Termination of Tuxedo Rental License Agreement with Macy?s
|3 Months Ended|
Apr. 29, 2017
|Termination Of Rental License Agreement [Abstract]|
|Termination of Tuxedo Rental License Agreement with Macy?s||
2. Termination of Tuxedo Rental License Agreement with Macy’s
During the first quarter of fiscal 2017, we reached an agreement with Macy’s to wind down operations under the tuxedo rental license agreement established between Macy’s and The Men’s Wearhouse, Inc. (“The Men’s Wearhouse”) in 2015. The winding down of our tuxedo shops within Macy’s has begun and we expect all tuxedo shops within Macy’s to close by the end of the second quarter of 2017.
As a result of the agreement, we incurred $17.2 million of termination-related costs, of which $14.6 million are cash charges. These costs include $12.3 million related to contract termination, $1.4 million of rental product write-offs, $1.2 million of asset impairment charges and $2.3 million of other costs, all of which relate to our retail segment. Of the $17.2 million in termination-related costs, $15.8 million is recorded in selling, general and administrative (“SG&A”) expenses and $1.4 million is included in cost of sales in the condensed consolidated statement of earnings. At April 29, 2017, $2.3 million of such costs are included in accrued expenses and other current liabilities in the condensed consolidated balance sheet.