Note 6 - Restructuring and Other Initiatives

6 Months Ended

Aug. 03, 2019

Notes to Financial Statements

Restructuring and Related Activities Disclosure [Text Block]

Note 6 Restructuring and Other Initiatives

Vionic Integration-Related Costs

During the thirteen weeks ended August 3, 2019, the Company incurred integration-related costs associated with the acquisition of Vionic, primarily for severance, totaling $0.6 million ($0.5 million on an after-tax basis, or $0.01 per diluted share). Of the $0.6 million in costs, which are presented as restructuring and other special charges, net in the condensed consolidated statements of earnings, $0.6 million are reflected within the Eliminations and Other category, with an immaterial amount reflected in the Brand Portfolio segment. During the twenty-six weeks ended August 3, 2019, the Company incurred integration-related costs, primarily for severance, totaling $0.9 million ($0.7 million on an after-tax basis, or $0.02 per diluted share).  Of the $0.9 million in costs, which are presented as restructuring and other special charges, net in the condensed consolidated statements of earnings, $0.8 million is reflected within the Eliminations and Other category and $0.1 million is included in the Brand Portfolio segment. As of August 3, 2019 restructuring reserves of $0.8 million were included in other accrued expenses on the condensed consolidated balance sheets.  Refer to further discussion of the acquisition in Note 3 to the condensed consolidated financial statements.

Blowfish Malibu Acquisition Costs

The Company incurred acquisition costs associated with the acquisition of Blowfish Malibu of $0.2 million during the thirteen weeks ended August 4, 2018, which are presented as restructuring and other special charges, net in the condensed consolidated statements of earnings and reflected within the Eliminations and Other category.  There were no acquisition or integration-related costs associated with the acquisition of Blowfish during the thirteen and twenty-six weeks ended August 3, 2019.  Refer to further discussion of the acquisition of Blowfish Malibu in Note 3 to the condensed consolidated financial statements.

Carlos Brand Exit

The Company's license agreement to sell Carlos by Carlos Santana footwear expired in December 2018.  In connection with the decision to exit the Carlos brand, the Company incurred restructuring-related costs of $1.9 million ($1.4 million on an after-tax basis, or $0.03 per diluted share) during the twenty-six weeks ended August 3, 2019.  Of these charges included in the Brand Portfolio segment, $1.3 million ($1.0 million on an after-tax basis or $0.02 per diluted share) primarily represents incremental inventory markdowns required to reduce the value of inventory to net realizable value and is presented in cost of goods sold on the statements of earnings and the remaining $0.6 million ($0.4 million on an after-tax basis, or $0.01 per diluted share) for severance and other related costs is presented in restructuring and other special charges. There were no corresponding costs in the thirteen weeks ended August 3, 2019 or the twenty-six weeks ended August 4, 2018.

Integration and Reorganization of Men's Brands

During the thirteen and twenty-six weeks ended August 4, 2018, the Company incurred integration and reorganization costs, primarily for severance, related to the men's business totaling $1.9 million ($1.4 million on an after-tax basis, or $0.03 per diluted share) and $3.7 million ($2.7 million on an after-tax basis, or $0.07 per diluted share), respectively.  Of the $1.9 million in costs presented as restructuring and other special charges, net in the condensed consolidated statements of earnings for the thirteen weeks ended August 4, 2018, $1.8 million was reflected within the Brand Portfolio segment and $0.1 million was reflected within the Eliminations and Other category.  Of the $3.7 million in costs for the twenty-six weeks ended August 4, 2018, $3.4 million was reflected within the Brand Portfolio segment and $0.3 million was reflected within the Eliminations and Other category.   There were no integration and reorganization costs related to the men's business in the thirteen and twenty-six weeks ended August 3, 2019.