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 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 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). During the year ended December 31, 2021, the Company recorded $15.0 million of incremental reserve charges relating to product categories that are not RV-related.

As of December 31, 2022, the activities under the 2019 Strategic Shift have been completed with the exception of certain 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 had 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 $121.3 million to $132.8 million. The breakdown of the estimated restructuring costs are as follows:

Through December 31, 2022, the Company has incurred $38.9 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 $2.8 million to $6.3 million represents similar costs that may be incurred through the year ending December 31, 2023 for locations that continue in a wind-down period, primarily comprised of lease costs accounted for under ASC 842 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, 2023 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 associated with the 2019 Strategic Shift (in thousands):


	Year Ended December 31,
	2022		2021		2020
Restructuring costs:
One-time termination benefits⁽¹⁾	$	—	$	—	$	231
Lease termination costs⁽²⁾		1,316		1,431		4,432
Incremental inventory reserve charges⁽³⁾		—		15,017		543
Other associated costs⁽⁴⁾		7,026		10,684		16,835
Total restructuring costs	$	8,342	$	27,132	$	22,041

(1)	These costs incurred in 2020 were primarily included in costs applicable to revenues – products, service and other in the consolidated statements of operations.

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

(3)	These costs were included in costs applicable to revenue – products, service and other in the consolidated statements of operations.

(4)

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 year ended December 31, 2020, costs of approximately $0.4 million were included in costs applicable to revenue – products, service and other. For the years ended December 31, 2022, 2021 and 2020, costs of approximately $7.0 million, $10.7 million and $16.4 million, respectively, were included in selling, general, and administrative expenses in the 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 at December 31, 2021		—		—		926		926
Charged to expense		—		6,097		7,026		13,123
Paid or otherwise settled		—		(6,097)		(7,083)		(13,180)
Balance at December 31, 2022	$	—	$	—	$	869	$	869

(1)

Lease termination costs exclude the $1.3 million, $6.1 million and $0.2 million and $4.8 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 and for the years ended December 31, 2020, 2021 and 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 consolidated financial statements.

Long-Lived Asset Impairment

During the years ended December 31, 2022, 2021 and 2020, the Company had indicators of impairment of the long-lived assets for certain of its locations. Such indicators primarily included the update of certain assumptions in the long-lived asset impairment analysis for closed locations or based on the Company’s review of location performance in the normal course of business. For locations that failed the recoverability test based on an analysis of undiscounted cash flows, the Company estimated the fair value of the locations based on a discounted cash flow analysis. After performing the long-lived asset impairment test for these locations, the Company determined that certain locations within the RV and Outdoor Retail segment had long-lived assets that were impaired. The long-lived asset impairment charge, subject to limitations described below, was calculated as the amount that the carrying value of the locations exceeded the estimated fair value. The calculated long-lived asset impairment charge was allocated to each of the categories of long-lived assets at each location pro rata based on the long-lived assets’ carrying values, except that individual assets cannot be impaired below their individual fair values when those fair values can be determined without undue cost and effort. For most of these locations, the operating lease right-of-use assets and furniture and equipment were written down to their individual fair values and the remaining impairment charge was allocated to the remaining long-lived assets up to the fair value estimated on these assets based on liquidation value estimates.

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


	Year Ended December 31,
	2022		2021		2020
Long-lived asset impairment charges:
Leasehold improvements	$	2,557	$	721	$	2,374
Furniture and equipment		61		196		2,588
Buildings		—		—		1,461
Operating lease right-of-use assets		1,613		2,127		5,930
Total long-lived asset impairment charges		4,231		3,044		12,353
Less: portion unrelated to 2019 Strategic Shift		(2,617)		(1,645)		(64)
2019 Strategic Shift long-lived asset impairment charges	$	1,614	$	1,399	$	12,289