TERMINATION OF TUXEDO RENTAL LICENSE AGREEMENT WITH MACY'S
|12 Months Ended|
Feb. 02, 2019
|TERMINATION OF TUXEDO RENTAL LICENSE AGREEMENT WITH MACY'S|
|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 in 2015. During fiscal 2017, we completed the winding down of our operations related to our tuxedo shops within Macy's and all tuxedo shops within Macy's closed in the second quarter of 2017.
As a result of the agreement, during the first quarter of fiscal 2017, we incurred $17.2 million of termination-related costs, of which $14.6 million were cash charges. These costs included $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, $14.6 million is recorded in SG&A, $1.4 million is included in cost of sales and $1.2 million is included in asset impairment charges in the consolidated statement of earnings. At February 3, 2018, all termination-related costs had been paid.