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Other Charges, Net
12 Months Ended
Feb. 03, 2018
Other Charges Related To Proposed Business Combinations Management And Organizational Changes Facilities Relocations And Fiscal Year Change [Abstract]  
Other Charges, Net

13.

OTHER CHARGES, NET

In an effort to enhance the Company’s competitive position, in late fiscal 2014 the Company commenced a program to actively focus on improving its business processes, key management personnel and planning resources. These efforts have been increasingly challenged by a number of external factors and industry trends, including the overall weakness in the women's specialty apparel retail space as well as declining mall-based traffic. In order to address these challenges, the Company has acted to best position itself for profitable, long-term growth, with a focus on improving inventory management, driving sales productivity, optimizing real estate, expanding its online presence and controlling costs. Among other efforts, the Company conducted a comprehensive evaluation of its key apparel brands and business relationships, resulting in strategic phase-outs and the elimination of certain non-core brands. The Company retained a leading consulting firm to review its costs and business strategy in order to implement an organizational transformation. The Company is in the process of executing a CEO transition having announced on September 17, 2017 the appointment of B. Allen Weinstein, a member of our Board since 2010, as Interim Chief Executive Officer (“Interim CEO”) and the resignation of Anthony M. Romano as our Chief Executive Officer & President (“Former CEO”). On January 2, 2018 Melissa Payner-Gregor, an independent director since 2009, replaced Mr. Weinstein as Interim CEO.  The Company also paid one-time retention bonuses with service conditions to certain key management personnel which are being recorded over the service period, while reducing its overall headcount to create a more efficient and effective operating structure. During fiscal 2017, 2016 and 2015 the Company incurred $3,714,000, $1,760,000 and $4,196,000, respectively, of net 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 the Company’s largest shareholder, Orchestra, a France-based retailer of children’s wear. On December 19, 2016 the Company entered into a merger agreement. During the second quarter of fiscal 2017 the parties determined that it was in the best interests of their respective stockholders to terminate the proposed merger. On July 27, 2017 the Company, Orchestra, and certain other affiliates of Orchestra entered into a termination agreement. In connection with the termination agreement, Orchestra and the Company agreed to reimburse each other for certain costs incurred in connection with their effort to implement the merger agreement, with a net amount of $1,000,000 paid to the Company on July 31, 2017. During fiscal 2017, 2016 and 2015 the Company incurred $1,198,000, $3,154,000 and $61,000, respectively, of net charges related to the merger.

The termination agreement also terminated certain ancillary agreements between the Company and a wholly-owned subsidiary of Orchestra, under which the Company provided real estate and construction project consulting services, and offered for purchase infant and childrenswear merchandise for sale in certain of the Company’s stores. In fiscal 2017 the Company recognized $44,000 of revenue under such agreements.

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 fiscal 2015, the Company recorded $2,695,000, of charges related the sale and closure of its prior facilities, and the preparation for occupancy of and relocation to its new facilities.

During fiscal 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 proposed business combinations, management and organizational changes, facilities relocations and fiscal year change for fiscal 2017, 2016, and 2015 follows (in thousands):

 

 

 

Year Ended

 

 

 

February 3, 2018

 

 

January 28, 2017

 

 

 

January 30, 2016

 

Proposed Business Combination and Other Corporate Activities

 

 

 

 

 

 

 

 

 

 

 

 

 

Legal and other professional fees

 

$

2,198

 

 

$

3,154

 

 

 

$

61

 

Net reimbursement for certain costs incurred

 

 

(1,000

)

 

 

 

 

 

 

 

Total proposed business combination and other corporate activities

 

 

1,198

 

 

 

3,154

 

 

 

 

61

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Management and Organizational Changes

 

 

 

 

 

 

 

 

 

 

 

 

 

Severance and related benefits

 

773

 

 

 

1,210

 

 

 

 

1,787

 

Non-core brand contract terminations

 

 

 

545

 

 

 

 

Consulting fees

 

1,233

 

 

 

5

 

 

 

1,388

 

Executive officer separation benefits

 

1,445

 

 

 

 

 

922

 

Pro-rata retention bonuses

 

263

 

 

 

 

 

 

Other

 

 

 

 

 

 

99

 

Total management and organizational changes

 

3,714

 

 

 

1,760

 

 

 

 

4,196

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Facilities Relocations

 

 

 

 

 

 

 

 

 

 

 

 

 

Pre-opening rent expense on new corporate headquarters and distribution facility

 

 

 

 

 

 

 

 

 

1,699

 

Moving and other costs

 

 

 

 

 

 

763

 

Accelerated depreciation and amortization expense

 

 

 

 

 

 

233

 

Total facilities relocations

 

 

 

 

 

 

 

 

2,695

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fiscal Year Change

 

 

 

 

 

 

 

 

 

 

 

 

 

Systems modifications

 

 

 

 

 

 

27

 

Total fiscal year change

 

 

 

 

 

 

 

27

 

Total other charges, net

 

$

4,912

 

 

$

4,914

 

 

 

$

6,979