DISCONTINUED OPERATIONS AND DISPOSALS

6 Months Ended

Jul. 02, 2016

DISCONTINUED OPERATIONS AND DISPOSALS

DISCONTINUED OPERATIONS AND DISPOSALS

2.    DISCONTINUED OPERATIONS AND DISPOSALS

The Company completed the sale of Lucky Brand in February of 2014 and substantially completed the wind-down operations of the Juicy Couture business in the second quarter of 2014.

The Company recorded pretax income (charges) of $1.5 million and $(1.5) million during the six months ended July 2, 2016 and July 4, 2015, respectively, and $0.3 million and $(0.8) million during the three months ended July 2, 2016 and July 4, 2015, respectively, to reflect the estimated difference between the carrying value of the net assets disposed and their estimated fair value, less costs to dispose, including transaction costs.

Summarized results of discontinued operations are as follows:

	Six Months Ended				Three Months Ended
	July 2, 2016		July 4, 2015		July 2, 2016		July 4, 2015
In thousands	(26 Weeks)		(26 Weeks)		(13 Weeks)		(13 Weeks)
Net sales	$	—	$	187	$	—	$	(21)
Income (loss) before provision for income taxes	$	1,443	$	(788)	$	1,941	$	78
Provision for income taxes		—		59		—		5
Income (loss) from discontinued operations, net of income taxes	$	1,443	$	(847)	$	1,941	$	73
Gain (loss) on disposal of discontinued operations, net of income taxes	$	1,491	$	(1,523)	$	273	$	(781)

Other

On March 4, 2015, the Company and Lucky Brand Dungarees, LLC (“Lucky Brand LLC”) entered into a transfer and settlement agreement (the “Lucky Brand Note Agreement”) to settle the three-year $85.0 million note issued as part of the consideration for the sale of the Lucky Brand business (the “Lucky Brand Note”) in full, prior to its maturity. Pursuant to the terms of the Lucky Brand Note Agreement, Lucky Brand LLC paid the Company $81.0 million to settle the principal balance of the Lucky Brand Note and related unpaid interest. Giving effect to the Lucky Brand Note Agreement, since the date of issuance, the Company collected aggregate principal and interest under the Lucky Brand Note of $89.0 million. The transactions contemplated by the Lucky Brand Note Agreement closed on March 4, 2015, and the Company recognized a $9.9 million loss on the settlement of the Lucky Brand Note in the first quarter of 2015.

The Company completed substantially all of the closures of its KATE SPADE SATURDAY operations and JACK SPADE retail stores in the second quarter of 2015. Although such dispositions were individually significant, they did not represent a strategic shift in the Company's operations and were not reflected as discontinued operations. The Company recorded pretax losses of $17.6 million and $1.8 million during the six and three months ended July 4, 2015, respectively, related to the KATE SPADE SATURDAY and JACK SPADE retail stores that were substantially disposed in the second quarter of 2015.