Segment Information

The Company’s segment reporting structure reflects an approach designed to optimize the operational coordination and resource allocation of its businesses across multiple functional areas including specialty retail, direct channel and licensing. The Company classifies its businesses into three reportable operating segments: Premium Fashion, Plus Fashion and Kids Fashion. Each segment is reviewed by the Company’s Chief Executive Officer, who functions as the chief operating decision maker (the “CODM”), and is responsible for reviewing the operating activities, financial results, forecasts and business plans of the segment. Accordingly, the Company’s CODM evaluates performance and allocates resources at the segment level. During the third quarter of Fiscal 2019, the Company made revisions to its reportable segments upon the divesting of its maurices business. As a result, the Company removed the maurices business from the Value Fashion segment and reallocated all corporate overhead to the remaining operating segments. In addition, during the second quarter of Fiscal 2020, the company completed the Dressbarn wind down, which concludes the reporting of the Value Fashion segment. The Company reallocated all corporate overhead to the remaining operating segments. The financial information presented below reflects such changes for all periods presented, including the prior year financial information.

The three reportable operating segments are as follows:


•	Premium Fashion segment – consists primarily of the specialty retail, outlet and direct channel operations of the Ann Taylor and LOFT brands.


•	Plus Fashion segment – consists of the specialty retail, outlet and direct channel operations of the Lane Bryant and Catherines brands.


•	Kids Fashion segment – consists of the specialty retail, outlet, direct channel and licensing operations of the Justice brand.

The accounting policies of the Company’s reportable operating segments are consistent with those described in the Fiscal 2019 10-K. Corporate overhead expenses are allocated to the segments based upon specific usage or other reasonable allocation methods. Certain expenses, including acquisition and integration expenses, and restructuring and other related charges, have not been allocated to the segments, which is consistent with the CODM’s evaluation of the segments.

Net sales, operating loss and depreciation and amortization expense for each reportable operating segment are as follows:



	Three Months Ended						Six Months Ended
	February 1, 2020			February 2, 2019			February 1, 2020			February 2, 2019
	(millions)						(millions)
Net sales:
Premium Fashion	$	624.1		$	638.9		$	1,209.1		$	1,234.9
Plus Fashion	318.6			305.8			598.4			591.2
Kids Fashion	274.2			326.7			529.0			592.7
Total net sales	$	1,216.9		$	1,271.4		$	2,336.5		$	2,418.8

Operating income (loss) ^(a):
Premium Fashion	$	8.9		$	(5.1	)	$	39.0		$	32.0
Plus Fashion	(9.7		)	(34.0		)	(15.6		)	(60.3		)
Kids Fashion	(29.7		)	(11.3		)	(35.6		)	(12.9		)
Unallocated restructuring and other related charges ^(b)	0.5			(13.5		)	(3.3		)	(21.4		)
Impairment of goodwill	(63.4		)	—			(63.4		)	—
Impairment of other intangible and other intangible assets	(46.9		)	—			(46.9		)	—
Total operating loss	$	(140.3	)	$	(63.9	)	$	(125.8	)	$	(62.6	)

Depreciation and amortization expense:
Premium Fashion	$	30.5		$	34.5		$	62.2		$	68.6
Plus Fashion	16.7			18.9			34.1			37.4
Kids Fashion	17.2			18.0			35.3			36.0
Total depreciation and amortization expense	$	64.4		$	71.4		$	131.6		$	142.0

^(a) For the three and six months ended February 1, 2020 and February 2, 2019, respectively, the maurices and Dressbarn businesses were classified as discontinued operations within the condensed consolidated financial statements. As a result, shared expenses of $18.3 million for the six months ended February 1, 2020, as well as $45.6 million and $89.4 million for the three and six months ended February 2, 2019, which were previously allocated to maurices and Dressbarn have been reallocated to the remaining operating units.

^(b)Restructuring and other related charges are as follows:



	Three Months Ended						Six Months Ended
	February 1, 2020			February 2, 2019			February 1, 2020			February 2, 2019
	(millions)						(millions)
Cash related charges ⁽ⁱ⁾:
Severance and benefit costs:
Premium Fashion	$	—		$	0.2		$	(0.4	)	$	0.2
Plus Fashion	(0.2		)	0.1			(0.5		)	0.1
Kids Fashion	—			0.1			(0.1		)	—
Corporate	(0.7		)	(0.1		)	3.9			(0.5		)
Total severance and benefit costs	(0.9		)	0.3			2.9			(0.2		)
Professional fees and other related charges:
Plus Fashion	—			—			—			(0.1		)
Corporate	0.4			13.2			0.4			21.7
Total professional fees and other related charges	0.4			13.2			0.4			21.6
Total restructuring and other related charges	$	(0.5	)	$	13.5		$	3.3		$	21.4

⁽ⁱ⁾ The charges incurred under the Company’s cost reduction initiatives are more fully described in Note 8.