Gilly Hicks Restructuring

12 Months Ended

Jan. 31, 2015

Restructuring and Related Activities [Abstract]

As previously announced, on November 1, 2013, A&F’s Board of Directors approved the closure of the Company’s 24 stand-alone Gilly Hicks stores. The Company substantially completed the store closures as planned by the end of the first quarter of Fiscal 2014. The Company continues to offer Gilly Hicks products through the Hollister direct-to-consumer channel.

As a result of exiting the Gilly Hicks branded stores, the Company currently estimates that it will incur aggregate pre-tax charges of approximately $91.2 million, of which $8.4 million in charges, primarily related to lease terminations and asset impairment, was recognized during Fiscal 2014 and $81.5 million was recognized during Fiscal 2013.

Below is a summary of the aggregate pre-tax charges incurred through January 31, 2015 related to the closure of the Gilly Hicks branded stores (in thousands):



Lease terminations and store closure costs	$	48,665
Asset impairment	40,036
Other	1,230
Total charges ⁽¹⁾	$	89,931


⁽¹⁾	As of January 31, 2015, the Company incurred aggregate pre-tax charges related to restructuring plans for the Gilly Hicks brand of $50.4 million for the U.S. Stores segment and $39.5 million for the 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 $1.3 million, are expected to be recognized over the remaining lease terms. These estimates are based on a number of significant assumptions and could change materially.

Costs associated with exit or disposal activities are recorded when the liability is incurred. Below is a roll forward of the liabilities recognized on the Consolidated Balance Sheet as of January 31, 2015, related to the closure of the Gilly Hicks stores (in thousands):



Accrued liability as of February 1, 2014	$	42,507
Costs incurred	11,631
Cash payments	(48,141		)
Accrued liability as of January 31, 2015	$	5,997

- 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.

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