EXIT ACTIVITY COSTS

3 Months Ended

May 05, 2024

EXIT ACTIVITY COSTS [Abstract]

EXIT ACTIVITY COSTS

EXIT ACTIVITY COSTS

2022 Cost Savings Initiative

The Company announced in August 2022 that it would be taking steps to streamline its organization and simplify its ways of working. Included in this was a planned reduction in 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, which was completed. These reductions have resulted in annual cost savings of over $100 million, net of continued strategic people investments. In connection with this initiative, the Company recorded pre-tax costs of $81.5 million during 2022 and 2023. There were no costs incurred during the thirteen weeks ended April 30, 2023. All expected costs related to this initiative were incurred by the end of 2023.

The pre-tax costs incurred in connection with the 2022 cost savings initiative were recorded in SG&A expenses of the Company’s segments as follows:

(In millions)	Cumulative Costs Incurred
Tommy Hilfiger North America	$	17.4
Tommy Hilfiger International	19.8
Calvin Klein North America	13.7
Calvin Klein International	14.3
Heritage Brands Wholesale	10.4
Corporate (1)	5.9
Total	$	81.5

(1) Corporate expenses are not allocated to any reportable segment.

Please see Note 16, “Segment Data,” for further discussion of the Company’s reportable segments.

The liabilities 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 2/4/24		Costs Paid During the Thirteen Weeks Ended 5/5/24		Liability at 5/5/24
Severance, termination benefits and other employee costs	$	20.4	$	10.3	$	10.1