XML 20 R8.htm IDEA: XBRL DOCUMENT v3.4.0.3
Restructuring and Strategic Charges
 3 Months Ended
Apr. 30, 2016
Restructuring and Related Activities [Abstract]  
Restructuring and Strategic Charges
Restructuring and Strategic Charges
During the fourth quarter of fiscal 2014, we initiated a restructuring program, including the acceleration of domestic store closures and an organizational realignment, to ensure that resources align with long-term growth initiatives, including omni-channel. In fiscal 2015, in connection with the restructuring program, we completed an evaluation of the Boston Proper brand, completed the sale of the Boston Proper direct-to-consumer business, and closed its stores. 
During the first quarter of fiscal 2016, we announced an expansion of our restructuring program to further align the organizational structure with long-term growth initiatives, including transition of executive leadership, and to reduce COGS and SG&A through strategic initiatives. These strategic initiatives include realigning marketing and digital commerce, improving supply chain efficiency, and reducing non-merchandise and marketing expenses. In connection with this program, during the first quarter of fiscal 2016 we recorded pre-tax restructuring and strategic charges of $3.7 million, primarily related to severance charges, continuing employee-related costs and consulting fees, which are included in restructuring and strategic charges in the accompanying condensed consolidated statements of income.
In connection with the restructuring program, we evaluated our domestic store portfolio and identified approximately 175 stores for closure, with 77 stores across our brands, including 20 Boston Proper stores, closed through the first quarter of fiscal 2016. As a result, we expect to incur additional cash charges related to lease termination expenses of approximately $1.6 million through fiscal 2017 related to these future closures.
A summary of the restructuring and strategic charges is presented in the table below:
 
Thirteen Weeks Ended
 
April 30, 2016
 
May 2, 2015
 
 
 
 
 
(in thousands)
Impairment charges
$
—

 
$
5,952

Continuing employee-related costs
1,015

 
5,625

Severance charges, net
1,184

 
1,634

Lease termination charges
221

 
—

Consulting fees and other
1,231

 
1,664

Total restructuring and strategic charges, pre-tax
$
3,651

 
$
14,875


As of April 30, 2016, a reserve of $6.6 million related to restructuring and strategic activities was included in other current and deferred liabilities in the accompanying condensed consolidated balance sheets. A roll-forward of the reserve is presented as follows:
 
Continuing employee-related costs
 
Severance Charges
 
Lease Termination Charges
 
Consulting Fees and Other
 
Total
 
 
 
 
 
 
 
 
 
 
 
(in thousands)
Beginning Balance, January 30, 2016
$
2,549

 
$
1,678

 
$
1,101

 
$
9

 
$
5,337

Charges
1,015

 
1,184

 
221

 
1,231

 
3,651

Payments
(712
)
 
(1,289
)
 
(265
)
 
(164
)
 
(2,430
)
Ending Balance, April 30, 2016
$
2,852

 
$
1,573

 
$
1,057

 
$
1,076

 
$
6,558