Annual report pursuant to Section 13 and 15(d)

RESTRUCTURING AND OTHER CHARGES

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RESTRUCTURING AND OTHER CHARGES
12 Months Ended
Feb. 03, 2018
RESTRUCTURING AND OTHER CHARGES  
RESTRUCTURING AND OTHER CHARGES

4.  RESTRUCTURING AND OTHER CHARGES

During the fourth quarter of fiscal 2015, we began implementing initiatives intended to reduce costs and improve operating performance.  These initiatives included a store rationalization program as well as a profit improvement program to drive operating efficiencies and improve our expense structure.  These programs were substantially completed in fiscal 2016 and resulted in the closure of 75 Jos. A. Bank full line stores, the closure of 56 factory and outlet stores at Jos. A. Bank and Men’s Wearhouse and the closure of 102 Men’s Wearhouse and Tux stores.

No charges were incurred under these initiatives in fiscal 2017. Cumulative pre-tax restructuring and other charges incurred in fiscal 2016 and 2015 related to these programs was $109.6 million, of which approximately $68.1 million were cash expenses.

A summary of the charges incurred are presented in the table below (amounts in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

    

 

 

 

    

 

 

 

 

 

Fiscal Year

 

 

 

 

 

 

2016

 

2015

 

Cumulative

 

Lease termination costs

 

$

43,116

 

$

 —

 

$

43,116

 

Store asset impairment charges and accelerated depreciation, net of deferred rent

 

 

1,734

 

 

23,146

 

 

24,880

 

Consulting costs

 

 

15,074

 

 

918

 

 

15,992

 

Inventory reserve charges

 

 

 —

 

 

11,008

 

 

11,008

 

Severance and employee-related costs

 

 

6,103

 

 

 —

 

 

6,103

 

Favorable lease impairment charges

 

 

 —

 

 

5,533

 

 

5,533

 

Other costs

 

 

2,060

 

 

858

 

 

2,918

 

Total pre-tax restructuring and other charges(1)

 

$

68,087

 

$

41,463

 

$

109,550

 


(1)

For fiscal 2016, consists of $71.9 million included in SG&A offset by a $3.8 million reduction in cost of sales.  For fiscal 2015, consists of $23.1 million included in asset impairment charges, $11.0 million in cost of sales, $5.5 million of goodwill and intangible asset impairment charges and $1.8 million in SG&A.  For fiscal 2016, fiscal 2015 and cumulatively since inception of the initiatives, of the total amounts recorded in the table above, $49.0 million, $39.9 million and $88.9 million, respectively, relate to our retail segment and the remainder are recorded in shared services.

The following table is a rollforward of amounts included in accrued expenses and other current liabilities in the consolidated balance sheet related to the pre-tax restructuring and other charges (amounts in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Severance and

 

Lease

 

 

 

 

 

 

 

 

 

 

 

 

Employee-

 

Termination

 

Consulting

 

Other

 

 

 

 

 

    

Related Costs

    

Costs

    

Costs

    

Costs

    

Total

 

Beginning Balance, January 28, 2017

 

$

986

 

$

4,834

 

$

60

 

$

25

 

$

5,905

 

Charges, excluding non-cash items

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

Payments

 

 

(986)

 

 

(4,557)

 

 

(60)

 

 

(25)

 

 

(5,628)

 

Ending Balance, February 3, 2018

 

$

 —

 

$

277

 

$

 —

 

$

 —

 

$

277

 

In addition to the restructuring costs described above, we incurred integration and other costs related to Jos. A. Bank totaling $8.8 million and $18.7 million for fiscal years 2016 and 2015, respectively.  Integration and other costs for fiscal 2016 include $2.1 million recorded in cost of sales with the remainder recorded in SG&A.  Integration and other costs for fiscal 2015 include $0.9 million recorded in cost of sales with the remainder recorded in SG&A.