Other Charges

Vision 20/20 Initiatives and Charges

During fiscal 2018, the Company launched its Vision 20/20 strategic plan, which involves a more aggressive approach to turn around its business over the next three years. The Vision 20/20 initiatives are primarily focused on product and pricing, as well as selling, general, and administrative expense reductions. The product and pricing initiatives include restoring the Company's full-price business by significantly reducing the amount of clearance merchandise offered on verabradley.com and in its full-line stores, as well as streamlining current product offerings by eliminating unproductive or incongruent categories and SKUs. The Company expects to reduce selling, general, and administrative expenses by right sizing the corporate infrastructure to better align with the reduced size of the business and closing underperforming stores. The implementation of the plan began in the third quarter of fiscal 2018, but the majority of the product and pricing initiatives will not be completed until fiscal 2019. There were no charges relating to Vision 20/20 during fiscal 2017.

The Company has incurred the following Vision 20/20-related charges during the thirteen weeks ended October 28, 2017 (in thousands):



	Thirteen Weeks Ended
	Statements of Income Line Item				Total Expense			Reportable Segment				Unallocated Corporate Expenses
	SG&A		Cost of Sales		Total Expense			Direct		Indirect		Unallocated Corporate Expenses
Asset impairment charges¹	$	5,852	$	—	$	5,852		$	5,852	$	—	$	—
Strategic consulting charges²	2,325		—		2,325			—		—		2,325
Severance charges	2,767		84		2,851			115		680		2,056
Inventory-related charges³	—		935		935			—		935		—
Other charges⁴	603		—		603			433		115		55
Total	$	11,547	$	1,019	$	12,566	⁵	$	6,400	$	1,730	$	4,436
(1)Refer to Note 12 herein for additional details
(2) Consulting charges for the identification and implementation of Vision 20/20 initiatives
(3) Inventory adjustments for the discontinuation of certain inventory categories
(4)Includes a net lease termination charge and accelerated depreciation charges
(5) After the associated tax benefit, the charges were $7.9 million

The Company has incurred the following Vision 20/20-related charges during the thirty-nine weeks ended October 28, 2017 (in thousands):



	Thirty-Nine Weeks Ended
	Statements of Income Line Item				Total Expense			Reportable Segment				Unallocated Corporate Expenses
	SG&A		Cost of Sales		Total Expense			Direct		Indirect		Unallocated Corporate Expenses
Asset impairment charges¹	$	5,852	$	—	$	5,852		$	5,852	$	—	$	—
Strategic consulting charges²	4,649		—		4,649			—		—		4,649
Severance charges	2,767		84		2,851			115		680		2,056
Inventory-related charges³	—		935		935			—		935		—
Other charges⁴	603		—		603			433		115		55
Total	$	13,871	$	1,019	$	14,890	⁵	$	6,400	$	1,730	$	6,760
(1)Refer to Note 12 herein for additional details
(2) Consulting charges for the identification and implementation of Vision 20/20 initiatives
(3) Inventory adjustments for the discontinuation of certain inventory categories
(4)Includes a net lease termination charge and accelerated depreciation charges
(5) After the associated tax benefit, the charges were $9.4 million

A summary of charges and related liabilities associated with the Vision 20/20 initiatives are as follows (in thousands):



	Asset Impairment Charges			Strategic Consulting Charges			Severance Charges			Inventory-Related Charges			Other
Fiscal 2018 charges	$	5,852		$	4,649		$	2,851		$	935		$	603
Cash payments	—			(2,324		)	(989		)	—			(411		)
Non-cash charges	(5,852		)	—			—			(935		)	(192		)
Liability as of October 28, 2017	$	—		$	2,325		$	1,862		$	—		$	—

The Company expects $1.0 million to $1.5 million of pre-tax restructuring charges associated with Vision 20/20 initiatives during the remainder of fiscal 2018. Material charges could occur if any additional initiatives are identified. The Company does not expect a material revenue impact from Vision 20/20 in the current fiscal year.

Other Charges

Thirteen and Thirty-Nine Weeks Ended October 28, 2017

The Company recognized the following other charges in fiscal 2018 (in addition to the aforementioned Vision 20/20-related charges):


•	The Company recognized $2.5 million in severance charges ($1.5 million after the associated tax benefit) during the thirty-nine weeks ended October 28, 2017, reflected in selling, general, and administrative expenses within corporate unallocated expenses. By quarter, the charges were as follows:


◦	In the first quarter of fiscal 2018, the Company recognized $1.3 million ($0.8 million after the associated tax benefit) primarily for the Company's former Chief Financial Officer and


◦	In the second quarter of fiscal 2018, the Company recognized $1.2 million ($0.7 million after the associated tax benefit) for the Company's former Chief Merchandising Officer.


•	The Company recognized $0.3 million for a net lease termination charge ($0.2 million after the associated tax benefit) during the thirty-nine weeks ended October 28, 2017, reflected in selling, general, and administrative expenses within the Direct segment. This net charge was recognized in the second quarter.

Thirteen and Thirty-Nine Weeks Ended October 29, 2016

In the second quarter of fiscal 2017, the Company recognized $0.9 million for an executive severance charge ($0.6 million after the associated tax benefit) reflected in selling, general, and administrative expenses within corporate unallocated expenses.

Refer to Note 6 herein regarding the release of certain income tax reserves related to uncertain tax positions reflected in income tax expense during the third quarter of fiscal 2017.