Gilly Hicks Restructuring

9 Months Ended

Nov. 02, 2013

Gilly Hicks Restructuring [Abstract]

On November 1, 2013, A&F’s Board of Directors approved the closure of the Company’s stand-alone Gilly Hicks stores. The Company anticipates the closure will be substantially complete by the end of the first quarter of Fiscal 2014. Store closures in Europe are subject to applicable notice and consultation provisions.

In connection with its long-term strategic review, the Company has decided to focus the future development of the Gilly Hicks brand through Hollister stores and direct-to-consumer channels. This decision reflects the successful pilot of selling Gilly Hicks branded intimates in Hollister stores.

As a result of exiting the Gilly Hicks branded stores, the Company currently estimates that it will incur aggregate pre-tax charges of approximately $90 million, inclusive of the $44.7 million of charges recognized during the third quarter.

Below is a summary of pre-tax charges incurred to-date related to the closure of the Gilly Hicks branded stores (in thousands):



	Thirteen and Thirty-Nine Weeks Ended
	November 2, 2013 ⁽¹⁾
Non-Cash Charges
Asset Impairment	$	37,940
Other Charges	$	4,668
Cash Charges
Lease Terminations	$	2,100
Total Charges	$	44,708

⁽¹⁾ For the thirteen week period ended November 2, 2013, the Company incurred charges related to restructuring plans for the Gilly Hicks brand of $14.5 million for U.S. Stores segment and $30.2 million for International Stores segment.

The remaining charges, primarily lease-related, including the net present value of payments related to lease terminations, potential sub-lease losses and other lease-related costs of approximately $45 million, are expected to be substantially recognized in the fourth quarter of Fiscal 2013 and the first quarter of Fiscal 2014. These estimates are based on a number of significant assumptions and could change materially.

Based on the timing of the store closures and the applicable accounting guidance, the Company has not incurred a liability as of November 2, 2013 related to the Company's decision to close its stand-alone Gilly Hicks stores.

- Definition

The entire disclosure for restructuring and related activities. Description of restructuring activities such as exit and disposal activities, include facts and circumstances leading to the plan, the expected plan completion date, the major types of costs associated with the plan activities, total expected costs, the accrual balance at the end of the period, and the periods over which the remaining accrual will be settled.

+ References+ Details