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Other Charges
6 Months Ended
Jul. 30, 2016
Other Charges Related To Management And Organizational Changes Proposed Business Combination Facilities Relocations And Fiscal Year Change [Abstract]  
Other Charges

9.

OTHER CHARGES

Subsequent to the appointment of Anthony M. Romano as the Company’s new Chief Executive Officer (“CEO”) in August 2014, the Company commenced a program to evaluate its business processes, key management personnel and planning resources. In connection with this evaluation, the Company changed its fiscal year and continues to implement changes with a focus on improving inventory management, driving sales productivity, optimizing real estate and controlling costs. Key management changes included elimination of the separate function of President in December 2015 in a further effort to streamline the Company’s operations and its reporting structure. The Company implemented an improved product life cycle calendar in fiscal 2015 and expects to complete the implementation of a new planning and allocation tool and re-platform its e-commerce sites in fiscal 2016, as it continues to improve its planning and allocation methodologies and e-commerce platform. The Company’s real estate strategy includes increased focus on the Company’s two key maternity apparel brands with strategic phase-out and elimination of certain non-core brands and business relationships. During the six months ended July 30, 2016 and August 1, 2015 the Company incurred $671,000 and $1,324,000, respectively, of charges related to these management and organizational changes.

During the fourth quarter of fiscal 2015, the Company announced that it had received an unsolicited, non-binding preliminary merger proposal from Orchestra-Prémaman S.A. (“Orchestra”), a France-based retailer of children’s wear. On March 15, 2016 the Company entered into a non-disclosure agreement with Orchestra and agreed to exchange information and engage in discussions with Orchestra in response to their communications. During the six months ended July 30, 2016 the Company incurred $873,000 of charges related to the proposal for a business combination.

In September 2013 the Company announced plans to relocate its corporate headquarters and distribution operations from Philadelphia, Pennsylvania to southern New Jersey. The Company completed the relocation of its corporate headquarters to Moorestown, New Jersey in January 2015 and completed the relocation of its distribution operations to Florence, New Jersey in August 2015. During the six months ended August 1, 2015 the Company recorded $2,094,000 of charges related to the preparation for occupancy of and relocation to its new distribution facility.

During the six months ended August 1, 2015 the Company incurred $27,000 of charges related to its change to a retail calendar-based fiscal year.

A summary of the charges incurred in connection with the management and organizational changes, proposed business combination, facilities relocations and fiscal year change is as follows (in thousands):

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

July 30, 2016

 

  

August 1, 2015

 

 

July 30, 2016

 

  

August 1, 2015

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Management and Organizational Changes

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-core brand contract termination

 

$

220

 

 

$

 

 

$

545

 

 

$

 

Severance and related benefits

 

 

3

 

 

 

152

 

 

 

121

 

 

 

242

 

Consulting fees

 

 

 

 

 

371

 

 

 

5

 

 

 

1,082

 

Total management and organizational changes

 

 

223

 

 

 

523

 

 

 

671

 

 

 

1,324

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Proposed Business Combination

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Legal and other professional fees

 

 

652

 

 

 

 

 

 

873

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Facilities Relocations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pre-opening rent expense on new distribution facility

 

 

 

 

 

796

 

 

 

 

 

 

1,615

 

Accelerated depreciation and amortization expense

 

 

 

 

 

93

 

 

 

 

 

 

233

 

Other

 

 

 

 

 

198

 

 

 

 

 

 

246

 

Total facilities relocations

 

 

 

 

 

1,087

 

 

 

 

 

 

2,094

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fiscal Year Change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Systems modifications

 

 

 

 

 

27

 

 

 

 

 

 

27

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total other charges

 

$

875

 

 

$

1,637

 

 

$

1,544

 

 

$

3,445