Annual report pursuant to Section 13 and 15(d)

Subsequent Events

Subsequent Events
12 Months Ended
Feb. 02, 2020
Subsequent Events [Abstract]  



The Company has evaluated events and transactions subsequent to February 2, 2020 through the date the consolidated financial statements were issued.


In March 2020, the World Health Organization declared the outbreak of COVID-19 as a global pandemic, and, in the following weeks, many U.S. states and localities issued lockdown orders impacting consumer demand and resulting in the closing of all of the Company's showrooms. Since then, the COVID-19 situation within the U.S. has rapidly escalated. On April 1, 2020, the Company announced that all showroom locations will remain closed until further notice. The Company will follow the guidance of local, state and federal governments, as well as health organizations, to determine when the Company can safely reopen its showrooms. Additionally, the Company implemented a reduction in workforce of approximately 445 part time employees (representing 57% of our total headcount) as well as a temporary reduction in executive cash compensation. Cash compensation was reduced by 20% for Shawn Nelson, Chief Executive Officer, Jack Krause, President and Chief Operating Officer, and Donna Dellomo, Executive Vice President and Chief Financial Officer. The base salaries of all other senior management and full-time headquarter team members has been temporarily reduced by graduated amounts. Our Board of Directors has also agreed to a temporary reduction of its retainer and monitoring fees and an extension of the associated payment timeline. The Company continues to monitor the situation closely and it is possible that the Company will implement further measures to provide additional financial flexibility as it works work to protect its cash position and liquidity.