lease amendments that extended the lease term, as lease modifications under ASC 842, Leases. In addition, the Company continued recording lease expense during deferral periods, as applicable, in accordance with its existing policies. The Company made rent payments in accordance with its lease terms during the thirteen and twenty-six weeks ended July 31, 2021.

Operating lease expense was as follows:

	Thirteen Weeks Ended				Twenty-Six Weeks Ended
	July 31, 2021		August 1, 2020		July 31, 2021		August 1, 2020
Operating lease cost (1)	$	55,341	$	59,558	$	110,747	$	120,562

(1) For the thirteen and twenty-six weeks ended July 31, 2021, includes $9.3 million and $19.2 million, respectively, in variable lease costs. For the thirteen and twenty-six weeks ended August 1, 2020, includes $7.7 million and $16.1 million, respectively, in variable lease costs.

Supplemental balance sheet information related to operating leases was as follows:

	July 31, 2021			January 30, 2021			August 1, 2020
Right of use assets	$	529,945		$	586,061		$	571,992
Current lease liabilities	$	163,376		$	194,551		$	218,691
Long-term lease liabilities	454,164			515,797			482,380
Total operating lease liabilities	$	617,540		$	710,348		$	701,071
Weighted Average Remaining Lease Term (years)	4.2			4.5			4.6
Weighted Average Discount Rate (1)	4.6		%	4.9		%	5.5		%

(1) The incremental borrowing rate used by the Company is based on the rate at which the Company could borrow funds using its credit rating for a collateralized loan of similar term to the lease. The weighted average discount rate represents a weighted average of the incremental borrowing rate for each lease weighted based on the remaining fixed lease obligations. 

Supplemental cash flow information related to operating leases was as follows:

	Twenty-Six Weeks Ended
	July 31, 2021		August 1, 2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash outflows	$	132,549	$	38,673	(1)
Right of use assets obtained in exchange for lease obligations, non-cash	24,297		12,775

(1) The Company suspended or deferred rental payments when and where applicable as a result of the impact of the pandemic during the thirteen and twenty-six weeks ended August 1, 2020.

Maturities of operating lease liabilities as of July 31, 2021 were as follows:

Fiscal Year Ending:
January 29, 2022	$	89,370
January 28, 2023	192,195
February 4, 2024	148,613
February 1, 2025	106,797
January 31, 2026	68,718
Thereafter	77,332
Total future minimum lease payments	$	683,025
Less imputed interest	(65,485)
Total	$	617,540