The Company announced in August 2022 it would be taking steps to streamline its organization and simplify its ways of working. The Company plans to reduce people costs in its global offices by approximately 10% by the end of 2023 to drive efficiencies and enable continued strategic investments to fuel growth, including in digital, supply chain and consumer engagement. The Company expects these reductions will generate annual cost savings of over $100 million, net of continued strategic people investments. In connection with this initiative, the Company recorded pre-tax costs during 2022 related to initial actions taken under the plan, as shown in the following table. The Company expects to incur additional costs in connection with this initiative, however the additional costs are not known at this time.

Of the charges incurred during 2022, $4.7 million relate to SG&A expenses of the Tommy Hilfiger North America segment, $2.5 million relate to SG&A expenses of the Tommy Hilfiger International segment, $4.6 million relate to SG&A expenses of the Calvin Klein North America segment, $3.5 million relate to SG&A expenses of the Calvin Klein International segment, $2.6 million relate to SG&A expenses of the Heritage Brands Wholesale segment and $2.3 million relate to corporate SG&A expenses not allocated to any reportable segment. Please see Note 20, “Segment Data,” for further discussion of the Company’s reportable segments.

The liabilities at January 29, 2023 related to these costs were principally recorded in accrued expenses in the Company’s Consolidated Balance Sheet and were as follows:


(In millions)	Liability at 1/30/22		Costs Incurred During 2022		Costs Paid During 2022		Liability at 1/29/23
Severance, termination benefits and other employee costs	$	—	$	20.2	$	7.0	$	13.2

As a result of the war in Ukraine, the Company made the decision in the second quarter of 2022 to exit from its Russia business, including the closure of its retail stores in Russia and the cessation of its wholesale operations in Russia and Belarus. In connection with this exit, the Company recorded pre-tax costs during 2022 as shown in the following table. All expected costs related to the exit from the Russia business were incurred during 2022.


(In millions)	Costs Incurred During 2022
Severance, termination benefits and other employee costs	$	2.1
Long-lived asset impairments	43.6
Gain on lease terminations, net of contract termination and other costs (1)	(2.7)
Total	$	43.0

(1) Gain on lease terminations, net of contract termination and other costs includes a $7.5 million gain related to the early termination of certain store lease agreements in Russia recorded during the fourth quarter of 2022 and $4.8 million of contract termination and other costs recorded during the second quarter of 2022.

Of the charges incurred during 2022, $31.6 million relate to SG&A expenses of the Tommy Hilfiger International segment and $11.4 million relate to SG&A expenses of the Calvin Klein International segment. Please see Note 20, “Segment Data,” for further discussion of the Company’s reportable segments.

The liabilities at January 29, 2023 related to these costs were principally recorded in accrued expenses in the Company’s Consolidated Balance Sheet and were as follows:


(In millions)	Liability at 1/30/22		Costs Incurred During 2022		Costs Paid During 2022		Liability at 1/29/23
Severance, termination benefits and other employee costs	$	—	$	2.1	$	1.7	$	0.4
Contract termination and other costs	—		4.8		4.3		0.5
Total	$	—	$	6.9	$	6.0	$	0.9

The Company announced in March 2021 plans to streamline its organization through reductions in its workforce, primarily in certain international markets, and to reduce its real estate footprint, including reductions in office space and select store closures, which resulted in annual cost savings of approximately $60 million. In connection with these activities, the Company recorded pre-tax costs during 2021 as shown in the following table. All expected costs related to the 2021 reductions in workforce and real estate footprint were incurred by the end of 2021.


(In millions)	Costs Incurred During 2021
Severance, termination benefits and other employee costs	$	15.7
Long-lived asset impairments	28.1
Contract termination and other costs	3.8
Total	$	47.6

Of the charges incurred during 2021, $1.7 million relate to SG&A expenses of the Tommy Hilfiger North America segment, $8.9 million relate to SG&A expenses of the Tommy Hilfiger International segment, $2.1 million relate to SG&A expenses of the Calvin Klein North America segment, $6.4 million relate to SG&A expenses of the Calvin Klein International segment and $28.5 million relate to corporate SG&A expenses not allocated to any reportable segment. Please see Note 20, “Segment Data,” for further discussion of the Company’s reportable segments.

The liabilities at January 29, 2023 related to these costs were principally recorded in accrued expenses in the Company’s Consolidated Balance Sheet and were as follows:


(In millions)	Liability at 1/30/22		Costs Incurred During 2022		Costs Paid During 2022		Liability at 1/29/23
Severance, termination benefits and other employee costs	$	6.2	$	—	$	3.4	$	2.8

The Company announced in July 2020 plans to streamline its North American operations to better align its business with the evolving retail landscape, including the exit from its Heritage Brands Retail business, which consisted of 162 directly operated stores in North America and was substantially completed in the second quarter of 2021. In connection with the exit

from the Heritage Brands Retail business, the Company recorded pre-tax costs during 2020 and 2021 as shown in the following table. All expected costs related to the exit from the Heritage Brands Retail business were incurred by the end of 2021.


(In millions)	Costs Incurred During 2020		Costs Incurred During 2021		Cumulative Costs Incurred
Severance, termination benefits and other employee costs	$	14.6	$	10.8	$	25.4
Long-lived asset impairments	7.2		—		7.2
Accelerated amortization of lease assets	7.2		5.9		13.1
Contract termination and other costs	—		4.4		4.4
Total	$	29.0	$	21.1	$	50.1

The costs incurred during 2020 and 2021 relate to SG&A expenses of the Heritage Brands Retail segment. Please see Note 20, “Segment Data,” for further discussion of the Company’s reportable segments.


(In millions)	Liability at 1/30/22		Costs Incurred During 2022		Costs Paid During 2022		Liability at 1/29/23
Severance, termination benefits and other employee costs	$	3.5	$	—	$	3.5	$	—
Contract termination and other costs	2.4		—		2.4		—
Total	$	5.9	$	—	$	5.9	$	—

The Company also announced in July 2020 a reduction in its office workforce by approximately 450 positions, or 12%, across all three brand businesses and corporate functions (the “North America workforce reduction”). In connection with the North America workforce reduction, the Company recorded pre-tax costs of $39.7 million during 2020, which consisted of severance, termination benefits and other employee costs. All expected costs related to the North America workforce reduction were incurred by the end of 2020.

Of the costs incurred during 2020, $3.0 million relates to special termination benefits included in non-service related pension and postretirement income and $36.7 million relates to SG&A expenses. Please see Note 12, “Retirement and Benefit Plans,” for further discussion of the special termination benefits. Of the above charges incurred during 2020, $12.5 million relate to the Heritage Brands Wholesale segment, $10.9 million relate to the Tommy Hilfiger North America segment, $10.5 million relate to the Calvin Klein North America segment and $5.8 million relate to corporate expenses not allocated to any reportable segment. Please see Note 20, “Segment Data,” for further discussion of the Company’s reportable segments.