Restructuring

12 Months Ended

Dec. 30, 2023

Restructuring and Related Activities [Abstract]

In the first quarter of fiscal year 2023, the Company announced its Transform and Grow plan ("TAG") designed to reduce operating costs, improve operating margins, and advance the Company’s commitment to profitable growth. The Company has now expanded the scope and duration of TAG to focus on a more comprehensive review of its global business operations. The expansion of TAG will put greater emphasis on initiatives to exit or minimize certain product offerings, brands and distribution, and to strengthen gross margin and increase the level of operating expense efficiencies. TAG is estimated to generate approximately $300 million of annualized operating income benefits by the end of 2025. The Company estimates approximately $100 million to $120 million in total charges over the duration of TAG and estimates approximately $35 million of charges in fiscal year 2024. Aided by these measures, the Company's long-term goal is to achieve adjusted gross margins in the low to mid 50% range and adjusted operating margins of approximately 10%.

The following table shows a summary of TAG plan charges (in thousands):


Fiscal Year	Fiscal Year 2023
Cost of sales	$	5,537
Selling, general and administrative expenses	43,279
Consolidated	$	48,816

The following table shows a rollforward of the accrued liability related to the Company’s TAG plan (in thousands):


	Fiscal Year 2023
	Liabilities				Cash Payments		Non-cash Items		Liabilities
	December 31, 2022		Charges						December 30, 2023
Stores and facilities closures	$	—	$	7,245	$	—	$	7,245	$	—
Professional services	—		6,648		6,531		—		117
Severance and employee-related benefits	—		29,386		20,951		318		8,117
Charges related to exits of certain product offerings	$	—	$	5,537	$	1,716	$	—	$	3,821
Total	$	—	$	48,816	$	29,198	$	7,563	$	12,055

TAG plan restructuring charges by operating segment were as follows (in thousands):


	2023
Americas	$	4,582
Europe	9,812
Asia	12,519
Corporate	21,903
Consolidated	$	48,816

In fiscal year 2022, the Company completed its New World Fossil 2.0 (“NWF 2.0”) restructuring program it launched in 2019. The following tables show a rollforward of the accrued liability related to the Company’s NWF 2.0 restructuring plan (in thousands):


	Fiscal Year 2023
	Liabilities		Cash Payments			Liabilities
	December 31, 2022				December 30, 2023

Professional services	74		74			—
Severance and employee-related benefits	2,821		2,821			—
Total	$	2,895	$	2,895		$	—


	Fiscal Year 2022
	Liabilities				Cash Payments		Non-cash Items		Liabilities
	January 1, 2022		Charges						December 31, 2022
Store closures	$	300	$	787	$	612	$	475	$	—
Professional services	643		166		735		—		74
Severance and employee-related benefits	4,388		5,168		6,431		304		2,821
Total	$	5,331	$	6,121	$	7,778	$	779	$	2,895


	Fiscal Year 2021
	Liabilities				Cash Payments		Non-cash Items		Liabilities
	January 2, 2021		Charges						January 1, 2022
Store closures	$	240	$	1,215	$	500	$	655	$	300
Professional services	2,280		5,695		7,332		—		643
Severance and employee-related benefits	7,741		14,979		18,332		—		4,388
Total	$	10,261	$	21,889	$	26,164	$	655	$	5,331

NWF 2.0 restructuring charges by operating segment were as follows (in thousands):


	2022		2021
Americas	$	234	$	2,356
Europe	1,754		9,868
Asia	1,610		5,072
Corporate	2,523		4,593
Consolidated	$	6,121	$	21,889