Restructuring and Other Charges

9 Months Ended

Dec. 28, 2019

Restructuring and Related Activities [Abstract]

Retail Fleet Optimization Plan

The Company plans to close between 100 and 150 of its Michael Kors retail stores in order to improve the profitability of its retail store fleet (“Retail Fleet Optimization Plan”). The Company anticipates finalizing the remainder of the planned store closures under the Retail Fleet Optimization Plan by the end of Fiscal 2020. The Company expects to incur approximately $100 - $125 million of one-time costs associated with these store closures. Collectively, the Company anticipates lower depreciation and amortization expense as a result of the impairment charges recorded once these initiatives are completed.

During the nine months ended December 28, 2019, the Company closed 29 of its Michael Kors retail stores under the Retail Fleet Optimization Plan, for a total of 129 stores closed at a cost of $100 million since plan inception. Restructuring charges recorded in connection with the Retail Fleet Optimization Plan during the three and nine months ended December 28, 2019 were $5 million and $6 million, respectively. The below table presents a rollforward of the Company’s remaining restructuring liability related to this plan (in millions):


	Severance and benefit costs		Lease-related and other costs		Total
Balance at March 30, 2019	$	2	$	53	$	55
ASC 842 (Leases) Adjustment ⁽¹⁾	—		(46)		(46)
Balance at March 31, 2019	2		7		9
Additions charged to expense	—		6		6

Payments	(1)		(7)		(8)
Balance at December 28, 2019	$	1	$	6	$	7

⁽¹⁾Consists of the reclassification of sublease liabilities to an offset of the related operating lease right-of-use asset due to the adoption of ASC 842. See Note 2 and Note 4 for further information.

During the three and nine months ended December 29, 2018, the Company recorded restructuring charges of $4 million and $10 million, respectively, under the Retail Fleet Optimization Plan, which were comprised of lease-related charges.

Other Restructuring Charges

In addition to the restructuring charges related to the Retail Fleet Optimization Plan, the Company incurred charges of $2 million and $5 million during the three and nine months ended December 28, 2019, respectively, primarily consisting of lease-related costs. The Company also incurred charges of $3 million and $4 million relating to Jimmy Choo lease-related charges during the three and nine months ended December 29, 2018, respectively.

Other Costs

During the three months ended December 28, 2019, the Company recorded costs of $8 million, which included $5 million in connection with the acquisition of Versace and $3 million in connection with the Jimmy Choo acquisition. During the nine months ended December 28, 2019, the Company recorded costs of $26 million, which included $18 million in connection with the acquisition of Versace and $8 million in connection with the Jimmy Choo acquisition.

During the three months ended December 29, 2018, the Company recorded costs of $12 million, which included $6 million in connection with the acquisition of Versace and $6 million in connection with the Jimmy Choo acquisition. During the nine months ended December 29, 2018, the Company recorded costs of $35 million, which included $20 million in connection with the Jimmy Choo acquisition and $15 million in connection with the acquisition of Versace.