BRAND HOUSE COLLECTIVE, INC. Leases Disclosure
Note 7 — Leases
The Company leases retail store facilities, corporate office space, warehouse facilities and certain vehicles and equipment under operating leases with terms generally ranging up to 10 years and expiring at various dates through fiscal 2034. Most of the retail store agreements include an initial term with renewal options and provide for minimum fixed rental payments. The Company does not include lease renewal options in the lease term for calculations of its right-of-use assets and liabilities until it is reasonably certain that the Company plans to renew these leases. A few retail store lease agreements have only variable lease payments based on a percentage of sales, while other store leases contain contingent rentals based on sales performance in excess of specified minimums in addition to minimum fixed rentals.
The majority of the Company’s leases have monthly fixed rent with additional costs that are not components of the lease (e.g., real estate taxes and insurance costs) and non-lease components (e.g., common area maintenance) either of which can be variable or fixed. These additional non-lease components are excluded from the calculation of the lease liability and right-of-use asset. The Company’s leases do not provide an implicit rate, so the incremental borrowing rate, based on the information available at commencement or modification date, is used in determining the present value of lease payments. The Company has elected not to recognize leases with an original term of one year or less on the consolidated balance sheets.
The Company's classification of lease cost on the Company's consolidated statements of operations is as follows (in thousands):
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|
52 Week Period Ended (1) |
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|
53 Week Period Ended (1) |
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|
52 Week Period Ended (1) |
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February 1, 2025 |
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|
February 3, 2024 |
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|
January 28, 2023 |
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Cost of sales (2) |
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|
|
|
|
|
|
|
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Operating lease cost |
|
$ |
45,373 |
|
|
$ |
46,066 |
|
|
$ |
44,960 |
|
Short-term lease cost |
|
|
743 |
|
|
|
1,308 |
|
|
|
2,662 |
|
Variable lease cost |
|
|
1,067 |
|
|
|
1,226 |
|
|
|
1,367 |
|
Total lease cost in cost of sales |
|
|
47,183 |
|
|
|
48,600 |
|
|
|
48,989 |
|
Other operating expenses |
|
|
|
|
|
|
|
|
|
|||
Operating lease cost |
|
|
1,201 |
|
|
|
1,651 |
|
|
|
1,657 |
|
Short-term lease cost |
|
|
63 |
|
|
|
66 |
|
|
|
67 |
|
Total lease cost in other operating expenses |
|
|
1,264 |
|
|
|
1,717 |
|
|
|
1,724 |
|
Total lease cost |
|
$ |
48,447 |
|
|
$ |
50,317 |
|
|
$ |
50,713 |
|
As of February 1, 2025, future minimum payments, by year and in the aggregate, under all operating leases with initial terms of one year or more consist of the following (in thousands):
|
|
Operating |
|
|
2025 |
|
$ |
48,944 |
|
2026 |
|
|
40,655 |
|
2027 |
|
|
29,994 |
|
2028 |
|
|
19,900 |
|
2029 |
|
|
11,613 |
|
Thereafter |
|
|
11,433 |
|
Total lease payments |
|
|
162,539 |
|
Less: interest |
|
|
(28,099 |
) |
Present value of lease liabilities |
|
$ |
134,440 |
|
The Company’s lease term and discount rate is as follows:
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|
February 1, 2025 |
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|
Weighted-average remaining lease term (years) |
|
|
4.3 |
|
Weighted-average discount rate |
|
|
9.4 |
% |
Cash paid for amounts included in the measurement of lease liabilities is as follows (in thousands):
|
|
52 Weeks Ended |
|
|
53 Weeks Ended |
|
|
52 Weeks Ended |
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Operating cash flows from operating leases |
|
$ |
46,122 |
|
|
$ |
55,805 |
|
|
$ |
49,125 |
|
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | May 2, 2025 | Showing above |
| 2024 | Mar 29, 2024 | |
| 2023 | Apr 4, 2023 | |
| 2022 | Mar 25, 2022 | |
| 2021 | Mar 26, 2021 | |
| 2020 | Apr 10, 2020 | |
| 2019 | Mar 29, 2019 | |
| 2018 | Apr 3, 2018 | |
| 2017 | Mar 31, 2017 | |
| 2016 | Apr 8, 2016 | |
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.