On September 3, 2019, the board of directors of CWH approved a plan to strategically shift its business away from locations where the Company does not have the ability or where it is not feasible to sell and/or service RVs at a sufficient capacity (the “Outdoor Lifestyle Locations”). Of the Outdoor Lifestyle Locations in the RV and Outdoor Retail segment operating at September 3, 2019, the Company has closed or divested 39 Outdoor Lifestyle Locations, two distribution centers, and 20 specialty retail locations relating to the 2019 Strategic Shift. As of December 31, 2020, the Company had completed the store closures and divestitures relating to the 2019 Strategic Shift. As part of the 2019 Strategic Shift, the Company evaluated the impact on its supporting infrastructure and operations, which included rationalizing inventory levels and composition, closing certain distribution centers, and realigning other resources. The Company had a reduction of headcount and labor costs for those locations that were closed or divested, and the Company incurred material charges associated with the activities contemplated under the 2019 Strategic Shift.

During the year ended December 31, 2021, the Company completed its analysis of its retail product offerings that are not RV related. The information available at the inception of the 2019 Strategic Shift relating to these product categories was incomplete based on the relative immaturity of the locations offering these products and was further delayed by the impact of COVID-19 on consumer buying behavior (see Note 1 — Summary of Significant Accounting Policies — COVID-19).

As of December 31, 2021, the Company had effectively finalized its 2019 Strategic Shift as it relates to closing locations, one-time termination benefits, and incremental reserve charges. The remaining potential ongoing charges under the 2019 Strategic Shift relate to lease termination costs and other associated costs relating to the leases of previously closed locations under the 2019 Strategic Shift. The process of identifying subtenants and negotiating lease terminations has been delayed in part due to the COVID-19 pandemic and is expected to continue. The timing of these negotiations will vary as both subleases and terminations are contingent on landlord approvals.

The Company currently estimates the total restructuring costs associated with the 2019 Strategic Shift to be in the range of $113.6 million to $132.6 million. The breakdown of the estimated restructuring costs are as follows:

Through June 30, 2022, the Company has incurred $35.7 million of such other associated costs primarily representing labor, lease, and other operating expenses incurred during the post-close wind-down period for the locations related to the 2019 Strategic Shift. The additional amount of $0.3 million to $4.3 million represents similar costs that may be incurred through the year ending December 31, 2022 for locations that continue in a wind-down period, primarily comprised of lease costs accounted for under ASC 842, Leases, prior to lease termination. The Company intends to negotiate terminations of these leases where prudent and pursue sublease arrangements for the remaining leases. Lease costs may continue to be incurred after December 31, 2022 on these leases if the Company is unable to terminate the leases under acceptable terms or offset the lease costs through sublease arrangements. The foregoing lease termination cost estimate represents the expected cash payments to terminate certain leases but does not include the gain or loss from derecognition of the related operating lease assets and liabilities, which is dependent on the particular leases that will be terminated.

The following table details the costs incurred during the three and six months ended June 30, 2022 and 2021 associated with the 2019 Strategic Shift (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Restructuring costs:
Lease termination costs⁽¹⁾	$	944	$	—	$	1,122	$	1,431
Other associated costs⁽²⁾		1,854		3,010		3,877		6,077
Total restructuring costs	$	2,798	$	3,010	$	4,999	$	7,508

(1)	These costs were included in lease termination charges in the condensed consolidated statements of operations. This reflects termination fees paid, net of any gain from derecognition of the related operating lease assets and liabilities.

(2)

Other associated costs primarily represent labor, lease, and other operating expenses incurred during the post-close wind-down period for the locations related to the 2019 Strategic Shift. For the three and six months ended June 30, 2022 and June 30, 2021, costs of approximately $1.9 million and $3.9 million, and $3.0 million and $6.1 million, respectively, were included in selling, general, and administrative expenses in the condensed consolidated statements of operations.

The following table details changes in the restructuring accrual associated with the 2019 Strategic Shift (in thousands):


	One-time		Lease		Other
	Termination		Termination		Associated
	Benefits		Costs⁽¹⁾		Costs		Total
Balance at June 30, 2019	$	—	$	—	$	—	$	—
Charged to expense		1,008		1,350		4,321		6,679
Paid or otherwise settled		(286)		(1,350)		(4,036)		(5,672)
Balance at December 31, 2019		722		—		285		1,007
Charged to expense		231		10,532		16,835		27,598
Paid or otherwise settled		(953)		(10,532)		(16,346)		(27,831)
Balance at December 31, 2020		—		—		774		774
Charged to expense		—		1,650		10,684		12,334
Paid or otherwise settled		—		(1,650)		(10,532)		(12,182)
Balance as of December 31, 2021		—		—		926		926
Charged to expense		—		2,023		3,877		5,900
Paid or otherwise settled		—		(2,023)		(4,060)		(6,083)
Balance at June 30, 2022	$	—	$	—	$	743	$	743

(1)

Lease termination costs exclude the $1.3 million, $6.1 million, $0.2 million and $0.9 million of gains from the derecognition of the operating lease assets and liabilities relating to the terminated leases as part of the 2019 Strategic Shift for the six months ended December 31, 2019, for the years ended December 31, 2020 and 2021, and for the six months ended June 30, 2022, respectively.

The Company evaluated the requirements of ASC No. 205-20, Presentation of Financial Statements – Discontinued Operations relative to the 2019 Strategic Shift and determined that discontinued operations treatment is not applicable. Accordingly, the results of operations of the locations impacted by the 2019

Strategic Shift are reported as part of continuing operations in the accompanying condensed consolidated financial statements.

Long-Lived Asset Impairment

During the three and six months ended June 30, 2022, the Company had indicators of impairment of the long-lived assets for certain locations based on the Company’s review of location performance in the normal course of business. During the three and six months ended June 30, 2021, the Company had indicators of impairment of the long-lived assets for certain of its closed locations relating to the 2019 Strategic Shift. As a result of updating certain assumptions in the long-lived asset impairment analysis for these locations, the Company determined that the fair value of certain long-lived assets were below their carrying value and were impaired. The long-lived asset impairment charge was calculated as the amount that the carrying value of these locations exceeded the estimated fair value, except that individual assets cannot be impaired below their individual fair values when that fair value can be determined without undue cost and effort.

The following table details long-lived asset impairment charges by type of long-lived asset (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Long-lived asset impairment charges:
Leasehold improvements	$	2,557	$	—	$	2,557	$	—
Furniture and equipment		61		—		61		—
Operating lease right-of-use assets		—		536		—		1,082
Total long-lived asset impairment charges		2,618		536		2,618		1,082
Less: portion unrelated to 2019 Strategic Shift		(2,618)		—		(2,618)		—
2019 Strategic Shift long-lived asset impairment charges	$	—	$	536	$	—	$	1,082