RETAIL FLEET OPTIMIZATION PLAN:

In the fourth quarter of fiscal 2018, the Company announced a retail fleet optimization plan to rebalance the mix between our physical store presence and our digital network with the closure of at least 250 stores in the United States over the next three years. Under this plan, we expect to close approximately 100 Chico's, 90 WHBM and 60 Soma locations over the next three years, with the majority of the closings occurring in years two and three. This initiative is part of the Company's efforts to better capitalize on its omnichannel platform, reduce costs, improve profitability and return on invested capital. In fiscal 2018, the Company recorded pre-tax impairment and accelerated depreciation charges within COGS of $9.4 million and $1.3 million, respectively, associated with this retail fleet optimization plan.

A summary of the retail fleet optimization charges is presented in the table below:



	Fiscal 2018

	(in thousands)
Impairment ⁽¹⁾	$	9,434
Accelerated Depreciation ^{(1) (2)}	1,268
Fleet Optimization charges, pre-tax	$	10,702

⁽¹⁾ Adjustments for impairment and accelerated depreciation charges reflect the impact of incremental store closures included in the Company’s retail fleet optimization plan.

⁽²⁾ Accelerated depreciation represents incremental depreciation due to the change in the useful life of store assets as a result of the retail fleet optimization plan.