0001558370-22-004959 | 10-K | XBRL Viewer | Lulus Fashion Lounge Holdings INC

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Significant Accounting Policies - Property and Equipment, net (Details)	12 Months Ended
	Jan. 02, 2022
Minimum
Property, Plant and Equipment [Line Items]
Useful lives of the property, plant and equipment	3 years
Maximum
Property, Plant and Equipment [Line Items]
Useful lives of the property, plant and equipment	8 years

Fair Value Measurements	12 Months Ended
Jan. 02, 2022
Fair Value Measurements
Fair Value Measurements	3.Fair Value Measurements The Company discloses and recognizes the fair value of its assets and liabilities using a hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date. The guidance establishes three levels of the fair value hierarchy as follows: Level 1—Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date. Level 2—Inputs are observable, unadjusted quoted prices in active markets for similar assets or liabilities, unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities. Level 3—Unobservable inputs that are significant to the measurement of the fair value of the assets or liabilities that are supported by little or no market data. The Company’s financial instruments consist of cash and cash equivalents, restricted cash, accounts payable, accrued expenses, revolving line of credit and long-term debt. As of January 2, 2022 and January 3, 2021, the carrying values of cash and cash equivalents, restricted cash, accounts payable and accrued expenses and other current liabilities approximate fair value due to their short-term maturities. The fair value of the Company’s new revolving facility that provides for borrowings up to $50.0 million (the “New Revolving Facility” — see Note 5, Debt) approximates its carrying value as the stated interest rates reset daily at the daily secured overnight financing rate (“SOFR”) plus an applicable margin and, as such, approximate market rates currently available to the Company. The Company does not have any financial instruments that were determined to be Level 3.

Fair Value Measurements

12 Months Ended

Jan. 02, 2022

Fair Value Measurements

Fair Value Measurements

3.Fair Value Measurements

The Company discloses and recognizes the fair value of its assets and liabilities using a hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date. The guidance establishes three levels of the fair value hierarchy as follows:

Level 1—Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date.

Level 2—Inputs are observable, unadjusted quoted prices in active markets for similar assets or liabilities, unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities.

Level 3—Unobservable inputs that are significant to the measurement of the fair value of the assets or liabilities that are supported by little or no market data.

The Company’s financial instruments consist of cash and cash equivalents, restricted cash, accounts payable, accrued expenses, revolving line of credit and long-term debt. As of January 2, 2022 and January 3, 2021, the carrying values of cash and cash equivalents, restricted cash, accounts payable and accrued expenses and other current liabilities approximate fair value due to their short-term maturities. The fair value of the Company’s new revolving facility that provides for borrowings up to $50.0 million (the “New Revolving Facility” — see Note 5, Debt) approximates its carrying value as the stated interest rates reset daily at the daily secured overnight financing rate (“SOFR”) plus an applicable margin and, as such, approximate market rates currently available to the Company. The Company does not have any financial instruments that were determined to be Level 3.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Consolidated Statements of Redeemable Preferred Stock, Convertible Preferred Stock and Stockholders' Equity (Deficit) (Parenthetical) - USD ($) $ in Thousands	12 Months Ended
	Jan. 02, 2022	Jan. 03, 2021
IPO
Stock issuance costs	$ 10,016
Series B Redeemable Preferred Stock
Issuance costs		$ 163
Series B-1 Redeemable Preferred Stock
Issuance costs	$ 23

Preferred Stock (Tables)

12 Months Ended

Jan. 02, 2022

Preferred Stock

Summary of outstanding redeemable preferred stock and convertible preferred stock


	January 3, 2021
		Shares	Issuance		Net
	Shares	Issued and	Price Per		Carrying		Liquidation
	Authorized	Outstanding	Share		Value		Preference
Convertible Preferred Stock (Series A)	3,129,635	3,129,634	$	38.34	$	117,038	$	240,000
Redeemable Preferred Stock (Series B and B-1)	7,500,001	7,500,001		1.00		16,412		15,000
Total	10,629,636	10,629,635			$	133,450	$	255,000

Significant Accounting Policies - Deferred Offering Costs (Details) - USD ($)	12 Months Ended
	Jan. 03, 2021	Jan. 02, 2022
Write-off of deferred offering costs	$ 1,950,000
Deferred offering costs	0	$ 0
General and administrative expenses
Write-off of deferred offering costs	$ 2,000,000.0

Income Taxes - components of the income tax (provision) benefit (Details) - USD ($) $ in Thousands	12 Months Ended
	Jan. 02, 2022	Jan. 03, 2021	Dec. 29, 2019
Current:
Federal	$ (5,919)	$ 900
State	(1,956)	357
Total current (provision) benefit	(7,875)	1,257
Deferred:
Federal	1,341	(220)
State	322	234
Total deferred benefit	1,663	14
Income tax (provision) benefit	$ (6,212)	$ 1,271	$ (445)

- Definition

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

+ References + Details

Equity-Based Compensation - Summary of Unvested Restricted Stock (Details) - USD ($)		12 Months Ended
	Nov. 15, 2021	Jan. 02, 2022	Jan. 03, 2021	Dec. 29, 2019
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Converted from class P units of the Company upon LP liquidation	1,964,103
Balance at the end of period		502,322
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract]
Income tax benefit recognized related to equity-based compensation expense		$ 0	$ 0	$ 0
Unvested restricted stock
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Converted from class P units of the Company upon LP liquidation	427,799	427,799
Restricted stock vested		(39,326)
Restricted stock forfeited		(6,861)
Balance at the end of period		381,612
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract]
Weighted average fair value, converted		$ 5.44
Weighted average fair value, vested		5.85
Weighted average fair value, forfeited		5.99
Weighted average fair value, end		$ 5.39
Total fair value		$ 200,000

Description of Business, Organization and Liquidity

12 Months Ended

Jan. 02, 2022

Description of Business, Organization and Liquidity

Description of Business, Organization and Liquidity

1.Description of Business, Organization and Liquidity

Organization and Business

Pursuant to a reorganization, Lulu’s Fashion Lounge Holdings, Inc., a Delaware Corporation (“Lulus”, or the “Company”), was formed on August 25, 2017 as a holding company and its primary asset is an indirect membership interest in Lulu’s Fashion Lounge, LLC (“LFL”). Prior to the Company’s initial public offering, the Company was majority-owned by Lulu’s Holdings, L.P. (the “LP”). In connection with the Company’s initial public offering, the LP was liquidated.

LFL was founded in 1996, starting as a vintage boutique in Chico, CA that began selling online in 2005 and transitioned to a purely online business in 2008. The LP was formed in 2014 as a holding company and purchased 100% of LFL’s outstanding common stock in 2014. The Company, through LFL, is an online retailer of women’s clothing, shoes and accessories based in Chico, CA.

Initial Public Offering

On November 10, 2021, the Company’s registration statement on Form S-1 relating to its initial public offering (“IPO”) was declared effective by the Securities and Exchange Commission (“SEC”) and the shares of its common stock began trading on the Nasdaq Global Market on November 11, 2021. The IPO closed on November 15, 2021, pursuant to which the Company issued and sold 5,750,000 shares of its common stock at a public offering price of $16.00 per share. On November 15, 2021, the Company received net proceeds of approximately $82.0 million from the IPO, after deducting underwriting discounts and commissions of approximately $6.1 million and other issuance costs of approximately $3.9 million. Immediately prior to the completion of the IPO, the Company filed an amended and restated certificate of incorporation, which authorized a total of 250,000,000 shares of common stock at $0.001 par value per share, and 10,000,000 shares of preferred stock, $0.001 par value per share. Immediately prior to the completion of the IPO, all shares of the Series A Preferred Stock then outstanding were converted into 15,000,000 shares of common stock. Additionally, 215,702 shares of common stock were issued to the LP immediately prior to the completion of the IPO. All shares of the Series B Preferred Stock and the Series B-1 Preferred Stock were redeemed and extinguished for a total payment of approximately $17.9 million on November 15, 2021.

Impact of COVID-19

The COVID-19 pandemic has had a significant impact on the broader economy and consumer behavior. As a result of these developments, the Company experienced an unfavorable impact on its revenue, results of operations and cash flows in 2020.

The Company may face longer term impacts from COVID-19 due to, among other factors, evolving federal, state and local restrictions and shelter-in-place orders, changes in consumer behavior and health concerns which may impact customer demand, as well as labor shortages, supply chain disruptions and higher shipping costs. The current events and economic conditions are significant in relation to the Company’s ability to fund its business operations. In response to the impact of COVID-19 primarily in 2020, the Company implemented a number of measures to minimize cash outlays, including reducing discretionary marketing and other expenses.

Debt - Future Minimum Payments of Principal on Outstanding Debt (Details) $ in Thousands	Jan. 02, 2022 USD ($)
Future minimum payments of principal on outstanding debt
2024	$ 25,000
Total carrying value of long-term debt	$ 25,000

- Definition

Amount, after unamortized (discount) premium and debt issuance costs, of long-term debt. Includes, but not limited to, notes payable, bonds payable, debentures, mortgage loans and commercial paper. Excludes capital lease obligations.

+ References + Details

Significant Accounting Policies - Long-Lived Asset Impairment (Details) - USD ($) $ in Millions	12 Months Ended
	Jan. 02, 2022	Jan. 03, 2021	Dec. 29, 2019
Significant Accounting Policies
Impairment of long-lived assets	$ 0.0	$ 0.0	$ 0.0

Debt - Outstanding Debt Under the Term Loan (Details) - USD ($) $ in Thousands				12 Months Ended
	Nov. 15, 2021	Apr. 30, 2021	Jun. 05, 2020	Jan. 02, 2022	Jan. 03, 2021	Dec. 29, 2019	Aug. 31, 2017
Debt Instrument [Line Items]
Debt instrument amendment fee and other costs			$ 1,400
Loss on extinguishment of debt				$ (1,392)
Total carrying value of long-term debt				25,000
Less: Current portion of long-term debt					$ (10,125)
Long-term debt, net of current portion					96,856
Accrued expenses and other current liabilities
Debt Instrument [Line Items]
Amendment fee payable					$ 900
Revolving credit facility
Debt Instrument [Line Items]
Revolving line of credit				$ 50,000			$ 10,000
Gain (loss) on debt modification		$ 0	$ 0
Revolving credit facility \| Minimum
Debt Instrument [Line Items]
Amount of minimum liquidity covenant		2,500
Revolving credit facility \| Maximum
Debt Instrument [Line Items]
Amount of minimum liquidity covenant		$ 10,000
Term Loan
Debt Instrument [Line Items]
Principal amount							$ 135,000
Repayment of principal	$ 105,800
Repayment of interest	1,400
Prepayment penalties	0
Loss on extinguishment of debt	1,400
Unamortized debt issuance costs and debt discounts written-off	2,300
Debt costs forgiven	$ 900
Debt instrument effective interest rate				15.30%	13.30%	12.20%
Principal amount of debt					$ 111,354
Less: Unamortized debt issuance costs					(4,373)
Total carrying value of long-term debt					106,981
Less: Current portion of long-term debt					(10,125)
Long-term debt, net of current portion					$ 96,856

Preferred Stock - Additional Information (Details) $ / shares in Units, $ in Thousands					12 Months Ended
	Nov. 15, 2021 USD ($) $ / shares shares	Mar. 31, 2021 USD ($) $ / shares shares	Feb. 28, 2021 item $ / shares	Jun. 30, 2020 USD ($) $ / shares shares	Jan. 02, 2022 USD ($) $ / shares shares	Nov. 14, 2021 $ / shares shares	Jan. 03, 2021 USD ($) $ / shares shares
Temporary Equity [Line Items]
Preferred stock, shares authorized \| shares					10,000,000	10,000,000	0
Preferred stock, par value (in dollars per share) \| $ / shares					$ 0.001	$ 0.001	$ 0.001
Preferred stock issued \| shares					0		0
Preferred stock outstanding \| shares					0		0
Common stock, shares authorized \| shares					250,000,000	250,000,000	21,196,740
IPO
Temporary Equity [Line Items]
Issue price per share (in dollars per share) \| $ / shares	$ 16.00				$ 16.00
Common stock issued within convertible stock (in shares) \| shares	11,870,366
Deemed dividend as a result of conversion of the convertible preferred stock	$ 1,400
Liquidation Preference	17,900
Temporary equity, carrying amount	19,300
Redemption of redeemable preferred stock	17,900
Stock issuance costs	$ 6,100
Equity based compensation					$ 3,500
Series A convertible preferred stock
Temporary Equity [Line Items]
Conversion price of preferred stock (in dollars per share) \| $ / shares	$ 38.34
Deemed dividend as a result of conversion of the convertible preferred stock	$ 123,000
Liquidation Preference	240,000						$ 240,000
Temporary equity, carrying amount	$ 117,000						$ 117,038
Issuance price per share \| $ / shares							$ 38.34
Shares authorized \| shares							3,129,635
Redeemable Preferred Stock (Series B and B-1)
Temporary Equity [Line Items]
Liquidation Preference							$ 15,000
Temporary equity, carrying amount							$ 16,412
Issuance price per share \| $ / shares							$ 1.00
Shares authorized \| shares							7,500,001
Series B Redeemable Preferred Stock
Temporary Equity [Line Items]
Preferred stock issued and sold \| shares				7,500,001
Issuance price per share \| $ / shares				$ 1.00
Gross cash proceeds from issuance of preferred stock				$ 7,500
Stock issuance costs				$ 200
Fair value of preferred stock \| $ / shares				$ 2.21
Equity based compensation				$ 8,600
Deemed dividend				$ 500
Common stock, shares authorized \| shares		24,000,000
Liquidity term		3 years
Risk-free rate		0.21%
Expected volatility		72.00%
Series B Redeemable Preferred Stock \| Until August 28, 2022
Temporary Equity [Line Items]
Ratio of liquidation preference to original share price \| item			2
Original share price \| $ / shares			$ 1.00
Series B Redeemable Preferred Stock \| From August 28, 2022
Temporary Equity [Line Items]
Ratio of liquidation preference to original share price \| item			2
Original share price \| $ / shares			$ 1.00
Percentage of liquidation preference on original issue price			15.00%
Series B-1 Redeemable Preferred Stock
Temporary Equity [Line Items]
Preferred stock issued and sold \| shares		1,450,000
Issuance price per share \| $ / shares		$ 1.00
Gross cash proceeds from issuance of preferred stock		$ 1,500
Fair value of preferred stock \| $ / shares		$ 2.02
Equity based compensation		$ 1,500
Shares authorized \| shares		2,500,000
Risk-free rate		0.11%
Expected volatility		78.00%
Series B-1 Redeemable Preferred Stock \| Minimum
Temporary Equity [Line Items]
Liquidity term		6 months
Series B-1 Redeemable Preferred Stock \| Maximum
Temporary Equity [Line Items]
Liquidity term		1 year 6 months

Common Stock

12 Months Ended

Jan. 02, 2022

Common Stock

Common Stock

8.Common Stock

Pursuant to the Company’s amended and restated certificate of incorporation the Company is authorized to issue 250,000,000 shares of common stock with a $0.001 par value. As of January 2, 2022 and January 3, 2021, there were 38,421,124 and 17,462,283 shares of common stock issued and outstanding, respectively. Holders of common stock are entitled to one vote per share on all matters to be voted upon by the stockholders of the Company. Subject to the preferences that may be applicable to any outstanding share of preferred stock, the holders of common stock are entitled to receive dividends, if any, as may be declared by the board of directors. No dividends have been declared to date.

The IPO closed on November 15, 2021, pursuant to which the Company issued and sold 5,750,000 shares of its common stock at a public offering price of $16.00 per share. The Company received net proceeds of $82.0 million, after deducting underwriting discounts and commissions of approximately $6.1 million and other issuance costs of approximately $3.9 million. In connection with the IPO, all outstanding shares of convertible preferred stock were converted into 15,000,000 shares of common stock. Immediately prior to the completion of the Company’s IPO, 215,702 shares of common stock were issued to the LP. The Company concluded that these additional 215,702 shares are considered stock dividends of $3.5 million based on the Company’s IPO price of $16.00 per share during 2021. The 215,702 shares were subsequently distributed to the LP’s unit holders, which included current and prior employees (Class P unit holders), board members, and service providers upon the liquidation of the LP on November 15, 2021.

As of January 2, 2022, the Company has reserved 322,793 shares of common stock for issuance upon the exercise of stock options, 417,828 shares of common stock to settle the CEO Special Compensation Awards in March 2022 and March 2023, and 4,462,803 shares of common stock for future issuance under the equity plans described in Note 9, Equity-Based Compensation.

- Definition

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

+ References

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+ Details

Income Taxes - Reconciliation of the statutory federal rate (Details)	12 Months Ended
	Jan. 02, 2022	Jan. 03, 2021
Reconciliation of the statutory federal rate to the Company's effective tax rate:
Federal statutory rate	21.00%	21.00%
State income taxes, net of federal tax benefit	16.30%	0.90%
Non-deductible equity-based compensation expense	36.00%	(18.00%)
Tax credits		0.40%
Change in uncertain tax position	(0.90%)	1.50%
Prior year adjustments	2.30%	0.20%
Other	0.50%	0.20%
Effective tax rate	75.20%	6.20%

Consolidated Balance Sheets - USD ($) $ in Thousands	Jan. 02, 2022	Jan. 03, 2021
Current assets:
Cash and cash equivalents	$ 11,402	$ 15,554
Accounts receivable	5,649	3,832
Inventory, net	22,176	16,895
Asset for recovery	3,754	1,104
Income tax refund receivable	748	2,739
Prepaids and other current assets	5,364	2,675
Total current assets	49,093	42,799
Restricted cash	506	505
Property and equipment, net	3,231	3,090
Goodwill	35,430	35,430
Tradename	18,509	18,509
Intangible assets, net	2,244	2,290
Other noncurrent assets	4,763	2,453
Total assets	113,776	105,076
Current liabilities:
Accounts payable	4,227	7,161
Accrued expenses and other current liabilities	21,948	7,533
Returns reserve	9,731	2,895
Stored-value card liability	7,240	4,973
Revolving line of credit		8,580
Long-term debt, current portion		10,125
Total current liabilities	43,146	41,267
Revolving line of credit	25,000
Long-term debt, net of current portion		96,856
Other noncurrent liabilities	1,108	2,504
Total liabilities	69,254	140,627
Commitments and Contingencies (Note 6)
Stockholders' equity (deficit):
Preferred stock: $0.001 par value, 10,000,000 and no shares authorized as of January 2, 2022 and January 3, 2021, respectively; no shares authorized, issued or outstanding as of January 2, 2022
Common stock: $0.001 par value, 250,000,000 and 21,196,740 shares authorized as of January 2, 2022 and January 3, 2021, respectively; 38,421,124 and 17,462,283 shares issued and outstanding as of January 2, 2022 and January 3, 2021, respectively	38	18
Additional paid-in capital	222,080	10,622
Accumulated deficit	(177,596)	(179,641)
Total stockholders' equity (deficit)	44,522	(169,001)
Total liabilities, redeemable preferred stock, convertible preferred stock and stockholders' equity (deficit)	$ 113,776	105,076
Redeemable Preferred Stock
Current liabilities:
Temporary equity, carrying amount		16,412
Convertible Preferred Stock
Current liabilities:
Temporary equity, carrying amount		$ 117,038

Debt (Tables)

12 Months Ended

Jan. 02, 2022

Debt

Summary of outstanding debt under the Term Loan

The Company’s outstanding debt under the Term Loan consisted of the following (in thousands):


	January 2,		January 3,
	2022		2021
Principal amount of Term Loan	$	—	$	111,354
Less: Unamortized discount and debt issuance costs		—		(4,373)
Total carrying value of long-term debt		—		106,981
Less: Current portion of long-term debt		—		(10,125)
Long-term debt, net of current portion	$	—	$	96,856

Summary of future minimum payments of principal on the Company's outstanding debt

Future minimum payments of principal on the Company’s outstanding debt were as follows (in thousands):


Fiscal Year Ending	Amounts
2022	$	—
2023		—
2024		25,000
Total principal amount	$	25,000

- Definition

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

+ References

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-Name Accounting Standards Codification
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-Paragraph 1
-Subparagraph (SX 210.5-02.22)
-URI http://asc.fasb.org/extlink&oid=120391452&loc=d3e13212-122682

Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef
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-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 3
-Subparagraph (SX 210.12-04(a))
-URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e24072-122690

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Reference 5: http://www.xbrl.org/2003/role/exampleRef
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+ Details

Description of Business, Organization and Liquidity (Details) - USD ($) $ / shares in Units, $ in Thousands				12 Months Ended
	Nov. 15, 2021	Nov. 14, 2021	Jun. 30, 2020	Jan. 02, 2022	Mar. 31, 2021	Jan. 03, 2021	Dec. 31, 2014	Jul. 25, 2014
Subsidiary, Sale of Stock [Line Items]
Acquired percentage of outstanding common stock of subsidiary by LP							100.00%	100.00%
Net proceeds				$ 82,546
Common stock, shares authorized		250,000,000		250,000,000		21,196,740
Common stock, par value (in dollars per share)		$ 0.001		$ 0.001		$ 0.001
Preferred stock, shares authorized		10,000,000		10,000,000		0
Preferred stock, par value (in dollars per share)		$ 0.001		$ 0.001		$ 0.001
Number of shares of common stock upon conversion of convertible preferred stock		15,000,000
LP
Subsidiary, Sale of Stock [Line Items]
Issuance of common stock (in shares)	215,702	215,702
Series B Redeemable Preferred Stock
Subsidiary, Sale of Stock [Line Items]
Underwriting discounts and commissions			$ 200
Common stock, shares authorized					24,000,000
IPO
Subsidiary, Sale of Stock [Line Items]
Issuance of common stock (in shares)	5,750,000
Share price	$ 16.00			$ 16.00
Net proceeds	$ 82,000
Underwriting discounts and commissions	6,100
Other issuance costs	$ 3,900
Number of shares of common stock upon conversion of convertible preferred stock	15,000,000
Redeemable preferred stock were redeemed for liquidation preference	$ 17,900

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Jan. 02, 2022	Jan. 03, 2021
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized	10,000,000	0
Preferred stock issued	0	0
Preferred stock outstanding	0	0
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized	250,000,000	21,196,740
Common stock, shares issued	38,421,124	17,462,283
Common stock, shares outstanding	38,421,124	17,462,283
Redeemable Preferred Stock
Temporary equity, par value (in dollars per share)	$ 0.001	$ 0.001
Temporary equity, shares authorized	0	7,500,001
Temporary equity, shares issued	0	7,500,001
Temporary equity, shares outstanding	0	7,500,001
Aggregate liquidation preference		$ 15,000
Convertible Preferred Stock
Temporary equity, par value (in dollars per share)	$ 0.001	$ 0.001
Temporary equity, shares authorized	0	3,129,635
Temporary equity, shares issued	0	3,129,634
Temporary equity, shares outstanding	0	3,129,634
Aggregate liquidation preference		$ 240,000

Commitments and Contingencies - Operating Leases (Details) - USD ($) $ in Millions		12 Months Ended
	Sep. 03, 2021	Jan. 02, 2022	Jan. 03, 2021	Dec. 29, 2019	Jan. 03, 2022	Dec. 01, 2021	Sep. 24, 2021
Lease [Line Items]
Rental expense		$ 3.3	$ 3.1	$ 3.0
Operating lease cost per year							$ 0.9
Amount of lease commitment							$ 3.7
Lease term						7 years 2 months 12 days
Operating lease cost per month	$ 0.2
Operating Lease cost for the term	$ 15.7
Security deposit						$ 0.4
Forecast
Lease [Line Items]
Lease term					4 years

Income Taxes - Carry forwards (Details) $ in Millions	Jan. 02, 2022 USD ($)
Income Taxes
State net operating loss carryforward amount	$ 5.7
State tax credit carryforward amount	0.1
Federal disallowed interest expense carryforward	$ 15.5

Equity-Based Compensation - CEO Stock Options and Special Compensation Awards (Details) $ / shares in Units, $ in Thousands		1 Months Ended	12 Months Ended
	Nov. 15, 2021 USD ($) item	Apr. 30, 2021 $ / shares shares	Jan. 02, 2022 USD ($) item shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Reclassification of liability-classified CEO award to equity-classified awards \| $			$ 2,887
Stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock options grants in period \| shares			322,793
Unrecognized equity-based compensation \| $			$ 2,600
Unrecognized equity-based compensation expected to be recognized period			2 years 2 months 26 days
IPO
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Equity based compensation \| $			$ 3,500
Service vesting \| Stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Accelerate vesting shares \| shares		137,567
Service and performance vesting \| Stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Accelerate vesting shares \| shares		23,830
CEO
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock options grants in period \| shares		322,793
Stock option exercise price \| $ / shares		$ 11.35
Number of bonus available \| item			2
Value of each bonus available \| $			$ 3,000
Aggregate value of bonus available \| $			6,000
Equity based compensation \| $			$ 3,300
Equity-based compensation (in shares) \| shares		208,914
CEO \| IPO
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of bonus available \| item	2
Reclassification of liability-classified CEO award to equity-classified awards \| $	$ 2,900
CEO \| Service vesting
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock options grants in period \| shares		275,133
CEO \| Service and performance vesting
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock options grants in period \| shares		47,660

Equity-Based Compensation - Stock Options (Details) - Stock options $ in Millions	12 Months Ended
	Jan. 02, 2022 USD ($)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized equity-based compensation	$ 2.6
Unrecognized equity-based compensation expected to be recognized period	2 years 2 months 26 days
General and administrative expenses
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Equity based compensation	$ 3.2
General and administrative expenses \| Service vesting
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Equity based compensation	2.1
General and administrative expenses \| Service and performance vesting
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Equity based compensation	$ 0.5

Consolidated Statements of Operations and Comprehensive Income (Loss) - USD ($) $ in Thousands	12 Months Ended
	Jan. 02, 2022	Jan. 03, 2021	Dec. 29, 2019
Consolidated Statements of Operations and Comprehensive Income (Loss)
Net revenue	$ 375,625	$ 248,656	$ 369,622
Cost of revenue	198,893	138,364	208,418
Gross profit	176,732	110,292	161,204
Selling and marketing expenses	66,684	47,812	72,875
General and administrative expenses	87,710	67,155	73,386
Income (loss) from operations	22,338	(4,675)	14,943
Other income (expense), net:
Interest expense	(12,774)	(16,037)	(15,206)
Loss on extinguishment of debt	(1,392)
Other income, net	85	137	239
Total other expense, net	(14,081)	(15,900)	(14,967)
Income (loss) before (provision) benefit for income taxes	8,257	(20,575)	(24)
Income tax (provision) benefit	(6,212)	1,271	(445)
Net income (loss)	2,045	(19,304)	(469)
Comprehensive income (loss)	2,045	(19,304)	(469)
Deemed dividend to preferred stockholders	(122,962)	(504)
Stock dividend issued to LP	(3,451)
Deemed contribution from redemption of redeemable preferred stock	1,420
Net loss attributable to common stockholders	$ (122,948)	$ (19,808)	$ (469)
Net loss per share attributable to common stockholder - Basic	$ (6.08)	$ (1.13)	$ (0.03)
Net loss per share attributable to common stockholder - Diluted	$ (6.08)	$ (1.13)	$ (0.03)
Weighted average shares used to compute net loss per share attributable to common stockholder - Basic	20,229,675	17,462,283	17,462,283
Weighted average shares used to compute net loss per share attributable to common stockholder - Diluted	20,229,675	17,462,283	17,462,283

Equity-Based Compensation - Restricted stock (Details) - USD ($) $ in Millions		12 Months Ended
	Nov. 15, 2021	Jan. 02, 2022
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Converted from class P units of the Company upon LP liquidation	1,964,103
Restricted shares outstanding		502,322
Vested common stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Converted from class P units of the Company upon LP liquidation	1,536,304
Unvested restricted stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Converted from class P units of the Company upon LP liquidation	427,799	427,799
Restricted shares outstanding		381,612
Unvested restricted stock \| Service vesting
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized equity based compensation		$ 4.0
Unrecognized equity-based compensation expected to be recognized period		1 year 9 months 3 days
Unvested restricted stock \| Service and performance vesting
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized equity based compensation		$ 0.3
Unrecognized equity-based compensation expected to be recognized period		1 year
Cumulative catch up to equity based compensation		$ 2.6

Significant Accounting Policies (Policies)

12 Months Ended

Jan. 02, 2022

Significant Accounting Policies

Basis of Presentation and Fiscal Year

The Company’s fiscal year consists of a 52-week or 53-week period ending on the Sunday nearest December 31. The fiscal year ended January 2, 2022 (“2021”) consisted of 52 weeks, the fiscal year ended January 3, 2021 (“2020”) consisted of 53 weeks, and the fiscal year ended December 29, 2019 (“2019”) consisted of 52 weeks.

The consolidated financial statements and accompanying notes include the accounts of the Company and its wholly owned subsidiaries, after elimination of all intercompany balances and transactions. The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the Unites States of America (“GAAP”) and the requirements of the Securities and Exchange Commission.

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. The significant estimates and assumptions made by management relate to sales return reserves and related assets for recovery, valuation of redeemable preferred stock, valuation of the LP’s Class P unit equity-based awards, valuation of stock options, valuation of common stock, and income tax valuation allowance. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, which management believes to be reasonable under the circumstances. The Company adjusts such estimates and assumptions when facts and circumstances dictate. Changes in those estimates resulting from continuing changes in the economic environment will be reflected in the consolidated financial statements in future periods. As future events and their effects cannot be determined with precision, actual results could materially differ from those estimates and assumptions.

Segment Reporting

The Company manages its business on the basis of one operating and reportable segment, retail. The Company’s chief operating decision maker is its chief executive officer (“CEO”). All long-lived assets are located in the United States and substantially all revenue is attributable to customers based in the United States. International sales are not significant.

Concentration of Credit Risks

Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash, cash equivalents and restricted cash. Such amounts may exceed federally insured limits. The Company reduces credit risk by depositing its cash with major credit-worthy financial institutions within the United States. To date, the Company has not experienced any losses on its cash deposits. As of January 2, 2022 and January 3, 2021, a single wholesale customer represented 24% and 51% respectively, of the Company’s accounts receivable balance. No customer accounted for greater than 10% of the Company’s net revenue during 2021, 2020 and 2019.

Cash, Cash Equivalents and Restricted Cash

Accounts Receivable

Accounts receivable consist primarily of receivables from credit card processing agencies and wholesale customers. Based on historical collections from these agencies, no allowance for doubtful accounts was deemed necessary as of January 2, 2022 and January 3, 2021.

Inventory

Inventory consists of finished goods, which are recorded at the lower of cost or net realizable value, with cost determined using the first-in-first-out method. The cost of inventory consists of merchandise costs and inbound freight costs. Inventory levels are reviewed to identify slow-moving merchandise, and promotions and markdowns are used to clear merchandise. In the period in which the Company determines estimated selling price, less costs to sell, is below cost, or identifies excess, obsolete, or unsalable items, the Company writes its inventory down to its net realizable value.

Property and Equipment, net

Property and equipment are recorded at cost and depreciated on a straight-line basis over their estimated useful lives, which range from 3 to 8 years. Improvements that extend the life of a specific asset are capitalized, while normal maintenance and repairs are expensed as incurred. When assets are sold or otherwise retired, their cost and related accumulated depreciation are removed from the balance sheet with any resulting gain or loss reflected in general and administrative expenses in the consolidated statements of operations and comprehensive income (loss).

Goodwill and Tradename

Goodwill is stated at the excess of the acquisition price over the fair value of net assets acquired in a purchase acquisition and is not amortized. Goodwill arose from the LP’s purchase of 100% of the outstanding common stock of LFL on July 25, 2014 and the Company has one reporting unit. The Company’s tradename is an indefinite-lived intangible asset and is not amortized. The Company reviews its goodwill and tradename for impairment at least annually (on the first day of the fourth quarter) or more frequently whenever events or changes in circumstances indicate that the carrying amount may be impaired.

When testing goodwill for impairment, the Company first performs an assessment of qualitative factors (“Step 0 Test”). The qualitative assessment includes assessing the totality of relevant events and circumstances that affect the fair value or carrying value of the reporting unit. These events and circumstances include macroeconomic conditions, industry

and competitive environment conditions, overall financial performance, reporting unit specific events and market considerations. The Company also considers recent valuations of the reporting unit, including the magnitude of the difference between the most recent fair value estimate and the carrying value, as well as both positive and adverse events and circumstances, and the extent to which each of the events and circumstances identified may affect the comparison of a reporting unit’s fair value with its carrying value. If the qualitative assessment results in a conclusion that it is more likely than not that the fair value of a reporting unit exceeds the carrying value, then no further testing is performed for that reporting unit. The Company performed the qualitative assessment of its goodwill and determined that it is more likely than not that the fair value of its reporting unit exceeds the carrying value of the reporting unit. As a result, there was no goodwill impairment during 2021, 2020 and 2019. There was no accumulated impairment of goodwill as of January 2, 2022 and January 3, 2021.

When testing the tradename for impairment, the Company first performs an assessment of qualitative factors. If qualitative factors indicate that it is more likely than not that the fair value of the tradename is less than its carrying amount, the Company tests the tradename for impairment at the asset level. The Company determines the fair value of the tradename and compares it to the carrying value. If the carrying value of the tradename exceeds the fair value, the Company recognizes an impairment loss in an amount equal to the excess. The Company performed the qualitative assessment of its tradename and determined that it is more likely than not that the fair value of the tradename exceeds the carrying value of the reporting unit. There were no additions to, disposals of, or impairments of the tradename during 2021, 2020 and 2019, There was no accumulated impairment of the tradename as of January 2, 2022 and January 3, 2021.

Intangible Assets, net

Intangible assets, net consists of capitalized internal-use software development, which is amortized over a 3-year period. The Company capitalizes certain costs in connection with obtaining or developing software for internal use. Additionally, the Company capitalizes qualifying costs incurred for upgrades and enhancements that result in additional functionality to existing software. Amortization of such costs begins when the project is substantially complete and ready for its intended use. Costs related to design or maintenance are expensed as incurred. Intangible asset amortization expense was $1.6 million, $1.7 million and $1.6 million during 2021, 2020 and 2019, respectively.

Intangible assets are amortized on a straight-line basis over the estimated useful life of the assets. The Company reviews intangible assets for impairment under the long-lived asset model described below. No impairment of intangible assets was recorded during the years presented.

Long-Lived Asset Impairment

The Company evaluates long-lived assets for impairment periodically whenever events or changes in circumstances indicate that their related carrying amounts may not be recoverable. In evaluating long-lived assets for recoverability, the Company uses its best estimate of future cash flows expected to result from the use of the asset and eventual disposition. To the extent that projected undiscounted future net cash flows attributable to the asset are less than the carrying amount, an impairment loss is recognized in an amount equal to the difference between the carrying value of such asset and its estimated fair value. There was no impairment recorded during the years presented.

Deferred Offering Costs

Deferred offering costs consist of expenses incurred in connection with an equity offering, including legal, accounting, printing, and other IPO-related costs. Deferred offering costs are written off to operating expenses in the consolidated statements of operations and comprehensive income (loss) upon the termination or significant delay of a planned equity offering. During 2020, approximately $2.0 million of deferred offering costs from an offering that was postponed were written off to general and administrative expenses in the Company’s consolidated statements of operations and

comprehensive income (loss). There were no deferred offering costs related to the IPO capitalized in the consolidated balance sheets as of January 2, 2022 and January 3, 2021.

Revenue Recognition

The Company generates revenue primarily from the sale of merchandise products directly to end customers. The sale of products is a distinct performance obligation, and revenue is recognized at a point in time when control of the promised product is transferred to customers, which the Company determined occurs upon shipment based on its evaluation of the related shipping terms. Revenue is recognized in an amount that reflects the transaction price consideration that the Company expects to receive in exchange for those products. The Company’s payment terms are typically at the time of order processing and shipment.

The Company elected to exclude from revenue taxes assessed by governmental authorities, including value-added and other sales-related taxes, that are imposed on and concurrent with revenue-producing activities. The Company has elected to apply the practical expedient, relative to e-commerce sales, which allows an entity to account for shipping and handling as fulfillment activities, and not a separate performance obligation. Accordingly, the Company recognizes revenue for only one performance obligation, the sale of the product, at shipping point (when the customer gains control). Shipping and handling costs associated with outbound freight are accounted for as fulfillment costs and are included in cost of goods sold. The Company has elected to apply the practical expedient to expense costs as incurred for incremental costs to obtain a contract when the amortization period would have been one year or less.

Revenue from merchandise product sales is reported net of sales returns, which includes an estimate of future returns based on historical return rates, with a corresponding reduction to cost of sales. There is judgment in utilizing historical trends for estimating future returns. The Company’s refund liability for sales returns is included in the returns reserve on its consolidated balance sheets and represents the expected value of the refund that will be due to the Company’s customers. The Company also has a corresponding asset for recovery that represents the expected net realizable value of the merchandise inventory to be returned.

The Company sells stored-value gift cards to customers and offers merchandise credit stored-value cards for certain returns. Such stored-value cards do not have an expiration date. The Company recognizes revenue from stored-value cards when the card is redeemed by the customer. The Company has determined that sufficient evidence exists to support an estimate for stored-value card breakage. Subject to requirements to remit balances to governmental agencies, breakage is recognized as revenue in proportion to the pattern of rights exercised by the customer, which is substantially within thirty-six months from the date of issuance. The amount of breakage recognized in revenue during 2021, 2020 and 2019 was not material.

The Company has two types of contractual liabilities: (i) cash collections from its customers prior to delivery of products purchased (“deferred revenue”), which are initially recorded within accrued expenses and recognized as revenue when the products are shipped, (ii) unredeemed gift cards and online store credits, which are initially recorded as a stored-value card liability and are recognized as revenue in the period they are redeemed.

The following table summarizes the significant changes in the contract liabilities balances during 2021, 2020 and 2019 (in thousands):


	Deferred		Stored-Value
	Revenue		Cards
Balance as of December 30, 2018	$	652	$	3,033
Revenue recognized that was included in contract liability balance at the beginning of the period		(652)		(1,907)
Increase due to cash received, excluding amounts recognized as revenue during the period		547		3,479
Balance as of December 29, 2019		547		4,605
Revenue recognized that was included in contract liability balance at the beginning of the period		(547)		(2,094)
Increase due to cash received, excluding amounts recognized as revenue during the period		792		2,462
Balance as of January 3, 2021		792		4,973
Revenue recognized that was included in contract liability balance at the beginning of the period		(792)		(1,471)
Increase due to cash received, excluding amounts recognized as revenue during the period		145		3,738
Balance as of January 2, 2022	$	145	$	7,240

Cost of Revenue

Cost of revenue consists of the product costs of merchandise sold to customers; shipping and handling costs including all inbound, outbound, and return shipping expenses; rent, insurance, business property tax, utilities, depreciation and amortization, and repairs and maintenance related to the Company’s distribution facilities; and charges related to inventory shrinkage, damages and the allowance for excess or obsolete inventory.

General and Administrative Expenses

General and administrative expenses consist primarily of payroll and benefits costs, including equity-based compensation for the Company’s employees involved in general corporate functions including finance, merchandising, marketing, and technology, as well as costs associated with the use by these functions of facilities and equipment, including depreciation and amortization, rent and other occupancy expenses.

Selling and Marketing Expenses

Selling and marketing expenses consist primarily of customer service, payment processing fees, advertising, targeted online performance marketing and search engine optimization costs. Selling and marketing expenses also include spend on brand marketing channels, including cash and free clothing compensation to influencers, events and other forms of online and offline marketing related to growing and retaining the customer base. Advertising costs included in selling and marketing expenses were $53.6 million, $38.1 million and $60.5 million in 2021, 2020 and 2019, respectively.

Equity-Based Compensation

Stock Options

The Company grants stock-based awards to certain employees, officers, directors, and other nonemployee service providers. The Company accounts for equity-based compensation expense by calculating the estimated fair value of each award at the grant date or modification date. The fair value of grants of restricted stock is based on the fair value of the common stock underlying the award on the grant date. For stock option awards, the Company applies the Black-Scholes option pricing model to determine the fair value. The model utilizes the estimated per share fair value of the Company’s underlying common stock at the grant date, the expected or contractual term of the option, the expected stock price volatility, risk-free interest rates, and the expected dividend yield of the common stock. Equity-based compensation expense is recognized on a straight-line basis over the period the employee or non-employee is required to provide service in exchange for the award, which is generally the vesting period. The Company classifies equity-based compensation expense as general and administrative expense in the Company’s consolidated statements of operations and comprehensive income (loss).

The Company bases its estimate of expected volatility on the historical volatility of comparable companies from a representative peer group selected based on industry, financial, and market capitalization data. The risk-free interest rate for the expected term of the option is based on the U.S. Treasury implied yield at the date of grant. The Company has elected to use the “simplified method” to determine the expected term which is the midpoint between the vesting date and the end of the contractual term because it has insufficient history upon which to base an assumption about the term; the Company believes the simplified method approximates a term if it were to be based on expected life. The expected dividend yield is 0.0% as the Company has not paid and does not anticipate paying dividends on its common stock. The Company recognizes forfeitures as they occur.

Determining the grant date fair value of options using the Black-Scholes option pricing model requires management to make assumptions and judgments. These estimates involve inherent uncertainties and, if different assumptions had been used, stock-based compensation expense could have been materially different from the amounts recorded.

Class P units

Certain of the Company’s employees participated in an equity incentive program (consisting of Class P units) offered by the LP. The LP’s Class P units were available to be issued as incentive compensation to employees, officers, directors, and other nonemployee service providers or consultants of the Company. Through mid-2020, the Company had concluded that the LP’s Class P units were not a substantive class of equity and any associated pre-vesting distributions allocated to the LP’s Class P units have been recorded as equity-based compensation under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic No. 710, Compensation – General (“ASC 710”), once the contingent payment becomes probable of payment, which is upon vesting of the Class P units. During mid-2020, all outstanding Class P units were modified to update forfeiture terms related to employment requirements and vesting conditions were added to some of the Class P units. Due to the modifications to the employment requirements, the Company concluded that the Class P units are a substantive class of equity to be accounted for under FASB ASC Topic No. 718, Compensation – Stock Compensation (“ASC 718”) and that the associated pre-vesting distributions related to outstanding Class P units for five employees are a separate award that are accounted for under ASC 710. With the completion of the Company’s IPO, the LP was liquidated, and the unvested Class P units were converted into shares of the Company’s restricted stock with the same underlying terms, and vested Class P units were converted into shares of the Company’s common stock. Equity-based compensation related to the Class P unit awards, restricted stock and any pre-vesting distributions are recognized as general and administrative expense in the Company’s consolidated statements of operations and comprehensive income (loss).

Equity-based compensation is measured at the grant date or modification date for all equity-based awards made to employees and nonemployees based on the fair value of the awards. The Company has elected to recognize forfeitures by reducing the equity-based compensation in the same period as the forfeitures occur. The method for how fair value is determined for the awards is described in Note 9, Equity-Based Compensation. The assumptions used to determine the fair value of the Class P units represent management’s best estimates. Awards with only service conditions are recognized as expense on a straight-line basis over the requisite service period, which is generally four years.

Certain of the outstanding Class P units were modified in 2020 to vest upon the satisfaction of both a service condition (satisfied over two years) and a performance condition. When the performance-based vesting condition becomes probable, which is upon the completion of a qualifying distribution event, the Company will immediately record cumulative stock-based compensation expense using the accelerated attribution method for the awards that have met the service-based vesting condition. With the completion of the Company’s IPO, the performance condition was met, and the Company recognized cumulative stock-based compensation expense for the awards that had also met the service-based vesting condition.

Income Taxes

The Company accounts for income taxes using the asset and liability method, under which deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax basis of assets and liabilities and for operating losses and tax credit carryforwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates that apply to taxable income in effect for the years in which they are expected to be realized or settled.

The Company believes that it is more likely than not that forecasted income, together with future reversals of existing taxable temporary differences and results of recent operations, will be sufficient to fully recover the deferred tax assets. In the event that the Company determines all or part of the net deferred tax assets are not realizable in the future, the Company would record a valuation allowance.

The Company recognizes tax benefits from uncertain tax positions only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. The Company recognizes interest and penalties related to unrecognized tax benefits, if any, as income tax expense.

Net Loss Per Share Attributable to Common Stockholders

The Company calculates basic and diluted net loss per share attributable to common stockholders in conformity with the two-class method required for participating securities as the application of the if converted method is not more dilutive. The two-class method requires income available to common stockholders for the period to be allocated between common stock and participating securities based upon their respective rights to receive dividends as if all income for the period had been distributed.

The Company considers its redeemable preferred stock and convertible preferred stock to be participating securities. In accordance with the two-class method, net income (loss) is adjusted for earnings allocated to these participating securities and the related number of outstanding shares of the participating securities, which include contractual participation rights in undistributed earnings, have been excluded from the computation of basic and diluted net loss per share attributable to common stockholders. The redeemable preferred stock and convertible preferred stock contractually entitle the holders of such shares to participate in dividends but do not contractually require the holders of such shares to participate in the Company’s losses. As such, where applicable, net losses were not allocated to these securities.

Basic net loss per share attributable to common stockholders is computed using net loss attributable to common stockholders divided by the weighted average number of common shares outstanding during the period. Diluted net loss per share attributable to common stockholders represents net loss attributable to common stockholders divided by the weighted average number of common shares outstanding during the period, including the effects of any dilutive securities outstanding. Basic and diluted net loss per common share attributable to common stockholders are the same for each period presented since the inclusion of all potential shares of common stock outstanding would have been anti-dilutive.

The following securities were excluded from the computation of diluted net loss per share attributable to common stockholders for the fiscal years presented because including them would have been anti-dilutive (on an as-converted basis):


	January 2, 2022	January 3, 2021	December 29, 2019
Series A convertible preferred stock	—	3,129,634	3,129,634
Stock options	322,793	—	—
Unvested restricted stock	381,612	—	—
CEO award share settlement	417,828	—	—
Total	1,122,233	3,129,634	3,129,634

Redeemable Preferred Stock

The Company has elected to record its redeemable preferred stock at the greater of its redemption value or the issuance date fair value, net of issuance costs, as it is probable of becoming redeemable due to the passage of time. Any change to the carrying value of redeemable preferred stock recognized in each period is recorded to additional paid-in capital, or in the absence of additional paid-in capital, recorded to accumulated deficit.

The issuance date fair value of the redeemable preferred stock shares purchased by entities related to current employees, board members, and service providers was higher than the consideration paid and such excess was recorded as equity-based compensation. The excess of the fair value over consideration paid for redeemable preferred stock shares purchased by an existing convertible preferred stockholder was accounted for as a deemed dividend and recorded in additional paid-in capital.

Comprehensive Income (loss)

Comprehensive income (loss) is defined as a change in equity of a business enterprise during a period, resulting from transactions from non-owner sources. To date, the Company has not had any transactions that are required to be reported in comprehensive income (loss) other than the net income (loss) incurred from operations. Thus, comprehensive income (loss) is the same as net income (loss) for the periods presented.

Recently Adopted and Issued Accounting Pronouncements

Recently Adopted Accounting Pronouncements

The Company is an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. The Company has elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that it (i) is no longer an emerging growth company or (ii) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act. As a result, these consolidated financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates.

In August 2018, the FASB issued Accounting Standards Update (“ASU”) 2018-15, Intangibles – Goodwill and Other - Internal-use Software: Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, which clarifies the accounting for implementation costs in cloud computing arrangements. The update effectively aligns the requirements for capitalizing implementation costs incurred in a cloud computing arrangement service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. ASU 2018-15 is effective for fiscal years beginning after December 15, 2020, including interim periods within fiscal years beginning after December 15, 2021. The Company adopted this standard on January 4, 2021 using the prospective transition method. The adoption of the new standard did not have a material impact on the Company’s consolidated financial statements.

Recently Issued Accounting Pronouncements

In February 2016, the FASB issued ASU. 2016-02, Leases (Topic 842), as amended, which requires lessees to recognize a right-of-use asset and lease liability on their consolidated balance sheets for all leases with a term longer than 12 months. The guidance, as amended, is effective for fiscal years beginning after December 15, 2021, including interim periods within fiscal years beginning after December 15, 2022. Early adoption is permitted. The Company anticipates implementing the standard by taking advantage of the alternative transition method and will apply the transition approach as of the beginning of the period of adoption and will not be restating comparative periods. The Company also plans to apply other practical expedients provided by the standard. The Company has begun an implementation plan, including the identification of its lease population and the implementation of changes to existing processes that will be required to implement the new lease standard. The Company is still finalizing its determination of the interest rate and estimates it will record right-of-use assets and operating lease liabilities between approximately $33.5 million and approximately $37.5 million in the consolidated balance sheet. Adoption of the standard did not have a material impact on its consolidated statements of operations and comprehensive income (loss) or cash flows.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, as amended, which amends guidance on reporting credit losses for assets held at amortized cost basis and available-for-sale debt securities from an incurred loss methodology to an expected loss methodology. For assets held at amortized cost basis, the guidance eliminates the probable initial recognition threshold and instead requires an entity to reflect its current estimate of all expected credit losses. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the assets to present the net amount expected to be collected. For available-for-sale debt securities, credit losses are recorded through an allowance for credit losses, rather than a write-down, limited to the amount by which fair value is below amortized cost. Additional disclosures about significant estimates and credit quality are also required. The guidance is effective for the Company for fiscal years beginning after December 15, 2022. The Company is currently assessing the potential impact of adopting ASU 2016-13 on its consolidated financial statements.

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. This standard is effective for fiscal periods beginning after December 15, 2021, including interim periods within fiscal years beginning after December 15, 2022, with early adoption permitted. The Company has evaluated the impact of adopting this guidance and it is not expected to have a material impact on its consolidated financial statements.

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Accounting, which, as amended, provides optional guidance for a limited period of time to ease the potential burden in accounting for (or reorganizing the effects of) reference rate reform on financial reporting. This standard can be adopted immediately, however, the guidance will only be available until December 31,

2022. The Company is currently evaluating the potential impact of adopting this guidance on its consolidated financial statements.

Debt - Debt Discounts and Issuance Costs (Details) - USD ($) $ in Millions	Jan. 02, 2022	Jan. 03, 2021
Other noncurrent assets
Debt Instrument [Line Items]
Unamortized debt issuance costs	$ 0.4	$ 0.1

Fair Value Measurements (Details) - USD ($) $ in Millions	Jan. 02, 2022	Aug. 31, 2017
Revolving credit facility
Fair Value Measurements
Revolving line of credit	$ 50.0	$ 10.0

Balance Sheet Components

12 Months Ended

Jan. 02, 2022

Balance Sheet Components

Balance Sheet Components

4.Balance Sheet Components

Property and Equipment, net

Property and equipment, net consisted of the following (in thousands):


	January 2,		January 3,
	2022		2021
Leasehold improvements	$	3,502	$	3,647
Equipment		3,278		2,595
Furniture and fixtures		2,123		1,849
Construction in progress		107		28
Total property and equipment		9,010		8,119
Less: accumulated depreciation and amortization		(5,779)		(5,029)
Property and equipment, net	$	3,231	$	3,090

Depreciation of property and equipment was $1.3 million, $1.5 million and $1.4 million for 2021, 2020 and 2019, respectively.

Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following (in thousands):


	January 2,		January 3,
	2022		2021
Accrued compensation and benefits	$	8,136	$	2,932
Accrued pre-vesting distributions payable to former Class P unit holders		2,648		—
Accrued debt amendment fees		—		917
Accrued marketing		3,621		495
Accrued inventory		2,928		90
Other		4,615		3,099
Accrued expenses and other current liabilities	$	21,948	$	7,533

The Company reclassified accrued interest to other and reclassified accrued inventory from other as of January 3, 2021 to conform to the current period presentation.

Common Stock (Details) $ / shares in Units, $ in Thousands			12 Months Ended
Common Stock (Details) $ / shares in Units, $ in Thousands	Nov. 15, 2021 USD ($) $ / shares shares	Nov. 14, 2021 $ / shares shares	Jan. 02, 2022 USD ($) Vote $ / shares shares	Jan. 03, 2021 $ / shares shares
Common stock, shares authorized		250,000,000	250,000,000	21,196,740
Common stock, par value (in dollars per share) \| $ / shares		$ 0.001	$ 0.001	$ 0.001
Common stock, shares issued			38,421,124	17,462,283
Common stock, shares outstanding			38,421,124	17,462,283
Number of votes per common stock \| Vote			1
Dividends declared \| $ / shares			$ 0
Issuance of common stock upon IPO, net of underwriting discounts and commissions and issuance costs \| $			$ 82,546
Number of shares of common stock upon conversion of convertible preferred stock		15,000,000
Stock dividends \| $			$ 3,500
Common stock for issuance upon the exercise of stock options			4,462,803
CEO
Common stock for issuance upon the exercise of stock options			417,828
LP
Stock issuance (in shares)	215,702	215,702
IPO
Stock issuance (in shares)	5,750,000
Issue price per share (in dollars per share) \| $ / shares	$ 16.00		$ 16.00
Issuance of common stock upon IPO, net of underwriting discounts and commissions and issuance costs \| $	$ 82,000
Underwriting discounts and commissions \| $	6,100
Other issuance costs \| $	$ 3,900
Number of shares of common stock upon conversion of convertible preferred stock	15,000,000
Stock options
Common stock for issuance upon the exercise of stock options			322,793
Class P Units
Stock issuance (in shares)			215,702
Class P Units \| IPO
Stock issuance (in shares)	215,702

Equity-Based Compensation - Stock Option Activity (Details) - Stock options	12 Months Ended
	Jan. 02, 2022 $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
Options Outstanding, Granted \| shares	322,793
Options Outstanding, Ending balance \| shares	322,793
Options Outstanding, Vested and exercisable \| shares	161,397
Options Outstanding, Expected to vest \| shares	322,793
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract]
Weighted-Average Exercise Price per Option, Granted (in dollars per share)	$ 11.35
Weighted-Average Exercise Price per Option, Ending balance (in dollars per share)	11.35
Weighted-Average Exercise Price per Option, Vested and exercisable (in dollars per share)	11.35
Weighted-Average Exercise Price per Option, Expected to vest (in dollars per share)	$ 11.35
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract]
Weighted-Average Remaining Contractual Life (years)	9 years 3 months 14 days
Weighted-Average Remaining Contractual Life (years), Vested and exercisable	9 years 3 months 14 days
Weighted-Average Remaining Contractual Life (years), Expected to vest	9 years 3 months 14 days
Weighted-average grant-date fair value of options granted	$ 16.44

Income Taxes

12 Months Ended

Jan. 02, 2022

Income Taxes

Income Taxes

10.Income Taxes

All of the Company’s income (loss) before income taxes is from the United States. The following table presents the components of the income tax (provision) benefit (in thousands):


	January 2,		January 3,
	2022		2021
Current:
Federal	$	(5,919)	$	900
State		(1,956)		357
Total current (provision) benefit		(7,875)		1,257
Deferred:
Federal		1,341		(220)
State		322		234
Total deferred benefit		1,663		14
Income tax (provision) benefit	$	(6,212)	$	1,271

The following table presents a reconciliation of the statutory federal rate to the Company’s effective tax rate:


	January 2,		January 3,
	2022		2021
Federal statutory rate	21.0	%	21.0	%
State income taxes, net of federal tax benefit	16.3		0.9
Non-deductible equity-based compensation expense	36.0		(18.0)
Tax credits	—		0.4
Change in uncertain tax position	(0.9)		1.5
Prior year adjustments	2.3		0.2
Other	0.5		0.2
Effective tax rate	75.2	%	6.2	%

Deferred income taxes reflect the net effects of (a) temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amount used for income tax purposes, and (b) operating losses and tax credit carryforwards.

The following table presents the significant components of the Company’s deferred tax assets and liabilities (in thousands):


	January 2,		January 3,
	2022		2021
Deferred tax assets:
Accruals and allowances	$	2,888	$	1,263
Interest disallowance		3,456		4,005
Inventory capitalization and other adjustments		849		585
Deferred revenue		1,142		1,053
Equity-based compensation		531		—
Net operating losses and tax credit carryforwards		488		658
Other		423		47
Gross deferred tax assets		9,777		7,611
Deferred tax liabilities:
Depreciation and amortization		(6,856)		(6,150)
Other		—		(202)
Gross deferred tax liabilities		(6,856)		(6,352)
Net deferred tax assets	$	2,921	$	1,259

Net deferred tax assets are included in other noncurrent assets on the consolidated balance sheets as of January 2, 2022 and January 3, 2021. Certain of the prior year deferred tax asset balances have been reclassified to conform to the current year presentation. Returns reserve accrual and accrued expenses were combined into accruals and allowances, UNICAP and amounts from other were combined into inventory capitalization and other adjustments, tax credit carryforwards and net operating losses were combined into one line.item.

The tax benefit of net operating losses, temporary differences and credit carryforwards is required to be recorded as an asset to the extent that management assesses the realization is “more likely than not.” Realization of the future tax benefit is dependent on the Company’s ability to generate sufficient taxable income within the carryforward period. A valuation allowance is recognized if, based on the weight of available evidence, it is more-likely-than-not that some portion, or all, of the deferred tax asset will not be realized. Management must analyze all available positive and negative evidence regarding realization of the deferred tax assets and make an assessment of the likelihood of sufficient future taxable income. We have not provided a valuation allowance on our federal and state deferred tax assets as we have determined that it its more-likely-than-not that they are realizable based upon the available positive evidence such as cumulative taxable income and estimated future taxable income.

As of January 2, 2022, the Company had state net operating loss carryforwards of $5.7 million, which may be available to reduce future taxable income. The state net operating loss carryforwards will expire, if not utilized, beginning in 2039. As of January 2, 2022, the Company also had state tax credit carryforwards of $0.1 million, which will expire, if not utilized, beginning in 2026. Lastly, the Company currently has $15.5 million of a federal disallowed interest expense carryforward under Section 163(j) of the Internal Revenue Code, which can be carried forward indefinitely.

Utilization of our net operating loss carryforwards, interest expense carryforwards, and tax credits may be subject to an annual limitation due to ownership changes that may have occurred or that could occur in the future, as required by Section 382 of the Internal Revenue Code and similar state provisions. These ownership change limitations may limit the amount of net operating loss carryforwards or interest expense carryforwards and tax credits that can be utilized annually to offset future taxable income and tax, respectively.

The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was enacted on March 27, 2020 in the United States, which includes several significant provisions for corporations, including a payment deferral of employer payroll taxes. The Company elected to defer the payment of employer payroll taxes in 2020. The deferred payroll taxes of $0.5 million and $0.5 million are included within accrued expenses and other current liabilities as of January 2, 2022 and January 3, 2021, respectively, and $0.6 million is included in other noncurrent liabilities as of January 3, 2021. The Company repaid $0.5 million during 2021 and must repay the remaining deferred payroll taxes by December 31, 2022.

As of January 2, 2022 and January 3, 2021, the Company’s uncertain tax positions and related accrued interest and penalties were not material. The Company’s policy is to recognize interest and penalties related to unrecognized tax benefits in the financial statements as a component of income tax expense. The Company does not anticipate that the uncertain tax positions balance as of January 2, 2022 will change significantly over the next 12 months.

The Company’s federal and state income tax returns are generally not subject to examination by taxing authorities for fiscal years before 2018.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 21
-URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SAB Topic 11.C)
-URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 17
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SAB TOPIC 6.I.5.Q1)
-URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 14
-URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 270
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-URI http://asc.fasb.org/topic&trid=2144680

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 30
-Section 50
-Paragraph 2
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(h)(2))
-URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

+ Details

Defined Contribution Plans (Details) - USD ($) $ in Millions	12 Months Ended
	Jan. 02, 2022	Jan. 03, 2021	Dec. 29, 2019
Defined Contribution Plans
Employer matching contribution, percent of match	100.00%
Employer matching contribution, percent of employees' gross pay	6.00%
Percentage of maximum annual contributions per employee	4.00%
Matching contributions made by company	$ 0.9	$ 0.7	$ 0.7

Debt - Outstanding Debt under the New Revolving Facility (Details) - USD ($) $ in Thousands			1 Months Ended	12 Months Ended
	Jan. 03, 2022	Nov. 15, 2021	Nov. 30, 2021	Jan. 02, 2022	Jan. 03, 2021	Dec. 29, 2019
Line of Credit Facility [Line Items]
Effective interest rate				11.60%	10.40%	10.30%
New Revolving Credit Facility
Line of Credit Facility [Line Items]
Revolving line of credit			$ 50,000
Increase in maximum borrowing capacity amount			25,000
Borrowed amount	$ 25,000
Credit facility outstanding	25,000
Line of credit remaining borrowing capacity	25,000
Variable commitment fee percent		0.375%
Interest rate at period end				1.92%
Effective interest rate				2.50%
Expected increase in interest rate per annum				2.00%
New Revolving Credit Facility \| Maximum
Line of Credit Facility [Line Items]
Revolving line of credit			75,000
New Revolving Credit Facility \| Secured overnight financing ("SOFR") rate
Line of Credit Facility [Line Items]
Debt instrument applicable margin percent		1.75%
New Revolving Credit Facility \| Base Rate
Line of Credit Facility [Line Items]
Debt instrument applicable margin percent		0.75%
New Revolving Credit Facility \| Federal funds rate
Line of Credit Facility [Line Items]
Debt instrument applicable margin percent		0.50%
New Revolving Credit Facility \| One month SOFR
Line of Credit Facility [Line Items]
Debt instrument applicable margin percent		1.00%
Letters of credit
Line of Credit Facility [Line Items]
Revolving line of credit			$ 7,500
Borrowed amount	250
Line of credit remaining borrowing capacity	$ 7,250

Significant Accounting Policies - Cash, Cash Equivalents and Restricted Cash And Accounts Receivable (Details) - USD ($)	Jan. 02, 2022	Jan. 03, 2021	Dec. 29, 2019	Dec. 30, 2018
Significant Accounting Policies
Cash and cash equivalents	$ 11,402,000	$ 15,554,000	$ 5,857,000
Restricted cash	506,000	505,000	504,000
Total cash and restricted cash	11,908,000	16,059,000	$ 6,361,000	$ 8,250,000
Allowance for doubtful accounts	$ 0	$ 0

Commitments and Contingencies (Tables)

12 Months Ended

Jan. 02, 2022

Commitments and Contingencies.

Future minimum lease payments under non-cancelable operating leases

Future minimum lease payments under non-cancelable operating leases as of January 2, 2022 were as follows (in thousands):


Fiscal Year ending:	Amounts
2022	$	4,899
2023		4,263
2024		3,879
2025		4,017
2026		2,427
Thereafter		5,037
Total	$	24,522

Balance Sheet Components - Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands	Jan. 02, 2022	Jan. 03, 2021
Accrued Expenses and Other Current Liabilities
Accrued compensation and benefits	$ 8,136	$ 2,932
Accrued pre-vesting distributions payable to former Class P unit holders	2,648
Accrued debt amendment fees		917
Accrued marketing	3,621	495
Accrued inventory	2,928	90
Other	4,615	3,099
Accrued expenses and other current liabilities	$ 21,948	$ 7,533

Debt - Outstanding Debt under the Revolving Facility (Details) - USD ($) $ in Thousands	12 Months Ended
	Jan. 02, 2022	Jan. 03, 2021	Dec. 29, 2019
Line of Credit Facility [Line Items]
Line of credit repaid	$ 8,580	$ 800	$ 5,000
Effective interest rate	11.60%	10.40%	10.30%
Revolving credit facility
Line of Credit Facility [Line Items]
Credit facility outstanding		$ 8,600
Revolving credit facility \| Minimum
Line of Credit Facility [Line Items]
Variable rates	7.00%

- Definition

The carrying value as of the balance sheet date of the current and noncurrent portions of long-term obligations drawn from a line of credit, which is a bank's commitment to make loans up to a specific amount. Examples of items that might be included in the application of this element may consist of letters of credit, standby letters of credit, and revolving credit arrangements, under which borrowings can be made up to a maximum amount as of any point in time conditional on satisfaction of specified terms before, as of and after the date of drawdowns on the line. Includes short-term obligations that would normally be classified as current liabilities but for which (a) postbalance sheet date issuance of a long term obligation to refinance the short term obligation on a long term basis, or (b) the enterprise has entered into a financing agreement that clearly permits the enterprise to refinance the short-term obligation on a long term basis and the following conditions are met (1) the agreement does not expire within 1 year and is not cancelable by the lender except for violation of an objectively determinable provision, (2) no violation exists at the BS date, and (3) the lender has entered into the financing agreement is expected to be financially capable of honoring the agreement.

+ References + Details

Commitments and Contingencies - Future Minimum Lease Payments (Details) $ in Thousands	Jan. 02, 2022 USD ($)
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract]
2022	$ 4,899
2023	4,263
2024	3,879
2025	4,017
2026	2,427
Thereafter	5,037
Total	$ 24,522

Significant Accounting Policies - Segment Reporting (Details)	12 Months Ended
	Jan. 02, 2022 segment
Significant Accounting Policies
Number of operating segments	1
Number of reporting segments	1

Significant Accounting Policies - Net Loss Per Share Attributable to Common Stockholders (Details) - shares	12 Months Ended
	Jan. 02, 2022	Jan. 03, 2021	Dec. 29, 2019
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total	1,122,233	3,129,634	3,129,634
Series A convertible preferred stock
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total		3,129,634	3,129,634
Stock options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total	322,793
Unvested restricted stock
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total	381,612
CEO award share settlement
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total	417,828

Income Taxes - Components of deferred tax assets and liabilities (Details) - USD ($) $ in Thousands	Jan. 02, 2022	Jan. 03, 2021
Deferred tax assets:
Accruals and allowances	$ 2,888	$ 1,263
Interest disallowance	3,456	4,005
Inventory capitalization and other adjustments	849	585
Deferred revenue	1,142	1,053
Equity-based compensation	531
Net operating losses and tax credit carryforwards	488	658
Other	423	47
Gross deferred tax assets	9,777	7,611
Deferred tax liabilities:
Depreciation and amortization	(6,856)	(6,150)
Other		(202)
Gross deferred tax liabilities	(6,856)	(6,352)
Net deferred tax assets	$ 2,921	$ 1,259

Consolidated Statements of Redeemable Preferred Stock, Convertible Preferred Stock and Stockholders' Equity (Deficit) - USD ($) $ in Thousands	Common Stock. IPO Lulu's Holdings, L.P	Common Stock. IPO	Common Stock.	Additional Paid-In Capital IPO	Additional Paid-In Capital	Accumulated Deficit	Redeemable Preferred Stock	Convertible Preferred Stock IPO	Convertible Preferred Stock	IPO	Total
Balance at Dec. 30, 2018									$ 117,038
Balance (in shares) at Dec. 30, 2018									3,129,634
Balance at Dec. 29, 2019									$ 117,038
Balance (in shares) at Dec. 29, 2019									3,129,634
Balance at Dec. 30, 2018			$ 18			$ (159,868)					$ (159,850)
Balance (in shares) at Dec. 30, 2018			17,462,283
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Equity-based compensation					$ 2,040						2,040
Net income (loss) and comprehensive income (loss)						(469)					(469)
Balance at Dec. 29, 2019			$ 18		2,040	(160,337)					(158,279)
Balance (in shares) at Dec. 29, 2019			17,462,283
Increase (Decrease) in Temporary Equity [Roll Forward]
Series B\B-1 redeemable preferred stock issuance							$ 16,412
Series B\B-1 redeemable preferred stock issuance (in shares)							7,500,001
Balance at Jan. 03, 2021							$ 16,412		$ 117,038
Balance (in shares) at Jan. 03, 2021							7,500,001		3,129,634
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock issuance					(504)						(504)
Equity-based compensation					9,086						9,086
Net income (loss) and comprehensive income (loss)						(19,304)					(19,304)
Balance at Jan. 03, 2021			$ 18		10,622	(179,641)					(169,001)
Balance (in shares) at Jan. 03, 2021			17,462,283
Increase (Decrease) in Temporary Equity [Roll Forward]
Series B\B-1 redeemable preferred stock issuance							$ 2,908
Series B\B-1 redeemable preferred stock issuance (in shares)							1,450,000
Conversion of convertible preferred stock to common stock								$ (240,000)
Conversion of convertible preferred stock to common stock (in shares)								(3,129,634)
Redemption of redeemable preferred stock							$ (19,320)
Redemption of redeemable preferred stock (in shares)							(8,950,001)
Balance (in shares) at Jan. 02, 2022							0		0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock issuance		$ 5		$ 81,983						$ 81,988
Stock issuance (in shares)	215,702	5,750,000
Deemed dividend to convertible preferred stockholders upon the IPO					(122,962)				$ 122,962		(122,962)
Equity-based compensation					8,145						8,145
Conversion of convertible preferred stock to common stock		$ 15		$ 239,985						$ 240,000
Conversion of convertible preferred stock to common stock (in shares)		15,000,000
Reclassification of liability-classified CEO award to equity-classified awards					2,887						2,887
Redemption of redeemable preferred stock upon the IPO					1,420						1,420
Forfeiture of unvested restricted stock (in shares)			(6,861)
Net income (loss) and comprehensive income (loss)						2,045					2,045
Balance at Jan. 02, 2022			$ 38		$ 222,080	$ (177,596)					$ 44,522
Balance (in shares) at Jan. 02, 2022			38,421,124

Equity-Based Compensation

12 Months Ended

Jan. 02, 2022

Equity-Based Compensation

Equity-Based Compensation

9.Equity-Based Compensation

Omnibus Equity Plan and Employee Stock Purchase Plan

In connection with the closing of the IPO, the Company adopted the Omnibus Equity Plan (the “Omnibus Equity Plan”) and the 2021 Employee Stock Purchase Plan (the “ESPP”).

Under the Omnibus Equity Plan, incentive awards may be granted to employees, directors, and consultants of the Company. The Company initially reserved 3,719,000 shares of common stock for future issuance under the Omnibus Equity Plan, including any shares subject to awards under the 2021 Equity Incentive Plan (the “2021 Equity Plan”) that are forfeited or lapse unexercised. The number of shares reserved for issuance under the Omnibus Equity Plan will automatically increase on the first day of each fiscal year, starting in 2022 and continuing through 2031, by a number of shares equal to (a) 4% of the total number of shares of the Company’s common stock outstanding on the last day of the immediately preceding year or (b) such smaller number of shares as determined by the Company’s board of directors. Under the Omnibus Equity Plan, the Company had 3,719,000 shares available for grant as of January 2, 2022. The Company’s board of directors administers the Omnibus Equity Plan and determines to whom awards will be granted, the exercise price of any options, the rates at which awards vest and the other terms and conditions of the awards granted under the Omnibus Equity Plan. The board of directors may or may not issue the full number of shares that are reserved for issuance. Options generally vest over four years and are subject to the employee’s continued employment with us. Options granted to consultants or other nonemployees generally vest over the expected service period to the Company. The options expire ten years from the date of grant. The Company issues new shares to satisfy stock option exercises.

Under the ESPP, certain Company employees may purchase shares of the Company’s common stock at a 15% discount in future offerings. The Company initially reserved 743,803 shares of common stock for future issuance under the ESPP. The number of shares of common stock reserved for issuance under the ESPP will automatically increase on the first day of each fiscal year beginning in 2022 and ending in 2031, by a number of shares equal to (a) 1% of the total number of shares of the Company’s common stock outstanding on the last day of the immediately preceding year or (b) such smaller number of shares as determined by the Company’s board of directors. The ESPP has not been started nor have any shares been issued under the plan.

2021 Equity Plan

During April 2021, the Company’s board of directors adopted the 2021 Equity Plan. The 2021 Equity Plan provides for the issuance of incentive stock options, restricted stock, restricted stock units and other stock-based and cash-based awards to the Company’s employees, directors, and consultants. The maximum aggregate number of shares reserved for issuance under the 2021 Equity Plan is 925,000 shares. The Company’s board of directors administers the 2021 Equity Plan. The options outstanding under the 2021 Equity Plan expire ten years from the date of grant. The Company issues new common shares to satisfy stock option exercises. In connection with the closing of the IPO, no further awards will be granted under the 2021 Equity Plan.

CEO Stock Options and Special Compensation Awards

During April 2021, the Company entered into an Employment Agreement (“Employment Agreement”) with the CEO and granted stock options to purchase 322,793 shares of common stock with an exercise price of $11.35 per share, which vest based on service and performance conditions. 275,133 of these stock options have only service vesting conditions, and 47,660 of these stock options have both service and performance vesting conditions. In addition, a portion of these stock options were subject to accelerated vesting conditions upon the occurrence of certain future events, which were satisfied upon the closing of the IPO. Upon completion of the IPO, 137,567 stock options with service conditions and 23,830 stock options with both service and performance vesting conditions were accelerated.

Under the Employment Agreement and subject to ongoing employment, and in light of the closing of the IPO, the CEO will receive two bonuses which will be settled in fully-vested shares of the Company’s common stock equal to $3.0 million each ($6.0 million in aggregate) on March 31, 2022 and March 31, 2023. The Company initially concluded that the two bonuses are subject to the guidance within ASC 718 and, were liability-classified upon issuance. Upon the completion of the IPO, the two bonuses became equity-classified as they no longer met the criteria for liability classification and $2.9 million was reclassified from accrued expenses and other current liabilities and other noncurrent liabilities to additional paid-in capital. The Company records the equity-based compensation expense on a straight-line basis over the requisite service periods through March 31, 2022 and March 31, 2023. During the fiscal year ended January 2, 2022, the Company recognized equity-based compensation related to the two bonuses of $3.3 million. Upon the completion of the service by the CEO, the Company will issue 208,914 fully-vested shares on March 31, 2022 and 208,914 fully-vested shares on March 31, 2023.

Stock Options

A summary of stock option activity for 2021 is as follows:


		Weighted-		Weighted-
		Average		Average
		Exercise		Remaining	Aggregate
	Options	Price per		Contractual	Intrinsic
	Outstanding	Option		Life (years)	Value
Balance as of January 3, 2021	—	$	—
Granted	322,793		11.35
Outstanding as of January 2, 2022	322,793	$	11.35	9.29	$	—
Exercisable as of January 2, 2022	161,397	$	11.35	9.29	$	—
Vested and expected to vest as of January 2, 2022	322,793	$	11.35	9.29	$	—

The weighted-average grant-date fair value of options granted during 2021 was $16.44.

The following table presents the range of assumptions used to estimate the fair value of options granted during the periods presented:


	January 2,
	2022
Fair value of common stock	$	25.86
Expected term (in years)		6.48
Expected volatility		50.62	%
Risk-free rate		1.17	%
Dividend yield		0	%

Fair Value of Common Stock – Given the absence of a public market prior to the IPO, the board of directors, with the assistance of a third-party valuation specialist, determined the fair value of the Company’s common stock at the time of the grant of stock options by considering a number of objective and subjective factors, including the Company’s actual operating and financial performance, market conditions and performance of comparable publicly-traded companies, developments and milestones in the Company, the likelihood of achieving a liquidity event and transactions involving the Company’s common stock, among other factors. The fair value of the underlying common stock was determined by the board of directors. The Company has not granted any stock options subsequent to the IPO during 2021.

Risk-Free Interest Rate - The risk-free interest rate is based on the U.S. Treasury yield in effect at the time the options are granted for zero coupon U.S. Treasury notes with maturities approximately equal to the expected term of the option.

Expected Term - The expected term is based upon the Company’s consideration of the historical life of options, the vesting period of the option granted, and the contractual period of the option granted. The Company has a limited history of granting options, accordingly, the expected life was calculated using the simplified method.

Volatility - As the Company is not publicly traded, the expected volatility for the Company’s stock options was determined by using an average of historical volatilities of selected industry peers deemed to be comparable to the Company’s business corresponding to the expected term of the awards.

Dividend Yield - The expected dividend rate is zero as the Company currently has no history or expectation of declaring dividends on its common stock.

During 2021, equity-based compensation expense of $3.2 million was recorded to general and administrative expense related to the stock options, which included equity-based compensation of $2.1 million recorded for stock options with service conditions only and $0.5 million recorded for stock options with both service and performance conditions as a result of accelerated vesting upon the completion of the IPO. As of January 2, 2022, total unrecognized compensation cost related to unvested stock options was $2.6 million, which is expected to be recognized over a weighted average remaining service period of 2.24 years.

Class P Units

During the second and third quarters of 2020, all outstanding Class P units totaling 1,858,210 were modified ($7.22 weighted average modification date fair value per unit) to include a provision that if the employment with or service to the Company is terminated, then all outstanding Class P units that have satisfied the service-based vesting requirements will remain outstanding. 384,522 of the outstanding Class P units were also modified to include both a service condition and a performance condition. The performance-based vesting condition is satisfied upon the occurrence of a qualifying distribution event, which is generally defined as an issuance of a distribution to the LP’s partners, and which was satisfied upon completion of the IPO. As of the modification dates, the Company measured the fair value of all modified Class P units. During the fourth quarter of 2020, the LP granted an additional 1,094,861 Class P units which vest monthly over four years from the grant date and only include a service condition ($4.54 weighted average grant date fair value per unit).

During October 2021, the LP modified the vesting schedule related to 763,178 outstanding Class P units for two senior executives to accelerate vesting if the two senior executives perform service after the completion of the IPO over the subsequent 12-month period. The Company concluded that the amendment to the Class P units was a modification under ASC 718 and there was no incremental equity-based compensation expense to recognize. With the completion of the Company’s IPO, the remaining unrecognized expense associated with the restricted stock, received in exchange at the IPO for the modified Class P units, is being recognized over the subsequent 12-month period through November 2022.

The Company recorded equity-based compensation expense of $1.9 million and $8.8 million ($8.4 million upon modification) during 2021 and 2020, respectively, related to the outstanding and vested service-based Class P units and after the conversion to restricted stock discussed below.

Pre-Vesting Distributions

With the completion of the IPO, the performance condition for pre-vesting distributions related to the Class P units was met and the Company recognized a cumulative catch-up to equity-based compensation of $2.6 million during 2021, and $2.6 million payable to the former Class P unit holders is included in accrued expenses and other current liabilities as of January 2, 2022. As of January 2, 2022, unrecognized pre-vesting distributions of $0.2 million will be recognized over a weighted average period of 1.0 years.

The following table summarizes the rollforward of unvested Class P units in 2021:


		Weighted-
	Unvested Class	Average Fair
	P units	Value per Unit
Balance at January 3, 2021	1,729,938	$	5.33
Units vested	(559,499)		6.06
Units forfeited	(58,184)		8.45
Units converted to unvested restricted stock of the Company upon LP liquidation	(1,112,255)		4.79

Balance at January 2, 2022	—	$	—

The total fair value of Class P units vested during 2021 was $3.4 million.

Restricted Stock

Immediately before the completion of the IPO, the LP was liquidated and the unit holders of the LP received shares of the Company’s common stock in exchange for their units of the LP. The Class P unit holders received 1,964,103 shares of common stock, comprised of 1,536,304 shares of vested common stock and 427,799 shares of unvested restricted stock. Any such shares of restricted stock received in respect of unvested Class P units of the LP are subject to vesting and a risk of forfeiture to the same extent as the corresponding Class P units. As of January 2, 2022, the unrecognized equity-based compensation expense for all restricted stock with a service condition is $4.0 million and will be recognized over a weighted-average period of 1.76 years.

With the completion of the IPO, there were 502,322 shares of restricted stock outstanding that had met the performance-based vesting condition. During 2021, the Company recognized a cumulative catch-up of $2.6 million for restricted stock that had met both the service and performance vesting conditions. As of January 2, 2022, the unrecognized equity-based compensation expense for all restricted stock with both a service and performance condition is $0.3 million and will be recognized over a weighted-average period of 1.00 years.

The following table summarizes the rollforward of unvested restricted stock in 2021:


		Weighted-
	Restricted	Average Fair
	Stock	Value per Share
Balance at January 3, 2021	—	$	—
Converted from Class P units of the Company upon LP liquidation	427,799		5.44
Restricted stock granted	—		—
Restricted stock vested	(39,326)		5.85
Restricted stock forfeited	(6,861)		5.99

Balance at January 2, 2022	381,612	$	5.39

The total fair value of restricted stock vested during 2021 was $0.2 million.

There was no income tax benefit recognized related to equity-based compensation expense in 2021, 2020 or 2019.

Equity-Based Compensation (Tables)

12 Months Ended

Jan. 02, 2022

Equity-Based Compensation

Summary of stock option activity

A summary of stock option activity for 2021 is as follows:


		Weighted-		Weighted-
		Average		Average
		Exercise		Remaining	Aggregate
	Options	Price per		Contractual	Intrinsic
	Outstanding	Option		Life (years)	Value
Balance as of January 3, 2021	—	$	—
Granted	322,793		11.35
Outstanding as of January 2, 2022	322,793	$	11.35	9.29	$	—
Exercisable as of January 2, 2022	161,397	$	11.35	9.29	$	—
Vested and expected to vest as of January 2, 2022	322,793	$	11.35	9.29	$	—

Summary of assumptions used to estimate the fair value of options granted


	January 2,
	2022
Fair value of common stock	$	25.86
Expected term (in years)		6.48
Expected volatility		50.62	%
Risk-free rate		1.17	%
Dividend yield		0	%

Summary of rollforward of unvested units

The following table summarizes the rollforward of unvested Class P units in 2021:


		Weighted-
	Unvested Class	Average Fair
	P units	Value per Unit
Balance at January 3, 2021	1,729,938	$	5.33
Units vested	(559,499)		6.06
Units forfeited	(58,184)		8.45
Units converted to unvested restricted stock of the Company upon LP liquidation	(1,112,255)		4.79

Balance at January 2, 2022	—	$	—

Summary of unvested restricted stock

The following table summarizes the rollforward of unvested restricted stock in 2021:


		Weighted-
	Restricted	Average Fair
	Stock	Value per Share
Balance at January 3, 2021	—	$	—
Converted from Class P units of the Company upon LP liquidation	427,799		5.44
Restricted stock granted	—		—
Restricted stock vested	(39,326)		5.85
Restricted stock forfeited	(6,861)		5.99

Balance at January 2, 2022	381,612	$	5.39

Balance Sheet Components - Property and Equipment, net (Details) - USD ($) $ in Thousands	12 Months Ended
	Jan. 02, 2022	Jan. 03, 2021	Dec. 29, 2019
Property, Plant and Equipment [Line Items]
Total property and equipment	$ 9,010	$ 8,119
Less: accumulated depreciation and amortization	(5,779)	(5,029)
Property and equipment, net	3,231	3,090
Depreciation of property and equipment	1,300	1,500	$ 1,400
Leasehold improvements
Property, Plant and Equipment [Line Items]
Total property and equipment	3,502	3,647
Equipment
Property, Plant and Equipment [Line Items]
Total property and equipment	3,278	2,595
Furniture and fixtures
Property, Plant and Equipment [Line Items]
Total property and equipment	2,123	1,849
Construction in progress
Property, Plant and Equipment [Line Items]
Total property and equipment	$ 107	$ 28

Subsequent Events

12 Months Ended

Jan. 02, 2022

Subsequent Events

Subsequent Events

13.Subsequent Events

On January 4, 2022, the Company granted 1,620,170 restricted stock units (RSUs) to certain executives and employees which vest quarterly over two years through December 31, 2023. On January 4, 2022, 25,874 fully vested RSUs were granted to the CEO, which cannot be sold until one year after the date of our IPO. The approximate amount of total stock-based compensation expense associated with these RSUs is $16.3 million.

On March 29, 2022, the Company paid $10.0 million on its New Revolving Facility.

Significant Accounting Policies - Revenue Recognition (Details) $ in Thousands	12 Months Ended
	Jan. 02, 2022 USD ($) item	Jan. 03, 2021 USD ($)	Dec. 29, 2019 USD ($)
Disaggregation of Revenue [Line Items]
Number of performance obligation \| item	1
Practical expedient	true
Number of contractual liabilities \| item	2
Maximum
Disaggregation of Revenue [Line Items]
Revenue duration period	36 months
Deferred Revenue
Significant changes in the contract liabilities balances
Beginning Balance	$ 792	$ 547	$ 652
Revenue recognized that was included in contract liability balance at the beginning of the period	(792)	(547)	(652)
Increase due to cash received, excluding amounts recognized as revenue during the period	145	792	547
Ending Balance	145	792	547
Stored-Value Cards
Significant changes in the contract liabilities balances
Beginning Balance	4,973	4,605	3,033
Revenue recognized that was included in contract liability balance at the beginning of the period	(1,471)	(2,094)	(1,907)
Increase due to cash received, excluding amounts recognized as revenue during the period	3,738	2,462	3,479
Ending Balance	$ 7,240	$ 4,973	$ 4,605

Subsequent Events (Details) - USD ($) $ in Thousands			12 Months Ended
Subsequent Events (Details) - USD ($) $ in Thousands	Mar. 30, 2022	Jan. 04, 2022	Jan. 02, 2022	Jan. 03, 2021	Dec. 29, 2019
Subsequent Event [Line Items]
Vesting period			4 years	2 years
Repayments of Lines of Credit			$ 8,580	$ 800	$ 5,000
Subsequent event \| New Revolving Credit Facility
Subsequent Event [Line Items]
Repayments of Lines of Credit	$ 10,000
Subsequent event \| Restricted stock units
Subsequent Event [Line Items]
Vesting period		2 years
Options expiration period		1 year
Compensation expense associated with RSU		$ 16,300
Subsequent event \| Restricted stock units \| CEO
Subsequent Event [Line Items]
Number of shares granted		25,874
Subsequent event \| Restricted stock units \| Certain officers and employees
Subsequent Event [Line Items]
Number of shares granted		1,620,170

Debt

12 Months Ended

Jan. 02, 2022

Debt

Debt

5.Debt

New Revolving Facility

During November 2021, the Company entered into a Credit Agreement with Bank of America (the “Credit Agreement”) to provide the New Revolving Facility that provides for borrowings up to $50.0 million. During the term of the Credit Agreement, the Company can increase the aggregate amount of the New Revolving Facility up to an additional $25.0 million (for maximum aggregate lender commitments of up to $75.0 million), subject to the satisfaction of certain conditions under the Credit Agreement, including obtaining the consent of the administrative agent and an increased commitment from existing or new lenders. In addition, the Credit Agreement may be used to issue letters of credit up to $7.5 million. As of January 2, 2022, the Company had drawn $25.0 million under the New Revolving Facility and utilized $0.25 million under the letter of credit (the “Letter of Credit”).

The New Revolving Facility matures on November 15, 2024, while the Letter of Credit matures on November 8, 2024. As of January 2, 2022, the Company had $25 million outstanding and $25 million available for borrowing under the New Revolving Facility and $7.25 million available to issue letters of credit.

All borrowings under the Credit Agreement accrue interest at a rate equal to, at the Company’s option, either (x) the term daily SOFR, plus the applicable SOFR adjustment plus a margin of 1.75% per annum or (y) the base rate plus a margin of 0.75% (with the base rate being the highest of the federal funds rate plus 0.50%, the prime rate and term SOFR for a period of one month plus 1.00%). Additionally, a commitment fee of 37.5 basis points will be assessed on unused commitments under the New Revolving Facility, taking into account the sum of outstanding borrowings and letter of credit obligations. As of January 2, 2022, the interest rate for the New Revolving Facility was 1.92% and during 2021, the effective interest rate for the New Revolving Facility was 2.5%.

Amounts borrowed under the Credit Agreement are collateralized by all assets of the Company and contains various financial and non-financial covenants for reporting, protecting and obtaining adequate insurance coverage for assets collateralized and for coverage of business operations, and complying with requirements, including the payment of all necessary taxes and fees for all federal, state and local government entities. Immediately upon the occurrence and during the continuance of an event of default, including the noncompliance with the above covenants, the lender may increase the

interest rate per annum by 2.0% above the rate that would be otherwise applicable. As of January 2, 2022, management has determined that the Company was in compliance with all financial covenants.

Term Loan

In August 2017, the Company entered into a term loan with a principal amount of $135.0 million (the “Term Loan”) and a revolving credit facility of $10.0 million (the “Revolving Facility”) with certain financial institutions for which Credit Suisse acted as an administrative agent (the “Credit Facility”).

During June 2020, the Company entered into a waiver and fifth amendment to the Credit Facility (“Fifth Amendment”). For the Fifth Amendment, the Company incurred an amendment fee and other costs totaling $1.4 million that were treated as a debt issuance cost and will be amortized over the remaining term. There was no gain or loss arising from the Fifth Amendment as it was considered to be a debt modification. As of January 3, 2021, $0.9 million of the amendment fee was unpaid and included within accrued expenses and other current liabilities.

During April 2021, the Company entered into the sixth amendment to the Credit Facility (“Sixth Amendment”), which: 1) Amended the minimum liquidity covenant from $2.5 million to $10.0 million, 2) Extended the due date for the 2020 audited consolidated financial statements to September 30, 2021, and 3) Upon receipt of proceeds from an IPO, Special Purpose Acquisition Company transaction, or other liquidity transaction that involves the equity of Lulu’s or its affiliates, the Company is required to pay off the outstanding obligations under the Credit Facility before any proceeds are utilized by the Company. There was no gain or loss arising from the Sixth Amendment as it was considered to be a debt modification.

During November 2021, the Company utilized the proceeds from the IPO and the New Revolving Facility to repay the $105.8 million of outstanding principal and $1.4 million of accrued interest related to the Term Loan. The Credit Facility was terminated on November 15, 2021 and no prepayment penalties were incurred. With the repayment of the Credit Facility, the Company recognized a loss on debt extinguishment of $1.4 million, comprised of the write-off of $2.3 million in unamortized debt issuance costs and debt discounts, net of forgiveness of accrued debt amendment fees of $0.9 million in accordance with the Fifth Amendment.

The effective interest rate on the Term Loan was 15.3%, 13.3% and 12.2% for 2021, 2020 and 2019, respectively.

Revolving Facility

Outstanding amounts under the Revolving Facility bore interest at variable rates with a minimum of 7.00%. The Revolving Facility was amended with the Fifth Amendment, but there was no change to the commitment or the maturity date. As of January 3, 2021, there was $8.6 million outstanding under the Revolving Facility, which was repaid in March 2021. The Revolving Facility was terminated on November 15, 2021. The effective interest rate for the Revolving Facility was 11.6%, 10.4% and 10.3% for 2021, 2020 and 2019, respectively.

Debt Discounts and Issuance Costs

Debt discounts and issuance costs are deferred and amortized over the life of the related loan using the effective interest method. The associated expense is included in interest expense in the consolidated statements of operations and comprehensive loss. Debt discounts and issuance costs are presented as a reduction of long-term debt with the exception of debt issuance costs related to the New Revolving Facility and the Revolving Facility, which are included in other non-current assets in the consolidated balance sheets. As of January 2, 2022 and January 3, 2021, unamortized debt issuance costs recorded within other non-current assets were $0.4 million and $0.1 million, respectively.

The Company’s outstanding debt under the Term Loan consisted of the following (in thousands):


	January 2,		January 3,
	2022		2021
Principal amount of Term Loan	$	—	$	111,354
Less: Unamortized discount and debt issuance costs		—		(4,373)
Total carrying value of long-term debt		—		106,981
Less: Current portion of long-term debt		—		(10,125)
Long-term debt, net of current portion	$	—	$	96,856

Future minimum payments of principal on the Company’s outstanding debt were as follows (in thousands):


Fiscal Year Ending	Amounts
2022	$	—
2023		—
2024		25,000
Total principal amount	$	25,000

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-URI http://asc.fasb.org/topic&trid=2208564

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-Name Accounting Standards Codification
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+ Details

Related Party Transactions (Details) - USD ($) $ / shares in Units, $ in Thousands					3 Months Ended	12 Months Ended
	Nov. 15, 2021	Nov. 14, 2021	Mar. 31, 2021	Jun. 30, 2020	Oct. 03, 2021	Jan. 02, 2022	Jan. 03, 2021	Dec. 29, 2019
Related Party Transaction [Line Items]
General and administrative expenses						$ 87,710	$ 67,155	$ 73,386
Advance from LP							37	2,003
Repayment of advance received							2,040
Aggregate ownership interest						10.00%
Rental expense						$ 3,300	3,100	3,000
Pre Vesting Distribution Class P Awards
Related Party Transaction [Line Items]
Cumulative catch up to equity based compensation						2,600
Pre Vesting Distribution Class P Awards \| Accrued expense and other current liabilities
Related Party Transaction [Line Items]
Cumulative catch up to equity based compensation						$ 2,600
Series B Redeemable Preferred Stock
Related Party Transaction [Line Items]
Equity based compensation							$ 500
Equity based compensation				$ 8,600
Fair value per share							$ 2.21
Consideration per share							$ 1.00
Series B-1 Redeemable Preferred Stock
Related Party Transaction [Line Items]
Equity based compensation			$ 1,500
Class P Units
Related Party Transaction [Line Items]
Issuance of common stock (in shares)						215,702
Equity based compensation						$ 1,900	$ 8,800
Management and consulting fees
Related Party Transaction [Line Items]
Accrued liabilities, related party							200
Accounts payable, related party							800
IPO
Related Party Transaction [Line Items]
Issuance of common stock (in shares)	5,750,000
Equity based compensation						$ 3,500
Share price	$ 16.00					$ 16.00
IPO \| Class P Units
Related Party Transaction [Line Items]
Issuance of common stock (in shares)	215,702
LP
Related Party Transaction [Line Items]
Equity based compensation					$ 4,500	$ 9,100
LP \| Pre Vesting Distribution Class P Awards
Related Party Transaction [Line Items]
Equity based compensation								2,000
LP \| Pre Vesting Distribution Class P Awards \| Accrued expense and other current liabilities
Related Party Transaction [Line Items]
Cumulative catch up to equity based compensation						2,600
LP \| Pre Vesting Distribution Class P Awards \| General and administrative expenses
Related Party Transaction [Line Items]
Cumulative catch up to equity based compensation						2,600
LP \| Class P Units
Related Party Transaction [Line Items]
Repayment of advance received							2,000
Payment of accrued interest							100
Entities related to current employees, board members and service providers \| Series B Redeemable Preferred Stock
Related Party Transaction [Line Items]
Equity based compensation							$ 8,600
Fair value per share							$ 2.21
Consideration per share							$ 1.00
Executives \| Series B-1 Redeemable Preferred Stock
Related Party Transaction [Line Items]
Equity based compensation						$ 1,500
Fair value per share						$ 2.02
Consideration per share						$ 1.00
HIG \| Management and consulting fees
Related Party Transaction [Line Items]
Expenses from transactions with related party						$ 400	$ 500	600
Other related parties \| Management and consulting fees
Related Party Transaction [Line Items]
Expenses from transactions with related party						300	200	200
Limited Partner and Series B Preferred Stockholder
Related Party Transaction [Line Items]
Rental expense						$ 100	$ 100	$ 100
LP
Related Party Transaction [Line Items]
Issuance of common stock (in shares)	215,702	215,702

Equity-Based Compensation - Rollforward of Unvested Units (Details) - Class P Units $ / shares in Units, $ in Millions	12 Months Ended
	Jan. 02, 2022 USD ($) $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Number of Shares [Roll Forward]
Unvested Units, Beginning balance \| shares	1,729,938
Unvested Units, Vested \| shares	(559,499)
Unvested Units, Forfeited \| shares	(58,184)
Unvested Units, converted \| shares	(1,112,255)
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract]
Weighted-Average Fair Value per Unit, Beginning balance \| $ / shares	$ 5.33
Weighted-Average Fair Value per Unit, Vested \| $ / shares	6.06
Weighted-Average Fair Value per Unit, Forfeited \| $ / shares	8.45
Weighted-Average Fair Value per Unit, converted \| $ / shares	$ 4.79
Total fair value \| $	$ 3.4

Equity-Based Compensation - Omnibus Equity Plan and ESPP (Details) - shares		12 Months Ended
	Nov. 15, 2021	Jan. 02, 2022	Jan. 03, 2021
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Maximum aggregate number of shares reserved for issuance		4,462,803
Options vesting period		4 years	2 years
Employee Stock Purchase Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Maximum aggregate number of shares reserved for issuance	743,803
Percentage of increase in shares reserved for issuance	1.00%
Discount in future offerings	15.00%
Omnibus Equity Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Maximum aggregate number of shares reserved for issuance	3,719,000
Percentage of increase in shares reserved for issuance	4.00%
Shares available for grant		3,719,000
Options vesting period		4 years
Options expiration period		10 years

Significant Accounting Policies - Equity-Based Compensation (Details) - employee	12 Months Ended
	Jan. 02, 2022	Jan. 03, 2021
Significant Accounting Policies
Expected dividend yield	0.00%
Number of employees	5
Vesting period	4 years	2 years

Balance Sheet Components (Tables)

12 Months Ended

Jan. 02, 2022

Balance Sheet Components

Schedule of property and equipment, net

Property and equipment, net consisted of the following (in thousands):


	January 2,		January 3,
	2022		2021
Leasehold improvements	$	3,502	$	3,647
Equipment		3,278		2,595
Furniture and fixtures		2,123		1,849
Construction in progress		107		28
Total property and equipment		9,010		8,119
Less: accumulated depreciation and amortization		(5,779)		(5,029)
Property and equipment, net	$	3,231	$	3,090

Schedule of accrued expenses and other current liabilities

Accrued expenses and other current liabilities consisted of the following (in thousands):


	January 2,		January 3,
	2022		2021
Accrued compensation and benefits	$	8,136	$	2,932
Accrued pre-vesting distributions payable to former Class P unit holders		2,648		—
Accrued debt amendment fees		—		917
Accrued marketing		3,621		495
Accrued inventory		2,928		90
Other		4,615		3,099
Accrued expenses and other current liabilities	$	21,948	$	7,533

Defined Contribution Plans

12 Months Ended

Jan. 02, 2022

Defined Contribution Plans

Defined Contribution Plans

12.Defined Contribution Plans

The Company sponsors a participant-directed 401(k) profit sharing plan for employees who have been working at the Company for at least three months and are at least 18 years of age. Participants may make wage-deferred contributions up to the maximum allowed by law. The Company matches 100% of each participating employee’s deferral up to a maximum of 4% of eligible compensation. The Company may make additional discretionary matching contributions up to 6% of eligible compensation. The Company made matching contributions of $0.9 million, $0.7 million and $0.7 million during 2021, 2020 and 2019, respectively.

- Definition

The entire disclosure for retirement benefits.

+ References

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+ Details

Preferred Stock

12 Months Ended

Jan. 02, 2022

Preferred Stock

Preferred Stock

7.Preferred Stock

Pursuant to the Company’s amended and restated certificate of incorporation, the Company is authorized to issue 10,000,000 shares of preferred stock having a par value of $0.001 per share. The Company’s board of directors has the authority to issue preferred stock and to determine the rights, preferences, privileges, and restrictions, including voting rights, of those shares. As of January 2, 2022, no shares of preferred stock were issued and outstanding.

The Company had outstanding redeemable preferred stock and convertible preferred stock (collectively, the “Preferred Stock”) on January 3, 2021 as follows (in thousands, except share and per share amounts):


	January 3, 2021
		Shares	Issuance		Net
	Shares	Issued and	Price Per		Carrying		Liquidation
	Authorized	Outstanding	Share		Value		Preference
Convertible Preferred Stock (Series A)	3,129,635	3,129,634	$	38.34	$	117,038	$	240,000
Redeemable Preferred Stock (Series B and B-1)	7,500,001	7,500,001		1.00		16,412		15,000
Total	10,629,636	10,629,635			$	133,450	$	255,000

In connection with the Company’s IPO, all convertible preferred stock has been converted to the Company’s common stock. The Company’s convertible preferred stock contained a down round provision that if preferred stock or common stock without consideration or for a consideration per share less than the conversion price for the Series A Preferred Stock of $38.34 per share was issued, then the Series A preferred stock conversion price would be automatically adjusted. As a result of issuing common stock at $16.00 per share in connection with the IPO, the down round feature within the

convertible preferred stock was triggered and resulted in the Company issuing additional common stock of 11,870,366 shares. The Company recorded a deemed dividend of $123.0 million in additional paid-in capital related to the conversion of the convertible preferred stock that represented the difference between the liquidation amount of $240.0 million and the carrying value of $117.0 million. In connection with the Company’s IPO, all redeemable preferred stock was redeemed for $17.9 million and extinguished. The difference between the liquidation amount of $17.9 million and the carrying value of $19.3 million was recorded as a deemed contribution of $1.4 million in additional paid-in capital.

Series B and Series B-1 Redeemable Preferred Stock Issuance

During June 2020, the Company issued and sold 7,500,001 shares of Series B Preferred Stock at $1.00 per share to the general partner and a limited partner of the LP and the Series A preferred stockholders. The Company received gross cash proceeds of $7.5 million and incurred issuance costs associated with the Series B Preferred Stock issuance of $0.2 million. The Company has elected to record its redeemable preferred stock at the greater of its redemption value or the issuance date fair value, net of issuance costs, as it is probable of becoming redeemable due to the passage of time. For accounting purposes, the Company determined the fair value of the Series B Preferred Stock to be $2.21 per share at issuance. The Series B Preferred Stock shares purchased by entities related to current employees, board members, and service providers were recorded at fair value and the excess of the fair value over the consideration paid was recorded as equity-based compensation of $8.6 million. The Series B Preferred Stock shares purchased by an existing Series A preferred stockholder was recorded at fair value and the excess of the fair value over consideration paid was recorded as a deemed dividend of $0.5 million in additional paid-in capital.

During February 2021, the Company amended its Second Amended and Restated Certificate of Incorporation to amend the liquidation preference of the Series B preferred stock to an amount per share equal to a) two times the original issue price of $1.00 per share until August 28, 2022, or b) two times the original issue price of $1.00 per share plus an amount equal to 15% per annum accruing on two times the original issue price from August 28, 2022 through and including the date of payment, plus any dividends declared but unpaid.

During March 2021, the Company issued and sold 1,450,000 shares of Series B-1 Preferred Stock at $1.00 per share to current executives of the Company. The Company received gross cash proceeds of $1.5 million and incurred nominal issuance costs associated with the Series B-1 Preferred Stock issuance. For accounting purposes, the Company determined the fair value of the Series B-1 Preferred Stock to be $2.02 per share at issuance. The Series B-1 Preferred Stock shares were recorded at fair value and the excess of the fair value over the consideration paid was recorded as equity-based compensation of $1.5 million.

In connection with the sale of the Series B-1 Preferred Stock, the Company filed an amended and restated certificate of incorporation which authorized the issuance of up to 2,500,000 shares of Series B-1 Preferred Stock with the same rights, preferences and privileges of the Series B Preferred Stock and increased the authorized shares of common stock to 24,000,000.

The fair value of the Series B Preferred Stock and Series B-1 Preferred Stock was estimated using a two-step process. First, the Company’s enterprise value was established using generally accepted valuation methodologies, including discounted cash flow analysis and comparable public company analysis. Second, the Company’s enterprise value was allocated among the various classes of outstanding securities using the Black-Scholes option-pricing method. The option-pricing method treats all levels of the capital structure as call options on the enterprise’s value, with the exercise price based on the “breakpoints” between each of the different claims on the securities. The inputs necessary for the Series B Preferred Stock option-pricing model include the Company’s then-current enterprise value, breakpoints (the various characteristics for each class of equity, including liquidation preferences and priority distributions), time to liquidity of 3 years, risk-free rate of 0.21%, and volatility of 72.0%.The inputs necessary for the Series B-1 Preferred Stock option-pricing model include the Company’s then-current enterprise value, breakpoints (the various characteristics for each class

of equity, including liquidation preferences and priority distributions), time to liquidity ranging from 0.5 to 1.5 years depending on the scenario, risk-free rate of 0.11%, and volatility of 78.0%.

Commitments and Contingencies

12 Months Ended

Jan. 02, 2022

Commitments and Contingencies.

Commitments and Contingencies

6.Commitments and Contingencies

Operating Leases

As of January 2, 2022, the Company had non-cancelable operating leases for its corporate offices and distribution facilities at various dates through 2029, some of which have renewal provisions. Rental expense classified within general and administrative expenses in the consolidated statements of operations and comprehensive loss totaled $3.3 million, $3.1 million and $3.0 million in 2021, 2020 and 2019, respectively.

On September 24, 2021, the Company entered into a new lease agreement for a master fulfillment system for lease payments of approximately $0.9 million per year or $3.7 million over the lease term (such amounts are not included in the future minimum lease payments schedule below). The lease will commence in early 2022 with a lease term of four years.

On September 3, 2021, the Company entered into a new lease agreement for a new distribution facility for approximately $0.2 million per month or $15.7 million over the lease term. The lease commenced on December 1, 2021 with a lease term of 7.2 years and there is a security deposit of $0.4 million, included in other noncurrent assets on the consolidated balance sheets as of January 2, 2022.

Future minimum lease payments under non-cancelable operating leases as of January 2, 2022 were as follows (in thousands):


Fiscal Year ending:	Amounts
2022	$	4,899
2023		4,263
2024		3,879
2025		4,017
2026		2,427
Thereafter		5,037
Total	$	24,522

Litigation and Other

From time to time, the Company may be a party to litigation and subject to claims incurred in the ordinary course of business, including personal injury and indemnification claims, labor and employment claims, threatened claims, breach of contract claims, and other matters. The Company accrues a liability when management believes information available prior to the issuance of the consolidated financial statements indicates it is probable a loss has been incurred as of the date of the consolidated financial statements and the amount of loss can be reasonably estimated. The Company adjusts its accruals to reflect the impact of negotiations, settlements, rulings, advice of legal counsel, and other information and events pertaining to a particular case. Legal costs are expensed as incurred. Although the results of litigation and claims are inherently unpredictable, management concluded that it was not probable that it had incurred a material loss during the periods presented related to such loss contingencies. Therefore, the Company has not recorded a reserve for any contingencies.

During the normal course of business, the Company may be a party to claims that are not covered by insurance. While the ultimate liability, if any, arising from these claims cannot be predicted with certainty, management does not believe that the resolution of any such claims would have a material adverse effect on the Company’s consolidated financial statements. As of January 2, 2022 and January 3, 2021, the Company was not aware of any currently pending legal matters or claims, individually or in the aggregate, that are expected to have a material adverse impact on its consolidated financial statements.

Indemnification

The Company also maintains director and officer insurance, which may cover certain liabilities arising from its obligation to indemnify the Company’s directors. To date, the Company has not incurred any material costs and has not accrued any liabilities in the consolidated financial statements as a result of these provisions.

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Jan. 02, 2022	Jan. 03, 2021	Dec. 29, 2019
Cash Flows from Operating Activities
Net income (loss)	$ 2,045	$ (19,304)	$ (469)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	2,828	3,216	3,041
Loss on debt extinguishment	1,392
Amortization of debt discount and debt issuance costs	2,283	2,485	2,045
Interest expense capitalized to principal of long-term debt and revolving line of credit	2,074	1,747
Payment of interest capitalized to principal of long-term debt and revolving line of credit	(3,821)
Equity-based compensation expense	10,338	9,086	2,040
Equity-based compensation expense related to redeemable preferred stock issuance	1,481	8,571
Equity-based compensation expense related to CEO special compensation awards	3,326
Write-off of deferred offering costs		1,950
Deferred income taxes	(1,663)	(14)	(1,620)
Loss (gain) on disposal of property and equipment	9	(25)
Changes in operating assets and liabilities:
Accounts receivable	(1,816)	123	(1,673)
Inventories	(5,281)	9,242	(1,822)
Assets for recovery	(2,650)	2,147	(369)
Income tax (receivable) payable	2,094	(302)	483
Prepaid and other current assets	(2,721)	339	(833)
Accounts payable	(2,895)	(3,702)	5,264
Accrued expenses and other current liabilities	21,263	(9,346)	3,118
Other noncurrent liabilities	(1,390)	(1,357)	2,669
Net cash provided by operating activities	26,896	4,856	11,874
Cash Flows from Investing Activities
Capitalized software development costs	(1,522)	(1,273)	(1,830)
Purchases of property and equipment	(1,447)	(700)	(2,212)
Other	(425)	60
Advance to Parent			(2,406)
Repayments of advance to Parent			2,406
Net cash used in investing activities	(3,394)	(1,913)	(4,042)
Cash Flows from Financing Activities
Proceeds from borrowings on revolving line of credit	25,000	5,300	9,000
Repayments on revolving line of credit	(8,580)	(800)	(5,000)
Repayment of long-term debt	(109,608)	(2,531)	(12,656)
Payment of debt issuance costs	(514)	(437)	(875)
Issuance of common stock upon IPO, net of underwriting discounts and commissions and issuance costs	82,546
Proceeds from the issuance of redeemable preferred stock, net of issuance costs	1,427	7,337
Redemption of redeemable preferred stock	(17,900)
Payment of deferred offering costs			(2,156)
Advance from LP		37	2,003
Repayment of advance from LP		(2,040)
Other	(24)	(111)	(37)
Net cash provided by (used in) financing activities	(27,653)	6,755	(9,721)
Net (decrease) increase in cash, cash equivalents and restricted cash	(4,151)	9,698	(1,889)
Cash, cash equivalents and restricted cash at beginning of year	16,059	6,361	8,250
Cash, cash equivalents and restricted cash at end of year	11,908	16,059	6,361
Supplemental Disclosure
Cash paid for income taxes, net of income tax refunds	6,112	171	1,383
Cash paid for interest	8,555	12,732	13,068
Supplemental Disclosure of Non-Cash Investing and Financing Activities
Purchases of property and equipment included in accounts payable and accrued expenses	55	94	$ 202
Debt issuance costs included in accrued expenses		917
Deemed dividend to preferred stockholders	(122,962)	504
Paid-in-kind interest added to principal balance of long-term debt and revolving line of credit	2,074	$ 1,747
Offering costs included in accrued expenses	542
Deemed contribution from redemption of redeemable preferred stock	1,420
Conversion of convertible preferred stock to common stock upon the IPO	240,000
Reclassification of CEO special compensation from a liability award to an equity award	$ 2,887

Significant Accounting Policies (Tables)

12 Months Ended

Jan. 02, 2022

Significant Accounting Policies

Reconciliation of cash, cash equivalents and restricted cash

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the consolidated balance sheets to the amounts shown in the consolidated statements of cash flows (in thousands):


	January 2,		January 3,		December 29,
	2022		2021		2019
Cash and cash equivalents	$	11,402	$	15,554	$	5,857
Restricted cash		506		505		504
Total cash and restricted cash	$	11,908	$	16,059	$	6,361

Summary of significant changes in contract liabilities balances

The following table summarizes the significant changes in the contract liabilities balances during 2021, 2020 and 2019 (in thousands):


	Deferred		Stored-Value
	Revenue		Cards
Balance as of December 30, 2018	$	652	$	3,033
Revenue recognized that was included in contract liability balance at the beginning of the period		(652)		(1,907)
Increase due to cash received, excluding amounts recognized as revenue during the period		547		3,479
Balance as of December 29, 2019		547		4,605
Revenue recognized that was included in contract liability balance at the beginning of the period		(547)		(2,094)
Increase due to cash received, excluding amounts recognized as revenue during the period		792		2,462
Balance as of January 3, 2021		792		4,973
Revenue recognized that was included in contract liability balance at the beginning of the period		(792)		(1,471)
Increase due to cash received, excluding amounts recognized as revenue during the period		145		3,738
Balance as of January 2, 2022	$	145	$	7,240

Schedule of securities that were excluded from computation of diluted net loss per share


	January 2, 2022	January 3, 2021	December 29, 2019
Series A convertible preferred stock	—	3,129,634	3,129,634
Stock options	322,793	—	—
Unvested restricted stock	381,612	—	—
CEO award share settlement	417,828	—	—
Total	1,122,233	3,129,634	3,129,634

Preferred Stock - Outstanding Redeemable Preferred Stock and Convertible Preferred Stock (Details) - USD ($) $ / shares in Units, $ in Thousands	Nov. 15, 2021	Jan. 03, 2021
Preferred Stock.
Temporary Equity [Line Items]
Shares Authorized		10,629,636
Shares Issued		10,629,635
Shares Outstanding		10,629,635
Net Carrying Value		$ 133,450
Liquidation Preference		$ 255,000
Series A convertible preferred stock
Temporary Equity [Line Items]
Shares Authorized		3,129,635
Shares Issued		3,129,634
Shares Outstanding		3,129,634
Issuance Price Per Share		$ 38.34
Net Carrying Value	$ 117,000	$ 117,038
Liquidation Preference	$ 240,000	$ 240,000
Redeemable Preferred Stock (Series B and B-1)
Temporary Equity [Line Items]
Shares Authorized		7,500,001
Shares Issued		7,500,001
Shares Outstanding		7,500,001
Issuance Price Per Share		$ 1.00
Net Carrying Value		$ 16,412
Liquidation Preference		$ 15,000

Equity-Based Compensation - Pre-Vesting Distributions (Details) $ in Millions	12 Months Ended
	Jan. 02, 2022 USD ($)
Stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized pre vesting distributions expected to be recognized period	2 years 2 months 26 days
Pre Vesting Distribution Class P Awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Cumulative catch up to equity based compensation	$ 2.6
Unrecognized pre vesting distributions	$ 0.2
Unrecognized pre vesting distributions expected to be recognized period	1 year
Pre Vesting Distribution Class P Awards \| Accrued expense and other current liabilities
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Cumulative catch up to equity based compensation	$ 2.6

Equity-Based Compensation - Assumptions Used to Estimate the Fair Value of Options Granted (Details)	12 Months Ended
	Jan. 02, 2022 $ / shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Dividend yield	0.00%
Stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Fair value of common stock	$ 25.86
Expected term (in years)	6 years 5 months 23 days
Expected volatility	50.62%
Risk-free rate	1.17%
Dividend yield	0.00%

Related Party Transactions

12 Months Ended

Jan. 02, 2022

Related Party Transactions

Related Party Transactions

11.Related Party Transactions

Transactions with the LP

Certain of the Company’s transactions with the LP are classified as a component within additional paid-in capital in the consolidated statements of stockholders’ deficit as there are no defined payments or other terms associated with these transactions. Such transactions included equity-based compensation related to outstanding Class P units of $4.5 million during 2021 and $9.1 million during 2020. During 2019, the Company recorded equity-based compensation of $2.0 million related to pre-vesting distributions. With the completion of the IPO, the performance condition for pre-vesting distributions related to the Class P units was met and the Company recognized a cumulative catch-up to general and administrative expenses of $2.6 million during 2021 and $2.6 million payable to the Class P unit holders is included in accrued expense and other current liabilities as of January 2, 2022.

Immediately prior to the completion of the IPO, 215,702 shares of common stock were issued to the LP as a stock dividend for $3.5 million based on the Company’s IPO price of $16.00 per share during 2021.

Series B Redeemable Preferred Stock Issuance

The Series B Preferred Stock shares purchased by entities related to current employees, board members, and service providers were recorded at fair value and the excess of the fair value of $2.21 per share over the consideration paid of $1.00 per share was recorded as equity-based compensation of $8.6 million in 2020. The Series B Preferred Stock shares purchased by an existing Series A stockholder was recorded at fair value and excess of the fair value of $2.21 per share over the consideration paid of $1.00 per share was recorded as a deemed dividend of $0.5 million in additional paid-in capital in 2020.

Series B-1 Redeemable Preferred Stock Issuance

The Series B-1 Preferred Stock shares purchased by current executives were recorded at fair value and the excess of the fair value of $2.02 per share over the consideration paid of $1.00 per share was recorded as equity-based compensation of $1.5 million in 2021.

Advance to/from the LP

An additional $37,000 was advanced to the Company from the LP during 2020. During 2020, the Company repaid

the $2.0 million of advances from the LP plus accrued interest of $0.1 million, and such repayment was used by the LP to pay accrued Class P unit distributions to certain current employees of the Company.

Management & Consulting Fees

The Company has accrued for management and consulting fees to H.I.G. Capital, LLC (“H.I.G.”, the LP’s ultimate parent), Institutional Venture Partners (Series A Preferred Stockholder), and certain board members. Expenses for such services were $0.4 million to H.I.G and $0.3 million to other related parties during 2021, $0.5 million to H.I.G and $0.2 million to other related parties during 2020 and were $0.6 million to H.I.G. and $0.2 million to other related parties during 2019. There were $0.2 million of accrued liabilities and $0.8 million of accounts payable related to these services as of January 3, 2021. All outstanding management fees were settled at the time of our IPO and the management and consulting agreements were terminated upon the IPO.

Significant Shareholder Relationships

The Company identified three shareholders with aggregate ownership interest in the Company greater than 10%. The Company reviewed the respective investment portfolio holdings of these shareholders and identified investments in other entities that the Company engages in business with. All of these business relationships were obtained without the support of these shareholders, and as such, are believed to be at terms comparable to those that would be obtained through arm’s length dealings with unrelated third parties.

Operating Leases

Until June 2021, the Company leased operations and warehouse spaces from a limited partner of the LP and a Series B Preferred Stockholder of the Company. After June 2021, the Company continued to lease a retail space from this limited partner and Series B Preferred Stockholder. Following the liquidation of the LP and the redemption of the Series B Preferred Stock in November 2021, the Company leased this retail space from the same party, who remains related as a common stockholder of the Company. Total rent expense to the related party was $0.1 million, $0.1 million and $0.1 million during 2021, 2020 and 2019, respectively.

Equity-Based Compensation - 2021 Equity Plan (Details) - shares	12 Months Ended
	Jan. 02, 2022	Jan. 03, 2021
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Maximum aggregate number of shares reserved for issuance	4,462,803
Options vesting period	4 years	2 years
2021 Equity Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options expiration period	10 years
2021 Equity Incentive Plan \| Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Maximum aggregate number of shares reserved for issuance	925,000

Equity-Based Compensation - Class P Units (Details) $ / shares in Units, $ in Millions	1 Months Ended		3 Months Ended			6 Months Ended	12 Months Ended
	Oct. 31, 2021 employee shares	Apr. 30, 2021 shares	Oct. 03, 2021 $ / shares	Jul. 04, 2021 $ / shares	Jan. 03, 2021 $ / shares shares	Sep. 30, 2020	Jan. 02, 2022 USD ($) $ / shares	Jan. 03, 2021 USD ($)	Sep. 27, 2020 shares	Jun. 28, 2020 shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options vesting period							4 years	2 years
Stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized equity-based compensation \| $							$ 2.6
Weighted-average grant-date fair value of options granted \| $ / shares							$ 16.44
Service vesting \| Stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Accelerate vesting shares		137,567
Class P Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unit grants in period					1,094,861
Options vesting period					4 years
Equity based compensation \| $							$ 1.9	$ 8.8
Weighted-average grant-date fair value of units granted \| $ / shares			$ 7.22	$ 7.22	$ 4.54
Accelerate vesting shares	763,178
Number of senior executives, shares accelerated vesting \| employee	2
Required service period after completion of IPO						12 months
Class P Units \| Service vesting
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Units outstanding									1,858,210	1,858,210
Class P Units \| Performance vesting
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Units outstanding									384,522
Modified Class P Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Equity based compensation \| $								$ 8.4

Income Taxes - Payroll (Details) - Covid 19, Cares Act - USD ($) $ in Millions	12 Months Ended
	Jan. 02, 2022	Jan. 03, 2021
Operating Loss Carryforwards [Line Items]
Deferred payroll taxes payment	$ 0.5
Accrued expense and other current liabilities
Operating Loss Carryforwards [Line Items]
Accrued payroll taxes	$ 0.5	$ 0.5
Other Noncurrent Liabilities [Member]
Operating Loss Carryforwards [Line Items]
Accrued payroll taxes		$ 0.6

Significant Accounting Policies - Intangible Assets (Details) $ in Millions	12 Months Ended
	Jan. 02, 2022 USD ($) item	Jan. 03, 2021 USD ($)	Dec. 29, 2019 USD ($)	Dec. 31, 2014	Jul. 25, 2014
Significant Accounting Policies
Acquired percentage of outstanding common stock of subsidiary by LP				100.00%	100.00%
Number of reporting units \| item	1
Impairment of goodwill	$ 0.0	$ 0.0	$ 0.0
Accumulated impairment of goodwill	0.0	0.0
Change in value of tradename during the period	0.0	0.0	0.0
Accumulated impairment of tradename	$ 0.0	0.0
Useful life	3 years
Amortization of intangible assets	$ 1.6	1.7	1.6
Impairment of intangible assets, excluding goodwill	$ 0.0	$ 0.0	$ 0.0

Income Taxes (Tables)

12 Months Ended

Jan. 02, 2022

Income Taxes

Schedule of components of the income tax (provision) benefit


	January 2,		January 3,
	2022		2021
Current:
Federal	$	(5,919)	$	900
State		(1,956)		357
Total current (provision) benefit		(7,875)		1,257
Deferred:
Federal		1,341		(220)
State		322		234
Total deferred benefit		1,663		14
Income tax (provision) benefit	$	(6,212)	$	1,271

Schedule of reconciliation of the statutory federal rate to the Company's effective tax rate


	January 2,		January 3,
	2022		2021
Federal statutory rate	21.0	%	21.0	%
State income taxes, net of federal tax benefit	16.3		0.9
Non-deductible equity-based compensation expense	36.0		(18.0)
Tax credits	—		0.4
Change in uncertain tax position	(0.9)		1.5
Prior year adjustments	2.3		0.2
Other	0.5		0.2
Effective tax rate	75.2	%	6.2	%

Schedule of components of the Company's deferred tax assets and liabilities


	January 2,		January 3,
	2022		2021
Deferred tax assets:
Accruals and allowances	$	2,888	$	1,263
Interest disallowance		3,456		4,005
Inventory capitalization and other adjustments		849		585
Deferred revenue		1,142		1,053
Equity-based compensation		531		—
Net operating losses and tax credit carryforwards		488		658
Other		423		47
Gross deferred tax assets		9,777		7,611
Deferred tax liabilities:
Depreciation and amortization		(6,856)		(6,150)
Other		—		(202)
Gross deferred tax liabilities		(6,856)		(6,352)
Net deferred tax assets	$	2,921	$	1,259

Significant Accounting Policies - Recent Pronouncements (Details) $ in Millions	Jan. 02, 2022 USD ($)
Cumulative Effect, Period of Adoption, Adjustment \| Accounting Standards Update 2016-02
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Lease liabilities	$ 37.5

Significant Accounting Policies - Concentration of Credit Risks (Details) - Customer concentration risk - customer	12 Months Ended
	Jan. 02, 2022	Jan. 03, 2021	Dec. 29, 2019
Accounts receivable \| Single wholesale customer
Concentration Risk [Line Items]
Concentration risk percentage	24.00%	51.00%
Number of customers	1	1
Revenue \| Maximum
Concentration Risk [Line Items]
Concentration risk percentage	10.00%	10.00%	10.00%
Number of customers	0	0	0

Significant Accounting Policies - Selling and Marketing Expenses (Details) - USD ($) $ in Millions	12 Months Ended
	Jan. 02, 2022	Jan. 03, 2021	Dec. 29, 2019
Selling and Marketing Expense.
Accounting Policies [Line Items]
Advertising costs	$ 53.6	$ 38.1	$ 60.5

Significant Accounting Policies

12 Months Ended

Jan. 02, 2022

Significant Accounting Policies

Significant Accounting Policies

2.Significant Accounting Policies

Basis of Presentation and Fiscal Year

Use of Estimates

Segment Reporting

Concentration of Credit Risks

Cash, Cash Equivalents and Restricted Cash

The Company considers all highly liquid instruments purchased with original maturities of three months or less when issued as cash equivalents. These consist primarily of time deposit bank accounts and money market accounts. Due to the

nature of the Company’s cash flow, amounts on deposit in individual banks may exceed the insured amount throughout the period.

Restricted cash represents deposits with a financial institution to serve as collateral for the Company’s corporate credit cards.


	January 2,		January 3,		December 29,
	2022		2021		2019
Cash and cash equivalents	$	11,402	$	15,554	$	5,857
Restricted cash		506		505		504
Total cash and restricted cash	$	11,908	$	16,059	$	6,361

Accounts Receivable

Inventory

Property and Equipment, net

Goodwill and Tradename

Intangible Assets, net

Long-Lived Asset Impairment

Deferred Offering Costs

comprehensive income (loss). There were no deferred offering costs related to the IPO capitalized in the consolidated balance sheets as of January 2, 2022 and January 3, 2021.

Revenue Recognition

The following table summarizes the significant changes in the contract liabilities balances during 2021, 2020 and 2019 (in thousands):


	Deferred		Stored-Value
	Revenue		Cards
Balance as of December 30, 2018	$	652	$	3,033
Revenue recognized that was included in contract liability balance at the beginning of the period		(652)		(1,907)
Increase due to cash received, excluding amounts recognized as revenue during the period		547		3,479
Balance as of December 29, 2019		547		4,605
Revenue recognized that was included in contract liability balance at the beginning of the period		(547)		(2,094)
Increase due to cash received, excluding amounts recognized as revenue during the period		792		2,462
Balance as of January 3, 2021		792		4,973
Revenue recognized that was included in contract liability balance at the beginning of the period		(792)		(1,471)
Increase due to cash received, excluding amounts recognized as revenue during the period		145		3,738
Balance as of January 2, 2022	$	145	$	7,240

Cost of Revenue

General and Administrative Expenses

Selling and Marketing Expenses

Equity-Based Compensation

Stock Options

Class P units

Income Taxes

Net Loss Per Share Attributable to Common Stockholders


	January 2, 2022	January 3, 2021	December 29, 2019
Series A convertible preferred stock	—	3,129,634	3,129,634
Stock options	322,793	—	—
Unvested restricted stock	381,612	—	—
CEO award share settlement	417,828	—	—
Total	1,122,233	3,129,634	3,129,634

Redeemable Preferred Stock

Comprehensive Income (loss)

Recently Adopted Accounting Pronouncements

Recently Issued Accounting Pronouncements

2022. The Company is currently evaluating the potential impact of adopting this guidance on its consolidated financial statements.